The Securities Authority of Israel establishes a committee to consider the regulations of the ICO.
The head of the Israeli Securities Authority (ISA) has announced the establishment of a committee tasked with assessing the need for ICO regulations in Israel. The committee has been assigned to determine whether or not initial coin offerings fall under the purview of securities legislation.
The new ISA committee is expected to submit its assessments of ICO regulations by December 31st, 2017. The committee is to be headed by the head of the ISA’s Corporate Department, Moti Yamin, and ISA chief economist, Dr. Gitit Gur-Gershgoren. The committee is reported to have been tasked with five specific directives.
These are specified below: “1. Evaluate the financial essence of ICOs and whether it overlaps with other financial activity under Israeli law; 2. Make a comparative analysis of cryptocurrency regulations in various countries to evaluate the legitimacy of Bitcoin; 3. Examine if cryptocurrency trading and ICOs should be watched by the ISA; 4. Devise a new regulatory policy balancing between alternative funding channels and technological innovation while protecting Israeli investors from unsupervised investments; and 5. Examine potential collaborations with fellow regulators and with the local Blockchain industry.”
The Israeli Securities Authority has claimed that more than $ 1 trillion USD was raised during the first half of 2017 through ICOs. ISA believes that “Israel is considered as a leading country in blockchain technology development with a flourishing industry,” and must affirm itself as a world leader in the development of ICO regulations. The ISA is particularly concerned about initial coin offerings being utilized as a vehicle to bypass established financial regulatory apparatus, stating that “some see ICOs as a financial bubble lacking any financial reasoning, and participating in some ICOs as a way to bypass current IPO regulations.”
CEO of 99bitcoins, Ofir Beigel, has spoken out in favor of ICO’s balanced regulations. Beigel described the ICO market as “become some sort of an OTC stock market which allows everyone to ‘join the party’… While I really think this is a great and innovative way to raise funds, most of the public is still unaware of the huge risks it entails. Government regulation for ICOs, if done properly and without stifling innovation, seems like a good initiative to protect the public.”
Therefore, Israel has joined the United States, Canada, China and Singapore to move towards the development of ICO regulations. Nir Porat of Porat and Co. Law Firm, a trading firm and cryptocurrency law, has “welcome[d] the ISA’s initiative”, emphasizing the risks associated with an unregulated ICO market. “If left to operate without regulation and supervision, negative influences are sure to enter this realm, be they illegitimate coin offerings without sufficient foundation, hacking attacks, or thefts from digital wallets… The Israeli regulator needs to set appropriate monitoring and enforcement guidelines, while at the same time checking that it is creating a fair and balanced regulatory framework. This framework should protect the public but not apply unfair weight upon companies in the market, lest it stifle innovation and profitability.”
The establishment of the ISCO’s ICO commission comes amid the growing concern of financial regulators around the world. This week, the US Securities and Exchange Commission warned investors against initial coin offerings, describing ICOs as sometimes being used to “convince potential victims to invest their money in scams.” It has also been revealed that Chinese regulators recently considered suspending all ICOs occurring in China, in addition to a number of measures designed to curb the proliferation of initial coin offerings.
In summary, investors for new innovation projects will receive protection under the laws of some countries that care about the resources of potential investors, meanwhile bitcoin will follow the path of success with these legal measures. New announcements are expected.
Disclaimer: This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest. The opinions expressed in this article are those of the author, they do not necessarily represent infocoin views and should not be attributed to Infocoin.