Thread: The Israeli Securities Authority Proposes Changes to Digital Asset Regulation
First Posted: January 10h, 2023
The Israel Securities Authority published a proposal for public comments on legislative amendments to the regulation of #digital_assets. The proposal includes a number of fundamental changes that will have extensive effects on those who market, buy, invest, use, etc #crypto #tokens #NFTs and basically, the whole industry. Here some of the key points as I understand them.
- In general - the entire proposal is intended to anchor the purposeful interpretation of the question of "what is a security" (according to the authority it is not a change but an anchoring). Then through this change and other changes to make sure that all the limitations that exist on classic securities also apply to digital assets with some changes. But what does this mean?
- The proposal seeks to change the definition of "security" in the law so that it does not necessarily require that the certificate be issued in a series or in a uniform/certain way (in writing for example).
- It is proposed to change the definition so that it refers to certificates of "financial investment" (thus if the purchase as intended as an investment it will be considered a security even if the currency/token was not intended for this in advance, meaning, it will be more difficult to argue that buying a token is not an investment because it is intended for utility). This is intended to prevent, according to the authority, circumventing the purpose of the law. It is proposed to add to the definitions of the law a definition of "digital assets" - the proposed definition is quite expansive.
- In addition and similarly, the document proposes including the definition of "financial instrument" in the law so that it can also apply to digital assets. (Similar to the proposed amendment of the Securities Law)
- Pay attention to this – the proposal includes granting special powers to the authority that will allow them to set special guidelines or *resolve from guidelines* digital assets - according to the authority, this is intended to deal with the uniqueness and flexibility of the field. It is also proposed to amend the Law on Joint Investments so that it can also apply to joint investment in digital assets.
6 And here is perhaps the most significant change - it is proposed to amend the Investment Advice Law so that it includes a "security" (which, I should note, according to the change, will include digital assets) even if it is not listed in an orderly manner on the stock exchange. Meaning - now officially there will be strict restrictions on anyone who "markets" or "advertises" digital assets. An entire industry will be affected by this.
🚨 Disclaimer: this is not legal advice, i'm not a lawyer. Read the full proposal: