Israel's financial regulator has proposed draft amendments to current financial legislation to decriminalize digital assets and expand the definition of securities.
The proposals appear to protect investors from risk that the regulator says has been rampant in recent years. The document mentions the collapse of the FTX crypto exchange and claims that the crypto lender Celsius - which caused the crypto market to crash last summer - is owned by Israel.
The draft amendment seeks to maintain flexibility to change the rules in light of rapid technological developments in the crypto industry.
The Israel Securities Authority proposes to subject digital assets to laws on securities, collective investment and investment advice, trading and portfolio management. In each case, digital assets are defined as "digital representations used for financial investments that can be transmitted and stored electronically using ledger technology or other technologies."
Public comments on the proposed amendment are open until February 12. The ISA recommends that authorities and regulators prepare for follow-up 6 months before the law is published.
The regulator sees crypto as an opportunity for investors and the Israeli economy, providing more diverse sources of capital and fostering innovation and growth.
"Improving technology in these resources will bring economic efficiency in many areas, reduce costs, eliminate the need for intermediaries and facilitate the transfer of information between organizations," the document says. According to the ISA, more than 200,000 Israelis are investing in cryptography, and there are about 150 crypto companies operating in the country.
Israeli authorities have shown increased interest in crypto in recent months and plan to launch a digital asset trading platform with a national stock exchange.
* The poem translated from Hebrew.
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