Israel's proposed laws classifying cryptocurrencies as securities will seriously harm the local crypto industry, according to the head of an Israeli crypto services company.
Cointelegraph editor Andrew Fenton spoke with Ilan Stirk, CEO of Altshuler Shaham Horizon. The Tel Aviv-based company provides custody and trading services for cryptocurrencies and is one of the few companies in the country authorized to trade with banks.
Sterk said the current legal situation regarding cryptocurrency in Israel is "extremely complicated."
He explained that the current proposal is to have digital assets under the supervision of the Israel Securities Authority (ISA), the country's securities regulator.
"Classifying digital assets as a security tool changes everything here," he said. Sterk didn't think the current proposal would pass as is, saying he's "not sure it's going to be what they want," adding:
"You can't classify all digital assets as securities because that would kill the industry."
In early January, the ISA came up with a proposal that would give the regulator new powers to oversee Israel's crypto industry.
It seeks to change the definition of securities to include "digital assets" used in financial investments. It clarified the definition of "digital assets" as digital "representations" of value or rights used in financial investments.
The ISA is also seeking powers to monitor the cryptocurrency industry, impose requirements on issuers and brokers and fines for non-compliance.
Under the ISA proposal, issuers of digital assets will be required to publish a prospectus-like document before digital assets are issued or registered for trading.
The public can submit comments and feedback on the matter until February 12.
Meanwhile, last November, the Ministry of Finance clarified its recommendations regarding the regulation of the crypto industry.
Related: Israeli court rules authorities can confiscate 150 blacklisted cryptocurrencies
Among the proposals was one that would allow cryptocurrency providers to operate in Israel, at least temporarily, if they had a parallel license from abroad.
Stirk said the proposal would "make life a little easier" for currency exchanges in Israel, since getting a license in the country "can take up to two, three, four years."
According to the latest data from the ISA in January, it was estimated that around 150 companies are working in the local cryptocurrency industry and that more than 200,000 Israelis are investing in cryptocurrencies.
