Israeli regulator changes legal framework for cryptocurrencies

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Israeli authorities have published a document on intermediaries of digital assets - cryptocurrencies are becoming popular in the country, so officials intend to control investors.

The Israel Securities Authority (ISA) has proposed the creation of a new structure to regulate cryptocurrencies as digital assets become more popular and the country operatesThere are already more than 150 crypto companies. The ISA promises to eliminate the risks associated with the new asset class and provide authorities with the means to regulate the industry.

The regulator intends to gain powers tosupervision of the digital asset industry as a whole - to establish requirements for cryptocurrency issuers and intermediaries, impose sanctions and fines. The proposal will be discussed until February 12.

According to the document, department officialsintend to require intermediaries to comply with the rules that already apply to intermediaries in the traditional securities industry - licensing, compliance with capital adequacy standards.

The document suggests taking into account uniquefeatures of digital assets, namely the ability to use smart contracts and tokens to perform tasks. The ISA wants to eliminate opportunities for fraud and market manipulation by giving authorities the ability to intervene if there is any suspicion.

Recently, Shira Greenberg, chief economist at the Israeli Ministry of Finance, proposed
update legislation and expand the powers of the ISA to improve protection for crypto investors.