Israel Plans to Establish Crypto Supervision Legally

The fallout of the Terra Luna ecosystem, as well as the bankruptcy filings of multiple crypto exchanges, has turned the broader crypto market highly volatile. As a result, governments around the world are adopting or amending existing crypto regulations in order to safeguard their citizens from potential risks.

As CoinGabbar earlier reported, countries like the United Kingdom, Italy, Brazil, France, and Alaska have amended or provided official insight about their crypto regulations. In line with this, the Israel Securities Authority (ISA) announced that the country is planning to establish a new regulatory framework for digital assets.

Israel, a Middle Eastern country, is one of the few countries that legally allow cryptocurrency trading. Currently, there are no limits on how many cryptocurrencies individuals can buy or sell at any time. This aided the Israeli crypto market to surge at an astounding rate. Experts believe that the country might witness an increase in crypto adoption in the times to come.

As the number of citizens interacting with cryptocurrency increases in the country, so do concerns about the risk associated with the market. As a result, the ISA announces its plans to amend the country’s existing securities regulations.

Need for Legal Crypto Supervision

As per the plan, the amendments to the country's regulations would integrate digital assets into existing securities regulations, potentially categorizing most crypto assets as financial investments monitored by the ISA.

ISA noted that this effort is intended to protect investors while also allowing for the distinctive benefits of cryptocurrencies. Although existing securities regulations can already regulate some digital asset activity, the ISA claims that the regulations are difficult to implement as drafted.

The ISA's proposal is open for public comment until Feb. 12, and it proposes a six-month transition time after approval. The ISA has also attempted to keep in mind that regulations must be adaptable to developments in the technology underlying digital assets. On the development, the chairwoman of the ISA, Anat Guetta, noted,

“We must recognize that there is no real difference between cryptocurrency and securities, and we must establish definitions in order to safeguard customers and investors, and to make this industry legitimate.”

The announcement from ISA comes after Shira Greenberg, Israel's chief economist, issued a list of recommendations to lawmakers on how to deal with digital asset regulations and increase crypto adoption.

What to expect from the upcoming regulation

The upcoming amended crypto regulation will assist the Israeli crypto market to thrive even more. As per recent reports, nearly 28% of Israeli citizens currently own cryptocurrencies, indicating that the country has enormous potential to become a global leader in crypto adoption.

What are your thoughts on the ISA's proposal to integrate digital assets into existing securities regulations? Please share your valuable thoughts in the comment section below.

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