The ISA Committee Claims Bitcoin Is Not A Security
The committee of Israel Securities Authority (ISA) responsible for the examination and regulation of Initial Coin Offerings (ICOs) published a series of recommendations designed to dispel uncertainty and strike a balance between technological innovation and the protection of the investors. The committee also discovered that digital currencies like bitcoin are deemed as securities.
The ISA committee stated that; As a general rule, cryptocurrencies that are designed to be used exclusively as a medium of payment, clearing, or exchange and are not limited to a specific venture; that do not confer additional rights; and are not controlled by a central entity – will not be deemed securities.
Analysts believe that this could be a precedent-setting decision, as modern economies all over the world have the same problem of how to categorize cryptocurrency. However, Israel has been one of those countries and are usually not that involved regarding the regulation of crypto.
The Bitcoin ATMs in Israel is quite different from the ones in the United States of America. The ATMs in the U.S request for basic know your customer identification, whilst the ones in Israel you’ll only require fiat in exchange for bitcoin.
The committee released a report noting that; The question of whether a cryptocurrency should be considered a security will be decided on the totality of the circumstances and features of each case in accordance with the purposes of the law. The report continued with; As a general rule, cryptocurrencies that confer rights similar to the rights conferred by traditional securities such as share, bonds, and participation units, will be deemed securities.
In contrast, cryptocurrencies that represent rights to a product or service and are acquired solely for the purpose of consumption and use and not for investment purposes, will not be considered securities.
Ms. Anat Guetta, the newly appointed Chair of ISA gave out recommendations. Mrs. Guetta has not been a big fan of bitcoin, at the beginning of the month she announced how the ISA would ban bitcoin from the nation’s stock exchange indices. She stated that; We have decided to prevent the exposure of passive investors to companies is high risk, speculative and volatile. Mrs. Guetta added; We also published a detailed warning to investors about the dangers of investing in cryptocurrency.