There are quite a few opinions on whether or not Bitcoin is a legal asset. In Israel, the decision was pretty easy to make. The country’s Securities Authority has deemed Bitcoin not a security. This is a rather remarkable and surprising decision, all things considered, and it creates an interesting precedent for the rest of the world.
Israel’s Securities Authority Rules on Bitcoin
Bitcoin has been receiving a ton of regulatory scrutiny over the past few months. Every country in the world is seemingly poised to introduce some form of regulation. Creating a legal definition for a form of money that has never existed before is pretty difficult, although it remains to be seen how countries will tackle this issue moving forward.
Over in Israel, the decision was made that Bitcoin used only for consumption cannot be labeled a security. This verdict not only applies to Bitcoin, as it seems the Israel Securities Authority applies the same logic to ICO tokens. That in itself is a pretty intriguing development, as there have been no real use cases for ICO tokens to date. Whether or not this decision will backfire on the agency remains to be seen.
It is worth noting that the specific committee set up to deal with these issues was first created back in August of 2017. Ever since that time, the group has been examining the regulation of ICOs and cryptocurrencies. As most people know by now, Bitcoin and other currencies pose a legitimate threat to the financial stability of most countries. For now, it seems Israel is not too bothered by any of these developments, even though it will feel the impact of this new form of money sooner or later.
More specifically, the committee wanted to see whether or not the existing Financial Securities Law in Israel would apply to Bitcoin and ICO tokens. It is evident existing rules do not mix too well with these new forms of money, even though there is plenty of room to apply some form of official rules in this regard. With all of these new currencies and forms of money showcasing characteristics that differ from traditional money, a very lengthy investigation was more than warranted.
The CEO of Moneynetint, Yishai Trif, commented:
Distributed registration is the future of the financial world. We must not forget that technological innovation is supposed to serve the public first and to streamline the range of services. During my years in digital commerce field, I have seen how technological innovation has been deliberately delayed many times, either because of barriers or because of the inability of the institutional bodies to contain them. The decision of the committee together with Israel’s global position in the space of technological innovation may serve as a catalyst for the rest of the developed countries and lead to its welcome regulation in the use of distributed registration technology.
As of right now, cryptocurrencies used solely for consumption cannot be labeled securities. This means that making a payment in bitcoin, altcoins, or ICO tokens is not a security-esque transaction, as long as there are no rights involved. As such, every individual transaction in which value changes hands will need to be looked at to determine whether or not it involves a security. It is a very tedious process, yet it goes to show there will not be any unified rules in this regard, at least under Israeli law.