Although cryptocurrencies became a lot more popular last year, they also pose a big problem for regulators. Most recently, the Israel Securities Authority proposed a ban on trading shares of cryptocurrency-related companies. This is a rather interesting development, especially when considering that no other country around the world has done so.
Israel Takes an Aggressive Stance Toward Cryptocurrencies
When it comes to Bitcoin and other cryptocurrencies, opinions are still divided. Governments and regulators don’t always see eye-to-eye on this front, which is anything but surprising. After all, the concept of regulating cryptocurrency itself is ludicrous, since no one can control these currencies. Nor is there a centralized entity to be regulated either, which makes the job of government officials a lot harder. The only thing they can do is take some sort of stance against companies involved in cryptocurrency.
In most cases, this would mean that cryptocurrency-related trading platforms would face additional scrutiny. They might have to introduce stricter KYC and AML regulations, which is not necessarily the worst thing in the world. In some countries, exchanges may need to keep a specific amount of funds in a domestic bank account at all times to ensure liquidity. Again, that’s not the biggest hurdle to overcome. In Israel, however, things are moving in a very different direction.
It seems the Israel Securities Authority has no love for Bitcoin or other cryptocurrencies. Nor does it like the concept of domestic companies dealing with cryptocurrencies. Its current plan involves a ban on trading shares of cryptocurrency-based companies listed on the Tel Aviv Stock Exchange. It’s a rather problematic development which could set a huge precedent for the rest of the world.
This decision comes at a rather interesting time for Bitcoin and all other cryptocurrencies. Considering the surge in the popularity and value of Bitcoin last year, one would expect a more open-minded approach to such publicly-traded companies. Instead, the ISA wants to ensure that such companies can no longer trade on the Tel Aviv Stock Exchange. Moreover, the listing of such shares would be forbidden by law altogether. Any currently-listed shares would be suspended immediately as well.
Unsurprisingly, the proposal has already been approved by the ISA’s board and will be made available for public comment soon. It will be interesting to see how the general public feels about this rather controversial development. The proposal was made after a company by the name of Blockchain Mining saw the value of its shares surge due to its new focus on cryptocurrency mining.
Assuming the proposed amendment is enacted, it will set a very dangerous precedent for the rest of the world. The last thing we need is more governments banning cryptocurrency companies from public stock exchanges. At the same time, it is one of the few options governments have to impose regulation in the world of Bitcoin these days. It will be very interesting to see how this situation plays out in the coming months.