Crypto executive warns that Israeli law proposal to categorize cryptocurrency as securities will have a detrimental impact on the industry.

The CEO of Altshuler Shaham Horizon, an Israeli crypto service provider, has warned that proposed laws in Israel to classify cryptocurrencies as securities would have detrimental effects on the local crypto industry. Ilan Sterk, in an interview with Cointelegraph Magazine, highlighted the complexity of the current legal situation for crypto in Israel. He explained that the current proposal is to place digital assets under the supervision of the Israel Securities Authority (ISA), which would significantly change the landscape for the industry. Sterk expressed doubts that the proposal would be enacted as is, stating that he is unsure if it will be implemented as intended. The ISA released a proposal in January that would grant the regulator extensive powers to regulate the Israeli crypto industry. The proposal seeks to amend the definition of securities to include digital assets used for financial investment and grant the ISA powers to oversee the industry and impose sanctions for non-compliance. Under the proposal, issuers of digital assets would be required to publish a prospectus-like document before issuing or registering them for trading. The public has until February 12 to provide comments and feedback on the matter. In November last year, the Ministry of Finance also laid out its recommendations for crypto industry regulations, including allowing crypto service providers to operate in Israel temporarily if they hold a parallel license from abroad. Sterk believes this proposal would make it easier for foreign crypto exchanges to operate in Israel, as obtaining a license in the country can take several years. According to the latest figures from the ISA, there are approximately 150 companies operating in the local crypto industry, with over 200,000 Israelis invested in crypto.