One of the toughest financial regulators in Israel has made some surprisingly positive comments today regarding the acceptance of ICO crowdfunding and cryptocurrency. The outgoing chairman of the Israel Securities Authority (ISA) talked about a need to foster the creation of an international financial center based on ICOs.
Also read: Reports of Israeli ICO Ban Are Fake News, Entrepreneurs Look to Create ‘Crypto Nation’
Speaking for the last time as the ISA head before the Israeli corporations conference, Prof. Shmuel Hauser discussed the main challenges that the regulatory body still faces. Regarding ICOs he said:
“We will have to bring order to the market. Some countries decided to examine digital tokens on a case by case basis. A small number decided to ban them. We have decided to find out, with a team headed by the chief economist and the head of the corporations division, under which terms is it a security? Coin? Or some hybrid I call a security-coin?
“The team is meant to file its report by the end of December. We will have to define for ourselves and the market what is this beast. Among other things, we will need to consider expanding the supervision on security-coin and define a proper regulatory framework, different from the one we know for IPOs.
“I believe that the topic of digital currencies and their offerings must receive a favorable regulatory response, maybe even daring somewhat, to give a chance for the option to develop an international financial center for security-coin from the type of ICOs.”
Still, the professor added that the regulatory framework will need to show a certain degree of paternalism to make sure ICOs won’t develop in directions he considers to be negative.
ICO Nation
Though they had very little to do with its development, Israeli politicians and high-ranking bureaucrats often pride themselves in the country’s ‘Startup Nation’ status.
About 5,000 high-tech startups are estimated to be operating in Israel at any moment. Most of them fail to mature due to local VCs allowing them very short growth periods before pressuring them to sell out or pulling the plug. ICOs could help fill this much talked about gap between seed funding and full blown IPO.
If regulators were to just step back and refrain from suffocating the nascent ICO scene in Israel, it is expected that a thousand ICOs could be launched in the country in 2018.
How should Israeli regulators promote ICO projects in the country? Tell us what you think in the comments section below.
Images courtesy of Shutterstock, ISA.
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