The U.S. Securities and Exchange Commission (SEC) has ruled securities laws may apply to ICOs. This led the Israel Securities Authority (ISA) to form their own committee to oversee and regulate the process.
Prof. Shmuel Hauser, chairman of the ISA, developed a committee whose aim is to examine the legal implications of ICOs. It will also investigate security regulations related to such activities before they are offered to the public.
A statement from the Israeli Bitcoin Association published on July 31, 2017, cautions investors to know and research the risks ICOs pose before participating.
The ISA has warned the public and cryptocurrency providers to stay put because ICO regulations have yet to be finalized. Those regulations will protect participants and secure their rights.
Participation before the regulations are finalized comes with risk, including transactions being unsecured. Companies that do not follow regulations may be forced to cease operations.
Yet there is still no exact date for the release of regulations. The ISA says it is doing everything it can to bring together studies that will eventually form the basis of such legislation.
This might be a good thing more than negative, because it shows the ISA prioritizes ICOs and investors’ willingness to invest in currencies of the future. It also means the ISA encourages new investment options and funding resources that may be suitable and accessible for everyone.
As far as ICOs are concerned, the ISA would like to encourage cryptocurrency providers to acknowledge this regulatory attention and to take steps to protect buyers and sellers. This can reduce scams, market manipulation, and hacking.
One major aim of the ISA is to prevent investors from losing their funds and to protect investors’ interests at all times. This can only happen once regulations have been rolled out.
Israel is starting to become a home to ICOs. For many, the ISA’s move may come as a surprise yet it will be beneficial for many.