The ICO’s Evaluation and Regulation Committee of the Israel Securities Authority stated that cryptocurrencies, the use of which is not limited to one enterprise, can not be considered securities. This is reported by Bitcoin.com.
The financial regulator noted that its recommendations are aimed at “eliminating uncertainty and establishing a balance between technological innovation and investor protection.”
“As a general rule, cryptocurrencies intended solely for use as a payment, clearing or exchange medium, the use of which is not limited to one entity that does not confer additional rights, will not be considered securities,” the representatives of the financial controller said.
The organization noted that the ability to classify cryptocurrency as a security must be established in each individual case and in accordance with the law in force.
“As a general rule, the cryptocurrencies that give their holders the same rights as traditional securities, such as bonds or shares, will be considered securities. Conversely, the cryptocurrencies that grant the right to use a product or service purchased exclusively for these purposes, but not for investment purposes, will not be considered securities,” the department’s report says.
Experts believe that the position of the committee, first of all, will play an important role for ICO start-ups, since the issuer of tokens, which will issue them for resale, will bear obligations under the law on securities. However, in the situation of decentralized cryptocurrencies like bitcoin, which do not have a single issuer, these decisions will not affect in any way.