The Israel Securities Authority intends to adopt a loose policy on ICOs and launch a temporary regulatory sandbox

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Launch of interim regulatory sandbox

According to a report published by the regulator, the Israel Securities Authority will launch a temporary regulatory sandbox that will allow companies to experience various regulatory requirements in the cryptocurrency market.

In addition, the Israel Securities Authority also stated that they will give certain companies the right to provide utility token products or services, and these tokens will not "necessarily" be considered securities. However, all these digital tokens may not be used for settlement, exchange and payment for a specific project.

Many in the blockchain industry have welcomed the Israeli regulator’s latest stance on cryptocurrencies. Amitay Molko, co-founder of Blockchain JLM in Jerusalem, said:

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“Case by Case”

According to the report issued by the Israel Securities Authority, they will evaluate digital tokens on a case-by-case basis, which mentions:

"Considering the current legal regulations, cryptocurrencies should be considered as a specific security. The rights provided by cryptocurrencies are actually similar to traditional securities products including stocks and bonds."

According to the Israel Securities Authority, the most obvious difference between utility tokens and securities is whether they are traded in the secondary market. Another key difference is whether there is a platform that allows people to actually use digital tokens. If there are no above two characteristics, then it means that the Securities Administration will consider that the digital token is likely to be regarded as an investment purchase.

Interestingly, the Israel Securities Authority's stance contrasts sharply with that of the SEC and other regulators. Recently, SEC Chairman Jay Clayton stated that every initial coin offering he has seen is a security.