Israel Securities Authority Wants a Dedicated Token Exchange

Israel Securities Authority May Promote the Creation of a Token Exchange

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An Israel Securities Authority (ISA) committee tasked with examining the regulation of crypto coin supplies has submitted its final recommendations now, March 6. They include the option of developing a dedicated platform for trading digital assets.
The last report delivers a few main recommendations. The initial is applying securities law into the issuance of crypto resources, while adapting the feasibility of disclosure requirements to the characteristics of the actions of these projects. The second recommendation is using a sand-box frame in order for the ISA to get experience and to accompany entrepreneurs in this format.

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In March 2018the committee released an interim report and has held a number of meetings with both academic and industry leaders to clarify. The last report noted that since this interim report’s book, lots of changes have occurred in the specialty. The trend in this context is the decline of ICOs compared to 2018. It clarified that raising funds in this subject in Western markets is currently performed mainly by sophisticated investors and from issuing crypto assets comprised in the meaning of Safety Token Offerings (STOs) in accordance with regulations that are applicable.
What do you think about the chance of creating a regulated token exchange in Israel?


Regulating Coin Offerings in Israel

Main Recommendations

The committee recommends examining the possibility of earning adjustments to the existing regulations in order to create a considerably better regulatory framework for this trading activity in the shape of a separate platform for the trading of crypto assets, which it considers will best mitigate the risks involved. The law of crowdfunding from Israel is offered as an identical version to the ISA to build up.
Israel Securities Authority Wants a Dedicated Token Exchange

The article Israel Securities Authority Wants a Dedicated Token Exchange appeared first on Bit Coin News.

The committee understood that the significance of a relationship between regulators and industry and has invited projects to get hold of the ISA, promising to examine their activity in an open manner, in as short a time as possible, and also from embracing a flexible interpretation.
Israel Securities Authority Wants a Dedicated Token Exchange

The Committee for the Examination and Regulation of this Issuance of Cryptographic Coins was created in August 20 17 to take into account the applicability of community securities law to initial sheet offerings (ICOs). The committee was asked to study and characterize these endeavors, prepare a review of the law in numerous nations and urge a policy outline. This was assumed to be done while balancing the reinforcement of technological invention with the responsibility to protect the interest of the public.

Security Token Offering (STO) Guide: Everything you need to know about STOs

Security Token Offering

Security Token Offering

A Security Token Offering (STO) is different than Initial Coin Offerings (ICO), because the tokens issued by both offerings are quite different from one another. Initial Coin Offering issued tokens don’t provide their owners with special rights, benefits and obligations. Initial Coin Offerings issue Digital Currencies or Cryptocurrencies that provide their owners with access to services, platforms, specific networks or specific Blockchains and Distributed Ledgers.

An Initial Coin Offering is the Cryptocurrency equivalent of an Initial Public Offering (IPO). Companies issue an Initial Public Offering so they can go from private to public and to start selling their stocks and equity shares to the public. This way, companies can raise funding without the need of Venture Capitalists and financial institutions like banks. Initial Coin Offerings are an upgraded crowdfunding mechanism that solves many problems, some of them are the token distribution.

“Blockchain Technology can help with the democratization of assets and currencies into assets classes traditionally available only to elite institutional investors by providing investors with the opportunity to invest into a fund via liquid tradable digital tokens.”

On the other hand, Security Token Offerings (STOs) issue actual financial securities called security tokens, that are actually backed by something like assets, revenue or profits. Companies or Firms are the ones that issue these Security Tokens, which offer legal rights like revenue distribution, voting rights or other benefits like royalties.

Security Token Offering and Security Tokens

Security Tokens issued by a Security Token Offering act and perform almost the same as conventional securities. One of the biggest differences is that Security Tokens make fractional ownership stake possible and confirm ownership stake through Blockchain transactions. Security Tokens like Securities are subjected to federal laws and institutional regulations. Institutions regulate Securities and Security tokens to protect investors from fraud and counterfeit.

A Security Token Offering tokenizes Security Tokens and Securities that can be programmed to suit different needs. Most Security Tokens are tokenized on the Blockchain and use smart contracts to act a certain way or to solve certain problems without involving third party regulators.

Example: A loan can be tokenized on the Blockchain to automatically make payments without the use of traditional middleman like financial institutions, regulators or banks.

Security Tokens and Security Token Offering are regulated by the CFTC which is the Commodity Futures Trading Commission. The CFTC is an independent commission and agency of the United States federal government. They view Security Tokens and Cryptocurrencies like Bitcoin as commodities and thus they should be subjected to commodity regulations.

Another Security Token regulator is the IRS or the Internal Revenue Service agency. They define Cryptocurrencies and Security Tokens from a Security Token Offering as property, which should be subjected to taxes. The Securities Exchange Commision or SEC considers most of the Initial Coin Offering issued tokens as securities.

Security Token Offering regulations and laws

Commodity exchanges that provide a spot market for currencies and tokenized assets don’t need to be licensed as regulated entities, but a platform that offers Security Tokens are required to register as a national exchange, apply as a dealer, broker or an Alternative Trading System (ATS).

Firms that are involved or use financial assets like bonds, stocks, financial deposits and similar instruments or assets are required to comply with the Bank Secrecy Act, the USA Patriot Act and consumer protection laws. The Digitalization and Tokenization of private and public assets and shares will provide more opportunities than we can currently grasp. In the future, assets like real estate ownership will be tokenized, providing many benefits to the regular investors.

A Security Token Offering can issue Security Tokens under a couple of regulation standards. They are the Regulation A+, Regulation S, Regulation D and Regulation Crowdfunding. They tend to be cheaper, simpler and faster than executing an Initial Public Offering (IPO).

Tokens that are classified as securities usually provide investors with options of generating profits, dividends and voting rights, the same as ownership stake shares of publicly traded stocks.

Benefits of Security Tokens

Security tokens are mostly cost effective. Unlike other financial asset offerings, a Security Token Offering comes with very little administrative costs of buying and selling of assets. The cost efficiency allows people to generate substantial returns on their investments.

Security Tokens have a high liquidity most of the time and they are easier to trade globally. The easy access to international investors brings a lot of benefits for investors and the asset itself. The increased adoption of Digital Assets will peak in the following years as most conservative investors will open up to the possibility of making profits with Digital Assets.

Selling and buying Security Tokens is fast and easy, because of the automated Anti-Money Laundering (AML) checks and the Know your Customer (KYC) procedures. This in turn boosts the liquidity of Security Token Offering assets. These assets are also able to be traded at any time of the day, making them one of the few assets that can be traded 24/7.

If a company wants to issue a Security Token Offering, it will first need to register with the Securities Exchange Commission. The problem is that it is an expensive and complex process. It is time consuming, so in order to bypass this complex process, companies can use the JOBS act of 2012. The JOBS act wasn’t made for Security Token Offering, but it fits the needs of STO issuers.

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