Bitcoin Won’t Be In Tel Aviv Stock Exchange: Israel Securities Authority

Announcements, News, Regulation | December 13, 2017 By:

Israel Securities Authority (ISA) Chairman Shmuel Hauser said they will not allow bitcoin-based companies to be included in any indexes on the Tel Aviv Stock Exchange (TASE) until a proper regulatory process is in place.

“I would like to emphasize that we will not allow companies whose values are based on bitcoin values, such as ‘Mashabei Teva’ to be included in TASE indices,” said Hauser. “We will also consider not to allow trading in ‘back-door’ ‘costumes’ of bitcoins or alike, on TASE until we find suitable regulatory framework for such instruments.”

Hauser said the ISA will work on a regulatory framework that will consider how they have to report activities to the regulators and investors, how money laundering concerns should be addressed and how their valuations should work, taking into account the fact that the bitcoin is a highly volatile currency.

“Bitcoin is a digital payment method whose value seems to be out of control,” he said. “Its price has characteristics of the Dot-Com bubble at the beginning of the millennium, or, if you will, the “taxi driver” recommendation for investments in the crisis of the ’80s and ’90s. There isn’t any information on supply and demand, and whether anyone is in control of that supply and demand. It looks like a bubble and behaves like a bubble, as there is no way to explain the price increase from $2,000 to $11,000 within a few months and then sudden drop of 20% within a day, and another increase to $14,000 within a few more days. That does not mean that bitcoins or alike are not to be considered, but it does mean that it should be examined at country level by all regulators.”

Speaking about initial coin offerings (ICO), Hauser believes “this story is different” as ICOs have similar qualities as equities and thus look more like traditional initial public offerings (IPO). Hauser believes IPOs have declined due to the fact there are so many additional funding options (such as crowdfunding) and the fact that trading on an exchange is not as attractive as it once was.

Huaser said the ISA has a task force reviewing ICOs and will provide regulatory guidance. He expects the ISA task force to have a report completed by the end of this month.

“I believe that the issue of issuing digital currencies (tokens) must receive a favorable regulatory approach, perhaps even a courageous one, to deal with the above mentioned challenges,” said Hauser.