Israel prepares to follow China in implementing a crypto crackdown

Digital currencies attract further controversy, as Israel indicates a potential cryptocurrency crackdown. "I think it looks like a bubble, smells like a bubble, acts like a bubble, and feels like a bubble," said Israel Securities Authority Chairman, Shmuel Hauser.

Digital currencies attract further controversy, as Israel indicates a potential cryptocurrency crackdown. "I think it looks like a bubble, smells like a bubble, acts like a bubble, and feels like a bubble," said Israel Securities Authority Chairman, Shmuel Hauser.

The chairman stated earlier this month that bitcoin-based companies should not be included in Tel Aviv Stock Exchange (TASE) indexes. He would be proposing the ban to the Israeli Securities Authority (ISA) board next week. Hauser clearly stated that any company with a digital currency as its main business would be denied accommodation. “If already listed, its trading will be suspended,” he said.

Bitcoin’s value is especially notorious for being prone to significant volatility. Its market value grew from $18 billion to $300 billion in only a single year. Last week, bitcoin fell almost 25% after reaching an all-time high of approximately $20,000.

Hauser made sure to mention this slump in his statement to prove the coin’s unpredictability. He said that this ban is only in the best interests of bitcoin investors. “We don't want investors to be subject to that volatility and uncertainty… Investors should know where we stand,” he said. He further added that the ISA must initiate proper regulatory framework for cryptocurrency-backed companies.

If the ban gets approved by the ISA, it will first need to go through a public hearing. Amendments would then be made to TASE's bylaws. Notably, the Financial Industry Regulatory Authority also issued strict warnings last week against involvement in cryptocurrency-related activities.

The warning was quite similar to that of Hauser’s, mentioning the risks associated with cryptocurrency-backed firms. China also issued a complete ban on the exchange of bitcoin and on Initial Coin Offerings back in September. So far, it seems that bitcoin will continue to attract controversy, regardless of its impressive growth.

Although Hauser did not mention any names, at least two companies listed on TASE are likely to suffer from this ban, Blockchain Mining Fantasy Network. Both of these companies describe digital currencies and blockchain technology to be essential to their business.

Although Israel does not believe bitcoin to be a reliable investment, the country is not against the idea of cryptocurrencies itself. In fact, the Israeli government and central bank are considering issuing a national cryptocurrency. Unlike bitcoin, it would be backed by the country’s central bank. Officials seek to use blockchain technology to support this new currency.