What does the future hold for the Israeli cryptocurrency market? According to the current regulator, it doesn’t seem promising. Prof. Shmuel Hauser, the head of the Israeli Securities Authority (ISA), is determined to use the time remaining in his tenure to impose strong regulations on cryptocurrencies and ICOs.
Hauser said that while Blockchain is a legitimate technology that will surely become a part of the financial landscape, Bitcoin deeply concerns him.
Paternalistic, Sympathetic and Bold
“It seems that Bitcoin’s value is out of control. It reminds me of the gold rush of the 19th century,” he said. “There’s no information on supply and demand, and perhaps somebody actively controls the supply or demand? In 2017, the cryptocurrency market cap grew by 16 times, from around $18 billion to some $300 billion.”, he added.
Hauser addressed the issue today during his speech at the organizations’ Annual Corporations Summit. He stated that the he aims to regulate this market, that he called “untamed”.
He went on saying that the regulators should take a “paternalistic approach”, but later hedged his statement and underlined the need to be “sympathetic and even bold” when engaging in the work of setting boundaries to this prosperous industry. Having said that, he stressed the need to do so in a discerning manner. “We must distinguish between Blockchain, Bitcoin and ICOs.”
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Hauser acknowledged that the ICO market is a financial tool with growing popularity and thus a force to be reckoned with. He said: “We must find the right way to do it. Some countries act on a case by case basis, others ban it altogether.”
He added that there will be a need for a whole new regulatory framework to tackle what he called a “hybrid creature”.
The Binary Options Debacle
Hauser, who is considered to be quite hawkish when it comes to the cryptocurrency sphere, announced his resignation in the beginning of 2018. However, his committee for regulating the cryptocurrency and ICO markets is already in full swing and is expected to complete its work by the end of December. Thus turning his determined rhetoric into an alarming indicator for the local industry.
One possible explanation for his militaristic approach can be found in his past misconduct regarding the regulation of the binary options industry. He keeps mentioning ICOs and binary options in the same sentence, as if they were two sides of the same coin. “We must prevent ICOs from becoming the new binary options”, he said, repeating his own words from prior speeches.
He explained his somewhat extreme decision to ban binary options trading in the jurisdiction, saying that the online trading industry in Israel is wild and gives preference to the stronger and most aggressive players. “Today, the online trading market is organized and well supervised”, he announced, and mentioned that the number of aggressive players has declined to a minimum.