Technology Will Force Regulator’s Hand, Says Bit2C Executive

Ron Tsarfaty was speaking at the Annual Cryptocurrency Conference in Tel Aviv

After months of doubt, fear, and faux-optimism, it was a happier crowd that turned out to the Annual Cryptocurrency Conference this Tuesday in Tel Aviv.

With Bitcoin on the rise and the Supreme Court of Israel ordering Bank Leumi to allow cryptocurrency exchange Bits of Gold to use its services, people were probably right to be happy.

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But, despite recent events, much of the talk was – even if it was delivered more optimistically – focused on the same subjects.

Regulation, for instance, was something that nearly all participants called for.

“Regulation and the banking system are still lagging behind and raising difficulties but, at the end of the day, technology and bitcoin will win,” said Ron Tsarfaty, CFO and compliance officer of cryptocurrency exchange Bit2C.

The Supreme Court’s ruling yesterday in the case of Bits of Gold against Bank Leumi, which prevented [the bank] from closing the exchange’s account, only proves this – progress can not be stopped.”

Tokenizing the illiquid

Other panels focused on some of the developments in the industry itself. Particularly interesting was a discussion on the tokenization of assets.

“There’s still a lot of work to be done but it’s happening,” said Tal Elyashiv, a founder of tokenization solutions provider Securitize. “The US real estate market has been particularly responsive to [this technology] and that’s where we are starting to see real progress.”

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Aside from illiquid assets, there were some disputes over the utility of security tokens, with lawyer Guy Lachmann taking a strong stance in support of the tokens while recognising their flaws.

“Raising capital through security tokens brings a wide range of challenges on various levels,” said Lachmann, a partner at Pearl Cohen’s Hi-Tech Group. “The multiplicity of difficulties and barriers raise serious questions about the chances of success of such issuances and their profitability.

“The advantages these security tokens bring are many and enable very modern trading in the underlying assets, nevertheless, it appears that the market and the eco-system around it are still far from being ready to to accept them and the scope of activity still remains extremely marginal.”

Also speaking at the event was the former Israeli Securities Authority’s chief economist, Dr. Gitit Gur Gershgoren. As much as cryptocurrency firms and journalists like to attack regulators for not governing the industry, Dr. Gershgoren highlighted some of the problems the ISA has in dealing with the nascent crypto-verse.

Not so easy

“Our main goals are to protect investors, ensure that financial institutions have sturdy finances themselves and to ensure the public is protected by suitable financial regulations,” she said.

“Those goals, with all of their nuances, are hard to reach even in the traditional financial markets. With cryptocurrency, you have new technology and market infrastructures, so it becomes even trickier.”

Still, that trickiness isn’t deterring the people working in the sphere. And it was Eli Bejerano, Bit2C’s CEO and co-founder, who finished the event off on a positive note.

“I am optimistic – even if the financial evolution we are in is going to take another decade, we’re on our way there,” said the Bit2C CEO. “To buy bitcoin now is to buy a piece of the moon. Ultimately, in the distant future, someone who doesn’t have bitcoin won’t have a pension.”

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