The draft agreement for the expansion of crypto trading activities to non-bank members has been published by the Tel Aviv Stock Exchange (TASE) for public comment.
In the first TASE, the February 27 announcement stated that the proposed structure would allow customers to deposit designated fiat money for investment in digital assets.
Non-banking members will act as license providers for crypto trading and custodial services if the proposal is approved. Customer funds will be placed in an “omnibus account” as an intermediary for crypto trading activities.
It will also allow the client to withdraw the funds derived from the sale of crypto but the process is a bit complicated. This has been done to reduce risk and increase consumer protection, according to the announcement.
“This is another step in the progress and development of the Israeli capital market that aims to encourage innovation and competition while reducing risk and protecting customers.”
After comments have been submitted, the proposal will be sent for approval by the TASE Board of Directors, but no time has been given.
But it may not be smooth sailing for the Tel Aviv Stock Exchange and its crypto trading ambitions.
The prospect of regulation in Israel has become difficult for the sector as the proposed law plans to classify crypto assets as securities. In January, the Israel Security Authority (ISA) proposed a framework for managing digital assets, putting them under the umbrella of securities.
In February, the CEO of Israeli crypto trading and captive firm Altshuler Shaham Horizon, Ilan Sterk, told Cointelegraph that the reclassification “changes everything here,” adding, “it will kill the industry.”
related: Israel’s proposed law to classify crypto as a security will damage the industry, crypto exec says
The TASE announcement states that the current regulatory approach in Israel is to “impose regulation on financial activities or services on digital assets similar to what is currently applied to non-digital assets.”
However, TASE remains confident, concluding:
“TASE believes that the alignment of local regulations with international regulations will attract more foreign investment and foreign investors to the Israeli market.”
In September, Israeli crypto exchange Bits of Gold became the first in the country to receive a license from the Capital Markets Authority.