Israel has become the latest nation to crack down on cryptocurrencies, proposing regulation to ban companies trading in bitcoin from operating on the Tel Aviv stock exchange.
“I think it looks like a bubble, smells like a bubble, acts like a bubble and feels like a bubble,” said Israel Securities Agency Chairman Shmuel Hauser.
He told the Calcalist business conference he will bring the proposal to the ISA board next week. If approved, it would be subject to a public hearing and then the stock exchange bylaws would need to be amended.
Hauser did not identify any companies that would be affected by his ban, but at least two firms listed on the Tel Aviv Stock Exchange now describe digital currencies or the technology behind them as essential to their business: Blockchain Mining and Fantasy Network.
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The move by the Israel Securities Agency follows last week’s warnings by the Financial Industry Regulatory Authority, Wall Street’s self-regulator, against companies that “tout the potential of high returns associated with cryptocurrency-related activities”.
The value of a bitcoin plunged by 30 percent to below $12,000 on Friday as investors dumped the cryptocurrency after its sharp rise to nearly $20,000. It recouped some losses to trade above $14,000 BTC=BTSPon the Bitstamp platform, down 9 percent on the day.
“We feel that the prices of bitcoin behave like bubbles and we don’t want investors to be subject to that volatility and uncertainty,” Hauser said. “There is an importance to signal to the market where things are… Investors should know where we stand.”
The proposal to block digital currency firms from the stock exchange will probably be the last move for Hauser, who will step down next month after 6-1/2 years as ISA chief.
“But once it’s on its way it will continue to be pursued,” said Hauser, who will be replaced by Anat Guetta.
He said he hopes she will promote easing capital gains taxes and focus on regulatory enforcement.