The Israel Securities Authority (ISA) is planning to propose a ban on trading shares of companies based on cryptocurrencies on the Tel Aviv Stock Exchange.
ISA, Israel’s market regulator has proposed an amendment in the bylaws of the stock exchange that would forbid it from listing the shares of companies that revolve around bitcoin and cryptocurrencies. Already listed trading will be suspended. Such companies would not be allowed in the exchange’s indexes.
“If we have a company that their main business is digital currencies we would not allow it. If already listed, its trading will be suspended,” said Shmuel Hauser, outgoing chairman of ISA.
The amendment is already approved by the ISA board and will go for public comment soon. It will not affect companies with equity of more than 100 million shekels ($29 million) and with three years of audited financial statements.
The ban was ignited after an Israeli company ‘Blockchain Mining’ saw a sudden surge in its shares after shifting its focus towards cryptocurrency mining.
No specific names were pointed out by the ISA; however, two companies Blockchain Mining and Fantasy network are likely to be affected by the ban, as both the companies describe cryptocurrencies as an integral part of their businesses.
According to the market regulator, trading shares of cryptocurrency companies along with other companies on the Stock Exchange would be unfair. A separate, appropriate regulation system should be introduced for such companies.
“This phenomenon, if it continues, may in the future have serious consequences on the … fairness of trading in the bourse in general and on investor confidence in the bourse,” the ISA said.
Chairman of ISA, Shmuel Hauser said last month that he intended to bring the proposal to the ISA board due to bitcoin prices that acted like a bubble.
“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.
The cryptocurrency inclined wildly in mid-December reaching near $20,000 but then suddenly dropping back to $12,000. Currently, it trades near $17,000.
Also Read: Alibaba acquired QR code startup Visualead