Israel Securities Authority Tackles Online Threats with Blockchain

ISA has implemented distributed ledger technology in its messaging platform and plans to expand DLT to other systems.

Israel’s market regulator, Securities Authorities (ISA), has embedded a blockchain-based solution to its internal communication system in a bid to bring more online protection, local media reported on Wednesday. ISA wants to expand distributed ledger technology (DLT) across other parts of the agency’s daily work.

ISA has successfully implemented blockchain in “Yael,” the regulator’s network for sending messages and information to entities and companies under its oversight. The ISA decided to use the underlying technology of Bitcoin (BTC) and other cryptocurrencies because it witnessed how the financial industry worldwide was using this “revolutionary” software, Natan Hershkovitz, Director of the ISA’s Information Systems Department said in a press release.

“[Blockchain] adds another layer to ensuring the credibility of the information relayed to the supervised bodies. The technology verifies the messages’ authenticity, prevents fraud, and prevents them from being edited or deleted. Additionally, the system prevents the option of denying that a message was received from the ISA,” the regulator explained in a statement as quoted by Times of Israel newspaper.

“The embedding of the technology in the ISA’s information systems is in line with its vision to promote financial innovation in the capital market,” ISA added.

The body plans to use blockchain in two other internal networks. Firstly, it will be utilized in an online voting system that will allow investors from around the globe to participate in business and regulatory meetings securely. After that, ISA will implement DLT in “Magna,” which is the regulator’s platform for recording reports by all entities under its supervision.

ISA backing of DLT does not mean support for cryptocurrency. In March, the body banned companies that primarily hold, invest, or mine virtual coin from listing at the Tel Aviv Stock Exchange. Last year, ISA Chairman Professor Shmuel Hause said that there was a fundamental difference between cryptocurrency and their underpinning technology, adding that “blockchain is here to stay.”