Israeli Regulator Sticking to its Tight Supervision on Crypto-Oriented Companies

The Israel Securities Authority is keeping an eye on crypto-oriented companies listed on Tel Aviv Stock Exchange. It asks crypto-related firms for clarifications on previous announcements.

The Israel Securities Authority (ISA) is sending requests for clarification to Israeli companies that had previously provided announcements related to cryptocurrency. This move shows that the regulator is not easing its control over crypto-oriented companies listed on the Tel Aviv Stock Exchange (TASE) despite the bearish trend of the crypto market. 

Last month, we reported that the ISA had announced that crypto-oriented companies would be excluded from TASE indices. ISA chair Anat Guetta stated that the regulator had decided to remove crypto companies from the TASE to protect passive investors from risky investments. The regulator came with the proposal as early as December last year, and has closely monitored each company announcement since then. 

The ISA also intended to change TASE rules to keep investors away from companies that hold, invest in, or mine digital currencies like Bitcoin or Ether.

In December, TASE-listed solar energy firm Apollo Power announced it has carried out a pilot to use solar energy for crypto mining, gaining millions of dollars from investors in a matter of days. Based on the announcement, the ISA requested clarification, and Apollo revealed that the pilot had generated insignificant returns. This led to a class action suit against the firm.

On Tuesday, Apollo said that the regulator was carrying out an investigation into the company based on December’s events. The next day, the company came with a second announcement, saying that it gave up its operations related to cryptocurrency mining or trading. Apollo recognized that its technology might empower clients to mine in the future, but it was not a certainty. As a result, Apollo’s stock price fell 6.43% during the Wednesday session.

In December, when the crypto market seemed to scrape the sky, TASE-listed media company Algomizer announced it was planning to become part of the crypto industry in a stock exchange filing.

On Tuesday, Algomizer said it wanted to conduct an Initial Coin Offering (ICO) to issue tokens whose price would be backed by an external tradable asset via a third party. Investors reacted to the announcement and pushed its stock 11.6% higher.

On Wednesday, upon request from the ISA, the company clarified that prior to conducting the ICO it would need the submission of a prospectus to the US Securities and Exchange Commission (SEC) given some, though not all, tokens are considered to be securities. Algomizer also said that it would offer its tokens to accredited investors only. The company saw its stock price drop 1.2% on Wednesday.