Israeli Regulator: Utility Tokens Shouldn't Be Deemed Securities
The Israel Securities Authority is recommending lenient regulations for initial coin offerings, including a clear definition of what separates a so-called "utility token" from a security.
In a report released last week, the regulator even proposed a temporary sandbox, where regulators would allow entrepreneurs to experiment under supervision as the cryptocurrency market evolves.
According to the ISA report, a utility token that "confers usage rights in a product or service offered by a specific venture" shouldn't necessarily be deemed a security. Neither should tokens that are used solely for clearing, exchange or payments for a specific project, the report said.
Many blockchain advocates welcomed the Israeli regulator's stance. Amitay Molko, co-founder of the Jerusalem-based networking group Blockchain JLM, told CoinDesk:
https://www.coindesk.com/israel-regulators-utility-tokens-not-securities/
