July 28, 2023

Israel Gears Up To Regulate DAOs

Published: July 28, 2023 at 5:51 am Updated: July 28, 2023 at 5:52 am

Edited and fact-checked: July 28, 2023 at 5:51 am

In Brief

The Israeli government has established a special examination team to explore and regulate decentralized autonomous organizations (DAOs) and their associated crypto tokens, with the aim of providing regulatory clarity and fostering a conducive environment for the burgeoning crypto sector.

Israel has established a specialized team to examine and regulate Decentralized Autonomous Organizations (DAOs). Headed by top finance and justice officials, the team plans to seek public input until September. This move aligns with Israel’s aim of exploring DAO activities and the usage of crypto tokens, thereby attracting investment and driving the growth of the crypto sector.

This examination team will investigate the operations of DAOs, including the decision-making processes. DAOs typically utilize native crypto tokens to allow stakeholders to partake in governance. The team’s goal is to scrutinize these tokens and evaluate the related risks, to ultimately provide clear regulations for this rapidly evolving field.

An official announcement stated, “The team is examining necessary regulations for DAOs, including corporate status and taxation aspects. This will create legal certainty, reduce risk factors, and realize the potential for the Israeli economy.”

Public feedback will greatly influence the team’s policy recommendations. Israel has been active in creating regulatory frameworks for the crypto industry to spur growth. Lawmakers have shown support for removing capital gains taxes for foreign crypto investors. However, like the European Union, Israel is considering stricter regulations for specific crypto assets, such as stablecoins, following notable collapses in 2022.

Israel and DAOs

Recently, Israel’s parliament passed a law granting tax breaks to the crypto industry, similar to those for high-tech companies. This measure aims to cut taxes on cryptocurrency options by half, to attract international investments. By regulating the digital asset market and providing tax clarity, Israel hopes to create a conducive environment for the growing crypto sector.

Israel’s initiative to regulate DAOs mirrors the increasing global interest in the technology and its potential impact. As the consultation lasts until September, stakeholders eagerly await a balanced regulatory framework. It should support innovation and safeguard investors.

ETHTLV is a 9-day event in Tel Aviv, Israel that will bring together web3 businesses to discuss how to get more people involved in the web3 world.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti