The Israeli government has established a special examination team tasked with regulating decentralized governance organizations (DAOs).
In an official announcement, the country revealed that the team, led by the Chief Economist at the Ministry of Finance and the Head of the Corporations and Capital Market Cluster at the Ministry of Justice, will explore the uses and types of activities carried out by DAOs.
The team’s primary objective is to assess the use of crypto tokens within DAOs and evaluate the associated risks.
By doing so, they aim to develop a regulatory framework that strikes a balance between fostering innovation and safeguarding the interests of stakeholders.
“The team examines the required regulation, including regarding the corporate status, the taxation aspects and other aspects of DAO in order to create legal certainty, reduce the risk factors in the activity through DAO and realize the potential for the Israeli economy,” the announcement read.
The Israeli government will also seek public input on DAO regulations. The consultation period will continue until September.
DAOs are entities that utilize blockchain technology and native crypto tokens to enable stakeholders to participate in decision-making processes.
This latest move by the Israeli government is part of a broader effort to establish robust regulations for the crypto industry.
Lawmakers in the country have recently shown support for axing capital gains taxes for foreign crypto investors, a measure intended to attract international investments.
Earlier this month, a bill granting the exemption from capital gains taxes on the sale of digital currencies for foreign residents in Israel and other tax benefits passed through a preliminary reading in the parliament.
“Similar to Rishi Sunak in the United Kingdom and lawmakers throughout Europe, Finance Minister Bezalel Smotrich has invigorated the local sector, and issued a clear call to global investors and companies – Israel invites you to engage in business on our shores,” said an explanatory note.
Isreal Confiscates Crypto Believed to Blong to Militant Groups
Last month, Israel announced that it has seized millions of dollars worth of cryptocurrency allegedly used to finance the Iran-backed militant groups.
Prior to that, the Israeli government confiscated a significant amount of cryptocurrency linked to the paramilitary arm of Hamas, which rules Gaza.
In December last year, a Tel Aviv court issued a ruling allowing Israel’s government to seize all the crypto in over 150 digital wallets that it had blacklisted for allegedly funding terrorist groups.
At the time, Israeli Defense Minister Benny Gantz said that the authorities seized $33,500 from digital wallets linked to the militant group Hamas.