On 23. January, the Financial Conduct Authority (FCA) of the United Kingdom published Kingdom, the domestic financial Supervisory authority, a 50-page long consultation paper with the title “Guidance on crypto assets” (guidance for crypto-Assets).
Since the United Kingdom seems to be a definitive regulatory framework and approach, it is time to check how other crypto-markets, in particular the large, with crypto-currencies at the legal level, deal with it.
“guide to crypto-Assets”: As the United Kingdom, with virtual currencies,
In light of the new FCA paper, it seems that the government of the United Kingdom a more neutral approach to Cryptocurrencies.
The main objective of this document is to provide market participants with the crypto market is more regulatory clarity. In particular, the FCA is intended to help you understand whether your digital assets are values within the regulatory scope of which rules apply to your company and whether they need to be authorized by the Agency.
In the paper, the authority discusses various possible definitions of crypto-Assets, and currently applicable laws of the United Kingdom. The Agency points out that crypto-assets in the framework of the RAO (Regulated Activities Order) of the state or “financial instruments”, which are regulated by the Directive on markets in financial instruments II, could be considered as “specified investments”. The regulatory authority also mentions that these assets of the E-could be subject to money regulations or the payment services regulations.
The Token consultation paper, the FCA is divided crypto-currencies in three categories: barter-Token, value of paper tokens, and Utility.
According to the Agency, the exchange Token, therefore, “not by a Central authority issued or supported tokens, to be used as a medium of exchange”. The FCA gave the example of Bitcoin (BTC) and Litecoin (LTC).In connection with this particular kind of digital asset exchange be decentralized Token in the rule. Accordingly, the regulatory authority adds, that these tokens can be used for the purchase and sale of Goods and services, without traditional intermediaries such as banks are required.
the value of paper tokens, in turn, are assets that “are the traditional instruments such as stocks, bonds, or shares in collective investment schemes equivalent or similar to.” The FCA adds that such a Token is likely to fall under the RAO and, therefore, “within the scope” of the authorities. The FCA declined to mention specific examples for such value of the paper Token, however, a more abstract example:
“Firm-CD, established in the United Kingdom, the exchange has created a social trading platform, the CD platform, with the user’s Fiat-currencies easily against Token. The company is “CD-tokens” which are replaced by Fiat funds, and these tokens are used to purchase other tokens.”
In this scenario, writes the FCA, CD-tokens could be classified as the value of paper tokens, since they give the holder “the right of ownership in the CD-platform”.
Coins that are referred to as Utility-Token, are those who allow the users access to a product, but not the same rights as the value of paper tokens, and therefore not subject to the regulatory system, unless they can be classified by Definition as E-money .
The FCA cited data that were previously received from U. K. crypto assets task force, and indicates that the country is home to less than 15 crypto-Spot exchanges. Taken together, they seem to have a daily trading volume of about 175 million euros— this makes up about 1 percent of daily world trade in crypto-currencies. In addition, there are in the UK, a total of 56 projects, which have kept Initial Coin Offerings (ICOs), which represents less than 5 percent of all projects worldwide. This means that the local crypto market is still relatively small.
Despite the modest size of the UK crypto industry, local regulatory authorities have intensified their examination: In December of last year, the FCA announced that it is investigating 18 companies on the use of the crypto-currency, while the British tax collection service, issued his first detailed Service for private holders of crypto currencies. With regard to the FCA’s consultation paper calls on the Agency to the Public, in front of the 5. April in the document and make comments. The final version of the document to be presented to the summer of 2019.
Therefore, could join the United Kingdom will soon add the list of the countries, which apply a unique regulatory approach for crypto-currencies. Some of these players, as well as the way you define digital Assets, are described in the Following.
Japan
Status of crypto-currencies: the Legally accepted means of payment
Japanist one of the world’s largest markets for Crypto. According to the by the Financial Services Agency (FSA), the main domestic financial supervision authority, data collected in the country is about 3.5 million crypto-traders, who carry out annual transactions totaling more than 85 billion euros. The majority of them to be business men at the age of 30 years. In addition, show domestic reports that around 14 percent of the young male work forces in the country in crypto-currencies.
Due to the significant size of the Japanese crypto market, the FSA was particularly active. The domestic market has acquired as a result of its policy, the reputation of one of the compliant and rules orientated to be
Japan is one of the first countries, the Bitcoin recognizes legal. The cryptocurrency can be used for may 2016, along with other Altcoins as a legally recognized means of payment in the country. Crypto not legal tender currency in Japan is, however, yet to be defined. In April 2017, the law on local payment services entered into force: The document confirmed the role of crypto-currencies as means of payment and outlined further regulatory measures of the local crypto-exchanges and ICOs.
In December 2018, the FSA, Bitcoin and other crypto decided currencies to a single Category, which is referred to in local media as a “crypto-asset”. The government was reportedly concerned that the distributor, as crypto-currencies have been referred to as “virtual currencies” were misleading, because they believed that they buy from the government-recognized legal means of payment.
China
Status of crypto-currencies: Not recognised for the trade
China used to be a very important player in the crypto market and housed for a considerable share of the Bitcoin-Miner (2017, it was estimated that 50 to 70 percent of mining are found in the country instead) and the Bitcoin trading volume. Since the massive crackdown by the government against local stock exchanges and ICOs in September 2017, however, were played, both Figures are significantly down. Nevertheless, China crypto has not given up completely and became a strict Blockchain.
so people in China can, since the wave of regulatory oppression took place, Cryptocurrencies hold, however, is not legal for money exchange. According to the local government, domestic regulation does not recognize the authorities of crypto-currencies as legal tender or as an Instrument for retail payments, and the Chinese banking system does not accept crypto-currencies.
The United States of America
Status of crypto-currencies: Varying, depending on the authority
In the United States, the US Congress has the Supreme powers over state regulatory authorities, such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), which cause the load to comply with the customs laws.
The Congress, however, has taken on the issue of how crypto-currencies and established should be regulated, still no statement. Meanwhile, various regulatory authorities have taken the matter in Hand, each Supervisory authority crypto-currencies in their own way.
The SEC is the Supervisory authority for securities transactions, considered to be a crypto, mostly as securities. According to the 70-year-old Howey Test, the SEC applied for the determination of the jurisdiction, includes a securities and the investment of money in a common enterprise in which the investor profits primarily from the efforts of others expected. Nevertheless, the SEC has decided that Ethereum (ETH) and Bitcoin are not securities, which means that the ICOs of the assets will not be assessed by the Supervisory authority, during its comprehensive investigation, the “unregistered securities” to a standstill.
The CFTC, the Agency, the transactions were controls derivatives, claims that Token. Basically, Bitcoin is, in your opinion, is closer to Gold than to traditional currencies, or securities of, since it is not protected by the state and no obligation is associated with it.
The Financial Crimes Enforcement Network (FinCen), the office, the Know extensive powers in the areas of-your-customer (KYC) and Anti-money laundering (AML), considered to be Tokens as money. their view is that ICO-sales are subject to the money transfer rules of the Bank secrecy act and must register with the government, information about your customers to collect and suspicious financial activities to report.
The Internal Revenue Service (IRS), in turn, believes that crypto-currencies are not currency, but property. This means that the sale of crypto-currencies will be charged at a profit, a profit tax.
The complex regulatory situation in the USA might change in the future. At the end of December 2018, two members of Congress introduced a non-partisan law with the title of “Token Taxonomy Act”, with the aim of preventing over-regulation of the domestic crypto-currency. In particular, the document provides greater clarity in relation to the ICO registration, and tax policy.
Status of crypto-currencies, Private money
crypto currencies are not legal tender, however, since 2013, by the Ministry of Finance as a “private money”. Consequently, profits made by trading, Mining, or trade Bitcoin or Altcoins are subject to capital gains tax. The assets are held (Kryptos) but longer than a year, they are exempt in accordance with the German income tax act tax.
crypto seems to be among young people in Germany is relatively popular. According to a November by the German consumer centres in Hesse and Saxony carried out a survey more than a quarter of 18 – to 29-year-old German on the purchase of digital Assets.
in the Meantime, the German Federal financial Supervisory authority (BaFin) is compared to ICOs tends to be more aggressive. It reports on unauthorized deals and warns private investors, “things to keep”. The Agency has also called for international regulations in the industry.
Switzerland
Status of crypto-currencies: the property
Switzerland is home to the famous Crypto Valley Zug and is known for his friendly dealings with crypto-related technologies. Xapo, the leading global Bitcoin Wallet, has recently announced that the most important business areas of Hong Kong to Switzerland to be relocated, where “opaque Jurisdiction” have been cited as a reason.
In Switzerland are classified crypto-currencies as property. According to a report by the Federal Council of 2014, the Swiss government crypto-currency is classified as a “virtual currency” or, more precisely, as a “digital representation of value that can be traded on the Internet, but nowhere as legal tender to be accepted.”
South Korea
Status of crypto-currencies: Undefined
South Korea since the investors boom in 2017, a leader in the crypto industry. In July 2017, the local foreign exchange market processed more than 14 per cent of global Bitcoin transactions, and was, according to the United States and Japan the third largest. The South Korean crypto industry was soon hit by one of the local financial Supervisory authority issued a prohibition of ICOs on the Chinese model, which was later repealed in may 2018. In the meantime, the country has developed on the Fintech area, and is rising steadily to become an international Blockchain Hub.
While on the way a lot of regulatory uncertainty prevailed, in the near future. At the end of December were from the local Legislators introduced six legislative proposals for the regulation of the crypto industry. With the proposed law, in particular, greater protection for private investors is to be created, and it is dealt with, among other things, with the Lack of a “Definition of virtual currencies and regulations for virtual-currency transactions in the applicable law”.
Malta
Status of the Cryptocurrency: a digital medium of exchange, unit of account, store of Value
Malta is known to be called the Blockchain-island, on which several foreign cryptocurrency exchanges, including OKex, Binance and BitBay, due to the development of a crypto-friendly area.
In July 2018, the local Parliament approved three draft laws to the Distributed Ledger technology (DLT): The Digital Innovation Authority Act, the Innovative Technological Arrangement and Services Act and the Virtual Financial Asset Act.
Silvio Schembri, the Junior Minister for financial services, the digital economy and Innovation in the office of the Maltese Prime Minister, announced the Changes on Twitter and claimed that the country would be “the first jurisdiction in the world that gives this room right security”.
in accordance with the Virtual Financial Asset Act are referred to crypto-currencies officially as a virtual financial assets (VFA), in order to avoid may be the Stigma that may be associated with the word “crypto-currencies”: For example, ICOs have been referred to as the first VFA-Offerings, while crypto-exchanges have become VFA-exchanges.
In Particular, the VFA for “any Form of recording of digital media, which is used as a digital exchange medium, transfer unit, or the value of memory”, which is “electronic money, a financial instrument or a virtual Token.” The use of virtual Token is only allowed on the “DLT platform on which they were issued,” while the withdrawal of funds is only “on such a platform, directly from the Issuer of such a DLT-asset”.
Malaysia
Status of crypto-currencies: securities
Malaysia one of the countries that Recently introduced the regulatory policy in relation to crypto. Crypto currencies are there since the 15. January as the securities are classified, which means that they are under the supervision of the Malaysian Securities Commission. Crypto stock exchanges or ICOs, will continue to operate without the consent of the authority, could be sentenced to a 10-year prison sentence and up to 2 million euros in fines.
Still, the Changes were connected with the positive sides: According to the Finance Minister Lim Guan Eng, the Malaysian government realizes the potential of crypto-currencies and Blockchains, the domestic economy:
“The Ministry of Finance considered digital Assets, as well as the underlying Blockchain technologies, as the potential of innovation in old and new industries. In particular, we believe that digital assets can have a role as an alternative Fundraising way for entrepreneurs and new businesses, and as an alternative asset class for investors to play.”
Singapore
Status of the crypto-currencies are Not legal tender, not regulated
Singapore is a booming market for crypto: the end of 2018, announced both Upbit, is the largest crypto exchange in South Korea, as well as the great Chinese Player, the Expansion in the local market to Binance.
meanwhile, the Monetary Authority of Singapore (MAS), extended in November of the current regulatory system, certain crypto-currencies bring under his jurisdiction. Thus, the Central Bank introduced a mandatory licensing regime for payment service providers, which now need to apply for one of the three licenses, which depends on the type and scope of your crypto activities.
Previously said the MAS, however, is that crypto-currencies in Singapore are not legal tender and that the Agency is not regulated.
Italy
Status of crypto-currencies: not regulated
On 23. In January an Italian Senate Committee approved an Amendment to the Blockchain-industry. This seems to be the first regulatory step of this kind for the country of Italy continues on the map of the Blockchain-oriented countries.
According to the document, which was published on the Website of the Senate contains the “Decreto semplificazioni” designated document basic industry terms, such as technologies based on the Distributed Ledger technology (DLT) and the definitions of smart contracts, like the one on the Senate Website, published document.
In the document, it also means that a digital data set with block chains allows for a legal validation of documents at the time of registration.
The decree now requires the further approval of the Italian Parliament — the chamber of deputies and the Senate of the Republic.
What crypto-currencies per se, as in Italy, there are still no well-established scheme. Nevertheless, the financial Department of the country in the Ministry of economy and Finance had been working on a bill to classify the use of crypto in Italy. Interestingly, it was laid down in the decree, specifically, how and when “the service provider in connection with the use of digital currency” of their activities to report to the government, which implies a stricter regulation.
