RUNDOWN OF CRYPTOCURRENCY REGULATION AROUND THE WORLD

Regulation of the crypto market is expected to be one of the huge influencing factors of the medium-term future of cryptocurrencies. This article will draw upon the research from 1H 2018 Global Blockchain Industry Strategic Overview by Huobi Pro to discuss the response towards cryptocurrencies by various governments and centralized authorities around the world. For a deeper discussion, the comprehensive report of the 1H 2018 Global Blockchain Industry Strategic Overview will be availed to attendees of Blockchain Festival Vietnam. You can visit the official website here for more information www.blockchainfestival.com

Overview of crypto assets and crowd funding policies in major countries and regions

Three trends to pay attention to regarding regulation

The United States may set a positive precedent for regulation

The United States highly televised SEC hearing on cryptocurrencies regulation has been positive so far and leaning to recognizing cryptocurrencies as securities, setting the tone for similar hearings in Germany and the Netherlands.

A combined effort of centralized and self-regulatory organziations will play a large role

After the Coincheck break out, 16 registered crypto currency exchanges formed Japan Cryptocurrency Business Association (JCBA) and announced to set investor safety standards of crypto market

Korean Blockchain Association (KBA)comprises 23 exchanges and they are dedicated to setup market standards

Efforts to improve regulation systems by leading countries and regions will speed up the formation of global joint regulation among country unions

Most countries proposed independent legislations of cryptocurrencies at the G20 summit held in March.

Before the G20 summit held in March, Germany and France proposed regulation of cryptocurrencies at the EU level.

Huobi Research evaluated cryptocurrency regulation along four parameters:

· Whether crypto assets are permitted to be used as payment tool

· Whether crypto assets exchanges are permitted to operate

· Whether crypto assets crowdfunding is permitted

· Whether investments in crypto assets are permitted

‘Supervision Strictness Index’ is a grade of the evaluation above, varying from one to four stars. The more stars, the tighter the policies, and the more conservative and unacceptable attitude toward crypto assets is

NORTH AMERICA(***)

· Whether crypto assets are permitted to be used as payment tool

The US government doesn’t recognize the monetary attributes of cryptocurrencies, but it doesn’t prohibit merchants from accepting cryptocurrencies as payment tool.

· Whether crypto assets exchanges are permitted to operate

State governments permit licenses eg. Coinbase licensed in New York State.

Exchanges with tokens defined as securities must be listed with the SEC

· Whether crypto assets crowdfunding is permitted

Crypto asset crowdfunding is permitted, but funding under the name of “Utility Token” is not in compliance any more according to the Chairman of the US SEC, in Feb 2018.

· Whether investments in crypto assets are permitted

Allowed

Taxation regulations are tightening

JAPAN(**)

· Whether crypto assets are permitted to be used as payment tool

Recognized legally according to the “Payment Service Amendment Act”

· Whether crypto assets exchanges are permitted to operate

Allowed as stipulated in the “Payment Service Amendment Act”

16 exchanges to date

· Whether crypto assets crowdfunding is permitted

Relevant laws and regulations are expected to come out soon.

· Whether investments in crypto assets are permitted

Relatively open to cryptocurrency investments

Different tax levels apply

SOUTH KOREA(***)

· Whether crypto assets are permitted to be used as payment tool

No legislative prohibition

Bitcoin is accepted as payment

· Whether crypto assets exchanges are permitted to operate

Domestic exchanges in compliance with e-commerce law can operate

Taxation applies

· Whether crypto assets crowdfunding is permitted

Prohibited

· Whether investments in crypto assets are permitted

Allowed

No tax

SINGAPORE(*)

· Whether crypto assets are permitted to be used as payment tool

In the future, crypto assets such as Bitcoin are expected to be considered as payment tool, and will be issued corresponding licenses according to Monetary Authority of Singapore(MAS)

· Whether crypto assets exchanges are permitted to operate

Licensed exchanges can operate

Taxation on profit applies

· Whether crypto assets crowdfunding is permitted

Tokens belonging to capital markets as defined by “A Guide to Digital Token Offerings”, issued by MAS, fall under the regulation of MAS

· Whether investments in crypto assets are permitted

Allowed, open attitude

Not taxed

HONG KONG(*)

· Whether crypto assets are permitted to be used as payment tool

Not legally recognized as payment

Cryptocurrencies are permitted as payment

· Whether crypto assets exchanges are permitted to operate

Allowed

Exchanges including security tokens have to seek license or register on HKSFC

· Whether crypto assets crowdfunding is permitted

Allowed

‘Security’ tokens have to be licensed by HKSFC or register with HKSFC.

· Whether investments in crypto assets are permitted

Allowed

No taxation

RUSSIA(***)

· Whether crypto assets are permitted to be used as payment tool

Bitcoin was banned in 2014 but stance has softened since

Several amendments proposed by the draft “On Digital Financial Assets” issued in 2018, the first step to legalization. Changes include the cryptoassets can be used but not as payment, recognizing digital signatures as valid among others.

· Whether crypto assets exchanges are permitted to operate

Not allowed, since Bitcoin was banned in 2014

The proposed draft “On Digital Financial Assets” 2018, softens this stance

· Whether crypto assets crowdfunding is permitted

According to a draft ‘On Digital Financial Assets’ introduced by the Russian Minister of Finance in 2018, outlined that individuals or legal entities can issue tokens as long as they have a number of documents and signatures

· Whether investments in crypto assets are permitted

In 2018, the Russian Ministry of Finance submitted the draft “ On Digital Financial Assets” delineating accredited and non-accredited investors

UNITED KINGDOM(*)

· Whether crypto assets are permitted to be used as payment tool

No legislation

Using crypto for payment is not prohibited

· Whether crypto assets exchanges are permitted to operate

Crypto-to-crypto exchanges are allowed. Registered examples are Bitstamp and HitBTC

Crypto-to-fiat exchanges or crypto asset related derivatives are regulated by the Financial Conduct Authority (FCA)

· Whether crypto assets crowdfunding is permitted

Allowed but investors asked to exercise caution

· Whether investments in crypto assets are permitted

Allowed

Not taxable yet.

SWITZERLAND (*)

· Whether crypto assets are permitted to be used as payment tool

Legislatively are not yet defined whether they are assets or currencies

Using cryptocurrencies as payment is not forbidden, and is not taxable

· Whether crypto assets exchanges are permitted to operate

Allowed.

The Swiss Financial Market Supervisory Authority (FINMA) grants regulatory compliance license to exchanges that meet requirements eg SBEX.

· Whether crypto assets crowdfunding is permitted

Positive. A lot of ICOs are issued in Switzerland

Regulation is still under construction.

Feburary 2018, FINMA categories tokens into three types: payment tokens, utility tokens and asset tokens

· Whether investments in crypto assets are permitted

no limit on crypto asset investment

Cryptocurrency investments are not taxable yet

GERMANY(**)

· Whether crypto assets are permitted to be used as payment tool

Supportive

August 19, 2013, the Federal Ministry of Finance in German announced that Bitcoin was categorized as a “accounting unit” and could be used for payment

· Whether crypto assets exchanges are permitted to operate

No clear regulations regarding cryptocurrency exchanges but relevant supervision might fall under the German Federal Financial Supervisory Authority (BaFin).

· Whether crypto assets crowdfunding is permitted

Conservative but no ban.

On March 28, 2018, BaFin clarified that tokens issued would fall under securities regulation.

· Whether investments in crypto assets are permitted

Allowed but investors are asked to conduct their due diligence before investing.

No clear policies for taxation for digital assets’ income.

Blockchain Festival Vietnam

The comprehensive report will be revealed at the Blockchain Festival Vietnam held in Ho Chi Minh City. Use the code WRITE50 to get a 50% discount when purchasing tickets. Don’t miss.

Website: www.blockchainfestival.com

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