Cryptocurrency Regulations Worldwide

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United States

Despite the large number of cryptocurrency investors and blockchain firms in the United States, the country has not yet developed a clear asset management framework. The Securities and Exchange Commission (SEC) considers cryptocurrency as a security, while the Commodity Futures Trading Commission (CFTC) calls Bitcoin (BTCUSD) as an asset, and Treasury calls it a currency. Crypto trading in the United States is subject to the Bank Secrecy Act (BSA) and must be registered with the Financial Crimes Enforcement Network (FinCEN). They are also urged to adhere to anti-money laundering (AML) and anti-terrorism financing (CFT) funding.

Currently, the Internal Revenue Service (IRS) classifies cryptocurrensets as assets for corporate tax purposes. Crypto investors should take a closer look at the high court case between Ripple Labs Inc. with the SEC, and threats from leading digital financial transaction agency Coinbase Global Inc. (COIN), for further clarification of control.

Canada

Regulators have often taken the initiative to look at crypto in Canada. It was the first country to receive a Bitcoin (ETF) exchange fund in February 2021. In addition, the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) have made it clear that crypto trading platforms and brokers in the country must register with local authorities. In addition, Canada places investment firms such as crypto as financial services businesses (MSBs) and requires them to register with the Financial Transactions and Reports Analysis Center of Canada (FINTRAC). From a tax perspective, Canada treats cryptocurrency like other things.

United Kingdom

The United Kingdom views cryptocurrency as an asset but not a legal tender. In addition, cryptocurrency exchanges must register with the U.K. Financial Conduct Authority (FCA) is also prohibited from providing trading from crypto. In addition, the regulatory body has introduced cryptocurrency-related requirements for knowing your customer (KYC), as well as the AML and CFT mentioned above. While investors still pay income tax on crypto trading profits, in general, taxation depends on the crypto activity performed and who does the work.

Japan

The rising sun world is taking a progressive approach to crypto rules, recognizing cryptocurrencies as a legal asset under the Payment Services Act (PSA). In the meantime, crypto exchanges in the country must register with the Financial Services Agency (FSA) and comply with AML / CFT obligations. Japan treats cryptocurrency-generated trading profits as “diversified revenues” and charges investors accordingly.

Australia

The underlying world is taking a more serious stance in terms of crypto regulation. Australia classifies cryptocurrensets as legal assets, making them subject to income tax. Trade is free to operate in the country, as long as they register with the Australian Transaction Reports and Analysis Center (AUSTRAC) and meet certain AML / CTF obligations. In 2019, the Australian Securities and Investment Commission (ASIC) introduced regulatory requirements for first-line currency issuers (ICOs) and restricted exchanges that provide confidential coins.

Singapore

Similar to the United Kingdom, the island nation presents cryptocurrency as an asset but not a legal tender. The Singapore Monetary Authority (MAS) is licensed and regulates exchanges as defined in the Payment Services Act (PSA). Singapore, in part, is gaining its reputation as a safe haven for cryptocurrency because long-term financial benefits are tax-free. However, state tax companies that regularly operate on cryptocurrency, treat profits as revenue.

South Korea

The state does not regard cryptocurrencies as legal tender or financial assets. Therefore, digital currency transactions avoid income tax. The South Korean Financial Supervisory Service (FSS) oversees the regulation of crypto exchanges, with operators under strict AML / CFT obligations. As of September 2021, cryptocurrency exchanges with other tangible service providers must register with the Korean Financial Intelligence Unit (KFIU), a division of the Financial Services Commission (FSC).

China

Globalization does not classify cryptocurrensies as a legal tender; however, it classifies them as assets for the purpose of determining assets. The People’s Bank of China (PBOC) prohibits crypto trading from operating in the country, saying it facilitates public financing without permission. The world’s largest crypto exchange, Binance, was originally launched in China but relocated to its headquarters in the Cayman Islands in 2017 following the country’s destruction of crypto laws. In addition, China imposed a ban on bitcoin mining in May 2021, forcing many participants in the project to completely shut down operations or relocate to more regulated areas.

India

Like many countries, the subcontinent points out that cryptocurrensets are not a legal tender. Apart from this, the country’s Central Board of Direct Taxation stipulates that investors must pay tax on crypto trading profits. In 2018, the Reserve Bank of India (RBI) banned financial institutions from operating with significant amounts; however, the Supreme Court reversed the decision in March 2020. However, regulations remain uncertain in the country. India, for example, enacted legislation in early 2021 that would make it legal to extract, hold, own, and trade cryptocurrensets without the state-owned digital assets.

European Union

Cryptocurrency is legal throughout the European Union (EU), although exchange management depends on individual member states. At present, taxes also vary from country to country within the EU, from 0% to 50%. In recent years, the EU’s Fifth and Sixth Anti-Money Laundering Directives (5AMLD and 6AMLD) have come into operation, strengthening KYC / CFT obligations and general reporting requirements. In September 2020, the European Commission lifted the Market in the Crypto-Assets Regulation (MiCA) – a framework that enhances consumer protection, establishes a clear crypto industry, and introduces new licensing requirements.

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