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Cryptocurrency Regulations

The Latest in Cryptocurrency Regulations and the G20 Summit

Cryptocurrency regulations seem to be gaining traction across the globe with the latest to call for regulation being the G20 finance ministers and central bank governors. The ministers and governors have asked the Financial Stability Board and the global standards-setting organizations to collaborate in the monitoring of cryptocurrency risks.

Call For More Cryptocurrency Regulations

In a note, G20 finance ministers indicated that they are welcoming the directory of FSB of cryptocurrency regulation. The statement indicated that although cryptocurrency does not pose a risk to the financial stability of the world at the moment, its regulation is necessary to avert risks related to consumers, to counter financial terrorism, as well as to anti-money laundering. The finance ministers asked the FSB and the standard-setting bodies to increase monitoring of risks as well as consider working on multilateral responses.

Vancouver mayor, Kennedy Stewart, on Friday last week suggested that Bitcoin ATMs should be banned because of risks associated with money laundering. The move comes days after eight individuals were apprehended in Spain on money laundering charges while trying to change fiat currency into cryptocurrency.

Growing Concerns Regarding Bitcoin ATMs

On the issue of ATMs, there was an incident in London’s Bond Street station where an ATM began spitting money. The incident occurred when a customer was withdrawing money, and the Bitcoin ATM began tossing out money.

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The CEO and owner of Poland-based Bitcoin ATM firm Adam Gramowski said, while giving insight on the incident, that their ATMs usually support huge transactions and the customer was not careful. He said that a redesigned presenter would be a better solution to cope with smaller denominations that are allowed in the UK.

In April, Polish cryptocurrency exchange Coinroom closed down and took up to $15,000 worth of customer accounts, and there is no way founders can be contacted. It is incidents such as these that are the reason officials are calling for more cryptocurrency regulations. India is taking this to the extreme, and regulators have proposed a jail term of ten years for anyone found engaging in cryptocurrency dealings.

Featured image: DepositPhotos © designer491

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Crypto bill

India’s Proposed Crypto Bill Puts Crypto Owners in Jail for 10 years

Lawmakers in India have proposed a crypto bill that is considered by many to be ludicrous. The country is clamping down on cryptocurrency with an extreme proposal that would make Bitcoin and crypto ownership completely illegal. Those caught holding, mining, owning, or trading any digital asset could face a prison sentence of 10 years.

The bill coincides with the country’s plan to launch its own state-backed cryptocurrency—the Digital Rupee. The message is clear; people will have to engage with crypto the government’s way or not at all.

India’s Proposed Crypto Bill

The bill proposes that anyone involved in the crypto ecosystem should face criminal punishment. Any persons who “mine, generate, hold, sell, transfer, dispose of, issue or deal in cryptocurrencies, directly or indirectly” would face a 10-year prison sentence.

So severe is the punishment that those caught committing the crimes would face “non-bailable” sentences.

The draft crypto bill was first sourced by BloombergQuint. The source goes on to say that the courts will use four criteria when sentencing someone. They are as follows:

  • Culpability of the accused
  • Actual and intended gain made, and loss caused
  • Repetitive nature of the offense
  • Harm caused to the system

The lawmakers are even going as far as using the accused’s crypto profits against them. Any incurred fines from the criminal act will be three times as much as the profit made in the first place.

According to BloombergQuint:

“The penalty imposed on the accused, according to the bill, shall be either thrice the loss caused to the system, or three-fold the gains made by him/her, whichever is higher. If the loss or gain can’t be reasonably determined, the maximum fine that can be imposed may be notified by the government.”

Should the bill be passed, anyone with Bitcoin or cryptocurrency will have to declare it and then get rid of it in 90 days. Further, the bill seeks to amend the Prevention of Money Laundering Act of 2002, to include all cryptocurrency and blockchain related activities.

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Where Does the Crypto Bill Leave the Digital Rupee?

In a rather hypocritical move, the government’s own cryptocurrency, the Digital Rupee, is exempt from such stringent laws.

The reason is the close ties to the country’s leading bank, the Reserve Bank of India (RBI), that this cryptocurrency would have. Both the central government and RBI will consult over the launch of the Digital Rupee.

Until now, RBI has been anti-cryptocurrency and blockchain. In 2018 it prohibited any RBI-regulated institutions from processing cryptocurrency purchases.

The proposed crypto bill puts to bed any hopes that India may adopt and regularize cryptocurrency.

Featured Image: DepositPhotos © hello.artmagination.com

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crypto regulations

France’s Crypto Regulations | Finance Minister Wants Whole EU Adoption

This week, some are focusing on the recent fire that broke out in Notre-Dame cathedral, while others are looking at Bruno Le Maire, the French Finance Minister. According to Le Maire, EU member states should implement the same crypto regulations the French parliament approved last week.

Here’s what we know.

French Crypto Regulations are Key, According to Le Maire

Last week, France’s parliament approved a law called the Pacte (Action Plan for Business Change) law, which pertains to cryptocurrencies. The law also deals with other business plans. According to Reuters, the new law will attract crypto traders to the Western European country. It will do so by giving these traders recognition and taxing their profits in return. The goal of this new law is to create a market in Paris, says Reuters.

Other sources say that at a blockchain event in Paris, Le Maire told those who attended that he plans to “propose to my European partners that we set up a single regulatory framework on crypto-assets inspired by the French experience.” He also reportedly said that the French model “is the right one.”

Will EU Member States Bite?

It will be interesting to see if EU member states decide to listen to Le Maire and adopt French crypto regulations. After all, cryptocurrencies are either banned or unregulated in most parts of the world.

>> SBI Delists Bitcoin Cash: Keeps Support for Bitcoin Sv

If Le Maire were to propose this (like he said he would), the relationship countries have with cryptocurrencies may change.

Takeaway

While there are places in the world that are regulating digital currencies in their own ways—Malaysia just regulated them back in January—it will be interesting to see if the European Union develops one stance on cryptocurrencies, based on French crypto regulations.

As we approach the month of May, be sure to keep updated with this story, as it will likely impact a handful of crypto traders.

Featured image: DepositPhotos © PromesaStudio

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Assembly Bill 953

Assembly Bill 953 | New Legislation Combines Weed and Stablecoins

Lawmakers in California have introduced a new bill geared towards cannabis companies. Assembly Bill 953 was introduced on February 21st. This new piece of legislation would allow cannabis-related businesses to pay taxes and fees in digital currency—more specifically, in stablecoins.

Assembly Bill 953

If passed, Assembly Bill 953 would allow all California-based tax offices (state, city, and county) to accept stablecoins as a form of payment. Cannabis companies would be able to pay their cultivation taxes with stablecoins. At this time, a specific stablecoin has not been identified, and it remains unknown if all forms of stablecoins will be accepted.

Assembly Bill 953 wouldn’t go into effect until January 1st, 2020, if it is approved at all.

Currently, the state of California imposes a 15% state excise tax on cannabis and cannabis products. Often, cannabis companies owe a large tax amount at the start of each year.

Another issue many cannabis businesses have run into is securing simple financing services from banks. There are a few states that have legalized the use of recreational cannabis, but it is deemed illegal under federal law. Most banks are secured by the Federal Deposit Insurance Corporation (FDIC) and won’t finance ‘illegal’ activity.

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Due to this, cannabis companies hold hundreds of thousands of dollars in cash at any given time. Assembly Bill 953 is not geared towards boosting cryptocurrency or the legitimacy of stablecoins, but more to reduce the vast majority of cash that gets flooded into the tax offices across the state.

California’s State Treasurer, Fina Ma, recently testified in front of the US House Committee regarding the amounts of cash collected. Ma said:

“Duffel bags and sometimes suitcases of cash would arrive quarterly at some of our designated offices and some business owners had to drive 350 miles to pay their taxes.”

It remains unknown at this time when Assembly Bill 953 could be approved.

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SEC ICO Guide Released Despite Ongoing Regulation Debate

In 2018, ICOs raised over $7.8 billion USD—up $1.6 billion from the year 2017. Most of these 2018 funds were raised in the first three months of the year. Cryptocurrencies have been on the decline ever since. Yesterday, the Securities and Exchange Commission (SEC) released their new guide to ICOs. This new SEC ICO guide seems oddly timed, considering the fundraising tactic has decreased dramatically.

SEC ICO Guide

The US regulator released the news of its new guide via Twitter and over its website. There is now a dedicated section on the SEC’s website that lists five aspects of ICOs the SEC considers “essential.” The regulator has also added a section for market professionals and investors.

It remains unknown at this time why it was announced just now, considering the content has existed on the site since March of 2018.

The main ICO guide page explains:

“Companies and individuals are increasingly considering initial coin offerings (ICOs) as a way to raise capital or participate in investment opportunities. While these digital assets and the technology behind them may present a new and efficient means for carrying out financial transactions, they also bring increased risk of fraud and manipulation because the markets for these assets are less regulated than traditional capital markets.”

>> Philippines Union Bank Launches Crypto ATMs: Will it Fuel Adoption?

The five descriptive aspects the SEC lays out aren’t surprising, given they summarize the organization’s stance on the fundraising tactics from the get-go. The guide explains that ICOs are a security and need to be registered with the SEC regardless of how the issuer refers to it.

In the past, there have been strong debates when it comes to digital currencies being a security in the eyes of the US regulator. Now, the SEC only sees ICO tokens as securities and has left digital currency alone.

In terms of market capitalization, the ICO industry is now just a fraction of what it once was a year ago. While the new SEC ICO guide gives clear direction for investors on how the organization feels, it may be too little too late.

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