List of major crypto regulatory policies and attitudes in 2021

In recent years, encrypted assets and related products and services have grown rapidly. At the same time, policymakers are also paying attention to this ever-changing market. Since 2021, the regulation of cryptocurrency is moving towards a more detailed and complete model. Many countries supervise and regulate digital assets, mining, encrypted funds, etc. The main policies and regulatory measures have varying degrees of impact on the industry.

The Reserve Bank of India favors a total ban on cryptocurrencies

On December 18, the Reserve Bank of India (RBI) has indicated to its Central Committee that it is in favor of a total ban on cryptocurrencies. According to a person familiar with the matter, the Reserve Bank of India briefed the board of directors on the “serious links” related to macroeconomic and financial stability and foreign exchange management. “The board of directors has been informed of the position of the Reserve Bank of India on this matter.” The Bank of India also emphasized the challenge of overseeing intangible assets originating from overseas. It is worth mentioning that in September this year, a report stated that India plans to regulate cryptocurrencies as commodities. The report stated that “cryptocurrency will be considered an asset/commodity used for all purposes, including taxation and depending on the use case-payment, investment or utility.”

South African regulator plans to complete the cryptocurrency framework in early 2022

On December 10th, the South African regulator plans to complete the cryptocurrency framework in early 2022. The cryptocurrency rules are designed to protect vulnerable populations in South Africa.

South Korea proposes to ban anonymous virtual currency transactions

On December 10th, in order to eliminate the use of cryptocurrency for illegal activities and money laundering activities, South Korea plans to ban all anonymous virtual currency transactions. South Korean regulators have proposed a new rule that will prohibit withdrawals from Korean exchanges to non-KYC wallets, such as Metamask, from March 2022. The regulator stated that there will be no exceptions after the deadline. In the future, when exchanges transfer virtual assets such as Bitcoin or Ethereum, they will keep a record of’who sent and who received’, and the transfer can only be carried out between’licensed exchanges’. The regulator also stated that the new rules will prevent tax evasion. In addition, South Korean legislators postponed the plan to tax virtual assets until 2023 in the plenary meeting. Starting on January 1, 2022, the proposed tax will impose a 20% tax on crypto gains over 2.5 million won ($2,122) in a year. Local analysts said that lawmakers from both the ruling and opposition parties are trying to attract voters in their 20s and 30s who are more likely to become cryptocurrency investors and therefore oppose the proposed tax before the presidential election in March.

The Russian Prosecutor’s Office sets guidelines for the confiscation of cryptocurrencies

According to news on December 9, Russia’s Attorney General Igor Krasnov stated that the Attorney-General’s Office has established guidelines that allow the seizure and confiscation of illegally obtained cryptocurrencies. The Russian Attorney General emphasized that although the judicial practice of criminal cases tends to recognize that cryptocurrency is a kind of property, that is, the object of bribery, it is still not enough to form sufficient conditions for uniform and sustainable law enforcement. I believe that the introduction of the concept of cryptocurrency and other virtual assets in the criminal law space should help to form a unified and sustainable law enforcement by formulating appropriate rules in the legislation.

The UK FCA’s latest proposal may exclude crypto investors from its financial services compensation plan

On December 7th, the British Financial Conduct Authority (FCA) released a “discussion document.” According to this proposal, when the company goes bankrupt, cryptocurrency investors may be excluded from the UK compensation plan. The regulator stated in the discussion document: “In particular, high-risk or alternative investments, such as encrypted assets and unlisted securities, may be excluded from the financial services compensation plan in some cases.” With this in mind, the agency Users have been warned in the past not to use most companies that sell crypto investments. Nevertheless, the attractiveness of cryptocurrencies has increased to a significant level. In October alone, the UK National Reporting Centre received more than 7,118 complaints.

The Bank of Thailand: does not support the use of digital assets for payment for goods and services

On December 1, the Bank of Thailand stated that it does not support the use of digital assets for payment for goods and services.

Argentina plans to impose a 0.6% tax on cryptocurrency exchanges

On November 19th, Argentina plans to impose a 0.6% tax on companies that provide cryptocurrency trading services. Argentina charges a 0.6% tax on bank credits and loans, but cryptocurrency exchanges currently do not pay this tax (exempted due to registration as a fintech company that provides payment service providers (PSP)). A senior executive of the Argentine cryptocurrency company stated that the tax will affect exchanges that have accounts in Argentine banks, adding that exchanges may pass on the new costs to cryptocurrency prices in Argentine pesos.

Kazakhstan passes cryptocurrency platform anti-money laundering legislation

On November 10th, members of the upper house of the Kazakhstan Parliament passed a law that will implement financial surveillance on encrypted platforms. These amendments are aimed at improving the country’s overall “anti-money laundering (AML)” framework, some of which involve cryptocurrency platforms. The bill was voted by the Senate and has yet to be approved by the President of Kazakhstan. The law will ensure that the crypto industry is fully compliant and prevent money laundering in the following ways: crypto businesses and service providers will be subject to financial supervision. Focus on strengthening the prevention of money laundering of crime proceeds. Prevent the legalization of illegal funds. Encryption companies are required to notify their respective government agencies of their operations. The government will ensure compliance with KYC and AML regulations.

U.K. Taxation and Customs Administration issued guidelines on the taxation of crypto investments

On November 1st, the UK Revenue and Customs Service (HMRC) issued a tax guideline to help cryptocurrency traders and investors understand their tax obligations in the UK. HMRC stated that it does not treat cryptocurrency as currency, more like traditional investments such as stocks, which means that cryptocurrency profits are subject to capital gains tax. And clearly pointed out that the exchange’s transaction costs cannot be offset by profits, and urged traders to keep records.

The U.S. Office of the Comptroller of Currency has included cryptocurrency in its regulatory operations plan for the first time

On October 16th, the U.S. Office of the Comptroller of the Currency (OCC) released the Bank Supervision and Operation Plan for the fiscal year 2022 on Friday, and cryptocurrency was included in the plan for the first time. In the report, the OCC listed 11 key areas of supervision. In addition to cybersecurity and climate change, the OCC stated that examiners should identify banks that are using cryptocurrency and other financial innovations to implement major changes to their operations, and evaluate their implementation. . When a major change occurs in the bank, the examiner should assess the appropriateness of the governance process. The OCC has been studying the crypto industry since at least 2018. This is the first time that cryptocurrencies have been included in the regulator’s annual operating plan. In July last year, the OCC issued an explanation letter allowing Federal Chartered Banks to provide crypto custody services.

President of Mexico: Mexico will not use Bitcoin as legal tender

According to news on October 15th, at a press conference held earlier today, Mexican President Andres Manuel Lopez Obrador ruled out the possibility of using Bitcoin as legal tender in the country. In answering reporters’ questions about Bitcoin, he said: “In this regard, we will not change. We believe that we must maintain orthodoxy in financial management instead of trying to innovate too much.” Lopez Obrador said that the government will focus on developing mechanisms to prevent tax evasion, rather than changing the national financial system. It is friendly to Bitcoin: “(We want to make sure) there are no privileges, everyone has to pay taxes, that’s enough.”

U.S.: Weigh the wide-ranging push for cryptocurrency regulation

U.S. Treasury Secretary Yellen said that stablecoins need proper supervision. Stablecoins can improve efficiency and facilitate payments, but they can only have this effect if they are fully regulated. In addition, on October 9 news, according to people familiar with the matter, the Biden administration is weighing an executive order on cryptocurrencies as part of developing a government-wide approach for this white-hot asset class. The proposed directive will require federal agencies to study encryption related fields and make recommendations—involving financial regulation, economic innovation, and national security. People familiar with the matter said that the plan will also aim to coordinate the work of the entire administrative department and agencies in terms of digital currency. The plan will prompt departments that are not paying enough attention to cryptocurrencies to focus on it. The White House declined to comment on the encryption plan. The draft directive is part of the White House’s efforts to develop a comprehensive strategy for digital tokens, and as digital tokens become popular among ordinary Americans, this has become a growing concern for regulators. When the financial regulator appointed by Biden seeks to strengthen the supervision of asset classes, it has taken an increasingly tough attitude towards the emerging crypto market. As the market swelled to more than US$2 trillion, regulators expressed concern about the lack of investor protection and possible risks to financial stability. National security agencies across the government are also working hard to deal with cases where digital currencies play a role in ransomware attacks.

Kazakhstan: Start to clean up and rectify digital mining companies

According to news on October 8, Kazakhstan’s Deputy Minister of Energy Kerat Rashimov recently announced that the country will begin to clean up illegal cryptocurrency “mining” companies and plans to restrict activities in this area. Rahimov said, “With the arrival of “mining companies”, the country’s power system has become very bad. This year’s consumption has increased by more than 7%. If companies want to open a virtual currency processing center in Kazakhstan, they must first register. Only after obtaining the status of a legal entity can a permit for installation of the facility be obtained.

However, Rashimov also clarified that virtual currency mining companies officially registered in Kazakhstan will not be discriminated against and will continue to operate in accordance with the contract. In June 2021, the President of Kazakhstan signed a decree stipulating that the country’s digital mining activities will be charged. The effective date of this regulation is January 1, 2022.

European Central Bank Management Committee: The EU needs to quickly adopt the “cryptocurrency market supervision”

On October 7th, the European Central Bank Management Committee Villeroy urged the European Union to quickly adopt the “Encrypted Currency Market Regulation” (MICA). Supervision should also be strengthened, because decentralized finance is making major developments. “Innovation is of course positive, but if it is not regulated, innovation may reduce financial stability. At the same time, there are problems with market concentration and customer protection. Regulators should consider combining activities and entities for large-scale technology companies. The operation of the financial services industry. It may be possible to organize a specific legal entity within a large technology company to subject it to financial supervision.

Central Bank of Uruguay: Develop a “work plan” for digital asset supervision

On October 5th, the Central Bank of Uruguay (BCU) has developed a “work plan” to lay the foundation for the supervision of digital assets and companies that provide these services. The entity confirmed in a statement on Friday that BCU plans to complete a proposal before the end of this year to amend current legal regulations involving digital assets and establish a clear framework to regulate these activities. The BCU will also promote “a dialogue with industry participants and will continue its relationship with other regulatory agencies and international organizations to deepen its understanding of the supervision and supervision experience of these activities”. BCU stated that digital assets are not legal tender like the Uruguayan peso, have no issuance, and do not have any central bank support. At present, BCU added that the issuance and trading of digital assets are not within the scope of the central bank’s activities and therefore are not subject to specific supervision.

French regulator: warns investors of unauthorized encryption services

According to news on October 1, the French stock market regulator Autorité des Marchés Financiers (AMF) continues to monitor the cryptocurrency market and warns investors of unauthorized crypto services. According to regulators, there are listed entities that have been providing crypto investment products without authorization to provide such services. To protect investors from potential fraudulent investments, AMF and the French Prudential Regulation and Resolution Agency (ACPR) regularly update the blacklist of unauthorized investment providers. Nonetheless, these lists are “incomplete” because “new unauthorized entities often appear”. The authorities strongly recommend that investors follow the list of authorized investment providers registered online using financial service providers and the authorized list of financial investment advisors or crowdfunding categories.

Swiss Financial Market Supervisory Authority: Approves the first crypto fund only for qualified investors

The Swiss Financial Market Supervisory Authority (FINMA) officially announced on September 29 that it has approved the Crypto Market Index Fund to become “the first crypto fund established under Swiss law.” The fund was initiated by the Swiss asset management company Crypto Finance, managed by the investment management company PvB Pernet von Ballmoos AG, and managed by the regulated institution SEBA Bank AG. FINMA pointed out that the newly approved funds are limited to qualified investors, mainly investing in encrypted currencies or digital assets “based on blockchain or distributed ledger technology.”

Canadian regulator warns of misleading “gambling-style” cryptocurrency advertisements

On September 27, the Canadian financial regulator, the Canadian Securities Regulatory Agency (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) have issued a joint guidance letter warning that cryptocurrency trading platforms are concerned about “communications with advertising, marketing and social The importance of requirements related to media use. In the published document, the regulator outlines three main areas of concern for cryptocurrency platforms that have registered (or filed an application) as traders under securities legislation or are considering doing so in the future: “May be considered false or misleading.” “Compliance and regulatory challenges” for advertising and marketing materials, the use of gambling-style competitions, promotions or programs, and the use of social media platforms for advertising. It is worth noting that the document pointed out that although these requirements mostly involve the trading of digital assets that are considered securities, they may also apply to “encrypted assets that are commodities, because the user’s contractual rights related to encrypted assets may themselves constitute securities. And/or derivatives”.

Indonesian Minister of Trade: Will not ban cryptocurrency but will tighten supervision

On September 26, Indonesian Trade Minister Muhammad Luthfi stated that Indonesia will not completely ban cryptocurrencies, but will tighten supervision. The country is studying how to reduce the possibility of cryptocurrency being used for illegal financial activities. It is reported that cryptocurrency trading in Indonesia has developed rapidly in the past year and a half. In the first five months of 2021, the trading volume of 13 domestic exchanges authorized by the Futures Exchange Supervision Committee has increased by 40%.

China: rectify mining and virtual currency trading hype

On the evening of September 24, the National Development and Reform Commission, the Central Bank, etc. issued a series of notices mentioning rectification of mining and virtual currency trading hype. Among them, the National Development and Reform Commission and other departments issued a notice on the rectification of virtual currency “mining” activities, mentioning strengthening the dual control of energy consumption for new virtual currency “mining” projects. In addition, on the evening of the 24th, the People’s Bank of China, the Central Cyberspace Administration of China, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Industry and Information Technology, the Ministry of Public Security, the General Administration of Market Supervision, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange issued a Notice on preventing and disposing of the risk of speculation in virtual currency transactions.

UAE Regulator: Approves Cryptocurrency Trading in Dubai Free Zone

On September 22, the Dubai World Trade Center Authority (DWTCA) announced that it has signed an agreement with the UAE Securities and Commodities Authority (SCA) to support the supervision and trading of cryptocurrency assets in the DWTCA Free Zone. This new initiative establishes a framework that enables DWTCA to issue the necessary approvals and permits for financial activities related to cryptocurrencies.

As part of the agreement, SCA will also oversee major cryptocurrency-related activities such as issuance, listing, trading and licensing processes. According to the announcement, SCA Acting Chief Executive Officer Maryam Al Suwaidi, DWTCA Director General Helal Saeed Al Marri, and an executive from the Dubai Tourism and Commercial Marketing Department signed the agreement.

South Korean financial authority: announced the list of 28 cryptocurrency exchanges that meet regulatory requirements

On September 19, the South Korean financial authority announced a list of 28 cryptocurrency exchanges that meet regulatory requirements. The revised “Specific Financial Transaction Information Reporting and Use Law” requires crypto exchanges to obtain information security management system (ISMS) certification before September 24 and report to the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC). Crypto exchanges that fail to do this must cease operations before September 24. The 28 exchanges that can continue to operate after September 24 include opax, Upbit, Korbit, Coinone, Bithumb, Hanbitco, Casherest, Tennten, Dove Wallet, Flybit, Gdak, Aprobit, Huobi, Coin&coin, Probit, Borabit, Coredax , Okbit, etc.

However, to provide Korean won fiat currency trading services, cryptocurrency exchanges must also cooperate with banks to provide customers with real-name verified deposit and withdrawal accounts. Out of concerns about money laundering risks, most banks are less willing to cooperate with crypto exchanges. So far, only four major crypto exchanges-Upbit, Bithumb, Coinone, and Korbit have achieved this, which means that the other 24 exchanges can only provide currency trading.

The Russian Duma: Hope to regulate crypto mining as a business

On September 9th, Anatoly Aksakov, Chairman of the Financial Market Committee of the Russian State Duma, stated that Russian legislators are now considering recognizing crypto mining as a form of entrepreneurship under the local commercial law. Since this [cryptocurrency mining] is an entrepreneurial activity, it is obviously necessary to include it in the national register, supervise it as an entrepreneurial activity in accordance with appropriate regulations, and collect related taxes. The government is actively carrying out a number of legal measures related to the encryption industry, and it is expected that the bills on encryption taxation, mining and digital currency issuance will be promoted in the near future. Aksakov also emphasized the need to provide more regulatory clarity for digital currency, and pointed out that there is still a need to discuss what digital currency is. Although it is called currency, it is more like a financial instrument or a financial asset that can be invested. Rather than a means of payment.

El Salvador recognizes Bitcoin as legal currency

El Salvador is definitely a representative of actively embracing the crypto world. On June 9, 2021, El Salvador’s Congress voted to approve the proposal of Bitcoin as legal tender submitted by the President. El Salvador became the first country in the world to recognize Bitcoin as legal currency. On September 7, 2021, Bitcoin officially became the legal tender of El Salvador.

South Korea: Strengthening supervision to curb tax evasion

On July 26, Reuters reported that the South Korean government proposed to amend the tax law so that tax authorities can seize crypto assets held by tax evaders, even if their cryptocurrency is stored in a digital wallet. Current regulations make it difficult for authorities to confiscate crypto assets held in digital wallets, although virtual assets obtained through exchanges can be seized to pay overdue taxes. South Korea continues to strengthen the supervision of the cryptocurrency market to eradicate money laundering and other financial crimes using cryptocurrencies. The tracking of tax evaders is an integral part of it. South Korean President Moon Jae-in hopes to expand the tax base to fund increased welfare expenditures. At the same time, South Korea’s Ministry of Finance stated that it should strengthen the supervision of cryptocurrencies to better curb tax evasion.

Thailand SEC: DeFi projects may require a license

According to a report in the Bangkok Post on June 1, the Securities and Exchange Commission of Thailand (SEC) announced that in the near future, any DeFi-related activities may require permission from financial regulators. At the same time, the SEC will in particular conduct stricter supervision of the DeFi protocol for issuing tokens. The regulatory agency stated that “the issuance of digital tokens must be authorized and supervised by the SEC, and the issuer must disclose information and provide tokens through a token portal permitted by the Digital Assets Act.”

China: Cracking down on Bitcoin mining and trading and resolutely preventing individual risks from being transmitted to the social field

On May 21, the Financial Stability and Development Committee of the State Council (hereinafter referred to as the Financial Committee) held its 51st meeting to study and deploy key tasks in the financial sector in the next phase. The meeting was presided over by Liu He, member of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council, and Director of the Financial Committee. Relevant responsible comrades from member units of the Financial Committee attended the meeting. The meeting pointed out that the financial system resolutely implemented the decisions and deployments of the Party Central Committee and the State Council, increased support for the real economy, prudent monetary policy was flexible and appropriate, credit policies accurately adapted to the needs of market entities, liquidity remained reasonable and sufficient, financial services improved, and financial services Supporting epidemic prevention and control and economic and social development have achieved obvious results. The meeting called for resolute prevention and control of financial risks. Adhere to the bottom line thinking, strengthen the comprehensive scanning and early warning of financial risks, promote the reform of small and medium-sized financial institutions, focus on reducing credit risks, strengthen the supervision of platform enterprises’ financial activities, crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field. It is necessary to maintain the smooth operation of the stock, debt, and foreign exchange markets, severely crack down on illegal securities activities, and severely punish financial illegal and criminal activities.

UK regulator requires unregistered cryptocurrency companies to close

According to the timetable established in early 2020, the UK Financial Conduct Authority (FCA) has required unregistered cryptocurrency companies to close and return funds to investors. On January 8, the regulatory agency warned that cryptocurrency companies that have not registered with the FCA before December 15, 2020 or have withdrawn their applications must stop cryptocurrency activities before January 10.

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