South Korea

10 Countries Actively Regulating Cryptocurrency Despite Global Crisis

06/04/2020 by Idelto Editor

Despite the coronavirus pandemic and the resulting financial crisis, at least 10 countries have made announcements regarding cryptocurrency regulation since our last regulatory roundup. They include Japan, Malaysia, Singapore, China, Spain, Germany, India, the Philippines, the U.S., and South Korea.

Also read: IMF Declares Global Recession, 80 Countries Request Help, Trillions of Dollars Needed

Regulations Directly Affecting Crypto Exchanges, Businesses and Individuals

The world is going through a crisis with an escalating number of covid-19 cases causing economic turmoil in many countries. The International Monetary Fund (IMF) has declared a global recession, noting that at least 80 countries have asked for its assistance. Nonetheless, since our last regulatory roundup, a number of countries have made announcements relating to their cryptocurrency regulations.

During the past week, two countries approved new cryptocurrency exchanges. Japan approved its 23rd crypto exchange while Malaysia followed suit and fully approved a crypto exchange operator even as the country extended the nationwide lockdown.

The Monetary Authority of Singapore has granted a temporary exemption from holding a license to a number of cryptocurrency companies under the new Payment Services Act. Among the companies benefiting from this six-month grace period are Binance, Coinbase, Gemini, Bitstamp, Luno, Upbit, and Wirex.

In Spain, the tax authority has begun sending notices to 66,000 crypto owners. This number represents a massive increase from the 14,700 tax letters the agency sent to crypto owners last year. The letters will be sent until the end of June.

Crypto Regulations Progressing Worldwide

In Germany, the Federal Finacial Supervisory Authority (BaFin) published guidelines in English on March 30 regarding how companies can apply for its authorization to offer a crypto custody service. The new German crypto regulation went into effect in early January and companies had until March 31 to submit their intent to operate a crypto custody business. They now have until Nov. 30 to submit their complete application.

India is also working on cryptocurrency regulation despite the fact that there is a draft bill that seeks to categorically ban all cryptocurrencies except state-issued ones. The government is reportedly discussing the matter with the central bank. Furthermore, a state official has been discussing hosting educational events with the founders of India Crypto Bulls, the organizer of a crypto roadshow to take place in 15 major Indian cities.

A number of countries have warned about cryptocurrency investment schemes. In the Philippines, the Securities and Exchange Commission (SEC) has issued several warnings, including one on Bitcoin Revolution. The United States has also been involved in several crypto-related cases. For example, the U.S. SEC recently charged two individuals for allegedly defrauding hundreds of investors with an alkaline water-backed cryptocurrency. The commission is also involved in an ongoing battle with Telegram.

Another country that likes to issue warnings about cryptocurrencies is China. The National Internet Finance Association (NIFA), a self-regulatory organization initiated by the People’s Bank of China (PBOC), published a notice on Thursday regarding the risks associated with cryptocurrency. The association specifically warned of fake volumes at crypto exchanges. Meanwhile, the PBOC has reportedly completed the basic development of the nation’s central bank digital currency and is now drafting legislation for its circulation.

Last but not least, South Korea has also started a pilot program for its national digital currency. The country’s central bank, the Bank of Korea, announced the launch of this pilot program on Monday, April 6. The system will be set up and tested throughout the year. This announcement followed the approval of the bill by the Korean government to regulate cryptocurrencies.

What do you think about these countries pushing ahead with crypto regulations amid the crisis? Let us know in the comments section below.

The post 10 Countries Actively Regulating Cryptocurrency Despite Global Crisis appeared first on Bitcoin News.

Major South Korean Bank Prepares to Launch Crypto Services as Government Green-Lights Regulation

28/03/2020 by Idelto Editor

Following the approval of a regulatory framework for cryptocurrencies by the South Korean government, one of the largest banks in the country is preparing to launch a range of crypto services. KB Kookmin Bank has applied for trademark registration, reportedly listing over 20 crypto services on its application.

Also read: 2x Bitcoin — Wanna Double Your BTC to the Moon? Forget About It

KB Kookmin Bank Registers Trademark for a Wide Range of Crypto Services

One of the largest banks in South Korea, KB Kookmin Bank has filed a registration application to trademark “KBDAC.” Local news outlet Digital Today reported on Friday that the bank listed over 20 crypto services on its application, adding that trademark registration can take between six months and two years in South Korea.

The bank’s filing with the Korean Intellectual Property Office dated Jan. 31 details a number of crypto services, including trading, financial reporting, asset management, consulting, advisory, over-the-counter brokerage, and custody.

A KB Kookmin Bank official explained that KBDAC is related to the bank’s collaboration with blockchain company Atomrigs Lab Inc., announced in June last year, the publication conveyed. However, the official did not reveal the service launch date. Meanwhile, the bank has also been actively exploring various use cases of blockchain technology.

South Korea Approves Crypto Regulation

KB Kookmin Bank’s move coincides with the passing of a revision to the Act on Reporting and Using Specified Financial Transaction Information. This bill, introduced in November last year, passed the National Assembly on March 5 and the South Korean government approved its revision on March 17.

Under the new law, South Korean cryptocurrency exchanges must use the real-name system by partnering with a financial institution that can provide this service. Banks will be obligated to conduct customer due diligence on the crypto businesses they deal with, ensuring proper reporting to the Korea Financial Intelligence Unit (KOFIU).

“The revision bill will take effect one year after promulgation, and the current crypto-asset business operators will be given a six-month transition period to report to the KOFIU,” South Korea’s top financial regulator, the Financial Services Agency, explained. “This revision act will place Korea’s legal framework on crypto assets more in line with international standards set forth by the Financial Action Task Force (FATF) and strengthen its AML/CFT regime.”

Do you think many South Korean banks will start offering crypto services? Let us know in the comments section below.

The post Major South Korean Bank Prepares to Launch Crypto Services as Government Green-Lights Regulation appeared first on Bitcoin News.

Regulatory Roundup: Crypto Regulations Advance Despite Global Crisis, Cash Shortages, Bank Closures

25/03/2020 by Idelto Editor

In this roundup, we cover crypto regulatory developments amid the global crisis effected by the coronavirus outbreak, bank closures, interest rate cuts, and plunging stock markets. Through it all, governments worldwide are still focusing on cryptocurrency regulation, including the U.S., South Korea, India, and Russia.

Also read: Bitcoin Legal in India — Exchanges Resume INR Banking Service After Supreme Court Verdict Allows Cryptocurrency

US: Proposal to Issue Two $1 Trillion Coins, Covid-19 Responses, State Cryptocurrency Bills

Governments worldwide are in a panic mode as the number of covid-19 cases has skyrocketed, bringing many industries to a standstill. In the U.S., the Federal Reserve has slashed interest rates to 0% and launched unlimited QE, but the moves have failed to impress the markets so far. Some financial institutions, facing cash shortages, are imposing withdrawal limits, which threatens the risk of a bank run.

An attempt to solve the economic problem was proposed by U.S. Rep. Rashida Tlaib, who wants the U.S. Treasury to mint two trillion-dollar platinum coins. Her new “Automatic Boost Act” claims it will not add any debt to anyone thanks to the ideas behind Modern Monetary Theory. Some supporters of this theory believe that it can attract crypto proponents, as news.Bitcoin.com explained.

Several U.S. states have independently pushed ahead with their own crypto bills. The state of Illinois has advanced a bill to allow its Treasury to seize cryptocurrencies left unclaimed at custodians after five years. The state of Hawaii is looking for cryptocurrency companies to join its first regulatory sandbox for digital currency, launched on March 17. Applicants can apply until May 1.

In Rhode Island, House Bill 7989, entitled “Rhode Island Economic Growth Blockchain Act,” was introduced on March 11. The bill “Establishes an economic growth blockchain act, set regulations for the sale of hemp, regulate virtual and digital assets and establish depository banks for these purposes,” its summary details. On the federal level, Rep. Paul Gosar introduced the Crypto-Currency Act of 2020 on March 9 while under a coronavirus self-quarantine.

Meanwhile, the New York State Department of Financial Services is requiring each regulated institution, including crypto companies, to submit a response describing their plans to address the operational and financial risk posed by the covid-19 outbreak. They have 30 days from March 10 to submit their responses.

South Korean Government Approves Regulatory Framework for Cryptocurrencies

Amid the coronavirus outbreak, the South Korean government approved a revision to the Act on Reporting and Using Specified Financial Transaction Information at a cabinet meeting on March 17, the Financial Services Commission (FSC) announced. The bill passed National Assembly on March 5, as news.Bitcoin.com reported.

The FSC explained that cryptocurrency businesses will be required to report their transactions to the Korea Financial Intelligence Unit (KOFIU). They will be subject to basic AML requirements, including customer due diligence and suspicious transaction reporting. They also must “follow additional obligations such as keeping separate transaction details for users,” maintain separate transaction details for users, ensure that only real-name accounts are used for crypto trading, and obtain approval from the FSC and KISA (Korea Internet & Security Agency) to offer services in the country.

Financial institutions will be required to conduct customer due diligence on the crypto-asset business operators they deal with, checking whether these companies report their business to KOFIU and maintain customer deposits in a separate account. “The revision bill will take effect one year after promulgation, and the current crypto-asset business operators will be given a six-month transition period to report to the KOFIU,” the FSC emphasized, adding:

This revision act will place Korea’s legal framework on crypto assets more in line with international standards set forth by the Financial Action Task Force (FATF) and strengthen its AML/CFT regime.

India Working on Crypto Regulation, Waiting on April Supreme Court Hearing

The Indian government has reportedly revealed that it is also working on a regulatory framework for cryptocurrency. It is discussing the matter with the Reserve Bank of India (RBI) for the central bank to regulate cryptocurrency. Crypto exchanges may come under the purview of the Securities and Exchange Board of India (SEBI). The government is waiting for the supreme court to hear a cryptocurrency case on April 27 before it makes the final decision on the cryptocurrency regulation. Recently, Minister of State for Finance and Corporate Affairs Anurag Thakur informed Lok Sabha, the lower house of India’s parliament, that the Ministry of Corporate Affairs had inspected some bitcoin businesses through the Registrar of Companies.

The central bank, however, is reportedly planning to file a review petition after the supreme court quashed its circular which banned regulated financial institutions from providing services to crypto businesses. The RBI is worried that the anonymous nature of cryptocurrencies may undermine the Indian banking system. After the historic ruling by the supreme court earlier this month, crypto exchanges started resuming INR services and several global companies have indicated that they are expanding into India and investing in local startups.

Venezuela Shuts Down Banking System, Residents Seek Refuge in Cryptocurrencies

Venezuela’s president, Nicolas Maduro, has shut down the nation’s banking system and ordered his entire country to self-quarantine, news.Bitcoin.com reported last week. The regulator Sudeban sent out a circular to all the financial institutions in the country on March 15, stating:

All activities involving direct attention to customers, users and the general public through agencies, branches, offices and administrative headquarters throughout the country will be indefinitely suspended.

The economic events in Venezuela have driven some residents to find refuge in cryptocurrencies and peer-to-peer markets.

Russian Central Bank Reaffirms Its Stance on Cryptocurrencies

Alexey Guznov, Director of the Legal Department of the Bank of Russia, provided an update on the bill for the regulation of cryptocurrencies in an interview with Interfax news agency, published on March 16. The bill on digital financial assets was adopted on first reading almost two years ago. Since then, its text has been modified and undergone significant changes.

“The position of the central bank remains unchanged,” Guznov said. “We believe that there are big risks in the legalization of cryptocurrency circulation, both from the point of view of financial stability and the system of combating money laundering, and from the point of view of protecting consumer rights .. We are opposed to the fact that there are institutions that organize the release of cryptocurrency and facilitate its circulation.” The director added, “But if a person who owns, conditionally, bitcoins, completes his transaction in a jurisdiction that does not prohibit this, we are unlikely to be able to limit it.”

The central bank has so far been skeptical about cryptocurrencies. Bank of Russia Governor Elvira Nabiullina has voiced her opinion several times that cryptocurrencies should not be legal in Russia. She also does not believe that Russia needs to have its own national digital currency.

What do you think of the regulatory developments covered in this roundup? Let us know in the comments section below.

The post Regulatory Roundup: Crypto Regulations Advance Despite Global Crisis, Cash Shortages, Bank Closures appeared first on Bitcoin News.

India Lifts Crypto Ban, South Korea Imposes New Rules and the US Remains Stagnant

11/03/2020 by Idelto Editor

The latest cryptocurrency regulations in Asia are wins for Bitcoin adoption but come at the cost of privacy. South Korea is tightening cryptocurrency regulations while India will likely lift its 2018 ban giving cryptocurrency companies bank accounts.

Meanwhile, an American lawmaker has proposed a new bill that follows suit but is not expected to pass.

India — Central Bank Overruled

India’s supreme court has overruled the Reserve Bank of India (RBI)’s 2018 ban that prevented banks within the country from working with cryptocurrency-related businesses. Sunny Ray, the global head of business development for cryptocurrency exchange Kraken and previous founder of the first regulated cryptocurrency exchange in India, described the significance in a blog post.

“This is an incredibly emotional moment for India,” Ray wrote. “Satoshi created Bitcoin because he felt that central banks were inefficient. The fact that the crypto industry just battled, and won, against the central bank located in the second-most populous country in the world is a massive achievement. We fought for 1.5 billion people to have the right to access crypto.”

Ray’s comments are not overblown. The Indian Supreme Court’s 180-page ruling boils down to a limit on the RBI’s power, by acknowledging how disproportionate the ban is for dealing with the often purported risks of cryptocurrency — enabling money laundering and terrorist financing. The court acknowledged that rather than prevent these risks, outright prohibition could have even exacerbated the problem by driving illicit activity underground. Though legislation will take time, reversing the ban means the Indian government will regulate cryptocurrency businesses with AML/CFT controls.

Although it’s easy to imagine what the RBI’s real intentions for such a disproportionate ban actually were, this overruling is a win for Bitcoin adoption and a limit on consumer privacy.

Despite the overrule, India’s central bank is now seeking a review. Meanwhile, cryptocurrency businesses inside and outside India are moving quickly. For example, Kraken stated, “The future is bright for crypto in India, we’re going to be there every step of the way.”

South Korea — FATF Guidelines Become Law

South Korea’s latest significant cryptocurrency regulation announcement is less palpable. Where there was previously no law, only guidelines, its new bill provides a framework for regulating cryptocurrency to the Financial Action Task Force’s (FATF) AML standards.

The announcement is both a win for legal certainty and an imposition of heavier requirements for cryptocurrency businesses in the country. In short, the bill will necessitate more alphabet soup compliance accreditation for cryptocurrency businesses through the real-name verification system to hold a bank account within the country as well as certification via the information security management system (ISMS) from the Korean Internet Security Agency (KISA).

We spoke with Joyce Yang, CEO of Global Coin Research, to break it down.

“[People] could already trade cryptocurrency with over 30 exchanges in Korea prior to the amendment passing, but with the amendment, the permitted and licensed exchanges actually goes down to just five to seven exchanges,” Yang said.

This number will probably increase as unaccredited exchanges have until September 2021 to meet the requirements. However, Yang is also hopeful that this new law will ultimately bring in more institutional money to Korean exchanges which, according to Yang, has plateaued as a retail market for the last six months.

U.S. — Regulatory Action Lacks Political Backing

These regulatory movements in Asia are without a doubt being followed closely in the West. Yang pointed out that U.S. Securities and Exchange Commission (SEC) Commissioner Hester Pierce has frequently visited Asian countries such as Singapore, expressing the need to accelerate cryptocurrency regulation guidelines within the United States. However, she is also less sure something will be moved forward in the short term due to the coronavirus.

Beware of the “Crypto-Currency Act of 2020” or any kind of legislation which may force businesses to spy on, deanonymize, or micro-monitor customers.

This is an attack on financial privacy, which we will desperately need in the future to safeguard democratic rights and freedoms. pic.twitter.com/B9lDM8lxE4

— Alex Gladstein (@gladstein) March 10, 2020

Valid concerns still circulate in the American Bitcoin ecosystem about staying relevant. Most recently, this conversation has shifted to the “Crypto-currency Act of 2020,” proposed by U.S. Rep. Paul Gosar. This act would create a “Federal Digital Asset Regulator” and divide cryptocurrency regulations according to their classification as currency (stablecoins), commodities (Bitcoin), security (Tezos) and privacy coins (Monero, Zcash). However, Jerry Brito, executive director of advocacy group Coin Center, does not believe the bill has legs.

Yesterday Rep. Paul Gosar introduced a crypto-focused bill that’s been getting some attention. Here’s a short thread with my thoughts on it. TLDR: It’s not a serious bill and has almost zero chance of moving, but should be opposed on principle.

— Jerry Brito (@jerrybrito) March 10, 2020

When assessing how important a cryptocurrency bill proposal is in the U.S., Brito underlined the importance of political reputation and clout. In his estimation, Gosar doesn’t appear to have enough.

The post India Lifts Crypto Ban, South Korea Imposes New Rules and the US Remains Stagnant appeared first on Bitcoin Magazine.

South Korea Passes Bill to Regulate Cryptocurrency in Line With FATF Standards

07/03/2020 by Idelto Editor

South Korea’s National Assembly finally passed a bill that provides a framework for the regulation of cryptocurrencies and exchanges. Crypto service providers will be required to use the real-name verification system and comply with reporting requirements in line with the global cryptocurrency standards set by the Financial Action Task Force (FATF).

Also read: Bitcoin Legal in India – Exchanges Resume INR Banking Service After Supreme Court Verdict Allows Cryptocurrency

South Korea Will Now Regulate Cryptocurrency

The South Korean National Assembly unanimously passed the amendment to the Act on Reporting and Use of Specific Financial Information on Thursday, after years of deliberation. The new legislation provides a regulatory framework for cryptocurrencies and related service providers. Previously, the government had only issued guidelines but there was no actual law passed. “Cryptocurrency now fully legal in South Korea,” the News Asia publication commented, elaborating:

The passing of the amendment signifies the official entry of cryptocurrency trading and holding into the legal system for the South Korean government.

The legislation, now awaiting President Moon Jae-in to sign into law, will enter into force one year from the date of signing. There will be a six-month grace period, the publication conveyed. “This means that all entities affected by the law will need to be in full compliance by September 2021.”

The amendment passed the National Assembly’s national policy committee in November last year. It imposes anti-money laundering (AML) obligations on cryptocurrency exchanges and service providers, in compliance with the standards set by the Financial Action Task Force (FATF), the global money-laundering watchdog. The FATF issued guidance on crypto assets and related service providers in June last year. All the G20 countries, including South Korea, have declared their commitments to following these standards. During their first meeting this year, the G20 finance ministers and central bank governors also urged countries to implement these guidelines.

The Real Name System

South Korea introduced the real-name verification system back in January 2018. Although not a requirement, crypto exchanges were encouraged to partner with approved banks to use the system. However, so far, only the largest exchanges — Bithumb, Upbit, Coinone, and Korbit — have been able to use this system, as banks have been reluctant to provide this service to small and medium-sized exchanges.

“Real-name accounts prevent money laundering by assigning a verified individual to a single bank account with which they may withdraw and deposit fiat currency from and to an exchange,” News Asia explained. “Up until now, anyone could launch a cryptocurrency exchange in South Korea. By September 2019, there were over 70 exchanges in the country.” The publication elaborated that under the new law:

Exchanges, trusts, wallet companies, and ICO are now required by law to have a real-name verification partnership with an approved Korean bank.

In addition, regulated entities must obtain an information security management system (ISMS) certification from the Korea Internet Security Agency (KISA).

Meanwhile, the country’s Ministry of Economy and Finance, which oversees the country’s economic policy, is pushing to amend the tax code to allow the taxation of cryptocurrency, as individuals’ crypto profits are not taxable under the current tax law in South Korea.

What do you think of South Korea passing a bill to fully regulate the crypto industry in line with the FATF standards? Let us know in the comments section below.

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