Crypto Regulations Worldwide

Governments worldwide are considering ways to regulate cryptocurrencies as they transform from speculative investments to a new asset class. The emergence of a plethora of laws intended to regulate cryptocurrency use has corresponded with the development of cryptocurrencies on a global scale.

 

As mentioned in an interview by crypto experts Bitai Method, it’s challenging to remain on top of the constantly evolving cryptocurrency sector and the many legal frameworks worldwide. Regulations for governing digital assets on a global scale have generally varied. While some countries have already enacted legislation governing crypto assets, others are working on their equivalents.

 

United States 

In 2022, the United States unveiled a new framework that allowed additional regulation. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission, two existing market regulators, have been given authority under the new mandate (CFTC).

 

With its recently publicised 2020 lawsuit against Ripple, which claims the company raised more than $1.3 billion by selling its native cryptocurrency, XRP, in unregistered securities transactions, the SEC has already taken some steps toward regulating the industry. Recently, the SEC has begun going after exchanges with cryptocurrency products, like Coinbase (COIN) and Binance. Gary Gensler, the chairman of the SEC, has spoken out against cryptocurrencies and described them as "a Wild West."

 

Illegal cryptocurrency activity is one of the concerns that the Biden administration is attempting to address. The new framework states that the president will decide whether to ask Congress to change the Bank Secrecy Act, anti-tip-off laws, and laws against unlicensed money transmitting to explicitly apply to providers of digital asset services, such as digital asset exchanges and nonfungible token (NFT) platforms.

 

The proposal said that by the end of February 2023 and read by the end of 2023, the U.S. "Treasury would conduct an illicit finance risk assessment on decentralised finance and an evaluation on non-fungible tokens."

 

China

When it comes to assessing inheritances, China classifies bitcoins as property. Due to their facilitation of unauthorised public financing, cryptocurrency exchanges are prohibited from functioning in China by the People's Bank of China (PBOC).

 

In May 2021, China also outlawed bitcoin mining, causing many people to shut down their businesses entirely or move to countries with better regulatory environments. Additionally, cryptocurrencies were explicitly outlawed in September 2021.

 

However, the nation has been putting effort into creating the digital yuan (e-CNY). It formally launched the second phase of its central bank digital currency (CBDC) pilot test program in August 2022.

 

United Kingdom

Although there are no laws specifically governing cryptocurrencies in the UK, the nation views them as property rather than legal cash, and crypto exchanges must register with the Financial Conduct Authority of the UK (FCA). Trading in cryptocurrency futures is also prohibited in the UK. Know Your Client (KYC), Anti-Money Laundering (AML), and Countering Terrorist Financing (CFT) standards all include reporting obligations that are particular to cryptocurrencies (CFT).

 

Although investors continue to pay capital gains tax on income from cryptocurrency trading, taxability often relies on the cryptocurrency activities carried out and who participates in the transaction.

 

As of 30 August 2022, suppliers of cryptocurrency exchanges and custodial wallets must adhere to the reporting requirements put in place by the Office of Financial Sanctions Implementation (OFSI). Now, cryptocurrency companies must alert OFSI as soon as they learn or have a solid suspicion that a person is under sanctions or has perpetrated a financial sanctions offence.

 

The lower house of the British Parliament declared cryptocurrencies to be regulated financial instruments in October 2022. The proposed measure includes stablecoins in the existing laws governing entities with a payments-focused emphasis.

 

Singapore

This island nation treats cryptocurrencies as property rather than legal cash, much like the United Kingdom does. The National Monetary Authority of Singapore (MAS) issues licenses and oversees exchanges through the Payment Services Act (PSA).

 

Long-term capital gains are exempt from taxation, contributing to Singapore's reputation as a haven for cryptocurrencies. Companies that regularly engage in cryptocurrencies are subject to national taxation, which treats gains as income.

 

In 2022, Singapore released guidelines cautioning digital payment token (DPT) suppliers against publicising their services.

 

South Korea

In South Korea, the Korea Financial Intelligence Unit (KFIU), a component of the Financial Service Commission, requires cryptocurrency exchanges and other service providers of virtual assets to register (FSC).

 

In 2021, South Korea will likewise outlaw the sale of any privacy coins on exchanges. The nation's parliament passed a new 20% tax on digital assets in 2021, although it was implemented in 2025.

 

The Digital Asset Basic Act is a project the nation is embarking on, and it could be finished by the first half of 2023.




The growing interconnection between the old financial system and the developing crypto ecosystem raises concerns about side effects that might affect systemic stability. Because of this, nations have adopted various measures to regulate the asset class as cryptocurrencies have grown in importance in the global investing scene. More countries are said to join regulation in the upcoming new year, making crypto safer for all.