Cryptocurrency Regulations and Speculations in Q2 of 2018 — Part 2

Global Cryptocurrency Regulations

We hope that our previous post was of interest to you. We have covered cryptocurrency regulations in some of the most important global markets. Read part one here.

Going forward, we will continue to look at various regulations laid out by authorities in some other markets of interest.


Summary of past regulatory activity

Up until this year, Switzerland’s traditional banking system was not operating with “crypto valley” startups, given the Anti Money Laundering (AML) Act. Cryptocurrency business’s compliance with the AML Act, regulated since 2014, is a must and is basically the only regulation; however this results in a lack of basic banking services. This domino effect is killing the emerging startups in Zug, a town near Zurich known as “crypto valley”, which is also home to the Ethereum Foundation.

The Swiss government recognizes Bitcoin & other cryptocurrencies usage as a legal means of payment which is non-state controlled. The country also recognizes exchanges which are registered with the Swiss Financial Market Supervisory Authority (FINMA) as legal. Further, the Swiss Federal Tax Administration (SFTA) considers Bitcoin as assets to be taxed under Swiss wealth tax and to be declared in annual tax returns.

Summary of current regulatory activity

Swiss policymakers have hinted that cryptocurrency businesses could have full access to banking services by the end of 2018. Economics Minister Johann Schneider-Ammann said in Jan 2018, that Switzerland wants “to be the crypto-nation”. The FINMA has also put up clear guidelines as well as a working group for ICOs which is expected to report by the end of the year.


Summary of past regulatory activity

“Bitcoin is not yet legal tender”, said Dr. Ernest Addison, governor of the Bank of Ghana in Jan 2018. “Fear of the Unknown” is how Ghana’s cyber-security advisor to the ministry of communications, Albert Antwi Boasiako, has described the challenge for Ghana’s cryptocurrency adoption.

Summary of current regulatory activity

Things are at an early stage in Ghana, there are ongoing discussions among policymakers to observe and understand global development and regulations. However, since Finchcoin, the first official digital currency of Ghana was introduced, things have turned around. Its expansion plans also includes a Finchcoin-based bank, an exchange, bonds and a mining station. Also, there is a bill pending to be tabled in Ghana parliament pushing for full legalization of cryptocurrencies in Ghana.


Summary of past regulatory activity

Singapore has been a favorite among startups given its friendly tax regime and bureaucratic flexibility. Since cryptocurrency introduction, Singapore was seen as a crypto-friendly country. In 2013, the Monetary Authority of Singapore (MAS) stated that “Businesses can choose to accept bitcoins for goods and services as it’s a commercial decision in which MAS doesn’t intervene.” This was followed by a warning for users and investors that, “if a cryptocurrency ceases to operate, there may not be an identifiable party responsible for refunding their money or for them to seek recourse against”.

In Jan 2014, a series of tax guidelines were issued by the Inland Revenue Authority of Singapore, according to which, bitcoin transactions may be treated as a barter exchange if it is used as a payment method for real goods and services. Businesses that deal with bitcoin currency exchanges will be taxed based on their bitcoin sales.

Summary of current regulatory activity

Currently, the Singapore dollar makes up 0.02% of daily global bitcoin trading volume but the country has emerged as a hub for ICOs. It’s speculated that the Monetary Authority of Singapore plans to tokenize the country’s currency in near future.

South Africa:

Summary of past regulatory activity

In December 2014 the Reserve Bank of South Africa issued a position paper on digital currencies whereby it declared that cryptocurrencies had ‘no legal status or regulatory framework’. However, during 2017, the government of South Africa was working with Bankymoon, a blockchain service provider, to create a favorable regime for cryptocurrencies. Given the dependency of the SA Rand on the Chinese Yuan, it’s also speculated that SA may have a similar regulatory framework, which China would be adopting.

Summary of current regulatory activity

In 2018 the South African Revenue Service (SARS) classified bitcoin and other cryptocurrencies as intangible assets and any earnings from cryptocurrency are taxable. In contrast, the South African Reserve Bank (SARB) is still formulating policies for cryptocurrencies.

South Korea:

Summary of past regulatory activity

The president of the Bank of Korea stated in December 2013, that bitcoin will be regulated in the future. In December 2017, South Korea’s Financial Services Commission forced the cancellation of seminars by security firms which were marketed towards bitcoin futures investors. On suspicion of tax evasion, various cryptocurrency exchanges were raided, this uncertainty caused market-wide cryptocurrency sell-offs followed by officials banning anonymous account trading.

Summary of current regulatory activity

Last year, regulators in South Korea had not only banned the trade of futures contracts and other derivatives attached to bitcoin or cryptocurrencies, but also ICOs. As of Jan 2018, New York State’s Department of Financial Services (DFS) has requested customer information on Korean bank accounts that have NY branches and were trading in cryptocurrencies.

We will be covering the latest updates on even more countries in our next and final blog post on international regulations.

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