Cryptocurrency continues to change and evolve as a testament to the new and growing technologies involved. As this transformation grows, more and more governments around the world remain conflicted on how best to regulate the currency and whether it’s time for it to be integrated into mainstream banking and investments.

 

Cryptocurrency regulation is a much-debated topic and is very controversial. But, it’s clear that due to the irregularities in regulations across the world, cryptocurrency is subject to many different classifications and tax treatments all over the world. These new regulations that are being introduced may be what is needed when it comes to adding stability in a highly volatile market. With that in mind, let’s have a look at how cryptocurrency regulations are changing around the world.

 

United States

Even though there are a large number of cryptocurrency investors in the US, the country is yet to develop a clear and regulatory framework for trading. There is a lot of debate in the US as to what crypto actually is, with the Securities and Exchange Commission (SEC) views crypto as security, whilst the Treasury calls crypto a currency.

 

Cryptocurrency exchanges and trades in the US come under the regulatory scope of the BSA and they must be registered with the Financial Crimes Enforcement Network (FinCEN), as well as comply with anti-money laundering and following obligations when it comes to financing terrorism. Currently, cryptocurrency is not considered legal tender in the UK, and whilst crypto exchanges are legal, regulations do vary from state to state.

 

United Kingdom

The UK currently considers cryptocurrency as property, instead of legal tender. As well as this, cryptocurrency exchanges need to register with the Financial Conduct Authority (FCA) and are banned from offering crypto trading. The regulatory body in the UK has introduced cryptocurrency-specific requirements that relate to Know Your Customer (KYC).

 

Whilst investors still pay capital gains tax on trading profits made through crypto, taxability depends on the crypto activities that have been undertaken, as well as who engages in the transaction. Although the crypto market in the UK is regulated more than others, unfortunately, there are a growing number of crypto scams that take place in the UK and investors are falling victim. Luckily, there are now specialist investment fraud lawyers who may be able to help investors recover money lost through crypto scams.

 

Japan

Japan takes a more progressive approach when it comes to cryptocurrency regulations and currently recognises cryptocurrencies as a legal property with the Payment Services Act (PSA). Crypto exchanges made in Japan must be registered with the Financial Services Agency (FSA) and comply with the AML/CFT obligations. When it comes to money made from crypto investments, Japan treats it as ‘miscellaneous income” and chooses to tax investors accordingly.

El Salvador

In September 2021, El Salvador became the first count to make Bitcoin a legal tender and allows consumers to use cryptocurrency in all transactions. However, this has not been well received by residents, who are dubious about using it instead of currencies such as the USD. Since its introduction as a legal tender, Bitcoin has quickly lost around half of its value, which could spell out economic difficulties for El Salvador.

Conclusion

Cryptocurrency continues to cause conflict in countries around the world, however, with a number of countries looking to introduce regulations, it’s likely that in the next few years, there will be standard regulations put in place. Alongside this increase in regulations, a number of law experts are looking to help investors recover money lost through crypto trading scams and firms, such as Wealth Recovery Solicitors can help investors potentially recoup lost finance.

By lalae

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