Cryptocurrencies have been around for quite a while. However, until the beginning of mainstream adoption, their potential was fairly limited. In 2020, when institutions became more welcoming to digital coins, the market growth exploded. Today, many countries have already tried embracing cryptocurrency. They are working on regulations to govern crypto exchange.
While no international regulations have been implemented so far, the legal landscape is evolving rapidly. Here are the key jurisdictions with regulations concerning operations with cryptocurrencies.
- The United States
It is legal to exchange, buy, and sell cryptocurrencies, but the regulation is far from comprehensive. For The Financial Crimes Enforcement Network (FinCEN), cryptocurrencies are money transmitters. Meanwhile, The Internal Revenue Service (IRS) defines them as digital property. The US Securities and Exchange Commission (SEC) treats them as securities. At the same time, the platforms must follow the stipulations of the Bank Secrecy Act (BSA).
- The EU
The EU has made cryptocurrencies legal, but it still does not have any specific laws that would apply to crypto transactions. The 5th AML Directive requires compliance with the EU’s regulations against money laundering, but that’s all.
The USA’s Northern neighbor has a positive view on crypto adoption. The transactions are legal across the country, and the assets are regarded as a commodity that brings a business income. Now, registration with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is expected from any company dealing with crypto coins.
While cryptocurrencies are not legal in this country, crypto exchanges operate within the law. Malta is leading the way in terms of regulation. It has pioneered the enactment of acts regulating digital assets (MDIA, ITAS, and VFA) and blockchain. In 2018, the government introduced a new legal framework for crypto exchanges. It also set up the Malta Digital Innovation Authority, which monitors compliance with crypto policy and ethical use of digital assets.
In 2020, the government of Singapore signed Blockchain and Cryptocurrency Regulation that should speed up the adoption of crypto. This country has always been at the cutting edge of technological advancement.
Cryptocurrencies are regarded as property subject to Capital Gains Tax (CGT). The platforms are legal, but they must adhere to the stipulations of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and related regulations. Since 2018, all platforms for crypto exchange must be registered with AUSTRAC (the Australian Transaction Reports and Analysis Centre).
Cryptocurrency transactions were legalized in 2017. Under the Payment Services Act, you can buy, sell, exchange, or even lend or borrow crypto. All platforms are governed by the Financial Services Agency (FSA).