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Regulation

Crypto Regulation In UK May Take Up To 2 Years To Be Drafted

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A new legal report is in the news on our DC Forecasts crypto news site today – centered around the market in the United Kingdom and the potential regulation of cryptocurrencies. Issued by a UK-based law firm, the report shows that it may take up to two years for such regulations to be introduced.

According to James Kaufmann who is the Legal Director at Reynolds Porter Chamberlain UK (RPC) commented on the subject in a statement published by his company, saying that the main reason for such delay is the approval that needs to be given from several legal bodies within the country.

Meanwhile, RPC is active in UK and Asia, as a firm which has over 80 partners and has been named ‘Law Firm Of The Year’ three times in a row since 2014. According to Kaufmann, the process of regulation needs to move bills that are “lengthy” given that the recent proposals sent to the House of Commons Treasury Committee (HM Treasury) have just begun moving forward.

As Kaufmann said:

“Bringing a complex and fast-evolving area like cryptocurrencies into a regulatory framework is going to be a difficult and lengthy process. Added to this, big issues like Brexit are already occupying a lot of regulator’s time,”

He also pointed out to the past precedents in the release, stating:

“Past precedents show it can take years to make relatively minor regulatory changes to the financial regulatory regime. For example, it took two and a half years from the Treasury’s original announcement (10 May 2004) for the regulation of home reversion plans to come in force (6 November 2006).”

In order to regulate cryptocurrencies, the Treasury Committee will need time to study the industry and know which “specific activities related to cryptocurrencies” would require monitoring, certain proposed regulations, consultation periods and changes.

 

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Regulation

South Africa Doesn’t Intend On Banning Crypto Trading

A consultation paper was issued by the South African Reserve Bank, showing the potential risks and benefits of cryptocurrencies and according to the official statement reaching in our crypto news, the paper was developed with the help of multiple government agencies. The document is titled ‘’Consultation Paper on Policy Proposals For Crypto Assets’’ and there you can see that the South African government makes clear that it doesn’t have a plan to ban cryptocurrencies or crypto trading for that matter. The paper proposes that all of the crypto trading platforms and payment service providers including crypto ATMs should register with the Intergovernmental FinTech Working Group that was established by the South African Government in order to foster fintech innovation. All of the crypto-related businesses will be obliged to comply with the Anti-Money Laundering and Counter-Terrorism Financing requirements. Also, major state agencies such as the Financial Intelligence Center, Nationa Treasury, South African Revenue Service and the Central Bank of South Africa worked together to develop the consultation paper. The document will be opened to the public by the middle of February 2019. Back in January, the South African government launched a regulatory group that was only dedicated to blockchain and cryptocurrencies. We are waiting for the group to release a final research paper somewhere in the middle of 2019 according to the Minister of Finance Tito Mboweni. The Reserve Bank of South Africa also pointed out that it tested successfully the Proof-of-Concept that they are going to use in their interbank payment system using an Ethereum-based private blockchain.
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Regulation

Crypto Exchanges In Bulgaria Are Investigated: Government Asks For 10% On Profits

In today's crypto news, the government of Bulgaria is starting to investigate crypto exchanges to demand taxes from the profits that investors generated from trading digital assets such as Bitcoin and other altcoins. The National Revenue Agency (NRA) of Bulgaria has categorized cryptocurrencies as financial assets which incur a 10% tax on profit that individuals have to disclose on an annual basis. The main problem, however, with NRA's regulation of cryptocurrencies using the same policies is that it does not take into account the volatility of the emerging class. Meanwhile, cryptocurrencies are still in their infancy stage and the dominant digital assets such as Bitcoin and Ethereum still demonstrate daily moves from 5% to 15%. Obviously, if an investor in Bulgaria is required to declare his profits on taxes on an annual basis, the decreasing price of Bitcoin could turn in a large negative return for the investor. Bulgarian authorities are now considering crypto assets to be anonymous and have already said that by doing that, it will be easy for investors to evade taxes in the crypto market. With the Know Your Customer (KYC) and Anti-Money Laundering (AML) systems integrated by all the local exchanges, however, it will be difficult to hide or confine any transactions from the authorities.
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Blockchain News

Accounts Of The First Digital Bank In India Closed After Involving In Crypto-Related Activity

Digibank, India’s first digital bank started closing accounts that allegedly were involved in crypto-related activities after a claim made on Twitter reached our crypto news today. The Twitter user ‘’IndianCryptoGirl’’ posted about this on January 14 but has also taken to the social media platform plenty details of the anti-crypto restrictions that were imposed on all of the account holders in India’s second largest bank Kotak Mahindra Bank. Both banks imposed strict measures related to the prohibition on domestic banks dealing with crypto businesses which were first announced by the central bank of India last July. According to the IndianCryptoGirl tweet, Digibank is a multinational financial services company which froze multiple accounts on its platform after it detected transactions from entities identified to be virtual currency traders or brokers. The Twitter user clarified:
 “I've been a user of DBS' Digibank for a year. Although I regularly used Kotak Mahindra Bank for my cryptocurrency transactions, I used Digibank only 7 times throughout the year. On January 14th, I received multiple messages from my twitter [sic] followers regarding an account closure notice by Digibank. I checked my mailbox and found the mail myself.”
However, Digibank stated:
 “Reserve Bank of India through their public notices have warned/advised the public regarding risks associated with virtual currencies. We reiterated the same vide our emails dated 4th May 2018 and 2nd Aug 2019, cautioning our account holders [against] the risks associated [...] and that DBS accounts and debit cards should not be used for their purchase or any kind of dealings.”
Many other users responded to the allegations that not only Digibank but many other banks are doing the same as well.
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Blockchain News

BitMex Pulls The Plug On Trading Accounts In Quebec And The US

BitMex, the Hong Kong Based futures exchange, shuts down all of the trading accounts in the US and Quebec-Canada because of the massive regulatory restrictions in North America. More about this decision, we read in our blockchain news below. The exchange is one of the most active trading platforms in the world and it’s now battling with the impact of the strict laws for exchanges in the continent. It is currently shutting down trading accounts in US and Quebec just in the middle of the crackdowns on unlicensed crypto exchanges. According to the South China Post:
‘’The development comes at the same time as the Hong Kong-based company notifying users in North Korea, Iran, Syria, Cuba, Sudan and Sevastopol in the Crimea since the fourth quarter of 2018 against holding positions or trading on BitMEX, as these are restricted jurisdictions.’’
It seems like BitMex only wants to cover its back and provide protection for their users against regulatory crackdowns. However, the exchange decided to pull the plug on the trading accounts after the Canadian regulatory body has announced the BitMex is operating illegally in Canada:
‘’BitMEX is not registered with the AMF and is therefore not authorized to have activities in the province of Quebec. We informed this company that its activities were illegal.’’
There is still no explanation why the exchange decided to shut down the trading accounts in the US. Many believe that the exchange does so because of the same strict crypto regulations. We are still expecting a comment from BitMex since it seems like there is almost a billion dollars worth of crypto still on the platform.
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