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Regulation

G20 Countries Sign A Declaration To Regulate Cryptocurrencies (Under FATF Standards)

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In the latest cryptocurrency news, we have the G20 Countries recently signed a joint declaration in Buenos Aires in order to regulate cryptocurrencies like Bitcoin and combat their use for money laundering and financing of terrorism in line with the Financial Action Task Force (FATF) standards.

The report was first published by Saudi Gazette, which cited the Section 25 of the declaration reading the following:

“We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards, and we will consider other responses as needed.”

Meanwhile, FAFT is a set of standards created by the Organisation for Economic Co-operation and Development (OECD) as a policy-making organisation that fights money laundering and the financing of terrorists. The organisation began to discuss ways to introduce binding rules that would govern the cryptocurrency exchanges around the world in a bid to accommodate new market realities.

As the G20 declaration reads, “other responses” were also considered, adding that it would seek “a consensus-based solution to address the impacts of the digitization of the economy on the international tax system with an update in 2019 and a final report in 2020.”

“The objective of the framework is to identify any emerging financial stability concerns in a timely manner. To this end, it includes risk metrics that are most likely to highlight suck risks, using data from public sources where available,” the FSB framework concludes.

The forum initially issued a communique in July and also has a regulator which is the Financial Stability Board (FSB) headed by Mark Carney, the Governor of the Bank of England who is a fan of strict monitoring in the crypto sector and recently published a set of metrics that it would use to monitor and bring sanity to the crypto markets.

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Altcoin News

CEO Of Allianz: Regulators Should Step In Harder And Outlaw Cryptocurrencies

While speaking at a panel discussion in London, CEO of Allianz Andreas Utermann urged market watchdogs to ‘’outlaw’’ cryptocurrencies and in today's crypto news we read more about his opinions. Utermann believed that a direct ban was actually preferable and he said to the regulators that they should outlaw cryptocurrencies by saying:
 “I am personally surprised that regulators haven’t stepped in harder.”
He was especially addressing the head of Britain’s Financial Conduct Authority Andrew Bailey who was sitting right next to him at the panel discussion. Bailey noted that Utermann’s opinions were ‘’quite strong’’ but he did agree that cryptocurrencies don’t have intrinsic value. Bailey made sure that the FCA is watching closely and that they have the initial coin offering sector under surveillance. Utermann’s stance doesn’t leave any room for negotiation but some of his colleagues at Allianz are more optimistic about the use of blockchain technology. The chief economist at Allianz Mohamed El-Erian said that he also doesn’t believe that cryptocurrency will ever be able to replace fiat money but they will become more widespread. He said:
 “Cryptocurrencies will exist. They will become more and more widespread, but they will be part of an ecosystem. They will not be dominant, as some of the early adopters believed them to be.”
El-Erian explained that crypto is not dead and the technology isn’t dead also. He is sure that we are about to see more widespread adoption by the private sector but also from the public one. El-Erian concluded that the last year’s frenzy was ‘’unwarranted’’.
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Regulation

Danish Tax Agency To Go After Its Nationals Who Secretly Trade Bitcoin

The Danish tax agency, Skattestyrelsen (SKAT) is in our crypto news today for announcing a massive crackdown on more than 2,500 nationals who traded bitcoin in secret on Finnish crypto exchanges. According to their information, more than 2,500 people bought about $5.80 million worth of bitcoin from the Finish exchange and managed to sell them back for more than $6 million in their local Danish currency. The price sums up to $12 million bitcoins that were traded unreported over two years time. The Directorate of SKAT Karin Bergen confirmed the announcement that they are now reviewing each case individually and will go after each person that didn’t report their offshore bitcoin trades:
 “If you have traded with bitcoins on the specific Finnish bitcoin exchange and have not specified any winnings, then you can hear from us so we can get your taxes in place’’.
The tax inspectors in Denmark are carefully going over each case so they can sum up the gains and losses made by these offshore trades. The chairman of the personal data department of SKAT explained that there are two types of trades, one called a curious trade where you invest a few thousand dollars and then there’s trading that involves huge amounts. Lawyers from Denmark confirm that bitcoin is taxable in the country and the country will impose charges when an asset such as BTC isn’t purchased properly or even sold properly for profits. Bergen noted:
“It’s probably just the tip of the iceberg. Although the Finnish company is a relatively small bitcoin exchange, the information they have revealed is a precious source, which clearly shows trends and patterns in the area.”
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Regulation

Japan: Tax On Crypto Will Reduce To Revitalize The Market

The government of Japan hinted a lot of plans earlier this year, all showing its initiative to ease the process of taxing crypto investments - all in order to refrain from the impractical taxation frameworks that negatively affect the local market. In today's crypto news, however, we have a new framework set up by Japan's government, aiming at reducing the tax on Bitcoin and other cryptocurrency investments. In fact, a committee of tax experts encouraged the authorities to simplify the complex process of disclosing taxable amounts that occur in investing in the crypto market. Before this, a local analyst said:
“If the rapid growth of the cryptocurrency sector in late 2017 is considered, 331 is a number that is simply too low to be true. A large portion of cryptocurrency investors probably did not declare their earnings to the government.”
Takeshi Fujimaki, who is a Japanese congressman and lawmaker, proposed four major changes to the taxation policies surrounding the digital asset market with the objective of revitalizing the market. In order to reduce the burden on investors and in consideration of the characteristics of the cryptocurrency market, Fujimaki proposed the following changes:
  1. Reduction of crypto tax gains from up to 55 percent to a fixed 20 percent rate on gains.
  2. Carry forward losses across quarters and years, until the cryptocurrencies are cashed out
  3. No taxes in trading crypto-to-crypto
  4. No tax on small cryptocurrency payments
All of these proposed changes are about to affect the market in a positive way and allow investors to trade in a fairer environment.
“In order to increase the volume of transactions between virtual currencies and to revitalize the virtual currency market, trading between virtual currencies should be tax exempt,” Fujimaki concluded.
 
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Regulation

Central Bank Governor Of China: STOs Are ‘An Illegal Financial Activity’

The People's Bank of China (PBoC) which is the central bank in the country, recently highlighted the illegality of Security Token Offerings (STOs) in the country. According to the latest crypto news as reported by the English-language outlet South China Morning Post (SCMP), a deputy governor of the China central bank named Pan Gongsheng reportedly said in a summit in Beijing that 'illegal' financing activities through STOs and ICOs "were still rampant in the mainland despite the nationwide clean-up of the market last year." Gongsheng also stated that if the government hadn't stepped in, the chaos of the crypto market could have hurt the overall financial stability in the country. The central bank official also said that "the STO business that has surfaced recently is still essentially an illegal financial activity in China.” As he wrote, the state of cryptocurrencies is associated with crime, saying that "virtual money has become an accomplice to many illegal and criminal activities." According to this article, Gongsheng noted that “most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes and other financial fraud.” In the article, he also mentions that the chief of the Bureau of Financial Work in the country, Huo Xuewen, warned against STOs about a week ago, stating:
"I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it.”
Meanwhile, blockchain adoption has been relatively embraced in China and is in a completely different type of regulation and adoption compared to crypto. The legal basis of blockchain can be assumed to be the Chinese Supreme Court's ruling from September which saw blockchain legally authenticating evidence in the country.
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