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Regulation

South African Central Bank Will Impose New Crypto Regulations Soon

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The South African Central Bank, known as the Reserve Bank (SARB), is apparently going to impose new regulations for digital currencies and their use. This comes in an attempt to deter users from skipping currency controls.

The cryptonews first emerged from the local business oriented publication named Business Report which showed that on December 2, the SARB deputy governor Kuben Naidoo said that the new rules will be implemented in the first quarter of 2020, following a five year long series of consultations on this matter.

According to the statements from Naidoo, this follows a decision of FirstRand Bank which is one of the largest financial institutions in South Africa – ordered to discontinue providing banking services to digital currency exchanges in late November. At the time, FNB reportedly blamed regulatory uncertainty for the move.

As the South African Central Bank is ready to impose new regulations, the blockchain and crypto communities have already responded to the idea of further controls on crypto. According to the South African blockchain development community SA Crypto, the stance is as following:

“The implications of the Sarb clamping down on cryptocurrency use for the purpose of stricter capital controls are far-reaching and alarming.”

Meanwhile, cryptocurrencies have proved to be very popular in South Africa. Reports showed that 10.7% of the country residents owned crypto which is the highest in any country surveyed. The South African rand’s currency volatility, on the other hand, prompted consumers to seek protection for their money.

In addition to this, we can see that cross border payments are a contributing factor of crypto popularity in the country, especially knowing how remittances are often sent from countries like South Africa to 15 other countries on the continent in something known as the Southern African Development Community.

Meanwhile, members of BRICS (which include South Africa) discussed the creation of a new cryptocurrency in mid-November this year. At the event, it was said that:

“An efficiently operating BRICS payment system is capable of stimulating settlements in national currencies and ensuring the stability of settlements and investments between our countries, which form more than 20% of the global influx of foreign direct investment.”

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Regulation

SEC Charges Shopin Founder For Its ‘Fraudulent’ $42 Million ICO

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The latest series of events in the cryptocurrency news show that the US Securities and Exchange Commission (SEC) is making moves to several ICO players as of lately. The most recent update shows us that SEC charges Shopin and its founder, Eran Eyal, with orchestrating a fraudulent ICO.The initial coin offering (ICO) which was carried out by Shopin is now under charge by the US SEC. A press release issued on December 11 confirms this and shows that the SEC charges Shopin as an ICO which raised more than $42 million from August 2017 to April 2018. According to the regulator, Shopin's actions constituted an unregistered securities offering on Shopin Tokens.As Eyal told investors, the funds will be used from the token sale in order to create blockchain-based shopper profiles. These profiles would be used to track customer purchase histories across online retailers as well as recommend products based on this information. Still, as SEC Charges Shopin's founder, we can see that he (Eyal) never created a functional platform.The Director of the SEC's New York Regional Office, Marc P. Berger, recently noted:
“As alleged in today’s action, the SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile [...] Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering."
Furthermore, he also told the public that Eyal lied about having forged partnerships with established retail outlets when in fact no such partnerships existed. The SEC also claims that Eyal misappropriated investor funds to pay for personal expenses. The SEC charges Shopin for this and the complaint clearly states:
“Eyal used over $500,000 of investor funds for expenses such as his rent, retail shopping, entertainment, tickets to philanthropic events, and a dating service, but omitted to disclose to investors that he would use any proceeds for his own benefit.”
The official charges show that Shopin was violating the anti-fraud and registration provisions of the federal securities laws. For that, it is seeking injunctive relief, disgorgement with prejudgment interest as well as civil money penalties.  
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Regulation

AML Chief: Crypto Companies Filed 7,100 Suspicious Activity Reports

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America’s Anti Money Laundering (AML) chief stated that the crypto companies filed up to 7,100 suspicious activity reports since May. In our cryptocurrency news today, we get more answers about the activity reports.According to Kenneth Blanco, the AML chief, and director of the Financial Crimes Enforcement Network, the reports explain how the banking security ACT which is the cornerstone of the US AML law, applies to virtual currencies. Since then, Blanco said that more than 11,000 crypto-related SARs have been filled with the FinCen and about 2,100 have been referenced directly to the guidance of dozens of new entities filed in the reports.The high numbers show that the virtual asset service providers such as the crypto ATMs and exchanges are keeping a close eye on the potential illicit activities that could move across their network:
 “It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us.’’
Venezuela is one particular case where it seems that a hotbed of suspicious activity is forming according to Blanco. The Latin American country has its own oil-backed token- The  Petro, and it seems that it has spawned an increasing number of the unregistered money services businesses. The country is having a lot of issues with the high inflation and Petro was the tool that was supposed to help the country.Domestically, the crypto-related companies reported more darknet-linked customer transactions and scams along with a lot of activities that targeted the elderly who have limited knowledge about cryptocurrency and therefore are opened to risks. Blanco explained that all of the financial institutions have to re-consider the crypto SAR reporting especially those who currently don’t report any activities. He said:
 “If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency.’’
The remarks came as the crypto exchange and analysts firms both boost their efforts to expand suspicious activity reporting. As it was reported by Forbes, there was a noticeable existence of the confidential indicators of suspicion for Virtual asset service providers and also a playbook for easily picking out the suspicious activity assembled by the stakeholders themselves.
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Regulation

DenmarkTax Agency Requests Users’ Background Of All Crypto Transactions

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The Denmark tax agency, the Skattestyrelsen or SKAT, requests from all of the traders to provide a full background of all of their crypto transactions according to the latest reports that we have in our crypto news.The users have already started receiving letters from the Denmark tax agency and in the letters, SKAT asked the crypto users to provide information about profits and losses for the fiscal years of 2016 and 2018 according to the First in First Out principles. These principles represent a method of inventory valuation since all of the goods are sold or used in the same order in which the consumers initially purchased them.Furthermore, the Danish tax agency for the rates used for each transaction, information on the purpose of acquiring the digital currencies and documentation regarding the entire process of creating a crypto wallet.  In terms of the exchange services, SKAT requests all of the crypto users to reveal the confirmation of the trading activity in the form of a screenshot where there can be seen the full name of the individual and the agreement on the creation of an account. In addition to that, Skat aims to examine the crypto consumers’ account statements from the bank accounts in the previous period. The founder of the crypto tax startup Koinly, Robin Singh commented:
 “Many of our Danish users have received these letters, Skat is asking for a full breakdown of all their transactions and asking them to fix all past reports as well. Filing tax on cryptocurrency trades is a difficult task as crypto traders usually hold several exchange accounts & wallets and freely transfer crypto between them, so there’s no easy way to figure out what the capital gains are for any particular trade.”
Skat mostly focuses on the crypto consumers' transactions in 2018 when it confirmed it was identifying more than 2,700 individuals that owed taxes on their BTC gains. The agency intended to go after each one of the users that avoided their payment obligations. Skat stated at that time:
 “If something does not match, we will contact them and ask for more information. However, how many people it is and what it may mean, it is still too early to say.”
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Regulation

Ukraine Adopts New Legislation Making Crypto Payments Legal

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New legislation was adopted by the Ukrainian Lawmakers that have the consequence of legalizing crypto payments as the country upgrades its framework in strict compliance to international anti-money laundering (AML) standards. Ukraine adopts new legislation right after a week later when they considered how the new bill will affect the crypto markets and we are reading further in the cryptocurrency news.According to Forklog, members of the Verkhovna Rada- Ukraine’s parliament, have adopted a new bill that sanctions international AML practices in the country’s cryptocurrency regulatory frame. In the newly adopted bill, cryptocurrency is now defined as property in Ukraine. Consequently, cryptocurrency owners can now use their digital assets as an agent for exchange paving the way for legalizing trading, payments, investments, and transfers.Also, in the new bill is included a provision for private individuals to act as cryptocurrency transmitters and custodians. However, those services must be done in strict compliance with financial monitoring and reporting standards introduced true the bill. Ukraine adopts the new bill hoping to boost the adoption of digital assets in the country.The news of the legalization of cryptocurrency payments comes after the announcement by the Ministry of Digital Transformation of Ukraine that it entered a partnership with a Belarusian crypto exchange. As reported by DC forecasts the goal of the partnership is to gain know-how from the Belarusian experience in making a legal frame for payments and cryptocurrency adoption in general sense.By the legalization of cryptocurrency payments, Ukraine has made an important step in developing a national cryptocurrency market. In the first half of this year, the capital city of Kyiv announced that it was taking into consideration the possibility of using Bitcoin payments in its public transport system. By enacting the new regulation for cryptocurrency payments, Ukraine is also in compliance with the guidelines enacted by the inter-governmental Financial Action Task Force (FATF). Form the beginning of 2019 FATF is keen on guiding member nations to enact more stern regulatory provisions.The chief focus for the FATF in relation to cryptocurrency has been compliance with AML regulations. Few crypto exchanges were made into compliance with FATF ‘Travel Rule’. In the writing of the bill, Ukrainian MPs cooperated with the European Union (EU)- funded cryptocurrency experts. The government of Ukraine is hopeful that the enactment of the new bill will aid its goal of securing €500 million in financial assistance from the (EU).
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