crypto legislation

South Korea Passes Comprehensive Law Officially Legalizing Cryptocurrency Trading And Holding

A day after India’s Supreme Court lifted the ban on cryptocurrencies, South Korea’s National Assembly followed suit and has amended the Act on Reporting and Use of Specific Financial Information. As reported on March 5, this move fully legalizes cryptocurrencies in South Korea.

Momentous amendment

Following the passage of the amendment by the South Korean Parliament, cryptocurrency holding and trading have finally found their place in the nation’s legal system. It is speculated that this turn of events will usher in a restructuring of the country’s blockchain sector.

After President Jae-in Moon signs the passed amendment, the enactment process will kickstart and is expected to take full effect one year from the date of signing, with a six month grace period to follow for a market adjustment.

Once this time lapses, crypto businesses, such as exchanges, wallet companies, and trusts, will have to adhere to the new rules and regulations. For instance, a real-name verification partnership with an approved local bank will be needed. This will come in handy in averting money laundering as a verified person will be assigned a single bank account where he/she can deposit and withdraw fiat currency to and from an exchange.

The lengthy two-year wait

The landmarking amendment had to wait for two years for it to be passed as it was subjected to thorough deliberations, as well as trial and error procedures. Nevertheless, a happy ending is now in sight as the Korean National Assembly has given cryptocurrencies the greenlight.

South Korea has emerged to be one of the nations setting a precedent in the blockchain/crypto arena. For instance, in October 2019, it revealed that it could pump in a whopping $12.8 million USD into the blockchain industry. Later on, in January 2020, it announced its intentions of a 20% tax on cryptocurrency proceeds.

With cryptocurrencies being validated in South Korea and India, will other nations follow suit?

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Japan’s Finance Minister Says No Plans to Lower Taxes for Cryptocurrencies Amid Call for Tax Rate Cut

Japan was one of the first countries around the globe to begin accepting cryptocurrency. Despite this history, Japan’s finance minister, Taro Aso, suggested that he was not willing to push for lowering the tax rate of cryptocurrencies to a flat 20% because it is difficult for the majority of households in Japan to invest in digital assets.

Crypto Tax Hurts Consumers

Although several people are considering steps that would lead to lowering tax rates, the finance minister indicated that he would not help in that direction. According to Aso, lowering tax rates on cryptocurrencies to a flat 20% is not the appropriate move to make. He justified his stance by stating that it is difficult to get most investors in the country to invest in cryptocurrency and, therefore, there is no need to adjust the tax rate.

Lowering tax rates of cryptos is the goal of the current legislation. The statement of the finance minister came as a response to a question from a member of the Japan Restoration Association, Shun Otokita. Aso expressed his statement during a meeting of the House of Councilors on Financial affairs on June 2nd.

Aso mentioned that: “Out of 1900 trillion yen financial assets held by households in Japan, around 900 trillion yen is now being held as cash deposits and that is abnormal.”

Aso’s reasoning is understandable. Basically, there are several numbers of cash-based businesses in Japan as the majority of citizens like keeping their savings liquid. Aso thinks that it would be difficult to convince the majority of investors in the country to go for cryptocurrency. He, therefore, believes that the tax rate on cryptocurrencies should remain at it is.

Of course, crypto tax rates are high, which damages people who use cryptocurrencies in Japan. Almost all cryptocurrency income – from lending, mining, and trading – is categorized as miscellaneous income on taxes and can be taxed up to 55%. But the country is taxing stocks at a flat rate of 20%. This is something that pro-crypto lawmakers have been pushing for legislation to bring the tax rate of cryptocurrencies down to 20%. However, based on the finance minister’s suggestion, it appears that pro-crypto legislators will have to wait a bit longer.

The modification to the country’s existing legislation on cryptocurrency (The Payment Service Act) came to effect on May 1. The newly amended regulation requires that all references to “virtual currency” to be replaced with “crypto assets.”

Speaking about cryptocurrency’s volatility, the finance minister jokingly commented that the word “crypto” sounds a bit strange and shady and thus suggested that the country uses the Japanese word “ango shisan” derived from stablecoin, as this sounds more stable.

Furthermore, the amended legislation reduces the leverage cap for cryptocurrency margin trading from 4x to 2x. This is another issue that several crypto traders did not receive positively. But the Financial Service Agency (FSA) – Japan’s financial watchdog – considered it as necessary so that to prevent fallouts such as the crash recently experienced during mid-March.

Japan FSA Remains Cautious on Bitcoin EFTs

In May 2019, the Japanese Financial Services Agency (FSA) indicated a cautious approach to ETFs (exchange-traded funds) based on cryptocurrencies. The FSA expressed hope for the crypto-based EFT’s approval in the US by the SEC (the Securities and Exchange Commission). The financial regulator stated that such crypto assets are important and Japan should not lag behind other nations in that regard. The watchdog commented that the introduction of such assets in the country would lead to market growth by making institutional investment easier, thus leading to lower volatilities. However, the regulator showed opposing views concerning cryptocurrencies and crypto EFTs, saying that cryptos like Bitcoins don’t have intrinsic value and that could result in intolerable price volatility. Japan is one of the countries with the most strict regulations concerning cryptocurrencies in the world.

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Australia Surpasses Asia in Crypto ATM Installations

Australia has become a leading country in the adoption of cryptocurrencies, with a growing number of businesses and individuals recognizing the benefits of using digital assets for daily transactions. According to Coin ATM Radar, Australia has surpassed Asia in the total number of crypto ATMs installed, with 364 machines as of January 2023. This represents a significant increase since the beginning of the year, with the country climbing from fifth to third place in January alone.

Over the last eight months, Australia has consistently added Bitcoin ATMs, unlike leading European nations and the United States, which reported a reduction in ATM installations during the same period. This suggests that Australia is on a crypto ATM installation spree, reflecting the growing demand for fiat-to-crypto conversions in the country.

In contrast, Asia, which includes major economies such as China, Japan, Singapore, and India, hosts only 355 crypto machines, representing only 1% of the total crypto ATMs installed worldwide. Despite the vast population and economic power of these countries, Australia has managed to outpace them in the installation of crypto ATMs.

The increasing popularity of cryptocurrencies in Australia is not limited to the installation of crypto ATMs. Leaked internal documents from Australia’s Department of the Treasury reveal that the country is also considering the introduction of crypto legislation. This would provide a regulatory framework for the crypto industry, helping to legitimize and foster its growth.

Although the final submissions to the cabinet will reportedly come later in the year, it is clear that crypto legislation is on the horizon in Australia. This would bring the country in line with other leading crypto-friendly nations, such as Switzerland and Malta, which have established themselves as global hubs for crypto innovation and adoption.

In conclusion, Australia’s growing number of crypto ATM installations and its consideration of crypto legislation demonstrate the country’s commitment to fostering the growth and adoption of cryptocurrencies. As the crypto industry continues to evolve and gain mainstream acceptance, Australia’s proactive approach positions it as a leader in the global crypto landscape.

Coinbase Legal Chief Urges Swift US Crypto Legislation Amid Israel-Hamas Tensions

Paul Grewal, the Chief Legal Officer at Coinbase, voiced a strong stance against funding malicious entities through cryptocurrencies in a series of tweets on October 11, 2023. His tweets come amidst escalating geopolitical tensions involving Israel and the terrorist organization, Hamas. Grewal labelled the situation as “evil,” emphasizing that no funds should be directed towards supporting Hamas or similar organizations, irrespective of the form of assets—be it fiat currency, gold, or cryptocurrency.

Grewal underscored Coinbase’s rigorous efforts to mitigate the misuse of cryptocurrencies on its platform. The measures include Know Your Customer (KYC) checks, sanctions screening, Suspicious Activity Report (SAR) reporting, and fostering strong partnerships with law enforcement agencies. He elucidated that these steps are integral to ensuring that cryptocurrencies are not leveraged for illicit purposes on Coinbase’s platform.

Further, Grewal advocated for the swift enactment of sensible cryptocurrency legislation within the United States. He opined that fostering the cryptocurrency industry in nations adhering to the rule of law is crucial. This, according to Grewal, would prevent the industry from veering into regions where human rights and public safety are not prioritized.

The discourse triggered a ripple of responses from the crypto community, including remarks from Mike Alfred, who pointed out Binance’s late response to similar issues, and Sam Morrow, who expressed gratitude for Binance’s current involvement. Others questioned the implications of asset seizures on Coinbase, hinting at potential infringements on individual rights.