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Virtual Currencies: International Actions and Regulations

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Virtual Currencies: International Actions and Regulations Virtual Currencies: International Actions and Regulations Last Updated: September 2019 No Legal Advice or Attorney-Client Relationship: This chart is provided by Perkins Coie LLP’s Decentralized Virtual Currency industry practice group for informational purposes only and is not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Recipient should not act upon this information without seeking advice from a lawyer licensed in his/her own state or country. For questions or comments regarding this chart, please contact [email protected]. Developments Over Time Country Current Summary Date Occurrence Sources 10/09/2017 The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Supplementary Guidance issued guidance on the regulation of initial coin/token offerings – Regulation of Initial (ICO) and digital currency as supplemental guidance to the existing Coin/Token Offerings and 2015 Financial Services and Markets Regulations (FSMR). The Virtual Currencies under guidance was directed at both issuers and intermediaries. FSRA the Financial Services and indicated that it will determine if a token issued in an ICO would be Markets Regulations regulated as a security on a case-by-case basis. A token deemed a security (Security Token) would be subject to regulation under the FSMR. Additionally, any market intermediaries dealing in Security Issuers and intermediaries of virtual Tokens and/or their derivatives will need to be licensed and currencies and “security” tokens may be approved by FSRA as Financial Services Permission holders, Abu Dhabi subject to regulation—depending upon the Recognised [sic] Investment Exchanges, or Recognised [sic] nature of the product and service. Clearing Houses. The Guidance also makes clear that, while spot trading of virtual currencies is not regulated under FSMR, derivatives are regulated as a type of Specified Investment under the FSMR. Consequently, any market intermediaries or market operators dealing in derivatives of virtual currencies will be subject to regulation under FSMR. 29032535.33 The purchase, sale, use or possession of any 01/01/2018 The 2018 Financial Law states that the purchase, sale, use, and 2018 Algerian Financial cryptocurrencies is prohibited in Algeria. possession of so-called ‘virtual currency’ are prohibited. “A virtual Law (French translation) currency is one used by Internet users over the Internet. It is Library of Congress: characterized by the absence of physical support such as coins, Algeria Algeria paper money, or payments by check or credit card.” Any violation of the provision is stated to be punishable in accordance with the laws and regulations in force. 04/11/2019 According to media reports, national agencies are in consultation Cointelegraph (ES) with cryptocurrency industry members regarding potential CNV 2017 Alert regulation and the evolution of cryptocurrency exchanges and ‘ICOs’ as forms of marketable securities are being studied by the GLI Summary CNV. Virtual currencies are not legal tender under the country’s National Constitution, which designates the Central Bank as the only Argentina’s largest futures trading market, the Mercado de Termino authority that may issue legal tender. de Rosario (Rofex) has been considering offering services to Bloomberg - Argentina's investors in digital currencies and plans to make an announcement Biggest Futures Market 11/02/2017 by the end of 2017. Preliminary drafts for the services include Plans to Join the Bitcoin Argentina Additionally, Argentina’s securities regulator offering custody services for Bitcoin and the ability for clients to Party has stated in the past that ICOs aren’t per se use Bitcoin as collateral in futures trading. regulated by the agency, but that certain tokens, depending on their structure, could The Unidad de Información Financiera (UIF) issued a resolution requiring a wide range of financial institutions as well as profit and meet the securities definition under the 07/10/2014 No longer available regulations. non-profit entities to report all transactions with virtual currencies on a monthly basis. The Central Bank of Argentina issued a statement about the risks 05/29/2014 involved in the use of virtual currency, including volatility and No longer available fraud, and confirmed that it is not legal tender. The Austrian Finance Ministry is considering regulation for ICOs and cryptocurrencies based on existing trading rules for gold and Bloomberg article 2.23.18 derivatives. The current goals of the proposed legislation are Austria* Austria regulates financial services involving - Austria Eyes Bitcoin 02/23/2018 curbing money laundering, combat terrorist financing, and subject virtual currencies. Rules Based on Gold *EU Member trading platforms to the oversight and rules that exist for financial Derivatives instruments, according to Austrian Finance Minister Hartwig Loeger. - 2 - 29032535.33 The Financial Markets Authority (FMA) of Austria issued a warning advising the country’s consumers to exercise utmost caution in relation to virtual currencies, particularly when related to 11/14/2016 business and investment models based on virtual currencies. FMA Press Release Further, the FMA explicitly advised consumers that such offerings are not subject to any form of regulation, and in particular are not subject to supervision by the FMA. The Financial Markets Authority (FMA) of Austria issued guidance on the regulation of alternative currencies and bonus points. When FMA Focus Alternative such products represent financial services, a license issued by the 06/01/2016 Currencies Financial Market Authority (FMA) is required. Products providing a means of payment may require a banking license and may be FMA FinTech Navigator regulated as issuance of E-money. Austrian ministers appear to have given conflicting guidance on the tax treatment of Bitcoin during a parliamentary Q&A session. The finance minister reportedly stated that Bitcoin is not a financial 07/25/2014 instrument, and that capital gains tax would apply to bitcoin No longer available holdings sold within a year of purchase, while the minister for science, research and economy reportedly referred to German policy recognizing bitcoin as a unit of account. Digital currency exchanges have l be subject In May 2019, the Australian Securities and Investment Commission to registration and regulation in the country (ASIC) issued updated guidance on initial coin offerings (ICOs) since mid-2018, after amendments to the and crypto-assets. The guidance is limited to issues under the Anti-Money Laundering and Counter- Corporations Act 2001 and the Australian Securities and Terrorism Financing Act of 2006. Investments Commission Act 2001 and is predicated on an ICO or crypto-asset being deemed a “financial product.” The questions it Australia’s primary financial regulator, the touches upon under these two laws include “what should you Australian Securities and Investments consider when offering crypto-assets through an ICO?,” “what is Commission (ASIC), does not regulate misleading or deceptive conduct in relation to an ICO or crypto- Australia 05/31/2019 Guidance ‘ICOs’ in principle, but digital assets could asset?,” “when could an ICO be or involve a financial product?,” be regulated as ‘financial products’ or “when could a crypto-asset trading platform become a financial financial services’ under Australia’s existing market?,” “what about financial products that reference crypto- financial services regulatory regime. To date, assets?,” and “how do overseas categorizations of crypto-assets there has not yet been a regulated financial translate to the Australian context?” The guidance also provides product ICO in Australia. reminders to different types of crypto-asset participants as to what, Digital currency transactions are no longer depending on the relevant facts and circumstances, their respective subject to goods and services taxes (GST) licensing responsibilities may be under the applicable Australian but remain subject to incomes and capital laws. - 3 - 29032535.33 gains taxes. AUSTRAC Guidance AUSTRAC suspended two cryptocurrency exchanges after an GLI Summary investigation found the companies were being used for drug trafficking. This is the first suspension of cryptocurrency exchanges Reuters 3.8.2019 in the country since April 2018 legislation that added cryptocurrency exchanges to AUSTRAC’s purview. AUSTRAC is Australia’s intelligence agency tasked with 03/08/2019 monitoring financial transactions to identify money laundering, organized crime, tax evasion, welfare fraud, and terrorism. Digital currency exchanges are entities that exchange money (Australian or foreign currency) for digital currency, or vice versa. It is illegal to operate a digital currency exchange without registration. AUSTRAC can impose civil penalty orders, enforceable undertakings, infringement notices and remedial directions, among other enforcement actions. Australia’s Digital Transformation Agency (DTA) cautioned other government agencies of the limitations of using blockchain technology to share and exchange information. In an advisory, The DTA, which worked in a cross-agency team to determine the suitability of blockchain technology for government services, discovered gaps in the technical and business aspects of technology when applied to trial projects and in comparison with different technologies. 02/18/2019 Advisory The gaps include additional risks encountered when using
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