Tag:cryptocurrency

1
AML Reforms Part 2: Digital Currency Service Providers
2
FINRA’s Findings: Member Firms Get Failing Grade in Crypto Communications
3
Australia: Licensing Comes to the Crypto Industry
4
Europe: Gains From Crypto Trading Are Taxable, German Court Decides
5
Australia: Treasury Releases Token Mapping Consultation Paper
6
Europe: UK Regulation of Cryptoassets – Another Glimpse but Still None the Wiser
7
Australian Regulatory Update – 14 November 2022
8
AUSTRALIA: CRYPTO DOWNTURN AND ITS REGULATION
9
United States: 10 Impactful Provisions of the Lummis-Gillibrand Bill

AML Reforms Part 2: Digital Currency Service Providers

By: Daniel Knight and Kithmin Ranamukhaarachchi

The Australian Attorney-General’s Department (Department) has released five consultation papers outlining proposals for extensive reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime.

Read More

FINRA’s Findings: Member Firms Get Failing Grade in Crypto Communications

By: Richard Kerr, Eden Rohrer, and Aiden O’Leary

On 23 January 2024, the Financial Industry Regulatory Authority (FINRA) published its findings from a 2022 targeted exam sweep, which may serve as a warning to broker-dealers offering crypto asset products. FINRA conducted a sweep reviewing communications made between 1 July 2022 and 30 September 2022 by member firms in connection with crypto assets and crypto-related products and services, focusing on compliance with FINRA Rule 2210 (Communications with the Public). The exam focused not only on written material, but also on communications made via websites, podcasts, advertisements, social media, and other public channels.

Read More

Australia: Licensing Comes to the Crypto Industry

By: Daniel Knight and Kithmin Ranamukhaarachchi

Yesterday the Australian Federal Government released its proposal paper on regulating the crypto industry (Paper). The government proposes to regulate exchanges, custodians and other digital asset service providers within the scope the Australian Financial Services (AFS) licensing regime.

Read More

Europe: Gains From Crypto Trading Are Taxable, German Court Decides

By Hilger von Livonius

In a recent decision of 14 February 2023, the Federal Fiscal Court (Bundesfinanzhof, BFH), the highest German tax court, has ruled that privately held cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and Monero (XMR) are – notwithstanding the fact that there are no physical goods in which a traditional form of legal ownership can be established – taxable assets for German income tax purposes. As a consequence, any gains from their acquisition (against fiat currency or otherwise) and sale (or exchange) within a one-year period will be taxable (at the owner’s personal tax rate); if, however, the relevant cryptocurrency has been held for more than one year, any gains will be tax exempt. For these purposes, the holder of the “private key” will be considered as legal owner of the cryptocurrency. The tax treatment of a realization of an increase in value of cryptocurrencies is therefore, in Germany, substantially the same as for fiat currency.

Australia: Treasury Releases Token Mapping Consultation Paper

By Daniel Knight and Oliver Herrmann

New licensing requirements for crypto service providers are coming, following a series of consultations launched last week by Treasurer, Jim Chalmers. The Government approach focuses on strengthening enforcement, bolstering consumer protection and ultimately establishing a new licensing framework.

Read More

Europe: UK Regulation of Cryptoassets – Another Glimpse but Still None the Wiser

By Kai Zhang and Philip Morgan

On 1 February, the UK Government published another consultation paper on the proposed regulation of business relating to cryptoassets in the UK. This is to seek views (by 30 April 2023) on the overall approach and policy direction, and includes a call for evidence to gather more pertinent information on decentralised finance. As such, the consultation does not contain details on any specific proposed rules.  For example, the proposed cryptoasset-related regulated activities described in the consultation paper are stated to be illustrative of the sorts of activities the Government intends to regulate, rather than specific proposals. For further information on this consultation please see our fintech blog here.

Australian Regulatory Update – 14 November 2022

By Jim Bulling and Anabelle Weinberg

1. Bitcoin plunges as FTX Trading files for bankruptcy – calls for more transparency from crypto exchanges

Bitcoin has plunged following the fall of FTX Trading (FTX). It remains unclear when or if traders will be able to recoup their money from FTX.

In response to the collapse of FTX and in an effort to retain confidence in their platforms, a number of large crypto exchanges have published Proof of Reserves showing that the levels of assets that they hold match their liabilities to customers.

Read More

AUSTRALIA: CRYPTO DOWNTURN AND ITS REGULATION

By Daniel Knight and Kithmin Ranamukhaarachchi

In the wake of the drawn out cryptocurrency market downturn, increased regulation of the sector seems inevitable. With nearly one million Australians transacting in cryptocurrencies last year, there have been widespread calls to enact additional protections for retail investors.

Read More

United States: 10 Impactful Provisions of the Lummis-Gillibrand Bill

By: Andrew M. Hinkes, Eden L. Rohrer, and Judie Rinearson

The “Lummis-Gillibrand Responsible Financial Innovation Act” lays out a bold agenda for legal reform related to digital assets. Although a detailed summary of Bill is still forthcoming, here’s an abbreviated summary of 10 impactful provisions.  For a more fulsome summary, see our full posting on the K&L Gates FinTech Law Blog.

  • Applies generally to incorporated and licensed entities, but  unincorporated DAOs, users of digital assets, and DeFi protocols would not be affected.
  • Excludes a gain or loss of $200 or less in transactions for “goods or services” from gross income for federal income tax purposes.
  • Requires regulated entities to make certain transaction-specific disclosures to consumers.
  • Introduces the “ancillary asset” concept that splits the digital asset from any promises made in an investment contract, and delegates jurisdiction over ancillary assets to the CFTC.
  • Authorizes spot crypto asset exchanges to register with the CFTC. 
  • Corrects the provision of the 2021 Infrastructure Investment and Jobs Act (HR 3684) that expanded the tax law definition of Broker to include any “person who… is responsible for … effectuating transfer of digital assets on behalf of another person.”
  • Clarifies that staking proceeds are not a part of gross income until the taxpayer “exercises dominion” over them.
  • Permits depository institutions to issue payment stablecoins subject to specific reserve and redemption requirements.
  • Prohibits banks from using reputation risk in its examination ratings and requires appropriate reasons for requesting the termination of a customer account.
  • Directs state regulators to adopt uniform money transmitter license requirements for digital asset transactions.

This Bill would radically change the way that regulated entities interact with digital assets in the U.S.. While the Bill is unlikely to pass this year, it is the product of significant bipartisan effort, and will likely lead to significant  regulation of digital assets in the coming years. 

Stay tuned for more in-depth coverage of the securities law and commodities law implications of amendments suggested in the Lummis-Gillibrand Bill.

Copyright © 2024, K&L Gates LLP. All Rights Reserved.