In this roundup, we cover an exceptionally busy week for crypto regulations around the globe. We start our coverage with the U.S. Virtual Currency Tax Fairness Act of 2020, actions by the SEC, Ripple’s lawsuit, India’s supreme court hearings, Australia green-lighting a Bitcoin retail fund, Thailand approving a new crypto exchange, and new crypto guidelines in Canada and Malaysia. We also cover the FATF’s progress to ensure countries implement its crypto standards, the regulatory developments in South Korea, China, Russia, Uzbekistan, Venezuela, and six central banks and the Bank for International Settlements collaborating on central bank digital currencies.
Also read: Regulatory Roundup: EU-Wide Crypto Regulations, New Rules in Europe, US, Asia
US Virtual Currency Tax Fairness Act of 2020
The U.S. made headlines last week when Representative Suzan K. DelBene introduced a bill on Jan. 16 “To amend the Internal Revenue Code of 1986 to exclude from gross income gain from disposition of virtual currency in a personal transaction.” H.R.5635 – Virtual Currency Tax Fairness Act of 2020 states:
Gross income of an individual shall not include gain, by reason of changes in exchange rates, from the disposition of virtual currency in a personal transaction … The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200.
As for the effective date, the bill proposes that the amendments apply to crypto transactions entered into after Dec. 31, 2019.
Oklahoma’s Depository, SEC Onto IEOs, Ripple Lawsuit
The U.S. state of Oklahoma has a new crypto bill. Senate Bill 1430, authored by Senator Nathan Dahm, was introduced on Jan. 15 to establish a “new type of financial institution to be a state-chartered financial institution and the central depository for virtual currency used by governmental agencies in this state.” The new financial institution will also provide financial and technical services to blockchain and crypto innovators as well as developers.
The U.S. Securities and Exchange Commission (SEC) took crypto-related actions this past week. On Jan. 14, the agency issued an Investor Alert on initial exchange offerings (IEOs). The notice came from the commission’s Office of Investor Education and Advocacy. It explains various aspects of IEOs, including whether they comply with federal securities laws. “Be cautious if considering an investment in an IEO,” the notice states. “It is a red flag if the IEO and its participants, including the online trading platform, do not address or discuss the applicability of the federal securities laws.”
In addition, the SEC said on Jan. 21 that it has reached agreements to settle with three defendants, including the former Riot Blockchain CEO.
Meanwhile, a lawsuit against Ripple continues at the U.S. District Court for the Northern District of California, the outcome of which may decide the fate of XRP.
India’s Supreme Court Hearings
The Indian supreme court has been actively hearing the crypto vs. RBI case over the past week. The court heard the case over three consecutive days last week as the counsel for the Internet and Mobile Association of India (IAMAI) presented his arguments against the banking restrictions by the central bank. He explained that the RBI does not have the power to ban cryptocurrency, but taking away the bank accounts of crypto exchanges constitutes an “absolute ban.” The central bank argued that it did not ban cryptocurrencies.
On Wednesday, Jan. 22, the court resumed hearing the case. The counsel for crypto exchanges presented his arguments against the banking restrictions. The RBI counsel also took center stage, arguing on behalf of the central bank.
Meanwhile, a Center of Excellence in Blockchain Technology has been inaugurated by Union Minister Ravi Shankar Prasad in Bengaluru.
Canada’s New Guidance on How Securities Law Applies to Crypto
The Canadian Securities Administrators (CSA) on Jan. 16 published Staff Notice 21-327 Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto Assets. The aim of the notice is “to help these entities to determine situations where securities legislation may or may not apply.” The regulator detailed that, for example, “Securities legislation may apply to platforms that facilitate the buying and selling of crypto assets that are commodities, because the user’s contractual right to the crypto asset may itself constitute a derivative, a security or both.” However, it added:
The relevant determination will depend on the facts and circumstances, including the obligations and intention to provide immediate delivery of the crypto asset.
Australia Green-Lights Bitcoin Retail Fund
The Australian Securities and Investment Commission (ASIC) has reportedly approved micro-investment fintech company Raiz to operate a Bitcoin retail fund. The company plans to…