Did you know that you can now use cryptocurrencies to play new slots? Many online casinos now support crypto (e.g., gg.bet online casino) and allow you to create a balance with digital currencies. Cryptocurrencies are becoming more and more common, and this is also attracting the attention of governments. Many countries have already started to develop some regulations about cryptos, and most countries are still in the planning stages. So, what's the latest on crypto regulation? What kind of legal infrastructure do cryptos have in which country? Below you can find the answers to these questions.
United States of America
In the US, multiple organizations are working on the regulation of cryptocurrencies. Among these, the Financial Crimes Enforcement Network (FinCEN) comes first. Companies identified as MTB (money transferring business) must comply with regulations regarding money laundering and customer recognition, and this includes cryptocurrencies too. As a matter of fact, FinCEN penalized Ripple in 2015 because of this reason. This penalty was also the first sanction imposed on cryptocurrency companies by a state. While the US Treasury Department defines Bitcoin as a convertible virtual currency, the Commodity Futures Trading Commission (CFTC) defines it as a commodity. According to the Internal Revenue Service (IRS), Bitcoin is a “property”, and the tax rules applied to properties apply to it as well.
Bitcoin is viewed as a commodity by the Canada Revenue Service (CRA). Therefore, Bitcoin transactions are considered as “barter transactions” and the income generated is considered as business income. Bitcoin tax, on the other hand, varies depending on whether the person making the transaction has a commercial enterprise. Canada considers Bitcoin exchanges to be money service businesses and, for the same reason, includes them within the scope of anti-money laundering laws. Bitcoin exchanges are required to register with the Canadian Financial Transactions and Reports Analysis Center (FINTRAC), report suspicious transactions and maintain certain records. However, some major Canadian banks have banned the use of credit or debit cards for Bitcoin transactions.
The United Kingdom
There is no legal regulation on cryptocurrencies in the UK. However, the British Government has announced that Bitcoin transactions will be treated as forex transactions and taxed. Accordingly, profits from Bitcoin transactions are taxed as capital income. If Bitcoin is used as a payment tool, Value Added Tax (VAT) is also applied.
The European Union has not taken any decision on Bitcoin, and there is no legal regulation covering all EU countries. Each EU country is free to make its own regulation for now. The Finnish Central Tax Board (CBRT) classifies Bitcoin as a payment instrument and exempts it from value-added tax. Bitcoin is treated as a commodity, not a currency in Finland. The Belgian Federal Public Service Finance Corporation takes the same approach, exempting Bitcoin from value-added tax. Bulgaria's National Revenue Agency (NRA) has updated its current tax laws to include profits gained through trading, which includes Bitcoin too. Bitcoin is considered legal in Germany, and all purchases made with it are subject to VAT. The German parliament allows banks to store and sell cryptocurrencies.
On April 1, 2017, Japan accepted Bitcoin as legal but classified it as property, not a legal tender. The Japanese Government has also made a series of strict legal regulations against the risk of using cryptocurrencies in illegal activities. Cryptocurrencies are subject to the supervision of the Japanese Financial Services Agency, and the identities of their investors must be confirmed and stored.
The Russian Government initially thought of banning cryptocurrencies entirely on suspicion of using them for crimes such as money laundering and financing terrorism but changed its decision with the increasing popularity of cryptocurrencies around the world. The institution responsible for overseeing cryptocurrencies in Russia is the Central Bank of the Russian Federation. This bank officially recognizes cryptocurrencies as monetary substitutes but prohibits their use for payments and declares the Ruble to be the only legal tender. The head of the Central Bank has recently said that he believes digital currencies are the future of the Russian financial system, but by that, he means Russia's own digital currency that it plans to develop.
Cryptocurrencies are considered legal in China, but financial institutions are prohibited from using or storing them. Crypto regulations are enforced by the People's Bank of China (PBOC), and the PBOC does not allow any financial institution to open cryptocurrency trading accounts. In 2017, crypto exchanges were also completely banned, and 173 exchanges headquartered in China had to close. China also banned mining operations. If you're wondering what it means to be “legal” despite all this, Chinese citizens are still allowed to own crypto. However, they cannot store or use their crypto within the country.
Turkey legally accepts cryptocurrencies but does not allow them to be sold, stored or used as a means of payment in banks. However, Turkey-based exchanges can operate on the condition of keeping the records of their members and reporting the transactions to the Ministry of Finance. If you make an income with a crypto exchange, you also have to pay income tax.