Round-up of key law and policy developments relating to blockchain and cryptocurrency in 2020.
In June 2019, the Financial Action Task Force (‘FATF’) updated its standards of anti-money laundering (‘AML’) and combating the financing of terrorism (‘CFT’) measures to regulate virtual asset service providers (‘VASPs’) in its member countries. FATF recommended its members to ensure that VASPs must record and verify information of sender and receiver of virtual assets transfers, and share the ‘required information’ with the transferee VASPs (‘FATF Travel Rule’). In 2020, FATF members such as Singapore, South Korea and Ukraine and crypto-businesses therein, all scrambled to comply with FATF’s updated AML/CFT measures as FATF conducted a 12 month assessment of the implementation of its recommendations in June 2020. Further, several countries progressed in developing comprehensive legal frameworks or policies on regulation of crypto-assets and related businesses. The round-up of such blockchain and crypto-assets related key regulatory developments of 2020 are as follows:
2. KEY LEGAL AND POLICY DEVELOPMENTS
- Illinois of the US enforced the Blockchain Technology Act.
The Blockchain Technology Act took effect in the state of Illinois of the USA. The statute confers statewide recognition to smart contracts and blockchain-based records and signatures as legal instruments. With the enactment, smart contracts are now admissible as evidence in court in similar manner as paper-based contracts. Additionally, they are statutorily exempted from taxes and licensing requirements as imposed on the businesses by the state government, on the use of blockchain. The Act has been touted as the most comprehensive law on blockchain enforceability as it addresses all concerns related to blockchain-based contracts – contractual enforceability, evidentiary standards and local interference. However, concerns regarding nation-wide implementation of smart-contracts remain unaddressed.
- Canadian authorities issued ‘Guidance on the Application of Securities Legislation to Entities Facilitating the Trading of Crypto-assets’.
The Canadian Securities Administrators (‘CSA’) issued a guidance specifying situations where securities law would apply on platforms facilitating the trading of crypto-assets. The CSA clarified that securities legislation not only governs crypto-assets transactions which are clearly securities but also those contracts or instruments of crypto-assets transactions which are not settled by immediate delivery of crypto-assets. The CSA is of the view that trading of crypto-assets by mere book entry without transferring assets to the user-controlled digital wallet i.e. full ownership and possession of user will be considered as trading of a derivative or a security. Such platforms would be subjected to Canadian securities law. This could compel many crypto-exchanges to exit from Canada as it is a common practice for exchanges to provide custody for assets and recognized ownership by book entry only.
- AMLD5 regulations prescribing the new AML/CFT norms enforced in the European Union (‘EU’).
Introduced in July 2016, the 5th EU Anti-Money Laundering Directive’s (‘AMLD5’) implementation came into full effect in member states on 10th January 2020. AMLD5 rules require crypto exchanges and wallet providers (custodial service providers) to mandatorily register with a local regulator and ensure compliance with minimum checks, such as enhanced AML, CFT and know-your-customer (‘KYC’) procedures on lines of FATF recommendations. With AMLD5 coming into effect, the Dutch crypto-market has seen numerous smaller crypto-businesses shut down due to excessive costs of compliances.
- Monetary Authority of Singapore (‘MAS’) promulgated the Payment Services Act, 2019.
Singapore’s MAS enforced the Payment Services Act 2019, mandating all crypto-asset service providers or digital payment token (‘DPT’) services to comply with AML and CFT norms. Therefore, from 28th January 2020, crypto-businesses are required to register and apply for the license with the regulator (MAS) to operate in Singapore. The comprehensive framework aims to implement the FATF recommendations and strengthen the consumer protection in relation to crypto-businesses. Later in the year, MAS also released the guidance on MAS administered laws which govern the process of issuing or offering of digital tokens in Singapore.
- Central Bank of Russia (CBR) introduced a legal framework for tokenization of assets and currencies.
CBR launched a pilot platform to allow users to tokenize their assets, equities/currencies and thereby, issue them to investors. The platform was expected to be also included in Russia’s upcoming crypto-currency law, with the aim to guide businesses that wanted to tokenize assets
- Telangana sought to launch a dedicated blockchain incubator.
In India, reportedly, the state of Telangana proposed to launch a dedicated blockchain incubator. Minister of State for Electronics and Information Technology stated that the government has assessed the potential of Distributed Ledger Technology (‘DLT’) and the requirement of “common infrastructure for testing different use cases of the technology”.
- Sweden’s Central Bank released its plan to pilot test its own digital currency.
The Central Bank of Sweden (Sveriges Riksbank) introduced the plan of pilot testing of its own central bank digital currency (CBDC) i.e., Sveriges Riksbank’s ‘e-krona’, built in association with Accenture. Riksbank undertook the initiative in light of citizens’ growing aversion towards using cash as the principal form of transaction. Riksbank stated that its digital currency will be based on R3’s Corda blockchain platform, which consumes less energy and is also more scalable. The same is expected to prevent users from “double-spending”. The traditional banking institutions have raised concerns of potentially losing funding from deposit accounts upon the launch of CBDC.
- The Supreme Court of India (SC) quashed Reserve Bank of India’s (‘RBI’) circular which proscribed its regulated entities from dealing in virtual currencies.
Internet and Mobile Association of India (IAMAI) v Reserve Bank of India (RBI) – On 6th April 2018, a RBI circular barred all RBI regulated banks and entities from dealing in virtual currencies. Following this, all such regulated banks engaged in facilitating crypto-businesses had to exit the crypto-market. Several crypto-businesses’ representatives including IAMAI challenged the impugned RBI circular in the SC. After two years of deliberations, on 4th March 2020, the SC struck down the RBI circular on grounds of it being disproportionately violative of the rights of crypto-businesses under Article 19(1)(g) of the Constitution to carry on their occupation, trade or business. The outcome of the case came as a huge relief for crypto-businesses in India and resulted in the revival of the Indian crypto-industry. Subsequently, RBI also issueda statement clarifying that commercial banks are allowed to facilitate firms dealing in crypto-currencies. However, in the absence of a comprehensive legal framework recognizing crypto-assets and government’s interest in introducing a bill to ban private crypto-currencies, the state of regulatory uncertainty still persists.
(In this matter, Ikigai Law filed the first petition before the Supreme Court on behalf of crypto-exchanges Koinex, CoinDCX, Throughbit and CoinDelta. The firm worked with Senior Advocate Nakul Dewan and AoR Avinash Menon. We have also provided a detailed explanation and summary on our website.)
- Ukraine issued a guidance mandating the disclosure of virtual assets as intangible property.
The Ukrainian National Agency for the Prevention of Corruption (NAPC) published the guidance requiring taxpayers to disclose the details of their virtual assets holdings as intangible property, in similar manner as intellectual property.The guidance relied on the FATF’s definition of ‘virtual asset’ which defines it as “digital representation of a value” which is “traded electronically and transferred” as a means of “payment or investment”. The guidance is an addition to the series of rules announced by Ukraine to clarify the laws governing virtual assets. The country does not have a comprehensive law on regulation of crypto-currency.
- The US District Court held Telegram’s private sale of digital tokens as an offering of unregistered securities.
Securities and Exchange Commission v Telegram Group Inc. et al – In January 2019, Telegram raised $1.7 billion through private sale of its digital tokens to 175 entities and sophisticated individuals to finance the development of its own blockchain – Telegram Open Network (TON). TON was intended to be Telegram’s proprietary blockchain where users would be able to trade and exchange Grams, Telegram’s own digital tokens. In reaction to TON, the US Securities Exchange Commission (SEC) filed for and secured a preliminary injunction order against Telegram. In the case, the Court decided that such a private sale of digital tokens by Telegram is an investment contract as per Howey test and is subjected to the securities laws and SEC regulations. Hence, Telegram was held to be engaged in an unregistered offering of securities which is in violation of securities laws. This is an important ruling for crypto-businesses where the Court focused on ‘economic realities’ in piercing through a contract of sale of digital tokens to decide whether such tokens are securities or not.
- Canadian amendment obligates crypto-businesses to register as Money Service Businesses.
Effective from June 1, 2020, all entities that deal in virtual currency and offer services to Canadian citizens are required to register as Money Service Businesses (‘MSBs’) with the Financial Transactions and Reports Analysis Centre of Canada(‘FINTRAC’). The requirement was introduced pursuant to the amended Proceeds of Crime (Money Laundering) and Terrorist Financing Act (‘PCMLTFA’) coming into effect in June which affects the crypto-businesses across Canada. As per FINTRAC, the changes in the regulatory regime would foster an “enhanced AML/ATF Regime” and meet the FATF thresholds. Among other things, the amended regulations warrant crypto-businesses with activity of more than $10,000 CAD to comply with due diligence, recordkeeping, and reporting requirements. Notably, crypto-businesses are required to document sender and receivers’ name, address, birth date, phone number and crypto type for any crypto transactions over $1,000 CAD.
- South Africa’s Fintech Working Group released its position paper on law governing crypto-assets.
South Africa’s Intergovernmental Fintech Working Group (‘IFWG’) released a position paper that could possibly become the nation’s first comprehensive law on crypto-assets. The position paper stated that the dealing in crypto-assets will no longer remain outside of the regulatory perimeter. The IFWG has recommended the government to employ clear “policy stances”, “enforce” strict oversight and codify AML measures, as recommended by FATF, for policing crypto-businesses. The members of IFWG include all the financial regulators of South Africa such as the South African Reserve Bank, the Financial Sector Conduct Authority and the National Treasury, among others. The implementation of the report would entail new formal restrictions for crypto-businesses in South Africa.
- Libra Association introduced its updated white paper with changes in the original plan.
The Libra Association (now renamed as “Diem Association”), a consortium overseeing planning of Facebook’s crypto-currency Libra, has discarded its original plan of formulating a global virtual currency backed by a host of national currencies. The consortium issued an updated white paper with plans to develop a set of stablecoins, each of which will represent a separate national fiat currency. Evidently, the decision has been made to pacify several national regulators that raised concerns of abandonment of national currency by people in favor of multi-national Libra under the original plan. The change has been said to have a restrictive effect on Association’s flexibility as every addition of new currency in Libra ecosystem would entail the issuance of another stablecoin.
- EU released its Action Plan calling for a Union Policy to bolster its AML/CFT framework.
In May, the EU published a Communication on an Action Plan for a comprehensive Union Policy on preventing money laundering and terrorist financing. The Plan intends to create a more comprehensive AML/CFT regime, and institute an EU-level AML/CFT supervisory body to work in cooperation with national-level regulators, to effectively enforce a zero-tolerance policy against illicit money within the EU region. The proposed framework could significantly increase compliance burden for financial services sector operating in the EU.
- ‘IVMS101’ standards developed to aid crypto-businesses in complying with FATF’s travel rule.
Joint Working Group (JWG) for InterVASP Messaging Standards confirmed that it has formulated a new messaging standard ‘IVMS101’ to help VASPs to comply with the AML regulations prescribed under FATF’s travel rule. It is a uniform standard of data that identifies pseudonyms of the senders and receivers of crypto payments, and automatically exchanges the same between transfer-transferee VASPs whilst indulging in crypto transactions. It was stated in the IVMS white paper that uniform data would allow VASPs to exchange messages in an “automated form”, which was likely to reduce costs and the risks associated thereof. Earlier, the firms were made to “reconfigure outbound and inbound messages on a continual basis to avoid error”, which was especially problematic and laborious while handling large volumes of transactional data. JWG is an international industry coalition of a set of blockchain organizations.
- Mauritius’ financial regulator published the guidance on licensing requirements for Security Token Trading Systems.
On 15 June 2020, the Financial Services Commission (‘FSC’) of Mauritius issued the guidance note for Security Token Trading Systems. The guidance provides that such trading systems would have to implement a set of common standards for Security Token Offerings (‘STOs’) and apply for the grant of a TSS license to FSC for continuing operations. The prescribed framework recognizes security tokens as a separate asset class, thereby, reflecting the recognition of the industry. Among this, the guidance notes also prescribe strict procedural requirements such as AML and CFT measures among others.
- Russia adopted a comprehensive law recognizing crypto-assets as ‘property’.
Russia granted legal recognition to ‘digital currencies’ as President Putin assented to the Bill on ‘Federal Law on digital financial assets and digital currency’. The law requires crypto-businesses to be registered as ‘issuers’ with the Bank of Russia in order to offer digital securities on a blockchain. Thus, the law regards decentralized crypto-currencies as a form of ‘property’ – necessitating the reporting thereof for tax related purposes. The law clarifies that the crypto-currencies still cannot be used to pay for goods/services. A more detailed regulation under the law is expected to be introduced for bringing clarity on trading related aspects of crypto-currency.
- Sri Lanka’s Central Bank proposed the blockchain platform to automate the processing of users’ information.
The Central Bank of Sri Lanka proposed a plan to develop the blockchain platform which will function to automate and expedite the processing of information of bank users’ IDs. The Board has shortlisted three software development firms for developing the proof-of-concept KYC platform. The KYC platform is expected to allow the sharing of customer related information between the banking industry and the State. This would also entail the updating of data collected on a blockchain network. If implemented, the project is also expected to allow banks to on-board more customers without going through the delays of manual processing.
- The FATF’s Report to the G-20 calls for a greater co-operation among regulators for implementing the FATF Travel Rule.
FATF presented a report to the G-20 Finance Ministers and Central Bank Governors, calling for an increased co-operation among regulators to effectively implement updated AML/CFT norms such as ‘Travel Rule’. It proposed the plan to formulate an international framework for regulatory authorities to foster the sharing of information on VASPs. The guidance to regulators across the globe would subsequently allow regulators to uphold price stability in crypto transactions.
- The US tax agency introduced a draft of tax return form with requirement of disclosure of crypto-assets holdings.
The US federal tax agency, Internal Revenue Service (‘IRS’) released a Draft of Income Tax Form 1040 clarifying that tax-payers would have to disclose in the Form 1040 if they have sold/exchanged any cryptocurrency for goods/services/other crypto-assets or received any cryptocurrency for free. The guidelines specify that tax-payers would not have to disclose any information if they merely held cryptocurrency in wallets. The form is an indication that selling, trading and buying in crypto-assets will be subjected to income tax.
- MAS released a consultation paper on New Omnibus Act for the Financial Sector.
In Singapore, MAS introduced a framework of new Omnibus Act recognizing the need to enforce a financial sector wide regulatory approach. The new Act aims to consolidate existing and novel provisions related to regulation of different financial institutions that fall under the purview of MAS’ regulatory oversight. Currently, the regulatory scope of powers of MAS is fragmented into the MAS Act and other legislations like the Banking Act. Apart from simplifying the fragmented regulatory process, the framework specifies that MAS would govern the regulation of digital token services and related AML/CFT processes. The framework was released as a consultation paper and MAS seeks to finalize the framework in 2021.
- Crypto-businesses’ association, backed by MAS and Association of Banks, released a Code of Practice for crypto-businesses operating in Singapore.
In August, the Association of Cryptocurrency Enterprises and Start-ups Singapore (‘ACCESS’), a non-profit industry body of crypto-businesses, released an evolving code of practice for VASPs. The code of practice provides the guidance on AML/CFT related KYC best practices. The code aims to enhance and assist the conduct of crypto industry in alignment with the regulatory requirements prescribed by the amended Payment Services Act. MAS and Association of Banks in Singapore (‘ABS’) have backed the code of practice.
- Thailand seeks to employ a blockchain storage network for e-sharing of judicial information.
In Thailand, the Office of the Court of Justice announced the plan to use blockchain storage network for online sharing of judicial information. The network will move all the judicial information online by 2021. The country is already in the midst of a national digitization drive, and is actively developing the blockchain network. Thailand is not the first country to come up with a judicial blockchain, as Chinese courts have already done so as early as 2017. The combination of internet courts and blockchain technology not only ensure judicial authenticity and transparency, but also offer major advantages during unprecedented events such as the COVID-19 pandemic.
- The European Commission (‘EC’) approved a legislative framework on crypto-assets and VASPs.
The EC adopted a new legislative proposal on crypto-assets called Markets in Crypto-assets (MiCA), as part of its expansive Digital Finance Package. The package scheme had been envisaged to promote competition in fintech sector while mitigating risks and ensuring financial stability in the EU region. MiCA would help in streamlining the implementation of DLT and crypto-assets regulation in the EU. MiCA framework extends the regulations to cover currently out-of-scope crypto-asset service providers and crypto-assets such as stablecoins. MiCA would make the regulatory framework stricter for VASPs in the EU but at the same time it would be a simplified legislative framework saving VASPs from hassles of complying with fragmented and convoluted regulations.
- China authorized a blockchain infrastructure project aiming to introduce public chains via decentralized applications.
Chinese authorities sanctioned a blockchain infrastructure project which would introduce public chains to Chinese users. This framework would be used for running decentralized applications (dApps) that serve a range of purposes such as financing platforms, tracking for food companies, record keeping for banks, law-firms or government agencies. In 2020, China also launched a massive pilot testing for its CBDC i.e. Central Bank-led Digital Yuan.
- Tamil Nadu proposed a state-wide ‘Blockchain Backbone’ in the form of BaaS.
Tamil Nadu introduced its Blockchain Policy, 2020 which proposes a state-wide Blockchain Backbone – a state-run blockchain network which will be provided as a Blockchain-as-a-Service (BaaS) to support government-to-government and government-to-citizen decentralized applications (dApps). Its initial nodes will be hosted by the Tamil Nadu e-Governance Agency, with a P2P network being developed. The policy envisages establishing a Policy Implementation Committee, and a Standards Committee to ensure the “security, privacy and maturity” of dApps. It also listed guidelines which government organizations must follow before implementing blockchain solutions. Further, it proposed to set up a semi-regulated sandbox environment for testing decentralized e-governance applications.
- The US Office of the Comptroller of the Currency (‘OCC’) released an elaborate interpretative letter on national banks’ authority to hold stablecoin reserves.
The US OCC issued a comprehensive guidance on treatment of stablecoins which are backed by fiat currencies. The guidance clarified that the national banks have authority to offer reserves and hold deposits for stablecoin issuers. It elaborates that banks providing such services must comply with applicable laws such as Bank Secrecy Act and AML/CFT norms, and ensure they have appropriate due diligence mechanism in place to gauge the risks associated with a particular stablecoin issuer. The guidance is the regulatory certainty for a large number of nationally chartered banks in the US which are already in engagement with stablecoins issuers.
- Swiss Parliament adopted a legal framework on the blockchain and the distributed ledger technology (DLT).
The Swiss Parliament approved the Federal Act on ‘the Adaptation of Federal Law to Developments in the Technology of Distributed Electronic Registers’ for amending local laws such as civil law, insolvency law, to name a few, in consistency with blockchain operations and DLT related developments in the country. The regulatory framework is aimed towards introducing a licensing process for Security Token Exchanges, enforcing a light-touch regulation for custody service providers, and ensuring legal recognition for electronic securities based on DLT. The framework is expected to come into force in early 2021. The changes will provide legal recognition to the use of blockchain applications.
- The US Department of Justice’s (DoJ) Report targets illicit crypto-asset transactions.
The US DoJ released its Report of the Attorney General’s Cyber Digital Task Force titled ‘Cryptocurrency: Enforcement Framework’. The enforcement framework discussed the current misuse and illegal usage of cryptocurrency and identifies some key legal authorities to combat criminal and national security threats. It also discusses approaches for addressing the growing public safety challenges related to cryptocurrency.
- Bahamas resorted to the Central Bank Digital Currency for promoting financial inclusion.
The Central Bank of Bahamas launched its own ‘Sand Dollar’ digital currency. ‘Sand Dollar’ is the first CBDC to be launched anywhere in the world. It is a digital version of the Bahamian Dollar (BSD) and backed 1:1 to the BSD. The project is designed towards promoting the inclusive access to regulated payments and financial services for underserved communities located in remote areas. The country is an archipelago with hundreds of islands, limiting the benefits of traditional financial infrastructure. Therefore, the smartphone-based CBDC will reduce financial service delivery costs and boost transactional efficiency.
- The US CFTC released advisory on risk management for FCMs dealing in virtual currencies.
The US Commodity Futures Trading Commission (‘CFTC’) issued an advisory to futures commission merchants (‘FCMs’) on risk management measures for holding virtual currency as futures customers’ segregated funds. FCMs are entities that deal with orders to buy or sell futures contracts, options or swaps and accept money or other assets from customers to support such orders. FCMs have segregated funds where they hold sufficient money or assets collected from customers to margin or guarantee futures trading. The advisory reports that accepting virtual currency from customers and holding it in segregated funds creates additional risks for other customers in the same origin who have deposited cash or other assets, typically because digital assets are still not subjected to comprehensive federal laws. The suggested measures implicates that an FCM receiving virtual currency has to adopt additional policies that go beyond typical segregation funds and which, among other things, include measures to protect the virtual currency against hacks and loss of keys.
- Nigeria introduced its “National Blockchain Adoption Strategy”.
As a part of its Digital Nigeria initiative, the Nigerian Government proposed a roadmap titled “National Blockchain Adoption Strategy” to facilitate nationwide adoption of blockchain technology. The government stated that the formalized blockchain adoption will help in diversifying Nigerian economy. The proposed roadmap includes the recommendation to create a legal framework governing the crypto-businesses. This implicates a shift in government’s stance on digital currencies to which the status of legal tender was denied in 2017.
- The UK FCA announced the prohibition on sale of crypto-derivatives to retail users.
In October, the UK’s Financial Conduct Authority issued a policy statement banning the dealing in cryptocurrency-based derivatives and exchange-traded notes (ETN) to retail users in, or from, the UK. The FCA stated that basis the extremely volatile nature of cryptocurrencies, the derivative products based on cryptocurrency are ‘ill-suited’ for retail consumers. The statement also notes ‘hacks’ and ‘unreasonable valuation’ as other reasons for the ban. The ban went into effect on January 6, 2021, significantly impacting the crypto-derivative exchanges, and associated brokers and platforms.
- South Korea’s Financial Services Commission prescribed stricter regulations for crypto-businesses in light of the new FATF norms.
In November 2020, the South Korean financial regulator – Financial Services Commission, proposed amendments to the Financial Information Act on Reporting and Using Specified Financial Transaction Information to strengthen AML measures. In March 2020, South Korean Parliament passed a bill to amend the existing Financial Information Act that legalizes the cryptocurrencies and crypto-exchanges. Upon enforcement, the amended Act will mandate VASPs to register with the regulator and partner with a regulated bank for handling deposits and withdrawals. To implement the FATF’s recommendations, the amended Act and FSC’s proposed amendments require VASPs to provide users with accounts or wallets as per the users’ verified real name and report the details of users to Korean Financial Unit. Moreover, every VASP has to get their systems verified by the Korean Internet Security Agency which is a costly process. The new law will make it easier for regulators to trace the movement of illicit funds but at the same time the stricter requirements will stifle the growth of smaller crypto-businesses.
- The US lawmakers are mulling over regulating stablecoins.
A group of US Congress members proposed a bill titled ‘Stablecoin Tethering and Bank Licensing Enforcement (‘STABLE’) Act’ which could be a potential regulatory framework for stablecoins specifically naming Facebook’s Libra as one example. The Bill requires issuers of stablecoins, which are pegged to certain national currency on 1:1 basis, to be an insured depository institution under Federal Deposit Insurance Act or maintain reserves for on-demand conversion of stablecoins into USD. Further, the Bill requires such stablecoin issuers to secure banking charter, and obtain approval from the Federal Reserves in a similar way like traditional banking institutions. The reason to regulate stablecoins issuers at par with banking institutions is that virtual currencies pegged to conventional currencies like USD represent a significant source of market, liquidity and credit risk. On the other hand, it is the view of industry that any inconsistent regulatory supervision might lead to stifling innovation in the fair and inclusive delivery of payments by stablecoin issuing entities.
- France imposed stricter KYC measures on VASPs
In light of suspected incidents of funding to terrorists using BTC via VASPs, the French government announced the ordinance no. 2020-1544 on Strengthening the AML- CFT System Applicable to Digital Assets. Going beyond the FATF recommendations, the ordinance imposes stricter KYC measures on all the crypto-businesses serving residents of France. The new measures done away with the anonymity for crypto-users and require VASPs to verify all their customers’ identities. Previously, only transactions of value above Euro 1000 required to undergo KYC processes. Further, new measures are applicable to all crypto-to-crypto transactions, an upgrade from the previous mandate for crypto-to-fiat transactions only. The new measures could possibly increase the burden and the costs of compliances affecting many smaller VASPs and result in exit of many customers who prefer anonymity.
- German government legalized all-electronic securities based on blockchain technology
The German government has approved the draft law sanctioning use of blockchain technology for recording all-electronic securities as part of its nationwide blockchain strategy. Until recently, issuers and securities holders had to document holding of securities using paper certificates which was burdensome for administration. The new law would now allow recording of entry in a central securities depository or a register based on blockchain technology. The announcement of passing of law comes after the recommendation of ministry from last year that suggested the country to recognize and regulate blockchain-based securities.
- Ukraine adopted a comprehensive legal framework to regulate virtual assets
The Ukrainian Parliament has adopted the draft Bill on Virtual Assets No, 3637. The Bill reflects Ukrainian lawmakers’ focus on regulating crypto-currency which includes provisions related to, without limitation, comprehensive definition of virtual assets, ownership of virtual assets and vesting of authority with Ukraine’s Ministry of the Digital Transformation to regulate virtual assets. The Bill also provides the requirement of registration for virtual currency service providers. The Bill is a consistent legislative effort of Ukrainian government to create a comprehensive regulatory framework for virtual currency after rolling out of new AML/CFT norms. The next effort is expected to be the announcement of a tax regime specific to virtual currency.
This article has been authored by Aryan Bebele with inputs from Anirudh Rastogi and the team at Ikigai Law.
For more on the topic, please get in touch at firstname.lastname@example.org
Image Credits: Freepik
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