The continents of Asia and Oceania, home to some of the leading and emerging economies of the world, have seen dramatic developments in the cryptocurrency arena.
China – The most recent development came out of China, China being a key player in the cryptocurrencies eco system as most of the mining capabilities of the industry are located in China, led by mining power house Bitmain.
China ‘s attitude towards cryptocurrencies has seen some major shifts, starting with the Central Bank’s warning to local banks warning them from conducting transactions in cryptocurrencies, which was followed by a ban imposed on financial institutions and third-party payment providers from accepting, using, or selling cryptocurrencies.
On the other end, the public was allowed to conduct transactions involving cryptocurrencies, while exchanges involved in cryptocurrency activities were required to register with the Central Bank and are closely monitored.
Lately, Chinese authorities imposed an immediate ban on all Initial Coin Offering (ICO) activities in China, stating that such activities shall be resumed once a licensing and supervision regime of ICOs is finalized. Finally, several reports hints at the Chinese Central Bank’s plan to develop its own cryptocurrency for China.
Japan – the first jurisdiction to regulate cryptocurrencies activities by enacting a law regulating virtual currency exchange operators (VCEOs) back in May 2016. The law came into effect on April 1, 2017. The law states capital requirements for virtual currency exchanges and sets cybersecurity and operational requirements, as well as duties to conduct employee training programs and submit annual audits.
The Philippines – Philippines has established itself as one of the first jurisdictions in Southeast Asia to formally regulate cryptocurrency activities through the regulating of cryptocurrency exchanges as remittance and transfer companies. As of June 2016, cryptocurrency exchanges must obtain a Certificate of Registration and comply with annual filing and reporting obligations. Some of the main requirements of the regulatory framework include the implementation of appropriate risk management and security controls, and restricting the acceptance of transactions to $10,000 cap.
Australia – Australia is yet to develop its own regulatory framework to cryptocurrency activities. In 2016, the Australian Attorney-General’s Department issued a Consultation Document stating that the government seek to start drafting legislative proposals to regulate crypto, hoping to finalize that legislation in 2018.
New Zealand – NZ has not taken any concrete steps to regulate cryptocurrencies, and for the time being it only issued the typical warning to investors as to the risks related to trading in cryptocurrencies. Reportedly, several statements issued by local officials show a favorable attitude towards cryptocurrencies and the need to regulate these activities.
India – the Reserve Bank has issued warnings to the public about the risks associated with cryptocurrencies and is reportedly examining the legal implications of cryptocurrencies activities under India’s existing legal framework.
Malaysia – the Central Bank of Malaysia stated that cryptocurrencies are not legal tender, and that cryptocurrency activities are not regulated in Malaysia. Additionally the Central Bank advised the public of the risks involved in such activities.
Thailand – the Central Bank has declared that a company which provides bitcoin exchange against the local currency (the baht) does not require a license of approval from the Central Bank, while bitcoin exchange against international currencies will require a license from the Central Bank.
South Korea – while the official position is that cryptocurrencies are not legal tender, a new cryptocurrency task force has been launched in the country with the goal to introduce new regulations for exchanges involved in cryptocurrency transactions.
Indonesia – cryptocurrencies are not considered legal tender, and the use of cryptocurrencies violates the country’s information and electronic transaction laws and currency laws.
Vietnam – the State Bank of Vietnam recommends not investing, holding or transacting in cryptocurrencies due to potential risks of use for criminal purposes, lack of technical security and high vulnerability to hacking, price volatility, and lack of a central government authority for these activities. It also stated that cryptocurrencies are not money nor are they a form of legal payment in Vietnam.
We are expecting for the regulatory landscape of the cryptocurrency industry to change and develop further and will be updating our website, to reflect any significant changes related to regulatory matters of interest for the industry.
Porat Group is one of the first law firms to have a dedicated team specializing on the cryptocurrency industry, as well as to offer legal services related to the regulation of cryptocurrency businesses and products. Therefore our lawyers are well equipped to handle regulation processes for these types of businesses in various jurisdictions, including several of the Asian and Oceanian ones.
We have also made a point of proving our commitment to the cryptocurrency industry by accepting payments in several cryptocurrencies (currently Bitcoin and ETH) for our legal services.
All business owners active in the cryptocurrency industry who are interested in knowing more about regulating their product or business or about the different options for regulating businesses and products in this field are welcome to contact the Porat Group team for a free and non-binding consultation to discuss this further.