Crypto Regulations
Cryptocurrencies, also known as altcoins, provide digital means of exchange without any physical coins or bills. The crypto market has grown rapidly in popularity since Bitcoin’s inception in 2008. However, the more ubiquitous it becomes, the need for crypto regulations increases. We discuss the history of government action, the future of crypto regulations and more.
Crypto Brokers
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1
NinjaTrader
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Stocks, Options, Commodities, Futures, CryptoNinjaTrader Desktop, Web & Mobile, eSignalACH Transfer, Debit Card, Wire Transfer, ChequeUSD -
2
Interactive Brokers
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1001:50FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFMStocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, CryptocurrenciesTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentralCheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit CardUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF -
3
eToro USAInvest $100 and get $10Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk. https://www.daytrading.com/ is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$100$10SEC, FINRAStocks, Options, ETFs, CryptoeToro Trading Platform & CopyTraderACH Transfer, Debit Card, PayPal, Wire TransferUSD -
4
IGForex trading involves risk. Losses can exceed deposits.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFMCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD -
5
OANDA USCFDs are not available to residents in the United States.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)OANDA Trade, MT4, TradingView, AutoChartistWire Transfer, Visa, Mastercard, Debit Card, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD -
6
UpholdTerms Apply. Cryptoassets are highly volatile. Your capital is at risk.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1CryptosDesktop Platform, Mobile AppWire Transfer, ACH Transfer, Bitcoin Payments, Debit Card, Credit Card, Mastercard, Visa, Ethereum PaymentsUSD, EUR, GBP -
7
IQCent20% to 200% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$250$0.011:500IFMRRCBinary Options, CFDs, Forex, Indices, Commodities, CryptoOnline Platform, TradingViewCredit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, MastercardUSD, EUR -
8
Videforex20% to 200% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$250$0.011:500Binary Options, CFDs, Forex, Indices, Commodities, CryptoTradingViewSkrill, Perfect Money, Bitcoin Payments, Neteller, Credit Card, Visa, Mastercard, Ethereum PaymentsUSD, EUR, GBP, AUD, RUB -
9
Coinexx100% Deposit Welcome Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
0.001 BTC0.01 Lots1:500Forex, Commodities, Indices, CryptocurrenciesMT4, MT5Bitcoin Payments, Ethereum PaymentsUSD -
10
Sage FX$1,500 trading competition
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$100.01 Lots1:500PendingForex, indices, cryptosTradeLockerCredit Card, Visa, Mastercard, Bitcoin Payments, Ethereum PaymentsUSD, EUR, GBP, CAD, AUD
Here is a short overview of each broker's pros and cons
- NinjaTrader - You can get exposure to micro Bitcoin futures through the CME Group’s centralized exchange, which is highly regulated by the US CFTC. Micro contracts allow you to trade a fractional size of one Bitcoin, giving you more risk control and order flexibility.
- Interactive Brokers - IBKR lets you purchase and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin at competitive commission rates and without needing a crypto wallet. Additionally, there is a range of other diverse assets to explore, such as crypto indices like the NYSE Bitcoin Index, as well as futures contracts like the BAKKT Bitcoin Futures.
- eToro USA - eToro US offers 24 tradeable cryptoassets, with just a 1% buying/selling fee added to the spread. Additionally, there are 80 different coins available through the broker’s proprietary wallet service. You can also practice your crypto strategies easily by switching between live and demo mode. Crypto asset investing is highly volatile and unregulated. No consumer protection. Tax on profits may apply.
- IG - IG's modest selection of 11 crypto CFDs trails top crypto brokers like Vantage which offers 40+ tokens. That said, it stands out with its crypto index, which tracks the value of the top 10 digital currencies by market cap and provides a holistic way to speculate on the value of the crypto market.
- OANDA US - Cryptocurrency trading is offered via Paxos, a separate entity from Oanda. You can speculate on the world’s biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Through the broker’s partnership with Paxos, clients can spot trade cryptocurrencies on the itBit exchange through the OANDA native platform.
- Uphold - You can buy and sell 250+ crypto assets with fiat currencies or in crypto pairs using the straightforward mobile app or through Uphold's browser-based account homepage. This is significantly more than many rivals. You can also earn up to 16% APY by staking one or more out of 32 valid tokens, or send tokens to an external wallet.
- IQCent - IQCent offers 17 crypto pairs through its proprietary terminal, including Bitcoin, Ethereum and Litecoin. Leverage on crypto CFDs is capped at 1:10, whilst binary options payouts vary by token but remain competitive. OTC assets, for example, pay out up to 95%.
- Videforex - Traders can speculate on crypto prices in pairs with USD and CNY through binary options and CFDs. The range of digital currencies is fairly narrow vs alternatives but major tokens like Bitcoin are available.
- Coinexx - Trade CFDs on BTC, ETH, LTC and XRP with 1:5 leverage, market execution and 0.01 micro lot trading. However, we weren't impressed with the narrow choice of cryptos with no emerging, smaller-cap tokens available.
- Sage FX - Trade CFDs with leverage up to 1:100 on 23 crypto pairs with USD including popular tokens like Bitcoin and Ether and lesser-known options like OMG. On the downside, crypto-only pairs are not offered.
NinjaTrader
"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."
Tobias Robinson, Reviewer
NinjaTrader Quick Facts
| Coins | BTC |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | NinjaTrader Desktop, Web & Mobile, eSignal |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD |
Pros
- Traders can get free platform access and trade simulation capabilities in the unlimited demo
- You can get thousands of add-ons and applications from developers in 150+ countries
- NinjaTrader is a widely respected and award-winning futures broker and is heavily authorized by the NFA and CFTC
Cons
- The premium platform tools come with an extra charge
- There is a withdrawal fee on some funding methods
- Non forex and futures trading requires signing up with partner brokers
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
| Coins | BTC, LTC, ETH, XRP |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | 0.12%-0.18% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral |
| Minimum Deposit | $0 |
| Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- The new IBKR Desktop platform takes the best of TWS while adding bespoke tools like Option Lattice and Screeners with MultiSort to create a genuinely impressive trading experience for day traders at every level.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
- IBKR is one of the most respected and trusted brokerages and is regulated by top-tier authorities, so you can have confidence in the integrity and security of your trading account.
Cons
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
eToro USA
"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."
eToro USA Quick Facts
| Bonus Offer | Invest $100 and get $10 |
|---|---|
| Coins | BTC, ETH, BCH, DASH, LTC, ETC, MIOTA, XLM, EOS, NEO, ZEC, XTZ, MKR, COMP, LINK, UNI, YFI, DOGE, AAVE, ALGO, MANA, ENJ, BAT, MATIC, FLR, SHIBxM |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | BTC 0.75% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | eToro Trading Platform & CopyTrader |
| Minimum Deposit | $100 |
| Regulator | SEC, FINRA |
| Account Currencies | USD |
Pros
- The low minimum deposit and straightforward account opening process means beginners can get started quickly
- The online broker offers an intuitive social investment network with straightforward copy trading on cryptos
- eToro USA Securities is a trustworthy, SEC-regulated broker that is a member of FINRA and SIPC
Cons
- There's a narrower range of day trading instruments available compared to competitors, with only stocks, ETFs and cryptos
- The proprietary terminal doesn't support trading bots and there are no additional stock market analysis tools
- Average fees may cut into the profit margins of day traders
IG
"IG continues to provide a comprehensive package with an intuitive web platform, best-in-class education for beginners, advanced charting tools bolstered by its recent TradingView integration, real-time data, and fast execution speeds for experienced day traders."
IG Quick Facts
| Coins | BTC, BCH, LTC, ETH, ADA, DOT, DOGE, LINK, UNI, XLM |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Variable |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral |
| Minimum Deposit | $0 |
| Regulator | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- The IG app offers a superb mobile trading experience with a clean design that helped it secure Runner Up at our 'Best Trading App' award.
- IG is amongst the best in terms of its range of instruments, which includes stocks, forex, indices, commodities, and cryptocurrencies, plus recently added US-listed futures and options, providing ample diversification opportunities.
- IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis.
Cons
- Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges.
- IG has discontinued its swap-free account, reducing its appeal to Islamic traders.
- IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors.
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| Coins | BTC, ETH, LTC, BCH, PAXG, LINK, UNI, AAVE |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | $100 |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- Day traders can enjoy fast and reliable order execution
- The broker offers a transparent pricing structure with no hidden charges
- The broker's API facilitates access to 25 years of deep historical data and rates from 200+ currencies
Cons
- It's a shame that customer support is not available on weekends
- There's only a small range of payment methods available, with no e-wallets supported
- The range of day trading markets is limited to forex and cryptos only
Uphold
"Uphold remains a top choice for crypto investors looking for a one-stop-shop solution to accessing the markets. There are over 250 tokens to buy, sell and trade through flexible platform options."
Uphold Quick Facts
| Coins | BTC, BTCO, AAVE, ALCX, DYDX, INH, XYO, API3, GHST, LSK, AUDIO, GLMR, NMR, CAKE, GODS, REQ, CHR, TRB, DAO, ROOK, XRP, ETH, BAT, ADA, ALGO, ATOM, AVAX, AXS, BCH, BAL, BTG, CSPR, COMP, CRV, DASH, DCR, DGB, DOGE, DOT, EGLD and many more |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Up to 1.5% |
| Crypto Lending | No |
| Crypto Staking | Yes |
| Platforms | Desktop Platform, Mobile App |
| Minimum Deposit | $0 |
| Account Currencies | USD, EUR, GBP |
Pros
- Uphold continues to remain ahead of the industry, often being one of the first platforms to list new crypto tokens
- Crypto staking is available on 30+ tokens with above-average rates up to 16%
- Uphold is 100% reserved which helps to protect client funds
Cons
- The charting analysis features on the platform trail specialist exchanges
- There is a 2.49% fee if you want to use debit or credit cards
- Customer service is slow based on tests, with limited contact options
IQCent
"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "
IQCent Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, LTC, ETC, DOGE, MATIC, QNT, SOL, XRP, USDT, XMR, BNB |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Variable |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Online Platform, TradingView |
| Minimum Deposit | $250 |
| Regulator | IFMRRC |
| Account Currencies | USD, EUR |
Pros
- There's an accessible $0.01 minimum stake for new day traders with a small budget
- The broker offers up to 98% payouts on binary options, which is more than alternatives like Pocket Option, only offering up to 92%
- The broker's 24/7 customer support is fast and reliable, responding within 1 minute during tests
Cons
- IQCent charges a punitive $10 monthly inactivity fee if you fail to place at least 1 trade per month
- The broker is not overseen by a respected regulator, though this is common among binary options firms
- IQCent trails binary brokers like Quotex with its narrow investment offering of around 100 assets with no stocks
Videforex
"Videforex will serve traders looking for a no-frills, easy-to-use platform to speculate on the direction of popular financial markets through binaries. With a sign-up process that takes a matter of minutes and a web-accessible platform, getting started is a breeze. "
Videforex Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, QUANT, UNI, SOL, BNB, DOGE, XRP, XMR, MATIC, USDT |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | TradingView |
| Minimum Deposit | $250 |
| Account Currencies | USD, EUR, GBP, AUD, RUB |
Pros
- Videforex regularly runs trading contests, offering practice opportunities and cash prizes to beginners and experienced traders, with position sizes from just ¢0.01.
- Videforex is one of the few brokers with 24/7 multilingual video support, providing comprehensive assistance for active traders.
- Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, bringing it in line with competitors like IQCent.
Cons
- The client terminal needs improvements based on our latest tests, sporting sometimes slow and unresponsive widgets which could dampen the experience for day traders.
- The absence of any educational tools is a serious drawback for newer traders who can find blogs, videos and live trading sessions at category leaders.
- Videforex lacks authorization from a trusted regulator, meaning traders may receive little to zero safeguards like segregated client accounts.
Coinexx
"Coinexx best serves short-term traders willing to foregoes regulatory protections in return for highly-leveraged CFDs and trading accounts, deposits and withdrawals processed in cryptos like BTC. "
Coinexx Quick Facts
| Bonus Offer | 100% Deposit Welcome Bonus |
|---|---|
| Coins | BTC, ETH, LTC, XRP |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | From 0.0 pips |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | MT4, MT5 |
| Minimum Deposit | 0.001 BTC |
| Account Currencies | USD |
Pros
- The virtual private server (VPS), hosted near the firm’s data center in Amsterdam, offers 24/7 connectivity, low latency and 99.99% uptime, catering to algo traders.
- Coinexx is one of a limited pool of brokers to support the ActTrader platform, which is highly customizable with detachable widgets, as well as 48 indicators, 11 timeframes, and price quotes up to 8 decimal places.
- Coinexx uses an ECN model that facilitates ultra-tight spreads from 0 pips, which alongside high leverage up to 1:500, may serve fast-paced, high-volume trading strategies.
Cons
- Aside from 7 calculators (forex, margin, pip, currency, commission, swap, PnL), Coinexx offers very little in terms of additional tools, with no education or research features to support traders.
- Although it supports near-instant account funding in 25+ cryptos, the absence of fiat deposit options at Coinexx will be severely limiting for many traders.
- Despite operating for over 7 years, Coinexx still hasn’t secured any regulatory approvals, respected industry awards or the full confidence of our experts.
Sage FX
"Sage FX will suit forex traders looking for high leverage and ECN spreads. The broker's prop trading service will also appeal to users looking for funded accounts with up to $200K available."
Sage FX Quick Facts
| Bonus Offer | $1,500 trading competition |
|---|---|
| Coins | BTC, XRP, LTC, DASH, ETH, EOS, NEO, TRX |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | TradeLocker |
| Minimum Deposit | $10 |
| Regulator | Pending |
| Account Currencies | USD, EUR, GBP, CAD, AUD |
Pros
- Bonus offers and trading competitions
- Low starting deposit from $10
- Prop trading accounts with multiple funding tiers
Cons
- Lacks educational resources and other extra features
- Relatively narrow range of asset classes
- Not regulated by any reputable body
History Of Cryptos
The technical foundations of cryptocurrency were pioneered by an American cryptographer named David Chaum in 1983. He invented a cryptographic system that has a blinding algorithm, which is still used in modern web-based encryption. This algorithm provided secure exchanges and confidential transactions amongst parties, which was known as ‘blinded money’.
However, the term ‘cryptocurrency’ was first coined by Wei Dai in 1998 who published a white paper on b-money. In that year, the software engineer formulated a payment method based on a cryptographic system that had characteristics of decentralisation, but it was never fully developed.
In 2008, Satoshi Nakamoto, a pseudonymous person or secret identity, published a paper called ‘Bitcoin – A Peer to Peer Electronic Cash System’. Nakamoto’s motive to create Bitcoin was in response to the financial crisis of 2008. In 2009, Nakamoto made the Bitcoin software public and a group of enthusiasts began exchanging and mining Bitcoin.
In 2010, Bitcoin was valued for the first time when someone decided to sell theirs by swapping 10,000 Bitcoin for two pizzas. Around the same time, dozens of similar cryptocurrencies began to appear with Litecoin and Ethereum gaining popularity by 2016. The number of establishments where Bitcoin could be used started to gradually increase in 2017, with the likes of Tesla now indicating that they will accept Bitcoin payments for its cars.
Blockchain technology continues to disrupt the fintech industry, bringing with it both trading opportunities while also capturing the attention of regulators.
Crypto Regulations
Government policies and crypto regulations vary by country as authorities aren’t globally coordinated on the matter. In the US, for example, cryptocurrencies are not insured by the government like bank deposits are. Cryptocurrencies stored online won’t have the same legal protections as the money in your bank account. If a digital wallet company goes out of business, the government is unlikely to step in.
New crypto regulations are continuously being updated so it’s important to stay abreast of trading exchange requirements, along with rules around crypto mining, lending, custody and taxes. And while there aren’t many blanket prohibitions or bans on crypto trading, governments always issue caution when investing due to market volatility.
Crypto Regulations In the UK
The UK’s cryptocurrency regulations allow users to buy and sell altcoins though they are not considered legal tender. However, as of January 6th 2021, the Financial Conduct Authority (FCA) banned the sale of retail crypto derivatives and ETNs. The motive behind the ban comes from the risky nature of the industry, which puts consumers in danger from scams and market instability.
Note, UK residents can still participate in cryptocurrency exchanges as the ban is focused on retail trading products. The direct purchase of established cryptocurrencies is still permitted.
Crypto Regulations In the US
US crypto regulations are more complicated due to the inconsistent approaches taken across the country. This is because laws vary by state, while others still have pending legislation.
Cryptocurrencies are not considered legal tender and are not backed by the US government or the central bank. Crypto exchange regulations in the US are in uncertain legal territory. With that said, one of the United States’ major regulatory bodies, the Securities and Exchange Commission (SEC), stated that it considers cryptocurrencies to be securities, with the intention to apply securities laws for digital wallets and exchanges.
On the other hand, the Commodities Futures Trading Commission (CFTC), describes Bitcoin as a commodity and allows for cryptocurrency derivatives to be traded publicly. The Financial Crimes Enforcement Network (FinCEN) has proposed a series of new regulations for financial institutions that deal with digital currencies. However, these have been delayed.
It’s worth checking the rules in your own state before you open an account and start trading. Also, more new USA crypto regulations are coming, so make sure to keep up with the news.
Crypto Regulations In Europe
The European Commission recognised the need for legal certainty on blockchain-based applications. In February 2021, The European Central Bank (ECB) issued an opinion on the MiCA proposal published by the EU Commission in September of the previous year.
The proposed MiCA regulation aims to set out a comprehensive regulatory and supervisory regime for crypto-assets in the EU while supporting innovation. The proposed regulation also covers both firms that issue crypto-assets and those that provide services such as digital wallets and cryptocurrency exchanges i.e. Crypto.com.
The ECB has generally supported the proposal’s objectives with some concerns on e-money and stablecoins. The concern stems from stablecoins presenting a potential threat to the conduct of monetary policies and smooth operation of payment systems, which fall under the competence of the ECB. For now, it is hard to know when MiCA regulations will be enforced. However, based on estimations from EU regulators and previous EU regulations, this might be enforced over the next two to four years.
On a national level, Germany is preparing a comprehensive national blockchain strategy, which will support the development of European and international regulations for cryptocurrencies. But currently, retail crypto trading is allowed at most EU-regulated brokers.
Crypto Regulations In The Netherlands, Switzerland & Estonia
In the Netherlands, cryptocurrencies aren’t accepted as digital money but are regarded as property. However, the country is striving to regulate them. In contrast, Switzerland accepts crypto exchanges and is regulated by SFTA and FINMA, with the need to obtain a license. Cryptocurrencies as payment are also legal in Swiss stores in certain contexts while retail trading is allowed.
Estonia also holds a similarly progressive stance, where crypto exchanges are legal with approved registration but are not yet considered legal tender. Estonia has planned future regulatory changes i.e. customer identification obligations, payments services and record keeping.
Crypto Regulations In Asia
Asia is the financial hub where most of the world’s crypto trading takes place. Japan has the most progressive regulation, recognising Bitcoin and other digital currencies as legal property. Crypto exchange regulations are also legal with the requirement to register with the FSA.
Singapore’s tax authorities treat Bitcoin as goods, thus, Goods and Services Tax is applied. The surge of Bitcoin in 2017 prompted Malaysia’s Securities Commission to regulate the market by enforcing the Capital Markets and Services Order in 2019.
Crypto is not considered legal tender in India, while exchanges are effectively legal due to the lack of robust regulatory frameworks. Hong Kong considers crypto as virtual commodities, which fall under ‘securities’ that are subject to the SFC’s regulation.
Other Global Views
Other countries take a more conservative view of crypto regulations. In Russia, the law prohibits crypto exchanges, with the Ruble remaining the only legal form of tender. In China, crypto exchanges are illegal and cryptocurrencies are not considered legal tender. In recent years, the Chinese government drafted a law that bestowed legal status on the People’s Bank of China’s digital Yuan.
When it comes to cryptocurrencies in Dubai, the UAE does not recognise Bitcoin as a legal form of tender. However, exchanging digital currencies is allowed, with many UAE-based brokers offering crypto trading. Interestingly, Abu Dhabi’s ADGM was the first to introduce a regulatory framework for virtual assets.
In Canada, digital currencies are not considered legal tender but can be used as payment to buy goods online or in stores that accept them. Canada’s central bank characterises it as securities and Canadian laws have applied tax to crypto transactions since 2013. Exchanges in Canada are regulated as well.
Australia treats cryptocurrencies as legal, classed as property in 2017. Crypto exchanges are also legal, with the requirement to register with AUSTRAC. Retail crypto trading is permitted.
The Future of Crypto Regulations
Cryptocurrency regulations are constantly changing as their popularity grows. While some governments like Japan and Australia have taken a progressive stance on cryptocurrencies, some countries are still concerned with the characteristics of blockchain technology and restrict retail trading, such as in the UK.
The main concerns come from a security perspective, with data protection, money laundering, tax evasion and other financial crimes flagged as issues. Also a perceived problem is their volatile nature, with crypto regulations often attempting to shield individuals from the dangers.
Nonetheless, it looks like cryptocurrencies are here to stay with global regulations likely to try and bring order to a mostly unregulated market. How crypto regulations grapple with the decentralised foundation of blockchain technology will be interesting to follow.
Final Word
Cryptocurrency regulations around the world vary, with retail traders facing different restrictions depending on their location. Many crypto regulations and policies are still a work in progress due to the myriad of considerations. As a result, it’s key that traders keep up to date with the latest rules and requirements in their country.