Connect with us

Regulation

ECB’s Draghi Says It’s Not His Job to Regulate Cryptocurrency

Published

on

The head of the European Central Bank (ECB) believes his organization does not have jurisdiction to regulate cryptocurrencies, tempering calls for a bigger crackdown on the alternative asset class.

// -- Discuss and ask questions in our community on Workplace.

Banning Cryptos Not the ECB’s Job

In an #AskDraghi video series hosted by the ECB, President Mario Draghi said it’s not his responsibility to regulate the digital currency market.

“Many of you posted questions about whether the ECB is going to ban Bitcoins or it’s going to regulate Bitcoins,” Draghi said, as quoted by Reuters. “I have to say it’s not the ECB’s responsibility to do that.”

Unlike fiat currencies, which are backed by central banks, cryptos are not backed by anyone, he added.

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

Draghi was asked whether he would recommend buying bitcoin, in which he responded that the decision would need to be weighed carefully given the market’s wild fluctuations.

Last week, the head of the Bank for International Settlements Agustin Carstens argued for central banks to do more to rein in cryptocurrencies – a market he described as a “Ponzi scheme.”

Cryptocurrencies will be an important agenda item at next month’s Group of 20 meeting in Buenos Aires. Representatives from France and Germany are said to be working on a new framework for regulating the market. The framework is expected to be tabled at the meeting.

Support for Blockchain Grows

Like other government officials, Draghi praised developments in blockchain technology, which he described as “quite promising.” However, he cautioned that blockchain is not yet safe enough for use by the ECB or any other central bank.

“We’re very interested in this technology but it’s still not secure for central banking and therefore we need to look through it and investigate it more,” he said.

The ECB, like its counterparts in Japan, have been exploring distributed ledger technology to boost financial market infrastructure. The Bank of Canada has also been exploring blockchain to speed up the clearing and settlement of financial securities.

Members of the old guard – governments, banks and other traditional financial institutions – have been quick to embrace blockchain while simultaneously disavowing cryptocurrency. However, many have broaden their scope due to heightened demand from mainstream investors.

Back in December, Goldman Sachs announced it would launch a bitcoin trading desk by the middle of 2018, becoming the first major Wall Street firm to do so.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
3 votes, average: 3.33 out of 53 votes, average: 3.33 out of 53 votes, average: 3.33 out of 53 votes, average: 3.33 out of 53 votes, average: 3.33 out of 5 (3 votes, average: 3.33 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 145 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Regulation

South Korea Downplays Fears of Crypto Ban After Public Backlash

Published

on

In its clearest statement yet, the government of South Korea has vowed to let cryptocurrency exchanges continue operating freely in the country, easing fears of a crackdown in one of the world’s biggest digital currency markets.

// -- Discuss and ask questions in our community on Workplace.

No Crypto Ban

Instead of an all-out ban on domestic exchanges, policymakers are no focusing on making cryptocurrency trading more transparent, according to Hong Nam-ki, Minister of the Office for Government Policy Coordination.

“I can assure you that the government has consistently maintained a close and careful approach to market conditions and international trends, keeping all possible means open,” he said in a statement that was quoted by CCN.

The Minister said his administration is working on a swift response to any illegal activities involving cryptocurrencies, adding: “It is the basic policy of the government to prevent illegal acts and opacity in the process of virtual currency transactions.”

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

The announcement comes just two weeks after regulators blocked anonymous traders from accessing crypto exchanges, a decision that was far less severe than what traders had feared. Worry over an “imminent crackdown” on cryptocurrency exchanges triggered a mass exodus from the digital currency market, with hundreds of billions of dollars fleeing global exchanges.

Traders Influence Policy

The government clarified its position on cryptocurrency after a petition with nearly 300,000 signatures denounced an earlier proposal to ban domestic exchanges. The proposal was first issued by the Justice Ministry, but was immediaterly struck down by the president’s office, which clarified that a ban was only one of several measures being considered.

Mainstream media took the story and ran with it, with various outlets reporting that an imminent clampdown was in the works. A similar misunderstanding occurred earlier this month after India’s finance minister said more needs to be done to curb illicit activity involving digital currency. Several news sources too this to mean that an all-out ban was being proposed.

Cryptocurrencies were trading firmly to the upside on Wednesday, with the market’s total value hitting $452 billion, according to CoinMarketCap. That’s a gain of more than 7% over the past 24 hours. All the major coins traded sharply higher, with bitcoin, Ethereum and bitcoin cash climbing between 7% and 11%. Meanwhile, Ripple rose 11.6% and Litecoin surged 30%.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 145 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

News

Japanese Cryptocurrency Traders Will See Profits Taxed 15% to 55% This Year

Published

on

Last summer, Japan became one of the first countries to formally recognize cryptocurrencies as legal tender. Now, it has announced new tax measures to govern the trade, sale and exchange of digital assets.

// -- Discuss and ask questions in our community on Workplace.

“Miscellaneous Income”

In Japan, capital gains on cryptocurrency transactions are deemed “miscellaneous income,” according to a Dec. 1 ruling by the National Tax Agency. As such, cryptocurrency investors will be taxed 15% to 55% on their profits this year.

The top bracket is much higher than winnings on stocks and forex, which are taxed around 20%.  The top amount applies to tax payers with annual income of 40 million yen, which is equivalent to about $365,000 U.S.

Under the tax law, “miscellaneous income” doesn’t just apply to cryptocurrency trading on exchanges, but also on gains collected from sales, purchases, mining and associated network fees.

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

It is estimated that 40% of bitcoin transactions are funded in Japanese yen, a testament to the nation’s wide scale adoption of cryptocurrency. However, as Bloomberg reports, cryptocurrency-rich investors are  feeling skittish about the new tax laws, with a handful of big name players already leaving the country. Some of them could be headed to jurisdictions like Singapore, which offer zero capital gains tax on long-term cryptocurrency investments.

Local experts have described the new tax process as unclear, leaving investors guessing on how to meet their obligations. In Japan, annual filings are due Feb. 16-Mar. 15.

Evolving Tax Laws

Although Japan is much further ahead when it comes to regulating cryptocurrency, it is not the first nation to impose tax levies on the digital asset class. South Korea – another hotbed for everything crypto – has decided to tax digital currency exchanges at a rate of 24.2%. That is the same tax bracket applied to most local companies.

Meanwhile, the United States has classified cryptocurrencies as regular securities, which means they are taxed accordingly.

In the European Union, cryptocurrencies are defined as actual currencies instead of property, which means they are subject to capital gains and income taxes. In places like Germany, a “wealth” tax is also involved.

Tax legislation will likely evolve further in the coming years as regulators play the game of perpetual catch up with the market. As U.S. lawmakers recently demonstrated, the regulatory landscape could evolve more favorably than some traders initially suspected.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
3 votes, average: 5.00 out of 53 votes, average: 5.00 out of 53 votes, average: 5.00 out of 53 votes, average: 5.00 out of 53 votes, average: 5.00 out of 5 (3 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 145 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

Regulation

On Eve of Crypto Senate Hearing, Regulators Look to Fix the System

Published

on

When it comes to the future of cryptocurrency regulation, few events are as consequential as Tuesday’s Senate Banking Committee hearing. On this day, Capitol Hill will be the venue of multiple hearings on cryptocurrencies, focusing on the oversight role of the nation’s  securities regulators.

// -- Discuss and ask questions in our community on Workplace.

Securities and Exchange Commission (SEC) and Commodity and Futures Trading Commission (CFTC), the nation’s top securities regulators.

What to Expect

The Senate Banking Committee has invited senior officials from the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to speak at the event, which is scheduled to kick off at 10:00 a.m. ET. SEC Chairman Jay Clayton and CFTC counterpart Christopher Giancarlo have each published their prepared remarks , giving market participants full disclosure of the issues they plan to tackle.

SEC

Jay Clayton’s testimony highlights a combination of skepticism and concern over whether cryptocurrencies can be governed using the Commission’s historic approach to currency transactions. He also highlighted the SEC’s enforcement actions concerning initial coin offerings (ICOs), a segment of the market that is coming under more intense scrutiny.

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

The SEC has expanded its oversight of ICOs significantly over the past year, beginning in July with a landmark ruling that DAO tokens were securities and therefore subject to federal regulations. On Tuesday, Clayton will issue a reminder that merely calling a token a “utility” is insufficient to sidestep federal regulations. Many crowdraises simply aren’t taking that chance and are instead avoiding the U.S. market entirely.

Even with the skepticism, the SEC’s top regulator says he remains committed to exploring whether cryptocurrency exchanges would benefit from federal regulation. According to the prepared remarks:

“[W]e are open to exploring with Congress, as well as with our federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate. We also are supportive of regulatory and policy efforts to bring clarity and fairness to this space.”

Crypto exchanges fall outside federal regulation, and are instead governed by state licenses. Domestic exchanges must therefore apply with each individual state to access local markets.

CFTC

Christopher Giancarlo argues that cryptocurrencies have presented “novel challenges for regulators,” but that his agency has the power to investigate domestic exchanges that may pose risks to investor safety. According to Bloomberg, the commodities regulator has already subpoenaed two high-profile cryptocurrency companies, possibly over suspicions that they were colluding to boost the value of bitcoin. The companies in question are crypto exchange Bitfinex and Tether, a startup whose tokens provide a convenient substitute for the U.S. dollar.

Giancarlo’s remarks also show that the CFTC is confident it protect traders involved in bitcoin futures and other derivatives products. However, the same guarantees cannot be provided for retail investors.

The outcome of the hearings could have major implications on cryptocurrency regulation, especially if the CFTC is granted a wider mandate to govern cash transactions involving cryptos.  Although this would require a legislative amendment, Giancarlo says such a step would help overcome “shortcomings of the current approach,” namely, “state-by-state money transmitter licensure that leaves gaps in protection for virtual currency traders and investors.”

 

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
8 votes, average: 4.75 out of 58 votes, average: 4.75 out of 58 votes, average: 4.75 out of 58 votes, average: 4.75 out of 58 votes, average: 4.75 out of 5 (8 votes, average: 4.75 out of 5)
You need to be a registered member to rate this.
Loading...

4.5 stars on average, based on 145 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending