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Google Bans Cryptocurrency Ads, But Bitcoin Not Affected

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Following in the footsteps of Facebook, Google has announced it will ban cryptocurrency and initial coin offering (ICO) promotional material from its ad platform.

Google Cracks Down on Sketchy ICOs & Crypto Ads

Alphabet Inc.’s Google explained the new policy will go into effect in June of this year, affecting its search engine, advertisements on YouTube, and and its display-ads network.

Google’s crackdown is intended mainly to “prevent consumer harm” and follows Facebook, which adopted a similar policy in late January. 

Google’s announcement reads:

This year, we updated several policies to address ads in unregulated or speculative financial products like binary options, cryptocurrency, foreign exchange markets and contracts for difference (or CFDs).

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‘Central Bank Digital Currencies Could Destabilize the Global Economy’ Says Bank for International Settlements (BIS)

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While the central banks of some countries are hoping to be a part of the virtual currency revolution, the Bank for International Settlements (BIS) is concerned about the repercussions of going digital.

A cashless society is definitely the way of the future, a future that some governments and banks are trying to be a part of. Central bank digital currencies (CBDCs) may be an abomination of decentralized cryptocurrencies, but it is happening.

Sweden’s Riksbank is hoping to offer its e-Krona and the Bank of England has a cryptocurrency unit to help it along its virtual currency journey.

BIS Voices its Concerns

However, according to Business Insider UK, the Bank for International Settlements (BIS) has stated that these bank-issued virtual currencies could have dire consequences for the global financial system.

A report written by Klaus Löber, who is a Senior Advisor at the European Central Bank (ECB) and Aerdt Houben, who is the Director of the Financial Stability Division at De Nederlandsche Bank (DNB), details the negative impact it could have on the economy.

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South Carolina Declares Cloud Mining Contracts to Be Securities

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The Attorney General of South Carolina has served a cease and desist order on Genesis Mining. In documents filed before its Securities Commissioner, it has declared cloud mining contracts to be securities, in a move that could have repercussions beyond the confines of the Palmetto State.

Attorney General Forecasts Dark Clouds for Mining Contracts

Cloud mining contracts enable individuals to purchase hashing power without the need to get their hands dirty. Rather than have to order, install, and maintain a bunch of miners, capacity can be purchased from a datacenter that’s set up to mine crypto. Genesis Mining is one of the most well established operators in the space. It, as well as companies such as Hashflare, has been plying its trade for years. Now, a cease and desist order looks set to put paid to that, in the state of South Carolina at least.

“Join over 1,000,000 people with the world’s leading hashpower provider,” proclaims the Genesis website. “It’s super simple – Your mining rigs are already set up and running. As soon as you’ve set-up your account you can start to earn your first coins from our bitcoin cloud mining service!” The company operates a datacenter in Reykjavik, Iceland. But in a filing dated March 9, South Carolina Attorney General’s Office has ordered Genesis Mining and Swiss Gold Global to stop targeting residents in the state.

The Company That Lives in the Cloud

Like many web companies, Genesis is everywhere and nowhere. The administrative proceeding document directed to the Securities Commissioner of South Carolina lists Genesis’ last known address as Chinachem Century Tower in Hong Kong. This seems to be a common registration address for businesses and appears in the Offshore Leaks Database that publishes findings from the Panama Papers. Under a section headed Findings of Fact, the Attorney General’s filing states:

Genesis Mining offers mining contracts for six cryptocurrencies: Bitcoin, Dash, Ethereum, Litecoin, Monero, and Zcash, each of which entitles an investor to…a “Mining Contract”…in exchange for investing in a Mining Contract, Respondent Genesis Mining engages in a certain amount of computational effort on behalf of the investors.

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Japan Urges G20 Officials to Introduce Unified Crypto Regulation

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Regulating cryptocurrencies can be done in many different ways. Japan’s government has paved the way for a positive approach in this regard. The same country is now urging the G20 to maintain a positive approach as well. However, they do want the G20 to address potential money laundering issues.

The G20 and Crypto Regulation

It is not the first time the G20 and cryptocurrency regulation is mentioned in the same breath. French and German officials urge this governing body to take a harsh stance against this new form of money. The lack of official regulation and accountability is considered to be a big threat to financial stability. Cryptocurrency allows everyone to be their own bank, which poses challenges and risks.

At the same time, cryptocurrency introduces a lot of new opportunities. Making the most of those potential changes is equally as important. Finding the middle ground between over-regulation and allowing for innovation is not all that easy. In fact, it is a regulatory puzzle the G20 will have to address a lot sooner than they might like.

Japanese officials want to have some form of crypto regulation by the G20 as well. However, their focus is more on preventing money laundering efforts altogether. Protecting consumers is of great importance as well. None of this indicates the organization wants to ban cryptocurrencies and limit the trading possibilities. Instead, they will focus on the actual matters at hand, while still allowing these new currencies to thrive accordingly.

Determining the Fate of Cryptocurrency

Building a proper regulatory system for cryptocurrency is very difficult. It isn’t easy to do in one country, let alone for the G20. As powerful as this entity may be, every country tends to approach these matters differently. Finding common ground has proven to be a hassle more often than not, regardless of the topic at hand. One common feeling among the member states is how too strict regulation for cryptocurrency would have an adverse effect first and foremost.

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Coincheck Clients Compensated from Crypto Heist, XEM Soars

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When a crypto exchange or digital wallet provider is compromised, the digital loot is often moved away so fast that there is no chance of recovery. This is what happened to Coincheck in January when 523 million XEM tokens were pilfered from the exchange. As promised, however, the Tokyo-based exchange has just completed reimbursing its clients for the loss.

According to a report in the WSJ, Coincheck claims that it has completed the compensation it promised to its customers for the loss. A total of 46.3 billion JPY ($433 million USD) was spent from the company’s own funds to reimburse 260,000 customers that stored NEM on the exchange.

Coincheck executives apologizing for the hack.NEM Accounts Refilled

Customers received XEM at a rate of 88.549 JPY per token as previously advised by the exchange. This equates to approximately $0.83, which is almost double NEM’s current trading price and is closer to that at the end of January when the hack took place.

A spokeswoman for the exchange said that the total payout was completed on Monday. Trading has also resumed at Coincheck this week after a month’s suspension to reevaluate security protocols. A number of customers took to social media to express their relief.

Japanese authorities are still investigating the incursion at the exchange but have yet to report any conclusions. Regulators are still waiting for Coincheck to acquire the appropriate licenses and improve its governance and controls. Hong Kong exchange Binance, meanwhile, has offered a bounty for any information on a recent attempted hacking and phishing effort that was thwarted.

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Thailand Proposes New Cryptocurrency Gains Tax

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Thailand’s cabinet is set to vote on implementation of a new 10% capital gains tax on profits from cryptocurrency investment. Royal Decree will empower the SEC to regulate digital currencies.

New Tax Part of Royal Decree

The Thai Revenue Department has asked the cabinet to vote on an amendment to the new revenue code which would include a proposed 10% capital gains tax on profits from trading in cryptocurrency according to a source inside the ministry of finance.

The Bangkok Post reported this morning that the tax will be part of a Royal Decree proposed to allow the SEC to comprehensively regulate all aspects of the crypto market including ICO’s.

The new decree will classify cryptocurrency as digital assets, not currency, meaning that the SEC will be charged with regulating all aspects of virtual coins. Rapee Sucharitakul the secretary -general of the SEC said the regulations should set standards for information disclosure of cryptocurrency trading while also overseeing the launching and proceeds generated by ICO’s.

He was further quoted by the Post speaking about investor protection included in the new regulations as saying;

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National Regulators to Shut Down Some Japanese Exchanges, Order Improvements

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Financial regulators in Japan are set to dole out punishments to multiple cryptocurrency exchanges this week, in addition to shutting some down entirely.

Cracking the Whip

In 2017, Japan became the first country in the world to nationally regulate cryptocurrency exchanges, resulting in a total of 16 legally registered exchanges and 16 more legally allowed to operate while their applications are considered. Now, some of those exchanges are supposedly being ordered to close their doors, while others must make significant improvements.

The FSA’s punitive measures come after the regulatory authority discovered serious issues in multiple cryptocurrency exchanges’ consumer protection and anti-money laundering measures. These flaws were discovered during on-site inspections — though exactly which exchanges will be punished, and in what form those punishments will take, is still unknown.

On-site inspections — which specifically look for gaps in security and report on risk management solutions and cryptocurrency storage — became a priority for the FSA after the infamous Coincheck hack. The conducted investigations have resulted in some unregistered exchanges being issued orders to cease operations.

Sources told CNBC that Japan’s Financial Services Agency (FSA) is also planning on potentially ordering Coincheck to raise its operating standards after the exchange lost $530 million of digital currency in a high-profile theft from hackers. This move would follow a previous order from Japanese regulators.

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SEC Publishes Warning Against Unlawful Crypto Exchanges

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On Wednesday, March 7, the U.S. regulator the Securities and Exchange Commission (SEC) published a letter concerning the potential of unlawful online platforms that trade digital assets. The SEC is concerned with platforms operating without permission and advises investors to use entities that are registered with the SEC as an alternative trading system (ATS).

Investors Should Use a Platform or Entity Registered with the SEC

The top U.S. regulatory agency has issued a warning to “unlawful online platforms that trade digital assets” alongside issuing a recommendation to digital currency investors. The SEC says that many exchanges have become popular selling cryptocurrencies and Initial Coin Offerings (ICOs). A number of the platforms offer a mechanism to trade assets that the SEC considers a “security” and some of them are operating unlawfully. If this is the case the platform “must register with the SEC as a national securities exchange or be exempt from registration.”

“The federal regulatory framework governing registered national securities exchanges and exempt markets is designed to protect investors and prevent against fraudulent and manipulative trading practices,” explains the SEC letter.

To get the protections offered by the federal securities laws and SEC oversight when trading digital assets that are securities, investors should use a platform or entity registered with the SEC, such as a national securities exchange, alternative trading system (“ATS”), or broker-dealer.

While the SEC’s Letter Questions if Exchanges Are Lawful, Crypto Prices Plummet

Immediately after the SEC letter was published and started being shared across social media and forums, cryptocurrency markets dropped significantly in value. The top 100 digital currencies according to Coinmarketcap.com saw losses between 10-20 percent in a short period of time.

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Japan Suspends Trading on Two Cryptocurrency Exchanges

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Japanese government regulators shuttered two cryptocurrency exchanges in the long-awaited aftermath of the massive Coincheck hack when hundreds of millions of dollars in digital currency were lost.

FSA Suspends Two Exchanges

Japanese Financial Security Agency (FSA) released a statement outlining regulatory steps it was taking against cryptocurrency exchanges earlier today. Most prevalent is the order that both FSHO and Bit Station temporarily suspend their business for a month starting today March 8.

The statement alleges that FSHO “does not have a proper system to monitor trading and has not given training to its employees,” and that an employee at Bit Station has used customer funds for his own trading purposes.

In addition, five other exchanges, including Coincheck were ordered to improve their business practices. These steps have been months in the coming and were prompted by the massive Coincheck hack that resulted in the loss of 530 million worth of NEM cryptocurrency.

The hack was ruled in part to have been a result of lax security practices at the company where customer coins were held in online wallets making them easily accessible to cyber-criminals.

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Bitcoin Takes a Dip as SEC Demands Exchanges to Register

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In the ongoing saga of how U.S. regulators will ultimately handle cryptocurrency the SEC yesterday said it will require digital asset exchanges to register causing Bitcoin to dip below $10,000.

Cryptocurrency  Defined as Securities

The SEC released a statement that said online platforms trading in digital assets are considered securities under existing guidelines and therefore must register with the agency.

The SEC statement reads as follows

“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”

“The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as “exchanges,” which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.”

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US Federal Judge: Bitcoin and Cryptocurrency Are Commodities

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For the first time, a federal judge has upheld that Bitcoin and other cryptocurrencies are commodities and thus subject to regulation by the U.S. Commodity Futures Trading Commission (CFTC).

Bitcoin & Cryptocurrencies Are Commodities

U.S. Federal Judge from the Eastern District of New York, Jack Weinstein, ruled on Tuesday that cryptocurrencies should be treated as commodities, reports CNBC.

The ruling is a landmark as this is the first time that a court upheld the CFTC’s jurisdictional assertion over cryptocurrencies like Bitcoin. Previously, the CFTC had stated that cryptocurrencies should come under the scope of the commodities regulator.

“CFTC holds that bitcoin and other virtual currencies are a commodity covered by the commodity exchange act,” the agency said in a statement back in September 2015.

Now, the ruling adds some much-needed clarity to cryptocurrency, as well as its related futures and derivatives markets, which launched at the end of last year.

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US Regulations May Require ICOs to Report Suspicious Investors

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Initial Coin Offerings must comply with laws associated with money laundering and anti-terrorism that require reporting suspicious investors to authorities according to a newly released letter from the treasury department.

New Information on Old Regulations

In December 2017 Senator Ron Wyden (OR-D) requested information from the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) about its efforts at oversight and enforcement related to cryptocurrency.

FINCEN’s response to the senator was published yesterday though originally dated Feb. 13. The letter explained that companies offering ICOs may be legally considered as money transmitters and therefore be subject to laws set up to combat money laundering and the financing of terrorism which apply to money services businesses under the Bank Secrecy Act (BSA).

FINCEN goes on to broadly explain that these acts apply to any project involved in “convertible virtual currency” which “either has an equivalent in real currency or acts as a substitute for real currency” as laid out in a 2013 guidance from the Treasury Bureau.

The letter then obfuscates things by adding that depending on the particulars of an ICO project, regulation may fall under the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

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Japanese Cryptocurrency Exchanges to Establish New Self-Regulating Body

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Japan’s two major cryptocurrency organizations will merge and form a new self-regulating body, the Japan Cryptocurrency Business Association (JCBA) and Japan Blockchain Association (JBA) said on March 2. The move comes amid deepening discussions about stronger regulations, and was triggered by Japanese cryptocurrency exchange Coincheck Inc.’s loss of massive amounts of NEM coins in late January.

The agreement on forming the new body was made by 16 cryptocurrency exchanges that have completed registration with the Financial Services Agency (FSA). However, the new body will not include exchanges such as Coincheck, whose applications are pending. Currently, details are unclear regarding the new body, such as its name, location and time of establishment, but the aim is to make it a body with legal backing. Companies aiming to complete registration with the FSA will be able to join the organization in the future.

The aim behind establishing the new organization is to strengthen self-regulation of Japan’s cryptocurrency business. The new organization will merge the major players in the cryptocurrency business that had been split before the Coincheck incident.

More major companies in Japan are going to get involved in the cryptocurrency business. Megabanks Mitsubishi UFJ Financial Group, Inc. (MUFG) and Mizuho Financial Group, Inc. are developing their own cryptocurrencies, respectively MUFG Coin and J-Coin, with the latter to be pegged to the Japanese yen.

LINE, a social media platform used by many Japanese, is also expanding into the cryptocurrency business, and Mercari, a flea market app popular in the Japanese domestic market, has also announced its intention to participate. Currently, there is said to be 100 companies on the FSA waiting list for assessment of eligibility to become an exchange.

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US Government to Sell Over 2,000 Seized Bitcoin at Auction

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2,170 bitcoins, worth more than $24 million, are up for auction as the U.S. Marshals Service plans on selling off digital assets seized in federal crimes. With the value of Bitcoin continually predicted to increase, this might prove to be a lucrative opportunity for investors on the sidelines to cautiously make regulation-insured purchases.

Bitcoin to the Highest Bidder

The U.S. Marshals Service has announced that they will be auctioning off approximately 2,170 bitcoins, currently worth over $24 million, that were originally seized in federal crimes later this month. A majority of the listed crimes are associated with DEA administrative forfeitures, which consist of drug-related offenses.

The bitcoins will be broken up into 14 blocks consisting of 70, 100, or 500 units. To participate in the auction, individuals are required to put down a deposit of $200,000 and complete all the required registration forms by March 14th.

The winning bidders are to be notified by March 19th, but the release mentions that the “complexity of the review process” might lead to delays.

Dirty Wallets Need Not Apply

Related to the lack of fungibility that Bitcoin currently suffers from, the terms of sale imply that the provided receiving address will be screened thoroughly to ensure that it hasn’t come in contact with malicious activity.

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Taiwan Airline Accepts Bitcoin Seeing ‘Bright Future’ for Tourism Sector

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Taiwanese airline FAT Taiwan Inc. (Far Eastern Air Transport) recently announced that it will accept bitcoin payments, becoming the first airline in the country to accept cryptocurrency for tickets in a growing trend.

Taiwanese Airline Wants Your Bitcoin

FAT’s announcement on February 28th states that the airline will accept cryptocurrency payments, namely Bitcoin, for tickets and related travel services as it looks to become a pioneer in cryptocurrency adoption within the country’s aviation industry.

Passengers can now use Bitcoin in a convenient and discounted trading experience to pay for more than 20,000 flights.

The airline’s president, Zhang Gangwei, explained that his company has “a bright vision for the future of cryptocurrency” as it proved to be “a significant transaction tool” over the past year. Zhang added:

The widespread use of cryptocurrency in various scenarios will usher in a new future for the airline business, lodging industry, OTA and the entire tourism sector.

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Chile is Putting Energy Regulation on the Blockchain

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In March, the Chilean National Energy Commission is set to adopt blockchain technology – a first for a public entity in the South American country.

Warming up to the Blockchain’s Benefits

Andrés Romero, the executive secretary of the National Energy Commission of Chile, has announced that the country’s regulatory entity will start using blockchain technology in March.

According to PV Magazine, CNE will use the Open Energy platform (Energía Abierta) in order to “certify the quality and certainty of the open data of the national energy sector.” In doing so, CNE will officially become Chile’s first public entity to utilize the inherent benefits of blockchain technology.

The blockchain technology to be used will assist CNE in authenticating “average market prices, marginal costs, fuel prices and the compliance with renewable energy law.”

Romero has claimed that blockchain technology will secure CME’s energy data published on the platform, since the blockchain makes it nearly impossible to alter information. Explained the executive secretary:

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Mexican Cryptocurrency Regulations Approved by Congress

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Mexico’s bill to regulate cryptocurrency exchanges has been approved by the country’s lower house of Congress and is now awaiting the signature of President Enrique Pena Nieto to become law. Crypto operators have 12 months to comply, a local crypto exchange explained to news.Bitcoin.com.

Mexico’s Crypto Bill Approved

Mexico’s bill to regulate the fintech sector, which includes rules on crowdfunding and cryptocurrency firms, has been approved by the country’s lower house of Congress, Reuters reported. In December of last year, this bill was approved by the country’s Senate. It is now waiting for President Enrique Pena Nieto’s signature.

The bill “seeks to promote financial stability and prevent money laundering,” the news outlet described. The National Banking and Securities Commission (CNBV), the central bank, and the finance ministry will soon begin drafting “secondary laws, which will determine key details for companies in the sector.” They are expected “in the coming months,” the publication noted, adding:

The law will give fintech companies greater regulatory certainty around issues such as crowdfunding, payment methods and rules surrounding cryptocurrencies such as bitcoin.

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Bank of England’s Carney dismisses bitcoin but sees crypto as integral to reorganisation of economy

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Bank of England governor Mark Carney in a speech today at the inaugural Scottish Economics Conference at Edinburgh University has dismissed bitcoin as a failure, saying crypto must be “held to the same standards as the rest of the financial system” in a broad hint that stronger regulation is coming soon.

The key takeaways from the speech were:

Crypto-assets do not pose risks to financial stability “at present” Bitcoin has failed as money Regulation of exchanges is coming The shielding of illicit activities “cannot be condoned” Bank of England is “open-minded” about distributed ledger technology It’s better to regulate crypto-assets than isolate them society preference is for “peer-to-peer interactions”

Bitcoin will fail to dislodge fiat

The bank chief begins the speech by looking at the current different forms of money and in which he includes crypto. Carney then runs through a brief history of money, using as his theoretical starting point and guide Adam Smith, referencing the trinity of store of value, means of payment and unit of account to define it. He says that ultimately “ money is a social convention.”

The history of the debasement of money led modern economies to settle on “centralised, public fiat money backed by robust institutions in order to provide the public with money that is both highly trusted and easy to use”, says Carney.

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Aussie Crypto Traders Expect Tax Crackdown Ahead of New Regulations

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With Australia set to introduce new legislation that will empower authorities to monitor and regulate the activities of cryptocurrency traders, many analysts are anticipating that the country’s bitcoin investors will face a crackdown from the the country’s tax office.

Australia to Expand Regulatory Domain Over Cryptocurrency Traders

Australia’s new cryptocurrency regulations will see anti-money laundering legislation extended in order to greater encompass the challenges posed by virtual currencies. Analysts are expecting that the Australian Tax Office (ATO) will launch a crackdown on Australian cryptocurrency traders once the new rules are in effect.

Will Day, the ATO deputy commissioner, has stated that the extension of Australia’s anti-money laundering and counter-terrorism financing rules will result in “increased transparency” with regards to the operations of cryptocurrency traders. Cryptocurrency investors will face compulsory 100-point identification checks, with the ATO also planning to mobilize data-matching techniques in order to monitor the operations of traders under the new rules.

“The Anti-Money Laundering Counter-Terrorism Financing Act ensures that there is investor transparency through ‘know your client’ requirements. The increased transparency the law provides, combined with our data-matching techniques and a range of existing powers which address unexplained wealth, strengthen the ATO’s ability to tax cryptocurrency profits.”

ATO to Partner With OECD Anti-Tax-Avoidance Chief

The new legislation will see Australia’s financial intelligence agency, Austrac, extend its information-gathering jurisdiction to virtual currency exchanges. Australian cryptocurrency exchanges will also be mandated to report any cash transactions of over $10,000 AUD ($770 USD approximately).

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China’s Police Force Reveals Offshore Exchange Surveillance

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According to regional reports, China’s police agency is allegedly monitoring cryptocurrency exchanges based outside of the country. An informant details that China’s Public Information Network Security Supervision task-force is closely watching both domestic and foreign trading platforms involved with cryptocurrencies to prevent fraud, pyramid schemes, and money laundering.

China’s Regulators Are Watching Offshore Exchanges Dealing with RMB Closely

The local financial publication Yicai reports that China’s network security agency and police force is monitoring exchanges dealing with virtual currencies even if they are based abroad. The regulatory crackdown is being led by the Ministry of Public Security and other Chinese government agencies. According to an insider familiar with the matter, Yicai explains that the investigators are looking for possible Ponzi schemes, fraudulent trading activities, tax evasion, and money laundering crimes.

Even though many trading platforms moved offshore, the publication’s source explains they still monitored the exchanges “synchronously.” “As for the next step there will be further regulatory measures, but also to wait for the notification of higher officials,” explains the insider speaking with the regional publication.

ICO Projects and Domestic Exchanges Evade Regulations by Setting Up Businesses and Servers Internationally

The translated report further states that China’s regulatory authorities have witnessed initial coin offering (ICO) projects and domestic exchanges evade the country’s laws by setting up operations outside of China, registering the businesses offshore, and moving their servers as well.

“To this end, Chinese regulators will conduct a review of domestic bank accounts and online payment accounts for businesses and individuals suspected of helping domestic investors to make digital currency transactions at overseas exchanges,” the report details.

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