Hungary to Cut Tax on Crypto Earnings to 15% from 30.5% to Help the Economy Recover

Hungary to Cut Tax on Crypto Earnings to 15% from 30.5% to Help the Economy Recover

The finance minister expects “several billion forints” of revenue from this tax reduction while its inflation spiked to above 5% in Q2, the fastest in Europe and the highest since 2012 as it sees no reason to make substantial cuts in spending next year.

Hungary is all set to reduce tax on cryptocurrency earnings by more than 50%, from the current rate of 30.5% to 15%, said Finance Minister Mihaly Varga in a Facebook post.

“Tax cuts and tax simplifications will continue next year: we will also help relaunch the economy through tax policy.”

As part of the post-COVID19 relief efforts, the government is considering cutting the taxes on crypto trading. It expects “several billion forints” of revenue from it, as per the video message posted by the finance minister.

In Hungary, buying and selling crypto assets are classified as “other income” for the purpose of taxation.

Hungary, which has also been involved in a discussion of central bank digital currency (CBDC) like the rest of the world, has been seeing an uptick in cryptocurrency trading this year, much like everywhere else, thanks to the raging bull market.

On Monday, Varga also said that he was not afraid of the economy overheating as it recovers from the pandemic and that there is no reason to make substantial cuts in spending next year.

“We are not afraid of the economy overheating, but we continuously monitor inflation, the forint’s exchange rate, and deficit and debt indicators,” he said in an interview on business website portfolio.hu.

“We do not see any problems that should force us to cool the economy already in 2022 … and make bigger spending cuts.”

Prime Minister Viktor Orban had said he would insist on an expansionary budget for 2022 following a deep 2020 recession caused by the pandemic and resulting lockdowns.

However, inflation is spiking to above 5% in the second quarter, increasing more than estimated.

Inflation in Hungary has been increasing the fastest in Europe and the highest since 2012. However, core inflation, which doesn’t include volatile food and energy prices, only rose 3% in April, the lowest in two years.

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Author: AnTy

Coincheck Sees 5x Surge in Revenue; Japan Assembly Members Seek ‘Tax-Free’ Crypto Zone in Tokyo

Coincheck Reports 5x Surge in Revenue, Japan Assembly Members Call to Make Tokyo a Special ‘Tax-Free’ Crypto Zone

During the period of Oct. and March, Monex Group acquired a crypto exchange that was hacked in Jan. 2018 gained 210,000 users. Meanwhile, ruling party members want to transform the city into a crypto “trading center.”

Japan is now aiming to boost its cryptocurrency industry with a member of the ruling party Tokyo Metropolitan Assembly wanting to transform the capital into a “trading center” for cryptos. And for this, they are advocating for a 0% tax on cryptocurrency trading.

Assembly member Yuu Ito talked about bolstering the city’s financial sector by increasing its involvement in the digital asset industry.

“According to our research, the number of financial institutions that are gathered in the city is key to our success or failure,” Ito was quoted as saying, “unfortunately, Tokyo is lagging behind in that regard.”

Fellow Tokyo Metropolitan Assembly member Nobuko Irie is of a similar opinion as she said,

“The country is printing deficit-financing bonds in the wake of the corona. Even in Tokyo, we must create new financial resources by setting technology that can generate wealth like blockchain as a growth strategy.”

While praising the rising bitcoin adoption, she raised concerns about how politicians were handling the situation and urged for necessary action to make Tokyo a crypto trading center.

“Politicians should now tackle the issues of monetary policy and taxation around bitcoin. If you do it in the nation, you will lose the sense of speed, so create a special zone in Tokyo to use it tax-free in the city. I think it is the role of politicians to identify issues and clear them systematically while running.”

Virtual currency and blockchain can also be used to turn its economy around, Irie said.

Gains on cryptocurrencies are taxed as capital gains, but Bitcoin “is originally a currency, therefore, it’s not easy to use unless taxation is set to 0%,” said Ito.

Moving Forward

Japan has been seeing a growth in crypto adoption until the crypto exchange Coincheck was hacked in January 2018, which has been acquired by online brokerage Monex Group. Hindering the growth of the crypto frenzy in the country, people are now hopeful of moving to the next stage after undergoing a period of scrutiny and renewal.

Coincheck’s revenue actually increased fivefold to ¥20.8 billion (over $191 million) in the 2020 fiscal year compared to the previous year, as per earnings released by the Monex Group last month.

The exchange also gained 260,000 users, out of which 210,000 were accumulated in the second half of the business year ending in March, reported Japan Times. However, the volume on the exchange only including the BTC/JPY pair, is still only about $150 million, as per CoinGecko.

According to CryptoCompare, JPY has the fifth biggest share of BTC volume by currency after Tether (USDT), USD, Binance stablecoin BUSD, and EUR.

“Due to our hacking problem, not only us but each Japanese cryptocurrency exchange had to strengthen measures to protect customers” and prevent cyberattacks, money laundering, and other inappropriate transactions, said Yusuke Otsuka, an executive, and co-founder of Coincheck.

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Author: AnTy

South Korea To Monitor Cryptocurrency Phishing Due To High Phishing Reports

South Korea To Monitor Cryptocurrency Phishing Due To High Phishing Reports

South Korea’s Ministry of Science and ICT is working with the Korean National Police Agency to bust the growing crypto phishing websites through a new system, Yonhap reports. This follows a rise in phishing attempts targeting crypto users.

South Korea Clamps Down On Crypto Phishing

The platform will run a 24-hour surveillance system to detect and swiftly take down fake websites.

The ICT ministry disclosed that it had become important to tackle the problem because of the increasing reports of phishing attempts via text messages.

These text messages trick cryptocurrency users into entering their exchange IDs and passwords on fake websites where scammers use them to steal their funds.

In barely three months, 32 phishing websites were identified and blocked by the ministry. This is more than the 41 websites detected in the whole of last year.

The Police have been conducting a crackdown on phishing websites since the start of March this year. According to the report, the police investigated 21 cases in which individuals accessed other cryptocurrency users’ accounts and sold their assets.

Phishing attacks have become increasingly sophisticated, with criminals creating emails and websites that resemble official company correspondence to target people online.

They rely on people misspelling web addresses and clicking on links that could compromise their security. A prime example of phishing websites found and blocked in South Korea was Bithnub.com—created to lure Bithumb clients to a fake website and steal their login details.

South Korea Getting Tough On Crypto

As prices of cryptocurrencies continue to surge in the East Asian country, the financial authorities have made their intentions to crack down on all illicit crypto activity clear.

The regulators are also getting strict on the exchanges in the country. The Korea Federation of Banks recently raised the alarm over the increase in altcoin trading volumes across crypto exchanges in the country.

The association is reportedly concerned about the potential risks of banks providing account services to exchanges overexposed to altcoins. To this effect, the bank association has asked its members to investigate the alternative coins available for trading on crypto exchanges.

Back in March, South Korea’s financial regulator, the Financial Services Commission (FSC), implemented a new rule suggesting hefty penalty standards and fines for all virtual asset services providers (VASPs), including exchanges, that fail to report suspicious transactions and keep relevant data.

This led to some exchanges suspending trading in South Korea.

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Author: Jimmy Aki

Central Bank of Iran Bans Foreign Deposits; ‘Locally-Mined BTC Only’ Policy for Bitcoin Users

Central Bank of Iran Bans Foreign Deposits; ‘Locally-Mined BTC Only’ Policy for Bitcoin Users

Iran’s central bank has introduced a ban on all Bitcoin (BTC) – just not those mined in the country. According to a report by Iran International, Bank Markazi, the central bank of Iran (CBI) has prohibited the trading of Bitcoin not mined in the country. The latest directive by the CBI aims to preserve capital in the sanctions-ridden economy, having previously banned any BTC trading in the country.

The country introduced legal Bitcoin mining contracts for sanctioned miners in the country. These miners leverage the cheap electricity from its large oil reserve deposits, making it cheaper to mine BTC than in most countries.

At the height of US-Iran tension that caused multiple sanctions on Iran, placed by the Trump Administration, Iran turned to Bitcoin to save their hyper-inflated Iranian rial. In January 2020, Iran’s Ministry of Industries, Mining, and Trade granted over 1,000 Bitcoin miners licenses in a bid to increase their foreign exchange reserves. Later in the year, the Iranian government allowed citizens to use Bitcoin mined in the country for international trade – in a bid to bypass the dollar due to U.S. sanctions.

However, the new laws bring about challenges on how exactly they will be implemented. How will the government separate the locally sourced BTC from foreign ones?

Speaking on the subject, Swiss Attorney Fatemah Fannizadeh stated the law might not be easily implemented to individuals. “Exchange platforms can basically not operate,” Fatemah explained. “But instead of a blanket ban, it allows banks and forex offices to use Iranian crypto for international transfers.”

With the recent calls for locally mined BTC growing stronger, Iran aims to bypass all sanctions while saving its currency from hyperinflation, she further said. Additionally, allowing exclusive Iranian BTC in the country may spike the number of miners the country in an effort to produce more BTC.

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Author: Lujan Odera

Thailand Regulator Introduces ‘Physical Identification’ KYC Process on Crypto Exchanges

Thailand Regulator Introduces ‘Physical Identification’ KYC Process on Crypto Exchanges

Cryptocurrency exchanges must comply by July this year.

Thailand is introducing new stringent laws to govern cryptocurrency service providers in the country, a Bangkok Times report stated on Monday. According to the report, Anti-Money Laundering Office (AMLo) requires local crypto exchanges to implement physical identification of customers via a “dip-chip” machine that requires clients to be physically present.

Over the past quarter, the country has seen a boost in crypto accounts on exchanges as the younger generation takes akin to the industry, but the numbers could slow down with respect to the new laws. The dip-chips machines will be introduced in September, having previously been used in gold and jewelry shops.

The new laws will come into effect in July this year and are expected to slow the overall growth of crypto investors in the country. Speaking on the effect of the new rules, Poramin Insom, co-founder and Director of Thai-based crypto exchange, Santang Corp, said,

“Most digital asset exchanges are still busy preparing their systems to accommodate the growing number of clients as new account applications continue to flow in. However, this growth may be curbed if the application process becomes more complicated.”

Currently, local exchanges only require customers to fill in their details electronically and submit their documents online to register on the platform. However, the new ‘dip-chip’ system will require Thai citizens to scan a chip in their national IDs on physical machines to register and trade crypto in the country. On top of collecting users’ information, the new rules also aim to prevent foreign customers from accessing the local exchanges and prevent money laundering.

The report further states digital asset intermediaries in the country will discuss the issue at the Thailand Digital Asset Operators Trade Association forum set to take place later in the month. The self-regulated organization aims to “further discuss issues with regulators and government entities” in charge of digital assets in the country, such as the SEC.

Notwithstanding, the law also states exchanges must report any suspicious transactions to relevant authorities and report transactions worth over 1.8 million baht (~$58,000).

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Author: Lujan Odera

IRS is Developing ‘Exploitation Techniques’ to Break Into Crypto Wallets

IRS is Developing ‘Exploitation Techniques’ to Break Into Crypto Wallets

  • Internal Revenue Service (IRS) is now targeting cryptocurrency users through the “development of exploitation techniques against Cryptowallets.”

According to its March report, the emergence and rapid adoption of cryptographic currencies have created a gap in digital forensic capabilities, and the decentralization and anonymity provided by cryptos are fostering an environment for the storage and exchange of value outside of the traditional purview of law enforcement and regulatory organizations.

The focus of IRS is crypto wallets, for which its Digital Forensics Unit provides forensic support for task forces agents, computer investigative specialists, and cyber investigators.

With the process of decrypting the hardware devices to gain access to the wallets being challenging, it says, “further forensic research is needed to mature the process and obtain reliable results.”

The proposal’s objective is to validate cybersecurity research in cryptographic wallets exploitation, identify new methods to gain access to these wallets, and create hands-on training for the identified techniques in supporting the digital forensic laboratory.

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Author: AnTy

Ireland Adopts AMLD5; Virtual Asset Service Providers Given Three Months to Register

Ireland Adopts AMLD5; Virtual Asset Service Providers Given Three Months to Register

  • Ireland is the latest European state to introduce the Fifth Anti-Money Laundering Directive (AMLD5).
  • Cryptocurrency exchanges are required to register with the central bank within 90 days.

In a statement released on Tuesday, the AMLD5 from the Financial Action Task Force (FATF) has been transposed into Irish law on Friday, April 23, 2021. The directive, now Irish law, forces virtual asset service providers (VASPs) to register with the Central bank of Ireland within the next three months and comply with all Know-Your-Customer (KYC) and Anti-Money Laundering (AML) laws.

The directive becomes part of financial laws in Ireland via the Criminal Justice (Money Laundering and Terrorist Financing) Amendment Act 2021.

The report describes VASPs as firms that facilitate the exchange between virtual assets and fiat currencies, an exchange between one or more forms of virtual assets, custodian wallet provider, transfer of virtual assets between digital addresses, and any other activities involving transacting virtual assets.

This starts a new regime in Ireland whereby crypto exchanges must record and keep their users’ KYC/AML information– effectively killing anonymous crypto transactions. As per the guidelines, VASPs operating in the country must comply with these laws or “it will be a criminal offense,” which could result in a fine, imprisonment, or both.

Additionally, VASPs are required to perform due diligence on their clients to find the origin of their funds, destination of transactions and report any suspicious activities to authorities.

As reported last May, the Irish cryptocurrency service providers found it difficult to conduct their business as local banks locked them out as the government delayed implementing the AMLD5. With the new laws, a few crypto companies are looking to restore their partnerships with local banks.

Netherlands became the first European country to charter a cryptocurrency exchange under the new AMLD5 laws in late October 2020. Nederlandsche Bank NV (DNB), the Netherlands’ central bank, approved AMDAX BV as the first digital asset firm to operate under its jurisdiction allowing users to buy and sell crypto through the exchange.

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Author: Lujan Odera

South Korea Finance Minister: Taxing Cryptocurrency Gains is ‘Inevitable’ Starting Jan 2022

South Korea Finance Minister: Taxing Cryptocurrency Gains is ‘Inevitable’ Starting Jan 2022

On Tuesday, Hong Nam-Ki, South Korea’s finance minister, stated that the government is on course with the proposal to introduce capital gains tax on crypto trading starting next year.

“It’s inevitable, we will need to impose taxes on gains from trading of virtual assets,” Hong stated during a news conference on Tuesday.

Hong’s answer came after a question on whether there will be further delays on the tax to allow the government to have full and structured oversight over the crypto sector.

The proposed tax was originally set to be introduced in October this year but has since been postponed to January next year.

According to a report by Reuters, capital gains taxes will be imposed for any yearly gains exceeding 2.5 million won ($2,253) of crypto trades. The government expects to impose the gains tax at a rate of 20%.

Additionally, Hong described cryptos as “intangible assets,” saying that it was wrong to call them currencies. The head of Korea’s finance sector also urged investors to remain vigilant as there is a hike in unauthorized fundraisings and fraud using digital tokens. He urged investors to make wise investment decisions when it comes to digital tokens.

South Korea has been keen to regulate the crypto industry over the last few months. The recently enacted financial reporting rules came into effect on March 25. Failure to adhere to these rules will attract a $44,000 fine or a jail term of not less than five years.

At the start of this month, South Korea’s Financial Supervisory Services (FSS), in conjunction with other financial sector regulators, agreed to come up with several measures to monitor crypto transactions closely.

Earlier this week, the country’s Financial Services Commission (FSC) chair, Eun Sung-soo, reminded the commission’s employees to declare their crypto investments by May 7.

South Korea also has a law that requires all the crypto exchanges to be registered as Virtual Asset Service Providers (VASP) with the FSC and indicate how their systems prevent money laundering. However, Eun stated that no single exchange has adhered to this requirement by now, which means that they might be closed when the law is enforced in September.

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Author: Joseph Kibe

Turkey Drafting Wider Crypto Regulations, Probe Launched into Another Exchange

Turkey Drafting Wider Crypto Regulations, Probe Launched into Another Exchange After it Ceases Activities

After Thodex was abruptly shut down, Vebitcoin abruptly stopped all its activities as well. An investigation has been launched in both the crypto exchanges, and several people have already been detained.

The Finance Minister of Turkey is working on broader regulations regarding cryptocurrencies, said Central Bank Governor Sahap Kavcioglu on Friday.

However, the bank does not intend to ban crypto, he added.

Some details on regulations would be ready as early as in two weeks, Kavcioglu said in an interview with Turkish broadcasters. Recently, the central bank banned the use of cryptos as payments, citing volatility along with “irreparable” damage and transaction risks.

This latest move towards regulating digital assets came after crypto exchange Thodex abruptly shut down, making hundreds of millions of dollars worth of crypto assets irretrievable.

Thodex recorded about $538 million in volume on its last trading day.

The authorities have detained dozens of people in the investigation into the exchange and sought its founder’s arrest in Albania, police said on Friday.

As we reported earlier this week, the Thodex platform said on its website that it would be closed for four to five days due to a sale process. After people were unable to make any withdrawals or access their accounts, they filed criminal complaints saying they had been scammed.

Police launched raids across eight provinces on Friday with warrants to arrest 78 suspects, the Istanbul police said. Sixty-two people have been detained so far, reported the state-owned news agency Anadolu.

A day earlier, the officials searched the company’s Istanbul offices and seized materials.

According to the police, the company’s founder and CEO, Faruk Fatih Ozer, had flown to the Albanian capital Tirana on Tuesday. Interpol then issued a red notice for Ozer.

Amidst all this, a probe has been launched into another cryptocurrency exchange Vebitcoin, a local prosecutor said on Saturday.

Turkish authorities blocked the onshore bank accounts of Vebitcoin and detained four people as part of the investigation. This action was taken after the exchange announced that it had stopped all activities, citing financial issues. The notice on the exchange reads,

“Due to the recent developments in the crypto money industry, our transactions have become much more intense than expected. We would like to state with regret that this situation has led us to a very difficult process in the financial field. We have decided to cease our activities in order to fulfill all regulations and claims.”

The Financial Crimes Investigation Board (MASAK) has blocked the company’s accounts and started an investigation, reported Anadolu.

“Four administrators and personnel of the company were detained on Saturday on allegations of fraud,” Mehmet Nadir Yagci, a prosecutor in the southwestern city of Mugla, said in a statement.

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Author: AnTy

Congress Passes Bill That Would Provide Regulatory Clarity On Cryptocurrencies

Congress Passes Bill That Would Provide Regulatory Clarity On Cryptocurrencies

The United States House of Representatives has passed a bill that aims to provide regulatory clarity to Bitcoin.

The bill called “The Eliminate Barriers to Innovation Act of 2021” was first introduced to the Financial Services Committee in March by ranking Member Patrick McHenry (R-NC).

The US Moves To Make Crypto Regulations Clearer

The bill, one of the six bipartisan financial services-related bills passed by the House on Tuesday, with the McHenry-sponsored legislation, would see US financial regulators working together on digital asset rules.

The duty or roles of agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the policing of cryptocurrencies in the country would be outlined in the bill.

The bill would also answer questions and misconceptions regarding cryptocurrencies, securities, and other cogent issues.

While addressing the floor on the Eliminate Barriers to Innovation Act, McHenry said that a working group would be composed of both SEC and CFTC employees.

The group would also include FinTech companies working in the digital asset sphere, financial firms overseen by either agency, academic researchers, investor watchdog groups, and small- and medium-scale enterprises. McHenry stated in the press release,

“[This bill] requires the Securities and Exchange Commission and the Commodity Futures Trading Commission to establish a working group focused on digital assets. This is the first step in opening up the dialogue between our regulators and market participants and move to needed clarity.”

Under the terms of the bill, Congress would be given 90 days to establish the working group among the participants. Once constituted, the group would have a year to issue a report analyzing the current crypto regulatory climate.

The panel’s work would also focus on matters like crypto custody, cybersecurity, private key management, and investor protection concerns.

U.S Unclear Crypto Regulations

In the past, the US has been accused of having unclear regulations concerning cryptocurrencies.

Crypto companies have been on the receiving end. Take, for instance, the SEC’s ongoing lawsuit against blockchain firm Ripple Labs.

The SEC sued Ripple over the issuance of XRP, which the agency claims to be a commodity, while the regulator says they are securities.

In December 2020, the agency alleged that Ripple had conducted unregistered security offerings for over $1 billion between 2013 and 2017.

Last month, Brad Garlinghouse bashed the US for not clarifying their crypto regulations. He argued that the US was lagging behind other countries like the United Kingdom, Japan, and Switzerland in cryptocurrency regulations due to the regulatory uncertainty.

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Author: Jimmy Aki