South Korea Proposing Revision of Tax Code to Allow the Confiscation of Crypto Assets of Tax Dodgers

South Korea Proposing Revision of Tax Code to Allow the Confiscation of Crypto Assets of Tax Dodgers

South Korea is now considering tightening its crackdown on tax evasion by cryptocurrency investors and high-income earners, said the finance ministry on Monday.

The government is proposing to revise tax codes that will allow tax authorities to seize tax dodgers’ crypto assets even if they are held in digital wallets, starting next year.

While virtual assets held on exchanges can be seized to pay overdue taxes, current regulations don’t allow confiscation of those stored in digital wallets.

This move is part of the country’s broader plan to tighten oversight of crypto markets to combat money laundering and other financial crimes using cryptocurrencies.

According to the statement, the tax review will be sent to parliament by Sept. 3 as the proposal needs approval from lawmakers to make it enforceable. This is just one part of the government’s once-a-year review of its tax system, which seeks to revise a total of 16 tax codes.

Interestingly, the revision will lead to a decline of at least 1.5 trillion won ($1.30 billion) in tax revenue between now and 2026 as tax breaks for research and development in vaccines, batteries, and semiconductors sectors more than offset any additional revenue expected, according to the ministry.

But finance minister Hong Nam-ki said at a news conference that “it isn’t that big of an amount and something necessary as we revised tax codes.”

President Moon Jae-in looks to expand the tax base to cover the rising welfare costs. In this context, the government has already been hiking taxes from conglomerates and big earners.

South Korea became the world’s fastest-aging society with the lowest birth rate in 2020. With this move, the government wants to ensure that wealthy citizens share the burden of the growing costs of an aging population.

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Author: AnTy

FCA’s Crackdown Hits Another One After Binance, Which Has ‘Not’ Seen Institutional Activity Slowdown

FCA’s Crackdown Hits Another One After Binance, Which Has ‘Not’ Seen Institutional Activity Slowdown

Rather, this continued interest from institutional investors is coming not only from crypto native firms but also from traditional finance institutions. Meanwhile, in the US, DeFi is on regulators’ radar where with no intermediary, the question is, “who do we put this on?”

Britain’s Financial Conduct Authority (FCA) said that crypto broker CoinBurp is not fully authorized to have its initial token offering and the launch of its BURP token planned for Monday.

However, the company can start a business under its temporary registration, the FCA added, as long as it has the controls in place.

Last week, the project raised $6 million to build a non-fungible tokens (NFTs) marketplace. Last week, in a press statement, CoinBurp claimed to be a “regulated broker” and said that all the NFTs listed on its market could be sold to investors.

Although CoinBurp is listed on the watchdog’s temporary registration register, this status only allows them to trade. The watchdog said the company isn’t yet assessed as “fit and proper” or entitled to claim to be authorized by the FCA as the regular has yet to determine their application for the money laundering regulations. The UK regulator said in its statement,

“The firm does not yet hold full FCA registration under the money laundering, terrorist financing, and transfer of funds (information on the payer) regulations … but has submitted an application for the FCA for registration.”

For some time now, FCA’s crackdown has been going on with Binance, which has no headquarters, particularly bearing the brunt of it. This has resulted in several big UK banks such as Barclays, Santander, and NatWest banning retail customers from sending money to the exchange.

Due to this, several hedge funds, according to the Financial Times, have also curbed trading on Binance as a regulatory crackdown on it continues to grow.

However, Binance told FTX that it has “not seen a slowdown in institutional activity. On the contrary, we have seen continued interest in our institutional offering from not only crypto native firms but also traditional financial institutions that have entered the crypto space.”

Amidst this, on Monday, Binance reduced the leverage from previously 125x to now 20x.

Meanwhile, DeFi is on US regulators’ radar, with CFTC Commissioner Dan Berkovitz saying in an interview,

“I’m very concerned there’s none of the reporting, none of the normal pricing and regulatory limits. The bottom line is there’s no free lunch anywhere in the economic system.”

As we saw last week, Uniswap Labs delisted several tokens from the exchange. With no intermediaries in decentralized finance, which has grown to become $110 billion in total value locked (TVL) and $85 billion in total market cap, the question is, “who do we put this on?” said Alabama Securities Commission Director Joseph Borg.

While Sen. Elizabeth Warren is urging regulators to rein in DeFi activities, Borg said, SEC and CFTC would have to come together to assess the potential possibilities and potential risks. OCC spokesperson Bryan Hubbard said,

“While DeFi, by definition, is decentralized and does not necessarily rely on the banking system, there are linkages, which are part of our review through the lens of responsible innovation, cognizant of the potential benefits of new technologies while focused on understanding the potential risks and use cases.”

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Author: AnTy

Stock Tokens, Even on Decentralized Platforms, Must Adhere to Securities Laws: SEC Chair

Stock Tokens, Even on Decentralized Platforms, Must Adhere to Securities Laws: SEC Chair

The US Securities and Exchange Commission (SEC) is renewing its efforts to impose “long overdue” rules for the registration and regulation of security-based swap execution facilities, including tokenized stocks, said Chair Gary Gensler on Wednesday.

In his prepared speech, Gensler said he wanted the SEC to coordinate such derivatives rules with those already in place at the Commodity Futures Trading Commission (CFTC), which has the bulk responsibility for overseeing derivatives.

When it comes to the cryptocurrency industry, Gary Gensler emphasized that any crypto token priced off the value of securities, be it a stock token, a stablecoin backed by securities, or any other product providing synthetic exposure to securities; must adhere to securities laws, even if offered on a decentralized platform.

“These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime,” he said in a speech at the American Bar Association Derivatives and Futures Law Committee Virtual Mid-Year Program.

While the SEC has brought some cases involving retail offerings of security-based swaps, “there may be more,” added Gensler.

Regarding tokenized stocks, the leading cryptocurrency exchange Binance has been asked by authorities in Germany and Hong Kong to stop offering these products.

Last week, the exchange announced that they are “winding down” support for these tokens on Binance.com effective immediately and would no longer be available on its website after October 14.

In other news, the US Banking, Housing, and Urban Affairs Committee will be conducting an open session called “Cryptocurrencies: What are they good for?” next week on July 27.

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Author: AnTy

Ethereum Developer Virgil Griffith Remanded In Custody For Violating Bail Terms By Accessing Coinbase Wallet

Ethereum Developer Virgil Griffith Remanded In Custody For Violating Bail Terms By Accessing Coinbase Wallet

Ethereum developer Virgil Griffith has been remanded in custody. He’s said to have reportedly violated the terms of his bail, per reports from Inner City Press. Griffith was granted bail in December 2019.

Griffith May Be In Jail Until His Trial In September

The remand order was given after a federal judge found out that he had violated the terms of his bail by seeking access to his Ethereum assets held by exchange Coinbase in May 2021.

Griffith, a former researcher with the Ethereum Foundation, will likely spend the next two months in jail as he is scheduled to be tried on September 21. If found guilty, he faces up to 20 years in prison.

The developer is being charged with conspiracy to violate the International Emergency Economic Powers Act.

Griffith is said to have allegedly assisted North Korea in laundering money through cryptocurrency in order to avoid US sanctions. The developer was arrested in November 2019.

Although he was denied bail initially, he was finally granted a bond order for $1 million in December 2019. Griffith’s father reportedly offered his house worth $835,000 as security for bond. His sister also secured the bond with her property.

The developer was granted bail on the condition that he would not access his accounts and would remain under house arrest with his parents in Alabama.

However, he is said to have violated these bail terms when he tried to access his cryptocurrency account by contacting Coinbase to request the removal of account security functions.

Although Griffith’s lawyers claimed the attempt to access the account on Coinbase was made by proxy. The lawyers argue that his family only contacted Coinbase to ascertain if the assets in Griffith’s account could cover his legal fees. The lawyers said,

“Given the impending trial date, Mr. Griffith may need to sell certain assets to fund his legal defense…In connection with their strategy to assess and access necessary resources to fund his defense, and after consulting counsel, his mother made an online request to access a US-based and regulated cryptocurrency exchange, Coinbase…”

US District Judge P. Kevin Castel said Griffith’s attempt to access the assets suggested a flight risk since the assets Griffith held had surged in value into the $1 million range.

Virgil Griffith’s Failed Attempt To Dismiss Case

Griffith had previously filed a motion to dismiss the conspiracy charges in October 2020. He claimed that his April 2019 conference presentation consisted of public information that was widely available. Therefore he did not provide a service to North Korean officials. This argument was not accepted as the US government labeled the statement as absurd.

Griffith’s case also gained support from the Crypto community, who championed his release. Ethereum (ETH) co-founder Vitalik Buterin had defended and declared his solidarity with Virgil Griffith last year. He said that Griffith didn’t do any wrong as he only tutored in his presentation.

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Author: Jimmy Aki

Non-Custodial Crypto Wallets Not Covered by Proposed Prohibition, Clarifies European Commission

Non-Custodial Crypto Wallets Not Covered by Proposed Prohibition, Clarifies European Commission

On Tuesday, besides prohibiting anonymous crypto transactions, the EU’s executive arm also added anonymous crypto asset wallets to its prohibition list, requiring the full application of AML/CFT rules to ensure complete traceability.

This created some confusion as to what exactly the crypto wallets meant here, which the European Commission confirmed is not applicable to non-custodial privacy wallets rather only to exchanges.

“Indeed, open-source, non-custodial wallets, will not be covered by the prohibition,” an EC spokesperson told Cryptonews.com.

Anti-money laundering (AML) frameworks are only applied to actors that are gatekeepers of the financial system, which in crypto means VASPs like exchanges that provide virtual asset services.

“But this requirement does not apply to un-hosted wallets that are retained by the users themselves,” the spokesperson added.

This week, European Union (EU) policymakers proposed tightening regulations on the cryptocurrency sector by prohibiting the anonymous transfer of crypto assets and requiring companies to collect data on both senders and recipients as part of its broad plan to crack down on money laundering and terrorist financing.

“The present proposal aims at introducing in EU law these new requirements of the VASPs, by providing an obligation for these actors to collect and make accessible data concerning the originators and beneficiaries of the transfers of virtual or crypto assets they operate,” reads the proposal.

The law, as we reported, basically extends the Financial Action Task Force’s “travel rule” that applies to wire transfers to the entire crypto industry.

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Author: AnTy

Treasury Secretary Urges Regulators to ‘Act Quickly’ in Drafting Stablecoin Rules

Treasury Secretary Urges Regulators to ‘Act Quickly’ in Drafting Stablecoin Rules

Jeremy Allaire, co-founder & CEO of Circle, the issuer of USDC stablecoin, called this meeting an “extraordinary and positive” movement as “It’s a sign of how far we’ve come and how fast this is all happening.”

Treasury Secretary Janet Yellen met with the top US financial regulators and urged them to accelerate their consideration of new rules to regulate stablecoins.

“The secretary underscored the need to act quickly to ensure there is an appropriate U.S. regulatory framework in place,” the Treasury Department said in a statement following Yellen’s meeting with the President’s Working Group on Financial Markets on Monday.

The group discussed the rapid growth of stablecoins, whose total market cap has surpassed $110 billion, with Tether (USDT) dominating with 57.13% market share followed by USDC at 23.57%, and BUSD at 10.22%.

“The demand for stablecoins comes from the ability to use dollars in new ways,” Robert Leshner, CEO of DeFi lending protocol, Compound Finance, tweeted to the Treasury Secretary.

“Stablecoins are unlocking a wave of innovation with the potential to change every facet of finance; to make markets cheaper, faster, fairer, and more transparent.”

US regulators also discussed their potential uses as well as risks to the financial system.

The group “expects to issue recommendations in the coming months,” according to the statement.

Jeremy Allaire, co-founder & CEO of Circle, called this meeting an “extraordinary and positive” movement as “It’s a sign of how far we’ve come and how fast this is all happening.”

“Crypto, public chains, DeFi, stablecoins and other digital currency models pose many complex questions, and requires significant engagement with policy makers if we hope to achieve global mainstream scale and adoption.”

According to him, stablecoins should achieve mainstream scale far ahead of any CBDC project. And it’s critical that national governments take a view on this, but they shouldn’t “try and fit a square peg in a round hole.”

He said this engagement offers an enormous opportunity for the US government and the global digital currency industry.

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Author: AnTy

Applying Travel Rule to Crypto, EU Proposes Prohibition of Anonymous Cryptocurrency Transactions and Wallets

Applying Travel Rule to Crypto, EU Proposes Prohibition of Anonymous Cryptocurrency Transactions and Wallets

The European Union says ensuring “full traceability of crypto-asset transfers” would help the crypto-asset industry develop in the region “as it will benefit from an updated, harmonised legal framework across the EU.”

The European Union is proposing to ban anonymous cryptocurrency transactions as well as wallets as part of its broader plan to combat money laundering and terrorist financing.

Companies that transfer Bitcoin and other crypto assets are required to collect details of senders and recipients to help authorities in cracking down on dirty money, EU policymakers proposed on Tuesday.

These latest efforts to tighten regulation of the crypto sector would apply travel rules to crypto transactions, making them traceable. It is already applicable to wire transfers.

The law proposed by the EU is one of the recommendations of the Financial Action Task Force (FATF), an inter-governmental watchdog. The Commission said in a statement,

“Today’s amendments will ensure full traceability of crypto-asset transfers, such as bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing.”

The information collected by the company handling the crypto assets for a customer will include name, address, date of birth and account number, and the name of the crypto asset receiver whose service provider must collect required information as well.

Besides anonymous transactions, anonymous crypto wallets will also be prohibited, much like anonymous bank accounts are already banned under EU anti-money laundering rules.

The European Parliament and the EU states will be deciding the fate of these proposals as such could take about two years to become law.

According to the EU, these proposals are designed to “find the right balance between addressing these threats and complying with international standards while not creating excessive regulatory burden on the industry,” helping the crypto-asset industry develop in the region “as it will benefit from an updated, harmonised legal framework across the EU.”

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Author: AnTy

US Rep Reintroduces Bill Aimed At Defining Cryptocurrencies Under Securities Act

US Rep, Tom Emmer, Reintroduces Bill Aimed At Defining Cryptocurrencies Under Securities Act

The United States Representative Tom Emmer has again introduced a bipartisan bill called the Securities Clarity Act. The bill is aimed at defining how federal regulators treat digital assets under securities laws.

Crypto Bill Gets Democratic Co-Sponsors Backing

Emmer first introduced the bill in September 2020, but it didn’t pass the Democrat-controlled House. The bill faded right after it was referred to the House Committee on Financial Services.

However, Emmer is back with the bill, but this time with the support of Democratic co-sponsors; Darren Soto and Ro Khanna.

The Securities Clarity Act aims to make regulators accept digital assets as commodities and not securities. This means if the law is passed, crypto firms would be free to sell and trade cryptocurrencies without registering them as securities with the Securities Exchange Commission (SEC).

The bill argues that there should be a distinction between investment contracts and the assets that underlie them. This means that, while an investment contract can be a security, its accompanying token or coin is not.

Emmer noted that while several countries have taken a different approach towards digital assets, the US has hindered the sector’s growth, pointing to continued regulatory uncertainty surrounding crypto assets.

“There has been an unreasonable approach by regulators as to how federal securities laws should be applied to transactions involving the sale of blockchain-based tokens, and this lack of clarity is hurting American innovation.”

The Securities Clarity Act has since garnered endorsements and support from several blockchain and cryptocurrency stakeholders. This includes the Chamber of Digital Commerce, the Blockchain Association, and the Coin Center.

US Authorities Focusing More On Crypto Regulation

The US appears to be putting more effort into drafting out regulations for the crypto market at the moment. Last month the US House of Representatives passed a crypto-related bill aimed at studying and exploring the use of blockchain technology and cryptocurrencies.

The bill titled the Consumer Safety Technology Act was sponsored by Rep. Jerry McNerny and co-sponsored by Rep. Darren Soto.

There have also been congressional hearings in the US where crypto regulation was key on the agenda. In May, SEC Chairman Gary Gensler, during a house hearing related to the GameStop short squeeze incident, called for more regulation to protect crypto assets.

Gensler disclosed his intention to work with Congress on investor protection, citing fraud and market manipulation as major concerns.

Rep. Maxine Waters (D-Calif.) had also previously made known that she was forming a group of Democratic House members to tackle concerns about cryptocurrency. This was announced during a House Fintech Task Force hearing about the future of central bank digital currencies (CBDCs).

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Author: Jimmy Aki

US Department of State’s Rewards for Justice (RFJ) Program Now Pays in Crypto for the First Time

US Department of State’s Rewards for Justice (RFJ) Program Now Pays in Crypto for the First Time

The US Department of State’s Rewards for Justice (RFJ) program announced this week that the reward payments now also include cryptocurrency for the first time.

The program, administered by the Diplomatic Security Service, is offering a reward of up to $10 million for information on cybercriminals “acting at the direction or under the control of a foreign government” against the US critical infrastructure.

These “reward payments may include payments in cryptocurrency,” it states.

These malicious cyber operations that may violate the Computer Fraud and Abuse Act (CFAA) include intentional unauthorized access, transmitting extortion threats as part of ransomware attacks, and transmitting a program, information, code, or command to cause damage without authorization to a protected computer.

The program has set up a Dark Web (Tor-based) tips-reporting channel to protect the safety and security of potential sources.

Since its inception in 1984, the program has paid more than $200 million to over 100 people who provided actionable information that helped prevent terrorism and resolve threats to U.S. national security, it said.

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Author: AnTy

BoE says Institutions Are Not A ‘Large Part’ of the Crypto Space to Warrant Action

BoE says Institutions Are Not A ‘Large Part’ of the Crypto Space to Warrant Action

But the central bank is keeping a careful watch because crypto is a “fast changing landscape.”

Bank of England (BoE) says crypto-assets do not pose a threat despite becoming more interlinked with big investors, at least no action beyond monitoring for now.

Price volatility in certain crypto assets could highlight “potential pockets of exuberance,” said BoE in its twice-yearly Financial Stability Report (FSR) on Tuesday.

Crypto assets are currently largely held by retail investors, with institutional investors having limited exposure at present, it added.

But at the same time, there are signs of growing interest in cryptocurrencies and related services from banks, institutional investors, and key payment system operators said the UK’s central bank.

However, this growing interest from big players can increase the interlinkages between crypto-assets and other systemic financial markets and institutions, the FSR said.

While repeating his warning that crypto investors can lose all of their money because crypto assets have “no intrinsic value,” BoE Governor Andrew Bailey said while institutions are not a big part of the crypto space, the rapidly changing industry requires attention.

“From an institutional point of view, the evidence does not point to it being a large part of the picture, but we clearly have to watch it very carefully, as we do, because it is a fast changing landscape.”

BoE Deputy Governor Jon Cunliffe also joined in, saying “high speculative” crypto-assets were being observed to see if any action is needed to protect retail investors.

“From a financial stability point of view, the point at which you act is the point where you think, well actually you have a risk that is beginning to crystalize,” said Cunliffe, adding that such a moment hadn’t been reached.

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Author: AnTy