All you need to know about crypto regulations worldwide

Discover the latest regulations and laws that might affect your favorite dapps.

Scams, fraud, mismanagement and an overall lack of transparency in the web3 industry are globally triggering the regulators’ radar now more than ever. So we crafted this guide with all you need to know about crypto regulations.

This article will be continuously updated, so bookmark it to keep track of the latest regulatory events and how they might impact dapps (decentralized applications).

It seems that 2022 marks the year of regulations in crypto. The hectic timeline of scandals during this bear market is remarkable. From Terra?s spectacular collapse to alleged insider trading at OpenSea, class lawsuits against PoolTogether, Uniswap, Gemini and more. 

Occasionally, fraudsters and opportunists promising riches usually exploit investors? lack of education and gray zones in the crypto industry today. This is why investors need to educate themselves about decentralized applications by using great dapp tools and analytics.

Here are the latest updates:

• Lithuania –  The government approves a bill to limit anonymous wallets and tighten their regulations ahead of rules set by the European Union to prevent Russia from evading sanctions 

(source: CoinGeek, June 15, 2022)

• Russia – Elvira Nabiullina, Russia?s central bank governor hints to the idea of cryptocurrencies as payments but only internationally and not inside of the country 

(source: CoinTelegraph, June 16, 2022).

Crypto regulation news per country

United States

• June 8th, 2022 – New York legislators issue a guideline for stablecoins indicating that all stablecoins must be fully backed. All stablecoin issuers must have clear redemption and backing of dollar-pegged stablecoins. 

• June 7th, 2022 – Senators Lummis and Gillibrand introduced the “Responsible Financial Innovation Act” seeking to act as a new federal law for stablecoins exempting these digital assets from taxes for small-scale payments under 200 USD. Stablecoins play an essential role in the DeFi ecosystem.

• June 3rd, 2022 – New York legislators passed a bill addressing environmental concerns and banning crypto mining that is carbon-based. Bitcoin uses Proof Of Work; an energy-demanding software algorithm that requires computational power.

El Salvador

• January 25, 2022- The IMF strongly urges El Salvador to drop bitcoin as legal tender after Nayib Bukele doubles down and buys the dip. The relationship between El Salvador, the IMF and the United States seemingly deteriorates and critics claim Bitcoin is not leading to financial inclusion and there are no widespread day-to-day transactions.

• September 8, 2021 – The controversial “Bitcoin Law” comes into force facing criticism from the IMF and crypto opponents. The regulation includes a set of conduct that all bitcoin service providers must comply including anti-money laundering measures, comprehensive risk management, cybersecurity programs and insolvency plans. 

• June 8th, 2021- President Nayib Bukele sends out his Bitcoin Law project to congress with the aim of promoting real financial inclusion and a dynamic economy. The Law was preliminarily approved by 62 general votes from the General Financial Legislation committee.  

Canada

• January 1st, 2022- The Canada Revenue Agency demands that Canadian Money Service Businesses (MSBs) have to report transactions greater than $10,000. So if an investor buys $10,000 worth of crypto from an exchange, the investor has to pay tax on crypto in Canada. 

• February 10th, 2021- Deputy governor Timothy Lane, agrees with the conclusions brought up in the discussion paper but shows himself open to the idea of stablecoins as a viable payment innovation. The Bank of Canada is also pursuing an active research agenda on Central Bank Digital Currencies. 

• February 1st, 2019- The bank of Canada releases a discussion paper “Crypto “Money”: Perspective of a Couple of Canadian Central Bankers” examining the role of crypto as money and whether it should become legal tender. The conclusion was that it is unlikely that crypto can be part of a stable monetary system. 

Mexico

• June 28, 2021 –  After a joint statement, the Central Bank of Mexico, the finance secretary and the National Banking and Securities Commission determine that financial institutions in Mexico are not authorized to deal with virtual assets. In Mexico, cryptocurrencies are neither legal tender assets nor currencies. 

Brazil

• February 22, 2022 –  The Senate introduces an unanimous bill creating rules for digital currency showing that regulators have a positive view of the opportunities brought by digital assets. It is undergoing a vote on the Senate floor and the lower house before President Jair Bolsonaro can sign it into law. 

      It is worth mentioning that Latin America accounts for a quarter of all Axie Infinity

Argentina

• May 16, 2022- The Senate passes a law to confiscate Bitcoin and other crypto assets to pay its aproximately 44,000 million dollars debt restructuring deal to the IMF with taxes on cryptocurrencies.
• May 5, 2022-  Argentina?s crypto industry suffers a major blow by the Central Bank, stifling the booming crypto market in the country. The regulators ban operations that allow bank users to buy crypto and any other operations with unregulated digital assets. 

Argentina is placed number 10 in the list of countries with crypto adoption by Chainalysis and despite the booming crypto sector in the country, the government is eyeing tighter restrictions. Crypto taxes are also on the table after agreements with the International Monetary Fund (IMF). 

Aountry?s reliance on IMF has pressured regulators to take this action. It was contingent on a ??$45 billion debt restructuring deal. 

United Kingdom

• May 31, 2022- The HM Treasury has opened a consultation on managing the failure of systemic digital settlement asset firms, including stablecoin firms. The month of May marks the official bear market this year after Terra?s stablecoin (UST) fell apart, prompting many regulators worldwide to take a closer look at crypto. 

• January 18, 2022 – The UK government and the FCA publish complementary reform proposals to bring financial promotions for some “qualifying crypto-assets” into HM Treasury’s financial promotions regime and into the FCA financial promotions rules.

 The U.K aims to become a crypto hub by having clear regulations in place and preventing potential criminal activity while simultaneously promoting innovation.     

• June 28, 2021- The FCA bans Binance from operating in the U.K.

• May 12, 2022- The Ministry of Finance issues new crypto friendly tax laws guaranteeing that individuals selling BTC or ETH more than 1 year after acquisition will not pay taxes, even if they make a profit on the sale. 

Crypto gains that are held for less than a year under 600 euros are also considered tax-free. If none of the conditions is met, then normal income rates apply. Germany is selling itself as a crypto-friendly country with an active blockchain scene with companies like 1inch Network. 

Russia

• June 15, 2022-  A bill swiftly passed the lower Chamber of Russian Parliament. The bill seeks to prohibit using “digital financial actives” (DFAs) to pay for goods or services.

• February 21, 2022 – The Ministry of Finance formally introduces a draft of the federal law “On digital currency” to the government. The proposed law is more crypto-friendly than the formal stance of the Central Bank. 

It aims to set a licensing regime for exchanges and requires risk management, data privacy and reporting measures that such operators would have to comply with. Purchasing and selling crypto legally would only be possible via a bank account, and it is proposed that both crypto platforms and banks introduce Know Your Client procedures (KYC).

France

• June 2021 – The French National Assembly adopts the Plan d’Action pour la Croissance et la Transformation de Enterprises (Action Plan for Business Growth and Transformationton). All crypto exchanges must register and comply with stricter mandatory KYC regulations. 

• January 10, 2022 – the CNMV published a circular ensuring that it will regulate the advertising of crypto assets to protect investors from risks. This includes advertisements by social media influencers. Spain is known to be a hot spot for crypto and the likely impact of crypto regulations remains to be seen.

Lithuania 

• June 15, 2022- The government approves a bill to limit anonymous wallets and tighten their regulations ahead of rules set by the European Union to prevent Russia from evading sanctions. 

• June 6, 2022- The Lithuanian government proposes a “quick-fix” before the European MiCa legislation takes effect in 2023/2024. The hasting comes after concerns of potential wrongdoings that could tarnish the industry?s reputation. 

The draft proposes a requirement for virtual asset service providers to hold 125,000 euros ($133,000) in capital and to have anti-money-laundering staff physically based in the country.

• July 16, 2021– The Bank of Lithuania issues a warning against BINANCE about unlicensed investment services in the country and orders that publicly available information must not be misleading. 

Nigeria

• May 12, 2022-  The Nigerian SEC (Securities Exchange Commission) imposed registration requirements which would give the Authorities the power of approving which digital exchanges can operate in the country. 

• October 25, 2021- Nigeria launched its central bank digital currency (CBDC) — the eNaira. Africa?s most populated country banned crypto to propel the eNaira but the country?s younger crypto enthusiasts daily circumvent the ban with peer-to-peer trading offered by crypto exchanges. 

• February 5, 2021- Nigeria bans cryptocurrencies prohibiting banks from enabling cryptocurrency transactions.

United Arab Emirates

• February 28, 2022- Dubai issues a significant Law on virtual assets establishing VARA (the Virtual Asset Regulatory Authority) as an independent regulatory body that sits within the Dubai World Trade Centre (‘DWTC’) tasked to regulate exchanges, wallets, issuers and all activities related to cryptos. VARA has a establishment in the metaverse (Sandbox) and the regulatory framework also covers NFTs. 

• April 13, 2018 – The UAE launches the Emirates Blockchain Strategy 2021 which seeks to transform 50% of government transactions into the blockchain platform by 2021. 

Saudi Arabia 

• June 14, 2021- Although consumers in Saudi Arabia can legally trade with crypto, there is no protection for any potential losses. Banks, on the other hand, are only permitted to deal with crypto after SAMA?s approval. 

• July 4, 2017 -The Saudi Arabian Monetary Agency (SAMA) issues a warning against bitcoin because it is not being monitored or supported by any legitimate financial authority. 

India

• February 1, 2022- Indian regulators announce a 30% tax on any income derived from crypto transactions and another tax of 1% at source on all transactions (TDS). Moreover, the government also announces plans on creating its digital rupee controlled by the Indian Central bank before april 2023. 

The Philippines 

• May 2, 2022- The Central Bank of Philippines (BSP) announces that it will implement its experimental CBDC Project later this year. The aim is to test a wholesale CBDC only for use by banks. 

• January 21, 2021 – The Monetary Board asserts that Crypto is not considered legal tender in the Philippines and any business providing financial services like remittances and transactions using virtual currencies must register with the BSP (Bangko Sentral Pilipinas).

China

• January 20, 2022- The Hong Kong Monetary Authority (HKMA) issued two papers: one on stablecoins and another on crypto-related exchange-traded funds. Bitcoin is defined as a virtual commodity and not legal tender. There are no capital gains taxes and AML/CFT laws apply to every individual or business in Hong Kong.

• April 13, 2022-  China?s banking, securities, internet and financial associations determined that NFTs must not be used for securitization or transacted in cryptocurrencies. The legislation makes it harder to trade NFTs. 

Indonesia

• October 29, 2021 –  BAPPEBTI lays down a clear regulatory framework for cryptocurrencies establishing that any crypto assets that are traded must first obtain a license with the entity. The crypto assets must comply with 3 basic requirements : 

1) Be based on distributed LEDGER technology.

2) Be asset-backed or utility-based.

3) Have been assessed via an Analytical Hierarchy Process (AHP) implemented by BAPPEBTI.

The Indonesian Commodity Futures Trading Regulatory Agency (BAPPEBTI) has been legalizing Bitcoin and other cryptocurrencies as commodities since 2019. Such commodities can be traded on official exchanges. 

Japan

• June 3, 2022- Japan becomes the first country worldwide to create a legal framework addressing stablecoins. The parliament passed a bill that defines them as digital money and asserts that stablecoins must be linked to the yen or another legal tender while guaranteeing holders the right to redeem them at face value. 

• December, 2017- Japan’s National Tax Agency ruled that gains on cryptocurrencies should be categorized as “miscellaneous income” with rates varying according to independent income. Rates can be as high as 55%.

South Korea

• June 1, 2022 – In the aftermath of Terra?s collapse, the Korean government announces the creation of a new entity : The Digital Assets Committee. Its main goals are to make policy recommendations, including criteria for new cryptocurrencies to be listed on exchanges, a schedule for ICOs (initial coin offerings), and enforce investor protections ahead of the enactment of a Digital Asset Basic Act (DABA).

• September 24, 2021 – The South Korean government requires all exchanges (national & international) to register with the Korea Financial Intelligence Unit (KoFIU) and comply with various AML obligations, such as filing reports on suspicious transactions and verifying the identity of their customers. 

Vietnam 

• March 29, 2022 –  The government announces the beginning of a research for the implementation of a legal framework governing digital assets. The country’s Ministry of Finance is  spearheading this mission.

• October 28, 2017- The State Bank of Vietnam (SBV) bans bitcoin and other cryptos for use as a means of payment. 

Australia

• December 2021- The Australian government  announces that it will create a licencing framework for cryptocurrency exchanges and consider launching a retail CBDC. The aim is to create a licensing framework for digital exchanges.