Cryptocurrencies are one of the most popular applied solutions of blockchain technology, the level of capitalization of which is only growing every year. With the development of the industry, there is a need for its legal regulation. In this article, we will consider the experience of legal consolidation and regulation of crypto-related activities in different countries of the world.
European Union
The European Commission supports a unified approach to the regulation of cryptocurrencies. The proposed Markets in Crypto-Assets Regulation (MiCA) should create a common legal framework for the circulation of crypto-assets, consumer protection and the development of innovations. The regulation (2019/1937) applies to organizations issuing crypto-assets, firms providing services related to crypto-assets and managing digital wallets, and cryptocurrency exchanges. In parallel, the possibility of launching a digital euro is being considered. In some EU countries, local requirements apply - for example, in Germany, cryptocurrencies are recognized as financial instruments, in the Netherlands, the law requires crypto exchanges and cryptocurrency wallet providers to register with the central bank. The implementation of the 5th EU Anti-Money Laundering Directive (5AMLD EU) has been influential, which has affected most of the existing cryptocurrency exchanges and platforms, which are obliged to comply with all the requirements of the law in terms of KYC and AML.
USA
Regulation varies between states. The Ministry of Finance classifies cryptocurrencies as a decentralized virtual currency that can be exchanged, and the Securities and Exchange Commission (SEC) includes it in the commodity class under certain conditions. Cryptocurrency trading activities in the country are overly regulated, with many restrictions and caveats. In the United States, although cryptocurrencies are not yet fully legalized, measures are being taken to use them in commercial life and research is being conducted to become a leader in this technology in the future.
Asia
In Japan, cryptocurrencies are recognized as money, and their regulation is clearly enshrined in law. China has banned the circulation of cryptocurrencies, but is working on launching a state-owned digital currency. In South Korea, since 2018, in order to combat money laundering and monitor the application of tax regulations, a provision has been introduced that will ensure that cryptocurrencies are processed only through bank accounts of real persons, and, thus, trading cryptocurrencies from anonymous bank accounts is prohibited.
Ukraine
Until 2021, the use of cryptocurrencies in the country was not recognized by law. A breakthrough was the adoption of the Law “About Virtual Assets” (March 15, 2022), which establishes the legal status of cryptocurrencies, provides for tax regulation and facilitates the registration of foreign crypto businesses in Ukraine. However, this Law should come into force only after amendments to the Tax Code of Ukraine, which is “not a priority issue” during the war. Thus, the legal regulation of cryptocurrencies and activities related to them still remains in a "gray" legal zone.