Brexit Takes A Backseat: UK Adopting EU-Wide Cryptocurrency Regulations

cryptocurrency tax lawyerLike the rest of the world, UK finance authorities are laser-focused on cryptocurrency, and despite Brexit, plan to adopt EU regulations. Will the new guidelines wallop the industry? Some folks predict regulatory doom. But others insist the new rules are a quasi-official approbation that will ultimately carry the digital currency market skyward.

The Rise of Bitcoin, Et Altcoins

2017 may have had 99 problems, but Bitcoin wasn’t one. The Grand Poobah of digital monetary systems, over the past 12 months Bitcoin’s value increased by 1,000%. Early adopters are drunk on their prescience, while old-guard skeptical luminaries are loudly sewing doubt (though quietly investing in blockchain technology).

Why Are Nations Worried About Cryptocurrencies? Should They Be?

Why are governments leery of cryptocurrency? In two words: power and crime. Digital money systems are created and traded using decentralized blockchain technology — decentralized being the operative word. Since cryptocurrencies aren’t dependent on a central source, like fiat currency financial institutions, “the people” are in control as opposed to a bank or government — a dramatic reversal to how things currently work. The decentralized nature means current banking institutions stand to lose their exalted spot in the finance hierarchy. It would also mean that governments risk losing significant control of financial markets.

Visions of cyber-crime are also dancing in regulators’ heads. Many folks believe that, because of its decentralized nature, encryption, and anonymous operational standard, cryptocurrencies are powerful arrows in ne’er-do-wells’ quivers.

But are these fears valid? The evidence suggests not. Yes, hackers have compromised ICOs and a handful of unlucky exchanges, but so far as analysts can decipher, underworld figures have yet to adopt digital money systems. Nevertheless, it’s a national security concern.

UK Vows To Adopt EU Cryptocurrency Regulations

Despite its imminent exit from the EU, UK’s economic secretary of the treasury, Stephen Barclay, made it clear that Great Britain intends to adopt amendments to the Anti-Money Laundering and Counter Terrorism Financing regulations. Still under consideration, plans are afoot to hold cryptocurrency businesses — like wallets, exchanges, and ICO-funded startups — to the same standard as traditional finance businesses. Ultimately, under the new rules, crypto traders will be required to disclose their identities in certain situations and firms will be forced to conduct due diligence on buyers and investors.

Is Cryptocurrency Regulation A Boon or Bust?

Are cryptocurrency regulations a good thing? It depends on who you ask. One school insists that any government interference, at this point in the crypto market’s metamorphosis, will hamstring efforts and halt innovation.

Other folks see the situation differently. Take Nicholas Gregory, CEO of CommerceBlock. In an email to Business Insider, he reasoned: “What some will bill as censure, the cryptocurrency community will deem as a stamp of approval that finally recognizes the pivotal role that digital currencies will ultimately hold for the global economy.”

Are You Operating On The Right Side Of The Cryptocurrency Regulatory Fence?

As the industry skyrockets, legislators are passing new rules and regulations affecting the blockchain industry. Some, like New Hampshire’s new digital currency law favors crypto startups. Others, like New York’s licensing requirement, add an extra step to the startup process.

If you’re in any way involved in an Initial Coin Offering or other type of cryptocurrency business, it’s time to get a regulations audit. The IRS has crypto on the mind, and the SEC is also sniffing around. Some laws do, now, apply.

Our cryptocurrency legal team works with entrepreneurs, startups and businesses in the blockchain space. We’ll guide you through any cryptocurrency regulatory mazes — and assist with any crypto-tax matters.

 

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