Categories: Business

Crypto Laws Around The World To Be Aware Of

As cryptocurrency becomes more popular and widely adopted, governments around the world are starting to implement rules and regulations to monitor and support its use.

For crypto enthusiasts, investors, and users, it’s important to understand the regulations surrounding crypto and how they may impact how you buy, sell, and use digital currency.

In this article, we’ll review some of the common crypto laws in various regions that users should be aware of, including crypto gambling laws, exchange laws, tax laws, and purchasing laws.

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Crypto Gambling Laws

Online gambling has become popular in recent years and, thanks to the introduction of crypto casinos, which allow bettors to buy in and wager using digital currencies, it is more accessible than ever; crypto allows bettors to wager from anywhere in the world.

It also offers quicker transactions and lower transaction fees, making it a popular choice for online bettors.

While wagering with crypto is becoming widespread, regulations surrounding the popular pastime vary from place to place. Some countries have legalized online gambling, but it still remains illegal in some countries, with Olaleye Komolafe sharing that gambling laws vary significantly from one jurisdiction to the next.

As such, players must do their research before betting to ensure that wagering with digital currency is legal in their area. Let’s explore a few countries and their crypto gambling laws players should know about.

United States: Crypto gambling laws in the US vary from state to state, just like online betting laws. Some states, like New Jersey, have embraced online betting and wagering with crypto, whereas others, like California, have not yet legalized the activity.

United Kingdom: In the UK, the UK Gambling Commission regulates all online gambling activities, including those that use crypto. Any operator in the UK that wants to offer crypto gambling must obtain the correct license and adhere to Anti-Money Laundering (AML) and responsible gambling measures.

Curacao: Curacao is a gambling-friendly region and is known to regulate and license crypto casinos. Many of the online casinos that are licensed in Curacao offer crypto gambling options, allowing players to wager on games like crypto poker, slots, blackjack, and more.

Crypto Exchanges

Cryptocurrency exchanges are a vital part of how investors and crypto enthusiasts buy, sell, trade, and use crypto. Exchange platforms make it possible for individuals to purchase digital currencies, sell crypto, and trade assets.

These platforms act as the gateway between fiat currency and cryptocurrencies, as users are able to add fiat currency to their exchange account in order to purchase crypto. As such, exchanges around the world must comply with a plethora of regulations to ensure that they are operating within the local laws specific to their region.

Let’s explore the crypto exchange rules and regulations in the United States, the European Union, and Japan.

United States: In the United States, crypto exchanges must comply with regulations that are enforced by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Exchanges within the country must comply with commodities and securities regulations, like licensing requirements, and Anti-Money Laundering and Know Your Customer (KYC) requirements.
European Union: Member states in the EU must comply with the Fifth Anti-Money Laundering Directive (AMLD5). This directive asks all crypto exchanges to register and implement Anti-Money Laundering measures to ensure the safety of users.
Japan: The Financial Services Agency (FSA) oversees licensing for crypto exchanges in Japan. Exchanges have to meet and comply with very strict regulatory requirements, like cybersecurity standards and Anti-Money Laundering measures in order to operate legally within Japan.

Using Crypto To Buy Goods And Services

A growing number of people all over the world are starting to use cryptocurrencies to purchase real-world goods and services. For example, consumers can now shop online at stores like Gucci and Balenciaga and buy clothes, accessories, bags, and more. Additionally, globe trotters can purchase holidays using digital currency, funding entire trips around the world using coins like Bitcoin or Ethereum.

Because a growing number of businesses are starting to accept crypto as a method of payment, governments have begun putting local rules in place around using crypto to buy goods and services.

Switzerland: Switzerland has quickly emerged as a crypto-friendly region, with a huge number of local businesses that accept digital currency payments. The Swiss Financial Market Supervisory Authority (FINMA) has provided a set of guidelines that businesses and individuals can follow to ensure purchases and sales made with crypto are within the law.
Japan: In 2017, Japan legalized crypto as a means of payment. This set Japan apart from many other countries and placed it as one of the most crypto-friendly countries at the time. In Japan, consumers can use crypto to buy goods and services at any business that offers crypto as a payment method.
El Salvador: El Salvador confirmed Bitcoin as legal tender in 2021, becoming one of the first countries to do so. This means that consumers in the country can buy and sell goods and services using Bitcoin, and some other cryptocurrencies, in the same way that they would once use fiat currency.

Crypto Taxes

With cryptocurrency’s widespread adoption and growing use, governments have been implementing different rules and laws surrounding how to tax crypto gains and losses. Some countries have implemented capital gains tax or reporting requirements, while other countries are still in the process of establishing tax rules for crypto assets.

Let’s explore the tax rules in the US, Germany and Australia.

United States: In the USA, the Internal Revenue Service (IRS) is responsible for crypt tax laws. Currently, the IRS asks individuals to report crypto transactions and pay capital gains tax on any crypto profits.
Germany: The German Government has outlined clear tax guidelines for cryptocurrency in the country. Crypto transactions in Germany are subject to capital gains tax if the holding period is less than one year. After one year, profits made from crypto sales are exempt from taxes.
Australia: In Australia, the Australian Taxation Office (ATO) has established that crypto assets are taxable. Capital gains tax applies to transactions, and individuals must report crypto holdings and transactions on their tax returns.

Crypto Laws – Conclusion

Cryptocurrency is becoming more popular all around the world, and as more individuals adopt and use crypto day-to-day, governments worldwide must put rules and regulations in place to ensure its safe use. The most common laws around crypto currently include gambling laws, tax laws, exchange laws, and purchasing laws.

However, as crypto continues to develop, it’s likely consumers will see expanded laws from local governments to regulate how crypto is used.

Disclaimer: The above references an opinion of the author and is for information purposes only. Never gamble for more than you can afford to lose. Gambling can lead to a serious addiction. Gamble responsibly.