India’s Bitcoin Ban Challenged

It will be very interesting to see where all of this goes.  India is the only major country I am aware of that outright banned and outlawed Bitcoin and other cryptocurrencies.  I think this situation is worse than the SEC in the US.  Most countries who are aggressive have a clear motive which is “we want to regulate and tax cryptocurrency” but India has taken it a step farther which is alarming.  What some regulators don’t seem to understand or care about is that this huge amount of money from both investors and exchanges can be moved in an instant.  If it gets banned then people may just physically and virtually move outside of that jurisdiction and never return.  Banning cryptocurrency may seem like an upside to central bankers, but with short-term gain.  In fact I would argue that outlawing it will only make cryptocurrency gain in adoption and popularity.  The only doomsday scenario that would possibly be effective is if all major governments banned cryptocurrency which I don’t see happening, as it is literally shooting yourself in the head financially. I think these sorts of decisions will be seen in the future, as being extremely silly, inline with those who wanted to kill eCommerce and digital media purchases in the 90’s and early 2000’s.

With that all said I really wonder if the law would uphold this ban which I think under any country’s laws would be found illegal.  This is hard to say as India has recently invalidated some of its own notes.  It may be ultimately found illegal but if I were any of these firms I would have moved away by now and consider returning once the legal issues have been sorted out. But with India’s economy being so vast and strong the firms in question have a lot to gain by remaining and pushing for the legal acceptance of cryptocurrency in India.

 

 

 

Another Crypto Firm Challenges India’s Bitcoin Banking Blockade

Countries where cryptocurrency, coins, tokens and ICOs are banned

There has been a lot of activity lately in the world with governments banning cryptocurrency and ICOs but this should come as no surprise as there has been strongly worded messaging about this for some time.

China bans ICOs and shuts down Exchanges
This had a massive impact on the valuations of coins such as Bitcoin, Litecoin, Etherum, Dash etc.. but things have since recovered since the 2017/09/04 law passed in China but serves as a warning and example of what government intervention can and cannot do.

http://en.people.cn/n3/2017/0904/c90000-9264331.html

Chinese authorities on Monday ordered a ban on Initial Coin Offerings (ICOs), a nascent form of fundraising in which technology start-ups issue their own digital coins, or “tokens”, to investors to access funds as the rapidly expanding market spawned concerns over financial risks.

Starting Monday, ICO activities should be halted, and ICO platforms should not engage in exchange services between fiat currencies, virtual coins and tokens, said a statement from the People’s Bank of China.

South Korea Bans ICOs

The good news is that while ICOs are banned it does not appear that trading in the currencies themselves is banned.
http://www.nasdaq.com/article/south-koreas-ico-ban-a-reaction-to-serious-concerns-over-cryptocurrency-investment-practices-cm854236

In fact it appears South Korea plans to allow trading but wants more regulation and safeguards:

South Korea Makes it Legal to Transfer Cryptocurrencies Internationally

Singapore

Although not by law, many companies in Singapore dealing in cryptocurrency have had their accounts closed:

https://www.out-law.com/en/articles/2017/september/singapore-banks-closing-accounts-of-cryptocurrency-firms/

Countries subject to strict or promising strict regulations

Nearly every country has taken a similar line where they are making a legal framework and claiming that ICOs are subject to the same laws and rules as IPOs. However this doesn’t appear to have been translated into law. It also doesn’t address the question of how holders on the coins will be impacted but one would guess that in the future they may be subject to capital gains tax and treated like traditional stock investments.

This list of countries includes:
EU, Hong Kong, Canada, Singapore and many other countries around the world.

Hong Kong Regulators Warn ICO Tokens May be Securities Under the Law

SEC: ICO Tokens Like Those of The DAO are Securities Subject to Regulations

Canadian Regulators Say Cryptocurrency ICO/ITO May be Subject to Securities Law

Is the regulation valid, practical and legal?

This is a hard call for me to understand in the sense that these cryptocurrencies are just that, digital currency and currently people are not taxed or penalized for simply exchanging, buying and/or holding different currencies.

It may also be interesting to see what the large exchanges, businesses and users do in response such as unprecedented regulation and laws. It may be that some of the regulations and laws imposed around the world may be found invalid or unenforceable in the end.

What are your thoughts and as always please let me know if I’ve missed any new developments around the laws of cryptocurrency.