Crypto Regulations
Cryptocurrencies, also known as altcoins, provide digital means of exchange without any physical coins or bills. The crypto market has grown rapidly in popularity since Bitcoin’s inception in 2008. However, the more ubiquitous it becomes, the need for crypto regulations increases. We discuss the history of government action, the future of crypto regulations and more.
Crypto Brokers
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1
NinjaTrader
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Stocks, Options, Commodities, Futures, CryptoNinjaTrader Desktop, Web & Mobile, eSignalACH Transfer, Debit Card, Wire Transfer, ChequeUSD -
2
Interactive Brokers
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1001:50FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFMStocks, Options, Futures, Forex, Funds, Bonds, ETFs, Mutual Funds, CFDs, CryptocurrenciesTrader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentralCheque, ACH Transfer, Wire Transfer, Automated Customer Account Transfer Service, TransferWise, Debit CardUSD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF -
3
eToro USAInvest $100 and get $10Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk. https://www.daytrading.com/ is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$100$10SEC, FINRAStocks, Options, ETFs, CryptoeToro Trading Platform & CopyTraderACH Transfer, Debit Card, PayPal, Wire TransferUSD -
4
OANDA USCFDs are not available to residents in the United States.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:50NFA, CFTCForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)OANDA Trade, MT4, TradingView, AutoChartistWire Transfer, Visa, Mastercard, Debit Card, ACH TransferUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD -
5
UpholdTerms Apply. Cryptoassets are highly volatile. Your capital is at risk.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$0$1CryptosDesktop Platform, Mobile AppWire Transfer, ACH Transfer, Bitcoin Payments, Debit Card, Credit Card, Mastercard, Visa, Ethereum PaymentsUSD, EUR, GBP -
6
IQCent20% to 200% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$250$0.011:500IFMRRCBinary Options, CFDs, Forex, Indices, Commodities, CryptoOnline Platform, TradingViewCredit Card, Debit Card, Wire Transfer, Bitcoin Payments, Ethereum Payments, Visa, MastercardUSD, EUR -
7
IGForex trading involves risk. Losses can exceed deposits.
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$00.01 Lots1:30 (Retail), 1:250 (Pro)FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFMCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread BettingWeb, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentralPayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit CardUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD -
8
Capitalcore40% Deposit Bonus up to $2,500
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$100.01 Lots1:2000IFSAForex, Metals, Stocks, Cryptos, Futures IndicesWebTrader, ProEthereum Payments, Mastercard, Visa, Perfect Money, Bitcoin Payments, Debit Card, Credit Card, PayPalUSD -
9
InstaTrade
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$10.011:1000BVI FSCFISP, CFDs, Forex, Stocks, Indices, Commodities, Cryptos, FuturesInstaTrade Gear, MT4Visa, Mastercard, Wire Transfer, Credit Card, Debit Card, Bitcoin Payments, Ethereum PaymentsUSD, EUR, RUB -
10
Pocket Option50% Deposit Bonus
Ratings/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5/ 5
$50$1MISABinary Options, Currencies, Commodities, Stocks, Indices, CryptosWeb, MT4, MT5Wire Transfer, Credit Card, Bitcoin Payments, Volet, Perfect Money, Visa, Mastercard, Debit Card, WebMoney, FasaPay, Ethereum Payments, Maestro, JetonCash, AirtelUSD
This is why we think these brokers are the best in this category:
- NinjaTrader - You can get exposure to micro Bitcoin futures through the CME Group’s centralized exchange, which is highly regulated by the US CFTC. Micro contracts allow you to trade a fractional size of one Bitcoin, giving you more risk control and order flexibility.
- Interactive Brokers - IBKR lets you purchase and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin at competitive commission rates and without needing a crypto wallet. Additionally, there is a range of other diverse assets to explore, such as crypto indices like the NYSE Bitcoin Index, as well as futures contracts like the BAKKT Bitcoin Futures.
- eToro USA - eToro US offers 24 tradeable cryptoassets, with just a 1% buying/selling fee added to the spread. Additionally, there are 80 different coins available through the broker’s proprietary wallet service. You can also practice your crypto strategies easily by switching between live and demo mode. Crypto asset investing is highly volatile and unregulated. No consumer protection. Tax on profits may apply.
- OANDA US - Cryptocurrency trading is offered via Paxos, a separate entity from Oanda. You can speculate on the world’s biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Through the broker’s partnership with Paxos, clients can spot trade cryptocurrencies on the itBit exchange through the OANDA native platform.
- Uphold - You can buy and sell 250+ crypto assets with fiat currencies or in crypto pairs using the straightforward mobile app or through Uphold's browser-based account homepage. This is significantly more than many rivals. You can also earn up to 16% APY by staking one or more out of 32 valid tokens, or send tokens to an external wallet.
- IQCent - IQCent offers 17 crypto pairs through its proprietary terminal, including Bitcoin, Ethereum and Litecoin. Leverage on crypto CFDs is capped at 1:10, whilst binary options payouts vary by token but remain competitive. OTC assets, for example, pay out up to 95%.
- IG - IG's modest selection of 11 crypto CFDs trails top crypto brokers like Vantage which offers 40+ tokens. That said, it stands out with its crypto index, which tracks the value of the top 10 digital currencies by market cap and provides a holistic way to speculate on the value of the crypto market.
- Capitalcore - Capitalcore allows traders to speculate on the price movements of just five cryptocurrencies through CFDs. Popular options like Bitcoin (BTC/USD), Ethereum (ETH/USD), and Litecoin (LTC/USD) are available. However, unlike competitors like eToro, you cannot purchase the underlying crypto directly.
- InstaTrade - InstaTrade offers a modest selection of around 12 cryptos against the USD, tradable via CFDs. Fees are low, especially for major assets like BTC/USD with spreads from 0. There's also a dedicated cryptocurrency blog with useful technical insights to support short-term trading decisions.
- Pocket Option - Pocket Option offers a modest crypto offering with 10+ digital currencies including Bitcoin and 65+ tokens if you deposit $1000. The integrated analytics feature in the platform is helpful for finding opportunities, while the daily signals service makes it straightforward to act on short-term crypto opportunities.
NinjaTrader
"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."
Tobias Robinson, Reviewer
NinjaTrader Quick Facts
| Coins | BTC |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | NinjaTrader Desktop, Web & Mobile, eSignal |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD |
Pros
- NinjaTrader continues to deliver comprehensive charting software for active day traders with bespoke technical indicators and widgets
- Low fees are offered, with $50 day trading margins & commissions from $.09 per micro contract
- You can get thousands of add-ons and applications from developers in 150+ countries
Cons
- There is a withdrawal fee on some funding methods
- Non forex and futures trading requires signing up with partner brokers
- The premium platform tools come with an extra charge
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
| Coins | BTC, LTC, ETH, XRP |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | 0.12%-0.18% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, eSignal, TradingCentral |
| Minimum Deposit | $0 |
| Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- With low commissions, tight spreads and a transparent fee structure, IBKR delivers a cost-effective environment for short-term traders.
- The TWS platform has clearly been built for intermediate and advanced traders and comes with over 100 order types and a reliable real-time market data feed that rarely goes offline.
- IBKR continues to deliver unmatched access to global stocks with tens of thousands of equities available from 100+ market centres in 24 countries, most recently the Saudi Stock Exchange.
Cons
- You can only have one active session per account, so you can’t have your desktop program and mobile app running simultaneously, making for a sometimes frustrating trading experience.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
eToro USA
"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."
eToro USA Quick Facts
| Bonus Offer | Invest $100 and get $10 |
|---|---|
| Coins | BTC, ETH, BCH, DASH, LTC, ETC, MIOTA, XLM, EOS, NEO, ZEC, XTZ, MKR, COMP, LINK, UNI, YFI, DOGE, AAVE, ALGO, MANA, ENJ, BAT, MATIC, FLR, SHIBxM |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | BTC 0.75% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | eToro Trading Platform & CopyTrader |
| Minimum Deposit | $100 |
| Regulator | SEC, FINRA |
| Account Currencies | USD |
Pros
- eToro USA Securities is a trustworthy, SEC-regulated broker that is a member of FINRA and SIPC
- Investors can access Smart Portfolios for a more hands-off approach, covering a range of sectors and markets such as renewable energy and artificial intelligence
- The online broker offers an intuitive social investment network with straightforward copy trading on cryptos
Cons
- There's no MetaTrader 4 platform integration for traders who are accustomed to using third-party charting tools
- Average fees may cut into the profit margins of day traders
- There's a narrower range of day trading instruments available compared to competitors, with only stocks, ETFs and cryptos
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| Coins | BTC, ETH, LTC, BCH, PAXG, LINK, UNI, AAVE |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | $100 |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- The broker's API facilitates access to 25 years of deep historical data and rates from 200+ currencies
- The broker offers a transparent pricing structure with no hidden charges
- Day traders can enjoy fast and reliable order execution
Cons
- It's a shame that customer support is not available on weekends
- The range of day trading markets is limited to forex and cryptos only
- There's only a small range of payment methods available, with no e-wallets supported
Uphold
"Uphold remains a top choice for crypto investors looking for a one-stop-shop solution to accessing the markets. There are over 250 tokens to buy, sell and trade through flexible platform options."
Uphold Quick Facts
| Coins | BTC, BTCO, AAVE, ALCX, DYDX, INH, XYO, API3, GHST, LSK, AUDIO, GLMR, NMR, CAKE, GODS, REQ, CHR, TRB, DAO, ROOK, XRP, ETH, BAT, ADA, ALGO, ATOM, AVAX, AXS, BCH, BAL, BTG, CSPR, COMP, CRV, DASH, DCR, DGB, DOGE, DOT, EGLD and many more |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Up to 1.5% |
| Crypto Lending | No |
| Crypto Staking | Yes |
| Platforms | Desktop Platform, Mobile App |
| Minimum Deposit | $0 |
| Account Currencies | USD, EUR, GBP |
Pros
- Over 250 cryptos are available including major tokens like Bitcoin and Ethereum
- Fees are competitive based on tests, with 26 underlying platforms helping to source the best prices
- Two-step authentication bolsters user security
Cons
- Customer service is slow based on tests, with limited contact options
- The charting analysis features on the platform trail specialist exchanges
- There is a 2.49% fee if you want to use debit or credit cards
IQCent
"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "
IQCent Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, LTC, ETC, DOGE, MATIC, QNT, SOL, XRP, USDT, XMR, BNB |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Variable |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Online Platform, TradingView |
| Minimum Deposit | $250 |
| Regulator | IFMRRC |
| Account Currencies | USD, EUR |
Pros
- The proprietary terminal offers TradingView-powered charts which deliver dozens of technical indicators and studies
- There's an accessible $0.01 minimum stake for new day traders with a small budget
- IQCent is one of the few binary options brokers that also offers a copy trading service for hands-off traders
Cons
- There's no automated trading support for algo traders
- IQCent trails binary brokers like Quotex with its narrow investment offering of around 100 assets with no stocks
- The broker is not overseen by a respected regulator, though this is common among binary options firms
IG
"IG continues to provide a comprehensive package with an intuitive web platform, best-in-class education for beginners, advanced charting tools bolstered by its recent TradingView integration, real-time data, and fast execution speeds for experienced day traders."
IG Quick Facts
| Coins | BTC, BCH, LTC, ETH, ADA, DOT, DOGE, LINK, UNI, XLM |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Variable |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral |
| Minimum Deposit | $0 |
| Regulator | FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD |
Pros
- IG is amongst the best in terms of its range of instruments, which includes stocks, forex, indices, commodities, and cryptocurrencies, plus recently added US-listed futures and options, providing ample diversification opportunities.
- The IG app offers a superb mobile trading experience with a clean design that helped it secure Runner Up at our 'Best Trading App' award.
- The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met.
Cons
- Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests.
- IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors.
- Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges.
Capitalcore
"The major selling points of Capitalcore are its high leverage options up to 1:2000 and zero commission or swap fees. However, its weak regulatory oversight from the IFSA and non-existent education place it far behind the top brokers."
Capitalcore Quick Facts
| Bonus Offer | 40% Deposit Bonus up to $2,500 |
|---|---|
| Coins | BTC, ETH, BCH, XRP, LTC |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | $45 |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | WebTrader, Pro |
| Minimum Deposit | $10 |
| Regulator | IFSA |
| Account Currencies | USD |
Pros
- Capitalcore is one of the only brokers to charge zero swap fees, which may appeal to Islamic traders looking to comply with Islamic Finance.
- Unlike most brokers, Capitalcore offers an unlimited demo account that takes under 5 minutes to open.
- The support team are available 24/7 and responded within minutes during testing with helpful responses.
Cons
- Capitalcore is not regulated by major financial authorities and has an unproven reputation, raising concerns about the safety of client funds.
- Platform support is limited to proprietary software, so there's no integration with the market-leading MetaTrader or cTrader, which offer built-in economic news and support automated trading.
- The web platform was inconsistent during testing, with occasional technical glitches that meant the trading platform wouldn’t load.
InstaTrade
"Although InstaTrade offers active trading on a comprehensive platform, it stands out with its fairly unique Fixed Income Structured Product (FISP), providing passive investment opportunities with up to 50% returns in 6 months if conditions are met. "
InstaTrade Quick Facts
| Coins | BTC, ETH, XRP, LTC, SOL, UNI, DOGE, BCH, FIL, ADA, DOT, LINK |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | InstaTrade Gear, MT4 |
| Minimum Deposit | $1 |
| Regulator | BVI FSC |
| Account Currencies | USD, EUR, RUB |
Pros
- InstaTrade TV, consisting of video interviews and valuable market insights spanning equities, cryptos and more, helps identify opportunities and inform short-term trades.
- Despite an average investment offering of around 300 assets, InstaTrade offers a particularly strong suite of currency pairs, catering to advanced traders seeking opportunities in volatile exotics.
- VPS hosting caters to algo trading strategies with a dedicated physical server providing rapid execution speeds as low as 9 milliseconds.
Cons
- Marketing of the FISP, especially phrasing around the “guarantee of profitability” and the “elimination of risks of trading on financial markets” raises concerns.
- InstaTrade’s growing educational tools provide valuable information for aspiring traders, but still trail category leaders like eToro with no structured course based on experience level.
- InstaTrade is registered in the offshore jurisdiction of the British Virgin Islands, resulting in limited regulatory safeguards for retail investors.
Pocket Option
"Pocket Option excels for its easy-to-use web platform which provides a best-in-class user experience for short-term binary traders. The $50 minimum deposit is also accessible for beginners while opening an account is really easy. Looking at the negatives, Pocket Option still trails alternatives in its market offering and regulatory credentials."
Pocket Option Quick Facts
| Bonus Offer | 50% Deposit Bonus |
|---|---|
| Coins | BTC, ETH, BCH, LINK, AAVE, ALGO, TLM, ALPP, ANT, AVAX, AXS, BNB, ADA, CHZ, COMP, ATOM, DASH, MANA, DGB, DOGE, ENJ, EOS, FIL, GLMR, ILV, ICP, KAVA, LTC, MKR, MASK, MIOTA, XMR, ALICE, NEAR, NEO, NULS, OMG, DOT, MATIC, QTUM and many more |
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | N/A |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Web, MT4, MT5 |
| Minimum Deposit | $50 |
| Regulator | MISA |
| Account Currencies | USD |
Pros
- Extremely fast and smooth sign-up process that takes less than 2 minutes
- The range of payment methods beats the majority of rivals, providing fast, secure and convenient deposits for traders in most countries
- The MetaTrader platforms offer integrated analysis with helpful technical summaries for short-term traders
Cons
- You need to deposit $1000 to access the extended list of 250+ assets, otherwise just 130+ assets are available
- Despite offering competitive payouts up to 92%, binary brokers like IQCent offer higher returns up to 98% based on tests
- The MISA is a weak regulator with limited investor protection for retail traders
History Of Cryptos
The technical foundations of cryptocurrency were pioneered by an American cryptographer named David Chaum in 1983. He invented a cryptographic system that has a blinding algorithm, which is still used in modern web-based encryption. This algorithm provided secure exchanges and confidential transactions amongst parties, which was known as ‘blinded money’.
However, the term ‘cryptocurrency’ was first coined by Wei Dai in 1998 who published a white paper on b-money. In that year, the software engineer formulated a payment method based on a cryptographic system that had characteristics of decentralisation, but it was never fully developed.
In 2008, Satoshi Nakamoto, a pseudonymous person or secret identity, published a paper called ‘Bitcoin – A Peer to Peer Electronic Cash System’. Nakamoto’s motive to create Bitcoin was in response to the financial crisis of 2008. In 2009, Nakamoto made the Bitcoin software public and a group of enthusiasts began exchanging and mining Bitcoin.
In 2010, Bitcoin was valued for the first time when someone decided to sell theirs by swapping 10,000 Bitcoin for two pizzas. Around the same time, dozens of similar cryptocurrencies began to appear with Litecoin and Ethereum gaining popularity by 2016. The number of establishments where Bitcoin could be used started to gradually increase in 2017, with the likes of Tesla now indicating that they will accept Bitcoin payments for its cars.
Blockchain technology continues to disrupt the fintech industry, bringing with it both trading opportunities while also capturing the attention of regulators.
Crypto Regulations
Government policies and crypto regulations vary by country as authorities aren’t globally coordinated on the matter. In the US, for example, cryptocurrencies are not insured by the government like bank deposits are. Cryptocurrencies stored online won’t have the same legal protections as the money in your bank account. If a digital wallet company goes out of business, the government is unlikely to step in.
New crypto regulations are continuously being updated so it’s important to stay abreast of trading exchange requirements, along with rules around crypto mining, lending, custody and taxes. And while there aren’t many blanket prohibitions or bans on crypto trading, governments always issue caution when investing due to market volatility.
Crypto Regulations In the UK
The UK’s cryptocurrency regulations allow users to buy and sell altcoins though they are not considered legal tender. However, as of January 6th 2021, the Financial Conduct Authority (FCA) banned the sale of retail crypto derivatives and ETNs. The motive behind the ban comes from the risky nature of the industry, which puts consumers in danger from scams and market instability.
Note, UK residents can still participate in cryptocurrency exchanges as the ban is focused on retail trading products. The direct purchase of established cryptocurrencies is still permitted.
Crypto Regulations In the US
US crypto regulations are more complicated due to the inconsistent approaches taken across the country. This is because laws vary by state, while others still have pending legislation.
Cryptocurrencies are not considered legal tender and are not backed by the US government or the central bank. Crypto exchange regulations in the US are in uncertain legal territory. With that said, one of the United States’ major regulatory bodies, the Securities and Exchange Commission (SEC), stated that it considers cryptocurrencies to be securities, with the intention to apply securities laws for digital wallets and exchanges.
On the other hand, the Commodities Futures Trading Commission (CFTC), describes Bitcoin as a commodity and allows for cryptocurrency derivatives to be traded publicly. The Financial Crimes Enforcement Network (FinCEN) has proposed a series of new regulations for financial institutions that deal with digital currencies. However, these have been delayed.
It’s worth checking the rules in your own state before you open an account and start trading. Also, more new USA crypto regulations are coming, so make sure to keep up with the news.
Crypto Regulations In Europe
The European Commission recognised the need for legal certainty on blockchain-based applications. In February 2021, The European Central Bank (ECB) issued an opinion on the MiCA proposal published by the EU Commission in September of the previous year.
The proposed MiCA regulation aims to set out a comprehensive regulatory and supervisory regime for crypto-assets in the EU while supporting innovation. The proposed regulation also covers both firms that issue crypto-assets and those that provide services such as digital wallets and cryptocurrency exchanges i.e. Crypto.com.
The ECB has generally supported the proposal’s objectives with some concerns on e-money and stablecoins. The concern stems from stablecoins presenting a potential threat to the conduct of monetary policies and smooth operation of payment systems, which fall under the competence of the ECB. For now, it is hard to know when MiCA regulations will be enforced. However, based on estimations from EU regulators and previous EU regulations, this might be enforced over the next two to four years.
On a national level, Germany is preparing a comprehensive national blockchain strategy, which will support the development of European and international regulations for cryptocurrencies. But currently, retail crypto trading is allowed at most EU-regulated brokers.
Crypto Regulations In The Netherlands, Switzerland & Estonia
In the Netherlands, cryptocurrencies aren’t accepted as digital money but are regarded as property. However, the country is striving to regulate them. In contrast, Switzerland accepts crypto exchanges and is regulated by SFTA and FINMA, with the need to obtain a license. Cryptocurrencies as payment are also legal in Swiss stores in certain contexts while retail trading is allowed.
Estonia also holds a similarly progressive stance, where crypto exchanges are legal with approved registration but are not yet considered legal tender. Estonia has planned future regulatory changes i.e. customer identification obligations, payments services and record keeping.
Crypto Regulations In Asia
Asia is the financial hub where most of the world’s crypto trading takes place. Japan has the most progressive regulation, recognising Bitcoin and other digital currencies as legal property. Crypto exchange regulations are also legal with the requirement to register with the FSA.
Singapore’s tax authorities treat Bitcoin as goods, thus, Goods and Services Tax is applied. The surge of Bitcoin in 2017 prompted Malaysia’s Securities Commission to regulate the market by enforcing the Capital Markets and Services Order in 2019.
Crypto is not considered legal tender in India, while exchanges are effectively legal due to the lack of robust regulatory frameworks. Hong Kong considers crypto as virtual commodities, which fall under ‘securities’ that are subject to the SFC’s regulation.
Other Global Views
Other countries take a more conservative view of crypto regulations. In Russia, the law prohibits crypto exchanges, with the Ruble remaining the only legal form of tender. In China, crypto exchanges are illegal and cryptocurrencies are not considered legal tender. In recent years, the Chinese government drafted a law that bestowed legal status on the People’s Bank of China’s digital Yuan.
When it comes to cryptocurrencies in Dubai, the UAE does not recognise Bitcoin as a legal form of tender. However, exchanging digital currencies is allowed, with many UAE-based brokers offering crypto trading. Interestingly, Abu Dhabi’s ADGM was the first to introduce a regulatory framework for virtual assets.
In Canada, digital currencies are not considered legal tender but can be used as payment to buy goods online or in stores that accept them. Canada’s central bank characterises it as securities and Canadian laws have applied tax to crypto transactions since 2013. Exchanges in Canada are regulated as well.
Australia treats cryptocurrencies as legal, classed as property in 2017. Crypto exchanges are also legal, with the requirement to register with AUSTRAC. Retail crypto trading is permitted.
The Future of Crypto Regulations
Cryptocurrency regulations are constantly changing as their popularity grows. While some governments like Japan and Australia have taken a progressive stance on cryptocurrencies, some countries are still concerned with the characteristics of blockchain technology and restrict retail trading, such as in the UK.
The main concerns come from a security perspective, with data protection, money laundering, tax evasion and other financial crimes flagged as issues. Also a perceived problem is their volatile nature, with crypto regulations often attempting to shield individuals from the dangers.
Nonetheless, it looks like cryptocurrencies are here to stay with global regulations likely to try and bring order to a mostly unregulated market. How crypto regulations grapple with the decentralised foundation of blockchain technology will be interesting to follow.
Final Word
Cryptocurrency regulations around the world vary, with retail traders facing different restrictions depending on their location. Many crypto regulations and policies are still a work in progress due to the myriad of considerations. As a result, it’s key that traders keep up to date with the latest rules and requirements in their country.