Legal highlights this week:
- New York passes bill to restrict crypto mining
- Bermuda works to set crypto-friendly regulations; targets becoming a digital asset hub
- Portugal rejects proposal to tax cryptocurrencies
- South Korea investigates cryptocurrency regulations after Terra Luna crash
- Prosecutors to arrest Chinese executive for embezzling $8M to mine Bitcoin
The Scoop:
New York governor Kathy Hochul passed a bill that would limit certain types of cryptocurrency mining in the state. The bill, penned and sponsored by Democratic assemblywoman Anna Kelles - will effectively prevent the development of cryptocurrency mining farms and other operations in New York for two years. It was sponsored by several environmental advocacy groups that were concerned with the potential environmental impact of cryptocurrency mining in the state. They claimed that cryptocurrency mining requires supercomputers to solve complex equations and verify transactions - consuming large amounts of electricity.
Bermuda is set to develop an extensive and comprehensive cryptocurrency regulatory framework. It's one of the latest countries that aim to attract blockchain companies to the island and making it a global hub for digital assets. The bill establishes a regulatory framework for the licensing of businesses that offer custody and insurance of digital assets and crypto-assets. It also establishes a regulatory framework for the licensing of businesses that provide services relating to initial coin offerings (ICOs) and crypto-asset exchanges. While Malta was the first country to make cryptocurrency regulations that benefited the industry, Bermuda has been taking steps to regulate digital assets in a positive manner. These regulations would allow Bermuda to compete with other countries like Malta and Gibraltar who are leading the way in this area.
Portugal has rejected a proposal to tax cryptocurrency transactions and profits made from the sale of digital currencies like Bitcoin. The Portuguese finance minister said that the proposal was "non-viable" and "inconsistent with the current tax legislation. The minister added that the government will continue to monitor the cryptocurrency market in order to "defend the interests of Portugal and of citizens." Portugal's move comes a few days after the finance minister of Malta announced that the European country plans to introduce three bills to regulate cryptocurrencies and initial coin offerings (ICOs) later this year.
South Korea is ramping up its investigations of cryptocurrency regulation in the wake of cryptocurrency prices falling in recent weeks. On Friday, South Korea’s Financial Supervisory Service (FSS) launched a comprehensive investigation into payment gateway services that support digital assets. Out of 157 payment gateways that were investigated about any service or products related to crypto, only six were found to have any digital assets. FSS reiterates that firms involved in cryptocurrency trading are subject to mandatory licensing requirements under financial laws. The government also announced on May 31, 2022 that they are launching the Digital Assets Committee, which aims to bring structure to the cryptocurrency market following the Terra crash.
Prosecutors have approved the arrest of Li Qunnan, a director of the board of Zhongchang Big Data, for allegedly embezzling 48 million yuan (approximately US$8 million) of company funds last year to mine Bitcoin and other cryptocurrencies. Li, according to local media reports, is not in China at the moment. Underground mining operations continue to persist in China even after the government launched a series of intensive crackdowns on mining last year.
New crypto adoption:
- Sao Paolo FC has started accepting crypto payments via crypto-trading platform Bitso
- Dubai allows CryptoCom to offer crypto services
- Binance sponsors The Weeknd's "After Hours Til Dawn" tour
- New crypto exchanges to launch on Australian markets
- Gold Coast mayor says Bitcoin payments for local taxes in the works
Decrypting Legalese:
DISCLOSURE:
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Charts, graphs and references to any digital assets are for informational and illustrative purposes only.
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