Crypto Regulations in 2019 – The Changes & The Progress The global trend towards tighter regulation and deanonymization of cryptocurrency transactions continues. Supranational organizations are introducing new rules that often contradict the very nature of cryptocurrencies. It inevitably affects the regulatory environment in individual countries. For example, the Anti-Money Laundering Development Group (FATF) obliged bitcoin exchanges and other cryptocurrency service providers to comply with anti-money laundering and terrorist financing measures similar to traditional financial companies. From June next year, member countries of this organization must ensure that local crypto exchanges exchange user data, including information about the sender, recipient, and their digital wallets. American Crypto Regulations In the U.S., activities related to cryptocurrencies are controlled by several departments at once. The Securities and Exchange Commission regulates digital currencies with the properties of securities, and the Commission for derivatives trading (CFTC) governs exchange commodities and crypto derivatives. The Federal Deposit Insurance Commission (FDIC) controls the participation of banks in the field of crypto assets. The U.S. Department of the Treasury’s Office of Financial Crimes (FinCEN), which, for example, intends to control stablecoins, also plays an important role. CFTC differs from the above organizations in a less stringent approach. In particular, the head of the department, Heath Tarbert, believes that digital currencies do not carry systemic risks for the financial system if we are not talking about any global stablecoin. SEC CEO Jay Clayton considers his department’s approach to cryptocurrency regulation to be “balanced,” protecting investors and fostering innovation. The primary resources for working with digital assets are concentrated in FinHub, which collaborates with other regulatory authorities. Canada Crypto Regulations The Bank of Canada ensures that the new class of assets does not create systemic risks of financial stability for the country’s economy, and the Financial Institutions Department observes that the volumes of crypto assets of the respective organizations are within the acceptable risk level. Bitcoin exchanges are classified as money transfer service providers and are required to comply with KYC / AML rules regarding both local and foreign platforms. Trading floors should identify the senders and inform the regulator of the details of transfers amounting to more than 10 thousand Canadian dollars. European Union Crypto Regulations The Fifth EU Anti-Money Laundering Directive (5AMLD EU), adopted on July 9, 2018, has a significant impact on the industry. Its provisions overlap with FATF requirements and suggest that: national financial investigation authorities should be able to obtain information that allows you to associate virtual currency addresses with the identity of the owner;national registries are required to disclose the beneficiaries of companies registered in EU member states;financial institutions are prohibited from opening and maintaining anonymous accounts and depository cells. EU member states are required to introduce the amended rules into national laws no later than January 20, 2020. The launch of the Libra project from the largest social network Facebook also probably contributed to the activation of restrictive actions by regulators. State institutions and banks perceived the announcement of this global stablecoin as a bolt from the blue: immediately at the highest levels, discussions about the risks to monetary policy and the stability of the global financial system flared up. Countries That Went Beyond the Future Estonia Estonia has a convenient e-residency system and simple business conditions. The legislation is generally friendly to blockchain and cryptocurrencies, and the developed digital infrastructure contributes to the effective regulation and creation of a favorable investment climate. Cryptocurrencies are regarded as property, income from exchange transactions with them is taxed on capital gains. Also, in this jurisdiction, the position of the regulator regarding the cases of recognition of ICO tokens by securities is quite clearly defined. At the end of 2018, the Ministry of Finance somewhat tightened regulation of the industry to prevent money laundering. In 2020, the local regulator will begin to verify information about the participants of cryptocurrency enterprises. The latter must be registered and located in Estonia. If the company is located abroad, it needs to open a branch in this country to obtain a permit for activity.