Tighter control over cryptocurrency exchanges: which laws will come into force in 2020?
Recently, cryptocurrency exchanges began to grow like “mushrooms after the rain.” Those who are only interested in cryptocurrency or are already an active trader have some idea about this type of trading floors.
If you look more deeply cryptocurrency exchanges can differ significantly from each other. First of all, this concerns the interaction of the system with users, the features of verification, the availability of technical support. An important difference is the terms of trade offered by cryptocurrency exchanges. Also, users can compare trading exchanges by the convenience of the interface, the availability of various options and tools that are necessary for the operation.
Thus, participants in the cryptocurrency market can analyze the opportunities that a particular exchange offers and choose favor of the trading platform that will allow you to realize financial goals.
Cryptocurrency exchanges work with digital assets. Due to this, there is no such problem as paperwork. But the issue of regulating the cryptocurrency exchange process continues to be an acute one. Every day, colossally large amounts of cash flow through large exchanges. This is a favorable environment for fraudulent activities such as money laundering and the financing of terrorist groups.
The free flow of assets in most countries is limited by stringent conditions or prohibited at all. That is why the lack of proper regulation of crypto exchanges is the subject of discussion at the government level in most countries. In particular, in 2019 a number of legislative norms were adopted that are aimed at solving this issue. The main task of regulating the exchange of cryptocurrency is the regulation of trade, eliminating the risks of fraud and protecting the rights of users.
How will the changes be introduced in the exchange of cryptocurrency? Let’s look at the example of laws that enter into force in 2020 in different countries.
While many countries have been actively involved in cryptocurrency, Hong Kong has long stood apart from the cryptocurrency epic. Now the country has begun to join the cryptocurrency trading process. Hong Kong has passed a law requiring enterprises that intend to engage in digital assets to obtain a license. Only with this permission, they can provide services for the exchange, sale, purchase of cryptocurrencies.
It is believed that the first cryptocurrency exchanges were opened in Singapore. The government supported a general trend aimed at tightening control over financial transactions in the cryptocurrency market. In 2020, a law enters into force according to which all exchanges must be registered with the Monetary Authority of Singapore (MAS). This state institution will control all financial transactions that are carried out in a particular company.
According to the adopted laws, in the EU countries, all cryptocurrency exchanges must be registered. The established requirements are less stringent than in Singapore. In particular, exchanges should provide data only on users of trading floors. All financial transactions remain anonymous. These are general requirements, each EU member state can additionally establish its standards.
After leaving the EU, the requirements specified above do not apply to the United Kingdom. The issue of regulation of crypto exchanges lies in the jurisdiction of the Financial Conduct Authority (FCA). Under the new rules, to operate, cryptocurrency exchanges must obtain a special Crypto license. This authorization also applies to companies that operate outside the United Kingdom.
Thus, strengthening control over financial transactions in the cryptocurrency market is designed to minimize the risks of fraud, to protect user assets when transferring from one country to another.