Crypto Legal

Weekly Legal Digest: 1st November 2018

“The crypto market continues to expand considerably, with mass adoption on the horizon”, Nigel Green, founder and CEO of deVere Group


On the 1st November 2018, the Innovative Technology Arrangements and Services (ITAS) Act and the Virtual Financial Assets (VFA) Act are the final Blockchain acts to be enforced. Following a transitory period during which all license conditions must be met, operators of DLT-based businesses will have to operate within defined parameters.

Hong Kong

Hong Kong Securities and Futures Commission (SFC) launched a statement on the regulatory framework for virtual asset portfolios managers, fund distributors, and trading platform operators.

Funds that invest more than 10 percent of their portfolio in crypto assets will need to be licensed.

To the crypto exchange operators, the SFC will propose them a regulatory regime known as a “sandbox”. In the initial exploratory stage, the SFC would not grant a license to platform operators, but the crypto exchanges will still be able to trade while negotiating with the SFC on the expected regulatory standards.


The Japanese Financial Services Agency (FSA) declare that stablecoins are not cryptocurrencies.

Currently, there are two pieces of legislation that cryptocurrency companies must satisfy in Japan. The Fund Settlement Law and the Payment Services Act.

The Fund Settlement Law defines cryptocurrencies as a means of payment, making them exempt from tax. The Payment Services Act state cryptocurrency exchanges must register with the FSA.

“In principle, stablecoins pegged by legal currencies do not fall into the category of ‘virtual currencies’ based on the Payment Services Act”,the regulator.


The Shenzhen Court of International Arbitration confirmed that Bitcoin is protected by law.

“CN law does not forbid owning & transferring Bitcoin, which should be protected by law bc its property nature and economic value”.

Russian Federation

Rosfinmonitoring took control of any operations related to cryptocurrency in accordance with the measures taken against money laundering (FATF). Exchanges, ICO sites and digital wallet operators will be registered and verified. Additionally, the officials will monitor fiat operations exceeding 600 thousand rubles.

“All countries that are the members of FATF need to review their legislation regarding legalization, registration and fixed accounting of crypto-asset exchangers, as well as administrators of digital wallets and ICO platforms”, Pavel Livadny, the vice president of Rosfinmonitoring.

A leading industry organization in Russia has decided to establish an arbitration body to look into disputes within the digital economy, including matters related to cryptocurrency transactions, as well as rights and responsibilities in token sales and the implementation of smart contracts.


The government in Kiev intends to legalize cryptocurrencies and comprehensively regulate the fintech sector as part of a new public policy developed by the economy ministry. The legal status of cryptocurrencies, trading platforms and other entities dealing with digital assets must be determined in 2018 and 2019. By the end of next year, the Ukrainian government will analyze the market to identify trends and outstanding issues to put forward adequate proposals to regulate the whole sector.

In 2020–2021 would involve recognizing cryptocurrency wallet providers and custodial platforms as “subjects of primary financial monitoring”. During that time, Ukrainian lawmakers are expected to draft and adopt legislation regulating initial coin offerings (ICOs), tokens and the use of smart contracts.

Great Britain

The UK’s Financial Conduct Authority (FCA) has said it would consider whether to ban the sale of cryptocurrency-based derivatives.

Unlike crypto spot market activities, trading, transacting and advising on crypto derivatives such as contracts for difference (CFDs), options, and futures currently falls within the FCA’s regulatory perimeter and requires its official authorization.

The regulator said it will now launch a consultation in the first quarter of 2019 into whether or not to place a ban on their sale in the future.

“It’s clear that cryptoassets have no intrinsic value and investors should therefore be prepared to lose all the value they have put in”, FCA.

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Published by GMT Legal

GMT Legal
GMT Legal is an International law firm providing services in crypto and blockchain industry.