Crypto regulation around the world - August 2018

This is the fourth edition of Element Group’s global crypto-regulation report. All content is up-to-date for August 2018, at press time.


Are you a resident of …?

If you are a resident of China, North Korea, Iran, Syria, Cuba, Myanmar, or New York State, you have one thing in common — you still cannot participate in a US-based digital asset sale. This general Know Your Customer (KYC) standard has been in place since late 2017, in order to comply with current US legislation. But will this list of prohibited countries change by the end of 2018? Possibly — and with the way things are moving the last few months — probably.

This month as well as looking at some of the usual macro-influencers in regulation, we’ll also look further into some countries in Central and South-East Asia — and a couple of African and Middle Eastern countries. Many are working away without as much media coverage as the more well-known players. (Read our most recent article on unexpected crypto-havens for more.)

(And here are the May, June, and July reports, in case you missed them.)

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US Congress

While it was reported that there was generally a positive response to blockchain technology in July at the meeting of the US Congress, the one naysayer was Representative Brad Sherman who believes cryptocurrency only serves to facilitate drug use and tax evasion.


While industry participants continue to debate the pros and cons, along with the potential and possible hurdles for ETFs in the cryptocurrency market, SEC Commissioner Hester Peirce has said that she believes that a bid for a bitcoin ETF should have received the green light.

States in the news

Washington DC

Washington is attempting to rid itself of its curmudgeonly reputation by embracing blockchain and cryptocurrency innovation. This comes at the same time as exchange-giant, Coinbase, is confirmed to be setting up a Political Action Committee ahead of the midterm elections.

North Carolina

A new ruling has come in to North Carolina, banning crypto donations for political campaigns. This news comes after Japanese financial services powerhouse SBI Holdings announced its investment in North Carolina-based cryptocurrency derivatives trading platform, Clear Markets.


The Chinese Banking Authority has called for regulation to be put in place around digital assets and ICOs as the Agricultural Bank of China (the fourth largest bank in the world) begins trials on blockchain projects, continuing the growing tendency towards blockchain tech use in the vast and influential region. A major financial and legal scholar in Beijing — Hu Jiye — has also advocated for more permissive regulation in the industry


Japan is opening up a new division of its Financial Services Authority, named the Strategy of Development and Management Bureau, to keep up with its ever-growing cryptocurrency and fintech sectors. The division will also address anti-money laundering to keep up-to-date with regulatory pressure. At the same time, Japanese crypto exchanges are filing to form a self-regulatory organization — having drawn up a 100-page industry legislation proposal.

South Korea

South Korea seems to be going through a period of regulatory evolution as it goes from largely negative to largely positive governmental policies in the last couple of months. There are plans within the Financial Services Commission to reorganize the structure completely and to have a department dedicated to blockchain development, in order to keep up with the times and global industry standards.

Europe (non-EU)

As the EU continues to debate the potential future of regulation and jurisdiction for its member states, we look at a couple of European (but not EU) countries and their current legislation.


A new company registry created by the Russian Association of Cryptocurrencies and Blockchain means that running everything from ICOs to mining businesses can now be officially whitelisted — or not. In an attempt to regulate the space and stamp out bad actors, Russia continues to tighten regulation under the tax code. Any official government announcements on general industry practice have been delayed for the moment.


The Ukrainian Financial Stability Council have been taking steps since late last year to put in place a working regulatory group for cryptocurrency which includes the Minister of Finance and the National Bank, as the popularity of digital assets continues to increase.


Once known as ‘Crypto Valley’, businesses in Switzerland are facing heat as regulation in the country becomes more stringent and companies are looking to move to more crypto-friendly countries. There may need to be some quick changes made to regain their status as a crypto-friendly environment.

UK – British Overseas Territories

For the last couple of months, we’ve looked at the UK and its regulation. This month we are reviewing British Overseas Territories to see how they are gaining ground with crypto law.


A bank act in Bermuda will create a new class for serving blockchain businesses, showing the positive sentiment in which this territory views digital assets. The island is also putting resources into crypto education on its isles and is reforming its rulings on ICO regulations.


Gibraltar Stock Exchange is applying for a license to include the trading of security tokens on its exchanges. If approved this could mean considerable and pioneering steps forward for cryptocurrency in the former British colony. It will also likely have an impact globally, due in no small part to the influence that the GSE exerts on global markets.

Cayman Islands

The Cayman Islands has inadvertently become home to a lot of crypto business, including blockchain platform EOS, meaning that it has had no choice but to look at its more favorable laws around the industry. Current legislation may need a second look in the near future.




As well as its crypto-embracing Cagayan Economic Zone Authority (CEZA), the Philippines is open to the potential positives of cryptocurrency for its country and has made its legislation reflect that sentiment in the hope of boosting their economy. The general population is also following suit. The plan is to make the CEZA an ICO and mining friendly region.


Following a ban in April by Vietnamese commercial banks on cryptocurrency transactions, the Vietnamese States Securities Commission has just banned public businesses and companies from partaking in any cryptocurrency-related activities going forward. It follows orders from the Prime Minister of Vietnam to strengthen regulations around the digital asset industry.

Middle East


Palmex, a Dubai-based cryptocurrency exchange, was granted a regulatory sandbox license that came into effect in July. It was granted by the Central Bank of Bahrain, the first of its kind in the region. California-based crypto company Stellar has also just been certified by an Islamic advisory firm, licensed by Bahrain’s central bank.


While some reports indicate that Iran is censoring cryptocurrency transactions in the Republic and even confiscating bitcoin in certain cases, other reports suggest that Iran might consider its own state-backed cryptocurrency — in an effort to evade sanctions currently being imposed by the US, as the price of the Iranian Rial continues to devalue.


Considering the rate of hyper-inflation that plagues some African countries, it is no surprise that cryptocurrency is gaining ground there. A recent report puts Botswana, Ghana, Kenya, Nigeria, South Africa and Zimbabwe at the top in terms of cryptocurrency activity.

This article from May gives a good insight into current regulation in several African countries. However, considering that typical internet use by the population in Africa is 22% whereas in the rest of the world it is 48%, it may take Africa a bit longer to get on board with the tech.

Legislation may take one step forward and two steps back… for a while

As Ari Paul recently pointed out in his presentation on cryptocurrencies at Penn State, regulation will take a while to come in at full scale. Many — up till now — have been trying to impose old laws on a new order. They are realizing that that won’t work. We need new laws.

And new laws, along with new mindsets, will take time and a series of trials and errors before anything is set in stone (or set in blockchain). And of course, regulation will only grow as the industry grows. So as innovations come in,  new legislation will need to be allocated accordingly.

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