Crypto regulation around the world — July 2018

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


We’re not in the Wild West anymore

Gone are the days of lawless abandon; crypto-regulation is here to stay. Finding a consistent and common approach, however, will take more time — as proven by the disconnection we see in the current legislative landscape. In the US, for example, some official opinions have been surprisingly less heavy-handed than expected, such as the SEC’s recent announcements about ETH. But then again, surveillance continues to be stringent — with the FBI increasingly monitoring crypto-activity in the States.

We are seeing more companies working with the government rather than against it; Coinbase and Circle have recently announced their pledge to list SEC-regulated security tokens on their exchanges. One area that many governments have not yet clarified, however, is privacy coins, as authorities are still trying to understand the implications of that sector. The industry is asking for more lucidity, and though lawmakers are clarifying legislation slowly — it might take longer than anticipated.

Proprietary Industry Regulation

As we noted in our most recent post on blockchain development in industries, it is not just regulation of the token itself that companies need to be aware of as they enter the market; they need to consider the current legislation of the industry in which they plan to integrate themselves — and what potential hurdles that might put up. Take the energy industry as an example, the current infrastructures make it difficult for blockchain-based companies to advance in a meaningful way as they come up against existing electricity rules.

Even financial institutions are still majoritively sitting on the sidelines as there are issues such as qualified custody, prime brokerage, and banking to resolve — before they can fully enter the market. There are frameworks that need to be reassessed before full-scale adoption occurs. Sectors may need to adapt to the ethos of decentralization, but the blockchain industry and crypto market are steadily realizing that they will also need to adjust to effect change — established industries will not accept such transition without some compromise on both sides.

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But back to cryptocurrency regulation — what’s been happening around the world this month?

(Here’s the May and June reports, in case you missed them)

Major Influencers


As we went to print on our last report, the SEC had just announced that ETH is not a security as far as they are concerned. The House then called for ‘light’ regulatory frameworks around ICOs, citing the need for some legislation to deal with the rampant scams that currently ensconce themselves around token sales particularly — and the market in general.

States in the news:

The BitLicence ruling imposed in New York a couple of years ago met criticism as companies found it impossible to measure up to the framework. So it was big news when Square just announced their BitLicence approval. Square joins an elite few — Coinbase, Circle, Xapo, Genesis, bitFlyer, and Ripple affiliate XRP II — who have been approved thus far.  

As the SEC did recently, Florida’s Chief Financial Officer created a position to supervise the crypto industry. No longer content to just sit on the sidelines, the sunshine state will be taking active measures to assess regulation around ICOs and cryptocurrencies going forward.

In Michigan, a bill has been introduced which will work to impede bad actors in the space who may attempt to tamper with or alter data on a blockchain — thereby making it a criminal offense which could incur a lengthy prison sentence.


The news that more than forty patent applications have been filed by the Digital Currency Research Lab at the People’s Bank of China indicates the country’s intentions towards creating a state digital currency. Meanwhile, the China Banking Regulatory Commission released a paper proposing self-sovereign regulations around crypto-related activity.

The current state of regulation aside, we are definitely seeing more moves towards blockchain tech and digital asset innovation in China on a big scale.


Japan’s self-regulatory crypto body is currently drafting legislation to counteract insider trading, and these new proposals also insinuate that support for privacy coins like Dash and Monero might be affected in the future.

Japanese credit agencies are working with the government on credit evaluations of crypto investors, in an attempt to avoid criminal activity. From the outside, these agencies seem to be taking measures to protect themselves against potential legal issues more than anything.

South Korea

Following the Bithumb hack, South Korea is actively clamping down on fraudulence by implementing further and more stringent legislation. Somewhat paradoxically the country still has big intentions of being a crypto hub, despite these current upheavals.

Of course, It is difficult to get the right balance between innovation and regulation — South Korea will have work to do to keep their crypto-boat even-keeled, so to speak.


Further weight has been given to the Russian cryptocurrency market by the governmental administration of a set of terms known as “Digital Rights”. Russia also continues to draft crypto-laws which will likely affect both token sales and taxes and will be in effect by mid-July.

At the same time, two Russian banks have begun testing cryptocurrency-based investment options for retail investors. The summer months may be quite revealing for legislation here.


Not long after legislation from the GDPR came to pass, the EU has now allowed the monitoring of individual wallets and coins by the Financial Intelligence Unit, effectively removing any anonymity in trading. It claims to be an effort to counteract the funding of illegal activities, with the directive particularly highlighting terrorism, as a threat.

While all this is going on, European banks continue to test out blockchain technology, having just completed their first live blockchain-based financial trades across borders.

Eastern Europe

Lithuania is the first country to officially recognize security ICOs, having put official guidelines in place to regulate digital assets. At the same time, their developing policies around cryptocurrency are drawing numerous entrepreneurs into the country to set up blockchain-based businesses and crypto startups.

A few other Eastern European countries are experiencing a crypto-boom due to their lower cost of living and due to their welcoming cryptocurrency policies. Countries like Kosovo, Belarus, and Georgia particularly are making their name on the crypto map.

Crypto-mining is especially popular as a result of the cheaper electricity in such countries, and volatile economic situations in the not-so-recent past also lend themselves to a call for a speedy, systemic reform of their financial sectors.

Western Europe

As governmental issues in Spain have settled, industries are taking the opportunity to test out and adopt blockchain tech, and the conversation is also tipping towards the use of the technology in public administration. Banking consortium, Niuron, has just announced that they are developing a blockchain platform to enhance identity verification for their clients.

In Italy, courts have seized bitcoin from the account of bankrupted cryptocurrency exchange BitGrail, but the amount appropriated is not confirmed. In Naples, an associate mayor has announced the creation of a focus group to explore the possibilities of blockchain tech.

In Ireland, banks are reported to have begun closing crypto-related accounts, while at the same time the Irish governmental agency for foreign investment is leading a blockchain development initiative that welcomes startups to set up shop on the Emerald Isle.


Iqbal Gandham, chairman of CryptoUK, spoke publicly on the state of the market, giving advice on the current craze of crypto scams and digital theft. He also spoke with authorities about the lack of trust in crypto-exchanges by UK banks which has led them to work with foreign banks instead. He insists there is a possibility of a missed opportunity with regard to blockchain tech and crypto for the UK if clearer regulatory guidelines are not introduced soon.

Meanwhile, a government-led cryptocurrency task force has just been implemented to combat illicit activity within the space — in light of recent hacks in other countries.

Minor Influencers


The Australian Tax Office has set up a 100 points check system for the tax treatment of cryptocurrency investors. All exchanges will need to be registered with the Australian Transaction Reports and Analysis Center (AUSTRAC), and individual tax will need to be made on any capital gains made with crypto.

In other news, Agnes Water has become Australia’s first ‘digital currency town’, proving that the land down under is serious about putting crypto and blockchain technology into action.


Having seen real proof that all-out bans won’t mitigate the crypto revolution, India has wrapped up the first draft of its new legislative framework for cryptocurrencies and is hoping to roll out a final draft by mid-July.

Will this new legislation lead to a ban reversal by Indian banks as more clarity is put in place in terms of regulation? Perhaps not likely, but let’s wait and see.


Malta gets its own space this month, as we look at the crypto-hub that is building up, in large part due to several high-profile blockchain and cryptocurrency-based businesses — exchange giant Binance for example — setting up shop on the island.

Three major cryptocurrency bills have also just been passed showing the country’s intention to drive innovation around blockchain technology going forward.


As central banks in Trinidad and Tobago are working with other banks in the Caribbean to find common ground in terms of fintech regulation on a grand scale, many believe that the cryptocurrency market will revive the Caribbean economy.

Some say that the cryptocurrency market has the potential to fill the banking void in emerging markets like Puerto Rico and other Caribbean islands.

South America

Uruguay is the latest of the Latin American countries to begin work towards a regulatory framework around digital assets. The focus will be on ‘leveraging innovation’ in the field while increasing transparency in order to counteract illegal activities.

Chile is also working in the same vein to increase clarity in the industry as the Chilean President looks at blockchain technology’s potential for the country.


The undisciplined landscape of 2017 is well and truly behind us and, globally, regulators are taking the market seriously in 2018. As governmental officials gain an understanding of the crypto market and all its nuances, firmer opinions are being stated and decisions are being made.

If the last quarter of this year is anything to go by, we will likely see many more categorical judgments by legislators and leaders — a lot has already been promised for July. That being said, a decision made right now is being made for 2018’s market, and we all know how quickly that can change. So legislation for the current space may not be a final ruling by any means.

With so many countries in-transit in terms of regulation, it’s impossible to cover everything. Next month we’ll look further into South-East Asia — as well as a couple of African and Middle Eastern countries in the news, to see what’s going on in those regions with their legislation.

Things change fast in crypto. Make sure you stay up-to-date by subscribing to Element Group’s newsletter: