Crypto regulation around the world — June 2018

This is the second edition of Element Group’s monthly report on global cryptocurrency legislature. All content is up-to-date for June 2018, at press time.


A day is a year in the crypto-sphere

As we head into our sixth month of 2018, developments in the cryptocurrency market continue to evolve at lightning speed. Crypto exchanges Binance and BitBay are moving accounts to Malta and Bitfinex is relocating to the Caribbean, presumably for regulatory reasons. Coinbase is entering the Japanese market as it also announces its bid to become a SEC-regulated broker-dealer.

As Coinbase plans to open up the ‘tokens as securities’ market, one of the most talked about points in the last couple of weeks was the future potential for tokens as securities. Some in the industry, like Peter Van Valkenburgh, believe this could harm innovation for blockchain tech, while others see it as a necessary step towards mainstream adoption.

The question of securities

Whether utility or security, one thing that continues to be asked of cryptocurrency and blockchain tech is — how can we benefit from the potential of this revolutionary phenomenon while at the same time keeping scams, frauds, and hacks at bay?

As regulation continues to dominate crypto discourse, the question of regulation is now less ‘if’ and more ‘when’. In the US, the industry is currently trying to work out just how heavy-handed the FEDs, the SEC, and the CFTC be in administering legislature.

Mike Novogratz thinks that SEC-regulation of fraud and market manipulation is a good thing. Erik Voorhees believes that addressing fraud should be the extent of the SEC’s involvement. Then there’s John McAfee, who believes the SEC should stay the heck away from crypto.

Element Group believes that some reasonable regulation is a sign of maturation in the market, as well as bigger things to come for crypto as a ‘mainstay’ in the economy. Whatever your opinion, it is clear that cryptocurrency regulation is inevitable in some form.

Mining regulation on the rise

Regulation around crypto-mining is also making the news, as analysts are assessing the energy that mining really uses and environmental concerns. Mining regulation is being introduced in Austria and Vietnam and has most recently been considered in Quebec. (If you’re curious, here’s a recommended guide to the current global state of crypto mining from May.)

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


As for global regulation as it stands in June 2018: We’re keeping a regular and detailed commentary on the ‘big 6’ in crypto – the US, China, Japan, South Korea, Russia, the EU and the UK. We’re also adding a report of a few other countries that have made the news in the last couple of weeks; this month it’s Indonesia, India, Australia, Singapore, Thailand, and Israel.

(Here’s a link to May’s report in case you missed it)


The Big 6 in Crypto


May was a busy month for crypto regulation in the US. The SEC, the CFTC, and the FINRA have been showing a much more unified front in terms of legislation, assessing what needs to be done and dividing up the workload, while clearing up some of the inconsistencies.

The CFTC commissioner made the announcement in May that he thinks “virtual currencies […] will become part of the economic practices of any country.”, and pointed out that regulation will be needed to fight corruption as the ‘unbanked’ are brought onto the grid.

The SEC has just appointed a new leader for its recently-created crypto division and Chairman Jim Clayton has given further indications on whether or not assets are securities (TL;DR: bitcoin is fine, ICOs probably aren’t.)

Further conversations in the news have revolved around whether or not there is a need for stricter tax regulation and adherence. Investigations into the possibility of bitcoin price manipulation are leaving lots of open-ended questions in the US this month.


China’s President surprised the crypto-sphere recently by endorsing the potential of blockchain as an economic mechanism. At the same time, there have been calls from several national industries to implement cryptocurrency regulation instead of an all-out ban.

With use-cases made for blockchain tech in China on the rise, especially in such areas as poverty reduction and economic innovation, we may see regulations in crypto-trade relaxed sooner rather than later.


The Financial Services Agency (FSA) of Japan recently announced a ‘five-point agenda’ for crypto exchange regulation, which led to the first-ever refusal order of a cryptocurrency exchange, due to the company’s inconsistent KYC procedures.

Following these proceedings, Hong Kong-based exchange HitBTC is pulling out of the Japanese market, while US-based mega-platform Coinbase is moving in. How will this all change the Japanese crypto-trading market going forward?

South Korea

Between the National Assembly calling for measures to allow token sales, and the Supreme Court making firm decisions on bitcoin’s legitimacy as an asset of value, it’s been a busy time for South Korea’s regulators of digital assets.

However, with the country’s finance minister announcing that cryptocurrency has the potential to threaten fiat, and more recent announcements to treat exchanges like commercial banks, we can see that officials are coming down on a more lenient side when it comes to crypto.


President Vladimir Putin has stated that he thinks Russia needs to be open to what’s coming with blockchain tech and he ‘sees a future for crypto’, believing it will open up finance – but he is strongly refuting any rumors of its possibility as the state currency.

At the same time, rulings on bans of media coverage of cryptocurrency are playing a back and forth game — so is there more going on with regard to blockchain and cryptocurrency adoption than Russia is letting on? Let’s see what the promised summer ruling brings.


A survey by European firm P.A.ID Strategies has observed that 68% of exchanges worldwide do not comply with the most basic KYC requirements. These results come as the EU sets in place firm regulations on anti-money laundering and identity verification procedures.

Political unrest in Italy suggests that crypto may become more popular as a trading mechanism, while in Spain political disruption threatens a setback to the industry’s current progress. France continues its efforts to become a base for crypto innovation in Europe.

Meanwhile, Estonia, Switzerland, Denmark, Germany, and Slovenia have been listed as some of the best places to start up your crypto company as of Summer 2018.


Since requests were made by self-regulatory body CryptoUK to clearly define legislation around the digital asset industry – to allow for financial innovation – the UK’s financial watchdog (the FCA) has begun to enforce heavier security measures in the market.

Currently, twenty-four UK cryptocurrency firms are under investigation to ensure compliance with the Financial Conduct Authority’s regulatory standards, and this number may increase and the span broadens, as the UK looks at how best to legitimately embrace cryptocurrency.

In Other News


Indonesia recently concluded that cryptocurrencies are deserving of commodity status, and the country continues its forward movement towards digital asset legislation, embracing the readily apparent popularity for crypto-trade on the country’s isles.

With cryptocurrency futures trading now approved, as well as laws in place to govern exchanges, mining, and wallets, and a trading tax plan in the works, Indonesia may well be setting the standard for other countries who are still considering regulatory options.


An initial impression of Australia (from this side of the globe) might be of a laid-back back approach to crypto, but appreciation for blockchain tech and interest in the crypto industry is surprisingly strong if Consensus 2018 indications are anything to go by.

At the same time the AUSTRAC, the Australian FEDs, are showing themselves to be actively enforcing anti-money laundering and KYC regulation — having recently made a pretty big statement by fining the Commonwealth Bank of Australia for procedural violations.


The legislation that Thailand promised to have in place by the end of June is in motion — however, decision-making is not as clear-cut as it may seem, as at least two big regulatory decisions have already been ‘decided on’ and then ‘undecided on’ during the month of May.

Having gone back and forth over decisions on ICO bans and tax charges for a couple of weeks, new regulations were finally unveiled last week. An intensive focus group meeting led to the Thai SEC waiving VAT charges while applying stringent rules to token sales from now on.


India continues its reach for a legislative balance between fast-growing nationwide blockchain popularity and the rampant crypto-crime that’s accompanying the rise. This report highlights the increasingly frequent corruption that regulators are trying to combat.

That being said, companies like Telecom are seeing the benefits of blockchain as a way forward for customer confidentiality, and are looking at ways that the technology can improve privacy options for their consumers.


Always a center for innovation and forward thinking in tech, Singapore is aiming to provide a ‘permissive, yet regulated environment’ for the crypto-industry. They have been putting ‘their money where their mouth is’ too, as the landscape and positioning within the industry are being swiftly drawn as we speak.

In saying that, any exchanges or companies that are deemed not to meet regulatory standards are being treated with the firm hand of the law, as several ‘non-compliant’ exchanges and ICOs have already received official compliance warnings.


There have been rumors of late, of Israel putting plans in motion to bring about its own ‘shekel cryptocurrency’, as the country’s blockchain buzz continues to get hotter and hotter. However, nothing has been confirmed more than the rumor, for the moment.

It seems that plans — initially put in place to include anti-money laundering regulations – have been postponed for a couple of months — a move that many in the Israeli crypto industry might see as negative in terms of ‘forward momentum’ for the market.


If ever there were a question about bitcoin and all its crypto-friends dwindling out, or in 10 years being nothing more than a memory of a fad we once had — solid evidence shows this is not going to be the case. Even if blockchain and cryptocurrency do not take the form we see today, they will certainly be sticking around, and legislation will inevitably follow behind.

Take a look at the level of real-world adoption and data-proof of crypto-interest we’ve seen on the climb in recent months. There are now more than 300 BTMs globally, and more people in Brazil are trading in crypto compared to traditional brokerage accounts. Five million people in the Philippines own a crypto wallet and South Africa’s central bank is celebrating the success of trialing interbank payments and settlements on an ethereum-based enterprise blockchain.

Crypto learning centers are cropping up all over Japan, Thailand, and South Korea, and some industry leaders and major cryptocurrencies are investing in the crypto-education of the masses. Analysts believe that there is a strong interest in the US to turn to crypto as a source of trade (depending on regulation), and the IMF has stated that bitcoin could even lead to less global demand for traditional fiat currencies in the future.

Perhaps there are still some people in the world who have not yet heard of bitcoin, or they have vaguely heard tell but don’t understand — however, with current trends, this number is more likely to decrease than increase anytime soon. The cryptocurrency market is sticking around, so get used to it — and local and global regulators are staying hot on its heels for sure.

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