Japan plans separate tax treatment for crypto ETFs and derivatives

Hong Kong’s Securities and Futures Commission (SFC) is gearing up to issue additional crypto exchange licenses before year’s end.  11 applicants under considerationThat’s according to SFC CEO Julia Leung. Leung commented on the matter while speaking with Hong Kong-based online news portal, HK01, on Oct. 7. She stated that 11 companies are considered as applicants for licensing and new progress is expected before the end of the year. Overall, 16 firms have applied for licenses and of these, the regulator is indicating that 11 will likely be awarded licenses at this stage. The 11 firms underwent reviews carried out by the SFC in August to determine and ensure their compliance with the current regulatory framework. The virtual asset service providers (VASPs) inspected included HKbitEX, PantherTrade, Accumulus, DFX Labs, Bixin.com, EX.IO, YAX, WhaleFin and Matrixport HK. Overseas applicants inspected included Crypto.com and Bullish. The regulator’s intention is to work towards an SFC objective of drafting these VASPs into the regulated environment established by the SFC. Leung explained that the SFC intends to award licenses in batches. Those applicants who have already had SFC on-site reviews carried out have been asked by the regulator to rectify issues identified based on the regulators findings. "Applicants who do not meet the requirements will lose their qualifications for licensing, while applicants who meet the requirements will be granted a license conditionally,” Leung told HK01.Photo by Bowen Chin on UnsplashSFC roadmapLeung also told the media outlet that relative to over-the-counter (OTC) crypto services, a new licensing system has been put in place to regulate OTC custody provision. The SFC CEO outlined that the organization’s roadmap for the period 2024 to 2026 incorporates plans to promote the tokenization of real-world assets (RWAs), further advance regulations relative to virtual asset platforms and gain further understanding of Web3 technologies and regional blockchains. Last week the regulator awarded a license to HKVAX, allowing it to join OSL and HashKey as the only fully licensed VASPs in Hong Kong thus far. While Hong Kong has made great strides over the course of the past two years to work towards becoming a regional hub for crypto businesses, it has faced criticism recently for having an overly restrictive regulatory framework.  Regulators felt the need to tighten up regulations in the aftermath of the collapse of the JPEX crypto exchange which implicated fraud and resulted in around 2,600 Hong Kong residents experiencing financial losses in the region of $200 million. The regulatory requirements have resulted in some platforms turning away from attempts to acquire licensing. In May, Gate.io’s local platform Gate.HK ceased operations in Hong Kong, while withdrawing its licensing application.In July HKX followed suit, advising its users to withdraw their funds from the platform, while notifying them that it had withdrawn its application for Type 1 and Type 7 licensing, as well as VASP licensing.

28 crypto service providers register with India’s FIUIn India, 28 entities providing services related to virtual digital assets (VDAs) have successfully registered with the Financial Intelligence Unit (FIU), the body responsible for combating money laundering in the world’s most populous country.Notable names in this list include Neblio Technologies, more commonly known as CoinDCX, Zanmai Labs, the company responsible for the WazirX crypto platform, Bitcipher Labs’ CoinSwitch, Nextgendev Solutions and Awlencan Innovations India’s Zebpay.Photo by Big G Media on UnsplashA need to register as ‘reporting entities’This information comes in response to a question posed in the Lok Sabha (India’s lower house of Parliament), where the government emphasized the significance of these entities complying with the Prevention of Money Laundering Act (PMLA). In March, the government had formally designated companies dealing in VDAs, crypto exchanges and related intermediaries as “reporting entities” under the PMLA.According to the notification, crypto exchanges and their intermediaries are obligated to conduct Know Your Customer (KYC) procedures for their clients and platform users. This includes maintaining KYC details, identity documents, account files and business correspondence records with clients.Offshore exchanges required to registerMinister of State for Finance Pankaj Chaudhary mentioned that the registration process for VDA service providers catering to the Indian market is underway. Non-compliance with these regulations may result in appropriate action under the PMLA. It has been clarified that offshore crypto exchanges operating in India are required to adhere to these guidelines. Despite that, none of the 28 entities who have registered so far appear to be offshore companies.Commenting on the development via the X social media platform, Sumit Gupta, Co-Founder of CoinDCX, wrote:”Emphasizing compliance to PMLA is vital for the safety and financial integrity of Indians, as dealing with non-registered platforms exposes citizens to nefarious actors, putting their finances at risk.” . . . “It’s encouraging to witness the Government initiating actions against non-compliant offshore entities.”While steps to provide guidelines for the industry are largely positive, the Reserve Bank of India (RBI) has been vocal in its criticism of cryptocurrencies and calls for potential bans have cast a shadow over the industry in India. The recent collapse of prominent platforms like FTX have not been helpful, only serving to exacerbate concerns relative to India’s crypto ecosystem.The negative sentiment, coupled with an ongoing funding winter, has resulted in the closure of operations for some crypto platforms, including Pillow and WeTrade, this year. Firms like CoinSwitch and Gupta’s CoinDCX have had to reduce headcount in 2023 amid challenging market conditions.Despite these challenges, there are also positive signs. A recent report by blockchain analytics firm Chainalysis found that India has been the frontrunner more recently in terms of crypto adoption in Asia.This latest development provides guidelines where anti-money laundering processes are concerned for crypto firms in India. However, the government needs to follow through with a complete regulatory framework for the industry. The Indian courts recently declined to act on such a petition on the basis that it falls within the remit of the country’s legislature and is outside the purview of the courts.

KuCoin Report Points to Marked Increase in Crypto Investors in TurkeyAs part of its “Into The Cryptoverse: Understanding Crypto Users” series, Seychelles-based crypto exchange KuCoin published a report on Thursday that identifies a significant increase in the number of crypto investors in Turkey over the course of the past eighteen months.Photo by Dima Rogachevskiy on UnsplashCrypto adoption surgeThe report, the fifteenth such report produced by KuCoin as part of this series, reveals that there has been a substantial surge in crypto adoption among Turkish adults, with an impressive 52% of the adult population participating in crypto investments.Since November 2021 there has been a 12% increase in the number of crypto investors aged 18 to 60. These statistics underscore the growing interest and acceptance of cryptocurrencies in Turkey. It’s not likely to be a coincidence that this surge in adoption has come about against the backdrop of the local currency, the Turkish lira, losing more than 50% of its value against the US dollar.Here are some of the key insights that the report identified:Growing Crypto Adoption Among Turkish Adults: The survey indicates a significant upswing in the number of Turkish adults investing in cryptocurrencies. The percentage of adults embracing crypto has surged from 40% to 52% over the last year and a half, despite the overall crypto market finding itself in the doldrums within that time frame.Increased Female Participation: While male investors continue to dominate at a rate of 57%, the survey points to a notable trend of increasing participation among women, particularly in the younger age brackets. Approximately 47% of female crypto investors are between the ages of 18 and 30.Youth-Driven Growth: Younger generations are leading the crypto adoption charge, with investors aged 31 to 44 constituting the largest group at 48%. Furthermore, a significant proportion of investors under 30 joined the market within the past year, indicating the influence of youth within the crypto space.Many have expressed the view that crypto adoption will come about through the younger demographic. It’s a factor that has not gone unnoticed by crypto platforms, including fellow Seychelles-based exchange Bitget.Motivations for Crypto Investments: The report delves into the motivations behind crypto investments among Turkish adults. A substantial 58% express the desire to create long-term wealth, transcending generational boundaries. This suggests a widespread belief in crypto’s potential as a tool for financial freedom.Popular Cryptocurrencies: Bitcoin remains a favored choice, capturing 71% of overall investor interest. Ethereum follows closely with 45% interest, while stablecoins garnered the attention of 33% of surveyed participants.Crypto Trading Dominates: A significant 70% of Turkish participants use crypto for trading, indicating the prevalent use of cryptocurrencies as investment instruments. Meanwhile, 22% have ventured into buying NFTs.Influence of Personal Connections: Personal relationships play a pivotal role in driving crypto adoption in Turkey. About 57% of participants learned about crypto through family and friends, highlighting the significance of these connections in introducing newcomers to the crypto world.This finding resonates with a similar finding relative to a recently published report covering crypto adoption in Vietnam.The report has been based upon online surveys carried out by KuCoin between May 5 and May 12 of this year.