Crypto Legal Digest: August 2018

Stay updated with our monthly blockchain industry news and regulation overview.

Netis Group
Aug 16, 2018 · 5 min read

Countries around the world are increasingly recognizing blockchain technology and cryptocurrencies as the next wave of technological, business and social progress potential.

Regulation news are signaling governments developing strategies to define, support and adopt the blockchain technology and cryptocurrencies, albeit some are more skeptical than others. As US and SEC are heavily influencing the crypto market at the moment with ETF delays, and larger economies like Chine and Russia still not so keen on opening crypto for users, some European countries are proactively working on passing favorable laws for blockchain startups and inviting innovation into their economy.


  1. EU Officials Propose ICO Regulations, Set Fixed Fundraising Limits: A draft report by The European Parliament’s Committee on Economic and Monetary Affairs presents opinions and comments on regulating and legalizing token issuance platforms and businesses present in the EU, stating that “crowdfunding limit helps mitigate financial risks for retail investors”. In a positive sentiment of the proposal, Ashley Fox, an MEP representing the U.K., added: “While this regulation may not provide the solution for regulating the ICO market, it takes a much-needed step toward imposing standards and protections in place for what is an excellent funding stream for tech start-ups.”
  2. UK FCA Remains Blockchain Bullish with Establishment of International Regulatory Network: The purpose of the network is to generate a reinvigorated concept of the ‘sandbox’, opening up an unprecedented global knowledge-sharing sandbox. Christopher Woolard, FCA Executive Director of Strategy and Competition said, “The establishment of the GFIN can help share the experiences and knowledge from across different markets, while also providing a platform for innovative firms wishing to scale their propositions via testing in multiple countries.”
  3. EU Issues Worrying Warning Over Future Of Bitcoin: A report on fintech competition, commissioned by the European Parliament Committee on Economic and Monetary Affairs (Econ), which oversees the decisions made by the EU’s European Central Bank (ECB), found that if banks and central banks were to issue their own cryptocurrencies, it could be bad news for the likes of bitcoin. “The arrival of permissioned cryptocurrencies promoted by banks, even by central banks, will reshape the current competition level in the cryptocurrency market, broadening the number of competitors,” the report authors added.
  4. The race is on to become the go-to destination for cryptocurrency companies that are looking for shelter from regulatory uncertainty in the United States and Asia. Small European countries, including Malta, Gibraltar and Liechtenstein, have recently passed laws, or have legislation in the works, to make themselves more crypto-friendly jurisdictions. Malta’s government recently passed three laws so companies can easily issue new cryptocurrencies and trade existing ones.
  5. GDPR Could Hinder Blockchain Innovation, Warns EU Body: Considering legal views with the optimism of blockchain entrepreneurs, innovation is one of the focuses for regulators, as they wish to implement new technologies to improve the business ecosystem. “As long as the legal framework around personal data and blockchain remains unclear, entrepreneurs and those designing and building blockchain-based platforms and applications in Europe face massive uncertainty. That can put a brake on innovation,” notes the reportBlockchain Innovation in Europe’ from The European Union Blockchain Observatory and Forum.
  6. First Fully Compliant Crypto Exchange Under New European Framework to Open in Liechtenstein: Liechtenstein-based cryptocurrency exchange opens in full compliance with most recent guidelines from the European Securities and Markets Authority (ESMA). “This is an ideal way for regulators across Europe to recognize cryptocurrencies as a new asset class and put in a regulatory framework,” added’s CEO Luka Gubo.

Rest of the World

  1. Money or Assets? How World Governments Define Cryptocurrencies: Governments around the world have different views on what cryptocurrencies mean. From opening up their economies for blockchain startups to banning exchanges, global perception varies. US Securities and Exchange Commission (SEC) classify them as securities, Canada Revenue Agency (CRA) and Mexico define them as commodities, Venezuela as legal tender, Brazil states that cryptocurrencies cannot legally be classed as financial assets, Columbia considers them as “high-risk investment”, Ecuador prohibits them as a means of payment and Argentina treats them as “goods”. In Europe, Germany recognized Bitcoin as “private money”, UK’s HM Revenue & Customs department wrote “Cryptocurrencies have a unique identity and cannot therefore be directly compared to any other form of investment activity or payment mechanism” and Netherlands central bank position is “We do not consider cryptos as money.” Switzerland has more progressive stance towards crypto, as the country positioned itself as a desirable place for crypto traders and businesses. Chinese position on crypto varies from banning ICOs to prohibition of crypto exchanges, citing “financial risks” as its motivation.
  2. U.S. regulator stands by decision to block Winklevoss bitcoin ETF: The U.S. Securities and Exchange Commission stood by a decision blocking an exchange-traded fund that would have tracked bitcoin, citing concerns about market manipulation. Chris Concannon, COO of CBOE Global Markets, added: “Investors are better served by products traded on a regulated securities market and protected by robust securities laws and we will continue to work with the SEC and ETF issuers to construct a fully regulated product”. Following the decision, the SEC announced they are taking more time to review the ETF filings, this time until September.
  3. CoinDesk Releases Q2 2018 State of Blockchain Report: CoinDesk released a report with over 100 slide analysis of industry news and data, covering market interest in public blockchains, a deep dive into interest around bitcoin and ethereum, developments around trading, ICOs, venture capital, distributed ledger technology (DLT), security, regulation and more.
  4. G20 Forum Shelves Deadline for ‘Very Specific Recommendations’ on Crypto: It is expected that in October 2018, the Finance Ministers & Central Bank Governors (FATF) will issue recommendations on their position towards cryptocurrencies. Their current view is that “Technological innovations, including those underlying crypto-assets, can deliver significant benefits to the financial system and the broader economy,” and “Crypto-assets do, however, raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing.”
  5. Backed by Microsoft and Starbucks, Intercontinental Exchange (ICE) is launching a startup called Bakkt to make the cryptocurrency safe for your retirement fund: ICE, who owns New York Stock Exchange (NYSE), created a new venture Bakkt, which will offer a federally regulated market for Bitcoin and is expected to launch in November.

“The parent company of the New York Stock Exchange, which also owns $42 billion of other exchanges, launched a cryptocurrency exchange called Bakkt. That is huge news. That is going to be a very profound impact over the next five or 10 years for the markets, and, to my mind, that’s what people should be focused on.” — Dan Morehead, founder & CEO of crypto investment firm Pantera Capital

This is the second edition of our Monthly updates on regulation in blockchain and news from the crypto industry. For regular blog updates follow this Medium space.

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