The argument over whether cryptocurrencies are securities or commodities has been raging for quite some time. The reality is that until regulators can all agree we won’t see proper crypto regulation. However, one US Federal Judge has come out and ruled that cryptocurrencies meet the regulatory framework requirements set out by the US Commodities and Futures Trading Commission (CFTC). This essentially means that cryptocurrencies are not used to fund a business and are instead a tradeable asset like a currency, rather than a stock or share. You can go to your local store and give them a commodity in exchange for another commodity, you can’t do the same with a security.
The Lines Remain Blurred
Unfortunately, not all cryptocurrencies 100% fit the bill. A lot of ICOs that are happening at the moment sound more like securities and will behave like them once the platform is live. These ICOs need to be regulated under the US Securities and Exchange Commission’s (SEC) laws and regulations rather than the CFTC’s. The blockchain industry will always have these two sets of coin types, and for that reason, a new regulatory framework needs to be built.
Regulations Flooding in
Around the globe, many nations are starting to declare their stance towards cryptos and implement appropriate regulations. Malta is leading the way and has implemented three crypto friendly bills. Malta is doing things right; rather than twisting old laws and regulations to fit this new technology and industry, it has decided to create an entirely new regulatory framework. This is the only way cryptos will ever be regulated and accepted as legal tender.
Elsewhere, Poland has been focusing on crypto tax laws. Poland just introduced tax legislation outlining how taxes from crypto activities should be paid – another key area in the crypto world that needs to be regulated.
Japan Keeping Up
Japan is seen as one of the most stringent when it comes to crypto regulations, and because of this it has become a popular destination for crypto and blockchain firms. In fact, it has become so popular, the Japanese Financial Services Agency has had to hire 12 new members of staff in order to cope with the demand for regulation. This new wave of businesses looking to become regulated shows great hope for the island nation.
This ruling from a US judge is a positive sign and a step forward for cryptocurrencies in the US. Once the US finally creates some form of regulation for cryptocurrencies, we will see a huge influx of crypto-related businesses moving to America – not to mention the huge bull market this positive news would create.