Cryptocurrency Laws and Regulations – What You Need to Know

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With the increasing popularity and use of cryptocurrency all over the world, cryptocurrency laws try to regulate these digital currencies. And before investing in crypto, it would be ideal for checking out what crypto laws are there or read a crypto law review to help you.

Countries all over the world or states in the US have their own regulation when it comes to cryptocurrency mining and exchange, and some might be harsher than others.

Crypto Laws in New York

The Department of Financial Services in New York recently granted two statewide digital currency licenses: LibertyX, a cryptocurrency ATM operator and Robinhood, a stock trading service.

BitLicense, the regulatory regime of New York, enforces a couple of strict consumer-protection and disclosure requirements to all businesses looking to offer services related to cryptocurrency to the residents in New York. The framework was first introduced in 2014, and since then, only a couple of companies were able to have their applications approved. Currently, there are only 18 companies, including the two newcomers, who are BitLicense holders in all the five years of existence of the regulation.

BitLicense is one of the earliest laws and regulations that was specially created to deal with the Blockchain industry.

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Although some of the states in the US implement seemingly lenient policies aiming to appeal to cryptocurrency businesses and firms, New York has been taking a more rigorous regulatory approach when it comes to cryptocurrency. Firms and companies have complained about how rigorous the process to obtain the license in the state is, and reports have stated that it had driven numerous entrepreneurs out of the state.

Wyoming Crypto Laws

cryptocurrency laws 2 - Cryptocurrency Laws and Regulations - What You Need to Know

With the harsher crypto laws in New York, some companies are looking to get around it, which is through the Wyoming crypto laws, at least that was what the team that drafted the crypto-friendly laws in Wyoming said.

There were 13 laws with one allowing the state to charter SPDIs (Special Purpose Depository Institutions), which is a type of fiat bank that is fully reserved and also stores cryptocurrency assets.

Wyoming advocates said that cryptocurrency startups and exchanges are allowed to operate in New York through the SPDI, and they wouldn’t have to go through the licensing process in the state. The SPDI offers the same principle that gives banks an exemption from needing licenses for state money transmissions.

The Wyoming SPDI can conveniently and legally operate in New York even without the state’s regulatory BitLicense.

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Crypto trading and exchange is legal. However, existing cryptocurrency laws and regulations should also be considered.

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