Crypto Compliance and Taxation Outlook of the Asia - Espay Exchange - PowerPoint PPT Presentation

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Crypto Compliance and Taxation Outlook of the Asia - Espay Exchange


Whether you are looking for a white label crypto exchange software development company or a centralized trading platform in Asia, you must know about compliance and taxation outlook. This article will help you acquire a better understanding of compliance and taxation outlook in Asia. – PowerPoint PPT presentation

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Title: Crypto Compliance and Taxation Outlook of the Asia - Espay Exchange

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  • The dramatic increase of retail and institutional
    investor interest in the crypto markets has
    resulted in an unavoidable need to reposition the
    current financial regulatory platforms to
    integrate regulation of digital asset markets.
    Since the existing Bitcoin surge is above 10,000
    per bitcoin, it quite obvious that crypto markets
    have become easily accessible and significant to
    the public for supervisions to not intrude. 
  • Currently, crypto markets are facing many crucial
    operational challenges, resulting in undermined
    investor confidence. Most recently, many
    significantly serious cybersecurity breaches,
    hackers infiltrating crypto markets and
    exchanges, have been widely reported on. Millions
    of dollars of virtual currency have also been
    stolen in recent years. Moreover, many crypto
    exchanges are reported to be involved in
    voracious and unreliable practices, insider
    abuses, and market manipulations. 
  • According to recent research conducted by TIE,
    75 of crypto exchanges are reporting doubtful
    volumes. Hong Kong and Singapore have introduced
    new licensing compliance with a requirement to
    acquire approval from regulatory before trading
    is permitted. The assessment covers an evaluation
    of an exchange monitoring system which further
    includes market supervision for the
    identification of market abuse behavior, along
    with KYC (Know Your Customer), AML (Anti-Money
    Laundering), and CFT (Combating the Financing of

  • In Hong Kong, the Securities and Future
    Commission classifies ICOs as security, subject
    to the securities laws of the country.
    Cryptocurrency assets are treated no differently
    than any other regulated security assets. In
    Singapore, the Monetary Authority of Singapore
    (MAS) has issued several guidelines. These
    guidelines explain the ICO resembles capital
    market products regulation under the Securities
    and Future Act. Crypto platforms are subjected to
    a licensing acquiring regime and are limited to
    serve only accredited investors. 
  • Similarly, other regions like China, South Korea,
    Taiwan, and the Philippines have issued different
    regulatory laws and guidelines for crypto
    exchanges and platforms. Some of them are
    comprehensively discussed in the following section

  • All the activities concerning Cryptocurrency have
    received a little amount of tolerance from the
    government of China. ICOs were banned in China in
    September 2017. Exchange platforms trading
    cryptocurrencies were not allowed to continue
    with the ICOs. Many exchange platforms decided to
    relocate to jurisdictions that are permitting
    cryptocurrencies than China. 
  • In China, it is legitimate to hold Bitcoins and
    other types of cryptocurrencies. Moreover, buying
    and selling are also legal in China. Here, the
    government also supports the applications and
    development of blockchain technology. They have
    also made it quite clear that this technology
    must service the actual economy of China.
  • In September 2017, government agencies of China
    issued the Notice related to the Prevention of
    Token offering and financing risks. The notice
    banned ICOs and ordered that any firm or
    individual who had previously conducted or
    completed an ICO for making arrangements
    including the return of token assets to the
    investors to guide investor rights.
  • According to the Article-6 of PRC Criminal Law in
    China, if any illegal activities or consequences
    of such activities happen to occur in China, the
    crime is deemed to have occurred in Chinas

Policies For Exchange
  • The issued by Government agencies of China
    ordered that any fundraising and traditional
    platforms must not provide exchange services
    between tokens, fiat currency, and virtual
    currencies. They are also not allowed to buy or
    sell tokens and virtual currencies, or buy or
    sell virtual currencies as a CCP (the central
    counterparty) or provide information intermediary
    or price determination services for virtual
    currencies or tokens. 
  • As a result of this notice, many crypto exchanges
    shut down their platforms in China. Moreover,
    they made some significant adjustments to their
    business models. However, these improved business
    models are not completely safe from the criminal
    law perspective of China. Exchanges also
    continued their exchange business via platforms
    that were registered in foreign jurisdictions and
    were more biased to exchange business than

Policies For Exchange
  • According to the law of China, no individual
    willing to invest in white label crypto exchange
    software is allowed to use the internet to check
    the information that violates Chinese laws and
    regulations. Therefore, Chinese investors cannot
    buy or trade cryptocurrencies on overseas
  • Trading Ban Yes
  • Banking Ban yes
  • Best Place for License No
  • Tax Haven Region No

  • Japans Financial Services Agency (FSA) has set
    up a few guidelines to divide ICOs and denote
    investment limits to guard investors, having
    initially permitted its crypto market to operate
    on a self-regulatory basis. In 2018, a
    cybersecurity breach stole around 530 million of
    Coincheck one of the biggest crypto exchanges
    of Japan. As a result, Japans Financial Services
    Agency has tightened regulations on crypto
    exchanges. This agency also introduced new
    screening requirements, along with a new
    licensing obligation. 
  • Trading Ban No
  • Banking Ban No
  • Best Place for License Yes 
  • Tax Haven Region No

  • In this country, the government has positioned
    all the token assets under securities regulation
    and non-compliance is sanctioned with fines and
    up to 10 years of imprisonment. In the year 2019,
    the Securities Commission Malaysia permitted
    three organizations to set up and operate a
    digital asset exchange. 
  • Trading Ban No
  • Banking Ban No
  • Best Place for License yes, easy process for
    licensing in Malaysia. Exchanger have to submit
    his investment documentation, provide evidence of
    sufficient investors protection, confirm the
    exchange has the capability to conduct due
    diligence of its clients, their activities, and
    meet the conditions within the framework of the
    disclosure mode of information of transactions
  • Tax Haven Region No

South Korea
  • South Korea is one of the Worlds most famous
    markets for companies that are dealing with
    blockchain technology. In 2018, the KRW (Korean
    Won) was the extensively used currency for
    digital currency trading excluding the US dollar.
    And in 2017, more than 10 of Bitcoin trades
    across the entire world were conducted in KRW. 
  • However, South Korea has still struggled to
    employ relevant regulatory and taxation measures
    for trading these currencies. The authorities of
    South Korea have altered their regulatory posture
    on several occasions, and the judiciary of Korea
    and financial regulatory agencies stay skewed in
    terms of setting up a cohesive regulatory stance.
  • Despite the outbreak of regulatory events from
    distinctive agencies and the judiciary of South
    Korea, market participants are still expecting
    clear guidelines from the National Assembly in
    the form of a statue that will offer an inclusive
    regulatory outline. On 19th June 2018, the FSC
    stated that it would seek to place digital
    currency exchanges under an all-inclusive
    regulatory system. 

South Korea
South Korea
  • Under this system, digital currency exchanges
    will need to register with a Financial
    Intelligence Unit of South Korea. It is a
    sub-organization of the FSC that has the job of
    monitoring transactional flows to reduce the
    risks related to money laundering or other sorts
    of attempts to dodge capital control measures.
    The centralized exchange solutions would require
    complying with KYC and anti-money laundering laws
    and regulations at levels similar to banks. The
    planned legislation is awaited before the
    National Assembly. In South Korea, there are also
    other pending bills related to digital currency
    trades and taxation measures. 
  • Trading Ban No
  • Banking Ban No
  • Best Place for License yes, since it is worlds
    most popular market for companies dealing in
    Blockchain technology
  • Tax Haven Region No

South Korea
Crypto Taxation Outlook in Asia
  • In the year 2019, a lot of Asian countries have
    issued regulations and laws on crypto taxation,
    as regulators were starting to understand the
    significance of digital assets. Many investors
    also taken an interest in the project based on
  • In 2019, there was a major move for regulators of
    China when a Chinese court officially
    documented Bitcoin as a virtual property in July.
    Though China has yet to proclaim any precise
    rules or regulations for crypto taxation, many
    have that this regulating can urge the nations
    tax authorities to make a decision on a crypto
    taxation policy in the future. 
  • The Inland Revenue Authority of Singapore (IRAS)
    also permitted a draft e-tax guide which
    recommended that cryptocurrencies that are
    proposed to operate as a medium of exchange are
    excused from the nations Goods and Service Tax
    from January 2020 and onwards.
  • In addition to this, the Inland Revenue Authority
    of Singapore also discovered the stablecoins will
    be exempt from GST, or the value-added tax of the
    country, as well.

Crypto Taxation Outlook in Asia
  • The Excise Department of Thailand has discovered
    that it will give its tax return practices a
    makeover by introducing a Blockchain-enabled tax
    return scheme by mid-2020.
  • According to a representative from the
    department, oil exporters will be capable of
    paying excise tax and requesting tax returns once
    the fuel has been delivered, with Blockchain
    technology to help the branch with evaluating tax
    payments with the higher levels of
  • Nowadays, while oil exporters have definite
    documents for submission to waive their taxes,
    the superiority of examination for each case
    could be enhanced.
  • Beyond Asian countries that are exempting or
    trying to put taxes on cryptocurrency, some of
    the most important crypto tax moves in 2020
    possibly the Philippines, Iran, and the United
    Arab Emirates amongst the others.

Final Thoughts
  • Whether you are looking for a white label crypto
    exchange software development company or a
    centralized trading platform in Asia, you must
    know about compliance and taxation outlook. And
    we hope, this article will help you acquire a
    better understanding of compliance and taxation
    outlook in Asia.

Thank You
Espay Exchange
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