Taiwan To Introduce Cryptocurrency Regulations To Curb Money Laundering

  • Taiwan is set to introduce regulations on cryptocurrencies by November 2018.
  • Tteir goal will seemingly be to curb money laundering, and not to clampdown on the industry.

Taiwan’s government is set to introduce a new regulatory framework for cryptocurrencies later this year. The move is set to prevent money laundering, and won’t seemingly be the start of a clampdown, according to local news outlet Asia Times.

Qiu Taisan, the country’s Justice Minister, called for the regulations to be in place by November this year, before the Asia Pacific Group on anti-money laundering visits Taiwan to evaluate its existing anti-money laundering (AML) rules.

According to reports, Taiwan’s central bank, the Ministry of Interior, and its Bureau of Investigation are set to determine how cryptocurrencies like bitcoin are going to be regulated in the country.

Gu Lixiong, chairman of Taiwan’s Financial Supervisory and Management Commission, revealed that as part of the country’s AML framework, banks have been told to label bitcoin-related accounts as “high-risk clients” by the Financial Services Coalition (FSC). According to the Asia Times, financial institutions in the country were asked to warn their customers about the potential risks of investing in cryptocurrencies.

Former FSC chairman Wellington Koo was notably opposed to harsh measures against cryptocurrencies, as he believed these would hurt the industry in the country. He was quoted as saying:

“Just because China and South Korea are banning doesn’t mean that Taiwan should follow suit—there is a huge opportunity for growth in the future. We should emulate Japan, where they treat cryptocurrency as a highly regulated, highly monitored industry like securities.”

Wellington Koo

What will come of Taiwan’s regulations is unclear. While countries like Japan and Singapore are Asian hubs for cryptocurrency startups, countries like China, India, and recently Thailand haven’t been exactly crypto friendly.

As covered, Thailand’s Finance Ministry recently revealed cryptocurrency investments will be taxed with a 7 percent value added tax (VAT), while returns will be hit with a 15 percent capital gains tax. The country’s cryptocurrency enthusiasts called for the government to review its approach, but their attempt seemingly failed.

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Gemini Applies For Broker-Dealer License To Offer Crypto Securities

  • Gemini is applying for a broker-dealer license to offer clients securities trading. 
  • Could take some time to attain approval from FINRA.

The Winkelvoss twins’ cryptocurrency exchange Gemini will apply for a broker-dealer license from the Financial Industry Regulatory Authority (FINRA) in a bid to offer traders cryptocurrency securities. 

Gemini Applies For Crypto Securities Trading

Just two months after popular cryptocurrency exchange Coinbase made its exit, Gemini has claimed that it will open an office in Chicago to meet “growing institutional demand.” The news was first announced by Tyler Winklevoss in a Medium post published on June 27. 

On July 2, CoinDesk broke the news that Gemini was seeking a broker-dealer license. If approved, the move would be the first step towards the exchange becoming an Alternative Trading System--a designation necessary to offer clients the ability to trade securities according to US law. 

Such approval would also consolidate Gemini’s current operation. The exchange had previously partnered with Harbor, a tokenized securities platform that allowed institutional investors to buy securities using Gemini’s native stablecoin, the Gemini Dollar (GUSD). 

Thus far Harbor has focused its tokenized efforts in fractionalizing real estate and startup equity, but Gemini appears bent on expanding into full-blown securities. The increased regulatory hurdles imposed on securities trading, particularly in a tokenized format, has limited the growth of the industry. 

However, an anonymous source knowledgeable of Gemini’s ongoing operation told CoinDesk the exchange intended to permit securities from external platforms, such as Harbor, to be traded on Gemini. The exchange is waiting upon approval to further expand its operation, which the source predicting would take quite some time. 

Waiting On Approval

FINRA appears to be in no hurry to approve broker-dealer applications and has historically been reluctant to do so for cryptocurrency-related operations. The regulatory body is reportedly mulling over 40 applications for broker-dealer license approval, with the waiting time extending beyond 14 months for certain companies. 

Tokenized securities trading has been a sought-after option for institutional investors and an expansion of the capability of digital assets. The problem has been in handling the regulatory hurdles, which involves far more oversight than that of traditional crypto-assets.

If Gemini intends to offer crypto securities trading, clients are likely going to have to wait until the end of 2019 or beyond.