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Blockchain Laws and Regulations

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Switzerland prescribes a registration procedure for cryptocurrency exchanges, which must obtain approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate. The regulation on cryptocurrencies also applies to ICOs in Switzerland, and FINMA applies existing financial legislation to offers in various areas – from banking to securities trading to collective investment schemes (depending on the structure). In 2019, the Swiss government also approved a motion instructing the Federal Council to adapt the existing financial regulatory provisions to cryptocurrencies. In September 2020, the Swiss Parliament passed the Blockchain Act, which further defines the legality of cryptocurrency exchanges and the operation of cryptocurrency exchanges in Swiss law. In 2020, Colombia, in coordination with crypto exchanges, introduced a sandbox test environment for cryptocurrencies to help companies test their business models in terms of bills. Brazil`s Securities Commission and its central bank have also introduced a regulatory sandbox, while Brazil`s Congress has discussed a bill in 2021 to introduce new record-keeping rules for cryptocurrency exchanges. In Latin America, cryptocurrency regulations determine the legal spectrum. Countries with stricter regulations include Bolivia, which has completely banned cryptocurrencies and exchanges, and Ecuador, which has banned the circulation of all cryptocurrencies except the government-issued SDE token (in effect from 2014 to 2018). In contrast, in Mexico, Argentina, Brazil, Venezuela, and Chile, cryptocurrencies are generally accepted as a means of payment by retail stores and merchants. In addition to federal securities laws, most states have their own laws, called Blue Sky laws, which are not always anticipated by federal law. Anyone selling digital assets that could constitute a security should check with a lawyer about the applicability of blue sky laws.

It is especially important that there are certain exceptions to registration under federal law that do not prejudge the application of state blue sky laws. Cryptocurrencies and blockchain have been around for a long time, but over the past decade, they have evolved towards widespread acceptance and acceptance – not only as alternative forms of payment for individuals, but also as time and money savings for a variety of business applications. The Department of Justice continues to coordinate with the SEC and CFTC on future cryptocurrency regulations to ensure effective consumer protection and stricter regulatory oversight. In 2021, the Biden administration turned to stablecoins, with the intention of facing the threat of token appreciation. Later that year, the President`s Working Group on Financial Markets issued a series of recommendations that included the need for new legislation. Congress also debated the status of cryptocurrency service providers in 2021, with new rules included in the Biden administration`s infrastructure bill. Under the new rules, cryptocurrency exchanges are considered brokers and must comply with relevant AML/CFT reporting and record-keeping requirements. Refers to the money transfer business; refers to money transfer licenses, licensing requirements, and registration by the Nationwide Multistate Licensing System; refers to the use of virtual currency for money transfer; refers to authorized delegates of a licensee; refers to the acquisition of control of a licence; refers to the obligations to keep and declare documents; authorizes the Ministry of Commerce, Community and Economic Development to cooperate with other States in regulating money transfers; concerns eligible investments; refers to violations and enforcement of money transfer laws; refers to exceptions to the money transfer licence; refers to payroll services; revokes foreign exchange licences; and provides for an effective date. The full list of US blockchain and cryptocurrency legislation can be found here. The EU is actively looking at other cryptocurrency regulations. A draft EU document expressed concerns about the risks associated with private digital currencies and confirmed that the European Central Bank is considering the possibility of issuing its own digital currency.

In January 2020, the European Commission announced a public consultation initiative in which it sought advice on where and how crypto assets fit into the existing EU legal framework. The Commission followed suit in September 2020 with a new proposal known as the Crypto Asset Markets Regulation (MICA). The proposal included draft regulatory measures for cryptocurrencies, including the introduction of a new licensing system for crypto asset issuers, industry codes of conduct, and new consumer protection measures. Prohibits local government entities from paying, indemnifying, allocating or transferring funds in the form of compensation or funds in the form of compensation or funds in blockchain, cryptocurrency, non-fungible tokens or virtual currency to any natural person, company or other entity (or procuring the services for the execution of such actions) without the prior written permission of the State Treasurer. With the entry into force of the PSA, crypto companies in Singapore are largely in line with the recent FATF recommendations. However, it is likely that the DSS will adopt additional regulations to further align its position. These regulations may include new regulations for the financial sector with stricter AML/CFT standards for cryptocurrency service providers and higher requirements for technology risk management in financial institutions. The Investment Companies Act of 1940 (the “Companies Act”), the Investment Advisers Act of 1940 (the “Advisers Act”) and the State Investment Advisor Laws impose regulations on investment funds that invest in securities.

The Companies Act generally requires investment companies to register with the SEC as mutual funds, unless they comply with an exception. Cryptocurrency funds and hedge funds in general can be structured under one of two exceptions to registration under the Companies Act. Article 3(c)(1) allows a fund to have up to 100 investors. Alternatively, Section 3(c)(7) allows a fund to have an unlimited number of investors (but in practice it should be limited to 2,000 to avoid being considered a publicly traded partnership under the Securities Exchange Act), but requires a much higher eligibility requirement for each investor (about $5 million for individuals, $25 million for businesses). Typically, most seed funds are structured as 3(c)(1) funds due to lower investor eligibility requirements. Like most countries, the subcontinent describes that cryptocurrencies are not legal tender. Nevertheless, the country`s Central Council of Direct Taxes stipulates that investors must pay taxes on the profits of crypto trading. In 2018, the Reserve Bank of India (RBI) banned financial institutions from transacting in virtual currencies. However, the Supreme Court overturned this decision in March 2020. Nevertheless, regulations in the country remain uncertain. For example, in early 2021, India proposed a law that would make it illegal to issue, hold, mine, and exchange other cryptocurrencies as state-backed digital assets.

Adopts the Nebraska Financial Innovation Act. Authorizes custodians of digital assets and ensures the charter, operation, supervision and regulation of such companies; transfers funds; refers to the rapid innovation of blockchain technology and digital ledgers; adopts the provisions of the Single Commercial Code relating to controllable electronic records; harmonizes the provisions; Deletes the original sections. Regulations for the exchange of cryptocurrencies in India have become increasingly strict. In 2018, the Reserve Bank of India (RBI) banned banks and all regulated financial institutions from “manipulating or unwinding virtual currencies.” The far-reaching regulation prohibited trading cryptocurrencies on national exchanges and forced existing exchanges to set up.