Singapore published a tax guide detailing how utility tokens, security tokens, ICOs, and token allocation will be treated for tax purposes. Huobi Global’s utility token has become the first token to be legally recognized in Japan after receiving approval from the country’s financial watchdog. The majority of major cryptocurrencies are in the green as Bitcoin’s price climbs above $7,500.
Japanese financial regulator approves Huobi Token
The Financial Services Agency (FSA) – Japan’s financial watchdog – has approved Huobi Global’s native token called the Huobi Token (HT). Following the regulatory approval, Huobi Token will begin trading in on Huobi Japan – the world’s second-largest cryptocurrency market – in May.
Huobi’s token is the first exchange to get approval from Japan’s financial regulator and will join the other 25 tokens that have already been green-lighted by the FSA.
The exchange said Japan has positioned itself “as one of the more thorough and meticulous regulatory bodies that is driving innovation within the cryptocurrency ecosystem” and this approval “marks a major milestone for Huobi’s ongoing efforts towards global compliance.”
Japan is currently tightening its regulations and updating existing laws as it tries to have a clear definition of crypto assets.
According to CoinMarketCap, Huobi Token is trading at $3.97 after gaining 0.88 percent against the US Dollar in the last 24 hours. The exchange token is up 38 percent – against bitcoin – in year-to-date (YTD) performance.
New SBI-backed crypto exchange FXCoin opens for business in Japan
Japanese crypto family has welcomed FXCoin, a cryptocurrency exchange backed by local financial giant SBI Holdings. The exchange announced last week that it was allocating third-party shares to the financial behemoth.
FXCoin has opened the registration for new accounts and is now accepting new applications. Bitcoin spot trading is set to begin in May. Although the exchange will initially provide support for BTC only, it will extend its services to other leading digital currencies such as Ripple and Litecoin.
The exchange plans to build a swap market to offer investors a tool to hedge against price volatility.
FXCoin was founded in 2017 by Tomoo Onishi, a veteran financial executive who spent 17 years at Deutsche Bank. The exchange received its operational license late last year, a delay caused by the stringent application process set in place by the FSA. The 2018 hacks on Coincheck and Zaif cryptocurrency exchanges made the application even harder.
FXCoin’s approval comes at a time when the world is grappling with coronavirus that has plunged the global economy.
Onishi is bullish on cryptocurrencies. Speaking to Bloomberg, he warned that “no asset is absolutely safe.” However, the crypto market was not insulated from the economic stress and see the market plunge as investors sold off their assets.
There is hope that the market will recover due to the upcoming Bitcoin halving and upcoming Ethereum upgrades.
South Korean exchange Upbit extends partnership with Chainalysis
Cryptocurrency intelligence firm Chainanalysis announced the extension of its partnership with the South Korean exchange Upbit. The firm has made this move to provide blockchain analysis services in the Asia Pacific (APAC) region.
Upbit APAC will utilize Chainalysis’ Know-Your-Transaction (KYT) to secure the trading platform and comply with legal procedures required in the region, says the announcement.
Chainalysis’ KYT is the crypto version of the Anti-Money Laundering (AML) product. The product is used by more than 275 customers in at least 40 countries. The KYT uses real-time monitoring to detect any signs of suspicious activities.
Upbit says the partnership gives it a regulatory edge in countries – such as Thailand, Indonesia, and Singapore – where it wants to expand into.
Chainalysis Chief Revenue Officer (CRO) Jason Bonds said, “As digital asset and cryptocurrency use in [the] Asia Pacific continues to grow, incorporating proper AML and KYC requirements is a vital step for all cryptocurrency exchanges in the region.”
Upbit is making plans to comply with the new guidelines set out by the Financial Action Task Force (FATF).
“As more and more markets around the world adopt new regulations, it was vital for us to find a compliance partner that could work with us as we expand our digital asset business to new markets,” said Upbit APAC CEO Alex Kim.
China includes foreign consumer brands in testing the digital Yuan
The People’s Bank of China (PoBC) has accelerated the testing phase of the digital Yuan, and has for the first time, included some foreign consumer brands in the pilot project that will run in four cities.
Three US chains – McDonald’s, Starbucks, and Subway – have been included on the list of firms to test the sovereign digital currency in conducting small transactions. The three chains will be joined by 19 local firms that include hotels, gyms, convenience shops, bookstore, and bakery in piloting the digital currency.
The central bank has expanded the pilot program to companies providing regular goods and services on a daily basis. China is the world’s first major economy to announce plans for a digital version of its fiat currency with the aim of catching up and have better control of the burgeoning digital payments industry.
Despite the central bank’s recent push to test the digital currency, China has maintained a hostile attitude towards digital currency trading and has banned banks from dealing in cryptocurrencies.
Singapore sets cryptocurrency tax rules
Singapore recently published a guide on cryptocurrency tax rules and how they affect utility tokens, security tokens, and initial coin offerings (ICOs).
The country regards security tokens as a ‘form of debt or equity” depending on a number of factors. Security token holders have to pay tax on interest on dividends received. The tax treatment of when security tokens are disposed of depends on whether the holder lost or gained revenue.
The tax treatment of ICOs will depend on their success or failure. The proceeds of an ICO may be taxed depending on specific facts and circumstances. Failed ICOs will not be taxed if they return all the money to investors.
Founder of blockchain firms will be taxed if they receive founders tokens – tokens allocated to founders of ICO projects – as compensation for services rendered.