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All the Places Now Crack­ing Down on Bit­coin and Cryp­tocur­ren­cies

Zhang Jianquan/Huashang Daily/VCG—Getty Images­The house
in which the Bit­coin min­ing machines used pow­er ille­gal­ly on
August 23, 2017 in Yan’an, Shaanxi Province of Chi­na.
For ear­ly adopters, one of the most appeal­ing ele­ments of cryp­tocur­ren­cies — aside from the hope of get­ting rich quick — has been the lack of gov­ern­ment over­sight.

Unlike tra­di­tion­al cur­ren­cies, the cryp­to vari­ety is decen­tral­ized. That means vir­tu­al cur­ren­cies aren’t con­trolled, manip­u­lat­ed, or in most cas­es even reg­u­lat­ed by any gov­ern­ment or regime.
But that’s start­ing to change. As inter­est in cryp­tocur­ren­cies has sky­rock­et­ed along with the price of Bit­coin and alt­coins, cities, states, and nation­al gov­ern­ments have begun to place restric­tions on var­i­ous aspects of cryp­tocur­ren­cy activ­i­ty, threat­en­ing to reduce their appeal — and price.
Here are 10 places that have recent­ly enact­ed or pro­posed mea­sures that threat­en to sti­fle the rise of Bit­coin and oth­er cryp­tocur­ren­cies.

Focus of crack­down: Exchanges, online plat­forms, and ini­tial coin offer­ings.
Bei­jing has been lead­ing an all-out assault on cryp­tocur­ren­cies. Thus far, gov­ern­ment offi­cials have out­lawed ini­tial coin offer­ings and cryp­tocur­ren­cy exchanges with­in China’s bor­ders, in an effort to curb cryp­to trad­ing. They’ve also cut off access to online trad­ing plat­forms and mobile apps that can act like exchanges. The gov­ern­ment claims this is to con­trol risky finan­cial spec­u­la­tion, but pro­tect­ing China’s yuan prob­a­bly plays a role as well.
In an effort to snuff out the cryp­tocur­ren­cy trade alto­geth­er, Chi­na has also recent­ly banned cryp­tocur­ren­cy min­ing, the process by which com­pa­nies vie to earn dig­i­tal coins by help­ing cryp­tocur­ren­cy net­works to ver­i­fy trans­ac­tions. And most recent­ly, Bei­jing has sought to restrict Chi­nese cit­i­zens from using for­eign exchanges to trade vir­tu­al cur­ren­cies.
Chelan, Wash.

Focus of crack­down: Min­ing
Amid sky­rock­et­ing prices, cryp­tocur­ren­cy min­ing has become a boom­ing indus­try. But because min­ing requires tremen­dous com­put­ing pow­er (and there­fore huge amounts of elec­tric­i­ty) min­ers have set up shop in some unex­pect­ed places. Here in the U.S., Chelan Coun­ty, Wash­ing­ton — a rur­al part of the state that ben­e­fits from cheap pow­er cour­tesy of hydro­elec­tric dams along the Colum­bia Riv­er — has become the epi­cen­ter of domes­tic min­ing activ­i­ty.
But the influx of min­ers has raised a host of envi­ron­men­tal and safe­ty issues. As a result, the Chelan City Coun­til recent­ly vot­ed to impose a one-year ban on min­ing activ­i­ty in res­i­den­tial areas.
The logos of bit­coin (BTC), etheri­um (ETH), dash­coin (DSH) and Lite­coin (LTC) sit on the screen of a cryp­tocur­ren­cy auto­mat­ed teller machine (ATM) at the Deex Exchange pro­mo­tion­al stand at the Cry­to­Space con­fer­ence in Moscow, Rus­sia, on Fri­day, Dec. 8, 2017.

Focus on crack­down: Cryp­tocur­ren­cy use
Russ­ian Pres­i­dent Vladimir Putin has made his views on cryp­tocur­ren­cies well known.He pub­licly stat­ed that grow­ing cryp­tocur­ren­cy usage could lead to “oppor­tu­ni­ties to laun­der funds acquired through crim­i­nal activ­i­ties, tax eva­sion, even ter­ror­ism financ­ing, as well as the spread of fraud schemes.”
While the Krem­lin hasn’t moved to ban cryp­tocur­ren­cies out­right, Russia’s Min­istry of Finance plans to crim­i­nal­ize the use of cryp­tocur­ren­cies as mon­e­tary sub­sti­tutesby July. And last year, it also blocked access to web­sites of cryp­tocur­ren­cy exchanges that offer “dubi­ous” coinage.
Hong Nam-ki, min­is­ter for gov­ern­ment pol­i­cy coor­di­na­tion, announces the intro­duc­tion of a real-name trans­ac­tion sys­tem for cryp­tocur­ren­cy trad­ing after a meet­ing of relat­ed vice min­is­ters at the gov­ern­ment com­plex in Sejong, South Korea, 28 Decem­ber 2017. The new pol­i­cy would ban open­ing an anony­mous cryp­tocur­ren­cy account.
South Korea

Focus of crack­down: Exchanges and trad­ing
In Jan­u­ary, the country’s Min­is­ter of Jus­tice spooked the cryp­tocur­ren­cy mar­kets when he indi­cat­ed that South Kore­an offi­cials were prepar­ing a bill to ban trad­ing of vir­tu­al cur­ren­cies out­right. The remarks sent Bit­coin prices tum­bling.
While the gov­ern­ment lat­er back­tracked on that threat, offi­cials in the world’s third largest cryp­tocur­ren­cy mar­ket have tak­en a num­ber of steps to reg­u­late the mar­kets.Among the moves
Gov­ern­ment offi­cials have moved to out­law cryp­tocur­ren­cy trad­ing using anony­mous accounts; raid­ed finan­cial insti­tu­tions seek­ing cryp­tocur­ren­cy-relat­ed tax infor­ma­tion; and tight­ened reg­u­la­tions to pre­vent mon­ey-laun­der­ing.
A fake gold bar sits on a table at the Coin­base office in San Fran­cis­co on Fri­day, Dec. 1, 2017. Coin­base exit­ed Hawaii oper­a­tions after the state imple­ment­ed new restric­tions on cryp­to-relat­ed com­pa­nies.


Focus of crack­down: Exchanges
Last year, the Hawaii Divi­sion of Finan­cial Insti­tu­tions imple­ment­ed a new pol­i­cy that required cryp­to-relat­ed com­pa­nies to keep liq­uid cash reserves equal to the dol­lar val­ue of all Hawai­ian cus­tomers’ cryp­tocur­ren­cy hold­ings. In oth­er words, if Hawai­ians col­lec­tive­ly held 1,000 Bit­coin through a finan­cial insti­tu­tion, that com­pa­ny would have to keep $8 mil­lion in cash reserves on hand.
The move forced the lead­ing cryp­tocur­ren­cy exchange Coin­base to exit Hawaii. Based on new ver­sions of the bill, Hawaii isrecon­sid­er­ing that require­ment. How­ev­er, cur­rent pro­pos­als would also “any­one who plans to trans­mit Bit­coin and oth­er forms of dig­i­tal assets” to apply for a license, which requires reveal­ing per­son­al and finan­cial infor­ma­tion.

Focus of crack­down: Cryp­tocur­ren­cy use
In Novem­ber, Morocco’s cen­tral bank informed busi­ness­es that it was ille­gal to accept vir­tu­al cur­ren­cies, pun­ish­able by fines, just days after the first com­pa­ny tried to accept Bit­coin with­in the coun­try. Morocco’s neigh­bor, Alge­ria is con­sid­er­ing a sim­i­lar move.
Platts­burgh, New York

Platts­burgh, N.Y.

Focus of crack­down: Min­ing
This small town of 20,000 in upstate New York has seen the elec­tric­i­ty that it receives at dis­count­ed prices get zapped by Bit­coin min­ers, who con­sume about 10% of the city’s pow­er sup­ply. The city has issued an18-month mora­to­ri­um on new min­ing so the local gov­ern­ment can con­sid­er zon­ing and reg­u­la­tions to com­bat the prob­lem.

Focus of crack­down: Min­ing

As Chi­na cracked down cryp­tocur­ren­cies, min­ers ini­tial­ly turned to Que­bec as the new land of oppor­tu­ni­ty — and cheap ener­gy. Yet late­ly, they’ve not found a warm wel­come. In Feb­ru­ary, Hydro-Que­bec said it was con­sid­er­ing rais­ing elec­tric­i­ty prices for cryp­tocur­ren­cy min­ers who’ve been mov­ing into the province, accord­ing to CBC News reports.
Quebec’s Pre­mier, Philippe Couil­lardrecent­ly said “we’re not real­ly inter­est­ed” in hav­ing min­ers set­tle in the city. He added: “There needs to be added val­ue for our soci­ety. Just hav­ing servers to do trans­ac­tion min­ing and acquire new Bit­coins, I don’t see the val­ue added.”

Focus of crack­down: Min­ing
Late last year, sev­en alleged Nepalese Bit­coin investors were arrest­ed for trad­ing cryp­tocur­ren­cies. That was fol­lowed by thearrest of two indi­vid­u­als who oper­ate Bit­coin exchanges.
Iron­i­cal­ly, there don’t appear to be any spe­cif­ic laws in Nepal against cryp­to trad­ing. In July, how­ev­er, the cen­tral bank’s deputy direc­tor did say that “Bit­coin is ille­gal,” with­out expand­ing on the state­ment, accord­ing to reports.
Wash­ing­ton, D.C.

Focus of crack­down: Gen­er­al over­sight
While there’s no fear of an out­right cryp­tocur­ren­cy ban in the U.S., the Secu­ri­ties Exchange Com­mis­sion has let it be know that it’s watch­ing. Most recent­ly, the Wall Street Jour­nal report­ed that the SEC has issued sub­poe­nas and request­ed infor­ma­tion from tech­nol­o­gy com­pa­nies tied to ini­tial coin offer­ings (ICOs), which raise funds in the cryp­tocur­ren­cy space.
In Jan­u­ary, SEC chair­man Jay Clay­ton saidthe SEC, along with the Com­mod­i­ty Futures Trad­ing Com­mis­sion and “oth­er fed­er­al and state reg­u­la­tors and crim­i­nal author­i­ties will con­tin­ue to work togeth­er to bring trans­paren­cy and integri­ty to these mar­kets and, impor­tant­ly, to deter and pros­e­cute fraud and abuse.”
Mean­while, the IRS, for tax pur­pos­es, hasforced Coin­base to pass along infor­ma­tion about its largest investors.

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