The 16th issue of our legal round-up (February, 2022).
We continue with a series of round-ups prepared by Mercuryo Legal Counsel Adam Berker to keep you updated on crypto regulations.
Russian Government and Central Bank Agree to Treat Bitcoin as Currency
The Russian Government has approved the concept of Virtual Assets Regulation. It is supposed to determine qualified and non-qualified investors, establish licensing requirements for crypto service providers, oblige them to meet minimum capital requirements, and inform clients about the high risks of the crypto sector.
This approach may help integrate VC service providers into the financial sector meeting the licensing criteria and bring crypto out of the gray area.
Canada to Encourage the Growth of Crypto Sector
Canada introduced a draft of an act respecting the encouragement of the growth of the crypto-asset sector. Even though the draft bill does not yet include a clear plan to regulate virtual currencies, it proposes having the Minister of Finance consult with industry leaders and develop a regulatory framework to encourage the development of the crypto sector. If the bill is adopted, the regulatory base should be developed within three years.
Kazakhstan Proposes Power Price Hikes and Taxes Targeting Crypto Miners
Kazakhstan plans to increase electricity prices and taxes for crypto miners. According to the First Vice Minister of Finance, Marat Sultangaziyev, electricity prices should be increased from $0.0023 per Kwh to $0.01. Every piece of graphics card (GPU) and mining equipment should be taxed, and mining hardware should become subject to the value-added tax.
After the crypto ban in China, Kazakhstan became one of the most popular jurisdictions for miners. Nevertheless, the proposed amendments may force mining powers to move to other territories, such as Russia or Texas, USA.
Venezuela Introduces Up to 20% Crypto Tax Bill
The bill aimes to incentivise national currency by setting higher tax rates for foreign and virtual currencies. Thus, the draft bill establishes the taxes from 0% to 2% for transactions executed in Bolivars. Transactions made in currencies or crypto assets not issued by the state within the national banking system will be charged a 2% to 8% tax fee. 2% to 20% tax is set for transactions processed in dollars or cryptocurrencies outside the Venezuelan banking system.
This regulation may push foreign and crypto transactions to the grey area to avoid taxation whatsoever. India applies the same strict approach, taxing all crypto income at a 30% rate.