The 19th issue of our legal round-up (21/03-25/03).
Korean Crypto Exchanges Fall Under the New Identification Travel Rule
Starting from March 25, Korean crypto exchanges will have to control all crypto transfers exceeding 1 million won ($821). Transactions higher than this amount should only be executed to the identified external wallets under the Travel Rule.
Travel Rule is the concept developed by an international organization called Financial Action Task Force (FATF) to combat money laundering and terrorist financing.
Korea is one of the first countries to declare this rule in its regulation and adopt it in practice. Still, the concept has its drawbacks. Currently, Korea’s biggest exchanges – Upbit, Bithumb, Coinone and Korbit – have adopted two main Travel Rule systems. The systems are not unified, and each has its operation flow, making the interaction between exchanges quite challenging.
NFT Guidelines From Abu-Dhabi Global Markets Regulator
The Financial Services Regulatory Authority (FSRA) of Abu-Dhabi Global Markets issued proposals for enhancements for capital markets and virtual assets. The document defines NFT as intellectual property rights over unique creations, not as specified investments or financial instruments.
Even though FSRA does not plan to create any special regulatory regime for NFTs, the regulator underlines that activities related to these tokens should be undertaken only by regulated and active exchanges or custodians. Additionally, FSRA warns the public about money laundering risks associated with NFT and the necessity to apply client identification and AML requirements to this area too.
Still, FSRA is open to amendments regarding its proposals. The deadline for providing comments on the proposed framework is May 20 2022. After receiving comments, FSRA will consider whether any modifications are required, and the Board of ADGM and the FSRA proceed to enact the proposals in their final form.
New Tax Rules for Crypto in India
After introducing a 30% tax for crypto incomes, the Indian government issued a note explaining how the new system works.
According to the note, crypto traders will have to treat profits and losses on each crypto asset separately, so they will not be able to offset their losses from one digital asset against profit on another. For instance, if you gain $100 from a BTC investment and lose $100 from ETH, you still have to pay $30 tax.