Regulation
The cryptocurrency industry’s influence on US elections is greater than ever, industry experts say
The cryptocurrency industry is throwing its weight around in Washington in hopes of influencing the upcoming US elections, spending an unprecedented amount of money to elect cryptocurrency-friendly candidates and educate lawmakers, all in the hopes of finally getting a regulatory framework friendly for cryptocurrencies.
Cryptocurrency-focused political action committees (PACs) like Fairshake, which has raised around $85 million from a number of crypto companies, senior executives and retail investors – have successfully determined the outcome of some major races, including spending $10 million to help crush the offer by crypto-critic Rep. Katie Porter (D-Calif.).
Fairshake has also poured money into two affiliated PACs: Defend American Jobs, which donates to Republican candidates, and Protect Progress, which donates to Democrats. Both donated to the winning campaigns. Over the past two months, Defend American Jobs has spent nearly $500,000 on media buys for Republican Indiana State Senator Mark Messmer, who won the Republican nomination for Indiana’s 8th District congressional seat this week.
Some of Protect Progress’ crypto-friendly Democratic candidates, including Shomari figureswho is running for a House seat in Alabama and Giulia Johnson in Texas, they won the primaries in part with the help of media buying.
“It’s at a level we haven’t seen in past election cycles,” said Kristin Smith, CEO of the cryptocurrency lobbying group Blockchain Association.
Industry experts say the industry’s economic power has even pushed some cryptocurrency skeptics, including Sen. Sherrod Brown (D-Ohio), chairman of the Senate Banking Committee, who is up for re-election this year, to take a more stance. open. careful attitude towards cryptocurrencies, lest they face well-funded opposition efforts from the industry.
“Previously he was not friendly with cryptocurrencies, but recently [Brown] has said he’s open to considering cryptocurrency legislation,” said Kyle Bligen, director of financial policy at the tech-focused House of Progress. “I think he’s aware of money coming in from outside industry groups that are looking of politicians who are open to reasonable choices, common sense policies on cryptocurrencies and are not just trying to prop up or support the traditional financial ecosystem without enabling innovation.”
While the industry’s past efforts to influence election results nationwide have been largely unsuccessful – and, in the case of former FTX CEO Sam Bankman-Fried, criminal – The growing political influence of the cryptocurrency industry now seems to have more power.
“It’s a much more sophisticated operation,” Smith said. “I feel like I walk around Washington and people say ‘Oh, there’s Kristin, she works for that little blockchain industry thing.’ Now it’s like, ‘Oh wow, this is the powerful cryptocurrency industry and they’re here to influence Washington and they’re pulling out all the tools to do it.’
While the cryptocurrency industry has largely focused its lobbying efforts on congressional elections, the U.S. presidential election will also have a significant impact on cryptocurrency regulation.
According to at least one small survey commissioned by cryptocurrency investment firm Paradigm, voters hold cryptocurrencies they tend to prefer Donald Trump for president – although, according to other polls, the the percentage of voters who own cryptocurrencies is smallL. Polymarket bettors currently give Trump a slight edge to win (47% versus Biden’s 44%). But industry insiders are less sure whether a Trump presidency would actually be better for cryptocurrencies.
While Trump’s stance on the cryptocurrency industry is changing, he is still significantly less pro-crypto than that of his former rival for the Republican presidential nomination, Vivek Ramaswamy, who promised to protect cryptocurrency developers and create a clear regulatory framework for cryptocurrencies that would see most tokens as commodities.
“Trump looks to Vivek on technology and digital asset policy,” said Lee Bratcher, founder and president of the Texas Blockchain Council. “He didn’t always do it, but when he saw how Vivek won over the Republican – and more centrist – voter [voters] than Trump can capture – he’s probably more interested in that [policy].”
Industry insiders were divided on whether a Biden re-election would be harmful to the cryptocurrency industry.
Smith said it would probably be “more of the same, unless [Securities and Exchange Commission Chair] Gary Gensler decides to step aside,” meaning continued regulatory uncertainty and aggressive enforcement actions. A better, more open-minded SEC chairman, he added, would be “extremely helpful.”
“It’s unfortunate because at the beginning of the Biden administration there was some interest in cryptocurrencies, then the industry imploded while they were doing all their reporting and as a result they are in a clearly negative position right now,” Smith said. “ON [Biden’s] look, the industry has had some not-so-great times and it’s understandable that regulators are concerned.”
Smith said that while the cryptocurrency industry has largely moved on from the cryptocurrency crash of 2022 – including the implosions of FTX, Terra/LUNA and Three Arrows Capital – regulators have a much longer memory.
“Having a new group of regulators would be helpful in restarting conversations,” Smith said.
Others, like Bligen, seemed more confident that pro-cryptocurrency legislation would pass after the election if Biden remains in power.
“I can’t say that if President Biden is re-elected it would be a loss for cryptocurrency advocates, because currently in this regime Democrats and Republicans are working together on a bipartisan basis to produce productive and responsible cryptocurrencies. [legislation]”Bligen said.
Efforts are underway in the current Congress to pass cryptocurrency legislation, including a bipartisan effort to regulate stablecoins.
These legislative efforts – which, in the past, have failed to find traction – still have significant hurdles to overcome before being passed, including multiple members of Congress getting involved with cryptocurrencies.
Bligen said there are still many members of Congress who don’t know much about cryptocurrency, and the things they do know about it “come from flashy headlines about cryptocurrency scams, people misrepresenting coins, people getting cheated out of their money, massive cryptocurrencies failing institutions – they look at it from a protectionist point of view,” he said.
“If you want to have more cryptocurrency-friendly people, every single office needs to have a basic understanding of what cryptocurrency is, why it matters to my constituents, and what the political landscape is that governs it. Everyone needs to know that.” , Bligen said. “If you don’t have this basic information, you will have members stumbling around, trying to understand what blockchain technology is… more concerted educational efforts are needed. We won’t just reach a more educated audience in 2025, we need work.”
Bratcher added that, in addition to educational efforts, the industry may have to compromise on some issues – such as privacy – to make real progress with lawmakers.
“We are at an interesting crossroads when it comes to privacy,” Bratcher said, referring to the ongoing crackdown on bitcoin mixing services like Tornado Cash and Samourai Wallet.
“People in the digital asset industry want to prioritize privacy above all else. When we work with government – state, local and national, and even law enforcement – we don’t have the luxury of being able to make grandiose claims at the Regarding this, Bratcher added: “There will have to be a balance between privacy and issues related to money laundering and national security.”
“Tornado Cash is not a hill I’m willing to die on,” Bratcher said. “We could lose a war if we choose to die on Tornado Cash Hill.”
While the spotlight is on national elections, Bratcher and others — like Dennis Porter, CEO and co-founder of bitcoin mining advocacy group Satoshi Action Fund — are focusing their efforts on state politics.
Porter’s group helped introduce bills in 16 U.S. states that provide protections for bitcoin mining and self-custody. The most advanced bill is in Oklahoma, where it has passed both the state House and Senate, and is awaiting the signature of Governor Kevin Stitt (right).
“DC is fun and sexy. Tons of money is being spent, but so far we haven’t seen any big victories — all the big battles are happening at the state level,” Porter said.
Porter said the industry should continue to strengthen its presence in Washington, but said it won’t find the magic cure for all its ills on Capitol Hill.
“We will do this at the state level,” Porter said. “We will go state by state to advocate for pro-digital asset policy, using states as a laboratory for democracy, ultimately taking those good ideas and using them to influence policy at the federal level. Or at a minimum, creating a regulatory regime that protects people at the state level.”
Porter’s model for cryptocurrency regulation takes cues from the cannabis industry’s agenda, building momentum and support in states until the industry is powerful enough to shape federal regulations.
“We’re hitting home runs over and over and over again in Washington, but we’re still not strong enough,” Porter said. “I just think we’re further away from that than we think… The important thing to me is that we need to spend a lot more time at the state level, investing a lot more money, because the hundreds of millions of dollars spent in D.C., if spent at the state level, it would fundamentally reshape the political landscape and fundamentally change the dynamic of bitcoin and digital assets in America.”
Slovenia, a small but highly developed European country with a population of 2.1 million, boasts a rich industrial history that has contributed significantly to its robust economy. As the most economically developed Slavic nation, Slovenia has grown steadily since adopting the euro in 2007. Its openness to innovation has been a key factor in its success in the industrial sector, making it a favorite destination for cryptocurrency enthusiasts. Many believe that Slovenia is poised to become a powerful fintech hub in Europe. But does its current cryptocurrency regulatory framework support such aspirations?
Let’s explore Slovenia’s cryptocurrency regulations and see if they can push the country to the forefront of the cryptocurrency scene. My expectations are positive. What are yours? Before we answer, let’s dig deeper.
1. Cryptocurrency Regulation in Slovenia: An Overview
Slovenia is known for its pro-innovation stance, providing a supportive environment for emerging technologies such as blockchain and cryptocurrencies. Under the Payment Services and Systems Act, cryptocurrencies are classified as virtual assets rather than financial or monetary instruments.
Regulation of the cryptocurrency sector in Slovenia is decentralized. Different authorities manage different aspects of the ecosystem. For example, the Bank of Slovenia and the Securities Market Agency supervise cryptocurrency transactions to ensure compliance with financial laws, including anti-money laundering (AML) and counter-terrorist financing regulations. The Slovenian Act on the Prevention of Money Laundering and Terrorist Financing (ZPPDFT-2) incorporates the EU’s Fifth Anti-Money Laundering Directive (5MLD) and aligns with the latest FATF recommendations. All virtual currency service providers must register with the Office of the Republic of Slovenia.
2. Cryptocurrency regulation in Slovenia: what’s new?
This year, there have been several noteworthy developments in the cryptocurrency sector in Slovenia:
July 25, 2024: Slovenia has issued a €30 million on-chain sovereign digital bond, the first of its kind in the EU, with a yield of 3.65%, maturing on 25 November 2024.
May 14, 2024: NiceHash has announced the first Slovenian Bitcoin-focused conference, NiceHashX, scheduled for November 8-9 in Maribor.
3. Explanation of the legal framework for cryptocurrency taxation in Slovenia
Slovenia’s cryptocurrency tax framework provides clear guidelines for both individuals and businesses. According to the Slovenian Tax Administration, tax treatment depends on the status of the trader and the nature of the transaction.
- Individuals: Income earned from cryptocurrencies through employment or ongoing business activities is subject to personal income tax. However, capital gains from trading or market fluctuations are exempt from taxation.
- Society: Capital gains from cryptocurrency activities are subject to a corporate income tax of 19%. Value added tax (VAT) generally applies at a rate of 22%, although cryptocurrency transactions considered as means of payment are exempt from VAT. Companies are not allowed to limit payment methods to cryptocurrencies only. Tokens issued during ICOs must comply with standard accounting rules and the Corporate Tax Act.
4. Cryptocurrency Mining in Slovenia: What You Should Know
Cryptocurrency mining is not restricted in Slovenia, but the income from mining is considered business income and is therefore taxable. This includes rewards from validating transactions and any additional income from mining operations. Both natural persons and legal entities must comply with Slovenian tax regulations.
5. Timeline of the evolution of cryptocurrency regulations in Slovenia
Here is a timeline highlighting the evolution of cryptocurrency regulations in Slovenia:
- 2013:The Slovenian Tax Administration has issued guidelines according to which income from cryptocurrency transactions should be taxed.
- 2017:The Slovenian Tax Administration has provided more detailed guidelines on cryptocurrency taxation, based on factors such as the trader’s status and the type of transaction.
- 2023The EU has adopted the Markets in Cryptocurrencies Regulation (MiCA), which establishes a uniform regulatory framework for cryptocurrencies, their issuers and service providers across the EU.
Final note
Slovenia’s approach to the cryptocurrency industry is commendable, reflecting its optimistic view of the future of cryptocurrency. The country’s balanced regulatory framework supports cryptocurrency innovation while protecting user rights and preventing illegal activities. Recent developments demonstrate Slovenia’s commitment to continuously improving its regulatory environment. Slovenia’s cryptocurrency regulatory framework sets a positive example for other nations navigating the evolving cryptocurrency landscape.
Read also: Cryptocurrency Regulation in Hong Kong 2024
Photo by The Dhage of Shubham ON Disinfect
As the cryptocurrency landscape continues to evolve, the need for clear regulation has never been greater.
Vice President Kamala Harris is now leading the charge on digital asset regulation in the United States, presenting a unique opportunity for a clean slate. This fresh start can foster innovation and protect consumers. It can also pave the way for widespread adoption across industries, including real estate agencies, healthcare providers, and online gambling platforms like these online casinos in the uk. According to experts at SafestCasinoSites, these platforms have advantages such as bonus offers, a wide selection of games, and various payment methods. Ultimately, all this increased adoption could push the cryptocurrency market forward.
With that in mind, let’s take a look at the current state of cryptocurrency regulation in the United States, which is a complex and confusing landscape. Multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN), have overlapping jurisdictions, creating a fragmented regulatory environment. This lack of clarity has hindered innovation, as companies are reluctant to invest in the United States, fearing regulatory repercussions. A cohesive and clear regulatory framework is urgently needed to unlock the full potential of cryptocurrencies in the United States.
While the US struggles to find its footing, other countries, such as Singapore and the UK, are actively embracing the cryptocurrency industry with clear and supportive regulatory frameworks. This has led to a brain drain, with companies opting to set up in more hospitable environments.
Vice President Kamala Harris has a unique opportunity to change this narrative and clean up the future. cryptocurrency regulation. By taking a comprehensive and inclusive approach, it can help create a framework that balances consumer protection with innovation and growth. The time has come for clear and effective regulation of cryptocurrencies in the United States.
Effective regulation of digital assets is essential to fostering a safe and innovative environment. Key principles guiding this regulation include clarity, innovation, global cooperation, consumer protection, and flexibility. Clear definitions and guidelines eliminate ambiguity, while encouraging experimentation and development to ensure progress. Collaboration with international partners establishes consistent standards, preventing regulatory arbitrage. Strong safeguards protect consumers from fraud and market abuse, and adaptability allows for evolution in response to emerging trends and technologies, striking a balance between innovation and protection.
The benefits of effective cryptocurrency regulation are many and far-reaching. By establishing clear guidelines, governments can attract investors and traditional users, spurring growth and adoption. This, in turn, can position countries like the United States as global leaders in financial technology and innovation. Strong protections will also increase consumer confidence in digital assets and related products, boosting economic activity.
A thriving cryptocurrency industry can significantly contribute to GDP and job creation, which has a positive impact on the overall economy. Furthermore, effective regulation has paved the way for the growth of many companies such as tech startups, online casinos, and pharmaceutical companies, proving that clear guidelines can unlock new opportunities without stifling innovation. This is a great example of how regulation can alleviate fears of regressive policies, even if Kamala Harris does not repeal the current progressive approach. By adopting effective regulation, governments can create fertile ground for the cryptocurrency industry to thrive, driving progress and prosperity.
- The UK Law Commission has developed a bill that will address a situation of legal uncertainty.
- The commission’s goal is to ensure that cryptocurrencies are legally treated as personal property.
UK law is not entirely clear whether cryptocurrencies can be considered personal property.
This is according to the UK Law Commission, which argues that while most investors assume that when they buy cryptocurrencies, they are “acquiring property rights in the same way as buying, say, a watch or a laptop.”
“As the law currently stands, this is not necessarily the case,” the respected legal body said in a new report on Tuesday.
The report was accompanied by a solution: a new bill to consolidate the legal status of digital assets as personal property.
This could be huge for the estimated 4.7 million Britons valued hold cryptocurrencies.
“This will allow the courts to determine a range of issues,” the report says.
If passed, the law would help clarify how cryptocurrencies are treated in cases of bankruptcy, estate planning or theft.
Flexible law
The commission is an independent body responsible for reviewing UK law. It began investigating whether English and Welsh property laws apply to digital assets in 2020.
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At the time, then-Chancellor of the Exchequer Rishi Sunak expressed ambitions to transform the UK into a cryptocurrency hub as Britons invested more.
In 2023, the commission decided that, in most cases, the legislation of England and Wales is sufficiently flexible to regulate cryptocurrencies.
This means that any asset, from Bitcoin to non-fungible tokens and some types of digital contracts, can be considered personal property, without Parliament having to write extensive new laws.
There was one small area of uncertainty, however: it was unclear whether cryptocurrencies fell within the two categories of personal property recognised under UK law.
These two categories are made up of tangible assets (cars, laptops, bags) and intangible assets (contracts, stocks, and debt).
The bill that will now go to Parliament to be converted into law aims to remedy this situation.
Without that clarification, courts may try to lump cryptocurrencies together with intangible assets, said Adam Sanitt, head of litigation, knowledge, innovation and corporate support EMEA at law firm Norton Rose Fulbright. DL News in March.
This is problematic because intangible assets are creations of the legal system, while cryptocurrencies are not.
“How the law treats digital assets, what rights you have over them, how you own them, how you transfer them to other people—that treatment is different, because digital assets don’t exist by virtue of the legal system, but independently of it,” Sanitt said.
The money in your bank account, for example, is a legal creation. The government could pass a law to cancel it.
However, if the UK passed a law banning Bitcoin, Bitcoin would not cease to exist.
Sanitt said: “That’s why digital assets are so important: neither the government nor the legal system can take them away from you.”
Contact the author at joanna@dlnews.com.
The cryptocurrency industry has performed remarkably well since its inception, but now faces a critical hurdle that requires careful consideration and regulatory expertise to overcome. Despite the industry’s rapid growth and rate of global adoption, the gap between the industry and global regulation is only widening as new innovations break through into the public domain.
Although efforts are being made on both sides, regulators’ lack of familiarity with cryptocurrencies and the industry’s lack of regulatory expertise are hindering innovation in the sector. To address this issue, traditional financial institutions (TradFi) such as MultiBank Group have started venturing into the cryptocurrency sector.
The regulatory gap
Over the past decade, the cryptocurrency industry has grown dramatically as tech entrepreneurs and forward-thinking thinkers have founded a plethora of crypto platforms and protocols to push the boundaries of the space. The problem faced by these newcomers, who are often unfamiliar with the hurdles posed by financial regulators, can quickly overwhelm and stall operations.
On the other hand, regulators more attuned to TradFi systems may be equally stifled by the complexities of decentralization and blockchain technology. The unfamiliarity experienced by both innovators and regulators creates a stark regulatory divide between both sides, leading to misunderstandings and potential conflicts.
To overcome this lack of communication, a bridge must be built to bridge the gap, ensuring future stability for the cryptocurrency industry and clearer legislation from regulators.
Efforts to bridge the gap between industry
The gap between the cryptocurrency industry and regulators is slowly narrowing as efforts to regulate cryptocurrencies and Web3 space activities are gaining momentum. Specific regulatory actions are taking place in many countries, aimed at providing greater oversight of cryptocurrency transactions, cryptocurrency exchanges, and initial coin offerings (ICOs).
Despite being a positive step in the right direction, these new regulations can differ significantly between jurisdictions around the world. This fragmentation results in a regulatory environment filled with obstacles, bottlenecks, and varying requirements and prohibitions. As cryptocurrency companies and TradFi institutions attempt to navigate the minefield, the regulatory maze becomes increasingly convoluted.
TradFi institutions like MultiBank Group are working to solve this problem, as one of the largest financial derivatives institutions in the world with over 12 licenses across all continents. Founded in 2005, the Group has an impeccable and trustworthy reputation globally, extensive expertise in financial regulation and has now ventured into the cryptocurrency space via MultiBank.io.
MultiBank.io: TradFi Excellence in the Crypto Space
Expanding into the cryptocurrency space via MultiBank.io has enabled MultiBank Group to provide regulatory clarity and trust to the digital asset industry. With a substantial daily trading volume of $12.1 billion, the timely decision to enter the cryptocurrency space has the potential to set regulatory precedents and standards for years to come.
By helping to develop sensible and well-considered regulations, MultiBank.io’s established reputation allows the company to communicate effectively and clearly with regulators. Unlike others in the industry without regulatory expertise, MultiBank.io facilitates the Group’s commitment to rigorous regulatory standards, the scope of oversight and establishes the necessary transparency.
The company’s approach ensures that regulatory licenses are pre-acquired, compliance is met globally without jurisdictional barriers, and transactions remain secure at all times. By helping to create robust regulations that are both clear and innovation-friendly, MultiBank Group looks forward to standardizing the entire cryptocurrency industry for other potential innovators.
One of the biggest challenges in establishing a clearly constructed bridge between regulators and the cryptocurrency industry is effective communication. By leveraging its institutional background TradFi and acting as an intermediary with regulators, MultiBank Group is able to translate the needs of the industry to those who shape it.
This quality of mediation is essential to ensure that regulation helps develop essential technological advances rather than hinders their establishment and growth. Through the lens of TradFi when looking at the complexity of the cryptocurrency industry, MultiBank Group is able to deconstruct unfamiliar crypto arguments for regulation and create a safer and more secure space.
Where TradFi and Crypto Meet
Regulations are crucial for traders, investors, and everyday users of crypto platforms and their safety when participating in crypto markets. While strict regulations are necessary for stable market integrity, innovation should still be considered, something MultiBank Group considers a priority.
Where TradFi and cryptocurrencies converge, the Group is there to provide a balanced approach to ensure promotion for both the cryptocurrency industry and regulators seeking to protect both retail and institutional investors. This balance is critical to maintaining a thriving space where cryptocurrency innovation can thrive without compromising the security of user funds or data.
As more TradFi institutions like MultiBank Group enter the cryptocurrency space with ever-expanding expertise in regulatory understanding, the future of the industry is increasingly encouraged. The financial freedoms of the cryptocurrency space coupled with regulatory oversight for financial security will be the guiding lights for the future success of the entire cryptocurrency industry.
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