#IntlRoundup: U.S. Delays ETF Decision & A DEA Agent Says Bitcoin is Not a Criminal Tool
The global nature of digital currencies makes following international news beneficial for investors and interested market participants. However, due to how fast news travels through the landscape, it can be easy to miss the occasional story now and again.
As part of a regular weekly roundup, Coinsquare News compiled the week’s significant international news headlines. In this edition, we look at survey findings on how Russians are engaging with cryptocurrencies, South Africa drafting new cryptocurrency tax laws, and more.
U.S. DEA agent refutes idea that Bitcoin is mostly for criminals
According to an August 7th report from Bloomberg, an authority from the U.S. Drug Enforcement Administration (DEA) said that Bitcoin is no longer a tool primarily used for illicit activity. This follows a recent a study which claimed that only 0.03% of Bitcoins in the U.S. and Canada are sourced from illicit activity.
Lilita Infante is a U.S. DEA special agent who is part of a 10-person Cyber Investigative Task Force which focuses on ‘dark web and virtual-currency related investigations.’ While Bitcoin has grown in popularity, she said that the majority of transactions are now done legally.
“The volume has grown tremendously, the amount of transactions and the dollar value has grown tremendously over the years in criminal activity, but the ratio has decreased,’’ she said, in a conversation with Bloomberg.
Infante added that the majority of transactions that occur in the current market are speculative, with only a minority being conducted for illicit reasons.
Interestingly, she added that blockchain technology can prove to be a helpful tool when it comes to tracing criminal activity, due to its function as a public ledger. She further joked that she wants criminals to use blockchain as it makes the DEA’s job easier.
Overall, her statements reflect a growing shift in public perception. While cryptocurrencies were seen negatively when they were first introduced to the public, increased education continues to prove that there are many legitimate uses for the technology.
The SEC postponed a Bitcoin ETF decision
This week, the U.S. Securities and Exchange Commission (SEC) delayed a highly-anticipated decision to approve or reject a bitcoin exchange-traded fund (ETF). As CNBC reported, the ETF proposal was put forward in a collaboration between VanEck and Solid X.
The proposal is one of many that aim to get the SEC to give the ‘greenlight’ to Bitcoin ETF’s – investments that track an asset or market index. While many are actively trying to get ETF’s approved in hopes of attracting large investors to the cryptocurrency market, none have succeed thus-far.
Last week, Coinsquare News reported that SEC commissioner Hester Peirce vocalized her displeasure with the SEC’s decision to reject a similar ETF proposal from Gemini cryptocurrency exchange founders Cameron and Tyler Winklevoss.
While the SEC is yet to reject this iteration of the proposal from VanEck, they have rejected two of the investment firm’s ETF proposals in the past. Currently, the SEC says that its decision will take place on September 30th, 2018.
New survey says 44% of Russians know about cryptocurrencies
According to a new survey from Romir, a private research company specializing in marketing and socio-economic studies, 44% of Russians are aware of cryptocurrencies.
The survey (note: link is in Russian) purportedly polled 1,500 Russians in an attempt to quantify how the country’s population is reacting to the rise of the cryptocurrency industry. Of those surveyed, only 13% claimed to have a ‘good’ understanding of the industry.
This is especially interesting for a country where the government previously expressed an intent to launch a cryptocurrency of its own.
Comparing these findings to a recent Bank of Canada publication provides some insight into how Canada’s level of cryptocurrency education compares to other parts of the world. Making use of a survey conducted in December 2017, the Bank of Canada estimated that 85% of Canadians had heard of Bitcoin.
South Africa drafts its plan to tax cryptocurrencies
Following previous sentiment from the South African Revenue Service (SARS), the country seems to be moving forward with its proposal to tax cryptocurrencies. This week, the revenue service outlined draft cryptocurrency tax legislation that could define how South Africa handles cryptocurrencies moving forward.
Bitcoin and other cryptocurrencies would officially be considered intangible assets for tax purposes as per the new draft, and subject to income tax. By law, residents would then have to declare income earned from cryptocurrency transactions in order to stay within the new tax guidelines.
This is consistent with the revenue service’s previous statements in April 2018, when it said that cryptocurrencies are not regarded as a ‘currency’ for tax purposes, and are instead considered ‘intangible assets.’
Purportedly, the proposed changes would also mean that Value-Added Tax (VAT) would not apply to cryptocurrency transactions, as the country’s tax authorities view them as ‘exempt financial services.’
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