Discussion - 11 While there are many benefits to the use of cryptocurrency, there is also much skepticism from the general public. Much of this concern centers around legal protection associated with
2 Substantive reply Posts
Post 1:
legal protection against bitcoin
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There are no proper tools present to protect Bitcoin users or transactions legally. Some countries are now coming up with various regulations, and they vary from region to region. While some countries have granted the use and trade of Bitcoin as money, others have banned it altogether. Some countries did not prohibit it entirely, but the definition of Bitcoin as money varies from state to state (Chohan, 2017). Even when the world is going through a financial crisis like right now, multiple countries, including Japan and Germany, have passed new regulations for Bitcoin usage in March this year (Helms, 2020). Federal Financial Supervisory Authority (BaFin) of Germany published new English guidelines on how a company using cryptocurrency can apply for registration to get custody of using it. Philippines Securities and Exchange Commission has issued several warnings to the Bitcoin users partaking in malicious schemes. Even the United States has charged two people stealing money from hundreds of investors in the name of alkaline water-backed cryptocurrency(Helms, 2020).
In the UK, cryptoUK, an industry body, is coming up with new regulations and stricter rules against Bitcoin use. It is planning to launch the Anti-Money laundering unit as well for more security. In the UK, Bitcoin is treated as private money (Legality of bitcoin by country or territory, 2020). No tax is imposed when a Bitcoin is exchanged for other currencies; however, to physically buy items or another cryptocurrency, fees can be applied. A few years back in Australia, there we no rules imposed on how a cryptocurrency is used. But today organization that wants the Bitcoin as a payment option has to register Australian Transaction Reports and Analysis Centre that implements know your customers, which will comply with the anti-money laundering laws(New Australian laws to regulate cryptocurrency providers, 2018).
even though there are regulations in many countries that use cryptocurrency as money, it is still unclear up to which extent the people and organizations are protected. The use of alternative currency is inevitable in the future. Hence, in my opinion, all the countries must form an organization to regulate the use globally, which can provide an extra layer of security for the transactions.
References
Ruslina, E. (2019). Legal Protection for Bitcoin Users in E-Commerce Transactions. Journal of Internet Law, 23(4), 3–6. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=buh&AN=139556416&site=eds-live
Helms, Kevin. (2020). Regulatory Roundup: 10 Countries Actively Regulating Cryptocurrency Despite Global Crisis. Retrieved from https://news.bitcoin.com/cryptocurrency-global-crisis/
Legality of bitcoin by country or territory. (2020). Retrieved from https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory#cite_note-143
Post 2:
Legitimate subjects must control legal protection since it is an individual right (Ruslina, 2019). Since Bitcoin transactions don't involve any centralized authorities like banks or regulators, many issues can occur in the transaction process. To mitigate the risks involved in bitcoin transactions and provide legal protection, tools such as: include escore agent, Contract, consider unalterable arbitration, and clear understanding of bitcoin grouping are used(Merker, 2017). Let us see how and what are the countries that are trying to implement these legal instruments to protect bitcoin.
US: In 2017, the Security and Exchange Commission labeled token sale, which uses blockchain as an alternative for fundraising. In 2015 NYDFS made law and administered, which should be followed by digital currency organizations to process the bitcoin transactions. This law is known as BitLicense. This provides added protection to users (Merker, 2017).
Outside the US: The FSA regulation in Japan revealed 669 skeptical transaction details. FSA's main program is to build trust in cryptocurrencies, such as bitcoin (Ruslina, 2019). Bitcoin is technically legal in India; RBI banned the banks involved with virtual currency dealings in 2018 ("Cryptocurrency Regulations," n.d.). But this was rechallenged by two petitions in the supreme court ("BlockChain & Cryptocurrency," n.d.).
Conclusion: Central Bank and the state have a duty as one of the state's commitments in giving legitimate assurance to its residents. To fill the legal vacuum for electronic exchanges by utilizing the devices of private and criminal law and bitcoin installment instruments can be used as an option in contrast to illuminating problems (Ruslina, 2019).
Reference:
Ruslina, E. (2019). Legal Protection for Bitcoin Users in E-Commerce Transactions. Journal of Internet Law, 23(4), 3–6.
Merker, N, R. (2017). Can You Legally Protect a Bitcoin Transaction? [Blog post]. Retrieved from https://www.insideindianabusiness.com/story/36644680/can-you-legally-protect-a-bitcoin-transaction
Cryptocurrency Regulations in India [Blog post]. (n.d.). Retrieved from https://complyadvantage.com/knowledgebase/crypto-regulations/cryptocurrency-regulations-india/
Blockchain & Cryptocurrency Regulation 2020 | India. (n.d.). Retrieved from https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/india#:~:text=After%20the%20RBI%20circular%20dated,institutions)%20from%20dealing%20in%20cryptocurrency.
