Eternity Law International — News — Legal regulation of operations with cryptocurrencies in Hong Kong

Legal regulation of operations with cryptocurrencies in Hong Kong

Published:
June 1, 2018

Legal regulation of operations with cryptocurrencies in Hong Kong is a popular direction in the country. Great influence on the development of legal relations in Hong Kong had the United Kingdom, under the authority of which the territory remained since 1842.

In this situation, the current special district of Hong Kong was 150 years old, and only in 1997 was the transfer of Hong Kong to the People’s Republic of China. The island received sovereignty under the auspices of another state, but at the same time, it acquired a wide autonomous administration for fifty years – until 2047.

These events affected the regulatory law in the field of finance.

HONG KONG ENTERING TO THE WORLD FINANCIAL CENTERS

Hong Kong is a special administrative area of ​​China and is located on the Kowloon Peninsula.

An important influence on the development of the county was provided by the UK at the time when the territory was rented by the empire for almost a hundred years. This markedly affected the legal regulation in the financial system.

The legislative system is represented by the common law. With regard to the tax system and taxation of all types of activities, there is an orientation toward the Western model.

The prosperity of Hong Kong was provided by location. It stands at the junction of the Asia-Pacific region. These are the basic factors that influenced the formation of the current status – the third financial center.

As you know, the first positions were taken by New York and London. Hong Kong is an active leader in such positions as the size of the economy and occupies an honorable ninth place. The fifth place Hong Kong is awarded for external assets in banking structures, which is indicated by the volume in the global understanding.

CRYPTOCURRENCY IN HONG KONG AND ITS LEGAL REGULATION

It is worth noting that Hong Kong is working actively to develop the financial environment. However, in the issues of cryptocurrency, the situation is ambiguous. Orientation to the western system of legal regulation has significantly affected this area.

Formed legislation of 1997 was developed under the strong influence of Great Britain. China also had its influence, which also had the right to vote at that time.

In Hong Kong, the cryptocurrency is in the so-called legal vacuum. The tax system, in turn, does not include any legal grounds regarding the taxation of this industry. November 2013 marked an event that directly affected the issue of the crypto currency – Bitcoin.

Norman Chan, being CEO of the Hong Kong Money Management Department, said that it is a virtual product, which does not require a separate legal adjustment. A few months later, the Secretary for Financial Treasury and Services of Hong Kong expressed his opinion on Bitcoin.

In particular, it was called a speculative commodity. Naturally, this implies a distrust of the government of the region to this money equivalent. The secretary also noted that there are risks in the process of trading with the cryptocurrency, exchange operations or the banal storage of electronic funds.

In July 2014, the risks of operations with digital currency were drawn to the attention of the Hong Kong police. In particular, the case involved not only trade operations, but also investment. Again, there was speculation with Bitcoin.

In 2015 was marked by the bankruptcy of the Hongkong bikoyun stock exchange, where depositors suffered serious damage. The amount was $ 387 million. At the same time, the Office said it was necessary to proceed with caution when dealing with cryptocurrency.

In March, it was informed that the government would not pass a law to regulate such operations or prohibit them, since it does not consider it necessary.

November 2016 also became significant in relation to the digital currency. The Office published a report, which notes the possibility of mass implementation of Blockchain technology. This can be an impetus to increase the risks of its criminal use.

In the tax legislation there are still no rules that could regulate this issue.

APRIL 2017 THE STATE BODIES OF JAPAN ADOPTED THE LAW ON CRYPTOCURRENCIES

In this regard, in Japan at the moment legalized such cryptocurrencies as Bitcoin and Ethereum. Now, these cryptocurrencies in Japan can be used for mutual settlements.

Although, despite the adoption of the law, cryptocurrencies in Japan at the moment have not become a legal tender.

In connection with the adopted law, Japanese companies, whose internal rules allow working with crypto currency, now can use Bitcoin and Ethereum for settlements between them.

Also, companies and individuals can buy these cryptocurrencies as a commodity that is not subject to compulsory taxation with an eight-percent consumer tax.

To get help with transactions with crypto-currencies in Hong Kong, you should contact Eternity Law International. Qualitative conditions of assistance and round-the-clock support of experienced lawyers are the main advantages that you get by calling to our manager.

You could be interested

Startups and technologies in Hong Kong

Startups and technologies in Hong Kong – development during quarantine. The rapid widespread of COVID-19, as well as the measures taken to completely isolate people, have led to the fact that most firms have introduced remote work for their employees. Contrary to popular belief that telecommuting is far less productive than regular scheduled jobs, experience...

Gaming License in UK

Amid the vibrant tapestry of the gaming and gambling industry, the United Kingdom emerges as a prominent and influential stalwart. Its well-entrenched system of gaming licensure, coupled with a stringent regulatory framework and an unwavering commitment to the tenets of responsible gaming, elevates the nation to a coveted destination for enterprises seeking participation in this...

The tax system in Croatia

To run a business in Croatia, each entrepreneur should know exactly what system of taxation is valid in the country and how it works. Thus, this article helps you understand the types of taxes that operate in Croatia and how it works in the frameworks of commercial activity. So it ought to be noted that...

PI license in the UK

Several types of non-banking firms whose main professional scope is provision of financial services exist. Operation of such enterprises and all deals performed by them as professional services are monitored by the state and laws of the jurisdiction in which organizations function. To conduct such activities officially, an appropriate permit from the regulator is required....

API license in Belgium

In recent years, the financial sector in Belgium has been actively expanding and developing. The country attracts the attention of financial enterprises due to its diverse government support, the presence of leading European financial and regulatory authorities, its favorable geographical position as an EU financial center and the presence of a developed market. These factors...

New Fintech legislation in Ukraine

New Fintech legislation in Ukraine outlined fundamentals of functioning and regulation of modern fin-technologies, particularly, circulation and usage of e-money, payment mechanisms and virtual currencies within Ukraine. Legal provisions provide greater safety and higher effectiveness of financial services offered in country, particularly, for every company with financial license. Ukrainian legislators harmonized new Law with updated...

Discover our services

The international company Eternity Law International provides professional services in the field of international consulting, auditing services, legal and tax services.

Ready-made companies for sale

Companies with a bank account around the world

Banks for sale

Established Banks for sale

Ready-made licenses for sale

Forex, cryptocurrencies, gambling, EMI, PSP, SVF, MSO, DLT

Licensing

Forex licenses, cryptocurrencies, gambling, EMI, PSP, SVF, MSO, DLT

Offshore company registration

Expert advice on the acquisition of an offshore company

Open a bank account

Open bank accounts in more than 120 banks around the world
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof
+41 435 50 73 23

Kyiv

Baseina street, 7
+38 094 712 03 54

London

Grosvenor Gardens, 52
+44 203 868 34 37

Washington

1629 K St. Suite 300 N.W.
+1 (888) 647 05 40 Toll Free

Vilnius

Gediminas Avenue, 44A
+370 52 11 14 32

Tallinn

Kesklinna linnaosa, Tuukri 19
+372 880 41 85

Edinburgh

Lochrin Square, 1
+44 203 868 34 37

Nicosia

Jacovides Tower, 5 floor
+371 665 550 51

Riga

Esplanade, 7 floor
+371 665 550 51

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai
800938622 Toll Free

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard
+6531594300

Sydney

20 Martin Place
+61 2 888 00 365

Porto

2609 Avenida da Boavista
+351 800 500 206 Toll Free

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7
+995706070360