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US, China regulators have a problem with bitcoin. Hong Kong, Singapore may have solutions
- Bitcoin is taking a beating. Tesla no longer accepts it, China is clamping down and the US is warning about how cryptocurrencies ‘facilitate illegal activities’
- But the two Asian financial hubs have for years calibrated ways to tap the market while guarding against money laundering, tax evasion and terror financing
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China’s warning earlier this month that it intended to curb bitcoin trading and mining was the latest indication that the world’s growing army of cryptocurrency backers face bigger headaches than Elon Musk changing his tune and saying Tesla would no longer accept it as payment.
The Chinese Vice-Premier Liu He and the State Council said it was necessary to crack down on bitcoin mining and trading behaviour to “resolutely prevent the transmission of individual risks to the social field”.
Bitcoin took a beating following the move and was at one point down nearly 50 per cent from its all-time high, while Ether fell to a two-month low last Sunday.
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And it is not just the Chinese government that is having jitters about the largely unregulated and borderless cryptocurrency market, where some players are intent on keeping the space free of conventional financial rules.
The same week, the United States Treasury Department said it would require any cryptocurrency transfer of more than US$10,000 to be reported.
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“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the department said in a release.
In Germany, investors have been closely scrutinising a dispute between financial markets regulator BaFin and cryptocurrency exchange Binance over the former’s imposition of a warning about possible security rules violations.
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