The South Korean government reportedly plans to soften its crypto regulations in line with the policies set by the G20 nations in an effort to create “unified regulations.” The Korean regulators have also agreed to apply the standards set by the Financial Action Task Force to its crypto policies.
G20’s Unified Crypto Regulations
South Korea is reportedly planning to follow the policies set by the G-20 nations and soften its crypto regulations, the Korea Times reported.
The G20 is an international forum for the governments and central bank governors. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, and the European Union.
The top financial policymakers of these countries have agreed to acknowledge and regulate cryptocurrencies as financial assets, the news outlet noted, elaborating:
Financial policymakers of G-20 nations have set a July deadline for the first step toward ‘unified regulations’ of cryptocurrencies. One reason for the move by the G-20 is that they see cryptocurrencies as ‘too small to jeopardize’ financial markets. The combined market value of cryptocurrencies is less than 1 percent of the global GDP.
Financial Action Task Force Standards
While the G-20 classifies cryptocurrencies as financial assets, the Korean government has earlier classified them as non-financial products due to their speculative nature. Acknowledging the differences, the country’s Financial Supervisory Service (FSS) was quoted expressing:
It’s almost certain that cryptocurrencies will be classified as assets and the main issue will be centered on how to regulate them properly under the unified frame that will be agreed upon between G-20 nations. Given the current stance, this isn’t good, but we will step up efforts to improve things.
South Korea has also agreed to apply to cryptocurrencies the standards of the Financial Action Task Force (FATF), an inter-governmental body formed to fight money laundering and terrorism financing, the publication conveyed.
Softening Crypto Policies
Recently, the new FSS chief indicated that he will ease the country’s cryptocurrency regulations. Governor Yoon Suk-heun said there are many positive aspects of cryptocurrencies, promising to release updates on this issue in the near future.
Meanwhile, the country’s National Tax Agency has been collaborating with the finance ministry to collect tax data in order to establish crypto tax policies. While cryptocurrency transactions are currently tax-free in Korea, crypto operators are required to pay income taxes, the news outlet detailed.
Despite the new FSS chief suggesting an easing of crypto regulations, his department has launched an investigation into crypto exchanges, in collaboration with other related authorities. In March, the prosecution arrested four employees of crypto exchanges including the CEO of Coinnest. Last week, they started investigating the country’s largest crypto exchange, Upbit. This week, three people were arrested from HTS Coin exchange for alleged fraud and embezzlement charges.
Cryptocurrencies price prediction: Bitcoin, Ripple & Bitcoin Cash – Asian Wrap 25 Feb
Bitcoin Price Prediction: After major dip from the $10,000 level, BTC/USD tries to consolidate above $9,600
BTC/USD bears retained control of the market as the price dropped from $9,662 to $9,592.80. This follows a heavily bearish Monday, where the price plummetted from $9,971.45, following a brief flirtation with the $10,000-level.
Ripple Price Analysis: XRP/USD bears take control as price consolidates above $0.26
XRP/USD bears continued to make their presence felt as the price dropped from $0.271 to $0.2675. This follows a heavily bearish Monday where XRP/USD plummetted from $0.284 to $0.271. The price is trending in a downward channel formation, while SMA 20 acts as immediate market resistance.
Bitcoin Cash Price Analysis: BCH/USD leg to $400 cut short at $380
Bitcoin Cash losses are in tandem with the rest of the cryptocurrencies. For instance, Bitcoin is trading under $9,600 after the rejection at levels close to $10,000. Ethereum and Ripple are also languishing in selling pressure.
New Zealand Plans to Drop ‘Unfavorable’ Sales Tax Treatment of Cryptocurrencies
New Zealand’s tax authority is considering changes to its treatment of cryptocurrencies that would drop the current and controversial application of goods and services tax (GST).
The current regime sees bitcoin and other digital currencies as property, with normal rules applying. That means crypto is liable for 15 percent GST when changing hands within the country as part of a business’s operations and potentially throws up a “double taxation” problem when income tax is later applied.
Calling the situation “unfavorable,” the New Zealand Inland Revenue Department (IRD) has now suggested doing away with the GST liability for cryptocurrencies in many cases, but keeping the treatment for income tax.
In a policy issues paper made public on Monday, the IRD states:
“Because of their innovative nature, [cryptocurrencies] will often also have different features to … other investment products. This means that some existing tax rules can be difficult to apply, involve very high compliance costs or may provide policy outcomes for some crypto-assets that lead to over-taxation compared to other alternative investment products.”
The overall aim of any changes would be that cryptocurrencies should have a similar treatment to other investment products or asset classes that are “close substitutes” for the digital asset.
An issue being considered by the IRD is whether different types of token should have different tax treatments depending on how they are used. One way forward is that tokens used like currency or shares would likely not be liable to GST, while other types might see the sales tax applied.
“An advantage of this approach is that it should provide a neutral tax treatment for those crypto-assets which are close substitutes for existing financial products such as currency or shares,” the IRD says.
The tax department suggests it might still treat some tokens differently, for instance, if a token is considered to be a share “but if it does not provide an interest in a foreign company or partnership, it would still be taxed very differently to other foreign equity investments.”
Yet with thousands of tokens now available offering different use cases and features, the IRD says there may be “practical limitations” to their potential classification for tax purposes.
As such, a different approach being considered is to usher in more general changes to tax rules that are seen as throwing up “the most significant policy issues when applied to crypto-assets.”
“There appears to be a case to exclude most types of crypto-asset from the GST and financial arrangement rules by developing a broad definition of crypto-assets for this purpose,” says the IRD.
Whatever the solution, Inland Revenue recognizes that change is needed. The department says, “The current GST rules provide an uncertain and variable GST treatment making, using or investing in crypto-assets less attractive than using money or investing in other financial assets.”
Parties with an interest in the issue have until April 9 to offer their opinions on the best solution.
Australia, which had previously also imposed GST on some crypto transactions, ended the policy in October 2017. Singapore proposed the same policy change last summer.
Ethereum, XRP, and Litecoin Stagnant, Investors Fear Steeper Decline
The low volatility in the market pushed the top three altcoins by market capitalization, Ether, XRP, and Litecoin, into a stagnant phase. The following technical analysis evaluates whether these cryptocurrencies could soon resume their bullish trends.
Ethereum Stagnant, Consolidates in Narrow Range
Ethereum has enjoyed a bull rally that has seen its price skyrocket nearly 130% so far this year. The significant uptrend, however, appears to have reached exhaustion on Feb. 15. Since then, Ether entered a consolidation phase without a clear indication of where it is heading next.
The low levels of volatility seen over the past week allowed the Bollinger bands on ETH’s 12-hour chart to squeeze. Squeezes are usually followed by periods of high volatility. The longer the squeeze, the higher the probability of a strong breakout.
Due to the inability to determine in which direction ETH’s trend will result, the area between the lower and upper Bollinger band is a reasonable no-trade zone. This trading range is defined by the $249 support level and the $285 resistance level.
Breaking below or above this zone could be key to determine whether Ether is bound for a steeper decline or the continuation of the bullish trend.
An increase in the selling pressure behind Ethereum that allows it to move below the $249 support level, could trigger a sell-off among investors. ETH could then plummet to the next support levels that are given by the 61.8%, 50%, and 38.2% Fibonacci retracement levels.
These support barriers sit at $222, $202, and $182, respectively.
Nevertheless, if the bulls are able to push the price of Ether above the $285 resistance level, investors would likely enter into a FOMO (fear-of-missing-out) stage sending it to new yearly highs.
On its way up, Ethereum could face significant resistance around $334, $358, and $393.
XRP on the Verge of a Major Move
The price of Ripple’s XRP has been stagnant within an ascending parallel channel since early December 2019.
Since then, each time this cryptocurrency plunges to the lower boundary of the channel, it goes up to hit the upper boundary, and from this point, it drops again. These are the primary characteristics of a channel.
Now that XRP appears to have moved below the middle line of the channel, it could be heading to the lower boundary. If this technical pattern continues to hold, a bounce back to the middle or the upper boundary of the channel can be expected. This move has been repeated for the past three months.
Nevertheless, Peter Brandt, a 45-years trading veteran, argues that a head-and-shoulders pattern could be developing on XRP’s 1-day chart. Brandt believes that a spike in the selling pressure behind this crypto could trigger a breakout very soon.
If validated, a daily candlestick close below the neckline at $0.268 could trigger a 23% correction.
“If this H&S top plays out,” said Brandt, “[then the] target would be .2071.”
The ambiguity that XRP is currently presenting suggests that in the event of a sell-off, the lower boundary of the ascending parallel channel could be key to its trend.
Moving past this support level would likely validate Brandt’s bearish outlook while bouncing off from it could set the stage for higher highs.
Litecoin Continues Trending Up
On Jan. 5, Litecoin was able to move above its 200-four-hour exponential moving average (EMA) turning it into support. Since then, this EMA has contained the price of LTC from a further correction on the 4-hour chart serving as a rebound zone and catapulting this crypto to higher highs on several occasions.
Following the recent peak around $84, Litecoin plunged over 22% and its 200-four-hour EMA was able to reject the bearish momentum once again. If this support level continues to work as it has done in the past, then LTC could be about to reach a new yearly high.
Adding credence to the bullish outlook, an inverse head-and-shoulders pattern appears to be developing within the same time frame. This technical formation is considered to be one of the most reliable trend reversal patterns by some of the most prominent analysts in the space.
Litecoin seems to be creating the right shoulder of the pattern. To do so, LTC needs to drop to the support area between $68 and $71 and surge back to the neckline at $80.5 with enough volume behind it. Breaking above this important resistance cluster could trigger an increase in demand that pushes the price of this cryptocurrency up over 18% to $95.5.
This target is determined by measuring the distance between the head and the neckline and adding that distance down from the breakout point.
It is worth noting that the 200-four-hour EMA poses a lot of significance to Litecoin’s uptrend. Thus, a candlestick close below this support level could jeopardize the bullish outlook previously mentioned.
A sudden increase in the amount of sell order behind LTC that pushes its price below its 200-four-hour EMA and the 38.2% Fibonnaci retracement level would likely have the strength to trigger a significant correction.
If this happens, Litecoin could find support on its way down around the 50%, 61.8%, or 78.6% Fibonacci retracement level. These support zones sit at $60, $54, and $46, respectively.
Stagnant Markets and Moving Forward
Over $127 billion has flooded the cryptocurrency market since the beginning of 2020. The massive inflow of capital allowed many digital assets including Ether, XRP, and Litecoin to post significant gains.
Due to the exponential upswing, it seems like now investors are worried about the threat of a steep correction.
In fact, the Crypto Fear and Greed Index (CFGI) is currently sensing high levels of fear among market participants. This fundamental indicator reached a value of 46, which represents fear.
Fear, however, is usually perceived as a positive sign. The last time the CFGI was this low the total crypto market cap surged 37%. Now, traders will simply have to wait out this stagnant period before determining if a similar scenario could be taking place.