Cambodia’s cryptocurrency sector appears to be marching forward, despite the absence of clear regulatory guidelines pertaining to virtual currencies.
Regulatory Ambiguity Fails to Deter Cambodia’s Cryptocurrency Sector
A report published by The Phnom Penh Post suggests that Cambodia’s virtual currency industry is pressing forward in spite of the regulatory ambiguity surrounding cryptocurrencies in the country.
The founder of the Khmer Crypto Foundation, In Mean, told local media that individuals operating in Cambodia’s cryptocurrency sector do so with great care due to the legal uncertainty. “It’s not clear yet whose job it is to regulate cryptocurrencies,” Mr. Mean said. “It could fall to the [National Bank of Cambodia (NBC)] or the [Securities and Exchange Commission of Cambodia (SECC)], but it’s not clear yet which one it will be.”
Although Cambodia has not explicitly outlawed the possession cryptocurrencies, Cambodia’s government announced the prohibition of “all banks and microfinance institutions from trading, buying, selling and advertising cryptocurrencies,” in December 2017.
Cambodians Citizens Launch Altcoins in Spite of Legal Grey Area
Mr. Mean launched his own cryptocurrency in November 2017, with local media stating that the “regulatory grey area […] prevents him from monetizing it.” Mr. Mean states that he “give[s] out the coin” and “tell[s] people that it has no value,” claiming that the project, Khcoin, functions as an educational tool as opposed to a speculative asset. Mr. Mean created a wallet for Khcoin, and claims that roughly 5,000 Cambodian citizens currently hold Khcoin. Mr. Mean states that he has also developed an exchange platform for Cambodian cryptocurrency trading, however, waiting for clear regulatory guidelines before he intends to launch such.
The exchange has so far proved a trying venture for Mr. Mean, who states “I used my own money and lost thousands of dollars to hackers [during testing], but I want to do this because I think it is important for Cambodia to show the world that it can have its own cryptocurrency.”
Entapay to Conduct ICO in Cambodia
At the start of March, Cambodia saw the launch of another local altcoin, called Entapay. The project was initially the subject of confusion – with a press release for the project announcing Entapay to be backed by the Cambodian government. Richard Lee, the PR director of Entapay, appears to have subsequently distanced the company from the bold claims, stating “We never said that we had the official backing of the government. We just said that we had their support” – despite adding “We don’t have a financial license for Entapay yet, but we will soon.”
The company is currently holding an initial coin offering for its Entapay token. The ICO is currently conducting pre-sales, accepting only ETH from investors. Investors will be distributed ‘Enta Diamond certificates’ which investors can then use to purchase Entapay tokens.
What are your thoughts on the ambiguity surrounding Cambodia’s cryptocurrency industry? Join the discussion in the comments section below!
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The European Securities and Markets Authority (ESMA) has announced that it will impose restrictions on the leverage offered for contracts-for-difference (CFDs) and binary options offered to European retail investors. Under the new measures, the leverage offered on cryptocurrency CFDs will be limited to no more than 2:1.
European Securities Regulator Imposes Restrictions on Leverage Offered by CFD Providers
ESMA has agreed on what it describes as “temporary product intervention measures on the provision of [CFDs] and binary options to retail investors in the European Union (EU).”
The new measures will see restrictions on the leverage offered on cryptocurrency CFDs to no more than 2:1. The agreements will also mandate that traders provide an initial margin of “50% of the notional value of the CFD when the underlying [asset] is a cryptocurrency” – more than twice the initial margin required of any other CFD.
New Measures See Harshest Rules Imposed on Cryptocurrency CFDs
ESMA has stated that cryptocurrencies CFDs states that “CFDs with cryptocurrencies as an underlying raise separate and significant concerns as CFDs on other underlying” assets.
The regulator stated that “Cryptocurrencies are a relatively immature asset class that pose major risks for investors.” ESMA expressed “concerns about the integrity of the price formation process in underlying cryptocurrency markets,” arguing that such “makes it inherently difficult for retail clients to value these products.”
ESMA concluded that “Due to the specific characteristics of cryptocurrencies as an asset class the market for financial instruments providing exposure to cryptocurrencies, such as CFDs, will be closely monitored.” Based on its findings, ESMA “will assess whether stricter measures are required.”
New Rules to be Formalised in “Coming Weeks”
The measures will also see restrictions of 30:1 placed on “major currency pairs;” 20:1 for “non-major currency pairs, gold and major indices;” 10:1 for “commodities other than gold and non-major equity indices;” and 5:1 on “individual equities and other reference values.”
ESMA states that it “intends to adopt these measures in the official languages of the EU in the coming weeks.”
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Thailand releases long-expected crypto tax regulations, former Thai Finance Minister warns against “conservative instincts” leading to “draconian regulations” #NEWS
The chairman of the central bank of Kazakhstan said that the bank has prepared legislation to prohibit the sale and purchase of cryptocurrencies in the country as well as any kind of crypto mining, citing several risks he sees.
National Bank’s Crackdown on Crypto
The chairman of the National Bank of Kazakhstan Daniyar Akishev said on Friday that “Kazakhstan intends to prohibit the purchase and sale of cryptocurrencies and any kind of mining of cryptocurrencies” in an interview with Ria Novosti.
The publication quoted the central banker stating:
In Kazakhstan, the National Bank is very conservative about this issue [cryptocurrency]. I welcome only rather stringent restrictions, that is, we want to prohibit the purchase and sale of the national currency for cryptocurrency. We want to prohibit the activity of exchanges on this segment and any kinds of mining.
Risks the Central Bank Sees
Akishev claims to see a lot of problems concerning cryptocurrencies, especially pertaining to the protection of customers’ rights.
He was quoted by the news outlet declaring his intention to “minimize the risks associated with the national market,” adding that “but for sure, not one central bank has full functionality to administer this market [cryptocurrency] in a cross-border market, so at the very least, we must stop this risk through the national currency.”
Another major risk, he described, “is the possibility of [using] cryptocurrency to commit illegal activities,” the publication noted, and quoted Akishev asserting, “Cryptocurrency is an ideal tool for money laundering and for avoiding taxation.” He noted that the central bank’s position on crypto “is supported by the majority of state bodies of Kazakhstan,” and was quoted by Ria Novosti saying:
We have prepared amendments to the legislation that should lead to this tightening.
In October of last year, Akishev said that the central bank proposed to restrict some activities relating to cryptocurrency in the country “to protect the public from speculative risks.” He said at the time, “we sent our proposals to the government, in which we suggest carrying out a series of tougher measures, including prohibiting the exchange of the national currency for cryptocurrencies, prohibiting the activities of some companies that generate cryptocurrencies and so on.”
Meanwhile, interest in cryptocurrency in the country has jumped 15-fold early this year compared to the previous year, according to Yandex. Citizens are also searching 10 times more for terms related to video cards, crypto mining, as well as how to mine.
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