The most important part of the investors' trust in crypto assets is their legal regulation. Now, we have several types of countries according to crypto regulations. The first ones include only El Salvador, where Bitcoin is a legal tender. The second ones unite countries where there’s a legal basis to buy/sell/margin trade/issue new tokens, and so on. The last ones are like China, where crypto activities are strictly forbidden. Many South-East Asia countries focus on providing a legal field for crypto companies to work and managing issuing crypto assets. The regulation authorities look for tax deductions of both individuals and companies if they make profits, trading crypto assets. Also, the countries pay much attention to anti-terrorist financing activities. In Kyrrex we noted that according to the ASEAN Today’s , the economics of South-East countries grow quickly. Analysts expect that 2021 annual revenue from e-commerce activities should be $67.6 billion, achieving a 10.3% mark of the annual growth. As a result, the emerging growth of cryptocurrencies in the region is attracting both investors and regulators. The Crypto Adoption placed Vietnam in first place worldwide, overtaking India, Pakistan, and Ukraine. All of this means that the ASEAN region has formed several local key players, but there’s a short period of time when upcoming companies can take their place on the market and be successful. report index South-East Asia countries and cryptocurrency regulation We have picked five states to discuss: Singapore, Vietnam, Malaysia, Thailand, and Indonesia. According to , the countries of Central and Eastern Asia have a 14% share of the global crypto value. These countries have received $572B in crypto value, where received value has amounted to over $120B in May 2021. The crypto activity data informs us that Central and Eastern Asia is the #3 regions right after Central, Northern & Western Europe, and North America. The most active crypto countries chosen by us are Thailand (12th) and the Philippines (15th). We’d like to note that over 95% of the crypto adoption takes place in Exchange and DeFi services. Chainanalysis Singapore Singapore seems to be the best country in the region to run a crypto business. Crypto assets aren’t legal tenders, but any company is allowed to work legally after registration in the Monetary Authority of Singapore. The National Bank still treats Bitcoin and other assets as goods, not money. After 2017, they regulated crypto not like money but like digital payment tokens (DPT) that were classified as “securities.” MAS keeps informing citizens that crypto investments are involved in high risk. If we talk about taxes, companies that work with crypto assets have to pay taxes from obtaining profits. Holding cryptos for a long-term gain isn’t taxed because there are no capital gain taxes in the country. Vietnam The country doesn’t allow cryptocurrencies as legal tenders. Authorities decided to design a pilot project for crypto regulation with the Central Bank efforts. It can take years before everything starts to work properly. Analysts expect that this will be done within 2021-2023. So, running a crypto company isn’t regulated by the present law base. You have to contact the Central Bank in advance to ask how to do this in the best way, doing everything in the legal field. Companies and individuals have to pay taxes on profits that were obtained from crypto trading. Malaysia Malaysia prepares regulation rules that take into account anti-money laundering and anti-terrorism financing. The document called "Anti-Money Laundering and Counter Financing of Terrorism Policy for Digital Currencies (Sector 6)" has regulated the crypto market since 2018. The financial institutions that are involved in exchanging have to identify customers and verify this data. These requirements were applied to prevent financing terrorism. Crypto traders must provide authorities with intel about gains annually and pay taxes. Thailand Crypto assets aren’t legal tenders in the country. The authorities started paying more attention to this market after May 2021. Cryptocurrencies are regulated by the Digital Asset Act since May 2018. Registration of new coins and upcoming ICO events must be approved by the SEC. The document provides a list of licenses that are required to run exchange and broker businesses. From May 2021, the Bank of Thailand will apply KYC requirements to all transactions. There are following tax rules. If an individual or a company makes profits from trading, they have to pay taxes. For companies, it’s 20% of the corporate income taxes. For individuals, it’s 35% of personal income taxes. Indonesia Crypto assets aren’t legal tenders in the country. The regulator notes that crypto assets are commodity asset class, and it’s regulated under the Commodity Futures Trading Regulatory Agency (BAPPEBTI). So, trading them is a completely legal activity. There’s a list of regulated crypto brokers and crypto assets. We can expect that there will be crypto future operations regulated. Indonesia has a huge pool of crypto investors (almost 5 million people). Anyone who trades crypto assets must pay 0.05% of the final taxes. It’s one of the lowest rates globally. How the crypto regulation affects the industry The regulation is a crucial part of average investors’ and financial institutions’ trust in crypto assets. Let’s take a look at crypto from the traders’ side with less than 100,000 USDT on the board. They want to be sure that authorities know that they work legally and completely in white. The traders want to understand how to pay taxes correctly. This is the right point of view. The companies are regulated by various financial authorities and they are willing to keep running business clear and transparent. Simple and sound regulation allows them to bring their billions of USDT on the market. Now, they invest in companies that run trading platforms, other crypto-related services, or develop crypto products. It's a one-step-more way to invest in crypto through the key market players and “rising star” companies. The Mafia wants the crypto market never to be regulated, which allows them to run their activities without using USD, so the FBI never looks at their transactions, and they hope they are never judged in the US courts. It’s because if you use USD for illegal purposes, it turns on the American jurisdiction immediately. We are sure that smart regulation is a way we must follow to make crypto investments and to trade clearly and transparently.

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Crypto Regulation Aspects in South-East Asia

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Viktor Kochetov

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