From the UK to Malaysia: How Countries Have Been Classifying Crypto Across the World

As the U.K. seems to be moving closer toward rolling out a definitive regulatory framework, it is time to reassess how other crypto markets, specifically the major ones, are dealing with cryptocurrencies on the juridical level.

"Guidance on Cryptoassets," reviewed: How the U.K. is going to deal with virtual currenciesGiven the tone of the new FCA paper, the U.K. government seems to be leaning toward a rather neutral approach for cryptocurrencies.

The FCA's consultation paper then breaks down cryptocurrencies into three potential categories: exchange tokens, security tokens and utility tokens.

Despite the modest size of the U.K.'s crypto industry, the local regulators have been intensifying their scrutiny: In December last year, the FCA revealed that it is investigating 18 companies over cryptocurrency use, while the U.K. tax collection service issued its first detailed tax legislation for private cryptocurrency holders.

The finalized version of the document will reportedly be presented by summer 2019.Therefore, the U.K. might soon join the list of countries that employ a definite regulatory approach toward cryptocurrencies.

In April 2017, the local Payment Services Act came into force: The document confirmed cryptocurrencies' role as a form of payment and outlined further regulatory measures of local crypto exchanges and ICOs.In December 2018, the FSA decided to place Bitcoin and other cryptocurrencies under a single category dubbed "Crypto-assets," according to reports from local media.

According to the local government, domestic regulators do not recognize cryptocurrencies as legal tender or as a tool for retail payments, and the Chinese banking system is not accepting any cryptocurrencies.

The Internal Revenue Service, in turn, believes that cryptocurrencies are not currencies, but properties, meaning that when cryptocurrencies are sold for a profit, a capital gains tax will be levied.

In late December 2018, two congressmen introduced a bipartisan bill titled "Token Taxonomy Act," aiming to prevent over-regulation in the domestic cryptocurrency space.

As per the Virtual Financial Asset Act, cryptocurrencies are officially referred to as virtual financial assets, possibly to avoid the stigma that might be attached to the word "Cryptocurrencies": For instance, ICOs have been named initial VFA offerings, while crypto exchanges have become VFA exchanges.