In past when the govt was not accepting crypto as a tradeable asset, in that time a lot of exchanges opened as a means to convert the crypto into the fiat. And that trend continued till the point govt started taking crypto and blockchain seriously. And this has made them push the crypto into regulation side.
Now that the regulations are coming a lot of companies which used the crypto and fiat transfer between the web to real life are now feeling the heat of the law. And so they are being asked by govt to pay up on the license and the taxes. Which many companies avoided using excuses of the crypto.
Bybit, Binance, HTX and many others have faced the same. In fact in india they were shut down to work because of same reasons. All the exchanges are supposed to pay local taxes where they operate. Which exchanges deny to do so.
Then comes bans and restrictions, same like the Hongkong SFC, India's crypto exchange license demand has been going on. So let's take a look at how the Bybit flagging has been going on with the hongkong.
Why ByBit was Flagged by SFC?
Bybit has no license in the Hongkong. And like I explained the regulations in the world are working in such way that each nation has to ask for the license locally before they can do the business. You cant just create business in america and expect other poeple to pay for the local taxes. Now each nation is asking for the local licenses. That's why even india banned binance to ask for the permit.
Hongkong has listed variety of the services and the products which need to be listed on the license and approval side. If they fail to do so they would be banning the company from being accessed in the nation. And that means Bybit has to comply. Though there is not much reply from the bybit on this as they must be adjusting with the local laws. You can read about the official warning post here.
What does govt expect Centralized Exchanges to do?
Govt around the world are creating CBDCs and the blockchains of their own. And so they want to make sure that everything goes as per their compliance. Only decentralized coins they would be tolerating is the bitcoin and etheruem. And rest they are going to be pretty harsh and force the exchanges to take down. This is one of the reasons even monero is delisted in most of the exchanges.
Which also means that for every crypto exchange to work in any nation, they need to come up with a license. And that license is going to decide how the exchange should be working with which instruments and the services within the country. Hongkong has started delisting and flagging the exchanges like this.
India too have done the same. They are asking the exchanges to share the transaction data with the local banks and then they would be using that to tax both sides. And this would be reasonable regulation. Because let's face it if we use the crypto to transact they can't do anything but if we use the local currency then surely we have to pay taxes, it's their regulation their rules.
Which also means that we have a lot to catch up on the exchanges regulation part. Binance has done a lot of damage for others by not abiding to the local rules and the issues. So in short that means we have a lot of regulation coming up in the blockchain space which includes the space where the real estate and the custody of the digital asset is also in the question too.
Hongkong's SFC flagging the Bybit is a sign that regulations are here and they are being questioned the right way. So hopefully we are going to be seeing legal and reasonable changes for the consumer side of crypto.
Posted Using InLeo Alpha