How to Safeguard the Taxation of Crypto Trading and Comply with AML Policy

Nowadays, it is very important for traders to play according to the rules imposed by crypto market regulators. Given the taxation of digital currency revenue and strict anti-money laundering (AML) policy, one needs to do everything possible in order to safeguard their funds.

Taxation

There is no universal taxation approach to virtual coins, as each country establishes own rules. For example, in Switzerland, amateur investors are not taxed at all, while in Australia, cryptocurrency used to be subject to double-taxation due to the fact that, as property, it was subject to both VAT at the point of purchase, and capital gains tax at the point of sale. In Norway and Bulgaria, a crypto coin is recognized as a financial asset and the revenue from exchange or sale operations on cryptocurrency exchanges is subject to a 25% tax in Norway and 10% in Bulgaria.

Nevertheless, it doesn’t matter in which country you’re trading bitcoin and altcoins, in order to avoid problems in any jurisdiction you need to follow a couple of simple rules. First of all, keep track of all details concerning your financial technology transactions, namely the cost of a trade coin when you have bought it, the duration of your possession of it, and the revenue from it. Moreover, don’t even try to conceal your crypto transactions, if you don’t want to be fined.

The best way to avoid taxation of cryptocurrency exchange operations is to use the exchanges that allow to conduct cryptocurrency trading and convert it to fiat money without user identification within the limit of several thousand dollars per day.

AML Policy

With a development of blockchain technology and virtual coins, the world’s financial market has got a brand-new way to deal with data and payment processing. However, it has also given criminals an opportunity to launder money. Thus, regulators obliged every business to comply with anti-money laundering policy.

Some key points of AML regulations include a system of internal controls that monitors high-risk operations and suspicious activity to fill out necessary reports. It is also of great importance to carry out independent testing of your compliance procedures. Each fintech business should have a compliance officer who has a thorough knowledge of the field. And finally, regulators always appreciate different training lectures held for staff on the subject of AML.