The Czech Republic has take a heavy handed approach to regulations even while telling citizens not to worry about cryptocurrencies. The country has introduced a law restricting bitcoin, requiring virtual currency exchanges to determine the identity of customers.
Czech Republic is located in Europe (EU): The countries of the European Union hold a patchwork of individual attitudes towards cryptocurrency regulation, but all of them also fall under the jurisdiction of the EU Commission.
Cryptocurrency trading in Czech Republic
In an official press release issued by the Czech Central Bank (Czech National Bank), in October of 2017, the financial regulator said there was no need to be worried about Bitcoin and cryptocurrencies, beginning with “Prague is a Real House for a Cohesive Community of Cryptocurrencies”. In the published statement, the Czech Central Bank considered the most popular judgments about possible threats with which Bitcoin and the cryptocurrency market may collide. The National Bank of the Czech Republic states on the pages of the document that traditional banks do not have any reasons be afraid of Bitcoin.
That being said, last year, the Czech Republic Finance Ministry has introduced a law restricting bitcoin, requiring virtual currency exchanges to determine the identity of customers. Bitcoin users will no longer be able to “hide behind fake names or nicknames,” according to the law.
Endorsed by the House and now heads to the Senate. Cryptocurrency users have called the law a disaster.
The law only applies to financial service providers. Someone who accepts payments in virtual currency only but does not provide other services like virtual wallets are not obligated.
The government also plans to amend the value added tax (VAT) section making the purchaser of goods or services liable for VAT. Should a contractor fail to pay the VAT, the tax office could take action.
The tax office wants money changers and electronic wallet providers to be licensed and to register with state governments. In the future, merchants that accept bitcoin may need to register and require customers to provide proof of identity when paying with bitcoin.
In January the EU came out with new directives on cryptocurrencies, asserting that “gaps still exist in the oversight of the many financial means used by terrorists, from cash and trade in cultural artefacts to virtual currencies and anonymous pre-paid cards. This proposal seeks to address those gaps while avoiding unnecessary obstacles to the functioning of payments and financial markets for ordinary, law-abiding citizens and businesses, so balancing the need to increase security with the need to protect fundamental rights, including data protection, and economic freedoms.”
Mostly focused on ending anonymity among the crypto community, and preventing nefarious individuals from buying, funding, or selling orgs or resources. It does include the sharing of company and individual information with public entities at times, and affects exchanges and wallets.
Regulation of ICOs in Czech Republic
ICOs were previously not regulated, though they were subject to KYC and AML laws. The country will continue to grapple with the new EU regulations.
Cryptocurrency markets in Czech Republic
Prague has over 80 locations that accept payment with cryptocurrency.
IBC’s planning and strategy team can provide expert advice on ICOs in different jurisdictions. If you’re thinking of holding an ICO in COUNTRY and you’d like more information, contact us here.
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