PUBLIC TO EXERCISE HIGH CAUTION WITH CRYPTOCURRENCIES
1. Autoriti Monetari Brunei Darussalam (AMBD) is highly concerned with the proliferation of cryptocurrencies globally. AMBD would like to remind the public that cryptocurrencies are not legal tender in Brunei Darussalam and are not regulated by AMBD. Members of the public are reminded to be vigilant and to exercise extreme caution when dealing with cryptocurrencies that are privately issued.
2. Cryptocurrency, such as Bitcoin, Bitcoin Cash and Ether, is a form of digital currency which operates independently from monetary authorities or central banks. Cryptocurrency transactions are anonymous and are often traded on platforms of unknown jurisdictions in which the authenticity of its operators are difficult to verify.
3. Cryptocurrency is also susceptible to being misused as intermediary for illegal activities. It is also highly susceptible to cybersecurity risks as evidenced by several high profile thefts involving the hacking of organisations in the cryptocurrency network. Criminals have also defrauded consumers by posing as well-known cryptocurrency websites and services.
4. The recent rapid escalation in the value of certain cryptocurrencies, including Bitcoin, is driven by high speculation and there is no clear sense of the fundamental value of these cryptocurrencies. The risk of losing its value is high and without any regulatory safeguards, members of the public are not protected under the laws administered by AMBD. The international communities remain vigilant and AMBD will continue to closely monitor the development of issues surrounding them.
5. AMBD would like to remind the public to be careful when participating in any investment plans or financial transactions. The public is advised not to be easily enticed by any investment or financial activity advertisements, and to conduct due diligence and understand the financial products properly before participating. [1]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance. Contact us now to schedule a consultation, or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.
[1] Press Release, Autoriti Monetari Brunei Darussalam, Public to Exercise High Caution with Cryptocurrencies (Dec. 22, 2017).
