Last December, the global crypto market reached an estimated market capitalization of $2.21 trillion. But many countries are still wary of using cryptocurrency, and some have imposed strict regulations.
What can you do to comply with these local cryptocurrency laws, especially in these three markets: EU, Japan, and South Korea, where cryptocurrencies are starting to gain traction?
Today, we will be discussing how translation services assist everyday crypto traders and crypto-based companies worldwide. To learn more about this, keep on reading!
Translation Services Keeping the International Crypto Industry Informed
On October 31, 2008, Satoshi Nakamoto (a pseudonym for a programmer or group of programmers) created Bitcoin, the world’s first blockchain, and published a white paper document in English entitled, “Bitcoin: A Peer-to-Peer Electronic Cash System.” It proposed a decentralized approach to currency where transactions would no longer need a third party in between the transaction to keep track and record it as it would all be done through blockchain programs.
Since then, Nakamoto’s white paper has been translated into 39 languages, including Braille, which is. Much of the success of cryptocurrency is due to the internet and, in turn, the professional translation services sector making it easier for users and businesses to disseminate and obtain information. This includes the latest cryptocurrency news and trends, local laws and regulations, press releases of crypto-based companies, etc.
While researching more on the influence of translation in the development of the crypto industry, we came across one of Ofer Tirosh’s blog posts that sparked the discussion of whether or not translators should accept Bitcoin as payment for their services, just four years after Bitcoin’s launch.
As the CEO of Tomedes, Tirosh has managed various translation services projects for crypto-based businesses and private crypto traders worldwide over the years. He has even been featured in several crypto-related articles providing insights on the role of language in promoting and solidifying the crypto industry globally.
“From my experience, the role of translators is crucial as they ensure that all parties are informed about the legal aspects of the crypto industry in whatever market they’re operating under. Like with any emerging industry or niche, translators will be the ones to get the word out in the global market about cryptocurrencies’ latest developments and trends,” Tirosh explained.
For Tirosh, like any other industry under this age of globalization, the translation sector and the internet have made it possible for cryptocurrency to rapidly gain its momentum even in remote regions, despite being a new monetary system that has only been around for the past decade. With that comes the challenge of international governments figuring out how to regulate this new industry.
Local Laws Affecting Exchange Platforms
Over the years, governments and legislators have always had a hard time catching up with the rapid advancement in technology. Cryptocurrency is no exception. Bitcoin, Binance Coin, Ethereum, and other cryptocurrencies are banned in some countries while others are beginning to explore their potential.
However, just like with any technological advancement, cryptocurrency faces issues of crime organizations and syndicates using it to anonymously make transactions worldwide. Reuters reported that crimes involving cryptocurrency reached an all-time high, with an estimated worth of $14 billion. Because of this, it’s no wonder legislators are trying to implement strict protocols and regulations to circumvent white-collar crimes, such as money laundering and embezzlement.
Tirosh stated that many people see cryptocurrency as a form of investment. For some, like the citizens of Argentina, they see it as a “lifeline” as they face an economic crisis. Because of this, some governments may discourage its usage but still allow it due to fear of public backlash and possibly increasing the economic burden on their people.
Depending on the market, crypto-based companies and private crypto traders will have to abide by the local laws surrounding the use and trade of cryptocurrency. Any crypto-centric business looking to expand or private crypto traders telecommuting to a foreign country will need translation services to have all their documents in compliance with the market they will be operating under.
How Professional Translation Services Assist in Integrating Cryptomarkets Worldwide
As mentioned by Tirosh, professional translation services have a crucial role in promoting cryptocurrency to different markets, especially as some English words and phrases need to be translated to become relatable to its local users and have crypto-based companies in compliance with local laws.
To give you an idea of how diverse each market is regarding the regulation of the crypto industry, we listed below some international markets where crypto trading and cryptocurrencies are legal.
EU Market
According to Investopedia, cryptocurrency is legal throughout most European Union member states. The taxation process regarding cryptocurrency ranges from 0% to 50%, depending on the country where you will be operating.
Wanting to deter criminal activities related to crypto, the EU has implemented the Sixth Anti-Money Laundering Directives (5AMLD and 6AMLD). These policies have made KYC/CFT obligations stricter and have tightened standard reporting requirements.
In 2020, the European Commission enacted the Markets in Crypto-Assets Regulation (MiCA), increasing consumer protection, ensuring clear conduct from the crypto industry, and integrating new licensing requirements. Since then, translation services have been ensuring crypto-financial documents comply with the EU’s regulations and provide interpretation support to crypto businesses and crypto miners.
This is especially true with the EU trying to implement the Proof-of-Work (PoW) limit for cryptocurrencies like Bitcoin and Ethereum. These restrictions are due to the large amounts of energy being used in mining cryptocurrencies, making them not environmentally sustainable. It’s in line with the EU’s plans to achieve a 55% cut in carbon emissions by 2030.
Regardless of where you stand on this matter, you have to consider this if you plan to do crypto mining or trading in this region.
Japanese Market
Surprisingly, Japan’s approach toward regulating the crypto industry has been very progressive. Their market recognizes cryptocurrencies as a form of legal property under the Payment Services Act (PSA).
However, crypto users and companies must register under the Financial Services Agency (FSA) to comply with AML/CFT obligations. In Japan, the money generated from cryptocurrencies, like Binance Coin and Etherium, are taken as “miscellaneous income,” and the taxes will depend accordingly.
South Korean Market
Unlike the other markets on this list, South Korea only began to acknowledge cryptocurrency as a financial asset last year. The South Korean Financial Supervisory Service (FSS) is tasked with overseeing crypto exchange policies and regulations and strictly enforcing AML/CFT obligations to operators.
Any cryptocurrency exchange platform or virtual asset service provider under this industry must register under the Korea Financial Intelligence Unit (KFIU), a division of the Financial Services Commission (FSC).
The parliament has approved new tax policies on digital assets, which have taken effect this year. Anyone making an income of 2.5 million Won or $2,000 from cryptocurrency will be taxed by 20%. However, any gains from crypto below that threshold are tax-free.
3 Ways Translation Services are Needed for Compliance with Local Cryptocurrency Regulations
Now that we’ve explained the three markets that have made the transaction of cryptocurrency legal in their country, let’s discuss more on the ways you can be compliant with them through professional translation services.
1. Taxes
Based on the three international markets we examined, the taxes implemented on the gains one receives from cryptocurrency vary. Suppose you’re telecommuting in the countries that we mentioned and plan to continue trading, mining, or staking cryptocurrency. In that case, you will need the assistance of translation services to ensure that all your documents and financial reports comply with the market you’re currently in.
And even though some of the markets mentioned above won’t tax you until you reach a certain level of gains from crypto, it’s in your best interest to be aware of these policies and file the necessary documents to avoid any lawsuits.
2. Buying and Selling Cryptocurrencies
Not all cryptocurrencies are treated equally in some markets. Certain cryptocurrencies are more favored than others, like Binance Coin or Ethereum. Crypto trading platforms have made it easier for everyday users to access them.
Many of these exchanges needed professional translation services to ensure that their websites and apps were user-friendly for their target locale and also follow the local laws of the country where they were operating.
3. Registration
To go back to the main reason why international markets have been implementing regulations on cryptocurrencies is that it can be a possible avenue where syndicates and crime organizations can use it for transactions. Many countries have begun a campaign to penalize crypto companies that have failed to register.
For example, South Korea, in recent years, has been cracking down on illicit crypto companies committing fraudulent activities. Last year, they raided a crypto exchange for alleged fraud worth 1.5 Billion USD. For everyday crypto traders, as mentioned, if they reach a certain level of gains from cryptocurrency, they are required to pay the corresponding taxes, which also means registering it under their tax forms and applications.
Final Thoughts
Despite what the skeptics have to say about cryptocurrency, it can’t be denied that it has revolutionized finance, investment, and economic trading. However, due to its nature of being a decentralized form of currency, regulating it has been a major problem for many countries, with some outright banning it.
In every step of the crypto industry, translation services have played a vital role in promoting its industry, making crypto companies legally compliant, and ensuring that crypto traders are informed of their rights in their day-to-day transactions.
