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UK Through Digital Services Law Subjects Crypto Exchanges To 2% Tax

The UK Her Majesty’s Revenue and Customs (HMRC), which is a non-ministerial department that handles tax collection. Recently, it reveals that crypto exchanges will be under a new tech tax. Also, The Telegraph reports on Nov 28 that crypto platforms are now subject to a 2% digital services tax.

Furthermore, The UK HMRC also confirms that crypto assets are not financial instruments. More so, this makes them not able to claim an exemption for being a financial marketplace.

Additionally, The UK HMRC notes that cryptocurrencies do not represent commodities, financial contracts or money. Then, it is unlikely that crypto-asset exchanges can enjoy the exemption for online financial marketplaces.

Already, some pro-cryptocurrency groups within the country are calling for changes. Also, The CryptoUK group affirms that treating cryptocurrencies differently from other assets is just unfair.

However, it’s unlikely that UK regulators will have a change of mind about the issue. Of course, this is because the country seems intent on regulating the market. Furthermore, The Financial Conduct Authority (FCA) is taking steps to educate investors and warn market players against any violations.

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Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.