Cryptocurrency in NZ: the devil is in the detail
*Watch the full story in the video above*
New Zealand’s financial market regulators and tax inspectors have so far taken a softly-softly approach to regulating the likes of bitcoin, ethereum and initial coin offerings (ICOs). They’re staying away from the bleeding edge of the blockchain phenomenon and are instead learning from other regulators over the horizon and listening to local players before moving too hard.
Newsroom Business Editor Nikki Mandow talks in this video with Bell Gully’s crypto-currency experts about how a variety of currencies and tokens are being regulated (or not) by the Financial Markets Authority (FMA) and the Inland Revenue Department (IRD).
Bell Gully Senior Associate Campbell Pentney explains how IRD treats bitcoin as if it was property being traded for profit and loss, and why an Australian-style move towards excluding bitcoin in the GST regime is likely. He details the quirks for those accepting cryptocurrency as a means of payment, and for those offering a token for a service or as a share. The devil is in the detail.
Bell Gully Partner Toby Sharpe talks about how the FMA is dealing with ICOs, particularly those where a token for equity in a new firm is being offered. He advises anyone planning such an offering to talk to the FMA first.
Sharpe and Pentney see an exciting and fast-changing landscape where regulators and the IRD are adapting as they go to a world spinning towards blockchain-led transactions and offerings. One day the landscape will settle, but for now, they argue it pays to stay alert to the opportunities and the risks, along with how regulators are reshaping that landscape.
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