UK crypto exchanges set to pay 2% tax

Karthik Subramanian

UK-based crypto exchanges would now need to pay a new 2% digital service tax as per some of the latest laws as the crypto regulations and classification in the UK continue to pose problems to regulators and users alike.

London-UK

This is not just an isolated problem but authorities all around the world are now grappling on what needs to be done with crypto and how to deal with it. For many years, the authorities had chosen to ignore the crypto industry as they felt that it was just a new fad that would vanish after a couple of years but the industry has managed to stand the test of time and over the last year or so, it has only grown stronger.

Crypto Industry Growth

This has pushed the regulators to sit up and take notice and in many cases, they have been scrambling to take action before things get out of their hands. In some cases like that of Binance, they have also been forced to take some retrospective action which has not only affected the respective platforms but also the thousands of users on it as well.

As far as the UK is concerned, the way that the regulators have gone after Binance makes it clear that they do not view the crypto industry very kindly at this time and this is further proved by the fact that the crypto exchanges based out of the UK will now have to pay a 2% digital services tax as they are not yet recognised as entities that offer financial services. This tax would not apply if they had indeed been classified as financial firms but the lack of this application would mean that the exchanges would have to pay this tax. This is viewed as a retrograde step by many of the crypto enthusiasts and insiders and they have been urging the government to quickly decide on what they plan to do with the crypto industry as the uncertainty is only harming the industry and its usrets as well.

Uncertainty adds to Pressure

This uncertainty only seeks to add more pressure on the regulators themselves as their actions would be closely monitored and scrutinised by the users and the crypto business owners. It is clear that regulation for the crypto industry is coming in the UK and the sooner that the users know the shape and form that it is likely to take, the easier it would be for all.

 

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