Our Approach to Compliance

Here at eWallet we take Compliance very seriously. We intend to always be ahead of regulation and to monitor it’s evolution in the Crypto space.

In the UK current Anti Money Laundering (AML), Know Your Customer (KYC) and Counter Terrorist Financing (CTF) regulations do not extend to cryptocurrencies, however, this is likely to be implemented in the near future, as outlined here:

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-10-27/110111

We believe that even though we are currently not required to follow legislation at this time it is in everyone’s best interest that we preemptively enforce relevant areas of AML, KYC and CTF regulations.

To this end we have limited our business to UK customers and require all registered users to have a verified ID, in the event of large purchases we may also ask for the customer to confirm the source of their funds.

We do not believe that this is where our responsibility ends and our view is that this is not just a tick box exercise, as such we will continue to monitor customers accounts and perform regular checks, especially when large changes are made to a customer’s account or large transactions are recorded.

Protecting Customers Money

Currently cryptocurrencies do not fall under regulation that covers the protecting of a customers funds, however, we are of the opinion that cryptocurrencies are a currency in the same way that any other is and believe that our duty to protect your funds is the same no matter what we hold.

Whilst this is aimed at gambling companies we believe that a similar level of legislation applies to us:

http://www.gamblingcommission.gov.uk/for-gambling-businesses/Compliance/General-compliance/What-you-need-to-tell-us/Protecting-customer-funds.aspx

To this end all customer funds are held entirely separate from our business funds and in the event of insolvency these would be protected and available to transfer.  Whilst we do not have an official overseeing body we believe that our customers have a right to be informed of where their funds are held and as such any major changes in the way we hold customers funds will be reported to all registered users.

Taxation Legislation

Under current legislation any gains made on cryptocurrencies will be realised as a capital gain when the currency is sold or traded and as such the individual may be required to pay Capital Gains Tax (CGT) on this gain.  We would strongly encourage people to research their tax implications and seek advice from an accountant if they are unsure as to whether or not they have a tax liability.

For the majority of users you will not need to report a gain at all unless the gain is over your Capital Gains Tax Allowance of £11,700 for 2018. If you already complete a self assessment and the total asset value is over 4 times the CGT allowance you are required to report this even if the gain is below the CGT allowance.

For some more information on your responsibilities as an individual please visit: https://www.gov.uk/capital-gains-tax/work-out-need-to-pay.

At this stage there is no legal obligation for exchanges like ours to disclose user information to taxation authorities, however, we believe that this legislation is inbound (currently this applies to banks and other financial institutions) and as such we would encourage users to make sure that they are up to date with their tax liabilities.

Value Added Tax (VAT)

Currently cryptocurrencies are VAT exempt in the UK and as such we are not required to be VAT registered. If at some point this changes we’ll have a full record of all past transactions and we’ll be readily positioned to meet our VAT obligations, however, we believe that it is unlikely that cryptocurrencies will become subject to VAT.

What legislation are you required to follow?

Under current UK rules there is no specific legislation that our exchange is required to follow.

What legislation do you believe is relevant to you?

We believe that legislation determining how we store money and how we verify our customers are who we are is relevant to our business whether or not we are compelled to follow it and as such we have decided to implement a number of Know your Customer (KYC) and Anti Money Laundering (AML) measures as well as further measures in order to ensure customer funds remain both secure and accessible to customers whilst also being separate to our own funds to protect our customers in the event of any issues with our business.

What about taxation?

Banks and other financial institutes currently are compelled to comply with taxation authorities, at this stage this would not apply to us.

Cryptocurrency trading is currently VAT exempt and we believe that this will remain the case in future.

How do you see legislation changing?

We expect that existing AML, Counter Terrorist Funding (CTF) and KYC measures will be extended to over cryptocurrencies.  Additionally we believe that the regulations that a business must follow when holding a customer’s Fiat currency will also be extended to cover cryptocurrencies.

We also believe that it is likely that in future we will be compelled to work with taxation authorities to ensure that our customers are reporting relevant details. If this does become the case we will make sure that all our members are informed.