Legal The European Union has passed no specific legislation relative to the status of the bitcoin as a currency, but has stated that VAT/GST is not applicable to the conversion between traditional (fiat) currency and bitcoin.VAT/GST and other taxes (such as income tax) still apply to transactions made using bitcoins for goods and services.[1]:European Union In October 2015, the Court of Justice of the European Union ruled that "The exchange of traditional currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT" and that "Member States must exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’", making bitcoin a currency as opposed to being a commodity.[2][3]According to judges, the tax shouldn’t be charged because bitcoins should be treated as a means of payment.[4]According to the European Central Bank, traditional financial sector regulation is not applicable to bitcoin because it does not involve traditional financial actors.[5]:5

Others in the EU have stated, however, that existing rules can be extended to include bitcoin and bitcoin companies.[6]The European Central Bank classifies bitcoin as a convertible decentralized virtual currency.[5]:6In July 2014 the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place.[7]In 2016 the European Parliament's proposal to set up a taskforce to monitor virtual currencies to combat money laundering and terrorism, passed by 542 votes to 51, with 11 abstentions, has been sent to the European Commission for consideration.[8]The European Commission also notably presented a "parallel" proposal aimed at preventing tax evasion techniques as revealed in the Panama Papers.[9]In 2017 it was revealed that the proposal will require cryptocurrency exchanges and wallets to identify suspicious activity.[10]BitNZ, a New Zealand bitcoin exchange, has announced it is closing due to the refusal of New Zealand banks to allow bank accounts to trade bitcoins, and has advised customers to withdraw all funds before April 15, 2017, the company announced on its website.

BitNZ also announced its decision on Reddit, noting that it is impossible to continue operations.BitNZ thanked customers for their support and noted it has processed over 11,000 bank transactions since 2011.BitNZ said the banks’ position is anti-competitive, raising the question of whether there is a fairness regulator in New Zealand.One poster noted that they stopped using BitNZ due to the banks’ refusal to trade bitcoins, but that BitNZ had always provided great service.The poster said they probably paid thousands of dollars in bank fees as a result of the trading they did on BitNZ.Another Reddit poster asked if BitNZ attempted to comply with KYC (know your customer) and AML (anti-money laundering) rules.A response to this post noted BitNZ did attempt to comply, but it was too much work since it was just one person.The response noted that there is no service in New Zealand for identification and KYC compliance.Another Reddit post noted the New Zealand banks’ action is not the only sign of the anti-competitiveness of both New Zealand and Australian banks, citing efforts to prevent Apple Pay from competing in those markets.

Apple has criticized Australia’s banking industry for trying to delay or prevent the use of Apple Pay, according to stuff.co.nz, a New Zealand news site.The Australian banks include National Australia Bank, which owns Bank of New Zealand.bitcoin atm latviaThe Australian Competition and Consumer Commission (ACCC) said in October it would scrutinize Australia’s “Big Four” banks for attempts o swallow fintech companies developing technologies like blockchain solutions.litecoin pool registerMeanwhile, Apple is battling Australia’s “Big Four” banks, which include Australia and New Zealand Banking Group, over access to its Apple Pay platform.dogecoin value developmentThe ACCC is deliberating over a collective proposal by the banks demanding Apple allow access to its mobile payment platform.foxconn bitcoin

Also read: New Zealand authority posts warning about crypto exchange IGOT In 2015, Queensland Senator Matthey Canavan urged the ACCC to investigate the possibility of banks engaging in anti-competitive behavior after closing and denying banking services to bitcoin operators, without any formal explanation.bitcoin piattaformaThe action resulted in the ACCC investigating those banks.bitcoin hsbc hong kongSeveral months later, the banks were cleared of colluding against the closure of at least 17 bitcoin companies’ bank accounts.chơi game kiếm bitcoinBitNZ also operates bitcoin ATMs, according to its website.ethereum amd vegaOne Reddit post said the “overflow” from BitNZ closure will hopefully make the banks become more cooperative with regards to bitcoin.ethereum miner debian

New Zealand-based bitcoin ATM operator Bitcoin Central says it has been forced to shut its doors, the result of local banks' refusal to provide financial services.While bitcoin businesses around the world are going to great lengths to comply with new or potential digital currency regulation, they are also discovering another layer of difficulty: getting banks to supply the account services vital to the existence of any mainstream business.The heading on Bitcoin Central's homepage now reads: "We are now closed.Please read below for the why."Unfortunately, despite complying with all the legal requirements we have been unable to secure banking facilities.Without these the Bitcoin ATM business cannot operate long term.The negativity from the banking sector to Bitcoin also threatens the ATM owner's other businesses.For me it is prudent to shut the ATM down.If you have any interest in purchasing a second-hand bitcoin ATM with compliance documents.Please get in touch."Bitcoin Central had only launched its Robocoin machine at Auckland's Ironbar Cafe on 3rd June, calling it "NZ's first true Bitcoin ATM" thanks to the machine's two-way exchange facility.

At the time, the company claimed "it does everything we need to make sure that we comply with NZ laws on its use".The Robocoin machine had all its know-your-customer (KYC) and anti-money laundering (AML) functions enabled.Although all Robocoin products have the ability to scan palms and check ID documents, they are not required to be functional in some jurisdictions.CoinDesk spoke to Jonathan Ewing, Director of NZ digital currency multi-service business Bitto, which operates a pair of Lamassu vending machines it launched in April.Bitto moves the machines around to various conferences, events, corporate gatherings and social environments.Bitto has had its own struggles with bank account closures.Ewing said: "Only last week, two months after account closure, I received a personal apology from the CEO of Co-Operative Bank NZ on business disruption and their need to comply with 'procedures' otherwise their banking license would be in jeopardy.We have taken oral expert advice from [law firm] Buddle Findlay indicating our requirements around AML & KYC, and this has led to the unintended outcome by the bank, specific to global AML legislation."

Ewing said as a result of this, Bitto is refocusing its efforts away from the vending machines and onto bitcoin applications, Ethereum-based smart contracts, Distributed Autonomous Organizations (DOAs) and mining upgrades.It's not all bad news, though, he added, there is still a large degree of professional interest across related industries."On the flip side we have had approaches from finance experts, brokers and lawyers seeking professional advice on how to technically up-skill and acquire bitcoin knowledge.We are empowered by our colleagues' enthusiasm for significant system wide change and open, transparent decentralisation."His company remained "invigorated and empowered" to explore how bitcoin could improve even more services, like employee pay, local tax, suppliers' invoices and debit cards.Bitto remained ready to look offshore for financial services if necessary."No doubt about it, the banksters are threatened and making business life difficult for young and innovative companies, to the detriment of advancing entirely new financial systems and rampant opportunity," Ewing said.

An unnamed banker in neighboring Australia recently revealed details on why banks often refuse bitcoin-related businesses, even those that merely accept or use bitcoin for services unrelated to finance.The banker blamed international counter-terrorism-financing (CTF) agreements as the primary reason for banks' reluctance, especially those with partnerships or subsidiaries operating in the US.Not only must banks perform expensive due diligence on every business customer, bitcoin's lack of legal status as money means government regulators are unable to assist in investigations.Many banks prefer simply to throw up their hands and walk away from digital currencies altogether, with some said to have written policies that specify such action.CoinDesk contacted Bitcoin Central for comment, but had not received a response at press time.Auckland image via NZGMW / Shutterstock The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.