Cryptocurrency Regulation in the US and UK Compared with Saudi Arabia

Abstract

Despite the unique characteristics and features of Cryptocurrency, it caused a lot of chaos and regulatory uncertainty and increased the rate of money laundering and fraud. Therefore, this research came to study the regulatory status of cryptocurrencies in both the United States and United Kingdom with regard to Anti Money Laundering, Taxation, and Initial Coin Offerings and compare it with the regulatory situation in Saudi Arabia and investigating the feasibility of benefiting from both the US and UK approaches in regulating cryptocurrencies. The comparation was conducted with the study of cryptocurrencies in Saudi Arabia from the perspective of sharia since the Basic Law of Governance confirms that sharia is the rule over all state laws. This dissertation concluded that it is not possible to consider cryptocurrency as a currency in Saudi Arabia based on the lack of government recognition and based on the non-applicability of the characteristics of currency in sharia to it. Besides, it cannot be considered a commodity because it lacks the intrinsic value as required by sharia. Therefore, this research suggests that the Saudi's regulators should take the initiative either to prevent or quickly regulate cryptocurrencies. This research argues that there is no effective regulation that matches the unique characteristics of cryptocurrency in relation to an ICO. Moreover, it is recommending that Saudi's authorities can benefit from adopting a hybrid regulation between both the UK and US’s approaches regarding AML and the adoption of the UK's taxation regulations