The U.S. Treasury has announced that they will begin to crackdown on cryptocurrency and transactions.
According to the Treasury’s latest proposal any transfer over 10,000 mustbe reported to the IRS.
They went on to say “As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on”.
The crackdown stems from the Biden Administration’s efforts to crack down on tax evasion and other illegal activities cryptocurrency is used for.
While some welcome the move from the Biden administration and believe it legitimizes cryptocurrency, others believe this is just the United States government getting their hands in on the pie.
The U.S. Treasury said the Biden administration’s proposal to strengthen tax compliance includes a requirement for transfers of at least $10,000 of cryptocurrency to be reported to the IRS. https://t.co/VDKG9WPQaY
— Bloomberg Tax (@tax) May 20, 2021
U.S. Treasury calls for stricter cryptocurrency compliance with IRS, says they pose tax-evasion risk https://t.co/l5cUUxisPR
— CNBC Now (@CNBCnow) May 20, 2021
CNBC covered the story, check out what they reported:
The Treasury Department on Thursday announced that it is taking steps to crack down on cryptocurrency markets and transactions, and said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service.
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury Department said in a release.
“This is why the President’s proposal includes additional resources for the IRS to address the growth of cryptoassets,” the department added. “Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on.”
Bitcoin reversed course shortly after the Treasury’s announcement and was last seen trading up 1.6%, according to Coin Metrics. Previously in the session, it was up more than 9%.
A growing number of Wall Street analysts have over the past month sounded the alarm that regulators at the Treasury and the Securities and Exchange Commission could soon take a more active role in cryptocurrency regulation.
Don’t expect any regulations to be placed anytime soon.
As of right now the U.S Treasury has just made a proposal any real changes would have to see it’s way through Congress first.
What the headlines don’t say is this would require congress to act and it wouldn’t even be implemented until 2023. It wouldn’t be all crypto transactions, just ones to businesses (not P2P). #Readbetweenthelines https://t.co/zpq5XxMbHS
— Alex Allaire (@AlexAllaire2) May 20, 2021
Bloomberg got the scoop too:
The U.S. Treasury said the Biden administration’s proposal to strengthen tax compliance includes a requirement for transfers of at least $10,000 of cryptocurrency to be reported to the Internal Revenue Service.
“As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on,” the Treasury Department said in a report on tax-enforcement proposals released Thursday.
The Treasury said that comprehensive reporting is necessary “to minimize the incentives and opportunity to shift income out of the new information reporting regime.” It noted that cryptocurrency is a small share of current business transactions.
Bitcoin pared a daily advance after the IRS announcement, which shaved about $3,000 from the token’s price. It was up 5.7%, at $40,530 as of 4:23 p.m. in New York. Cryptocurrency-linked stocks like Coinbase and MicroStrategy also gave up some of their gains immediately after the news, which had also prompted an outcry from some digital-coin enthusiasts on Twitter.
— Stoyan Zhekov (@zh) May 21, 2021
As one of the very few companies that issued 1099s to our US users, not too many people in crypto liked the decision.
However, we were forward-looking and knew if this space were to be legitimized, tax laws would have to be followed properly. https://t.co/86waHghaDc
— Simon Yu (@SimonYuSEA) May 20, 2021
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