While some political and corporate leaders have been eager to invest in and adopt cryptocurrencies, others are entirely hostile. Turkish President Tayyip Erdogan recently declared outright war on the Bitcoin network. President Erdoğan: "We Are At War" President Erdoğan expressed his opposition to Bitcoin in a meeting with Turkish students this Saturday. The event comes after one of them asked if the country's central bank would adopt cryptocurrencies. Erdogan responded with total rejection: "We have absolutely no intention of embracing cryptocurrencies. On the…
The Treasury Department has made it official that any cryptocurrency transfer worth $10,000 or more will be reported to the Internal Revenue Service.
The step marks the first of many in the crackdown on cryptocurrency markets and transactions. The Treasury Department said that cryptocurrency already presents a significant detection issue by enabling criminal activity in broadest measure, including tax evasion.
U.S. Treasury’s Crypto Clampdown
Bitcoin has always struggled to marginalize official bodies. Janet Yellen, known for her crypto skepticism, and many others have continually discussed the role of Bitcoin as a medium for illegal activity.
To “minimize the incentives and ability to switch revenue from the new reporting regime, the treasury said that comprehensive reporting is expected. It acknowledged that cryptocurrency represents a small proportion of current transactions.
The Treasury statement added that, like cash transactions, companies receiving crypto assets would also be reported on with a fair market value of over $10,000.
It further observed, to give crypto holders preparation time, the ruling will take effect from 2023.
Wall Street analysts have been alarmed over the last months at the potential to be more involved in regulating cryptocurrencies by regulators of the Treasury and the Securities and Exchange Commission.
For the second consecutive day, Bitcoin fell by 5%, falling below $40,000. The asset plunged into the giant bloodbath of the crypto since March 2020 this week. The news caught Ethereum, Binance Coin, and Dogecoin trading down.
Tax Evasion Crackdown
As part of a more prominent announcement, the Treasury Department released efforts to tackle tax avoidance by the Biden administration and encourage more vigorous enforcement. Proposals include enhanced IRS funding and technologies and stricter sanctions for those who evade their obligations.
According to the Treasury’s figures, it estimated the disparity between the U.S. government owed taxes and paid taxes in 2019 at almost $600billion.
Increased regulation would probably upset some investors in cryptos who have seen Bitcoin’s value slide around 25% over the last month and talk of capitulation creeping in online forums.
Although participation by the Treasury and the SEC may potentially prove a boon for investors in cryptocurrency, any regulatory obstacles in the foreseeable future are likely to become another boon for investors in Bitcoin, Doge, etc.
Miller Tabak reiterated these opinions last month when the company told customers that the cryptocurrency markets do not consider legal risks.
Democrats and Republicans made cryptocurrency regulation an essential priority in 2021. Concerns on market manipulation and uninformed retail investment also came up due to the price ups and downs in bitcoin and other digital assets last year.