The recent crypto tax reporting regulations proposed by United States President Joe Biden have been met with criticism from several prominent figures within the cryptocurrency community.
Just recently, the Internal Revenue Service (IRS) revealed new rules aimed at restricting tax evasion within cryptocurrency. The regulations set in place require brokers to adhere to new guidelines when selling or trading digital assets. With a new form for tax filing, the goal is to streamline reporting and prevent fraudulent activities related to taxes.
The United States Department of the Treasury has emphasised that the proposed regulations are designed to align digital asset reporting with the reporting practices for other types of assets. Despite this aim, many within the crypto industry are concerned that such strict measures could potentially drive the industry further away from the United States.
There’s no future for crypto in the US if Biden is reelected. I’m sorry.
Move abroad, draft Newsom and hope for the best, or vote GOP where at least we know the top three candidates are less terrible on this issue.
Crypto has always been political. 🔫🧑🚀
Have a nice weekend.
— Ryan Selkis 🪳 (@twobitidiot) August 25, 2023
There are also doubts about whether either political party in the United States truly supports crypto interests. Some users voiced scepticism that neither the Democrats nor the Republicans would effectively listen to and act on the crypto industry’s concerns.
Privacy concerns have also been highlighted, with individuals in the space noting that the new rules could compromise personal privacy due to increased surveillance related to taxation. This goes against the digital market’s core, with decentralisation and anti-tracking being a major component in the design of most leading cryptocurrencies.
This development follows Biden’s suggestion to impose taxes on crypto mining in a bid to reduce its environmental footprint. A budget proposal dated March 9th outlined a plan to implement an “excise tax equal to 30% of the costs of electricity used in digital asset mining.”
Throughout the crypto industry in the United States, there have been ongoing concerns that regulatory decisions might hinder innovation in the country. Figures like Michael Sonnenshein, CEO of Grayscale Investments, and Brad Garlinghouse, CEO of Ripple, have raised alarms about excessive regulatory actions hindering the growth of the sector and prompting the industry to shift its focus away from the United States. They’ve called for a balanced approach that allows innovation to flourish while maintaining necessary regulatory oversight.