The thing is, the Crypto Industry could have looked at the Stock Market Industry to get an idea of how cryptocurrency would be leveraged for the sake of taxes and honest reporting.
True, the new reporting requirements will strip cryptocurrency of privacy, which is defeating the purpose the currency was created, but the US Gov will not play ball if cryptocurrency doesn't;t fall in line.
So what do you do?
You do what others are suggesting. You move your transactions offshore.
However, if you are caught, and eventually, you will be because no bank, organization, or crypto finance company worldwide can operate effectively if they are placed on the IRS's blacklist. Almost all banks and financial institutions around the world have given in to the Department of Treasury's request for customer information on US citizens.
Biden's administration proposed new crypto tax reporting rules, which have been criticized by several prominent crypto commentators.
To prevent crypto users from avoiding taxes, the Internal Revenue Service (IRS) proposed new rules for brokers to follow when selling and trading digital assets. Brokers would use a new form 1099- to make tax filing easier.
Treasury officials indicated that the proposed rules would make digital asset reporting similar to reporting on other assets.
Here is the latest list of complaints over Biden's new crypto regulation.
Many are concerned about the proposed cryptocurrency tax regulations proposed by United States President Joe Biden. Digital currency brokers (individuals who facilitate buying and selling) would be required to report transactions to the government under these regulations, similar to existing monetary transaction practices.
Critics argue that these stringent measures may stifle innovation and progress in the US cryptocurrency community.
If Biden is reelected, Ryan Selkis, CEO of Messari, predicts unfavorable outcomes for the US cryptocurrency industry.
Additionally, Chris Perkins, an executive with a cryptocurrency investment company, disagrees. According to Perkins, the proposed regulations may hinder the influx of innovative concepts into the US market because several other countries outperform the US in this area. Cryptocurrency regulations should be clear and easy to understand so that new ideas can be utilized.
There is skepticism about whether the Democratic Party or the Republican Party will genuinely support cryptocurrencies and privacy concerns due to the government's ability to see transactions. Observers argue that anonymous cryptocurrency transactions might not be tenable due to the US government's goal of collecting taxes from all citizens.
In an earlier instance, Biden proposed taxing individuals who mine for cryptocurrencies and levying them 30% of their electricity expenses. Due to regulatory pressures, cryptocurrency practitioners are concerned that their businesses will relocate to more favorable jurisdictions as a result of this approach.
In his opinion, excessive legal intervention could inhibit the development of new innovative ideas, according to Michael Sonnenshein, CEO of Grayscale Investments. According to Brad Garlinghouse, CEO of Ripple, the US has a sluggish regulatory development compared to other countries such as the UK and Singapore.
Kristin Smith, CEO of the Blockchain Association, is concerned about confusing traditional and digital currency regulations. She calls for rules that reflect the distinct nature of cryptocurrencies.
As other nations design progressive cryptocurrency rules, the US is in danger of being left behind. People within the cryptocurrency space call for embracing regulations that reflect the particularities of cryptocurrencies, which would encourage business improvement and prevent organizations from leaving the country. Nevertheless, there are worries that Biden's rigid transaction reporting conditions could block new and creative crypto projects from coming to fruition.
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