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The Crypto Community Responds to Biden’s Suggested Tax Rules for Crypto

Phillip Bryant

ByPhillip Bryant

Aug 30, 2023

The new crypto tax reporting rules introduced by United States President Joe Biden have garnered criticism from numerous prominent commentators within the crypto community. 

On August 25th, the Internal Revenue Service (IRS) introduced a proposal outlining guidelines for brokers to adhere to to address the issue of tax evasion among cryptocurrency users. The proposed rules aim to regulate the sale and trading of digital assets. Brokers would employ a novel document to facilitate the tax filing process, thereby mitigating the likelihood of fraudulent activities associated with tax evasion.

According to the U.S. Department of the Treasury, the proposed rules aim to establish a framework for digital asset reporting that aligns with the reporting requirements applicable to other types of assets.

Nevertheless, it is widely held within the cryptocurrency community that implementing rigorous regulations will significantly distort the crypto industry in the United States.

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The response to the news was met with disapproval by Messari CEO Ryan Selkis, who expressed concerns regarding the potential impact of a Biden reelection on the crypto industry’s growth within the nation. 

If Biden stays in office, there will be no future for crypto in the U.S. I apologize. Move abroad, vote for Newsom and hope for the best, or vote GOP, where at least we know the top three candidates are less harmful to this problem. Politics has always been a part of crypto. Enjoy your time off.

Similarly, the perspective put forth by Chris Perkins, the esteemed president of CoinFund, a prominent crypto venture firm, posits that various nations have made significant strides ahead of the United States. Consequently, implementing these regulations is expected to inevitably lead to a decline in the influx of innovative endeavors into the country.

Instead of employing stringent measures, the individual posits that implementing comprehensive and precise regulations is imperative to facilitate secure advancements within the cryptocurrency sector.

To be clear, other places have taken the lead, and the U.S. has, unfortunately, dropped behind. We need intelligent, forward-looking policies that support and open responsible innovation across all crypto verticals. One way or another, things will become clear. 

In contrast, there exists a segment of individuals who harbor reservations regarding the ability of both the Democratic and Republican parties to effectively advocate for the interests of cryptocurrency within the United States.

There exists a need for more confidence regarding the potential suitability of either political party in effectively addressing the needs and concerns of the cryptocurrency industry. One user expressed that the current state of affairs is more unfavorable than the previous presidential term. Another user highlighted that the newly implemented regulations give rise to apprehensions regarding privacy.

The commitment of the United States to income tax necessitates an inherent inability to embrace private transactions conducted on public ledgers without the oversight of taxation and regulatory measures.

On August 25th, Cointelegraph published an article stating that Kristin Smith, the Chief Executive Officer of the Blockchain Association, expressed concerns regarding the integration of digital asset reporting with traditional assets.

“It is crucial to remember that the cryptocurrency ecosystem exhibits significant distinctions from conventional assets. Consequently, the regulatory framework must be meticulously customized to ensure that it does not encompass participants within the ecosystem who lack a viable means of adhering to compliance measures,” Smith asserted.

The statement above aligns with President Biden’s proposal to implement taxation measures on cryptocurrency mining activities to reduce the scale of such operations. 

The budget proposal, dated March 9th, outlines the implementation of an excise tax equivalent to 30 percent of the expenses incurred from electricity consumption in the context of digital asset mining.

The cryptocurrency industry in the United States has consistently expressed apprehensions regarding regulatory decisions that have the potential to impact innovation within the country. 

On August 13th, the Chief Executive Officer of Grayscale Investments, Michael Sonnenshein, expressed concern regarding the Securities and Exchange Commission’s frequent reliance on enforcement measures, suggesting that such a pattern may result in the relocation of cryptocurrency enterprises away from the nation.

According to Sonnenshein, if each cryptocurrency matter necessitates legal intervention, it would impede the ongoing innovation within our nation.

In a similar context, Brad Garlinghouse, the Chief Executive Officer of Ripple, has recently expressed that the cryptocurrency industry is transitioning away from the United States. This shift is attributed to the comparatively sluggish pace of crypto regulation within the country, in contrast to the more expeditious processes observed in nations such as Australia, the United Kingdom, and Singapore.

Phillip Bryant

Phillip Bryant

Phillip Bryant, an esteemed writer in the financial field, imparts his extensive knowledge of currency markets to the readers of Main Crypto News. With a wealth of experience in international finance and a keen sense of market trends, Bryant offers timely and perceptive analysis of foreign exchange, keeping readers well-informed.

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