Billionaire CEOs, viral #DontKillCrypto social media campaigns, possible tax reporting regulations for crypto, and more.
The $1Trillion Bipartisan Infrastructure Bill of the U.S. was stalled in part as the opposition raised concerns over the crypto industry’s impact on the U.S. economy.
As “Crypto Red Alert “ and #DontKillCrypto campaigns were going viral on social media, TESLA CEO Elon Musk and Coinbase CEO Brian Armstrong briefly shared their views on the new bill and its potential impact on the crypto industry.
The following is a brief exchange on the micro-blogging platform.
The last-minute modifications suggested by the opposition opened the conversation on whether the federal authorities should regulate the booming industry with such a stern approach and if the new rules would hinder the growth of an industry that is gaining popularity worldwide.
Many narratives across social media and opinion blogs suggest that cryptocurrency to the current decade is what the “internet” was for the past decades, further enunciating its importance and influence.
The amendments also focused on certain technologies, which would be prioritized over the others, factoring in risk and security breaches. This sparked a debate in the Senate, stalling the long-awaited federal infrastructure bill from the Biden Administration. However, the negotiations will continue to take place.
How Would The Infrastructure Bill Impact Crypto?
The bill, if passed by the Senate, would require crypto brokers, crypto companies, and other decentralized crypto entities to comply with the tax reporting regulations of the IRS. Further, the bill will also accelerate the user identification procedures, allowing the federal authorities to monitor the transactions and the miners.
Currently, cryptocurrencies are treated as capital assets by the IRS. Any gains made on these assets have to be reported on Form 1099-K, 1099-B, and other business tax forms as appropriate.
With negligible measures taken by the tech stack companies, crypto traders and enthusiasts are at risk. Further, the inherent security layers of the crypto exchange keep the traders anonymous, not allowing the federal authorities to monitor the traders and the funds transferred. This brings in the heightened risks of money laundering and terrorism funding.
While several aspects of the debate are still in progress, tech CEOs like Elon Musk, Jack Dorsey, Brian Armstrong, and more quickly sided with the crypto industry.
Political Influence Of Crypto
Washington Post reports that the viral campaigns and criticism of the bill are the results of a highly influential industry that is attracting billions of dollars in investments and interest both domestically and internationally.
The industry has grown massively in a little over a decade and now stands centric as it is being discussed as a factor for a possible amendment in the historic bill.
“What I think you’re seeing is the maturing of the industry — you see the crypto folks now understanding how Washington can influence their world and Washington learning a little bit about the technology,” says the former chief of staff under President Donald Trump’s Administration.
“One of the challenges that legislators face is they are still learning the language of crypto,” He added.
Scope For Regulation In the Crypto Industry
A loophole (even unintentional) within the blockchain technology applications allows the users to trade anonymously, protecting their identity from the federal authorities and the IRS. This complicates the process of dispute grievance and submitting suspicious activity reports.
Although it looks like crypto is here to stay, the IRS, federal authorities, international authoritative bodies, and even influential personalities advise crypto enthusiasts to trade cautiously and assess risk before investing.
The lack of a robust legal framework around crypto activity is leading to inconsistencies within regulatory and tax compliance regimes. It’s like a game that has gained momentum not too long ago and has no handbook or rules (at least for now).
And the risk is very high.
What do you think about the new tax regulations on crypto? Do you agree? Comment your thoughts below.
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