After a request from a group of lawmakers, the IRS is expected to update its guidance for cryptocurrencies, first set in 2014. A July 6, 2019, report by the Wall Street Journal indicates that the U.S. is putting cryptocurrency at the top of its agenda.
Penance or Peace for American Crypto Enthusiasts?
Although crypto investors in the U.S. would enjoy a bit of regulatory relief, nobody can be sure of what the new tax guidelines will call for. As of today, spending cryptocurrency in the U.S. is considered a taxable event which has caused much trial and tribulation for the average American crypto enthusiast.
This may soon change though, as the proposed guidelines, requested by lawyers who advocate for reasonable regulation of cryptocurrencies, are widely expected to boost the industry by giving a broad push to adoption. This could mean several positive developments, but little is ever certain with governments as their views on specific subjects are almost as volatile as the cryptocurrency market.
Since the launch of Bitcoin, regulators across the globe have struggled with implementing reasonable guidelines. Most laws were formulated before the1990’s, so, inevitably, such outdated legislature cannot truly help either party. Lawmakers will have to begin drafting a more forward-thinking council that applies to the current global scenario.
Cryptocurrencies, however, may finally give regulators the necessary push to take such action.
The SEC, IRS, and many other regulatory authorities are becoming more involved with cryptocurrencies as the market expands, and more individuals and institutions look to explore it. The rise of different crypto-related scams has been a huge pain point, not just for investors and speculators.
In one of the largest sweeps of such crimes, the United States and Canada launched regional sweep lead by the North American Securities Administrators Association (NASAA). The probes sought out fraudulent ICOs and unregistered securities offerings in the cryptosphere.
These days, it is becoming more clear that Bitcoin and other decentralized networks can only be regulated at the on- and off-ramps. This means that the government only has power in this domain whenever bitcoin, fiat, goods, and services change hands. Already the space has seen tighter KYC and AML regulations on exchanges, with Binance blocking American users as a result.