The US Treasury Department today announced a major clampdown on crypto transactions in the US as it set an upper limit of $10,000 to be reported to the Internal Revenue Services (IRS). The department said that the measures have been taken to keep a check on illegal activities and tax evasion using digital assets. The new reporting regime would come into effect by 2023 to give crypto exchanges ample time to adhere to new regulations.
The Treasury estimates that the increased visibility into taxpayers’ accounts, on its own, would net the IRS $460 billion of the $700 billion over a decade.
*TREASURY CALLS FOR CRYPTO TRANSFERS OVER $10K REPORTED TO IRS
— *Walter Bloomberg (@DeItaone) May 20, 2021
The department said,
“Within the context of the new financial account reporting regime, cryptocurrencies and crypto-assets exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive crypto assets with a fair market value of more than $10,000 would also be reported on.”
The decision by the US Treasury comes at a time when the crypto market is already volatile and recovering from a major sell-off yesterday.
The US Treasury Decision Shatters Hopes of Many Who Expected Better Regulations From Biden Regime
A change in administration in the white house brought high hopes for the crypto community as the Biden administration was seen more liberal, along with those early appointments including the new SEC chief Gary Gensler only heightened that expectation. However, right from the beginning, the legislature that the new administration has approved or passed hinted otherwise be it the new crypto wallet regulations or the STABLEAct. The latest decision by the US Treasury Department only hint at the continued passive stance of the government towards digital assets.
Gensler in his last testimony hinted towards the need for more regulations required to ensure netter investor protection and even said that despite the growing popularity of these assets they do pose a potential risk to new entrants. The markets reacted sharply to the news of stricter regulations around crypto transactions as Bitcoin fell below $40,000 after recovering above $42,000, ETH also fell below $2,700.
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An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.