Several prominent cryptocurrency commentators have criticized U.S. President Joe Biden’s recently proposed new cryptocurrency tax reporting rules.
On Aug. 25, the U.S. Internal Revenue Service (IRS) advised brokers to follow new rules for selling and trading digital assets in an effort to stop cryptocurrency users from evading taxes. Brokers will use a new form to simplify tax filings and prevent tax evasion.
Many in the crypto community believe that strict rules will drive the crypto industry further away from the U.S.
Messari CEO Ryan Selkis was among those who reacted negatively to the news, arguing that the crypto industry would not thrive in the country if Biden was re-elected.
If Biden is re-elected, cryptocurrencies have no future in the United States. sorry.
Move abroad, pick Newsom and hope for the best, or vote Republican, at least we know the top three candidates aren’t that bad on the issue.
Cryptocurrencies have always been political.
have a nice weekend.
— Ryan Serkis (@twobitidiot) August 25, 2023
Similarly, Chris Perkins, president of crypto venture capital firm CoinFund, believes that other countries are already ahead of the United States, and these rules will inevitably lead to less innovation flowing into the country.
He believes that simple yet detailed rules are needed to aid and allow security innovation in different cryptographic areas.
To clarify, I agree that other jurisdictions have seized the initiative, while the US is unfortunately lagging behind. We need proactive, nuanced policies to encourage and unleash responsible innovation across crypto verticals. Regardless, clarity is coming. Participation time…
— Christopher Perkins New York (@perkinscr97) August 26, 2023
While others remain skeptical that neither Democrats nor Republicans can adequately defend U.S. crypto interests
“I don’t believe either side is going to be good for crypto. Though it sure feels worse now than it did during the last presidency,” said one user, while another pointed to the lack of privacy as his main concern:
“The U.S. emphasis on income taxation means they can never accept private transactions on public ledgers without tax and sanctions oversight.”
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Previously, Biden suggested taxing cryptocurrency mining to reduce mining operations.
In the March 9 budget proposal, it was outlined that “a consumption tax equivalent to 30% of the cost of electricity used to mine digital assets” was outlined.
The cryptocurrency industry in the United States has repeatedly expressed concerns about regulatory choices affecting domestic innovation.
On Aug. 13, Grayscale Investments CEO Michael Sonnenshein warned that continued enforcement action by the U.S. Securities and Exchange Commission (SEC) will drive cryptocurrency firms out of the country.
“If every encryption issue needs to go to court, then as a country we are suppressing the innovation happening here,” Sonnenshein said.
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