New Crypto Tax Law Takes Effect in US: Transactions of $10,000 or More Must Be R

[sirty143]

New Crypto Tax Law Takes Effect in US: Transactions of $10,000 or More Must Be Reported to IRS Within 15 Days

A new tax reporting law has entered into force in the U.S. Starting on Jan. 1, all Americans receiving $10,000 or more in crypto in the course of their trade or business must file a report with the Internal Revenue Service (IRS) within 15 days... See more for yourself here.

Your opinion is greatly appreciated.

[Fenix]

In general, such a law was to be expected. Most likely, similar laws will be adopted in other countries, but with some peculiarities.
The law states that an individual or legal entity that has received an amount of 10 thousand dollars or more in cryptocurrency must report this to the relevant tax authorities within 15 days, indicating the details of the sender of the cryptocurrency. But it is not clear here whether this means one transaction, or any several transactions for the specified amount from one sender. The article provides many other questions that will arise if US citizens try to comply with this law.

[Zed0X]

~ But it is not clear here whether this means one transaction, or any several transactions for the specified amount from one sender.

This is per transaction. It is similar to an existing anti-money laundering policy on bank transactions. If someone is to make a deposit/withdrawal request amounting to $10,000 or more, the bank is required to report it to the IRS. In this case, it's the individuals who should report since transactions could be done P2P (no banks or CEX involved). It is also important to note the nature of the transaction has to be business-related.

[Alcor]

~ But it is not clear here whether this means one transaction, or any several transactions for the specified amount from one sender.

This is per transaction. It is similar to an existing anti-money laundering policy on bank transactions. If someone is to make a deposit/withdrawal request amounting to $10,000 or more, the bank is required to report it to the IRS. In this case, it's the individuals who should report since transactions could be done P2P (no banks or CEX involved). It is also important to note the nature of the transaction has to be business-related.

That is, this law actually equalizes the requirements for the circulation of non-cash government money and cryptocurrency. This means that crypto enthusiasts have nothing to complain about yet. Cryptocurrency is not infringed in this case. But it appears that this legal requirement can easily be circumvented by not sending $10,000 or more in one transaction, but by dividing that amount into several smaller transactions so that one transaction is for less than $10,000.

[Z-tight]

The U.S. and their regulations/laws relating to crypto keeps getting stricter, i know there is the argument that they are doing this to combat money laundering, terrorism financing and other criminal transactions, but they are also eroding privacy as they want to know everything about people using crypto. This new law in summary means if you receive an amount greater than $10k, you must provide the name, address and SSN of the sender.

Needless to say that there are many instances that you may not have that information, and the article points that out, for example, in the case of miners or people who use p2p exchanges. It is clear the U.S. government do not want people to use crypto privately anymore, as they want people to only carry out tx's through centralized exchanges and services.

[Bobcrypto]

It obvious that everything about cryptocurrency is strictly under regulation by the US government. I am sure the Tax law is to confirm US readiness to checkmate every crypto transactions, and also get some benefits, that is, to generating revenue having seen the amount of money that is intering into the crypto economy.

[hugeblack]

I do not think that this decision will affect most traders, investors, and individual miners, as most of them have transactions for less than $10,000 per transaction, but it will definitely affect central platforms or DEXs, the large mining pools that are based in the United States, which may force them to leave United States if the tax is high.

I don't know, but some may try to make repeated transfers for $9,999 to avoid reporting within 15 days.

[Z-tight]

I don't know, but some may try to make repeated transfers for $9,999 to avoid reporting within 15 days.

That can be one way to avoid it if the situation permits. Take note also that it is the receivers of the funds that must file the report within 15 days, and this report would include name, address and ssn of the sender and also the purpose of the tx.

It obvious that everything about cryptocurrency is strictly under regulation by the US government. I am sure the Tax law is to confirm US readiness to checkmate every crypto transactions, and also get some benefits, that is, to generating revenue having seen the amount of money that is intering into the crypto economy.

This is what the U.S. government wants to do, they want to have some form of control over crypto and this is how to do it, through regulations and by fighting privacy solutions and tx's. Using crypto in the U.S. will keep getting difficult and it would be a negative to adoption.

[Senin]

It obvious that everything about cryptocurrency is strictly under regulation by the US government. I am sure the Tax law is to confirm US readiness to checkmate every crypto transactions, and also get some benefits, that is, to generating revenue having seen the amount of money that is intering into the crypto economy.

If cryptocurrency existed on its own and was used by people without contact or conversion with fiat, perhaps states would not seek to regulate it so strictly. However, cryptocurrency is converted into state currency and vice versa, which directly affects the interests of states and their financial system. Therefore, it is not surprising that states will regulate the circulation of cryptocurrency. But the good thing is that by regulating, states are simultaneously legalizing cryptocurrency.

[Don Pedro Dinero]

If cryptocurrency existed on its own and was used by people without contact or conversion with fiat, perhaps states would not seek to regulate it so strictly. However, cryptocurrency is converted into state currency and vice versa, which directly affects the interests of states and their financial system. Therefore, it is not surprising that states will regulate the circulation of cryptocurrency. But the good thing is that by regulating, states are simultaneously legalizing cryptocurrency.

And if my grandmother were a bird she would fly, but as she is not a bird she does not fly. The facts here are that cryptocurrencies are used as an investment, and states want to cash in by taxing them. What would happen if what is happening didn't happen is a highly speculative question that is not worth getting too hot in the head about.

The point is that we are seeing more and more of the same kind of measures and I'm sure that over time that $10,000 will be lowered, and even if it isn't, simply because of inflation it will be as if they were lowered in real terms.

[Alcor]

The point is that we are seeing more and more of the same kind of measures and I'm sure that over time that $10,000 will be lowered, and even if it isn't, simply because of inflation it will be as if they were lowered in real terms.

The amount of $10,000 in cryptocurrency, which is subject to control by banks and tax authorities, was established by FATF, it seems, in 2019. In my country, Ukraine, this FATF recommendation has long been implemented and adopted into law. Many states have also incorporated this mandatory FATF recommendation into their national laws. The state has the right to reduce, but not increase, the specific amount of cryptocurrency transactions that is subject to immediate accounting and verification.

[Nwada001]

This rule doesn't look new to me at all, as I always believe this has been happening on exchanges and platforms that are being licenced by the US government, so if you want to make a large deposit, be ready to present your source of income and a full explanation of how those funds were gotten.
 
This law is still very active on centralised exchanges, and those who want to avoid it will always make use of NONKYC exchanges and Dex to avoid further explanation in the future.
 
And with this law of large deposits being monitored, let's not be surprised by the way things are going. Even those who make use of USDT and other stable coins that are working with the Feds will face the same faith as your large crypto transaction can be frozen in your wallet, and KYC will be required before the funds can be released. If you are not ready to compare, you just need to avoid centralised systems totally and store coins in places where full control is handled by you, the holder, and there are no loopholes.

[Tribalchief]

It hurts me so much to see that the people making and dictating laws for the crypto community are none Crypto ethusiast, and they don't understand how crypto clearly works. IRS were quick in making a decision that they thought would put the people under control, but they failed to identify other possibilities that can't be included in their laws. Well, there shouldn't be any need to panic because the Coin Center executive director has placed them in a state were they must go back to their drawing board and rethink the law they've placed.

[Zed0X]

It hurts me so much to see that the people making and dictating laws for the crypto community are none Crypto ethusiast, and they don't understand how crypto clearly works. IRS were quick in making a decision that they thought would put the people under control, but they failed to identify other possibilities that can't be included in their laws.

It's part of the price we have to pay for wanting crypto to be widely adopted and reach mainstream. The problem with a lot of us is we only want to enjoy/reap all the benefits but we don't want to deal with the consequences that comes with it.

Also, being a crypto enthusiast doesn't guarantee that they will propose laws that are favorable to most of us. Remember how SEC's Gary Gensler was thought to be a crypto ally when he was newly appointed? Now a lot of people view him as an adversary.

Well, there shouldn't be any need to panic because the Coin Center executive director has placed them in a state were they must go back to their drawing board and rethink the law they've placed.

I doubt that guy is influential enough to sway lawmakers to revise this new policy. He'll probably lose the case he filed.

[SamReomo]

I think US government and authorities are doing this to track the users so they can find the other crypto-currency assets of such users. Their main purpose is to tax crypto-currency users and they'll impose more such things in future to the citizens of US.

In the first phase they choose to tax transactions of $10k or more but who knows that in next phase they may start reduce the minimum amount $5k and so on. Crypto-users especially the miners of US will have hard time now. If I'm not wrong then they want such information so that they can easily tax crypto-currency users.