IRS Rains On Bitcoin Parade With Mandatory >$10k Transaction Reporting

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IRS Rains On Bitcoin Parade With Mandatory >$10k Transaction Reporting
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In the latest of a series of moves to regulate the leaping trillion dollar cryptocurrency market, the US treasury has now mandated that Crypto transfers worth $10,000 and above, must be reported to the IRS. The move is a mirror of the fiat currency transfer rule mandated by the US for all transfers above the same limit.

The IRS sees this measure as necessary to closely monitor the transfer of assets in the market, especially with large corporations who may be seeking to use cryptocurrencies as a conduit to escape tax commissions, funnel cash to sanctioned countries or fund illegal enterprises within and outside the US.

Already US President, Joe Biden, had earlier imposed a tax-on-gain reporting for all crypto assets held by tax-paying citizens in the US. He has expressed his desire to tighten up scrutiny within the financial sector and discover more ways to mop up funds for the replacement of critically depleted government spending in the inflation-laden economy.

As blurry lines of definition become clearer, the US, through the SEC has now specified that cryptocurrencies like Bitcoin are assets and the IRS computes due taxes on crypto-assets in the same manner. Following this new rule, it is unclear whether the IRS will rescind its reporting limit of $15,000 on all forms of crypto gifted, or if the same rules apply to other DeFi, stable coins, and widely transacted tokens.

Many holders have reacted to the news with a frown, labeling the IRS a party pooper, and the timing of the regulation insensitive considering the current red wave sweeping across the Bitcoin space. The apex cryptocurrency began showing promising signs, gaining 1.5% at the start of US trading today to regain its place on the $40,000 threshold.

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Centralized vs. Decentralized Wars

In the never-ending subtle wars between traditional finance regulators and the crypto players, the US – though a significant voice, is not the only country to tighten its grip around bitcoin’s neck. The Bank of England recently stamped a seal of disapproval on the use of cryptocurrencies and China has also issued warnings to all crypto mediators and exchange institutions regarding the trading, storing, and transaction of businesses using cryptocurrencies as a payment option.

Other nations that have kicked crypto away from its territories are: Bolivia, Algeria, Macedonia, Saudi Arabia, and Turkey being the latest to join after a large-scale $2 billion crypto fraud rocked hundreds of thousands of its citizens.