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Crypto community reacts to Biden’s proposed crypto tax reporting rules

Crypto community reacts to Biden’s proposed crypto tax reporting rules

Several prominent crypto commentators have criticized the new crypto tax reporting rules recently put forth by United States president Joe Biden. 

On Aug. 25, in an effort to catch crypto users avoiding taxes, the Internal Revenue Services (IRS) proposed brokers follow new rules for selling and trading digital assets. Brokers would use a new form to make tax filing easier and prevent cheating on taxes.

The Treasury indicated that the proposed rules would make digital asset reporting similar to reporting on other kinds of assets.

However, many in the crypto community believe the stringent rules will push the crypto industry even further away from the U.S.

Messari CEO, Ryan Selkis was among those who responded unfavorably to the news, believing that if Biden secures re-election, the crypto industry will not flourish in the country. 

Likewise, Chris Perkins, president of crypto venture firm CoinFund holds the viewpoint that other countries have surged ahead of the U.S., and these rules will inevitably result in reduced innovation flowing into the country.

Rather than resorting to harsh crackdowns, he believes that simple and detailed rules that will allow safe innovation across the crypto industry is needed.

Meanwhile, others remain skeptical that neither the Democrats or the Republicans would adequately champion crypto interests in the U.S.

“I’m not confident that either party would be good for crypto. Though it definitely feels worse now than last presidency,” one user stated, as another pointed that the new rules raise privacy concerns:

“US devotion to income tax means they can NEVER accept private transactions on public ledgers without tax and sanction surveillance.”

On Aug. 25, Cointelegraph reported that Kristin Smith, CEO of the Blockchain Association, held reservations about merging digital asset reporting with traditional assets.

“It’s important to remember that the crypto ecosystem is very different from that of traditional assets, so the rules must be tailored accordingly and not capture ecosystem participants that don’t have a pathway to compliance,” Smith stated.

This follows Biden’s suggestion to impose taxes on crypto mining in order to decrease mining operations. 

In a budget proposal dated March 9, it was proposed that there would be an “excise tax equal to 30 percent of the costs of electricity used in digital asset mining.”

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The crypto industry in the U.S. has repeatedly voiced concerns about regulatory choices affecting innovation within the nation.  

On Aug. 13, Grayscale Investments CEO Michael Sonnenshein warned that the Securities and Exchange Commission (SEC) constantly resorting to enforcement action will drive crypto firms out of the country.

“If every crypto issue needs to go to a court of law, then as a country, we are squashing the innovation taking place here,” Sonnenshein stated.

In the same vein, Brad Garlinghouse, CEO of Ripple, recently indicated that the crypto industry is shifting away from the U.S. due to its slower crypto regulation process compared to other countries like Australia, United Kingdom and Singapore. 

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