Forex Zone - Forex Forum
  1. Forex Zone - Forex Forum
  2. Cryptocurrencies
  3. General Cryptocurrency Discussion
  4. Cryptocurrency Regulation and Taxation

Cryptocurrency Regulation and Taxation

Discussion started on General Cryptocurrency Discussion

Print
Pages: [1]   Go Down

smdburst

  • Hero Member
  • Posts: 526
  • Points: 494
  • Likes Received: 289
  • Reputation: +5/-7
This is a new topic I hope is not covered elsewhere.  In the US, Cryptocurrency regulation, taxation, and law is in its infancy.  I think this is true that countries around the world are struggling to deal with how to regulate these new financial instruments and technologies based on block chains.  Issues are many but here are a few:

1.)  How to protect ordinary citizens from manipulation and scams?
2.)  How to enforce a fair system of taxation?
3.)  How to prevent money laundering from criminal activity?

This is an area of great interest to me.  Perhaps others have some insights or news they can share.


Linkback: https://www.forex.zone/general-cryptocurrency-discussion/32/cryptocurrency-regulation-and-taxation/3534/
#1 - September 08, 2021, 01:14:34 PM

smdburst

  • Hero Member
  • Posts: 526
  • Points: 494
  • Likes Received: 289
  • Reputation: +5/-7
Bloomberg has run two stories on how Coinbase's plan to launch a cryptocurrency Lending platform.  The platform allows depositors to earn interest on cryptocurrencies but has drawn scrutiny from the US Securities and Exchange Committee (SEC).   The SEC is threatening to sue Coinbase if they launch the new platform.  It is somewhat unclear what the specific objection to the concept is.  Coinbase said they will delay the launch until October 2021.


"Coinbase Gets Wells Notice From the SEC on Lend Product"

"Coinbase Accuses SEC of ?Sketchy Behavior? After Threat to Sue"

Coinbase's plan is not really any different than a bank paying interest.  There really needs to be a way to resolve this and not hobble the cryptocurrency industry or new innovations like this. 
#2 - September 08, 2021, 02:02:05 PM

Admin

Administrator
  • Hero Member
  • Posts: 5122
  • Points: 29381
  • Likes Received: 5123
  • Reputation: +220/-14
Quote from: smdburst on September 08, 2021, 01:14:34 PM
1.)  How to protect ordinary citizens from manipulation and scams?
The government isn't always looking for ways to protect us though. A good example is in the USA in the 1930s. Owning physical Gold bullion was made illegal. So the people in the land of the free were not even free enough to own something as simple as Gold. Then after it was all acquired from the people, they made the price of Gold go up. But it's okay when it's the government who is the scammer though.


Quote from: smdburst on September 08, 2021, 01:14:34 PM

2.)  How to enforce a fair system of taxation?
In the US, the tax system is so complex that it is many books long. The more they try to fix it, the more complicated it gets. To this day, there are still so-called loopholes. Decades and decades and nothing gets fixed. The rich pay most of the taxes and provide jobs and innovation and the poor get paid to stay home. In my opinion, a fair tax system would be a flat tax for everyone's income. But even better would be to have no income tax since that penalizes success, but instead have a sales tax on every single transaction. So instead of taxing success, they would be taxing consumption. It be a very small tax on every purchase and would go unnoticed most times. It wouldn't even need to be big due to the sheer volume of transactions made in the country every single day. Similar to what many states already do. Illegals would pay it. Tourists would pay it. And so on. So it would be a straight small percentage added to every single transaction. No paperwork. No hassle. No threats of audits or prison. It's fair and easy to understand.


Quote from: smdburst on September 08, 2021, 01:14:34 PM

3.)  How to prevent money laundering from criminal activity?
I have heard many times that the USD is the most laundered currency. It's been that way for a long time. If they didn't solve it with the Dollar, they will not with Crypto too. There's always going to be someone out there with a new method of hiding things, bribing middlemen, and so on.


#3 - September 08, 2021, 11:12:44 PM

Cryptocurrency Regulation and Taxation in General Cryptocurrency Discussion_topic=585

smdburst

  • Hero Member
  • Posts: 526
  • Points: 494
  • Likes Received: 289
  • Reputation: +5/-7
More on the Coinbase fight with the SEC:

"Why the SEC cracking down on Coinbase could level the crypto playing field"
(From Yahoo Finance)
Zack Guzman?Senior Writer
Thu, September 9, 2021, 6:51 AM

The hands-off regulatory position the U.S. Securities and Exchange Commission (SEC) has long taken when it comes to managing cryptocurrencies appears to be coming to an abrupt end.

On Tuesday, Coinbase co-founder and CEO Brian Armstrong went public with the battle he says the SEC has now picked with his company's proposed lending product. In a long thread on Twitter, Armstrong chronicled his attempts to work with the SEC to explain how the company's customers would be able to earn interest on their crypto assets. After months of open dialogue, Armstrong claims the SEC shut talks down and threatened to sue Coinbase if they launched the service.

At the heart of Armstrong's issue is that other crypto platforms have already been offering interest on crypto assets, similar to the way banks pay interest on cash deposits. In his thread attacking the SEC for what he called "sketchy" and ?intimidation tactics behind closed doors,? Armstrong also bemoaned that "plenty of other crypto companies continue to offer a lend feature, but Coinbase is somehow not allowed to."

    "They refuse to tell us why they think it's a security, and instead
    subpoena a bunch of records from us (we comply), demand testimony
    from our employees (we comply), and then tell us they will be suing us
    if we proceed to launch, with zero explanation as to why."
    -  Brian Armstrong (@brian_armstrong) September 8, 2021

But the question around what exactly the SEC sees as above and below board in the crypto space has been boiling for years. The agency has punted on opportunities to more clearly define what might be a security in crypto ? only going as far as saying that bitcoin and ether, the two largest cryptocurrencies by market cap, are most likely not securities. In regards to stablecoins, the cryptocurrencies that maintain a peg to the dollar or other base currencies, the SEC had not previously made them a priority. The Federal Reserve, however, had been sounding the alarm over the impact a run on stablecoins could have for the traditional financial sector.
#4 - September 09, 2021, 03:03:11 PM
« Last Edit: September 09, 2021, 03:06:25 PM by smdburst »

Kardel Sharpeye

  • Hero Member
  • Posts: 2167
  • Points: 2732
  • Likes Received: 3
  • Reputation: +0/-11
Cryptocurrency regulation and taxation vary from country to country. Some governments have implemented regulations to protect investors and prevent fraud, while others have taken a more hands-off approach. Taxation of cryptocurrency also varies, with some countries treating it as property or capital gains and others treating it as a currency. It's important for cryptocurrency traders to understand the regulations and tax laws in their respective countries and to keep accurate records of all transactions for tax purposes. Consulting with a tax professional or financial advisor can also be helpful in navigating the complex world of cryptocurrency taxation.
#5 - March 04, 2023, 01:25:40 AM
Print
Pages: [1]   Go Up
  1. Forex Zone - Forex Forum
  2. Cryptocurrencies
  3. General Cryptocurrency Discussion
  4. Cryptocurrency Regulation and Taxation

Members:

0 Members and 1 Guest are viewing this topic.


Cryptocurrency Regulation and Taxation in General Cryptocurrency Discussion_collapse Refresh Activity Stream (It's automatically updated) Open Activity Stream in Popup Activity: