Several prominent cryptocurrency commentators have criticized U.S. President Joe Biden’s recently proposed new cryptocurrency tax reporting rules.
On Aug. 25, in an effort to catch cryptocurrency users evading taxes, the U.S. Internal Revenue Service (IRS) advised brokers to follow new rules for selling and trading digital assets. Brokers will use a new form to simplify tax filings and prevent tax evasion.
The U.S. Treasury said the proposed rule would make digital asset reporting similar to that of other assets.
However, many in the crypto community believe that strict rules will keep the crypto industry further away from the United States.
Messari CEO Ryan Selkis was among those who reacted negatively to the news, saying that the crypto industry will not thrive in the country if Biden secures re-election.
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 and detailed rules are needed to allow security innovation across the encryption industry, rather than harsh crackdowns.
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
Meanwhile, others remain skeptical that neither Democrats nor Republicans can adequately defend U.S. cryptocurrency interests.
“I don’t believe either side is going to be good for crypto. Although it definitely feels worse now than it did during the last presidency,” said one user, while another pointed to privacy concerns raised by the new rules:
“The U.S. emphasis on income taxation means they can never accept private transactions on public ledgers without tax and sanctions oversight.”
On Aug. 25, Cointelegraph reported that Blockchain Association CEO Kristin Smith had reservations about merging digital asset reporting with traditional assets.
“It’s important to remember that the cryptocurrency ecosystem is very different from that of traditional assets, so the rules must be adjusted accordingly rather than capturing ecosystem participants who don’t have a path to compliance,” Smith said.
Previously, Biden suggested taxing cryptocurrency mining to reduce mining operations.
A March 9 budget proposal proposes “an excise tax equal to 30 percent of the electricity cost of mining digital assets.”
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 the SEC’s ongoing enforcement actions 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.
Similarly, Ripple CEO Brad Garlinghouse recently stated that the crypto industry is shifting away from the United States due to the slower crypto regulatory process in the United States compared to other countries such as Australia, the United Kingdom, and Singapore.