Called “The Virtual Currency Tax Fairness Act of 2020,” the bill would establish an exemption for virtual currency expenditures that qualify as personal transactions. Users would then not have to report instances when they spent crypto whose value had changed relative to the U.S. dollar on day-to-day expenses.
Representatives Suzan DelBene (D-WA) and David Schweikert (R-AZ) introduced the bill today, Jan. 16. Schweikert introduced an earlier version of this bill in 2017 that featured a substantially larger exemption. Existing tax law struggles to cope with cryptocurrencies, as they sometimes behave as investments, sometimes commodities, and sometimes just like other currencies. It is to this last type of transaction that the bill looks to simplify for crypto traders and users.
Currently, the IRS could hold crypto users responsible for paying taxes on gains earned and realized unknowingly, based solely on the value of their crypto at a time of purchase. Such a system would make use of crypto as currency incredibly cumbersome within the U.S. The newly reintroduced bill would exempt taxpayers from a reporting duty as long as the gains involved are under $200, which would generally only apply with major purchases or wild bull markets. The earlier version of the bill put this number at $600. The bill would insert a new category within existing IRS exclusions from classification as gross income.
Taxing cryptocurrencies has proved a major sticking point in the U.S. In December, eight congresspeople sent a letter to the IRS asking the tax agency to clarify rules for reporting income due to hard forks or airdrops. Last year, just before the tax reporting deadline in April, 21 representatives sent a similar letter to the IRS, likewise dissatisfied with current clarity.
Dubai Government Set To Launch KYC Blockchain Consortium In Early 2020
One of the financial hubs of the Middle East, the United Arab Emirates (UAE), is continuing to expand blockchain-driven developments. The Department of Economic Development (DED) of Dubai has established a Know Your Customer (KYC) blockchain consortium with six major banks. Dubbed “KYC Blockchain Consortium,” the new blockchain-powered regulatory platform is designed to accelerate processes like an exchange of digital customer data and documents while ensuring security.
Scheduled for launch in Q1 2020, the KYC Blockchain Consortium will purportedly become the first project of its kind in the region, the report notes. Ali Ibrahim, Deputy Director-General of the DED, outlined that the effort aims to bring more investment to the region:
“Our strategic alliance with banks to launch the first KYC blockchain platform in the UAE is an important step towards continuing to attract investors to this market.”
Additionally, the consortium-powered ecosystem hopes to boost business as well as regulatory compliance in the UAE. According to the report, the UAE Central Bank and Smart Dubai authority will be monitoring operations of the KYC Blockchain Consortium. The UAE’s newly reported blockchain comes in line with the general growth of blockchain spending in the region.
Governments across the Middle East and Africa region are projected to see at least a 400% surge in their investment to blockchain-based solutions in four years. In October 2019, the UAE accepted cryptocurrency regulation after releasing the draft law for public comment. As reported, the UAE has taken a very positive stance to the crypto and blockchain industry as the country is already hosting a number of blockchain-based initiatives such as digitized trade projects the “Digital Silk Road” and the document exchange platform known as the “Bank Trust Network.”
IRS Invites Cryptocurrency Advocates to March Summit
With the 2019 tax season upon us, the IRS is leaving nothing off the table. Cryptocurrency holders are looking for ways to avoid reporting failures on their returns, and the agency has noticed. According to a Feb. 19 report by Bloomberg Tax, the IRS has invited cryptocurrency companies and advocates to appear for a March 3rd summit in Washington DC. Among the aims of the summit are determining how to “balance taxpayer service with regulatory enforcement.”
Topics under discussion at the summit include regulatory guidance and compliance, preparing tax returns, issues for cryptocurrency exchanges, and technology updates. Each panel will last 90 minutes and feature speakers from the government and private sector. Crypto holders in the United States need to know how to declare their assets on their 1040 form. This year’s tax return is the first to include a question on virtual currency.
TON Devs Worldwide Working Together To Intervene In SEC Case Against Telegram
A group of international Telegram Open Network (TON) contributors has submitted a court document criticizing United States regulators’ line of attack against the project. The group has formed a non-profit association, “The TON Community Foundation,” and collectively submitted the brief on Feb. 14 in the form of an amicus curiae.
An amicus curiae is a brief that offers expertise or insight into a given case on behalf of an entity that is not formally a party to the case itself — i.e. an entity that is neither a plaintiff, defendant, nor legal counsel for either side. The court can decide whether or not to take the brief into account at its discretion.
In their filing, the contributors state that the foundation has been formed to represent a “professional community of active participants in the TON project in whose interest it is to see the TON blockchain mainnet launched as soon as possible.” The foundation comprises 20 teams in the TON global community, designated as “independent specialists with extensive blockchain experience who are involved in the actual work on the TON blockchain and who write its code, protocol, smart contracts, tools, and applications.” These 20 teams ostensibly represent over 2,000 computer scientists, engineers, programmers, and entrepreneurs — based in China, Russia, France, and Spain, among other countries.
The foundation writes that the unanimous position of the TON dev community is that the TON blockchain is fully operational, has “state-of-the-art prelaunch security” and a developed suite of services. They contend it would, in its current state, be ready for launch as a mainnet in a “matter of seconds.” The brief focuses on particular arguments that were presented by Brown University Professor Maurice Herlihy in his review of TON for the United States Securities and Exchange Commission.
Following Telegram’s wildly successful $1.7 billion initial coin offering for TON in 2018, the SEC had launched an investigation into the project in 2019, claiming the entity had not registered with the commission for its ICO and the network’s “Gram” tokens. The Herlihy report was submitted as evidence on behalf of the SEC in late December 2019. In its brief, the foundation argues that the court should decline the SEC’s impulse to place the industry under an “innovation-suffocating regime,” it contends. It argues that other successful blockchains — such as Bitcoin, Ethereum and Tezos — would never have launched had they been subjected to Professor Herlihy’s “academic scrutiny” and his “unrealistic standards of pre-launch performance, security, and maturity.” Moreover, despite Professor Herlihy serving as the SEC’s blockchain expert, the foundation claims he has mischaracterized the TON network in his report. It notes that he uses a blockchain definition from 2010 that has since become obsolete, which fails to account for smart contract functionality as one of the technology’s core parameters.
What makes the TON blockchain unique, the brief outlines, is that literally “everything in its network is based on interaction with smart contracts” and “all Grams will be located in smart contracts,” so that, “in a way, TON is a smart contract platform more than a cryptocurrency one.” The rest of the foundation’s arguments against Professor Herlihy’s report provide a detailed overview of the state of the network’s services, readiness for launch, protocol, code, and security audit results.
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