Connect with us

Regulation News

The IRS Sends Letters To US Crypto Holders

Published

on

The IRS Sends Letters To US Crypto Holders

The IRS Sends Letters To US Crypto Holders

Last week, the United States Internal Revenue Service sent another round of letters to crypto traders called CP2000. These notices were sent to traders of some crypto exchanges due to inconsistencies found in their tax reports. Using the information provided by third-party systems — such as crypto exchanges and payment systems — the IRS has been able to determine the amounts traders owe and included the amounts in dollars in the notices. Individuals who have received these notices are required to pay within 30 days, starting on the delivery date indicated in the letter.

If you think the exchange — on which you traded — provided your details to the bureau, you are probably right, but do not hold it against the exchanges. The regulation stipulates that all broker and barter exchange services are required by law to annually report trader activity on a 1099-B form, send it directly to the IRS and send a copy to the recipient. 

Also, transaction payment cards and third-party network transactions are also required to report on Form 1099-K, send it directly to the IRS and send a copy to the payee. The IRS has not yet published specific guidelines for crypto exchanges. In fiat stocks, every broker must submit 1099-B to the IRS and send a copy to the trader. In crypto, the IRS still didn’t publish clarification whether exchanges should provide 1099-K or 1099-B. Exchanges can benefit from the uncertain situation to provide 1099-K — like Coinbase Pro and Gemini — but some do not provide any forms, such as Kraken and Bittrex. 

Meanwhile, the exchange must provide the users with the 1099-K copy by the end of every January, so they will be available to use it in their capital gains report. The users, at the same time, don’t submit the IRS their copy of 1099-K, as they only use this form to calculate and report on their capital gains or loss report. Similarly, earlier this month, the United Kingdom’s tax, payments and customs authority, Her Majesty’s Revenue and Customs, has reportedly requested that digital currency exchanges provide it with information about traders’ names and transactions, aiming to identify cases of tax evasion.

In the U.S., data gathered from these exchanges is collected by the IRS and compared to every trader’s 1099-K report. If the reports do not match the data provided by the exchanges, the IRS will send the CP2000 notice to traders. The notice includes the amount every trader is expected to pay within 30 calendar days. What’s more, the notice generally includes interest accrued, which is calculated from the due date of the return to 30 days from the date on the notice. This Interest continues to mount until the amount is paid in full, or the IRS agrees to an alternate amount. It means that interest began on the due date — on the day that you were supposed to report this for the first time. If you should, for example, have included this capital gains on your 2017 report, the interest will start on April 2018 — the last day you should have reported this gain. And it’s calculated until the reply date on the CP2000 notice.

Blockchain News

CFTC Hires Former Coinbase Executive As Their Director of Market Oversight

Published

on

CFTC Hires Former Coinbase Executive As Their Director of Market Oversight
CFTC Hires Former Coinbase Executive As Their Director of Market Oversight

Coinbase’s vice president Dorothy D. DeWitt will now serve as director of the division of market oversight at the United States Commodity Futures Trading Commission (CFTC).

The U.S. CFTC Chairman Heath P. Tarbert announced on Sept. 17 that DeWitt will take responsibility for the CFTC’s oversight over derivatives platforms and swap data repositories, as well as other new platform-traded products.

Before joining the CFTC, DeWitt served as vice president and general counsel for business lines and markets at U.S.-based cryptocurrency exchange and wallet provider Coinbase. DeWitt also held positions as a partner and portfolio manager at asset management firm Cadogan Management, and served at asset management group GAM, among other positions. Commenting on the appointment, Tarbert said:

“I am excited Dorothy will soon be joining our team. She brings to the CFTC more than 20 years of private sector experience in the financial services and legal fields. Her strong investment, risk, legal, and compliance background and familiarity with distributed ledger technology, including crypto assets, will be invaluable as the agency looks to develop a holistic approach to regulating 21st-century commodities.”

DeWitt is not the first Coinbase’s officer who has transitioned to the CFTC. In July, the agency announced that it was hiring Andrew L. Ridenour as senior counsel to the chairman. Ridenour joined the CFTC from Coinbase where he worked as counsel for institutional products.

Tarbert became chairman of the CFTC in mid-July. His predecessor J. Christopher Giancarlo’s five-year tenure saw the rise of cryptocurrency derivatives as an object of regulatory oversight. 

Widely regarded as the crypto industry’s ally, Giancarlo — known as “Crypto Dad” — superintended the historic launch of regulated Bitcoin futures and advocated for a “do no harm” approach to blockchain regulation in his testimony before the U.S. Congress.

Continue Reading

Regulation News

Chinese Regulators Warn Crypto Miners In Mongolia

Published

on

Chinese Regulators Warn Crypto Miners In Mongolia
Chinese Regulators Warn Crypto Miners In Mongolia

Chinese authorities have issued a notice to ministries within the autonomous province of Inner Mongolia to crackdown on cryptocurrency mining in the region.

Five ministries and commissions in Inner Mongolia have been issued a warning to clean up cryptocurrency mining, which is heavily regulated under Chinese law. The document refers to crypto mining as “pseudo-financial innovation” that exists outside of the regular economy, 

“The virtual currency ‘mining’ industry belongs to the pseudo-financial innovation unrelated to the real economy, and should not be supported.”

The crackdown will be carried out in two phases, according to details in the report. Phase I will occur from Sept. 3 to Sept. 25, allowing the ministries in question time for “self-examination and self-correction” in regards to crypto mining. 

The second phase, which is set to begin on Sept. 30, will involve supervision and rectification by a joint inspection team to thoroughly review any ongoing crypto operations. 

While some miners in the region have feared greater pressure from the Chinese government, other members of the crypto community remain skeptical. Dovey wan, co-founder of Primitive Ventures and regular crypto pundit responded to the news by predicting that it would have little impact.

Continue Reading

Regulation News

Libra Association Looking To Get Swiss Payments License

Published

on

Libra Association Looking To Get Swiss Payments License
Libra Association Looking To Get Swiss Payments License

Facebook is seeking a payment system license under Switzerland’s Financial Market Supervisory Authority (FINMA) for its planned stablecoin project. 

In an official statement today, the Switzerland-registered Libra Association — a not-for-profit membership organization established to govern the Libra network — explained its choice to coordinate a regulatory framework with the Swiss watchdog:

“Switzerland offers a pathway for responsible financial services innovation harmonized with global financial norms and strong oversight. We are engaging in constructive dialogue with FINMA and are encouraged to see a feasible pathway for an open-source blockchain network to become a regulated, low-friction, high-security payment system.”

FINMA has notably this summer released guidance on regulatory requirements for payments on the blockchain, which applies to blockchain service providers including exchanges, wallet providers and trading platforms. 

The guidance adheres to the framework for digital asset regulation issued this June by the intergovernmental Financial Action Task Force (FATF), which includes provisions for Anti Money Laundering (AML) measures, Know Your Customer compliance, risk-monitoring systems and more. FINMA has gone a step further than the FATF’s provisions in refusing to exempt payments that involve unregulated wallet providers from its oversight.

Earlier this week, a United States Treasury official had told reporters in Geneva that it was imperative that the Libra project satisfy the highest standards for combating money laundering and countering terrorism financing if it is to be approved by regulators and lawmakers. 

At a hearing before U.S. representatives in mid-July, David Marcus — chief of Facebook’s Calibra wallet service — had claimed that the choice had “nothing to do with evading regulations or oversight,” arguing instead that the jurisdiction is an international hub conducive to doing business.

In August, U.S. lawmakers visited Switzerland to meet with local financial regulators and government officials about Libra, expressing their persistent “concerns […] with allowing a large tech company to create a privately controlled, alternative global currency.” On Sept. 5, Swiss National Bank President Thomas Jordan said that stablecoins pegged to foreign currencies could — in some circumstances — adversely impact Switzerland’s monetary policy.

Continue Reading

TRENDING

Copyright © 2015 Crypto Global News Team.