New suite of bills dealing with crypto submitted to Congress

24 Sep, 2018
by Arthur Sillers
News
New suite of bills dealing with crypto submitted to Congress

As crypto gains mainstream visibility and adoption by conventional private sector enterprise, regulators are quickly looking to adop legal frameworks to accommodate.

A press release by the Law Office of Jeffery B Kahn detailed a suite of bills proposed by Tom Emmer, a Republican Congressman representing Maine.

The bills work in tandem to propose a ‘light touch’ by regulators moving forward in drafting legislation over crypto entities, and to keep stimulation of technological growth central to any legal framework. The first proposes simple, consistent legislation.

The second stipulates that any entity involved in the processing and architecture of crypto systems which doesn’t directly touch money (i.e. crypt mining) should not have to register as a ‘money transmitting’ entity, which is a crucial distinction protecting mining from tax liability.

The third protects users and investors of crypto from being prosecuted in the event of technological changes implemented by the cryptocurrency, focusing on the scenario in which holdings in a crypto asset make a hard fork which no longer complies with regulatory requirements.

All in all, these proposals may seem specific and relatively mundane, but it has been over three years since the IRS issued taxation guidelines to regulators on how to deal with crypto profits. The crypto ecosystem has changed and is continuing to change rapidly, so regulators will need to adopt consistent, fair, and clear guidelines in order to keep pace with digital financial technology.

The law office of Jeffery B Kahn recommends voluntary disclosure of crypto profits in order to remain completely legal, but it is clear that the IRS is quite behind in enforcing their ostensible requirement that all digital profits be completely disclosed. If the kinds of proposals Emmer is putting up to Congress go through, the enforcement arm of the IRS may be reaching your crypto savings sooner than you may wish.

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