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You are here: Home / Archives for cryprocurrency industry

cryprocurrency industry

South African Crypto Investors Lose Millions as Former CEO Declared Bankrupt

July 6, 2020 by Vaigha Varghese

Willie Breedt, CEO of Vaultage Solutions, has been declared bankrupt while 2000 investors are expected to lose around R227 million, according to a News 24 report.

Vaultage solutions founded in 2018 welcomed the investment with the promise of weekly investment returns via cryptocurrency mining and trading. Breedt allegedly missed repaying investments, however, and never eventuated the development he had guaranteed to investors.

One of the biggest investors, Simon Dix of Hilton, who handed over R7.5 million to Breedt, successfully applied for a sequestration order against Breedt on Friday. The Gauteng High Court in Pretoria released a sequestration order on Friday. The sequestration order is issued by the Federal Court or the Federal Circuit Court, which decides that an individual is bankrupt. Once a sequestration order is received, the bankrupt ‘s assets are handed over to be managed by a bankruptcy trustee appointee.

Willie Breedt is also accused of going on the run after a few angry investors went on a manhunt, allegedly led by a colonel in the South African National Defense Force. The aim of the manhunt was to find Breedt and possibly recover some of the funds from him for ‘debt collectors.’ But Breedit had opened a case of intimidation with police in Jeffreys Bay before going on the run.

Investigators managed to find Breedt at a guesthouse in Pretoria and soon after the court issued Dix the sequestration order, the court sheriff accompanied by officers, raided the house where Breedt had been hiding, according to News 24’s report.

Numerous electronic devices have been seized on the raid, including a laptop and Ledger Nano hardware wallet, with police hoping to find details on where the bitcoin, as well as other currencies, could be hidden.

Filed Under: Industry Tagged With: Bitcoin scam, cryprocurrency industry, cryptocurrency mining, south african crypto investors, Vaultage Solutions, willie breedt

Crypto Businesses Licensing Bill in Progress in US State of Louisiana

May 26, 2020 by Arnold Kirimi

 American state of Louisiana legislators passed a crypto businesses licensing bill that is only awaiting to be signed into law, as per public records. The new bill will provide a structure to properly regulate entities working in the digital currency industry.

The legislation backed by a state representative, Mark Wright, was filed earlier this year. The bill looks to create a procedure for firms tied to digital currencies to seek and secure operating licenses in the state of Louisiana.

Louisiana warming up as crypto  businesses licencing bill awaits approval

The new laws would see the creation of definitional language for cryptocurrency exchanges and the words and phrases associated with digital assets. Louisiana is following in the footsteps of New York, to release its own BitLicense to regulate the expanding cryptocurrency industry in the United States.

The House of Representatives in the state advanced the bill on May 20 with 92 members agreeing to the legislation. There are several requirements that all crypto businesses should fulfill with Louisiana’s Office of Financial Institutions (OFI) before beginning to operate in the state; such as recording of fingerprints, do a “experience, character, and fitness” test, pay an initial non-refundable fee of $2,000 and an annual renewal fee of $1,000.

It’s not over yet

Despite the eagerly anticipated law receiving green-light from the lower chamber, there is still a long way to go to obtain approval from others such as the State Senate, Consumer Protection, and the Committee of Commerce. Additionally, the bill is quite costly. Its enactment will cost over $150,000 and its total cost will probably break past $1 million in the next five years.

Cryptocurrency licensing in the United States varies in different states. Back in 2019, although it was launched countrywide, Binance US was still not available in 13 states including Louisiana. Nevertheless, the booming cryptocurrency industry has forced many of them to regulate digital currencies.

Filed Under: Industry Tagged With: cryprocurrency industry, Crypto Regulations, licens, US

Bitcoin Trading Volume Dwindling as Investors Become Nervous

May 25, 2020 by Arnold Kirimi

The price of Bitcoin is currently in consolidation within the lower $9,000 price level. This is the region where the cryptocurrency has been trading for the last day, as both the buyers and sellers reach a stalemate, pushing down the Bitcoin trading volume.

This consolidation has triggered a reduction in Bitcoin trading volume, which has been soaring high over a multiple week time frame. Additionally, it seems that the investors have become nervous as it’s getting increasingly unclear where the world’s largest cryptocurrency will go next, up or down?

Bitcoin trading volume declines as the crypto commences consolidation stage

Last week, Bitcoin suffered vast volatility that was triggered by the transfer of 50 BTCs from an account that has been dormant for over a decade. This price volatility happened when Bitcoin’s price was about $9,800, triggering a sharp decline to $8,800 lows. At this point, the buyers upped their game to regain the $9,000 price levels.

Notably, Bitcoin has formed a string of lower highs over the past couple of weeks, as it saw a number of harsh rejections at about $10,000, distracting its momentum. Its current dull price action has already made investors nervous and fearful, resulting in a decline in the Bitcoin trading volume.

Bitcoin traders have become fearful

A recent study carried out by Arcane Research concluded that BTC’s trading volume is diminishing after hitting this year’s high last week. The decline has conflicted with the occurrence of last week’s vast volatility, which seems to symbolize a shift of sentiment in the industry.

https://alternative.me/crypto/fear-and-greed-index/

According to the study’s report, Bitcoin’s stalling price action has got the investors nervous. Per the Fear and Greed Index, market participants have become more fearful as Bitcoin fails to break past $10,000. If Bitcoin carries on with its price struggles in the coming days, investors will get even more worried and fearful.

Filed Under: Bitcoin News Tagged With: Bitcoin (BTC), Bitcoin halving, Bitcoin Trading, BTC price, cryprocurrency industry

Following a Challenging March, What are some Fintech Highlights?

April 1, 2020 by Richard M Adrian

Almost every industry is feeling the impact of the current coronavirus epidemic. From retail and consumer packaged goods to entertainment, sports, travel, and recreation, each sector has a different impact and faces its own specific challenges.

The companies are in a lockout amid national governments ‘curfew policies. Company strategists find the environment hard to change. An inevitable danger of closing down the business and the need to build long-lasting business structures has left leaders terrified by what lies ahead. Businesses around the world are surviving the lockdown through remote working. Millions of employees are logging on to online co-working spaces.

Forbes correspondent Robert Walcott compares the present crisis to Julius Caesar’s  49 BCE rubicon. A time at which businesses must remove all signs of uncertainty, from fundamental business and digital transformation.  In fact, there exists a space of digital savvy companies that are shifting and adjusting faster to the hard time. 

Organizations that are at the core of transforming how they function, building products, serving customers and protecting themselves. These companies, whose deep market has been a rare but collapsing segment of the market share, include Slack, Zscaler, Zoom and Crowdstreak.

The start of the year signaled a closer launch of China’s digital yuan, but the wake of Covid-19 pushed down the chances of launching the digital currency. The pandemic highly affected staff members leading to delays and expertise setbacks. 

Leading cryptocurrency exchange Binance launched a crypto campaign against Covid-19 through its Binance Charity Foundation. The objective of the campaign is to raise at least $4 million that will be spent on outbreak-affected nations. Donors are sending their funds through bitcoin and other cryptocurrencies. 

The infection has also placed unprecedented strains on the global medical supply chain. Ventilator shortages and lack of personal protective equipment have urged firms to design open source movements. A method that converts medical supplies to better care for the health sector during the epidemic.

Manufacturers have moved online and are contracting a million dollar worth of business across the internet supply chain. However, a big problem of trust exists between contractors. It is clear that the blockchain is the only digital facilitator for trust and guarantee. 

Some experts believe that this is the best time for companies that have faded after the 2008 financial crisis to recover and overcome. There is a possibility for companies to readjust using digitization and services from companies such as Zoom. The proximity of innovations will ensure incrementalization of IoT, data analytics and blockchain workflow technology, business generation, and product creation.

The virus has also affected government operations and policy-making processes. A Chinese media outlet claimed government institutions had earlier on postponed their work. Some of these institutions included the People’s Bank of China, research staff for the digital renminbi and policymakers. 

Nevertheless, some companies have kept going and scaling their businesses. Some admit that innovating during a time of crisis is tough.  It remains evident that the businesses that fail to adjust will win or lose. Some could meet their end, while a couple seems to be having a taste of their winning rubicon.

Filed Under: Industry Tagged With: Blockchain, coronavirus, COVID-19, cryprocurrency industry

Supreme Court of India Lifts the Ban on Banks Facilitating Cryptocurrency Trading

March 4, 2020 by Arnold Kirimi

The Supreme Court of India has eventually lifted the curb placed by the Reserve Bank of India (RBI) on digital currencies. On March 4, the prime court in the land struck down  RBI’s ban on banks providing financial services to crypto related businesses; describing it as illegal.

Moreover, the court verdict was delivered by justices Rohinton Nariman, S Ravindra Bhat, and V Ramasubramanian according to a news report by litigation news site Live Law. The Indian Central Bank (RBI) foisted a ban on the country’s banks from offering financial services to cryptocurrency-related firms. This was back in April 2018 with the rule coming into effect during June of 2018 as well.

The news of the lifted ban was well received by the cryptocurrency community in India. According to the Director Of Technology at Tokenyz Ventures, Samuel Benson:

“It’s a very positive sign that has come through, something that we have been waiting for and expecting for two years now. Most of the infrastructure and bits and pieces towards the cryptocurrency was already built out over the last few years.”

RBI’s Ban Crippled Crypto Industry in India

Following the news by RBI to curb cryptocurrencies back in 2018, the industry was left crippled after showing signs of big progress. The ban led to a very significant drop in cryptocurrency trading in India. Multiple exchanges were forced to shut down the business and some had to relocate to more crypto friendlier nations.

However, following petitions by both industry players and the public, a legal action challenging RBI’s ruling was filed before the Supreme Court. The lawsuit was filed by the Internet and Mobile Association of India (IAMAI) which also represented various exchanges. The association argued that trading digital currencies while there is no law inhibiting it was a ‘legitimate’ business practice according to the constitution. It said that the RBI should not deny such businesses or individual banking services.

Nevertheless, Indian Central Bank in its defense, argued that it has always maintained consistency in opposing; the introduction of other payment systems that undermine the traditional banking system.

A Landmark Ruling for the Indian Cryptocurrency Industry

Well, it might have taken a long time with the Supreme Court postponing hearings and judgment but it has finally dawned. This appears to be a landmark ruling for all the players in the Indian cryptocurrency sector. They can now approach banks for financial services which are very significant in running an exchange firm.

Furthermore, the lawyer arguing against RBI’s controversial ban questioned RBI’s authority in regulating virtual currencies. The RBI responded that it had not generally banned cryptocurrencies in India, but it only imposed banking restrictions on the sector. We all understand banking services are crucial to run cryptocurrency business. A firm has to deal with both fiat and crypto and RBI’s move to deny the industry banking services; it was simply a death sentence to the whole industry.

In the meantime, the government has appointed a panel and tasked it with studying the cryptocurrencies industries generally. The panel has proposed banning all privacy-oriented cryptocurrencies; and even went on to recommend hefty fines and a jail term of up to ten years; for those found guilty of dealing with crypto.

In conclusion, the Israeli Attorney General has submitted a similar case in court; against the ban of banks from providing financial services to cryptocurrency entities. The Attorney General wants money laundry cases to be handled individually, instead of freezing the whole industry.

Filed Under: Bitcoin News, News Tagged With: cryprocurrency industry, Crypto Adoption, Crypto Regulations, Internet and Mobile Association of India [IAMAI], Reserve bank of India

Are Blockchain Voting Systems the Solution to Election Fraud?

February 18, 2020 by Richard M Adrian

Blockchain has won attention as a means to boost public trust during elections. The Indian Election Commission is considering a blockchain voting system and has partnered with the Indian Institute of Technology to develop a blockchain voting system.

Mr Sunil Arora, Chief Election Commissioner, believes that blockchain will improve voter turnout as more people from different regions choose to vote even when they are away from their hometowns of registration.

Aleksander Essex and Jeremy were the developers who identified the potential of blockchain in the validation of the voters.  During the early stages of budding technology, when bitcoin was a meager $30; Clark and Essex used bitcoin as a form of carbon footprint in digital information that could make electronic voting secure and efficient. 

Several startups have since followed up to build on the Blockchain electronic voting infrastructure. One such startup is FollowMyVote-a Virginia-based company. FollowMyVote is trying to break the idea that voting systems can’t go online. Especially in an era that has infiltrated democracies through the lure of election fraud and third party tampering.

When governments do not accept the concept of democratic voting systems, developed democracies would probably collapse. Blockchain voting platforms will ensure effective voter identification, registration and also streamline the process of counting and validating votes. At a time when almost all aspects of life are conducted online, technology will help bridge political functions. 

In fact, blockchain researchers have successfully run acid tests on how to eliminate vulnerabilities in blockchain voting systems. However, several entities remain skeptical about the implementation of blockchain in voting. For example, the increasing trend of hackers exploiting blockchain applications provides further cause for concern.

 Back in 2017, Homeland Security posited U.S. elections as the country’s core infrastructure. US Homeland Security Secretary Jeh Johnson told media reporters how elections would qualify for state-funded cybersecurity assistance, federal transport systems, and federal protection.

The Department of Homeland Security reported more than 500,000 damaged voter records after the 2016 US election. A series of investigations led by Robert Mueller, a special counsel, indicted 26 Russian nations for allegedly hacking into voting systems. The investigation report highlighted the hackers target voting systems in at least 21 states.

Security researchers have just recently discovered attempts at phishing campaigns targeting three candidates in the 2018 midterm elections. Homeland Security Department claims that a lack of confidence would impact voter turnout. Say a scenario where you’d prefer to stay home and not vote, rather than participate in a rigged election or may lose their trust in the elections.

Blockchain voting remains one of the most explored blockchain use cases. However it isn’t clear why most tests for blockchain voting have been on a small scale. Especially targeting community projects and student organizations. Nonetheless, the largest blockchain voting system was tested in Moscow, Russia during a city council election. In fact, the end result was increased voter turnout with 90 percent of those registered to use the blockchain program.

 

Filed Under: Education, Industry Tagged With: Blockchain Crime, cryprocurrency industry, India

Is Ethereum’s Price Action Dependent on Bitcoin?

February 9, 2020 by Mary

The Underlying Correlation Between Bitcoin and Ethereum

The correlation coefficient is the statistical measure of strength that two relative variables have in their relationship. Analysts observed a sync performance between Ethereum and Bitcoin since last year. Both coins have a strong positive relationship. Where their price correlation coefficient is 0.68.

This estimate represents the past 100 days of price action for both assets. The correlation measurement usually has 1 as the strongest positive correlation. -1 represents the strongest negative correlation.

A negative coefficient reveals two prices moving in opposite trends. The positive coefficient, however, shows price actions moving in the same direction.

In this regard, the price of Ethereum has most times depending on the valuation of Bitcoin. Here is why? 

Oftentimes factors such as expert forecasts, calamities and major political events have influenced cryptocurrency market sentiment.

Closely, it turns out that overall cryptocurrency market sentiment has a huge influence on Bitcoin. Therefore it is likely that the price of a couple altcoins could depend on the price action of Bitcoin.

According to Skew, Ethereum posted the highest correlation coefficient with Bitcoin for two consecutive years. The total average correlation is 0.9. While 2019 posted the highest correlation index between both digital assets. 

2018 bear market will go down the books of history given the historic bitcoin price crash. A squashing crypto market bloodbath followed the massive price shed. This indicated a striking correlation between the price of Bitcoin and that of all crypto assets.

The stock market has witnessed a high correlation between the United States Dollar and equity markets. As the US dollar is the largest store of wealth, so is Bitcoin the largest store of asset class wealth. It, therefore, makes sense that the overall performance of crypto markets is pegged on Bitcoin. 

However, most traders and analysts agree the Ethereum – Bitcoin correlation is a natural situation in the cryptocurrency market. Meanwhile, Michael Van de Poppe compared the correlation coefficient in crypto markets to that of commodities. The Amsterdam Stock Exchange trader and market analysts said gold leads in the commodities asset class. Gold’s price sets the pace for other metals. 

It is therefore clear that Bitcoin’s price could change as a result of government policies, high volatility in traditional financial markets; but this change will likely reflect on the entire cryptocurrency market. However, Van de Poppe notes slight variations in this observation. He says: 

“Some parts the correlation is high in which Ethereum outperforms Bitcoin, in some parts, it’s low as Ethereum drops hard against Bitcoin, while Bitcoin trends up against USD. It’s different in different parts.”

Ethereum will not necessarily repeat Bitcoin price movements. A correlation study for the period between June 2017 and December 2019 revealed that 5 of 14 cases indicated a strong positive correlation. While four cases showed a negative correlation coefficient.

However, the correlation between Ethereum and Bitcoin has intensified since the last half of 2019. Nonetheless, researchers at the San Francisco Open Exchange reveal Ethereum’s strong correlation is a result of general failure.

Particularly the failure to launch Ethereum 2.0 in 2019. Several studies have also been trying to establish a correlation pattern between cryptocurrency and equity markets. Sadly, none was identified and traders have been quick to suggest that correlation is not a reliable tool for market analysis. 

 

Filed Under: Bitcoin News, Education Tagged With: Bitcoin news, cryprocurrency industry, ETH, Ethereum - Bitcoin correlation, Ethereum (ETH), Ethereum and Bitcoin

Billion Dollar Startup Exits in Fintech

January 29, 2020 by Richard M Adrian

The billion-dollar fintech startups list has 1 in 10 exits the market through a high valuation merger, acquisition or IPO. There is a staggering amount of fintech startups evolving every day and scaling cross borders. Venture capitalists are pouring more capital to support the next wave of scale.

Ideally, ideas originating from one location are developing and evolving elsewhere. A 2019 survey by Global Fintech Adoption suggested 96% of respondents were aware of at least one financial technology service. 75% of them had used a financial technology product or even money transfer. 

Looking at the figures, Fintech has not only evolved into a mainstream space but also become hypercompetitive. 

Billion Dollar Valuation Startups in Asia

The rate of cashouts and investment is also alarming. Fifteen financial technology firms in China have had exits valued at 1 billion dollar valuation, within the past three years. Data-driven studies in Asia indicate that South East Asia witnessed a record 80 deals and $700 million of investment in Q3 2019. 

The figures are accelerating in Africa as well, where fintech startups doubled their volume between Q2 and Q3 of 2019. Meanwhile, the promising behavior of the space has guaranteed incumbent firms to transform their business models. In fact, these entire space seems to be piquing investor interest be it -; insurance technology, on-demand fintech services, payment processing and so on. 

The leading nations with upperhand in fintech startups remained to be Hong Kong and China. While global startups in the industry raised a combined sum of $45 billion, both countries raised $26 billion. That is owing to the figures collected in 2018. The trend in the past year is evenly tremendous and we might see the amounts hit a peak this year. 

Since 2017, fifteen China and Hong Kong based fintech startups have exited through a merger or an Initial Public Offering at a billion dollar plus valuation. Prior to that year there had never been any $1 billion valuation exit from those regions. 

CBInsights Charts for High Valuation Fintech Exits

 

According to CBInsights, Zhong Insurance became the most valued exit with a whopping $11 billion dollar valuation. The leading insurance technology company came to birth following joint efforts by tech giants Ping An, Alibaba and Tencent. ZhongAn is China’s first online insurance service provider to have broken the $1.49 billion premium. 

valuation at the time of exit

Moreover, we have Challenger banks that are directly manifesting more holistic solutions to customers. The banks saw a blockbuster 2019 after raising over $3 billion in Q3.

Note that the banks are a spectacular phenomenon for customer money, paycheck, provision of intelligent insights for financial forecasting and the best in class financial technology products. There are at least 75 challenger banks today and we expect the number to grow this year. 

Qudian, an electronics retailer based in Beijing went public at a $7.9 billion valuation in 2017, following a $955 million in funding. In 2018, Carlyle and TPG Capital led a consortium of investors that bought  Du Xiamon Financial Services for $4 billion. 

The latest billion-dollar fintech startup in the spin of high valuation exists is OneConnect. A financial accounting management infrastructure, OneConnect went public at a $3.7 billion valuation in December. Hong Kong-based Futu Securities an online trading platform went public in March  2019 and exited with a $1 billion dollar valuation. 

 

Source: CBINSIGHTS

 

Filed Under: Industry, Opinion Tagged With: cryprocurrency industry

Iran Issues 1,000 Licenses To Crypto Miners

January 27, 2020 by Tabassum Naiz

As per sources, the government of Iran has allowed licenses to over 1,000 cryptocurrency mining entities. These licenses are issued by the Iranian Ministry of Industry, Mining, and Trade. This decision has given benefits to large firms established in the country. On the contrary, many small investors are away from the project due to higher electricity taxes which have proved to impede them.

 In an interview with IBENA news agency, an official with ICT Guild Organization of Iran said that the industry of cryptocurrency mining is new and has attracted many people in Iran towards itself. Amir Hossein Saeedi Naeini stated that:

 “The Ministry of Industry, Mine and Trade has issued more than 1,000 licenses for cryptocurrency mining in the country.”

 Saeedi Naeini further added that Iran’s researches show that the crypto mining industry can generate $8.5 billion for the economy.

 Electricity Costs – A Leading Impediment

 As the country is grappling with economic problems and the U.S. has sanctioned, Saeed Naeini believes this decision will help improve Iran’s economy. However, he discussed that the electricity cost is a leading impediment for the miners in the country. Moreover, a high number of large mines have been established. To the news agency, he said:

“High electricity tariffs plus stringent regulations have made the sector less appealing for small investors.”

 He said that the industry’s operating conditions should be in a position so that everyone, from large to small firms, can enter in it. Further, he emphasized that modification in electricity costs and terms could help boost the cryptocurrency mining industry and can generate a significant amount of revenue.

 Cryptocurrency Mining Law of Iran

 The cryptocurrency mining industry of Iran is established last year and was officially recognized by the government of Iran. It is necessary that ahead of operations, crypto miners should have a license issued by the Ministry of Industry, Mine, and Trade.

 Furthermore, the decision of recognizing the industry faced severe criticism by several authorities in the government. The authorities accused crypto miners of consuming more electricity. Last year, in June, it was reported by the state’s television that the authorities had seized about 1,000 mining machines. These mining machines were seized in two deserted factories on the charge of consuming subsidized electricity of the government.

 However, the official Saeedi Naeini said to IBENA that debate is under discussion for creating a favorable environment for the cryptocurrency miners. 

Filed Under: News Tagged With: cryprocurrency industry, crypto miners, Crypto Mining, cryptocurrency mining, Cryptominers, Iran

Coin Centre Bill Could Loosen Cryptocurrency Taxation Policies and Pave Way for Mainstream Adoption

January 18, 2020 by Richard M Adrian

Crypto asset taxation could be lengthening the long walk to crypto adoption in the United States. While the CFTC deems cryptocurrency as commodities, the Internal Revenues Service (IRS) classifies them as property. Hence, once an individual purchases any amount of digital currency, they are creating a taxable event. 

The outlook on the future of cryptocurrency taxation and adoption is however based on more theory than practice. What community participants fail to notice is just how difficult it would be for bitcoin to go mainstream. Especially if these hardly compliant participants are to comply with existing taxation laws. In fact, it is right to say that mainstream crypto adoption would turn out such a headache, if current legislatures are anything to go by. 

Like-Kind Exchange Scenario 

Another problem is crypto adoption and usage seems so simple at face value. While on the other hand, cryptocurrency taxation regards to even tiny investments is complex. Take for instance the loose translation of a section of the IRS Code Section 1031: 

“Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange.”

This is quite a controversial exaggeration at worst given that it’s not at all times a crypto exchange event will result in a gain. A scenario which raises the question of a like-kind exchange. Note that exchanging Bitcoin to Ethereum, vice versa would only create a taxable event once the ethereum is converted to fiat. One of the confusing cases thereof is that of an individual crypto trader executing to and fro (fiat-crypto) transactions. Don’t you think taxation laws would overestimate the trader’s portfolio, and therefore end up overtaxing them? 

Washington-based Coin Centre is attempting to change things by introducing a more practical taxation legislature. The not for profit organization has been working with congress member to introduce a bill that can exempt low-value transactions from taxation. 

Cryptocurrencies are Treated Either as Property or Commodity 

Any event of cryptocurrency taxation following a transaction creates serious headaches among holders during tax season.

Back in 2014, the IRS published a detailed guide on cryptocurrency taxation. The guide stated that Bitcoin and other cryptocurrencies would be treated as property; hence all would incur profits if sold or bought. Thereby, the introduction of capital gains into instances of crypto purchases. This would also include crypto events for trivial purchases and payments. 

Pros and Cons of Listing Crypto as Property

IRS classification of cryptocurrencies as property brings with it several cons and one pros.. 

Pros

  • A 15% Maximum rate will apply to any cryptocurrency’s capital gains. A figure that is likely to be the lion’s share of what an average individual would report. Moreover, this figure is at least 10% less than the maximum for the normal income tax. Nonetheless, crypto miners, stakers, traders and workers accepting crypto would anticipate a narrow tax rate of 25% on their average crypto income. 

Cons

  • Compliance burden among crypto users. It’s cumbersome to track capital gains/losses, transactions, and crypto price (in US Dollars) every single time. Sometimes the pricing varies with exchanges. Hence placing a large burden on regulator requirements for reporting all transactions taking place. 
  • The Internal Revenue Service caps the amount of deductible loss for all property transactions at an annual $3,000 sum. Therefore tightening and offsetting big investment losses against the average taxation bill. 

However, the prices of major digital currencies have a tendency to bounce. Therefore, reporting of values following bounces would pose a great challenge to daily crypto users. The 2020 Virtual Currency Tax Fairness Act is attempting to address this problem.  Representatives of both Democrats and Republicans parties introduced the bill to the US Congress today. The legislature will ensure that low-value crypto transactions are easy to execute. 

Representatives Schweikert, Emmer, DelBene and Soto introduced the new act to parliament. The measure will allow tax authorities to exempt cryptocurrency transactions from taxation. In fact, the initiative would similar to the exemption of small value foreign currency de minimis. As a result, individuals using cryptocurrencies would not have to report transactions that created a gain/loss of less than $200. 

Coin Centre has been working round the clock for a feasible solution that would lead to massive crypto adoption. The Washington based research group released a report claiming that it had collaborated with Schweikert and DelBene; in a bid to attract attention from lawmakers.

 

Filed Under: Bitcoin News, News, Opinion Tagged With: cryprocurrency industry, Crypto Adoption, Crypto Regulations, Securities and Exchange Commission

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