U.S. Congress Members Concerned Over New Tax Obligations for Defi Exchanges and Stablecoins
Several U.S. Congress members have expressed concerns over the newly proposed crypto-related tax reporting rule revealed recently by the U.S. Treasury Department and the Internal Revenue Service (IRS) and its possible effect on several elements of the cryptocurrency industry.
- Exclusion of significant parts of the crypto machinery, including miners, stakers, validators, and wallet providers
- Proposal includes decentralized crypto asset exchanges and U.S. dollar-backed stablecoins
- The rule would require cryptocurrency brokers to disclose customer information
- Industry actors criticize the rule, saying it makes compliance difficult
- Public comment period open for two months
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Other members of Congress have also criticized the proposal, stating that it could disrupt the activities of the cryptocurrency industry in the U.S. Chairman of the House Financial Services Committee, Patrick McHenry, called it an “ongoing attack on the digital asset ecosystem” from the Biden administration. However, Senator Elizabeth Warren supports the proposal, emphasizing the need to prevent wealthy tax cheats from hiding income in digital assets.
Hot Take: The newly proposed tax reporting rule for crypto is facing criticism from Congress members who believe it could have a negative impact on the cryptocurrency industry. While some parts of the industry are excluded from the rule, others, including decentralized exchanges and stablecoins, are still included. The rule would require cryptocurrency brokers to disclose customer information, which has raised concerns about compliance. While some members of Congress support the rule as a means to prevent tax evasion, others see it as a threat to the digital asset ecosystem.
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