In a letter to U.S. Senate Finance Committee Chairman Ron Wyden and Senator Mike Crapo, Coin Center listed a number of criteria that the U.S. government should take into account when developing regulations for the crypto industry.
Coin Center mentioned the virtual currency tax fairness bill previously presented to Congress. According to this bill, the US Internal Revenue Service (IRS) should exempt traders from paying taxes for making cryptocurrency transactions. These measures will encourage the use of cryptocurrencies as a payment method. Thus, transactions with digital assets should be considered similar to transactions when buying foreign currencies, the letter notes.
The advocacy group has called for tax authorities not to require third-party reporting on digital assets. Experts argue that US users may be required by law to provide information about the senders of digital assets, which creates privacy problems and additional difficulties.
“Forcing ordinary people to meticulously collect information about other people and report it to the government without a warrant violates the Fourth Amendment to the Constitution. And requiring politically active organizations to create and make public lists of their benefactors, and then provide this information to the government, violates the First Amendment to the Constitution, ”said the Coin Center.
In addition, the non-profit organization has proposed revising the IRS definition of a broker to exclude cryptocurrency miners and node operators from this category. The department’s powers to prosecute alleged tax evaders should also be limited, the Coin Center noted.
The legal center cited as an example the situation when the IRS received data from the Coinbase crypto exchange about users who might not have been involved in any tax violations.
“If regular bitcoin trading results in trader data being no longer private, this will have serious consequences for bitcoin and the entire cryptocurrency ecosystem,” Coin Center experts concluded.
Last year, the Coin Center condemned the actions of the US Treasury Department for blocking the Tornado Cash cryptocurrency mixer. However, recently the court dismissed the lawsuit of users against the Ministry of Finance, considering that the department did not exceed its powers.
Source: Bits
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
