The cryptocurrency space needs regulatory certainty and the existing definition of cryptocurrency and virtual assets is too wide, mentioned the CEO of cryptocurrency finance startup Circle, Jeremy Allaire, in a blog post on May 20¬¬¬.
It is to be noted that the CEO’s statement comes in the wake of the geofencing of 9 different coins for US-based clients of virtual currency exchange Poloniex, which is owned by Circle Internet Financial. Crypto exchange Poloniex mentioned then that the verdict was provoked by the uncertain regulatory environment in the nation.
Allaire mentioned, in the present post, that virtual assets and cryptocurrencies represent a fundamental innovative class of financial instrument. He further added that they should not be considered as or currencies, commodities, or securities. On the other hand, the SEC is forced to build up guidance regarding cryptocurrencies and digital assets deeming them securities. Circle’s CEO also argued that existing laws cannot address the digital asset and cryptocurrency issue.
Furthermore, the recently reintroduced Token Taxonomy Act will generate a de minimis tax exemption for virtual asset related transactions under six hundred dollars, according to Jerry Brito, the executive director of Coin Center. It is to be noted that the Token Taxonomy Act seeks to exclude digital currencies from being defined as securities.
Brito further mentioned that, under current laws, one is technically obligated to report capital gains when using cryptocurrencies to pay money for uncomplicated things like a plane ticket, laptop, or even in writing a smart contract.
Yesterday, several crypto media outlets reported that the U.S. Internal Revenue Service prioritized issuing tax guidance on digital assets and cryptocurrencies. IRS Commissioner Charles Rettig mentioned, in a letter addressed to Rep. Tom Emmer, that the agency made it a priority to issue pertinent supervision. The instruction will particularly envelop several issues like acceptable methods for calculating cost basis, the tax treatment of forks, and cost basis assignment.