The cryptocurrency space needs regulatory certainty and the current definition of cryptocurrency is too broad, said the CEO of crypto finance startup CIrcle, Jeremy Allaire, in a blog post on May 20.
Allaire’s statement comes in the wake of the “geofencing” of nine different coins for United States-based clients of digital currency exchange Poloniex, which is owned by Circle Internet Financial. Poloniex said then that the decision was motivated by the uncertain regulatory environment in the country.
In the recent post, Allaire stated that digital assets represent a fundamental new class of financial instrument and should not be considered securities, commodities, or currencies, while the U.S. Securities and Exchange Commission (SEC) “is forced” to develop guidance regarding cryptocurrencies deeming them securities. Allaire argued that existing laws cannot address the cryptocurrency issue. Concluding his statement, he said:
“We urge lawmakers to recognize the unparalleled economic power that permissionless innovation has unleashed and to act to let crypto and blockchain technologies flourish. We know lawmakers want to support economic growth and want them to seize the opportunity to lead the charge.”
As earlier reported, the recently reintroduced Token Taxonomy Act — which seeks to exclude digital currencies from being defined as securities — will create a de minimis tax exemption for crypto transactions under $600, according to the executive director of Coin Center, Jerry Brito.
Brito said that, under current laws, one is technically obligated to report capital gains when using crypto to buy simple things like a laptop, plane tickets, or even in writing a smart contract.
Yesterday, Cointelegraph reported that the U.S. Internal Revenue Service (IRS) prioritized issuing tax guidance on cryptocurrencies. In a letter addressed to Rep. Tom Emmer, IRS Commissioner Charles Rettig stated that the agency “made it a priority” to issue relevant guidance. The instruction will specifically cover issues such as acceptable methods for calculation cost basis, cost basis assignment; and tax treatment of forks.
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