Bitcoin News — IRS

Ripple Leads Crypto Coalition Seeking Gov’t Oversight Encouraging Crypto, Blockchain

Posted by Helen Partz on

A crypto coalition led by Ripple plans to pay D.C. lobbyists to impact the government’s stance on cryptocurrencies.

Ripple will lead a group of crypto startups to lobby lawmakers and financial regulators in D.C. to support crypto and blockchain innovation, Bloomberg reported on Thursday, September 27.

According to the report, the coalition of San-Francisco-based crypto firms is planning to pay Klein/Johnson Group, a bipartisan lobby group, to assist the crypto and blockchain community in conveying to regulators that the industry needs support from the government.

The new group, called the Securing America’s Internet of Value Coalition, aims to soften the government’s stance in order to encourage innovation and support competition in the ecosystem of global crypto markets.

The coalition, together with the lobby group, will raise issues with Congress, as well as the Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), and other agencies that have relations to cryptocurrencies.

According to the preliminary agreement, the fintech lobby group Klein/Johnson will reportedly receive around $25,000 a month and 10,000 in Ripple (XRP) from the coalition. As Bloomberg reports, the company is planning to convert the cryptocurrency into dollars by the time it discloses the payments on federal lobbying forms.

Along with Ripple, as well as independent foundation RippleWorks, the coalition will also feature digital payments firm Coil, crypto investment company Yaka, and PolySign, a startup that is set to launch a crypto custodian.

Chris Larsen, executive chairman of Ripple, commented that while the company admits that the matter is “really complicated,” due to a great deal of “misinformation,” there is still “a lot of interest in this topic in D.C..”

The companies’ lobbying move follows the increased attention of Congress and other agencies like the SEC towards cryptocurrencies. Yesterday, a group of Congress lawmakers sent a letter to the SEC, urging the regulators to provide more clarity in regard to cryptocurrencies. Specifically, the lawmakers have reportedly requested the SEC to confirm whether digital tokens can be identified as securities or not.

On September 26, the U.S. House of Representatives passed a bill to establish a crypto task force to combat terrorist use of cryptocurrencies.

In June, SEC chairman Jay Clayton claimed that major cryptocurrency Bitcoin (BTC) is not a security due to its function as a replacement for sovereign currencies. Around a week later, a senior SEC official claimed that the top altcoin Ethereum (ETH) will be not regulated as a security, while Ethereum co-founder has previously denied that ETH was ever a security.

Concerning Ripple, in April, the company’s chief market strategist Corey Johnson stated that Ripple is “100 percent clear” and not a security since it does not meet the standards of what a “security is based on the history of court law.”

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Public Records Show US Government Tripled Investment in Blockchain Analysis Firms in 2018

Posted by Marie Huillet on

New research into publicly available records shows that U.S. government agencies have tripled their investment in blockchain intelligence firms this year.

New research into publicly available records shows that U.S. government agencies have tripled their investment in blockchain intelligence firms this year, according to a Diar report published September 24.

As Diar outlines, blockchain analysis can be used by financial institutions or banks to track compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations.

The analysis can equally be used as a “digital trail” that provides law enforcement agencies with actionable intelligence, allowing them to potentially counter illicit activity that would otherwise remain concealed behind pseudonymous crypto wallet addresses.

U.S. government agencies reportedly account for $5.7 million out a collective total of $28.8 million that has been invested in blockchain analysis firms to date, Diar states.

Funding from U.S government. agencies in blockchain analysis firms. Source: Diar.co

According to Diar, the vast majority of government deals have been contracted to New York- based blockchain intelligence firm Chainalysis, which has signed deals with government agencies totalling $5.3 million (out of a total of $17.6 million from all its investors).

Chainalysis’ largest contract was reportedly signed with the Internal Revenue Service (IRS) in August of this year for around $1.6 million. According to Diar’s report, Chainalysis is followed by rival firms Elliptic and CipherTrace in terms of overall investment.

The IRS reportedly accounts for the highest share of total government expenditure on blockchain intelligence, followed by the U.S. Immigration and Customs Enforcement (ICE), as Diar’s consolidated data shows:

U.S government agencies’ expenditure on contracts with blockchain analysis firms. Source: Diar.co

While Diar notes that the IRS, ICE, and Federal Bureau of Investigations (FBI) have a combined 85 percentage of the total expenditure, several other government agencies have also sought smaller contracts with blockchain intelligence firms, including securities and commodities regulators.

Diar’s Sept. 24 report also included a section devoted to Initial Coin Offerings (ICO), which have reportedly raised double in investments in 2018 ($12 billion) as compared with last year. However, Diar’s collected statistics have also shown that 70 percent of tokens “are now valued at less than what was raised during their ICO.” The report notes that 402 out of 562 projects that collectively raised over $8.2 billion are now worth $2.2 billion — a hefty $6 billion market capitalization loss.

As a recent Cointelegraph analysis piece has outlined, the role of third-party blockchain intelligence firms was brought into the spotlight by the recent high-profile indictment from the U.S. Department of Justice (DoJ) against Russian officials who allegedly used crypto to fuel efforts to interfere in the 2016 U.S. presidential elections.

One of the most “heavily interviewed” experts in the wake of the indictment news was Jonathan Levin, co-founder and COO of Chainalysis, who declined to comment on the firm’s official involvement in the case.

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Regulations Roundup: U.S. Govt. Pays $5.7 Million for Blockchain Analysis, Amit Bhardwaj’s Assets Seized

Posted by Samuel Haig on

Regulations Round-Up: U.S. Govt. Pays $5.7 Million for Blockchain Analysis, Amit Bhardwaj’s Assets SeizedIn recent regulatory news, a report published by Diar has found that U.S. government agencies have paid approximately $5.7 million USD to blockchain analysis contractors, India’s Enforcement Directorate has seized $5.9 Million worth of assets linked to the case of Amit Bhardwaj, and the Bank of International Settlements finds cryptocurrencies to “not, at this point, […]

The post Regulations Roundup: U.S. Govt. Pays $5.7 Million for Blockchain Analysis, Amit Bhardwaj’s Assets Seized appeared first on Bitcoin News.

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US Representatives ‘Urge’ the IRS to Clarify Cryptocurrency Tax Guidance

Posted by Jamie Redman on

US Representatives 'Urge' the IRS to Clarify Cryptocurrency Tax GuidanceOn Wednesday September 19, a committee of US bureaucrats sent an open letter to the Internal Revenue Service (IRS) in regard to the way cryptocurrencies are taxed. The representatives’ letter directed towards IRS commissioner David Kautter wants the taxation office to publish provisional guidelines on how digital currency transactions and investments should be handled when US […]

The post US Representatives ‘Urge’ the IRS to Clarify Cryptocurrency Tax Guidance appeared first on Bitcoin News.

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US Lawmakers Say IRS Too Focused on Enforcement, Should Provide Clarity for Crypto Taxation

Posted by Marie Huillet on

U.S. lawmakers have chastised the Internal Revenue Service (IRS) for failing to issue updated and “comprehensive” crypto taxation guidance since 2014.

U.S. lawmakers have called on the Internal Revenue Service (IRS) to issue clarified and “comprehensive” crypto taxation guidance, in an open letter submitted yesterday, September 19.

The letter was sent to acting IRS commissioner David Kautter by Congress members David Schweikert, Darin LaHood, and Brad Wenstrup, Kevin Brady and Lynn Jenkins from the Committee on Ways and Means.

It opens by calling attention to a prior letter sent by the representatives in May of last year, which had already questioned the agency’s lack of a comprehensive crypto taxation strategy. Since then, the lawmakers claim, “the IRS [has] continue[d] to expand its enforcement activities [but] without issuing any further guidance for taxpayers.

The representatives deem that the IRS has had “more than adequate time” to work through complexities after its preliminary rules were issued four years ago. These indicated that crypto would be treated as property for tax purposes in the U.S., and were issued in March 2014.

The lawmakers note that in September 2016, the Treasury Inspector General for Tax Administration had reported that the IRS crypto tax strategy was incomplete, and had already called for updated guidance at the time, further noting that other associations have since called on the agency to provide additional clarity for taxpayers. However, the lawmakers consider that:

“Despite the issuance of only preliminary guidance on this issue [back in March 2014], the IRS has made enforcement of this guidance a priority, undertaking robust enforcement actions on a number of fronts.”

As an example of the IRS’ robust enforcement actions to date, the lawmakers draw attention to the agency’s decision to summon records from American users of crypto exchange and wallet service provider Coinbase in July 2017, which has since seen a protracted legal battle set in.

The lawmakers argue that while the IRS has proactively continued to remind taxpayers of the penalties for non-compliance with its guidance, its failure to introduce a more robust taxation framework “severely hinders taxpayers' ability” to meet their obligations.

The letter closes by stating that the representatives will be asking the Government Accountability Office to undertake an audit on the matter.

As previously reported, data released ahead of the close of the preceding tax year suggested that just 0.04 percent of tax filers were reporting capital gains from crypto investments to the IRS.

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