Global cryptocurrency investors active in the U.S. market or on the U.S. crypto exchanges are going to have a tough time dealing with the regulators. In the latest development, the current U.S. administration has proposed to collect data of foreign crypto investors active on crypto exchanges and in the crypto market. It seems like the U.S. government is mulling a move for a broader crackdown on crypto tax evaders and is looking for international cooperation.
Treasury Department proposal wants crypto exchanges to share data on foreign investors.
Last week, the Treasury Department released the “Greenbook” of revenue proposals. It demands that crypto brokers such as crypto exchanges and other wallet service providers provide all details of foreign individuals indirectly holding accounts. In exchange for the information they receive, the government is keen on working with foreign governments on providing information of individuals or entities that are evading tax liabilities of their respective countries. Regulators across countries are actively working on crypto regulations.
“Crypto market offers opportunities for U.S. taxpayers to conceal assets.”
The Greenbook proposal states, “The global nature of the crypto market offers opportunities for U.S. taxpayers to conceal assets and taxable income by using offshore crypto exchanges and wallet providers.” The criminal division of the IRS is already working with its counterparts in other countries like Canada, Australia, the U.K, and the Netherlands. This move comes as the current Biden administration is willing to bolster the tax administration. However, Congress legislation is still required for this proposal to come into effect. The IRS officials believe that cryptocurrencies are contributing to the growing tax gap in the country, meaning the taxes owed and the ones actually paid on time.