Crypto's worst enemy:
As the spread of cryptocurrency comes more and more. The profits also become more and more. Especially with last year, cryptocurrency had exponential growth. So the IRS in the United States, and other tax offices alike, are faced with a tax problem. How in the world do you tax something so intangible. Or how in the world do you go about filing for crypto taxes. Like crypto can be looked at like stocks, but there is a huge problem with compliance from these crypto exchanges. Leading to a battle with many of these places, because all they want is to remain as decentralized as possible.
For example, the battle with coinbase has become rather vocal. At first the IRS wanted coinbase to report all their users. Which has the amount of 500,000. This crazy amount is normal for stocks, but continues to have many questions in crypto. Then with a recent court order, coinbase won the battle tremendously with only having to report 14,000 of their clients. Compared to the original 500,000, it is so much better! With that 14,000 that is reported are just people with super high frequencies of transactions, and were notified promptly before all this happened.
In the end creating a giant mess in crypto taxes for the IRS this season. Literally just fractions of people have reported there gains. Might I add, these are very impressive one year gains. However, rules on taxes are still to come soon, but I think more taxation is going to take at least until next year. If the cryptocurrency community could figure a way to avoid many of these taxes though, I think we will be witnessing history. Do you think crypto can really achieve its goals of decentralization? What about decentralization for taxes? Just some things to think about, and I'll see you steemians in the next post!