Is it the end of cryptocurrencies as we know them? As the Handelsblatt reports, the US tax authority has asked Congress for explicit permission to view and collect various information and data on crypto transactions.

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Tax authority asks the Senate for an official mandate by law

Until now, the authority had to deal with contradictions again and again when it asked for the disclosure of certain tax-relevant information. As IRS Chairman Charles Rettig announced Tuesday before the Senate Finance Committee, an official mandate that would be guaranteed by law could rule out individual disputes between crypto providers and authorities in the future.

There are now around 8,600 crypto exchanges and other trading venues. These would collectively manage a market capitalization of the entire cryptocurrencies list of over $ 2 trillion. A large number of tokens are intent on allowing anonymized crypto transactions “so as not to appear on the radar screen,” as the Handelsblatt Rettig quotes.

As before, the unclear tax situation in combination with a partly weak hand of the authorities ensure that cryptocurrencies are abused for evading taxes. Worldwide, this amounts to billions.

Ministry of Finance demands stricter interpretation of the law

US President Joe Biden has already stated that from 2023, transactions with cryptocurrencies with the equivalent of more than $ 10,000 will be subject to a reporting requirement.

If it goes to the US Treasury, then the threshold should be lowered to a limit of only $ 600. This would be a stricter interpretation of the law, such as in the case of banking transactions involving cash transfers or other securities transactions.

Whether a corresponding mandate for the local tax authorities is also being considered in Europe is still unclear. However, it seems quite conceivable that the European Union could follow the American example in terms of implementation.

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Photo by Ferdinand Stöhr