The world is changing its views on money, especially about cryptocurrency and how it is used on sites like Vulkan Vegas. Because of this, more and more countries are becoming receptive to cryptocurrency. However, there are those that want to regulate it heavily—and rightfully so—it prevents scams from happening. There are new legislations underway and being approved worldwide. Let us take a look at the most recent global news about cryptocurrency.
New York Bill Bans Bitcoin Mining
A bill in New York prohibits mining bitcoin, citing that the mining process has an unacceptable carbon footprint. The bill has been passed and is only waiting for the approval of the Governor to make it into law.
The issue is that mining bitcoin uses a significant amount of electricity. This hefty amount of power means people are burning a lot of fossil fuel, which is bad for the environment.
If Governor Kathy Hochul signs this bill, it will be the first of its kind in the United States. The bill is in alignment with New York’s goal to reduce its carbon footprint by 85% come 2050. It is in compliance with the Climate Leadership and Community Protection Act.
The bill does not mean mining is not allowed altogether. People can still mine bitcoin, but they must do so using 100% renewable energy. These miners must renew their permits. According to the Chamber of Digital Commerce, members who mine bitcoin in New York use 80% renewable energy. This figure exceeds the 60% global average of other miners.
Of course, there are opponents of the bill. The opponents say that crypto miners will leave the states because it is easier to mine bitcoin in states where there is no such law. The result, the opponents claim, is a revenue loss for New York.
Congress Mulls Over New Laws
The US Senate is now reviewing a new law called the “Responsible Financial Innovation Act”. This bill attempts to regulate cryptocurrencies. It does not stop there, as there are also provisions to regulate other forms of digital assets.
The bill will also introduce new regulations and frameworks to make mining and crypto-ownership more transparent. What the bill wants to do is classify coins and tokens as commodities. If this bill passes, coins and digital assets will be like corn and oil—commodities.
As such, digital assets will have a new classification called ancillary assets. It also means that the Commodity Futures Trading Commission will have the right to oversee operations that have something to do with mining and owning digital assets.
In relation to this bill, there will be new rules about fees and the role of the Securities and Exchange Commission. The SEC will have lesser control over the regulation of crypto assets. Digital coins will only fall to the control of SEC under certain conditions. For example, coins that offer dividends, liquidation rights or stock privileges will fall in the control and oversight of the SEC.
The bill wants to define digital assets as those that people use as a medium of exchange. Anything that is used to trade falls into this, and it could mean that the classification may even include non-fungible tokens, which is the hottest digital asset to own right now.
Bipartisan Infrastructure Bill Signed by Biden
President Joe Biden signed a new law. It is a $1.2 trillion bipartisan infrastructure bill. It has an impact on crypto investors. The new law now requires brokers, which includes cryptocurrency exchange sites, to issue a document called 1099-B. Brokers are now required by law to notify the IRS for crypto-transactions.
What does this mean? It means that owners of digital assets can no longer hide. They can no longer hide their gains, and they must now pay taxes. Because of this, there are two things that cryptocurrency owners must do:
- The first one is keeping track of the cost of the assets and the gains.
- The second one is finding a tax professional who specializes in crypto currency and digital assets management.
For the first one, a cryptocurrency owners must know how much they paid or spent to own the digital asset. Then, they must know how much they sold it for. From here, they can assess if they owe tax to the IRS or not.
The second one is to guarantee that the owner is not making mistakes. As you know, ignorance is not an excuse or a justification. With a professional accountant who understands the management of crypto assets, the owner cannot go wrong. As such, the owner will not pay heavy fines or go to jail for tax evasion. It is the accountant’s job to make the owner comply with legal expectations.
While many of the legislations are staring in the US, these legislations will soon creep in other countries. As more and more people are using crypto, governments will certainly get involved to regulate these assets and make sure that people are paying taxes.
In addition, cryptocurrencies are also an easy way to money launderers to go around the law. It is why the American government is bent on making sure that there are provisions to combat fraudulent transactions and activities.