The Internal Revenue Service (IRS) is looking to increase their power to regulate the cryptocurrency industry, asking Congress for the authority to access and collect data on its use and users, according to IRS Commissioner Charles Rettig.
During a Senate Finance Committee hearing on Tuesday, Rettig said, “I think we need congressional authority.”
“We get challenged frequently, and to have a clear dictate from Congress on the authority of us to collect that information is critical,” he added.
Looking to clamp down on the comparatively under-regulated market, “The Biden administration has proposed requiring cryptocurrency brokers, including exchanges, to report information on their customers, including on indirect foreign investors. It would also require businesses to report when they receive crypto assets valued at more than $10,000,” explained Bloomberg.
As reported by Reuters, Rettig “said cryptocurrency market capitalization is over $2 trillion, with more than 8,600 exchanges worldwide,” and that “and by design, most crypto virtual currencies are designed to stay off the radar screen.”
According to Bloomberg, Rettig continued to explain that “The IRS currently issues summonses to third parties to get information on cryptocurrency users, without naming specific individuals,” and that the agency is “also active in both civil and criminal enforcement,” but “needs additional tools and resources from Congress.”
As the Biden administration seeks to increase spending, the volatile cryptocurrency market has been viewed by the Biden administration as another potential source of capital gains tax income; Reuters noted, “The Biden administration has targeted the volatile crypto asset markets for capital gains tax collections.” That agenda would join the additional goal of cracking down “on illicit uses of such digital currencies, which have been demanded increasingly by perpetrators of ransomware attacks on corporate computer networks.”
As The Verge noted, “Proposed legislation regulating the industry has been piling up, especially since Biden took office.”
For example, in December, “the Financial Crimes Enforcement Network (FinCEN) proposed requiring exchanges to report information (like names, for instance) connected to private anonymous crypto wallets exchanging over $10,000 in a day,” while also proposing “similar “know-your-customer” requirements on international transactions.”
The request for added cryptocurrency-related power came during a Senate Finance Committee hearing on the IRS’s proposed Fiscal Year 2022 budget.
The effort to regulate and tax cryptocurrency in the U.S. comes as part of a raging debate over the part currencies such as Bitcoin can play in domestic and international markets. China, for example, is looking to push their own state-regulated digital currency, and is therefore arguably engaging in an assault on cryptocurrencies. Just days ago, multiple “key opinion leader” social media accounts which discussed cryptocurrencies were banned, described as “Judgement Day for crypto KOL,” according to one censored user.
Weeks prior, further Chinese legislative action triggered a crash in the cryptocurrency market, with the market cap losing nearly $1 trillion.
Yahoo! Finance explained in mid-May that the sharp decline followed China’s decision to ban “financial and payment institutions from providing cryptocurrency services.” According to the BBC, the communist regime also “warned investors against speculative crypto trading.”
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