The Biden administration in the United States is looking to crack down on cryptocurrency transfers above a certain amount.
Any transfer of cryptocurrency of more than $10 000 will need to be reported to the American tax authorities under new proposals from the Biden administration. This move coincides with a broader regulatory tightening around cryptocurrencies; China is also looking to tighten regulations so as to limit tax evasion.
The US Treasury had flagged the use of cryptocurrencies, especially in illicit transactions, as a way of avoiding tax.
The dual announcements by China and the US saw a drop in the price of Bitcoin, one of the most widely traded cryptocurrencies, although it recovered somewhat later.
According to the Financial Times, this is part of a broader move by Biden to strengthen the capacity of the American tax authority, the Internal Revenue Service, and close the so-called ‘Tax Gap’ – the difference between what the US is owed in tax and what is actually paid. This gap was estimated to be $600 billion last year.
[Image: Eivind Pedersen from Pixabay]