Ron Wyden and Mike Crapo penned an open letter to the crypto community to get suggestions for the new tax measures on the crypto sector, which is very complex for the US authorities to understand & further implement rules.
The crypto industry is evolving in the US jurisdiction under the roof of traditional financial rules & regulations, which means there are no laws for the crypto sector. The majority of the existing financial rules were developed several years before the origin of Bitcoin. In the present time, almost every US government agency is facing pressure to develop crypto-dedicated rules & regulations to ensure safe development activities in this innovative sector.
On 11 July 2023, United States Senate Financial Services Committee Chair Ron Wyden and ranking member Mike Crapo penned an open letter to get input from the crypto industry participants.
With the help of public input on crypto taxation, they will try to create better & clear tax measures for the digital assets sector.
Bill Hughes, a lawyer at popular blockchain firm ConsenSys, said that ConsenSys is going to share its crypto taxation thoughts & ideas in response to the US Senate Finance Committee’s letter.
The letter mentioned several challenges associated with the tax rules of crypto assets investment. In the crypto sector, people are free to invest their crypto assets in several ways like staking, lending, yielding, liquidity pool, mining, ICOs, and gifts, etc and also the return on the investment changes with time, as the price of crypto assets keeps changing every second crypto. This sector is totally different from the traditional financial system and here traditional rules & regulations, including tax rules, are not applicable directly.
In the present time, there are nearly a dozen countries where people are not required to pay any tax against their investment. In the majority of such countries, tax agencies believe it is very tough for people to make money in this highly volatile market and secondly, it will be very tough to impose tax rules on volatile assets.