|
|
CRYPTOS VS. GOVERNMENT EDGING TO HOT CONFLICT. Cryptos continued to mostly trend down during last week. Bitcoin and Ether are now trading at nearly half of all-time highs achieved less than two months ago.
The huge sell-off has happened even amid news of dollar inflation, and $6 trillion budgets. As Treasury Secretary Janet Yellin has quietly extended the timeframe out to year for how long they predict outsized jumps in inflation will continue, the Feds continue to make noise about going after “tax evasions” of crypto assets.
Some see it as a concerted effort to keep money in traditional markets, treasuries, bonds, etc.
Government has two major ways of generating income. Taxing is the front door. Currency inflation printing money to service its debts is the back door. Bitcoin is the backdoor killer, and governments and the central banks that exert control behind them are out to effectively kill it.
BIDEN’S $6 TRILLION BUDGET INCLUDES CRYPTO CRACKDOWN PROVISOS. When you’re concocting a $6 trillion budget, you’d better have something in there to keep investors scared into backing your currency.
The Biden administration covers that base with provisions to track and squeeze cryptos. That includes a huge expansion of IRS resources to do it.
In announcing the budget, the Treasury focused on what it characterized as attempts to combat “tax evasions” of crypto investors.
“Tax evasion using crypto assets is a rapidly growing problem. The global nature of the crypto market offers opportunities for U.S. taxpayers to conceal assets and taxable income by using offshore crypto exchanges and wallet providers.”
Fed inflationary policy has siphoned the accrued savings of millions of Americans and forced them into riskier investments to try to stay ahead of the inflation monster they’ve created.
One of the rational responses of investors has been to move into cryptos that represent value in their anti-inflationary attributes (i.e., Bitcoin), and their abilities to enable apps that cut out middle parties (i.e., Ethereum).
The two-pronged response of the Biden administration is to demand its cut of the crypto pie, and to dog cryptos with accusations of criminality, to suppress the influx of investment.
As noted by The Block, crypto exchanges operating in the U.S. such as Coinbase are already required to procure and keep detailed personal and accounting info on people using their service.
The Treasury is targeting crypto activity happening beyond those silos. To that end, it is fleshing out a more formal international regulatory cabal of central bank-backed actors, fueled by regulatory bodies like the FATF, to surveil and tap decentralized crypto networks.
The full Treasury statement regarding cryptos reads:
“The proposal would expand the scope of information reporting by brokers who report on crypto assets to include reporting on certain beneficial owners of entities holding accounts with the broker. This would allow the United States to share such information on an automatic basis with appropriate partner jurisdictions, in order to reciprocally receive information on U.S. taxpayers that directly or through passive entities engage in crypto asset transactions outside the United States pursuant to a global automatic exchange of information framework. The proposal would require brokers, including entities such as U.S. crypto asset exchanges and hosted wallet providers, to report information relating to certain passive entities and their substantial foreign owners when reporting with respect to crypto assets held by those entities in an account with the broker. The proposal, if adopted, and combined with existing law, would require a broker to report gross proceeds and such other information as the Secretary may require with respect to sales of crypto assets with respect to customers, and in the case of certain passive entities, their substantial foreign owners.”