U.S. Government wants a 'slice' of the digital market profits

U.S. Government wants a 'slice' of the digital market profits

Now that the tax season in the United States is at its peak, the government's interest in cryptocurrencies has grown, which could be a problem for people who saw large profits with digital assets last year.

Coinbase, one of the most popular platforms for selling and buying digital currencies, had to comply with a court order issued by a federal judge after a lawsuit filed by the Internal Revenue Service (IRS), and now must give the federal government the information about the transactions of nearly 13,000 users.

“Coinbase fought this summons in court in an effort to protect its customers, and the industry as a whole, from unwarranted intrusions from the government,” informed the company to its customers.

This is a hard blow to investors in cryptocurrencies, since part of the appeal of digital assets is their perceived independence. But in recent months, different governments around the world have tried to impose a regulation on this new economy.

According to Money, last year the 10 best-performing cryptocurrencies averaged price gains of 14,000 percent, compared to the 20 percent average returns for the stock market.

However, the number of people who reported those earnings to the IRS --In the U.S., the taxpayers are supposed to report any income or capital gain to the IRS in their annual Income Tax Return-- was minimal.

Last month, the credit-monitoring company Credit Karma reported that of the more than 250,000 people who had filled in their 2017 taxes through their service, less than 100 --Or fewer than 0.04 percent-- reported any cryptocurrency transactions.

“That only 800 to 900 taxpayers reported gains related to Bitcoin in each of the relevant years and that more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin in a given year suggests that many Coinbase users may not be reporting their bitcoin gains,” wrote Judge Jacqueline Scott Corley last november, when detailing her ruling in favor of the IRS.

Coinbase will have to surrender its user's names and cryptocurrency transaction records if they made transactions over $20,000 USD on the Exchange between 2013 and 2015.

At least for now in the U.S., this implies a jolt to the libertarian ideal that investing or making transactions with digital currencies is completely anonymous.

 

By Alejandro Cortés

Fuentes: Money, Credit Karma

  • Alejandro Cortés

    Alejandro Cortés

    Egresado de la Escuela Mexicana de Periodismo Carlos Septién García. Ha trabajado para varios periódicos en México y los Estados Unidos desde 2002.

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