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Summary
- Blockchain developers and crypto exchanges set to face compliance rules under the Warner Portman crypto tax amendment.
- Crypto miners or “proof of work” businesses are likely to be exempted from this amendment.
- Crypto market seems bullish on this development with a four per cent rise over the last 24-hours.
Crypto trading platforms, developers and validators may soon need to follow stringent reporting guidelines, under the new crypto tax compliance changes recommended by US senators Warner, Rob Portman, and Sinema on late Thursday, August 5. However, crypto miners may not need to comply with these rules.
The crypto market is responding positively to this development. The digital currency market was up almost four per cent over the last 24-hours. Bitcoin was trading at US$ 40,800 apiece, a four per cent rise over the last 24-hours. Its one-day volume bloomed over 55 per cent.
Ethereum’s token continues to surge on the back of its London hard fork upgrade. The second-largest crypto was up by 3.5 per cent to US$ 2,780 apiece, with a 24-day volume of US$ 31.48 billion.
How are developers reacting to this development?
The crypto developer community has opposed this amendment because proof-of-stake and blockchain engineers will be taxed if this law is passed in the US congress.
However, proof-of-work transactions and mining equipment and software providing private key functions would be exempted, as per the proposed crypto tax rules.
Crypto analysts believe that if this tax amendment comes into effect, it may harm the US-based crypto businesses significantly. On top of this, the move could force crypto firms move out of the country in pursuit of crypto and blockchain technology-friendly territories.
Blockchain Technology (Copyright © 2021 Kalkine Media)
White House backs Portman’s crypto tax amendment
The US President Joe Biden-led government released a formal statement to validate Portman’s strict changes to crypto tax compliance. The White House expects this amendment to curtail tax evasion and bolster crypto tax rules.
Democrat Senator Elizabeth Warren remains one of the strong critics of crypto operations across the nation. Earlier this week, the US Securities Exchange Commission (SEC) head Gary Glenser urged the government to table stronger crypto regulations to safeguard investors' interests.
The Senate will reportedly vote on this amendment by next week. Then the bill will move to the lower house of Congress. If the House of Representatives passes the amendment, US president Joe Biden will sign it or veto it.
A glance at Bitcoin’s price chart
Bitcoin could test its nearest resistance of US$ 42,000 apiece over the weekend. The largest electronic token has been getting consolidated, with more long-term investors entering the crypto space.
BTC’s one-year price performance against moving average multiple. (Source: Refinitiv)
The virtual token has outperformed its short-term moving average, showing a bullish price trajectory. However, it is yet to breach its 200-day moving average, representing a downtrend against its all-time high of around US$ 65,000 per BTC.
