Cryptocurrency regulations have been a long-running matter of controversy across the crypto space. Due to the lack of a refined crypto regulatory framework, the crypto markets are subjected to volatility and multiple thefts. Poor regulations have also given hackers more power to wreak havoc over cryptocurrencies and their exchanges. Therefore, to stop those adversities, the US senators are urging the Treasury Department and Internal Revenue Service to implement stronger crypto regulations. December 2023 has been touted as the deadline for introducing those regulations and saving cryptos from facing a $1.5 Billion revenue loss. In the last few years, cryptocurrency has already lost half its trillion-dollar market valuation. Hence, the US senators find this the right opportunity to stabilize the regulatory conundrums.
Among the hundreds of investors present across the US Senate, four of them voiced their concerns regarding crypto regulations. Elizabeth Warren, Robert P. Casey Jr., Richard Blumenthal, and Bernard Sanders were the ones who sent a letter to the Treasury and the IRS. Within that letter, the details of a massive loss in revenue were mentioned if crypto regulations weren’t implemented.
Even December 31 was outlined as a deadline in the content of that letter for better clarity. In November 2021, Congress passed a bill called the Infrastructure Investment and Jobs Act (IIJA), which obliged the Treasury and IRS to put rules in place for crypto brokers. However, after a long time, the US senators found that the bill still needed to be published by Congress. The research conducted by the US senators even outlined that almost half the taxes on crypto transactions go unnoticed every year. As a result, if this practice continues, the government will lose $28 Billion in taxes.
The crypto industry has a market valuation of $2 Trillion due to the yearly rise in the tax gap of over $1 Trillion. According to extensive research, an upside of $50 Billion is lost annually as people evade crypto tax by cheating the IRS. But this number is just a projection, which might be more than what’s claimed.
For a long time, US senators have continued to voice their concerns about bills regarding crypto regulations. Due to decentralization, cryptocurrencies are entirely autonomous, which removes them from the ownership of a central organization. Additionally, US senators are fighting hard to improve clarity regarding the cryptocurrency ecosystem. The US senators regularly propose several reforms, strategies, tactics, and recommendations.
Nonetheless, on August 15, 2023, the US senators issued a letter stating the need to implement rules over the crypto market. If those rules are not imposed before the deadline of December 31, 2023, Congress could face massive trouble. The country as a whole would fail to capitalize on enormous tax revenues.
Regarding tax evasion, the crypto market is one of the ideal places that has repeatedly benefited traders. But those scenarios could soon change as the US senators end tax evasion in the crypto market.