The United States Internal Revenue Service (IRS) has recently proposed new regulations regarding the sale and exchange of digital assets by brokers. The aim of these rules is to simplify tax filings and reduce tax cheating. Brokers would be required to use a new form specifically designed for reporting digital asset transactions. These regulations are intended to bring digital asset reporting in line with reporting requirements for other types of assets.
The proposed rules are scheduled to go into effect in 2026 and will apply to sales and exchanges carried out in 2025. The IRS is currently accepting written comments on the proposal until October 30th. Following this, a public hearing will be held to further discuss the regulations.
However, these new tax reporting rules have faced criticism from several prominent figures in the crypto community. Kristin Smith, the CEO of the Blockchain Association, pointed out the differences between the crypto ecosystem and traditional finance. CEO Miller Whitehouse-Levine of DeFi Education Fund called the rules “confusing, self-refuting, and misguided.” Ryan Selkis, the CEO of Messari, even stated that if President Joe Biden is reelected, there will be no future for the crypto industry in the United States. Representative Patrick McHenry, the House Financial Services Committee chairman, described the proposal as “another front in the Biden Administration’s ongoing attack on the digital asset ecosystem.”
In other news, cryptocurrency exchange Gemini has filed a reply brief in an attempt to dismiss the lawsuit it is currently facing from the U.S. Securities and Exchange Commission (SEC). Gemini argues that the SEC has failed to present a clear claim and suggests that the court should focus on more straightforward questions to determine whether their service qualifies as a security. The SEC alleges that Gemini’s service, Gemini Earn, violated securities regulations by offering unregistered securities.
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Additionally, a U.S. District Judge named Beryl Howell has recently upheld the stance of the U.S. Copyright Office regarding copyright protection for art created solely by artificial intelligence (AI). The judge ruled that AI-generated artworks are not eligible for copyright protection. This decision has raised concerns about the potential displacement of human artists and ongoing discussions about AI firms using copyrighted content for training purposes. Multiple lawsuits in California have been filed by artists claiming copyright violations, which could result in AI companies needing to modify their language models.
Meanwhile, the United Kingdom is considering a ban on cold calls related to crypto investments. His Majesty’s Treasury has issued a consultation paper seeking evidence to assess the impact on businesses and the costs associated with implementing the ban. The Treasury aims to impose a comprehensive ban on financial cold calls to combat scammers while minimizing adverse effects on businesses reliant on cold calling prospects. Stakeholders have until September 27th to provide their input and feedback on this potential ban.
Overall, these recent developments in the cryptocurrency and digital asset space demonstrate the ongoing regulatory and legal challenges faced by the industry. As governments and regulatory bodies strive to catch up with the rapid evolution of technology and digital assets, it is essential for stakeholders to actively participate in shaping these regulations to ensure a fair and inclusive environment for innovation and growth.
