Crypto Compliance and Taxation Outlook of the America - Espay Exchange

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(No Transcript)
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Introduction

• Cryptocurrencies in America are not considered
  legal tender. However, Cryptocurrency exchanges
  are legal and the regulations vary by state. In
  this article, we will be discussing the entire
  regulation and taxation situation in the US,
  along with state laws that pertain to
  Cryptocurrency and blockchain technology. Lets
  get started!

N. America
S. America
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Cryptocurrency Regulation Outlook

• It is quite overwhelming to find a reliable
  lawful approach to Cryptocurrencies in the US.
  Every law that is governing centralized crypto
  exchanges varies by state. Moreover, federal
  authorities differ in their definition of the
  term Cryptocurrency. The FinCEN (Financial
  Crimes Enforcement Network) doesnt consider
  Cryptocurrencies to be a legal tender. However,
  FinCEN has been considering exchanges as money
  transmitters since 2013, based on the fact the
  tokens are other value that substitutes for
  currency. On the contrary, the IRS considers
  Cryptocurrencies as property and has issued tax
  regulation for that reason.  
• Regulatory laws for Cryptocurrency exchange in
  the US are also in an indecisive lawful
  territory. Many of the federal regulators allege
  jurisdiction. The Securities and Exchange
  Commission has indicated that it considers
  Cryptocurrencies as securities. In March 2018,
  SEC stated that it was seeking to apply
  securities laws comprehensively for exchanges and
  digital wallets. On the contrary, the Commodities
  Futures Trading Commission has adopted a friendly
  and do-no-harm approach, explaining Bitcoin as a
  commodity and permitting Cryptocurrency
  derivatives to buy and sell openly. 

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Cryptocurrency Regulation Outlook

• The Justice Department is working with the CFTC
  and SEC over future Cryptocurrency regulations to
  make sure that the customers are effectively
  protected and regulatory oversight is more
  streamlined. Treasury of the US has emphasized an
  urgent need for crypto regulation to combat
  domestic and global criminal activities. In
  January 2018, Steve Mnuchin and Treasury
  Secretary declared a new FSOC working group to
  look at the progressively more crowded
  Cryptocurrency marketplace.
• In June 2015, New York managed to become the
  first state of the US to regulate virtual
  currency companies via state agency rulemaking.
  In 2019, there were 32 states of the US that
  introduced legislation accepting or encourage the
  utilization of Bitcoin and blockchain distributed
  ledger technology (DLT). A few states passed them
  into law. However, some of them established task
  forces to revise the further use of technology.
  In 2017, the FTC gave LedgerX Crypto trading
  platform operator in the US, permission to become
  the first federally regulated digital currency
  options exchange and clearinghouse.

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New York

• Crypto Regulatory Sandbox In 2015, New York
  released the BitLicense that is needed by any
  virtual currency company serving New York
  business owners or residents. The New York State
  Department of Financial Services (NYDFS)
  established the BitLicense to provide guardrails
  that safeguard customers and root out illegal
  doings without stifling advantageous
  improvement.  According to the legislation, any
  individual or company who is involved in any of
  the following activities in New York should
  obtain a BitLicense
• Performing exchange services as a customer
  business
• Trading virtual currency as a customer business
• Virtual currency transmission
• Issuing, controlling or administering a virtual
  currency
• Maintaining custody of virtual currency on the
  behalf of others

New York
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New York

• Trading Ban No
• Banking Ban No
• Tax Haven Region No
• Is it best Place for License Yes, BitLicense
  can be acquired by following simple instructions
  in New York

New York
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Washington State

• Crypto Regulatory Sandbox In December 2014, the
  DFI in Washington State formed the Emerging
  Payments Task Force during the annual conference
  of State Bank Supervision (CSBS). In September
  2015, the annual conference of State Bank
  Supervision released a model regulatory platform
  for virtual currencies. 
• According to the Washington States government,
  virtual currencies are considered as a digital
  currency or Cryptocurrency. Virtual currencies
  are the medium of exchange not adopted by a
  government. In December 2014, Bitcoin was added
  to the definition of Money Transmission. Every
  virtual currency in the state of Washington is
  subject to the UMSA Uniform Money Services Act.
• Trading Ban No
• Banking Ban No
• Tax Haven Region Yes
• Is it best Place for License Yes, Washington
  has generated a multi-state licensing program to
  make it easy for companies to comply with crypto
  regulations.

Washington State
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California

• Crypto Regulatory Sandbox The legislature of
  California is working on a new set of regulations
  specifically designed for virtual currencies and
  inspired by the New York BitLicense. In February
  2017, the Virtual Currency Act was a bill
  proposed to the California Legislature. The
  Assembly Bill was released by the Legislature in
  August 2016. Just like the New York BitLicense,
  already established banks would not be needed to
  apply for the California Virtual Currency License
  if they want to involve themselves in the
  activities of the Cryptocurrency business.
  Nonetheless, the bill will be needed for any new
  businesses that lack a bank charter.
• This bill would prohibit an individual from
  involving in any virtual currency business, as
  defined, in California unless the individual is
  licensed by the Commissioner of Business
  Oversight or is exempt from the licensure
  prerequisite, as provided. This bill will also
  need applicants for licensure, including an
  applicant for licensure and approval to get
  control of a licensee, in order to pay the
  commissioner a nonrefundable application fee and
  finish an application form, amongst other things,
  prior virtual currency services offered by the
  applicant, detail of the applicant, a sample form
  of receipt for transactions concerning the
  virtual currency business, and specified
  financial statements. 

California
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California

• Trading Ban No
• Banking Ban No
• Tax Haven Region No
• Is it best Place for License No, its too early
  to create a license on Bitcoin and other virtual
  currencies since they are still in the earliest
  stages of development.

California
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Argentina

• According to the National Constitution of this
  country, the only authority that is able to issue
  legal currency is the Central Bank. Bitcoins are
  not lawful currency strictly speaking, as they
  are not issued by the monetary authorities of the
  government and are not a legal tender. 
• Hence, they can be considered money but not legal
  currency. They are not an essential means of
  cancelling debts or obligations. 
• Even though Bitcoins are not certainly regulated,
  they are increasingly being used in this country
  that has strict controls over foreign currencies.
  According to some professionals, a bitcoin can be
  considered a good or a thing under the civil
  code, and transactions related to Bitcoins can be
  governed by the rules of the sale of products
  under the civil code. The latest amendment to the
  Income Tax Law provides that the gain derived
  from the sale of digital currency will be
  considered income and taxed as such. 
• Trading Ban No
• Banking Ban No
• Tax Haven Region No
• Is it best place for License No

Argentina
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Cryptocurrency Taxation Outlook of America

• In October 2019, the US Internal Revenue Service
  (IRS) issued new guidelines on the tax treatment
  of virtual currency willing to assist taxpayers
  to understand tax and reporting obligations for
  transactions including virtual currency, along
  with tax treatment of hard fork transactions.
• In the same year, the IRS also released a draft
  of Schedule 1 to Form 1040. That draft would need
  taxpayers to answer whether they had any virtual
  currency-related transactions during the tax
  year.
• The guidelines issued by IRS and the proposed
  amendment of Schedule 1 Form part of the Virtual
  Currency Compliance Campaign of the IRS that was
  initiated in July 2018 and emphasizes that the
  tax outcomes of Cryptocurrency or virtual
  currency transactions are a focal point for the
  IRS.
• The new guidelines also mention that the income
  tax treatment of certain transactions that are
  unique to Cryptocurrency, for example, airdrops
  and hard forks.

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Cryptocurrency Taxation Outlook of America

• According to the new guidance issued by the IRS
• A person who is paying tax does not recognize
  gross income as an outcome of the hard fork of
  the Cryptocurrency owned by the taxpayer if that
  person does not receive units of new
  Cryptocurrency.
• A person who is paying tax does recognize gross
  income, ordinary in character, as an outcome of
  an airdrop of new Cryptocurrency following a hard
  fork if the person who is paying tax receives
  units of Cryptocurrency. The total amount of the
  gross income to be recognized is the fair market
  value of the new Cryptocurrency.
• If the person who is paying tax is capable of
  selling, transferring, or exchanging, or
  otherwise disposing of Cryptocurrency, which will
  be the case once the Cryptocurrency is recorded
  in the distributed ledger of the taxpayer, then
  the taxpayer has the vital extent of control and
  dominion.
• In cases where the ledger of the taxpayer at a
  Cryptocurrency exchange does not get credited due
  to the reason that the exchange does not yet
  favors the new Cryptocurrency, the person who is
  paying tax does not have dominion until the new
  Cryptocurrency is accredited. 

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Final Thoughts

• Before you get started with centralized exchange
  development or white label crypto exchange
  software development in America, you must know
  about the crypto regulatory and taxation outcome
  of that region. As a crypto owner, you must stay
  updated with the compliance of the Commodity
  Futures Trading Commission and the US Securities
  Exchange Commission and then think of making your
  Cryptocurrency decision!

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