Crptocurrency
IRS Crypto Tax Reporting Rules: Threat to Industry
In a groundbreaking move, the IRS has unveiled fresh regulations for reporting taxes on cryptocurrency in August. Should these regulations receive the green light, they are slated to take effect from January 2026.
Paul Singh Grewal, the Chief Legal Officer of Coinbase, a leading crypto exchange, has rallied the crypto community to stand against the proposed tax reporting guidelines from the United States Treasury. Grewal passionately implored the community to resist these regulations, cautioning that they might establish a worrisome precedent for extensive surveillance.
Expressing his concerns on X (formerly Twitter), Grewal delved into the potential issues tied to the suggested crypto tax reporting rules. He asserted that these rules extend beyond the mandate set by Congress for establishing tax reporting guidelines. Furthermore, he warned that if these regulations metamorphose into law, they could disadvantage digital assets and pose a threat to a burgeoning industry in its infancy.
The Internal Revenue Service (IRS) laid out a blueprint of the proposed regulations for crypto tax reporting on August 25. According to the proposed rules, crypto brokers would be mandated to use a new form to streamline tax filing processes and mitigate tax evasion. These regulations encompass both centralized and decentralized exchanges, crypto payment processors, specific online wallets, and crypto brokers.
Defending the introduction of a new form, the U.S. Treasury Department contends that it will simplify the tax filing process. By aiding taxpayers in determining their tax obligations, the new form aims to eliminate the need for intricate calculations or the employment of digital asset tax preparation services. If sanctioned, the revamped tax system will become effective in 2026, with brokers obligated to report transactions from 2025 starting January 2026 using Form 1099-DA. Nevertheless, numerous U.S. lawmakers are advocating for the IRS to enforce crypto tax reporting requirements before 2026.
Despite the Treasury Department’s assertion that the crypto tax reporting rules align with traditional financial reporting, Coinbase’s Chief Legal Officer refutes this claim. Grewal, in his X post, argues that these proposed rules could establish a concerning precedent, subjecting virtually every digital asset transaction, including the purchase of a cup of coffee, to mandatory reporting.
Furthermore, Grewal highlighted that the proposed regulations would necessitate the extensive collection of user data, serving no “legitimate public purpose.” He argued that this data collection could burden Web3 startups with onerous requirements while inundating the IRS with more data than they can effectively process and analyze.
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Seoul, South Korea, November 21, 2024 – Prom, a scalable network based on Polygon SDK, today announced the launch of its mainnet, following an extensive testnet campaign that saw over 25,000,000 transactions and 2,000,000 unique wallets interacting with a chain. This milestone is a step forward in blockchain scalability, as Prom leverages zero-knowledge proof technology to deliver enhanced throughput, optimized transaction costs, and advanced security.
Prom’s solution addresses the most prevalent problems of modern networks by utilizing ZK-based architecture, which until now have not been widespread due to technical complexity. Its architecture ensures the needed speed, level of security, and seamless interaction with the chain, reducing friction for users and granting developers a flexible framework for building a diverse range of dApps.
“We’re thrilled to open a new chapter for Prom and streamline the expansion of our ecosystem by welcoming developers and users to interact with the chain,” said Iva Wisher, COO of Prom. “We’re committed to constant efficiency improvement, transmitting scalability and convenience of everyday on-chain actions, and we are looking forward to welcoming a wave of products built on our network.”
The Prom network was developed in collaboration with industry leaders such as Polygon, DWF Labs, Ankr, Goldsky, Automata, and Blockscout to ensure the highest standards of performance and security.
The native network token, $PROM, is powering the Prom network. Listed on Binance, HTX, KuCoin, Gate.io, Upbit, and AscendEx, $PROM is driving fast on-chain interactions, and serving as the governance token for the Prom DAO. Through this community-driven governance model, users are empowered to help shape the future of the Prom ecosystem while benefiting from a percentage of the total network fees.
The mainnet launch opens new doors for developers seeking a platform for building decentralized applications (dApps). With a grant-based support mechanism in place, developers can utilize Prom’s platform to be an ideal environment to easily build and deploy, unlocking greater product scalability and reducing the barriers to entry for development. For users, Prom’s technology ensures lower transaction fees, strong security, and enhanced decentralization.
About Prom
Established in 2019, Prom has rapidly grown with innovative products across GameFi, SocialFi, Influencer Marketing, DeFi, and more. Prom looks to address critical shortfalls in various markets, setting the standard for capturing a large share of the market, by introducing its own solution to effortlessly unite diverse product sectors.
Prom creates a competitive landscape for advancing blockchain adoption, enhancing network security, decentralization, and efficiency.
Media Contact
Max Kan
CMO
Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
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