Government Regulation for Cryptocurrency in 2018

by Admin / Saturday, 19 May 2018 / Published in Cryptocurrency Trading Regulation
Cryptocurrency trading regulation

Bitcoin and other cryptocurrencies have no direct national bank overseeing the creation and release of the currency. This has made the digital currency desirable in the eyes of many as, at least up until this point, it meant fewer regulations and regulatory issues. However, the way Bitcoin stayed in the headlines in 2017, it has forced the hand of different government regulatory agencies. Some of these changes will go into effect in 2018 while others are further down the road. If you're interested in blockchain cryptocurrency any nation, it is important to know the current, upcoming and potential government regulations.  

Securities and Exchange Commission

Better known as the SEC, this government agency has not approved any kind of exchange or trade products that hold a cryptocurrency or even assets related to a cryptocurrency. The SEC hasn't registered any kind of coin offering for these currencies. The current official stance by the SEC on cryptocurrencies is that it can be a beneficial investment, but the currency can be used improperly (due to it not having a connection with any banks, it's more difficult to track and trace, although this is one of the many attractive benefits of dealing in cryptocurrencies).  

Internal Revenue Service

In the eyes of the IRS, all bitcoin (it mentions Bitcoin specifically on its website) must be treated as a property for the simple purpose of taxes. This means cryptocurrency would fall under capital gains taxes. Essentially, the IRS sees it as a physical inventory and not like a currency exchange. So for tax payment purposes, cryptocurrency needs to be converted to a market value in order to pay market value taxes on the particular currency.  

Department of Treasury

The United States Department of Treasury stated in November of 2017 that it would be watching Bitcoin very carefully (it did not mention other cryptocurrencies by name, but it likely will keep an eye on other, popular currencies). Its main purpose for watching currency movement is terrorism and money laundering. One of the issues for the DoT here is as the currency does not have a national origin, there is no national jurisdiction. For example, even if an American Dollar is in Singapore, the U.S. government has jurisdiction over the physical dollar itself because it is classified as government property. The same is true with all other currencies. The lack of a national origin makes cryptocurrencies more difficult to monitor or to lead to arrests due to this. Instead, the DoT and other government agencies must track currency movement and then monitor for other illegal activities associated with it.  

Commodity Futures Trading Commission

According to the CFTC, Bitcoin should be considered a commodity. Due to this, if there is a case of interstate fraud in connection with Bitcoin (or other cyber currencies), it falls under the CFTC jurisdiction and it has the authority to look further into it.  

Additional Government Regulations 

Currently, governments are still trying to decide how exactly to treat cryptocurrencies. Due to this, major, wide-sweeping regulations will likely not come out until after 2018, as these currencies become more commonplace.  

There are far more cryptocurrencies than just Bitcoin. Litecoin (one of the oldest successful cryptocurrencies), Ethereum, Dash, and Ripple are just several of the most important and trending cryptocurrencies today. As these currencies continue to develop and grow, it's important to understand not only the value in these nationless (and bankless) currencies but also what kind of government regulations are moving through. So stay up on the latest trends and shifts with blockchain cryptocurrency around the world. 

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