Crypto Investing Has Become So Mainstream the US Senate Wants to Tax It

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Published on: August 16, 2021
Author: Caroline Kong

Crypto Tax Is Coming

How do you know when an asset class has bridged the gap from a fringe investment to the mainstream market? When Uncle Sam wants its share. And that’s exactly what’s happening right now with cryptocurrencies and digital assets.

US Senators have been embroiled in a debate over the amendment language in a cryptocurrency tax reporting provision included in the Infrastructure Investment and Jobs Act, which passed on Tuesday with bipartisan support. Why is this so important? Senators were not debating whether to digital assets or not – both sides agree on taxing crypto assets – they were hashing out the details.

The heart of the debate came down to amendment language and exclusions, with the US Treasury casting a very wide net on reporting requirements and some US Senators arguing for a broader set of reporting exemptions.

This surprise inclusion has been met with mixed emotions from the crypto community. Some people expressed concern that their previously free gains would now be subject to tax, while others rejoiced in the fact that the US government is moving to embrace digital assets as part of the economy. And what’s more, once a government gets used to tax revenue, you can be pretty sure it’s here to stay.

Robinhood Is Building Its Crypto Trading Business

Robinhood is giving investors what they want, and what they want is to have crypto wallets available on the very popular retail trading app.

On Saturday, Robinhood CEO reiterated that crypto wallets are coming to the platform soon but stopped short of providing an exact timeline. “We’ve been doing a lot of work behind the scenes to provide our crypto customers with the functionality that they’ve been asking for,” he said. “We know you want wallets.”

Robinhood isn’t new to the crypto world. Right now, users can buy and sell crypto within the app, but they can’t remove them from the platform or transfer in existing coins. The company’s most recent S-1 disclosed that 17% of its Q1 revenue came from cryptocurrency transactions.

While they are moving full steam ahead with the introduction of crypto wallets (eventually), the company has admitted that volatility within its crypto trading segment could present a significant liability to its overall business.

The US Senate Fought Over How to Tax Cryptocurrency

Cryptocurrency tax reporting became a hot issue during talks before the US Senate voted on Tuesday’s Infrastructure Investment and Jobs Act.

At the center of the negotiations was how the tax should work and who it should apply to. In its current state, “…any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person” will be required to report crypto transactions for tax purposes. A last-minute amendment to the bill was announced to exclude proof-of-stake validators as well as proof-of-work cryptocurrency miners.

However, several Senators have argued that the definition of “broker” is too broad and fought for additional exclusions to the bill, including protection for software developers and decentralized platforms. Senators contended that the bill could hinder US innovation in the digital asset space and harm growth in its current state.

The Infrastructure bill passed with bipartisan support on Tuesday, and efforts to include the amendments came up short.

Canadian Company Making Fiat-To-Crypto On-Ramp Services Available

One of the biggest issues for newbie crypto investors is actually buying the currency. And even seasoned investors can find the process a little intimidating.

However, Canadian company Mobilum Technologies Inc (CSE: MBLM) (OTC: MBLMF) (FRA: C0B) is helping make investing in digital assets more accessible. This technology-driven fintech provides its clients with secure, fully compliant, and easy to use, plug-and-play digital payment infrastructure and digital asset management technologies.

In addition to several existing partners, Mobilum has just entered into a new agreement with ALT 5 Sigma for its fiat-credit-cards-to-crypto on-ramp services.

Under terms of the arrangement, Mobilum will be providing its fast, convenient, FINTRAC compliant gateway services to ALT 5, enabling users of the financial platform to instantly purchase cryptocurrencies like Bitcoin, Litecoin, and Ethereum securely with a credit card.

“We are very pleased to be partnering with ALT 5 to provide its clients with the Mobilum on-ramp solution,” Mobilum OÜ CEO Wojciech Kaszycki said in a statement.  “With only a limited number of exchanges offering credit card processing at favourable rates, we’ve seen an increase in demand from exchanges and cryptocurrency businesses to utilize our on-ramp solution. We look forward to providing our best-in-class solution to the growing cryptocurrency market.”

More recent updates from Mobilum Technologies Inc:

  • Mobilum Technologies Awarded Payment Institution License and Announces Record Monthly Total Transaction Volume of CAD $5.3M in July
  • Mobilum Technologies Signs MOU With Matic to Launch Its Hosted On-Ramp and Beta Off-Ramp Solution for Polygon
  • Mobilum’s Portfolio Company Catalyx Announces Listing of the CADX Stablecoin on the Bittrex Global Exchange, and Catalyx Achieved a 97% Revenue Increase and 51% Jump in Daily Active Users MoM in May

Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.

 

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