Undoubtedly, crypto and Bitcoin have shifted the public eye in recent years. There is interest from governments about the sphere’s underpinning technology, the blockchain. Applicability in the years of doubting regulators is lukewarm. While some embrace blockchain, they still rebuff the idea of cryptocurrencies. Most governments nowadays are receptive to cryptocurrencies and strategically positioning themselves to tap extra revenue from the rapid price gains of the past few years.
Half Moon Reports Q3 Loss Of -2.4% As Short Profits Fail To Make Up For Long Losses
Half Moon Capital returned -2.4% net of fees in the third quarter of 2021, according to a copy of the firm’s latest investor update, which ValueWalk has been able to review. Throughout the period, the hedge fund maintained an average exposure of 56.3% net, which was slightly above its average net exposure since inception (2012) Read More
Less than 15 years after launching, Bitcoin is now emerging from the ashes of rejection and finding acceptance in mainstream finance. The asset now commands a market cap of over $2 trillion and is the most popular cryptocurrency. There are others like ETH, Litecoin, DeFi tokens, and even NFTs, broadly classified as digital assets.
Cryptocurrencies are Property in Most Countries
While cryptocurrencies disrupt processes, forcing remittance companies to adapt and even integrate them expediently, binding laws in most jurisdictions remain fuzzy. Besides El Salvador that recently made Bitcoin legal tender accepting the coin to settle debt and tax obligations, countries across the globe employ different classification criteria.
From Japan to the United States and other progressive crypto jurisdictions, cryptocurrencies—known officially as virtual currencies, are categorized as property. Accordingly, owners of these digital assets must file tax returns reflecting on capital tax gains matching the records of tax authorities. This, to be specific, is regardless of whether the digital asset in question is a utility or an investment contract.
As of October 2021, Bitcoin is the only asset that regulators have hinted as being a utility. That is, the token is community-driven, satisfactorily decentralized without a central intermediary, and the coin serves a purely utilitarian purpose promising its holders no return on their initial investment. Ethereum (ETH) may also qualify as a utility but as per regulators in the U.S., reading from SEC’s official comments, most cryptocurrencies qualify as securities—and that’s a whole different ball game.
The Cryptocurrency Tax Campaign by the Internal Revenue Service (IRS)
Therefore, it is imperative for cryptocurrency…