Regulatory concerns are a growing issue in the cryptocurrency industry, and the gaps that are opening up between different global regions are impossible to ignore.
In the EU, this week saw MiCA regulations signed off, with the rules expected to come into play next year. However, this does not mean that the path to crypto integration in Europe is now entirely clear. MiCA is a start and to some extent a work in progress, and there will no doubt be continuing disagreements between regulators and industry participants.
That said, these steps in Europe represent an attempt at clarity and are in sharp contrast to the situation in the United States, where there is a lack of consistency and a sense of uncertainty.
The Biden Administration Signals Crypto Hostility
Earlier this month, President Biden posted a tweet making reference to closing “tax loopholes that help wealthy crypto investors,” and even included a figure of $18 billion.
However, It’s unclear exactly what he was referring to, or why crypto investors were singled out in particular, as was emphasized by a Community Note that was amended to his tweet. Community Notes are a new Twitter feature that aims to provide potentially misleading tweets with context and correction, and this one explained that regular capital gains taxes already apply to crypto profit and that there is no known crypto loophole.
We don’t have to guess what MAGA House Republicans value. They’re telling us. pic.twitter.com/BM6JGMEFeq
— President Biden (@POTUS) May 9, 2023
This comes after, earlier in the year, the US Treasury Department proposed a 30% excise tax on crypto mining as part of the 2023 budget proposal, and it was reported recently that the Department of Justice is to crack down on crypto exchanges, with Eun Young Choi, the Director of the National Cryptocurrency Enforcement Team, stating that:
“We’re seeing the scale and the scope of digital assets being used in a variety of illicit ways grow significantly over the last, say, four years.”
While moving to prevent illegal activity is not out of the ordinary, it’s striking nonetheless that when it comes to crypto, the message communicated by US authorities is only focused on illegal activity and tax increases. Concurrently, there is no official message to suggest that crypto may have benefits to be tapped, or economic value as a growing technology.
And, when it comes to the SEC, which is currently embroiled in high-profile legal disagreements…
