Beautiful Virgin Islands

Tuesday, Jul 22, 2025

Crypto traders are facing a tax crackdown by the US Treasury

Crypto traders are facing a tax crackdown by the US Treasury

A new report could have major implications for US crypto users as authorities seek to modernise outdated tax infrastructure.

Cryptocurrency traders in the United States could face more stringent tax reporting requirements under proposals put forward in a new report from the US Treasury.

The report said cryptocurrencies were a "significant concern," saying they presented a significant obstacle for tax authorities by helping to facilitate illegal tax evasion.

The proposals would also see government investment in America's tax office, the Internal Revenue Service (IRS), funding it by an additional $80 billion (€65.5 billion) over the next decade.

The moves are part of a plan to close the "tax gap" – the difference between taxes owed and taxes paid – which could rise to around $7 trillion (€5.7 trillion) over the course of the decade, the report said.

Also falling into the tax authorities' crosshairs are wealthier Americans who tend to make more of their money from assets.

"While roughly 99 per cent of taxes due on wages are paid to the Internal Revenue Service (IRS), compliance on less visible sources of income is estimated to be just 45 per cent," the report said.

Crypto under scrutiny


Among the proposed changes, businesses that receive "cryptoassets" worth more than $10,000 (€8,176) would have to report them to the IRS, bringing cryptocurrency into line with current rules on cash receipts.

Another policy change would require payment services providers to file Form 1099 reports in order to discourage their clients from attempting to hide their income by using alternatives to traditional banks.

"Although cryptocurrency is a small share of current business transactions, such comprehensive reporting is necessary to minimise the incentives and opportunity to shift income out of the new information reporting regime," the report said.

One major stumbling block for US tax authorities is the outdated technology in use by the IRS, which has held back the agency's ability to tax income held in assets like crypto.

According to the report, the IRS's main tax processing system, responsible for processing over 150 million annual tax returns that account for $1.2 trillion (€981 billion) in revenue, is written in programming languages that date back over half a century.

The combination of outdated tech and the growth of alternative finance has disproportionately benefited America's top earners, "who can avoid taxes through sophisticated strategies such as offshoring, creating complex partnership structures, or moving taxable assets into the crypto economy," the report said.

SEC backs tougher regulation


Also on Wednesday, US Securities and Exchange Commission (SEC) Chair Gary Gensler indicated he would also like to see cryptocurrency trading come under tougher regulation.

"This is a quite volatile, one might say highly volatile, asset class, and the investing public would benefit from more investor protection on the crypto exchanges," Gensler said in remarks at the Financial Industry Regulatory Authority (FINRA)’s annual conference.

"Technology is always evolving, as are our markets. As we continue to stay abreast of those developments, the SEC and FINRA should be ready to bring cases involving issues such as crypto, cyber, and fintech," he said.

Speaking to Bloomberg on Wednesday, European Central Bank Vice President Luis de Guindos said cryptocurrencies had "very weak fundamentals" and that investors should be prepared for more violent swings like Wednesday's crash.

"When you have difficulties to find out what are the real fundamentals of an investment, then what you’re doing is not a real investment," de Guindos said.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Defends Attorney General Pam Bondi Amid Epstein Memo Backlash
Renault Shares Drop as CEO Luca de Meo Announces Departure Amid Reports of Move to Kering
Senior Aides for King Charles and Prince Harry Hold Secret Peace Summit
Anti‑Semitism ‘Normalised’ in Middle‑Class Britain, Says Commission Co‑Chair
×