CRYPTO REGULATION IN THE UNITED STATES 2023
The United States is one of the few countries that opted for a more progressive system when it comes to cryptocurrency. In recent times people have started realizing the positive impact cryptocurrency can have on their lives and thus the United States government both at the federal and at the state level has given more attention when it comes to regulating the cryptocurrency market. Since the federal government is the driving force most of the regulation at this level is based majorly upon the agency and administrative level.
Many federal agencies are given the task of regulating cryptocurrency and its related business. These organizations include the SEC i.e the Securities Exchange Commission and the Department of Treasury via the IRS i.e. Internal Revenue Service. Many experts in the United States including the government believe that blockchain technology and cryptocurrency can be the future in terms of financial infrastructure and hence all the stakeholders think to conduct more formal research in this technology.
CRYPTO REGULATION IN THE UNITED STATES
Much of the legislative and framework has been left to the state government as many have framed laws on blockchain and cryptocurrency. The states believe that as more people engage in blockchain business the investment opportunities in this sector might lead to prosperity and might lead to effective public welfare services. In the United States, there is legislation in Wyoming wherein the law allows the citizens to open new banks focused only on dealing with cryptocurrency. Another popular US state Colorado used the law to give freebies to cryptocurrency by keeping it out of the purview of securities regulation.
Oklahoma has gone beyond one step by making legislation that allows cryptocurrency to be used as a monetary value while dealing with state departments However the regulations are not only in favor of cryptocurrencies. Many states like Iowa have prohibited political and other election parties to accept payment in the form of cryptocurrencies other states such as Maryland and Hawaii have warned their citizens about the crippling effect of cryptocurrencies and also have issued a warning when it comes to investing and trading in them.
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SPECIFIC REGULATION TO DEAL WITH CRYPTOCURRENCY
- In the sales regulation department, the law will only come into force if the sale of cryptocurrency is termed as the sale of a security under any federal or state law. Further, the sale must be considered as a money transmission under state law. In addition to these, if any contract derivatives make any reference to the price of any crypto-related asset then the commodity exchange act will apply to them.
- The SEC has been of the view that if a token is issued in an initial coin offering then the token remains a security that must be regulated within the framework of securities law. Since the digital asset is a security, the issuer of that digital asset must register the security with the SEC.
- Under the law relating to Money laundering comes the Bank Secrecy Act. Virtual currencies are considered as MSBs. the administrator of a centralized repository of virtual currency would also be considered as an MSB. The job of the MSB is to see that a complete risk assessment in terms of money laundering and implementation of an anti-money laundering programme is implemented in its stricter sense.
- In terms of taxation, the Internal Revenue Service declared that virtual currency would be taxed as a property and not currency. All the businesses that are dealing with cryptocurrency are mandatorily required to keep all the details of any crypto-related purchase. They also have to pay whatever gains they have made upon the purchase of any good or service with cryptocurrency.
CRYPTO REGULATION IN THE UNITED STATES