Cointelegraph By Brian Quarmby
Kraken has been ordered to provide information on its users to who conducted the equivalent of $20,000 in crypto transactions in any one year, between 2016 and 2020, to the Internal Revenue Service.
A federal court in northern California authorized the IRS to serve a “John Doe summons” on Kraken yesterday. The exchange is not alleged to have done anything wrong.
The IRS is after the records of an “ascertainable group or class of persons” who may have failed to comply with tax reporting and internal revenue laws
In addition, the IRS will check if Kraken has been compliant with its record-keeping obligations such as the Know-Your-Customer rules.
“This John Doe summons is part of our effort to uncover those who are trying to skirt reporting and avoid paying their fair share, ” said IRS Commissioner Chuck Rettig in the court’s press release.
Acting Assistant Attorney General David Hubbert of the Justice Department’s Tax Division said:
“Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer.”
A John Doe summons is used by the IRS to get the names and information about all taxpayers from a specified description, such as the ‘$20,000 and over’ class stated in the latest summons.
According to the supporting declaration, the IRS is after information on five different classes of U.S taxpayer. Some of the activities the IRS are looking into, include: reporting limited income despite trading crypto between a range of $5 million to $56 million, operating multiple accounts while exchanging fiat currency to digital assets and back to fiat for no apparent economic benefit.
The IRS is also keeping an eye on people who submitted delinquent tax returns in 2017 and 2018 with income more than $2 million each year, with activity consisting of more than $23 million in deposits and withdrawals at various crypto exchanges.
The road to this latest fishing expedition was reportedly paved by the first John Doe summons on Coinbase in 2016, in which the IRS obtained the information of 13,000 Coinbase customers.
Coinbase has been under scrutiny ever since, and in November 2020 tax lawyers of Coinbase warned customers that it had been tracking an increase in IRS enforcement against users who fail to comply with tax and reporting requirements.
Cointelegraph reported on April 18 that a Massachusetts federal court had entered an order authorizing the IRS to serve a “John Doe summons” on Circle Internet Financial Inc.
“Bitcoin maximalists? They can’t stop innovation,” says Mati Greenspan
Cointelegraph By Marco Castrovilli
In an exclusive interview with Cointelegraph during Bitcoin 2021 in Miami, Greenspan criticized a segment of Bitcoin (BTC) maximalists for being “small-minded and insecure,” pointing out that they don’t have control over the main cryptocurrency.
“They cannot stop any kind of innovation from happening. So let them yap, it doesn’t bother me,” said Mati Greenspan, founder and CEO of Quantum Economics, about Bitcoin maximalists.
Greenspan‘s statements came a few days after a number of Bitcoin hardliners attacked him on Twitter for calling the Bitcoin conference in Miami “a crypto conference.”
Greenspan’s inclusive view on crypto is also reflected in his diversified investment portfolio. When asked about it, Greenspan pointed out that Dogecoin (DOGE) is his top holding on eToro. “Why not?” he said. “It’s funny!”
Check out the full interview on our YouTube channel, and don’t forget to subscribe!
Over 2 million adults in UK now hold crypto, FCA survey finds
Cointelegraph By Helen Partz
A new study by the United Kingdom’s Financial Conduct Authority has indicated a significant increase in cryptocurrency ownership in the country.
On Thursday, the FCA published the results of a consumer survey which found that 2.3 million adults in the U.K. now hold crypto assets, up from 1.9 million last year. Alongside the increasing number of crypto investors, the study also identified a surge in ownership volumes, with median holdings rising to 300 British pounds ($420) from 260 pounds ($370) in 2020.
The rising popularity of holding cryptocurrency comes in line with an uptick in the awareness level as 78% of adults said they have heard of crypto, up from 73% last year.
Despite the rising awareness and ownership of crypto, the FCA study has flagged a notable decline in understanding of cryptocurrencies, suggesting that some people who have heard of crypto may not fully understand it.
According to the report, only 71% of respondents correctly identified the definition of cryptocurrency from a list of statements, down 4% from 2020. “This suggests there may be a risk of consumers engaging with cryptocurrency without a clear understanding of it,” the FCA noted.
Related: Crypto and ‘meme stocks’ shunned by 90% of UK financial advisers
Sheldon Mills, the FCA’s executive director of consumers and competition, said that some U.K. investors have benefitted from the bull market this year. “However it is important for customers to understand that because these products are largely unregulated that if something goes wrong they are unlikely to have access to the FSCS or the Financial Ombudsman Service,” he added.
The FCA study also said that U.K. consumers significantly favor Bitcoin (BTC) over other cryptocurrencies, with 82% of respondents recognizing BTC. Among those who recognized at least one cryptocurrency, 70% recognized only Bitcoin, up 15% from 2020, the study said. “It seems likely many adults who have now heard of cryptocurrency are only acquainted with Bitcoin,” the FCA stated.
SEC opens to comments on whether to approve VanEck Bitcoin ETF
Cointelegraph By Turner Wright
The U.S. Securities and Exchange Commission has issued an order allowing the public to comment on the proposed rule change surrounding the Bitcoin exchange-traded fund from asset manager VanEck.
According to a Wednesday filing from the SEC, the regulatory body has not yet reached a decision on whether to approve or disapprove of VanEck’s Bitcoin exchange-traded fund, or ETF, but “seeks and encourages interested persons to provide comments” on the proposal. Specifically, the commission is asking the public to consider whether they believe the Bitcoin ETF would be susceptible to manipulation and designed to prevent fraudulent and manipulative acts and practices.
The SEC also asked people to weigh in on “the suitability of Bitcoin as an underlying asset for an exchange-traded product,” and the liquidity and transparency of the Bitcoin (BTC) market. Existing rules require that national securities exchanges are aimed to “protect investors and the public interest.”
Anyone interested in commenting on the proposed Bitcoin ETF will have until 21 days after the order is published in the Federal Register, and 35 days after publication in the same register for rebuttals. Members of public can submit comments through the SEC website, via email, or snail mail.
Related: SEC pushes decision on VanEck Bitcoin ETF until June
VanEck submitted the paperwork to apply for a Bitcoin ETF with the SEC in March following the asset manager withdrawing a similar application it had filed in January in partnership with blockchain startup SolidX. The commission has already extended the deliberation window once, from May 3 to June 17.
The SEC has the ability to extend the deadline in 45-, 45-, 90- and 60-day increments — up to 240 days — before delivering a final decision. However, under Section 19(b)(2)(B) of the Securities Exchange Act of 1934, the commission also has the right “to determine whether the proposed rule change should be disapproved” prior to any deadline, as is the case in the request for public comment.
No Bitcoin ETF has been approved by regulators in the United States. Given the SEC’s continued delays in the case of VanEck’s, Valkyrie Digital Assets’ and Fidelity Investments’ proposed BTC exchange-traded funds, many do not expect an approval soon. However, Canadian officials have given the green light for many crypto ETFs this year, including offerings from investment fund manager 3iQ, Purpose Investments, Evolve Funds Group and CI Global Asset Management.
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