The Biden administration has revealed new measures that will require crypto investors to report their digital earnings to the US tax office
Cryptocurrency transfers of more than $10,000 will need to be flagged with authorities, as Biden moves to tighten regulations surrounding the currencies.
These new measures are designed to prevent tax evasion within the underregulated sector, and come one day after China revealed it would also be cracking down on the crypto market.
The price of Bitcoin fell 5 percent after the announcement, following a week of disastrous slumps for the world’s most popular crypto.
Chair of the US Federal Reserve, Jay Powell says authorities should be “paying attention to private-sector payments innovators who are not within the traditional regulatory arrangements applied to banks and other financial institutions”.
Bitcoin on the rise again
Bitcoin has surged 9.8 percent to over $39,000
The digital currency has once again proved how volatile it is, following another tweet from Elon Musk.
Musk stated that Tesla would restart transactions with the cryptocurrency when mining is done with more clean energy.
The crypto, which has been volatile in recent weeks, added $3,490 to its previous close.
The bounce follows El Salvador voting to make Bitcoin legal tender.
China crypto crackdown sees over 1,100 arrested
Police in China have arrested over 1,100 people on money-laundering charges, claiming they used cryptocurrency to help them evade the law.
The arrests come as authorities in China step up their crackdown on cryptocurrency trading.
Reports say the money launderers charged their criminal clients a commission of 1.5% to 5% to convert illegal proceeds into virtual currencies via crypto exchanges.
Last month, three industry bodies banned crypto-related financial and payment services, and the State Council vowed to clamp down on Bitcoin mining and trading.
The public security ministry confirmed police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money.
The money launderers charged their criminal clients a commission of 1.5% to 5% to convert illegal proceeds into virtual currencies via crypto exchanges.
China continues crackdowns
China’s State Council ordered a tough crackdown on telco fraud in October 2020.
Executives from two of the largest crypto exchanges that provide services to Chinese investors assisted police with their inquiries.
Bitcoin becomes legal tender in El Salvador
El Salvador has become the first county to adopt Bitcoin as a legal tender
Earlier El Salvador’s President Nayib Bukele sent a law to the country’s congress proposing to make Bitcoin legal tender – that was then passed.
If approval makes El Salvador the first nation in the world to give cryptocurrency this status.
Under the legislation, prices can be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.
Salvadorian President Nayib Bukele announced in a video recording shown during the Bitcoin 2021 conference held in Miami that he has a strong belief in cryptocurrency.
Bukele added that the use of Bitcoin would not bring risks to users.
Its use as legal tender will go into law in 90 days
El Salvador’s dollarized economy relies heavily on money sent back from workers abroad. World Bank data showed remittances to the country made up nearly $6 billion or around a fifth of GDP in 2019, one of the highest ratios in the world.
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