Prominent figures in the cryptocurrency community have expressed concerns regarding the new crypto tax reporting rules proposed by United States President Joe Biden.

The Internal Revenue Service (IRS) has introduced new rules for brokers, requiring them to follow stricter guidelines for selling and trading digital assets. These rules aim to enhance tax compliance and prevent tax evasion in the crypto space.

The U.S. Department of the Treasury has suggested that these rules will align digital asset reporting with the reporting requirements for traditional assets. However, many within the cryptocurrency industry are worried that these stringent regulations could discourage crypto firms from operating in the United States.

Ryan Selkis, the CEO of Messari, voiced his skepticism about the future of the crypto industry in the United States if Biden wins reelection. Chris Perkins, the president of CoinFund, believes that these rules will stifle innovation in the country and that a more conducive regulatory environment is necessary to encourage safe innovation in the crypto sector.

Crypto champions

Some individuals within the crypto community expressed doubts about whether either major political party in the U.S. would effectively champion crypto interests. Additionally, concerns were raised about the privacy implications of the new rules, particularly in relation to tax and sanction surveillance.

Kristin Smith, CEO of the Blockchain Association, emphasized the need for tailored regulations that acknowledge the unique characteristics of the crypto ecosystem. She argued against treating digital asset reporting in the same way as traditional assets.

These proposed rules come on the heels of Biden’s suggestion to impose taxes on crypto mining, aiming to reduce the energy consumption associated with mining operations. The crypto industry in the United States has consistently raised concerns about regulatory decisions that could stifle innovation and drive crypto firms to operate elsewhere.