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US to enhance crypto tax enforcement for infrastructure bill

2021.08.01 Adam James

Cryptocurrency continues to occupy one of the United States government’s spotlights.

It’s been an eventful week in the blockchain and cryptocurrency industry — with regulatory news continuing to lead the charge. The government of the United States is looking to pay for infrastructure through enhanced cryptocurrency-tax enforcement as Senator Elizabeth Warren continues to express extreme skepticism. Despite the negativity, Goldman Sachs has filed for a “DeFi” exchange-traded fund.

Here’s everything you need to know about these stories, and more, in this week’s edition of OKEx Insights’ News of the Week.

White House to increase cryptocurrency tax enforcement

The government of the United States plans on partially funding its high-profile infrastructure bill through more aggressive enforcement of cryptocurrency taxes, per a fact sheet from the White House that notes:

“In the years ahead, the deal will generate significant economic benefits. It is financed through a combination of redirecting unspent emergency relief funds, targeted corporate user fees, strengthening tax enforcement when it comes to crypto currencies, and other bipartisan measures, in addition to the revenue generated from higher economic growth as a result of the investments.”

Key takeaways

  • The U.S. government seems intent on generating more revenue from the rapidly growing blockchain and cryptocurrency industry. According to CoinDesk, authorities are looking to raise upward of $28 billion through enhanced reporting requirements for exchanges and brokers.
  • The infrastructure bill in question has its fair share of opponents in the Senate. Whether or not the bill, as is, is passed remains to be seen — though few are expecting the cryptocurrency-related tax provisions to be removed.

Binance substantially lowers withdrawal limit

Cryptocurrency exchange Binance — a competitor of OKEx — has reduced its withdrawal limits for accounts with the lowest-tier of verification. The previous withdrawal limit of 2 BTC per day has been lowered substantially to 0.06 BTC per day, with the new restrictions coming into effect for existing accounts between Aug. 4 and Aug. 23.

Key takeaways

  • Despite claiming the move “better accounts for current BTC prices” on Twitter, Binance’s lowered limit is more likely a result of increased regulatory scrutiny around the world.
  • Binance’s lowered withdrawal limit also comes as the industry, as a whole, conforms more to global regulators. The proverbial Wild West days of crypto are, in general, coming to an end.

Elizabeth Warren increasingly vocal about crypto skepticism

U.S. Senator Elizabeth Warren featured prominently in cryptocurrency-related headlines this week after the Democrat from Massachusetts penned a letter to Janet Yellen asking the Treasury Secretary to lead the development of “a coordinated and cohesive regulatory strategy to mitigate the growing risks that cryptocurrencies pose to the financial system.”

Warren also unintentionally created something of a meme in the blockchain and cryptocurrency space after claiming at a Senate Banking Committee hearing that “instead of leaving our financial system at the whims of giant banks, crypto puts the system at the whims of some shadowy, faceless group of super-coders and miners.”

Key takeaway

  • Warren has turned herself into one of the Senate’s most vocal crypto skeptics. However, many believe her statements are out of touch with reality. Though many involved in the development of blockchain-based protocols are anonymous, the identity of many key developers is widely known and transparent. Furthermore, most distributed ledgers are public and open source.

Goldman Sachs files DeFi and Blockchain Equity ETF

Goldman Sachs has filed with the U.S. Securities and Exchange Commission to create an exchange-traded fund tied to blockchain and fintech companies called “Goldman Sachs Innovate DeFi and Blockchain Equity ETF.” The filing states that “The Index is designed to deliver exposure to companies that are aligned with two key themes, the implementation of Blockchain Technology and the Digitalization of Finance.”

Key takeaway

  • The Wall Street banking behemoth’s use of the term “DeFi” in relation to its ETF filing is liberal, given that it refers to the “Digitalization of Finance” and not decentralized finance. In fact, critics are skeptical about whether or not the ETF really has anything to do with DeFi whatsoever.

Shopify offering direct support for NFT sales

The president of Shopify stated on Monday that the e-commerce staple is offering direct-but-limited support for nonfungible-token sales for its merchants. Harley Finkelstein tweeted that “we are making it easier for our merchants to sell NFTs directly through their stores,” before noting:

“Before Shopify offered this capability, merchants would have to sell through a 3rd party marketplace aka less control of the sale and customer relationship. Once again we are putting the power back into the hands of merchants and meeting customers how and where they want to buy.”

Key takeaway

  • The option is currently not available for all Shopify customers. It is unclear when exactly more support will be rolled out.

OKEx Insights presents market analyses, in-depth features and curated news from crypto professionals.

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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.



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