After a roller-coaster week of trading, China and the US decided regulation and tax compliance on cryptocurrencies, with Chinese Vice Premier Liu He and the State Council stating that tighter regulation is needed to protect the financial system. From their point of view, it is mandatory to “crackdown on Bitcoin mining and trading behaviour, and resolutely prevent the transmission of individual risks to the social field.” The Chinese crypto business accounts for as much as 70% of the world’s crypto supply.
Moreover, the US Treasury Department announced that it started to impose stricter regulation on crypto markets and transactions. Any transfer worth $10,000 or more will have to be reported to the Internal Revenue Service (IRS). According to the Treasury Department, “cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion.”
Following the news, Bitcoin fell approx. 16% to $31,772.43.
Despite the recent setbacks, Bitcoin is up 268% in the past year. At the same time, Ether, the second-largest crypto in the world, edged up more than 840%.
Sources: cnbc.com, coindesk.com