6th November 2021 > > How Congress ate my crypto hamster.

tl;dr

US regulation takes a wrong turning for cryptos.

Market Snap

Market Wrap

The sell-off in 10-year treasuries due to US tapering has now been completely reversed, which is very positive for risk assets.

Curious Cryptos’ Commentary – How Congress ate my crypto hamster

The Infrastructure Bill (the smaller of the two cornerstone domestic policies of the Biden administration at a mere $1 TRILLION) appears to have eight concerning words deeply embedded within.

Since 1984, section 60501 of the US tax code has mandated that any physical or electronic movements of cash more than $10,000 needs to be reported. In addition, the sender’s name, address, and Social Security Number must be declared by the recipient to the US Internal Revenue Service.

This measure was introduced as part of the crime-fighting toolbox against international drug smugglers. I leave it up to others to pass judgement on its effectiveness at preventing the drug trade.

Within the Infrastructure Bill there is an amendment to section 60501 that includes “any digital asset” in the definition of cash.

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This is hugely problematic for the crypto industry, and Decentralised Finance (DeFi) in particular, for obvious reasons.

The CCC will always be fully supportive of appropriate and targeted legislation and regulation that allows for innovation and development.

This small amendment could drive all DeFi advances off US soil and will prevent many US individuals from being part of that space. Until now the US has led the world in terms of providing a positive regulatory landscape, fostering, and driving innovation for everyone’s benefit.

All crypto enthusiasts need to be worried by this development.