A group of Democratic senators has urged the Internal Revenue Service (IRS) to expedite the development and implementation of tax reporting rules for cryptocurrency transactions. In a letter sent to IRS Commissioner Charles Rettig on October 12, the senators expressed their concern about the lack of clarity and guidance for taxpayers and tax professionals on how to report and comply with their tax obligations involving digital assets.
The letter was signed by Senators Ron Wyden, Mark Warner, Sherrod Brown, Elizabeth Warren, Catherine Cortez Masto, and Kyrsten Sinema, who are all members of the Senate Finance Committee. The senators noted that the IRS has been slow to update its guidance on cryptocurrency taxation, which dates back to 2014 and only covers a limited range of transactions.
They also pointed out that the IRS has not issued any regulations or guidance on how to implement the new reporting requirements for cryptocurrency brokers that were enacted as part of the Infrastructure Investment and Jobs Act in August.
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The senators urged the IRS to prioritize the development of comprehensive and clear rules for cryptocurrency taxation, as well as to provide adequate resources and training for its staff and contractors to handle the increasing volume and complexity of cryptocurrency transactions.
They also asked the IRS to collaborate with other federal agencies, such as the Treasury Department, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, to ensure a consistent and coordinated approach to cryptocurrency regulation.
The senators emphasized that timely and effective tax reporting rules for cryptocurrency transactions are essential to protect the interests of taxpayers, investors, and the U.S. economy. They wrote: “We believe that providing taxpayers with clear rules of the road when it comes to reporting their crypto transactions is critical to ensuring that our voluntary tax system remains fair and effective.”
BarnBridge DAO votes over response to SEC probe
The decentralized autonomous organization (DAO) behind the BarnBridge protocol, a platform for risk tokenization and structured products, has recently held a vote on how to respond to a probe from the U.S. Securities and Exchange Commission (SEC).
The vote, which took place on the BarnBridge governance forum, was triggered by a letter from the SEC requesting information and documents related to the protocol’s BOND token and its distribution. The letter also asked the DAO to voluntarily cooperate with the SEC’s investigation and to preserve all relevant records.
The DAO members had three options to choose from: comply with the SEC’s request, ignore the SEC’s request, or seek legal counsel before responding. The vote was open for seven days and ended on October 12, 2023.
According to the results, the majority of the DAO members (67%) voted in favor of seeking legal counsel before responding to the SEC. The second most popular option was to comply with the SEC’s request (28%), while only 5% voted to ignore the SEC’s request.
The BarnBridge DAO stated that it respects the outcome of the vote and will proceed accordingly. It also thanked the community for its participation and support. The BarnBridge protocol, which launched in October 2020, aims to create a marketplace for risk exposure, where users can hedge against price volatility, interest rate fluctuations, and other market risks. The protocol uses smart contracts to create tokenized derivatives that represent different risk profiles.
The BOND token is the native governance token of the protocol, which allows holders to propose and vote on changes to the protocol’s parameters and features. The token also entitles holders to a share of the protocol’s fees and rewards.
The SEC probe is part of the regulator’s ongoing efforts to scrutinize the crypto industry and its compliance with securities laws. The SEC has previously issued subpoenas and enforcement actions against several crypto projects, such as Ripple, Uniswap, and BlockFi.