White House to monitor cryptocurrency industry for fraud

Today, March 9, the US President’s office will present the draft budget for 2024. First of all, it is aimed at reducing the national deficit by $ 3 trillion. For crypto investors, the document contains several unpleasant surprises.

A White House official confirmed that the draft budget will include a tax provision designed to reduce fictitious sales by crypto investors. The fictitious sales strategy allows for a lower tax rate. Its essence lies in the fact that a trader sells assets at a loss to reduce the overall capital gains, and then buys them back.

Such maneuvers are prohibited in the stock market. But since cryptocurrencies are not classified as securities, they are not subject to the ban. President Biden wants to change that.

The second unpleasant surprise for crypto traders is the new tax levies on cryptocurrency capital gains. The rate for investors with an income of $ 1 million or more will increase from 20% to 39.6%.

This is not the first attempt by Washington to close the window of opportunity for crypto investors. At the end of 2021, lawmakers presented a draft law that similarly did not allow claiming losses for the re-purchase of the same cryptocurrencies. At the same time, a tax provision was included in the Infrastructure Investment and Jobs Act, requiring reporting from brokers who facilitate cryptocurrency transactions.

At the time, many members of the crypto community criticized the authorities for interpreting the term «broker» too broadly. They claimed that miners and a number of other organizations that do not directly facilitate transactions should not have this status.