The United States Internal Revenue Service (IRS) has proposed new regulations for digital asset brokers regarding the sale and exchange of digital assets. These regulations aim to simplify tax filings and reduce tax fraud by requiring brokers to use a new form specifically designed for digital asset reporting. The IRS intends to align the reporting of digital assets with that of other types of assets.
If approved, these new rules will take effect in 2026, applying to sales and exchanges that occur in 2025. The IRS is currently accepting written comments on the proposal until October 30th and plans to hold a public hearing afterward.
However, the crypto community has been quick to criticize these proposed regulations. Kristin Smith, the CEO of the Blockchain Association, emphasized the difference between the crypto ecosystem and traditional finance, expressing concerns about the potential negative impact on the industry. Miller Whitehouse-Levine, CEO of DeFi Education Fund, described the rules as confusing, self-refuting, and misguided. Meanwhile, Ryan Selkis, the CEO of Messari, went as far as suggesting that President Joe Biden’s reelection would spell the end for the crypto industry in the United States. Representative Patrick McHenry, chairman of the House Financial Services Committee, labeled the proposal as yet another attack from the Biden Administration on the digital asset ecosystem.
In other news related to cryptocurrencies, the cryptocurrency exchange Gemini has filed a reply brief in its ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC). Gemini argues that the SEC has failed to make a clear claim and contends that the court should avoid the convoluted analyses presented by the SEC. The company believes that the agency should ask straightforward questions to determine whether it qualifies as a security. According to the SEC, Gemini Earn, a service that allows customers to lend cryptocurrencies like Bitcoin to Genesis, has breached securities regulations by offering unregistered securities.
Shifting our focus to artificial intelligence (AI), a U.S. District Judge, Beryl Howell, has upheld the decision of the U.S. Copyright Office that artworks solely created by AI are not eligible for copyright protection. This ruling comes at a time when there are growing concerns about the potential replacement of human artists and writers by generative AI. It also coincides with ongoing legal discussions surrounding AI firms’ use of copyrighted content for training. In California, multiple artists have filed lawsuits alleging copyright violations, potentially leading to AI companies dismantling their language models.
Looking internationally, the United Kingdom is preparing to implement a ban on finance-related cold calls. In response, His Majesty’s Treasury has issued a consultation paper seeking evidence to assess the impact and associated costs of introducing and implementing this ban. The Treasury aims to impose a comprehensive ban on financial cold calls and has presented stakeholders with 19 questions to gather input. The goal is to maximize the impact on scammers while minimizing any negative effects on businesses that rely on cold calling for prospecting. The consultation period will close on September 27th, 2023.
These developments highlight the ongoing challenges and debates surrounding digital assets, cryptocurrencies, AI-generated content, and cold-calling practices. As regulatory bodies propose new regulations and legal battles continue, the future of these industries remains uncertain.
