Cryptocurrency Regulation And Rules
Your personal perspective on regulation will dictate your views on cryptocurrency as a whole.
Financial regulation is the product of disastrous market failures, and fraudulent trading. The regulation is the product of great depressions around the world.
Financial markets today, such as public stocks, are heavily regulated to avoid massive losses.
Cryptocurrency, on the other hand, is not regulated.
What the United States government has been focused on in regards to cryptocurrency has been those laundering money or purchasing illegal substances and services through cryptocurrency, as well as identifying fraudulent ICOs, and collecting taxes.
Perhaps the most important and relevant piece of regulatory guidance for average cryptocurrency users is Notice 2014-21 issued by the IRS.
Notice 2014-21 says that cryptocurrency is treated as property for federal tax purposes and falls under general tax principles.
Thus, a gain or loss is recognized whenever a specific cryptocurrency is sold or used to purchase goods, services, or other cryptocurrencies (i.e., trading Bitcoin for Ethereum).
As someone diving into the cryptocurrency basics, it’s important to understand the regulatory climate around cryptocurrency is in a constant state of flux — some details could even change tomorrow — with a few of the largest and most important landmark decisions are still ahead of us.
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