On May 20, a specific call was made by the U.S. treasury to make the cryptocurrency industry more compliant with Internal Revenue Service requirements. Everything related to cryptocurrency was identified as a significant risk of tax evasion. A certain amount of income will come from a source that has not previously been reported to the IRS.
Some significant movements were initiated by the crowd investors. The administration, moving to stop those crowdsourced stock manipulations, started with the Reddit forum.
Mitja mentions that the U.S IRS promoted tax transparency a few years ago. Paying taxes on crypto-assets is no longer a problem in many countries.
Eugene explains that many tax specialists in the United States would have to gather information not only from records of transactions on a regulated exchange, but also touch on a decentralized format that they have not seen before. We will have to report for all amounts exceeding ten thousand dollars.
Mitja believes that the regulation problem is not directly related to crypto regulation, since a decentralized industry cannot be regulated. Banking regulation is the main problem, according to him. A huge number of banks will immediately close your account if they suspect that you are engaged in any crypto related investment activities, despite the fact that these activities are absolutely legal. In fact, we now have two parallel economies,which will become harder and harder to interconnect with. We are dealing with a parallel system that is above the law. Banks are not subject to the central bank authority when it comes to their decision to open an account or not, this decision is regulated by a completely different institution that is not related to your country. It is like a shadow police in the whole banking industry.
Eugene is convinced that it is impossible to fight this, since different countries, especially such as China or Russia, regulate this in different ways. For example, the fight against blockchain voting is another type of pressure. The question is whether this will have an impact on individuals or not.
Ben mentions cases where people almost lost their homes due to their involvement in cryptocurrency-related activities several years ago. Mitja believes that such episodes are completely unacceptable in a civilized society. Shadow regulations in the economic industry affect everyone, and it’s outrageous because this whole scheme is completely illegal. The bank closes your account — there is nothing you can do about it. There is no way, for example, to take legal action against this bank. The Federal Reserve System, for example, is fully regulated by the country’s legislature. It has proper reporting and so on. The first central bank was formed to force some budget allocations into the central bank reserve system, which would help banks pay off their balance sheet problems. It is embedded into the political system and quite transparent.
The main question arises: what can be done about it? Mitja is convinced that cryptocurrency is invulnerable. Of course, criminals can use it in illegal actions, but they use anything that can transfer value.
Eugene suggests giving regulators access to certain voluntarily provided information that can be used by them at their discretion. Mitja is strongly opposed to this idea. He questions the fact that this information might not harm ordinary people.
Eugene says that governments will rather fight and lead than allow blockchains to properly penetrate technological development.
Mitja is convinced that technological progress is almost a force of nature; reactionaries will always lose to progress. Decentralization has nothing to do with politics. The idea of decentralized governance is that it is a direct democracy; there are no parties. Of course there will be conflicting interests, but the goal is that those people’s ideas will win one over the other, not through pure manipulation. In the Free TON governance system, any decision you make directly affects the value of your tokens. This is the only answer to people’s involvement and judgment about the decisions they want to make.
According to Eugene, one should not forget about such a component as information availability for people, on the basis of which they make decisions.
Mitja says that not only information availability is important, but also the expertise of this information. In Free TON, the jury members are responsible for this. Decisions are made on the basis of contests and voting. On top of that, there is a group of experts with a proven track record in the community in this particular area who will evaluate the results of contests.