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Crypto Tax Exemption Proposed By U.S. Senators For Trades Under $50

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Crypto Tax Exemption Proposed By U.S. Senators For Trades Under $50

Summary:

  • A crypto tax bill was introduced in the U.S. Senate.
  • The proposal is championed by lawmakers from both the Democratic and Republican parties.
  • A de minimis exemption for crypto transactions under $50 forms the core of the bill, per reports.
  • The exemption could nullify otherwise mandatory capital gains taxes for such small transactions.
  • CoinDesk noted that the proposal could face a long road ahead as Congress might take an extended August recess and crypto laws might not take off until 2023.
  • The proposal comes months after President Joe Biden signed an executive order on cryptocurrencies.
  • Other jurisdictions like India have opted for a different approach to crypto taxation.

Senators Pat Toomey and Kyrsten Sinema introduced a de minimis crypto tax bill to Congress geared toward providing capital gains tax relief for traders engaging in transactions worth $50 or less.

Room for a higher limit is also included in the proposal as the bill considers inflation and other macro factors. Additionally, crypto-fiat trades do not fall under the purview of this proposal, per reports.

Notably, a similar bill with a limit of $200 has floated in the Senate during the past two hearings. A much broader proposal called the “Omnibus crypto bill” from Senators Lummis and Gillibrand also supports a de minimis structure for taxing crypto.

JUST IN: 🇺🇸 US senators propose a bill that would exempt #crypto transactions under $50 from taxes.

— Watcher.Guru (@WatcherGuru) July 26, 2022

The so-called Virtual Currency Tax Fairness Act from Senators Toomey and Kyrsten could implement a de minimis exemption for investors when filing their tax reports.

Currently, U.S. tax laws treat cryptocurrencies as an investment vehicle as opposed to a means of payment. Therefore, it’s mandatory for investors to report capital gains made from their crypto holdings.

Crypto users in the U.S. have supposedly asked for clarity regarding the matter although the Internal Revenue Service does not actively police smaller digital asset transactions, per The Block’s report. 

While the bill has enjoyed support from a plethora of crypto advocacy entities like the Blockchain Association, the future of the proposal in Congress remains unclear. The U.S. Senate is close to enacting a long recess and experts believe crypto laws could stay on the back burner until after the elections later this year.

Reports also say that Senator Toomey will not rerun for office, although the lawmaker seems intent on pushing the proposal through. 

crypto tax
Senators Pat Toomey (Source: CNBC)

Crypto Tax Regimes In Other Jurisdictions 

While U.S. lawmakers seemingly prefer a more friendly approach to crypto taxation, other jurisdictions like India have reportedly adopted rigid structures toward the matter. India introduced a hefty 30% crypto tax. 

An additional 1% tax deduction at source (TDS) was implemented as well. Since these laws came into effect in April and July, trading volumes have slumped and exchanges mull over relocating to more accommodating climates.

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Ethereum

Huobi Founder Keen On Selling Majority Of His Stake At $3 Billion Value: Report 

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Huobi Founder Keen On Selling Majority Of His Stake At $3 Billion Value: Report 
  • Crypto exchange Huobi’s founder Leon Li is reportedly in talks with financiers to sell his stake in the firm
  • Potential buyers include Justin Sun of Tron and FTX CEO Sam Bankman-Fried

Per a recent Bloomberg report, Huobi founder Leon Li is currently in talks with a bunch of investors to sell the majority of his stake in the Huobi crypto exchange at a price of nearly $1 billion. 

Huobi Founder Is Reportedly In Talks To Sell 60% Of His Stake

Per a recently published Bloomberg report, Huobi’s founder is reportedly in talks with financiers to sell 60% of his stake to potential buyers. The report further states that the deal could be finalized sometime later this month. 

Citing people familiar with the matter, Bloomberg added that the potential list of buyers involves prominent crypto industry names including Justin Sun, founder of cryptocurrency Tron and Crypto billionaire and CEO of FTX exchange Sam Bankman-Fried. The report also adds that SBF and Sun had earlier established talks with Huobi concerning the acquisition of shares.  

In addition to this, the report mentions ZhenFund and Sequoia China as “existing backers,” who were made aware of Huobi’s decision in the shareholder’s meeting held in July. Per the report, Li is seeking a valuation between $2 billion to $3 billion. 

A Huobi spokesperson has shed more details on the matter, reporting that Li is currently in process of conducting a discussion with several international institutions concerning the stake sale, but has refused to offer specific details concerning the transaction. 

“He hopes that the new shareholders will be more powerful and resourceful and that they will value the Huobi brand and invest more capital and energy to drive the growth of Huobi,” the spokesperson said in an emailed statement to Bloomberg

Launched in 2013 in China, Huobi is one of the leading crypto exchanges that has consistently been expanding its work portfolio. The exchange has recently acquired a license to operate and offer services in Australia and had earlier acquired the necessary permissions to operate in New Zealand. 

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Robinhood To Face US Market Manipulation Claims Over “Meme Stock” Rally : Reuters Report

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Robinhood To Face US Market Manipulation Claims Over “Meme Stock” Rally : Reuters Report

TL;DR

  • According to a U.S judge, the stock trading platform Robinhood Markets Inc should face market manipulation claims.
  • This lawsuit was one of many brought against the platform after it temporarily barred customers from purchasing stocks back in Jan 2021, such as GameStop and AMC.
  • Robinhood prices surged in May after the CEO of FTX SBF announced that he had purchased stake in the company.

Robinhood Judge Rules That Robinhood Should Face Market Manipulation Claims

According to Reuters, a U.S Judge ruled on Thursday that stock trading platform Robinhood Markets Inc should face market manipulation claims.

Judge Cecilia Altonaga said in the ruling that investors in GameStop Corp (GME), AMC Entertainment Holdings INC (AMC), and seven other stocks could proceed with the proposed class action lawsuit.

This lawsuit comes after retail trading company Robinhood temporarily barred customers from buying certain stocks in January 2021. 

The “meme stock rally” was mainly social media-fueled, and the shares of the companies mentioned were involved in a short squeeze that led Robinhood and other trading platforms to restrict retail trading. 

Attorneys for Robinhood did not reply to a request for comment. 

Robinhood Stocks Soared after SBF Confirmed he had Stake in company

Robinhood stock prices surged earlier in May of this year after the CEO of crypto exchange FTX Sam Bankman-Fried announced he had purchased a 7.6% stake in the company.

According to the filing, SBF paid a total of $648 million to acquire a 7.6% stake in Robinhood.

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Ethereum Merge Tentative Date Is Set And It’s Sooner Than You Think

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Ethereum Merge Tentative Date Is Set And It’s Sooner Than You Think
  • The Ethereum core developer team has discussed the tentative dates for the Merge to take place.
  • The dates are not definitive; however, the devs have agreed that the Bellatrix update would land on September 6, and the Paris update would target September 15.
  • The Merge is planned to take place before the end of September.
  • It aims to resolve the core problems Ethereum faces today, such as security, scalability, and environmental stability.

The Ethereum Core developer team suggested possible dates for the Merge on their latest Consensus Layer Call earlier today. 

The Merge, which successfully completed the final testnet phase on August 11 of this month, is one of the most anticipated events in Ethereum’s history. 

Read more: Ethereum Price Headed to $2,000 as Ethereum Goerli Merge Goes Live

The initial dates were set on September 17; however, during the call, the core developers agreed on roughly two dates for the main upgrades. The consensus so far is that the 144896 epoch for the Bellatrix upgrade would land on September 6, and the Paris upgrade would be completed by September 15.

As discussed on the call, the developers mentioned that the dates are not definitive and can be changed within the coming weeks. 

The Merge should occur after the Bellatrix mainnet upgrade before the end of September. Ethereum’s Eth token has already rallied 17.5% in anticipation of the Merge. The upgrade will go as scheduled unless the Ethereum hash rate falls significantly, which would cause lower block times and delay the Merge’s expected time. 

The Merge aims to resolve security, scalability, and environmental sustainability. All of these issues have been concerns that have halted Ethereum adoption and the adoption of other cryptocurrencies on the Ethereum network.

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