Bitcoin’s slide continues as it fell to $37,378.95, down 20% in the last seven days, figures from Coingecko shows Sunday as the threat of stiffer government regulation grows, triggering a new round of price jitters.

News that China will crack down on bitcoin mining and trading activities as part of measures to deflect financial risks was blamed for bitcoin’s collapse.

Bitcoin fell almost 30% at one point last week after the China Banking Association (CBA) warned member banks of the risks linked with cryptocurrencies, USA Today reported Saturday.

According to China’s State Council’s Financial Stability and Development Committee, the country will stamp out illegal activities in the securities market, and maintain the stability of bonds, stocks and the forex markets.

In the United States, the Internal Revenue Service has been strengthening its ability to track taxpayers who own cryptocurrencies by probing virtual currency exchanges and threatening to seize the assets of tax evaders. 

As central banks take a more serious look at cryptocurrencies, governments are campaigning for increased oversight of volatile digital assets.

In the latest indication of a looming regulatory clampdown on cryptocurrency, the U.S. Treasury Department has said it will require cryptocurrency transfers of $10,000 or more to be reported to the IRS, Engadget reported.

The plan forms part of U.S. President Joe Biden’s new tax enforcement initiative that would add almost 87,000 staff to the IRS, make banks disclose more information to the agency and carry out stricter cryptocurrency compliance.

The prevention of money laundering and investor protection are particular concerns of financial regulators who are faced with the challenge of how they should regulate the cryptocurrency market.

The Treasury said the gap between taxes paid and owed totaled almost $600 billion in 2019 and could increase to $7 trillion if left unaddressed.

Echoing concerns by the U.S. Justice Department, the Treasury cautioned that cryptocurrency poses “a significant detection problem” by facilitating illegal activity, including tax evasion.

“Bitcoin is no longer an investment tool to avoid risks. Rather, it’s a speculative instrument,” China’s state broadcaster CCTV warned.

Source: https://www.btimesonline.com

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