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New Crypto Law Could land regular investors in jail

Cryptocurrency as a whole lately, has taken a massive hit in recent months. This is bad news for most crypto investors, but shortly, some could be in way worse shape than originally thought. A lesser-known law was passed last November that requires certain taxpayers who receive more than $10,000 in digital assets per year to notify the IRS about who sent them the digital currency.

The Basics

The law begins in 2024, requiring recipients of these digital assets to report the sender’s name, address, and Social Security number within 15 days of receiving the asset. Civil penalties for anyone who accidentally overlooks these requirements can face fines of up to $3 million. If it is found out that someone is intentionally disregarding the requirement can be charged with up to 5 years in prison along with a fine. Corporate violators could also face fines up to $100,000 per transaction.

Crypto in the future

This new law comes in due to the ever-increased usage of Bitcoin and other digital currencies. According to a survey conducted in May of 2022, one in five Americans has invested in, traded, or used crypto as a form of payment. Small businesses are also expected to begin offering digital payment options later this year; as many as 1 in 5 according to a recent survey conducted by the Visa credit card company.

Ric Edelman, the founder of the Digital Assets Council of Financial Professionals, an educational and advocacy group, said the new law created concern for “anyone involved with the transfer of digital assets.” One problem, he added: The law doesn’t clearly define what it means to “receive” digital assets.

Wrap Up

Dealing with cryptocurrency, no matter the transaction can often be confusing at times when it comes to laws, regulations, and tax implications on it. It is always important to keep up with the rules and regulations of crypto, especially if you are an active investor. If you ever need assistance within the crypto space, contact your trusted financial advisor for assistance.

 
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