“That wasn’t my plan when I ran for office, I can assure you,” said Liccardo, the former mayor of San Jose.

But the president’s launch of a meme coin just before taking office last month needed some kind of response, said Liccardo. Those who bought the meme coin right after launch made out, but the price quickly dropped leaving others with big losses. Even Trump-supporting crypto enthusiasts found the launch distasteful.

“That behavior is so self-evidently unethical that it raises the question why isn’t there a clear enough prohibition,” he said, adding that Trump’s meme coin raises concerns about transparency, insider trading and improper foreign influence.

The bill is set to be called the Modern Emoluments and Malfeasance Enforcement, or MEME act. According to a draft of the legislation, it would block the president, members of Congress, and other senior officials, as well as their spouses and children, from issuing or sponsoring securities, commodities and cryptocurrencies like meme coins. It would also force Trump to disgorge any profits he’s made from the sale of his meme coins.

Liccardo’s bill, which he plans to introduce Thursday, has no chance of passing in this Republican-controlled Congress. But the freshman lawmaker said it would serve as a placeholder if Democrats come to power as well an important symbolic gesture against what he called obvious corruption. His bill comes amid a fractured Democratic Party struggling to find its footing in the early weeks of the Trump presidency.

Meme coins are a strange and highly volatile corner of the crypto industry that often start as a joke with no real value but can surge in price if enough people are willing to buy them. Critics view them as nothing more than Ponzi schemes that enrich insiders and unethical celebrities. Supporters say meme coins could be early indicators of ways in which the internet could revolutionize financial and other transactions.

Trump has long defied presidential norms when it comes to endorsing and promoting products like branded Bibles and perfume. But he’s leaned in particularly hard with cryptocurrency-related projects that could significantly boost his personal wealth.

The Trump meme coin quickly soared in price to nearly $70 shortly after it was launched but has since fallen to about $12. Researchers have estimated that trading fees have generated tens of millions of dollars for entities that launched the coin, including a company owned by Trump.

Trump and his sons also helped launch a decentralized finance cryptocurrency platform last year, and the president has backed online stores that sell crypto-themed sneakers and $100,000 watches.

The Trump family business recently released an ethics agreement that prohibits Trump from “day-to-day” decision-making involving outside business deals and limits financial information shared with him.

Once a skeptic of cryptocurrencies, Trump changed course and promised last year to make the U.S. the world capital of digital assets. The cryptocurrency industry, which felt unfairly targeted by the Biden administration, embraced Trump and spent heavily to help him win last year’s election.

First Lady Melania Trump also launched a meme coin that spiked in value around the inauguration but has since cratered. A crypto developer who said he helped launch that meme coin was also involved in a disastrous meme coin launch that’s led to Argentine President Javier Milei facing a corruption probe.

That developer, Hayden Davis, has said meme coins are essentially a rigged game that benefit a small group of people at the expense of retail investors.

“It is an insiders’ game. This is an unregulated casino,” Davis said.

Besides a criminal prohibition, Liccardo’s bill would also allow private investors who lose money on a meme coin backed by a public official to sue. Liccardo said that’s a key part of the legislation, given what he sees as a lack of independence in the current Justice Department.

“You need to have some enforcement mechanism and a private right of action helps to keep everybody honest,” Liccardo said.

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The lawyers filed papers with the 2nd U.S. Circuit Court of Appeals asking a three-judge panel to reverse his conviction and assign the case to a new judge for a retrial, saying the trial judge “imposed a draconian quarter-century sentence on this first-time, non-violent offender” after they contend he hurried the jury into reaching a one-day verdict to cap off a complex four-week trial.

“Sam Bankman-Fried was never presumed innocent. He was presumed guilty — before he was even charged. He was presumed guilty by the media. He was presumed guilty by the FTX debtor estate and its lawyers. He was presumed guilty by federal prosecutors eager for quick headlines. And he was presumed guilty by the judge who presided over his trial,” the lawyers wrote.

They said the passing of time has cast Bankman-Fried in a better light.

“From day one, the prevailing narrative — initially spun by the lawyers who took over FTX, quickly adopted by their contacts at the U.S. Attorney’s Office — was that Bankman-Fried had stolen billions of dollars of customer funds, driven FTX to insolvency, and caused billions in losses,” the attorney said.

“Now, nearly two years later, a very different picture is emerging — one confirming FTX was never insolvent, and in fact had assets worth billions to repay its customers. But the jury at Bankman-Fried’s trial never got to see that picture,” they added.

Bankman-Fried, 32, was convicted last November of fraud and conspiracy a year after his companies collapsed into bankruptcy as investors rushed to withdraw funds. A jury concluded that some of their money had been improperly spent on real estate, investments, celebrity endorsements, political contributions and lavish lifestyles.

At its height, FTX was treated as a pioneer and darling in the emerging cryptocurrency industry, with a Super Bowl advertisement, testimony by Bankman-Fried before Congress and endorsements from celebrities such as quarterback Tom Brady and comedian Larry David.

Bankman-Fried was arrested in December 2022 following his extradition from the Bahamas, just weeks after his company filed for bankruptcy and days after some of his former top executives began cooperating with federal prosecutors. Some of them testified against him at trial.

He initially remained under strict bail conditions at his parents’ home in Palo Alto, California, but Judge Lewis A. Kaplan in Manhattan revoked his bail shortly before the trial after concluding that Bankman-Fried was trying to influence likely witnesses, including an ex-girlfriend who had served as chief executive at Alameda Research, a crypto hedge fund.

The fallen mogul is serving a 25-year sentence after he was sentenced in March in what a prosecutor once described as one of the biggest financial frauds in U.S. history.

A prosecutor’s spokesperson declined to comment Friday.

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File # N/A

Details:

The Southwest Sheriff Station is seeing an increase in phone scams that are targeting residents of Riverside County. The most recent incidents have scammed the victims of tens of thousands of dollars. Many of the scams involve the suspect convincing a victim to convert currency into cryptocurrency and send the cryptocurrency elsewhere, which tends to lead out of the country. Some of the scams give the false belief the victim is investing in a new cryptocurrency. Once the money is sent outside of the United States, it is very difficult for investigators to track down and recover.

We are asking the public to be aware of the following:

• Never give out personal information such as name, date of birth, social security number or bank information to unsolicited callers.
• Never respond to an unsolicited email asking you to confirm personal information such as bank accounts or passwords.
• If someone calls claiming you have a warrant out for your arrest, hang up and call Riverside County Sheriff at (951) 776–1099 to verify.
• If someone calls claiming you owe money to the IRS, hang up and call your local IRS office. Law enforcement agencies, including RSO, and the IRS will never accept wire transfers, money orders, Bitcoin, other cryptocurrency, or gift cards as payment.
• If someone calls claiming a family member has been involved in an accident or arrested, call a family member and confirm that this is true. Never wire money or pay someone with gift cards before verifying the information.
• If somebody wants you to deposit cash into a kiosk-like ATM machine for crypto transactions, it is most likely a scam.
• Never trust the number that appears on your caller ID. Technology allows fraudsters to fake the caller ID information.

If you have become the victim of a scam or to report fraud, contact (951) 776–1099

For media inquiries regarding this incident please contact the Media Information Bureau.

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NEW YORK (AP) — The swift collapse of cryptocurrency exchange FTX sent more shockwaves through the crypto world on Thursday, with authorities now investigating the firm for potential securities violations and analysts bracing for a further downturn in crypto prices.

FTX had agreed earlier this week to sell itself to bigger rival Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital.

A person familiar with matter said that the Department of Justice and the Securities and Exchange Commission are examining FTX to determine whether any criminal activity or securities offenses were committed. The person could not discuss details of the investigations publicly and spoke to The Associated Press on condition of anonymity.

This week’s developments marked a shocking turn of events for FTX CEO and founder Sam Bankman-Fried, who was hailed as somewhat of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.

The investigation into Bankman-Fried and FTX by those in the crypto world as well as securities regulators is centering on the possibility that the firm may have used customers’ deposits to fund bets at Bankman-Fried’s hedge fund, Alameda Research. In traditional markets, brokers are expected to separate client funds from other company assets. Violations can be punished by regulators.

Meanwhile, investors in popular digital currencies got some relief from the latest crypto crisis Thursday after days of selling. Bitcoin rose to $17,691 after dropping as low as $15,512 on Wednesday. Ethereum rose 12%. The gains came after a government report showing inflation cooled a bit last month gave a lift to riskier assets.

The crypto world had hoped that Binance, the world’s largest crypto exchange, might be able to rescue FTX and its depositors. However, after Binance had a chance to look at the books of FTX, it became clear that the smaller exchange’s problems were too big to solve.

A person familiar with the dealings between FTX and Binance described the books as a “black hole” where it was impossible to differentiate between the assets and liabilities of FTX the exchange and those of Alameda Research. This person spoke on condition of anonymity because they weren’t authorized to speak publicly about the matter.

This person said Bankman-Fried committed the “ultimate sin” by tapping into FTX’s custodial assets to fund Alameda Research.

In a further illustration of FTX’s financial straits, Bankman-Fried asked his investors Wednesday for $8 billion to cover withdrawal requests, according to The Wall Street Journal, citing unnamed sources.

In a series of Tweets on Thursday, the FTX founder and CEO said that he did not have enough liquidity to cover withdrawals and that he was more leveraged than he had thought.

“I f(asterisk)(asterisk)(asterisk)ed up, and should have done better,” he said.

The latest crisis in the crypto industry prompted renewed calls for stricter regulation. White House press secretary Karine Jean-Pierre said the FTX developments “highlights why prudent regulation of cryptocurrencies is indeed needed. The White House, along with the relevant agencies, will again closely monitor the situation as it develops.”

The collapse of the cryptocurrency’s third largest exchange is likely to cause further disruption across the entire crypto world, analysts say, meaning Thursday’s rally could be temporary.

“The unwinding of FTX, as well as its shock of confidence to the system, will cause crypto prices to fall even further leading to “a new cascade of margin calls,” said analysts at J.P. Morgan in a note to investors. This would be similar to the selloff that happened after the collapse of the stable coin Terra earlier this year, where prices continued to decline weeks after its failure.

“This deleveraging is likely to last for at least a few weeks unless a rescue for Alameda Research and FTX is agreed quickly,” J.P. Morgan analysts wrote.

The crypto industry is waiting to see what other companies are impacted by the FTX collapse. The venture capital fund Sequoia Capital said Thursday it is writing down its total investment of nearly $215 million n FTX.

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A House oversight subcommittee asked regulators and industry leaders on Tuesday to explain what they are doing to stop cryptocurrency fraud and other scams perpetrated on consumers.

Illinois Rep. Raja Krishnamoorthi, head of the Economic and Consumer Policy subcommittee, asked leaders of the Treasury Department, Securities and Exchange Commission, Commodity Futures Trading Commission, and Federal Trade Commission for more information on the steps they are taking to curb the growth of fraud and consumer abuse linked to cryptocurrencies.

The inquiries come as the cryptocurrency market has seen immense volatility, as bitcoin lost nearly half its value at one point this year and other cryptocurrencies fell even more.

“Despite these vulnerabilities, the federal government has been slow to curb cryptocurrency scams and fraud. Existing federal regulations do not comprehensively or clearly cover cryptocurrencies under all circumstances,” reads one letter addressed to Treasury Secretary Janet Yellen.

Five of the biggest cryptocurrency exchanges were also sent inquiry letters, requesting documents on company policies regarding the removal of fake accounts.

A report on the impacts of cryptocurrencies and other digital assets on financial markets and illicit finance is expected to be released in the coming weeks. In March, President Joe Biden issued an executive order calling for several agencies to look at ways to regulate digital assets and gave them 180 days to do so.

On Monday, the Federal Bureau of Investigation warned that criminals are more frequently exploiting vulnerabilities on certain decentralized finance platforms to steal cryptocurrency.

Several major legislative proposals were offered in Congress this year as well.

Sens. Debbie Stabenow, D-Mich., and John Boozman, R-Ark. have proposed a bill that would give the regulatory authority over Bitcoin and Ether to the Commodities Futures Trading Commission. Stabenow and Boozman lead the Senate Agriculture Committee, which has authority over CTFC.

In June, Sens. Kirsten Gillibrand, D-N.Y., and Cynthia Lummis, R-Wyo., proposed the Responsible Financial Innovation Act, which would create legal definitions of digital assets and virtual currencies; would require the IRS to adopt guidance on merchant acceptance of digital assets and charitable contributions; and would make a distinction between digital assets that are commodities and those that are securities.

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WASHINGTON (AP) — President Joe Biden on Wednesday signed an executive order on government oversight of cryptocurrency that urges the Federal Reserve to explore whether the central bank should jump in and create its own digital currency.

Treasury Secretary Janet Yellen said the effort would “promote a fairer, more inclusive, and more efficient financial system” while countering illicit finance and preventing risks to financial stability and national security.

The Biden administration views the explosive popularity of cryptocurrency as an opportunity to examine the risks and benefits of digital assets, said a senior administration official who previewed the order Tuesday on the condition of anonymity, terms set by the White House.

Under the executive order, Biden also directed the Treasury Department and other federal agencies to study the impact of cryptocurrency on financial stability and national security.

Brian Deese and Jake Sullivan, Biden’s top economic and national security advisers, respectively, said the order establishes the first comprehensive federal digital assets strategy for the United States.

“That will help position the U.S. to keep playing a leading role in the innovation and governance of the digital assets ecosystem at home and abroad, in a way that protects consumers, is consistent with our democratic values and advances U.S. global competitiveness,” Deese and Sullivan said Wednesday in a joint statement.

The action comes as lawmakers and administration officials are increasingly voicing concern that Russia may be using cryptocurrency to avoid the impact of sanctions imposed on its banks, oligarchs and oil industry due to the invasion of Ukraine.

Last week, Democratic Sens. Elizabeth Warren, Mark Warner, and Jack Reed asked the Treasury Department to provide information on how it intends to inhibit cryptocurrency use for sanctions evasion.

The Biden administration has argued that Russia won’t be able to make up for the loss of U.S. and European business by turning to cryptocurrency. Officials said the Democratic president’s order had been in the works for months before Russia’s Vladimir Putin invaded Ukraine last month.

Daleep Singh, a deputy national security and economic adviser to Biden, told CNN on Wednesday that “crypto’s really not a workaround for our sanctions.”

The executive order had been widely anticipated by the finance industry, crypto traders, speculators and lawmakers who have compared the cryptocurrency market to the Wild West.

Despite the risks, the government said, surveys show that roughly 16% of adult Americans — or 40 million people — have invested in cryptocurrencies. And 43% of men age 18-29 have put their money into cryptocurrency.

Coinbase Global Inc., the largest cryptocurrency exchange in the United States, said the company had not seen a recent surge in sanctions evasion activity.

Treasury Secretary Janet Yellen said last week that “many participants in the cryptocurrency networks are subjected to anti-money laundering sanctions” and that the industry is not “completely one where things can be evaded.”

As for the Federal Reserve getting involved with digital assets, the central bank issued a paper in January that said a digital currency “would best serve the needs” of the country through a model in which banks or payment firms create accounts or digital wallets.

Some participants in digital currency welcome the idea of more government involvement with crypto.

Adam Zarazinski, CEO of Inca Digital, a crypto data company that does work for several federal agencies, said the order presents the opportunity to provide “new approaches to finance.”

“The U.S. has an interest in growing financial innovation,” Zarazinksi said. He added that China and Russia were looking at crypto and building their own currency. More than 100 countries have begun or are piloting their own digital sovereign currency, according to the White House.

Katherine Dowling, general counsel for Bitwise Asset Management, a cryptocurrency asset management firm, said an executive order that provides more legal clarity on government oversight would be “a long term positive for crypto.”

But Hilary Allen, a financial regulation professor at American University, cautioned against moving too fast to embrace cryptocurrencies.

“I think crypto is a place where we should be putting the brakes on this innovation until it’s better understood,” she said. “As crypto becomes more integrated into our financial system it creates vulnerabilities not just to those who are investing in crypto but for everybody who participates in our economy.”

On Tuesday, the Treasury Department said its financial literacy arm would work to develop consumer-friendly materials to help people “make informed choices about digital assets.”

“History has shown that, without adequate safeguards, forms of private money have the potential to pose risks to consumers and the financial system,” said Nellie Liang, undersecretary for domestic finance.

Bitcoin and cryptocurrency related stocks got a boost Wednesday following Biden’s executive order.

The price of Bitcoin was up 9.8% at $42,211, according to Coindesk. Shares in cryptocurrency exchange Coinbase Global surged 9.3% in midday trading, while online brokerage Robinhood Markets rose 4.5%.

Riot Blockchain, which focuses on cryptocurrency mining, jumped 11.5%. Digital payments platforms also rose. PayPal added 4.9% and Block climbed 10.55%.

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The post Biden signs order on cryptocurrency as its use explodes appeared first on The Hemet & San Jacinto Chronicle.

A lot right now in the U.S. Congress. One way lawmakers propose to pay for the $1 trillion infrastructure bill the Senate approved Tuesday is by imposing tax-reporting requirements for cryptocurrency brokers, the way stockbrokers report their customers’ sales to the IRS. It could open the way for tighter regulation of cryptocurrency — something the Biden administration is moving toward as it also pushes for tax compliance.

The plan could raise about $28 billion in revenue over 10 years, congressional accountants estimate.

The $28 billion could get stretched very quickly. Take bridges, for example. It would cost an estimated $25.6 billion to replace all the bridges in the country that are classified as structurally deficient, according to the Federal Highway Administration.

So, currency you can’t hold in your hand would effectively pay for roads, bridges, water systems, internet broadband access and shoring up the electrical grid, what President Joe Biden called “a generational investment” on par with building the transcontinental railroad in the 1800s or the Interstate highway system in the ’50s. That’s testament to the explosive growth of cryptocurrencies in recent years — an enticing potential revenue source — and the mounting push by some government officials to put new reins around a largely unregulated market.

After weeks of wrangling, the Senate passed the bipartisan infrastructure package in a 69-30 vote. It now moves to the House.

A look at the situation:

__

WHAT’S THE STORY WITH CRYPTOCURRENCY?

The market for cryptocurrencies has ballooned to an estimated $1.8 trillion. They’re basically lines of computer code that are digitally signed each time they travel from one holder to the next. Not tied to banks or governments, they allow users to spend or receive money anonymously. That appeals to libertarians, off-the-grid types and risk-taking millennials who believe the financial system is rigged.

But it’s also favored by international criminals, money launderers, drug dealers and ransomware hackers.

The most widely traded cryptocurrency is Bitcoin, now worth around $45,000 each, down from a high in April of about $64,800. It’s notoriously volatile, in some instances spiking or plunging on public pronouncements by Elon Musk, the provocative Tesla Inc. CEO. Some businesses now accept Bitcoin as payment. Other well-known cryptocurrencies include Ethereum, Dogecoin, Ripple and Litecoin. All told, there are thousands. Bitcoin and others can be bought and sold on exchanges with U.S. dollars and other national currencies.

__

WHERE DO GOVERNMENT OFFICIALS STAND?

On both sides of the coin.

Some lawmakers see cryptocurrency as a font of technological innovation, especially in the development of blockchain, the digital ledger that records transactions.

Top U.S. regulators, on the other hand, are flashing danger signs. Gary Gensler, the chairman of the Securities and Exchange Commission appointed by Biden, said last week that investors need more protection in the cryptocurrency market, which he called “rife with fraud, scams and abuse” and “like the Wild West.” While the SEC has won dozens of cases against crypto fraudsters, Gensler said the agency needs more authority from Congress — and more funding — to regulate the market.

The Federal Reserve, meanwhile, is considering developing its own digital currency pegged to the U.S. dollar. A so-called digital dollar could enable faster payments among banks, consumers and businesses.

“You’ve got federal agencies not talking on the same page,” says Suzanne Lynch, a professor at Utica College who focuses on financial crime. “It’s so grey right now.”

__

WHAT’S THE CONNECTION WITH THE INFRASTRUCTURE BILL?

The debate over cryptocurrency landed in the middle of the Senate’s work on the massive infrastructure package. An earlier plan to pay for the legislation, by bolstering IRS enforcement to crack down on tax cheating by individuals and businesses, went down as Republicans objected to expanding the agency’s reach. That would have brought in an estimated $100 billion over 10 years.

Going back to the drawing board on revenue raisers, the plan was hatched for stricter tax-reporting requirements for cryptocurrency brokers. The estimated $28 billion it would generate over a decade is only about a quarter of what the IRS crackdown proposal envisaged. But it’s still the biggest revenue raiser of several in the infrastructure bill.

It raised objections from some senators and unleashed an opposition lobbying blitz from the cryptocurrency industry as well as internet freedom advocacy groups.

The provision defines brokers too broadly, opponents say, potentially stifling innovation by unfairly putting new tax-reporting obligations on software developers and crypto “miners” — users who create coins by lending computing power to verify other users’ transactions and receive coins in exchange. Those people don’t have access to cryptocurrency users’ data the IRS would be collecting, opponents say.

Opponents brought forward amendments to the provision and a compromise emerged. But it failed to muster Senate approval, pushing the debate over cryptocurrency, taxes and brokers to the House.

__

WHAT’S THE SITUATION NOW WITH CRYPTOCURRENCY AND TAXES?

Some cryptocurrency brokers already report transactions to the IRS, though most don’t, experts say. Brokers place buy and sell orders for users on the cryptocurrency exchanges.

The exchanges are required to collect personal identifying information from users and report their annual activity to the IRS.

The IRS defines cryptocurrency as “property” similar to stocks or gold. That means you pay capital gains tax when you sell it or cash it in at a profit.

__

Follow Marcy Gordon at https://twitter.com/mgordonap

MARCY GORDON | AP News

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The post How cryptocurrency fits into infrastructure bill appeared first on The Hemet & San Jacinto Chronicle.

WASHINGTON (AP) — What does Bitcoin have to do with roads and bridges?

A lot right now in the U.S. Congress. One way lawmakers propose to pay for the $1 trillion infrastructure bill the Senate approved Tuesday is by imposing tax-reporting requirements for cryptocurrency brokers, the way stockbrokers report their customers’ sales to the IRS. It could open the way for tighter regulation of cryptocurrency — something the Biden administration is moving toward as it also pushes for tax compliance.

The plan could raise about $28 billion in revenue over 10 years, congressional accountants estimate.

The $28 billion could get stretched very quickly. Take bridges, for example. It would cost an estimated $25.6 billion to replace all the bridges in the country that are classified as structurally deficient, according to the Federal Highway Administration.

So, currency you can’t hold in your hand would effectively pay for roads, bridges, water systems, internet broadband access and shoring up the electrical grid, what President Joe Biden called “a generational investment” on par with building the transcontinental railroad in the 1800s or the Interstate highway system in the ’50s. That’s testament to the explosive growth of cryptocurrencies in recent years — an enticing potential revenue source — and the mounting push by some government officials to put new reins around a largely unregulated market.

After weeks of wrangling, the Senate passed the bipartisan infrastructure package in a 69-30 vote. It now moves to the House.

A look at the situation:

__

WHAT’S THE STORY WITH CRYPTOCURRENCY?

The market for cryptocurrencies has ballooned to an estimated $1.8 trillion. They’re basically lines of computer code that are digitally signed each time they travel from one holder to the next. Not tied to banks or governments, they allow users to spend or receive money anonymously. That appeals to libertarians, off-the-grid types and risk-taking millennials who believe the financial system is rigged.

But it’s also favored by international criminals, money launderers, drug dealers and ransomware hackers.

The most widely traded cryptocurrency is Bitcoin, now worth around $45,000 each, down from a high in April of about $64,800. It’s notoriously volatile, in some instances spiking or plunging on public pronouncements by Elon Musk, the provocative Tesla Inc. CEO. Some businesses now accept Bitcoin as payment. Other well-known cryptocurrencies include Ethereum, Dogecoin, Ripple and Litecoin. All told, there are thousands. Bitcoin and others can be bought and sold on exchanges with U.S. dollars and other national currencies.

__

WHERE DO GOVERNMENT OFFICIALS STAND?

On both sides of the coin.

Some lawmakers see cryptocurrency as a font of technological innovation, especially in the development of blockchain, the digital ledger that records transactions.

Top U.S. regulators, on the other hand, are flashing danger signs. Gary Gensler, the chairman of the Securities and Exchange Commission appointed by Biden, said last week that investors need more protection in the cryptocurrency market, which he called “rife with fraud, scams and abuse” and “like the Wild West.” While the SEC has won dozens of cases against crypto fraudsters, Gensler said the agency needs more authority from Congress — and more funding — to regulate the market.

The Federal Reserve, meanwhile, is considering developing its own digital currency pegged to the U.S. dollar. A so-called digital dollar could enable faster payments among banks, consumers and businesses.

“You’ve got federal agencies not talking on the same page,” says Suzanne Lynch, a professor at Utica College who focuses on financial crime. “It’s so grey right now.”

__

WHAT’S THE CONNECTION WITH THE INFRASTRUCTURE BILL?

The debate over cryptocurrency landed in the middle of the Senate’s work on the massive infrastructure package. An earlier plan to pay for the legislation, by bolstering IRS enforcement to crack down on tax cheating by individuals and businesses, went down as Republicans objected to expanding the agency’s reach. That would have brought in an estimated $100 billion over 10 years.

Going back to the drawing board on revenue raisers, the plan was hatched for stricter tax-reporting requirements for cryptocurrency brokers. The estimated $28 billion it would generate over a decade is only about a quarter of what the IRS crackdown proposal envisaged. But it’s still the biggest revenue raiser of several in the infrastructure bill.

It raised objections from some senators and unleashed an opposition lobbying blitz from the cryptocurrency industry as well as internet freedom advocacy groups.

The provision defines brokers too broadly, opponents say, potentially stifling innovation by unfairly putting new tax-reporting obligations on software developers and crypto “miners” — users who create coins by lending computing power to verify other users’ transactions and receive coins in exchange. Those people don’t have access to cryptocurrency users’ data the IRS would be collecting, opponents say.

Opponents brought forward amendments to the provision and a compromise emerged. But it failed to muster Senate approval, pushing the debate over cryptocurrency, taxes and brokers to the House.

__

WHAT’S THE SITUATION NOW WITH CRYPTOCURRENCY AND TAXES?

Some cryptocurrency brokers already report transactions to the IRS, though most don’t, experts say. Brokers place buy and sell orders for users on the cryptocurrency exchanges.

The exchanges are required to collect personal identifying information from users and report their annual activity to the IRS.

The IRS defines cryptocurrency as “property” similar to stocks or gold. That means you pay capital gains tax when you sell it or cash it in at a profit.

Find your latest news here at the Hemet & San Jacinto Chronicle

The post EXPLAINER: How cryptocurrency fits into infrastructure bill appeared first on The Hemet & San Jacinto Chronicle.