Authorities are taking cryptocurrencies seriously and are going after anyone who has been using this market to perpetuate illegalities, such as money laundering and tax evasion. Just the other day, the British financial authorities announced that they would be requiring all crypto businesses to report potential crimes that may amount to money laundering. In other jurisdictions, such as South Korea, the trend has been the same.
The latest to join this trend is the United States, where the IRS has announced that it would require information from Circle, on individuals who traded over $20k worth of crypto in the last four years. This comes after a federal court granted the IRS the leeway to serve a John Doe summons to the fintech companies to reveal information on crypto-assets trading worth $20k and above.
The summons will not just apply to Circle but also to its subsidiaries, divisions, and earlier versions of the company. The judge stated that there was a valid basis to believe that a sizeable number of cryptocurrency investors have not been paying their taxes, as is required by the law.
However, the summon also noted that the crypto exchange was not under investigation. The IRS was only seeking to go after a category of investors who have not paid their fair share of taxes from their crypto-generated wealth. Commenting on the issue, the crypto exchange stated that it was cooperating fully with the IRS in response to the summons.
The Attorney General in charge of the Tax Department, David Hubbert, also weighed in on the issue stating that anyone trading in crypto should be ready to pay their fair share, just like all other taxpayers. It will be interesting to see how all this will affect the market now that Bitcoin is hugely bullish again.