[Bitcoin Now] Falls to 74 Million Won Range... Biden Signs Cryptocurrency Taxation Bill

Cryptocurrency Industry Protests Over Personal Data Privacy Violations

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] U.S. President Joe Biden has signed the infrastructure bill that includes a cryptocurrency taxation plan. As the taxation plan caused instability in the cryptocurrency market, the leading cryptocurrency Bitcoin fell to the 74 million KRW range.

Domestic cryptocurrency exchange Upbit recorded Bitcoin at 74.99 million KRW as of 2:46 PM on the 16th, down 3.36% compared to the previous day. It had rebounded to 80.25 million KRW the day before but has since declined.

It is interpreted that President Biden’s signing of the infrastructure bill, which includes the cryptocurrency taxation plan, had an adverse effect. According to cryptocurrency specialized media CoinDesk on the 15th (local time), President Biden signed a $1 trillion (approximately 1,177.8 trillion KRW) infrastructure bill. The bill includes a cryptocurrency taxation plan and plans to impose an additional tax of about $28 billion on cryptocurrency transactions.

According to this bill, cryptocurrency exchanges are defined as ‘brokers’ and must report related information to the U.S. Internal Revenue Service (IRS) using a specific tax reporting form (Form 1099). When exchanges report according to this form, U.S. financial authorities will naturally identify cryptocurrency trading customers, who will then have to pay taxes based on their capital gains. Additionally, if transactions exceed $10,000, the recipient of the cryptocurrency must report the sender’s personal information, such as name and address, to financial authorities within 15 days.

Cryptocurrency taxation will not be implemented immediately. Taxation under this bill is expected to begin in January 2024. Over the next two years, the U.S. Congress is expected to revise related laws by gathering opinions from the cryptocurrency industry.

However, the cryptocurrency industry is opposing the bill. They argue that reporting information for transactions over $10,000 violates privacy rights and is unconstitutional. According to U.S. economic media MarketWatch on the 9th, Peter Van Valkenburgh, research director at cryptocurrency research firm Coin Center, explained, “In the case of fiat currency transactions, third parties have management and supervisory responsibilities and thus have reporting obligations. However, imposing reporting obligations on peer-to-peer (P2P) transactions like cryptocurrency requires a warrant under the Fourth Amendment related to unreasonable searches and seizures.”