What crypto investors should know about the infrastructure bill signed by President Biden

Global Crypto Market Cap Falls 7% in the Past 24 Hours

As you all know, there has been a lot of uncertainty over the past few months about the cryptocurrency industry. The US SEC has delayed numerous BTC ETF applications, stoking fears that all cryptocurrency projects will be severely damaged by these delays. 

This fear appears to have manifested itself already, with the total market capitalization of all cryptocurrencies declining 7% in just 24 hours after US President Joe Biden officially unveiled the country’s 2021 Blockchain Infrastructure Bill. An estimated 3 Billion dollars were wiped off the Market Cap since this legislation was introduced.

infrastructure bill signed by President Biden

There’s bad news and there’s good news. The good news is the Token Taxonomy Act (TTA) has passed in the United States Senate. The Token Taxonomy Act will exempt crypto startups from having to pay capital gains tax above $500,000 in yearly revenues. The cryptocurrency market cap increased by 15% after this.

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America's rich crypto investors will owe more in taxes under Biden's latest 2021 plan. 

A new infrastructure bill introduced by former US Vice President Joe Biden is catching some criticism for the hefty taxes it places on crypto investors. The infrastructure bill aims to raise $1 trillion in funds via a variety of new tax increases and other revenue sources that, according to the plan, will go toward America's infrastructure development.

The government has some specific targets in mind, your big names in cryptocurrency, but Biden is likely not going after the darknet makers and sellers out there. He is relying more on the billionaires such as Amazon's Jeff Bezos and Facebook's Mark Zuckerberg to bring in more of their crypto money. This idea is just one of many new notions for crypto that the current administration has come up with over time. All of which have been shot down.

The bill will in 2021 force all crypto investors

This is a big one folks - giant in fact. The bill will in 2021 force all crypto investors in the US over a certain amount to tell the IRS everything. Right now a lot of people don't report their crypto taxes and this bill aims to fix that.

The buzz around cryptocurrency is louder than ever. This year, there were 17 cryptocurrencies with a total market cap of over $1 billion. People have been getting rich with early investments in Bitcoin, Ethereum, and other cryptos. For most investors who got involved in the crypto space in 2017 or earlier, their wealth is uncollateralized. Meaning they haven't yet paid capital gains taxes on it.

What about tax evaders?

The new provisions on crypto taxation introduced in the 2021 Infrastructure Bill by Joe Biden that target cryptocurrency-rich investors. Including the creation of a Cryptocurrency Tax Collection Office (CTCO) and a Cryptocurrency Tax Compliance Agency (CTCA) to target US tax evaders, and non-compliance makers by targeting the cryptocurrency market. 

Two things Crypto Investors should know about the Infrastructure Bill President Biden just signed in 2021.

Two things Crypto Investors should know

(1) The Bill requires crypto-currency exchanges to file tax returns on cryptocurrency transactions. The exchanges must report the value of the cryptocurrency transactions, the value of the payments in dollars, and the value of both relative to each other. What this means is that cryptocurrency exchanges will have to produce detailed, audited financial statements that support their valuations. And, these valuations will have to be certified by a CPA. This is good news for crypto-currency investors and crypto-currency exchanges.

(2) The Bill requires cryptocurrency exchanges to report to a government agency (the Department of Homeland Security) all transactions of cryptocurrency worth $10,000 or more. The exchanges will also have to provide other information about their markets and users to the government agency. This is bad news for crypto-currency investors and crypto-currency exchanges.

This new Infrastructure Bill calls for new federal standards for cyber security.

The bill imposes new reporting requirements on anyone who trades in more than $20,000 of virtual currency in a given year. It calls for new federal standards for cyber security. It repeals a 2015 provision that allowed people to avoid most taxes when the currency they sold was used to buy things.

Crypto-currency exchanges will have to obtain government approval before they launch. That's a good thing. But, the Bill doesn't say anything about what kinds of approval exchanges would have to get. We hope the exchanges will have to get approval before they start trading.

The Bill includes some provisions that the Securities and Exchange Commission hopes will use to make it easier and cheaper for exchanges to get approval. The Bill doesn't say anything about whether the SEC will approve or disapprove exchanges. We hope the SEC will approve exchanges.

One benefit is that the bill explicitly allows crypto-miners to deduct their expenses from their taxes. 

The first is that the bill explicitly allows crypto-miners to deduct their expenses from their taxes, just like any other business could. To understand why that's important, we have to understand the way crypto-currency works.

Almost none of the major cryptocurrencies are issued by the government. The major cryptocurrencies are created through a process called mining. In mining, lots of people are all trying to solve the same problem, get together, and use their computers to try to guess the answer to a complicated math problem. The person who guesses the answer first gets to claim some newly created tokens.

The math problem the miners are trying to guess is generated by the cryptocurrency software. But it doesn't exist. It's made up. The software represents the crypto-currency itself. It's a code, and the code uses a set of algorithms to solve a complex mathematical problem.

The algorithms are complicated. They are measured in millions of lines of code, and no one can understand them. But in a complicated computer code, the rules say, "A line can contain anything. But it can't be any line except one: the instruction 'return.'”

So, for example, when mining cryptocurrency, you first download a program that will compile the algorithms into lines of code. Then you run this program on thousands of computers, each of which is solving part of the problem. When a miner guesses the answer, the program transfers the tokens to him.

To mine cryptocurrency, you have to buy computer equipment. Some of the equipment costs a lot, like graphics cards that mine cryptocurrency with graphics, mining software, and mining hardware. But other equipment, like small computers, costs very little. 

But will the Infrastructure Bill be able to stop the people's technological interest and success?

There’s no doubt - cryptocurrencies are here to stay, and there’s nothing that can stop their sweeping success from transforming modern life as we know it into a bright, digital world.

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What crypto investors should know about the infrastructure bill signed by President Biden
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What crypto investors should know about the infrastructure bill signed by President Biden
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There’s bad news and there’s good news. Check here to find out more about the infrastrucure bill signed by President Biden.
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Ghacks Technology News
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Comments

  1. Shiro said on November 17, 2021 at 9:53 am
    Reply

    “There’s no doubt – cryptocurrencies are here to stay, and there’s nothing that can stop their sweeping success from transforming modern life as we know it into a bright, digital world.”

    Where and when did we hear that kind of nonsense again? Oh, right, whenever a new tech came along, we’d have a bright new world. And then it blew up in our faces.

    Cryptocurrency (not blockchain) represents no value at all. Every other real coin is based on real goods and services. Crypto is hot air, and sooner or later the bubble will burst. Only crypto coins that are linked to the real world, offering real economic value in goods and services, in other words based on the real economy, will stay. That will not be the ones currently being mined at the expense of the planet and the poor.

    Anyone defending the current situation probably has a vested interest in keeping this pyramid ponzy scheme going for their own personal interest. Shaun my man, how much do you have invested in this stuff? It’s been nothing but crypto on gHacks these last few days, all coming from you.

    1. beemeup5 said on November 17, 2021 at 12:09 pm
      Reply

      Any currency’s value is relative to its utility as a medium of exchange.

      If a vendor is willing to accept crypto in exchange for giving you electronics, then crypto has value. If a company will offer a VPN service in exchange for crypto, then crypto has value. If a central power is unable to steal your purchasing power by printing trillions at the drop of a hat due to crypto being decentralized, then crypto is useful as a store of value and as a hedge against inflation (aka theft by the Fed).

      Can you attach a price to privacy? To most, privacy is valuable, so being able to offer privacy and independence from banks which are the opposite of fiduciaries to their customers, is in itself valuable, so privacy coins like Monero have intrinsic value by nature of enforcing this anonymizing property.

      Sure most cryptocurrencies are junk, but the market will sort those out, and the ones that remain will inevitably have their value increase several fold as adoption continues to increase.

      1. MdN said on November 17, 2021 at 2:08 pm
        Reply

        Maybe some day, as you said, but right now the value is jumping around so much that you have to be desperate to use it for payment. You sell something, the next day bitcoin goes down and you could have earned 2x more. You buy something and spend your coins, the next day Bitcoin is worth twice. All you can do is collect the bitcoin and think you’re rich, but never dare spend it.

      2. MdN said on November 17, 2021 at 2:21 pm
        Reply

        Also, about it being “decentralized” – sure, in theory, but if one rich guy tweets he’s buying houndcoin or catcoin, everything changes.
        Worse than being regulated by actual laws.

    2. ULBoom said on November 17, 2021 at 3:39 pm
      Reply

      Wow, someone with a clue.

    3. Anonymous said on November 18, 2021 at 2:07 am
      Reply

      If it was worthless Biden wouldn’t be so desperate to tax it.

  2. Paul(us) said on November 17, 2021 at 11:52 am
    Reply

    Because of that, the bill allows crypto-miners to deduct their expenses from their taxes I think Biden has almost completely lost the battle.
    By not going after the darknet makers and sellers out there and relying more on shadowy figures as Jeff Bezos & Mark Zuckerberg.

    These kinds of tax evaders pure and simple are precisely the ones who connect the underworld and the upper world.

    1. beemeup5 said on November 17, 2021 at 1:00 pm
      Reply

      It’s not evading taxes if you don’t owe them in the first place. FYI, bank loans are not considered income because they’re pure debt, not profit. Being paid in stocks is also not considered income because their value can rise or drop unpredictably. Trying to tax unrealized gains doesn’t make any sense, but the “eat-the-rich” commies aren’t exactly known for their logic and deep understanding of how the world actually works.

      I can’t speak for the rest of the world’s tax system, but in the U.S. the “Big Tax” aka the Federal Income Tax, isn’t actually used for what people THINK it should be used for, which leads to the ignorant masses buying into the notion that ‘paying your taxes’ is the “responsible” and “adult” thing to do. Little do they know that the vast majority of the Federal Income Tax is used to pay off merely the interest owed by the U.S. government to the Federal Reserve (a private entity with anonymous shareholders BTW).

      What actually pays for the public roads and schools? The roadway infrastructure is paid for by the gas tax, which has curiously remained stagnant for decades compared to inflation. This stagnation is evident by the decreasing road quality. Public schools are paid for by property taxes, which leads to the segregation of public school quality by gerrymandering school districts based on arbitrary neighborhood borders, e.g. the “affluent neighborhood” with expensive homes (and therefore higher property taxes) and the “poor neighborhood” with low property values and therefore lower funding for public schools.

      The tax system definitely has problems but they have nothing to do with wealthy entrepreneurs “not paying their fair share”. The Federal Income tax itself is a blight among the people and should be abolished along with the Federal Reserve, but sadly only a constitutional amendment repealing the 16th Amendment has the power to do so.

  3. The Reality said on November 17, 2021 at 2:05 pm
    Reply

    Imagine if a piece of paper doesn’t hold any real value unlike the gold or other real material and the value was only represented by some mafia like banks and what some ‘powerful’ people told you to, now imagine a currency that is represented by bytes, that doesn’t exist in this world and it is like, it disappears and appears from nothing, you can farm it with just GPUs, you can’t touch it or weight it or anything…. one small error in your computer devices and it is gone, one error in some electrical grid and it is gone, just imagine how bad and worst the world goes today, for whatever reason, so all those fears some elites have implanted on people’s mind to make the “apocalyptic era” it can really happen eventually, so all those “currencies” that are digital, will be gone forever. It is even worst than paper money that has been manipulated by banks.

    Just look at the world, all they are doing is removing your survavility from that post-apocaliptic world, electric cars, some stupid and less than optimal and powerful wind turbines and solar panels, digital watches, digital everything you have seen today… it is done to obviously make you useless if something bad happens.
    Like… do you see all those movies where skateboards are hovering and cars and humans finally got rid of the “wheel”? well, it is somethig like that, wheels have worked for centuries and somehow the futuristic movies show you an unrealitsic scenario where you live better without them and it is most modern to be without them even if you can move wheels by just pushing them, you don’t need an external energy unless the object is too heavy.
    That’s what they are doing about everything, and crytocurrencies are not different when just vanishes when people unplug their computer or the government unplugs your computer or some storm affects your power or flooding or just a war or something that will not let electricity happen for days and days and maybe forever.

    Humans are so easy to manipulate and it is funny how they say “it is the new gold” like if it held any value without a computer, and we know computers are going away once the snap of the fingers of the masters decide to. Do people really think those scam solar panels and wind turbines which are not clean or green or anything at all, which creation polluted the world more than people apparently realize, do you think those things will work forever and you will enjoy your fake crytpo currency once they stop working for the weather and the easy to create post-apocalytic era?

    Now obviously government first let you do it and now they will want to get some money from all this fake and digital crypto currency, they want to steal you even with your fake money. Crypto currency was planned since the 80s, it has just been a slowly growing beast that will end up eating you like anything those ‘powerful’ people create. Now they want to control your fake unrealistic digital money, they want to control your nothing and your everything and your partial something, and people will allow them to, like everything Government does that affect your life, and some people believe they are “free” and fireworks or something equals “freedom” etc etc. Nah, you are all slaves humans, you are a product of a system, they eventually will even tell you when and how you can wipe your butt… I mean, they already told you if you can breath pure air or not, so it is not even a joke anymore that they would control if you can breath or not and how well it can be.

    Humans should wake up, but they actually go and sleep more, they fall for all this shiny and fancy “technologies”, the neon lights, the spinning fans, the fake “AI” voice turning your lights on or off, the one where you push a button and you get food at your door… everything that will not matter someday when the all governments will just unplug your whole life and you will not even know how to cook an egg, or how to create far with simple natural environment, you will not know anything, and you will just be useless because all your “digital” world is gone.

    Crypto currency is just part of it, and Government and THE US Government especially, now wants to show you they want to control more of your life, your fake digital currency, the one they created to control you and make you a slave, I mean, imagine buying so many GPUs, all the power consumed for months and months, to farm them and then one day, just one second everything will be gone because the power will just puff and vanish.

  4. ULBoom said on November 17, 2021 at 3:35 pm
    Reply

    Politics??????????????
    WTF? Ghacks goes lower than it already has, wonderful.

    This Shaun Bot thing isn’t capable of writing coherent articles about simple topics; this one is a garbled nonsensical mess. A vomit draft. Reprogram the bot to produce something beside paragraph after paragraph of clickbait keywords or get rid of it.

    Who allowed this garbage to be posted? Comments aren’t moderated, articles are rehashed Master of the Obvious junk or gibberish. No one’s at the helm.

    1. Bindere Dundat said on November 17, 2021 at 5:21 pm
      Reply

      Somebody got bored writing about Android, so, hop off one bandwagon and onto another. However this bandwagon is the hottest one in existence. Everyone on it has to keep hopping around so they don’t get burned.

  5. Anonymous said on November 17, 2021 at 4:50 pm
    Reply

    “Nothing that can stop their sweeping success from transforming modern life as we know it into a bright, digital world.”

    Lol what’s with that new feverish enthusiasm for cryptomoney, did ghacks find a new revenue stream recently ?

  6. Mr.Prayer said on November 17, 2021 at 5:06 pm
    Reply

    I am seriously considering unsubscribing from ghacks’ rss feed. I didn’t need another android resource, but at least i could tolerate it. This crypto cultist crap is actually triggering me though.

    In case i will not see y’all: good bye, it’s been wonderful years reading a truly useful information.

    1. Crypto Cultist said on November 18, 2021 at 2:27 am
      Reply

      What convinced me about crypto was meeting a Bitcoin millionaire from France. That’s when I saw it wasn’t just fake news or something used to buy drugs.

      So far I made $40K over the past six months. I am lending it out for interest, getting 3-7% returns while hodling. When Bitcoin crashed it was a great second chance for new buyers to come in.

  7. GoodMeasure said on November 19, 2021 at 4:39 pm
    Reply

    Mixed bag of thoughts:

    -We can’t have a system that makes it even easier for people who do bad things like corruption to hide their money. We need less corruption in this world, not more.

    -Taxes are what brought down Al Capone.

    -Now that the US government is going after crypto taxes (which we all knew was inevitable) there may be a stronger push (and more motivation) to examine things like everybody’s privacy efforts, like VPNs and such. Privacy in general will diminish even more.

    -Not trying to get political, but I wonder if there was discussion of carbon tax on miners. I am not arguing for or against, just curious. I recognize that mining is a global thing and that this article is regarding a US thing.

    -I agree with other posters here: I’m sorry Martin, but that last sentence in the article was shocking and damaged the credibility of this site.

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