As regulations for cryptocurrency exchanges have gone into effect in the U.S. state of Washington., big exchanges: Poloniex and Bitfinex promised to stop serving Customers in Washington.
Following the passing of Senate Bill 5031 into law at the weekend, the state's money transmitter laws now apply to exchanges, meaning that they need to obtain a license from the Washington State Department of Financial Institutions and must provide a third-party audit of their data systems.
Among other requirements, the law also mandates a new transmitter bond requirement, with the figure being tied to the amount of currency exchanged during the previous year.
Lawmakers finalized the measure in April, sending it to the desk of Gov. Jay Inslee, who signed it days after work on the bill was completed. According to public records, the law went into effect on Sunday, July 23.
As CoinDesk has previously reported, lawmakers in the western U.S. state have been working since January to develop regulations for exchange startups.
The bill's passage wasn't without controversy, however. Cryptocurrency exchanges Poloniex and Bitfinex declared that they would would stop serving customers there, citing the new regulations.
At the same time, startups such as New York-based exchange Gemini moved in the opposite direction, obtaining approval to begin serving customers in the state earlier this year.
Reference: https://www.coindesk.com/washingtons-new-cryptocurrency-exchange-rules-now-effect/
While it is necessary to regulatethe field a bit better after all that ICO fuzz we had over the last months, we need to hope, that the coming regulation wave is not too destructive. Crypto will be a sensitive ecosystem in the upcoming months, that's for sure, although I doubt that this has immediate effect on other industrialized countries, although some of them might definitely see that as a blueprint for their own regulation efforts.
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I agree with you. Most of these moves are to safeguard innocent crypto users, control money laundering. But I believe it could make government to enforce tax on crypto users. The good news is, the technology is getting more popular. It's a good omen crypto's gonna have an happy ending.
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i hope it doesn't affect us in Australia -we tend to follow US laws - i am now following you
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I belive it will be overturned, cryptocurrency/digital currency is treated as property by the IRS, who is the standing and controlling agency:
IRS Virtual Currency Guidance : Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply
IR-2014-36, March. 25, 2014
WASHINGTON — The Internal Revenue Service today issued a notice providing answers to frequently asked questions (FAQs) on virtual currency, such as bitcoin. These FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency.
In some environments, virtual currency operates like “real” currency -- i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance -- but it does not have legal tender status in any jurisdiction.
The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:
• Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
• Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
• The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
• A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
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The rule applies to Washington customers only... but if you're running same law system as Washington, am afraid so
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They remove U.S. users n keep on going simple
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You sound judgmental. LOL!
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