An academic debate rages over the length of the Internal Revenue Code. It is widely quoted at more than 70,000 pages. That figure may be overstated by at least a few dozen thousand pages, though. Beyond pure tax law, the Code also includes related interpretive documents, such as Treasury Regulations, Revenue Rulings, and IRS Notices. What is indisputable however, is the number of pages devoted to digital currency.
There are but six pages of guidance on cryptocurrency. That guidance is approaching its fifth birthday, in a space that evolves daily.
Less is more? Not necessarily. This lack of guidance stocks a cold pond of uncertainty that prevents many of the best and brightest from jumping in. The US, home to the largest capital market in the world, ready to deploy its mighty resources, is doing no more than dip its toes in the water because the US has been too slow to create an inviting framework of legislation that tells the world to jump in; the water is just right.
In the first “Regulation Crypto” article from BX3 Capital, we tackled many issues affecting securities regulations, and presented a framework that would get the markets rightly excited for blockchain and cryptocurrency-focused projects. This article tackles the tax framework.