The Financial Crimes Enforcement Network (FinCEN) has announced that it will soon propose new regulations that will have an impact Cryptocurrency holdings of foreign exchange. This proposal differs from the recent FinCEN proposal for cryptocurrency wallets.
The new crypto rules from FinCEN
FinCEN, an office of the US Treasury Department, issued a notice on Thursday about a new mandatory registration for cryptocurrencies. FinCEN in detail:
Currently, the provisions of the Foreign Bank and Financial Accounts (FBAR) report do not define a foreign virtual currency account as a type of reportable account.
The notice adds that the offices “intend to propose an amendment to the provisions implementing the Bank Secrecy Act (BSA) on Foreign Financial Account Reports (FBAR) to include virtual currency as a type of reportable account.”
Shehan Chandrasekera, Head of Tax Strategy at Cointracker, stated, “FBAR is a form that you file with your tax return if you have foreign financial assets over 10,000 at any time of the year.” He clarified, “There is no tax on this form pay, only additional information. “
Marc Boiron, attorney at Manatt, commented, “Goodbye, exchanges outside of the US … FBARs must be filed for virtual currency accounts outside of the US.”
If you accidentally fail to file an FBAR, it could result in a civil penalty of $ 10,000 for each violation.
“Another example of a violation of US regulations,” said Adam Cochran, Duckduckgo’s strategist. “Completely insane – but that rule will be something FinCEN would use to track international exchanges more generally.”
Attorney Jake Chervinsky described that this proposal “appears to be aimed at users of exchanges outside of the US” and believes it “should not apply to assets in self-custody”. He suggested that the reason for the proposal could be either tax evasion or “non-US crypto corporations’ compliance with bank secrecy law”. FinCEN is also currently trying to implement rules for crypto wallets before the end of Trump’s term in office.
What do you think of this new rule that FinCEN will propose? Let us know in the comments below.
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