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Bitcoin

Panic spreading as bitcoin price goes up and down

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There is rising concern about a proposed US law as $6000 was shaved off the price of bitcoin.

Bitcoin dropped from Sunday’s high of (AUD)$57,262 to $51,454 at 7am Wednesday as fears grow about the impact of the US President Joe Biden’s proposed $675 billion infrastructure bill.

Bitcoin has surged in recent weeks after a topsy-turvy year.

It took a dive when Elon Musk hinted Tesla might dump its cryptocurrency holdings in May.

A crypto clampdown by Chinese regulators in June also hit the price hard.

Now there are jitters about a provision in the infrastructure bill which could raise $37.81 billion from crypto investors, with some warning it could “kill” the industry.

RELATED: China bans bitcoin to make own cryptocurrency

“This is a deeply misguided provision that, if adopted, will do far more harm than good to US interests,” lawyer Jake Chervinsky wrote in a lengthy Twitter thread.

He explained the bill would expand the definition of a “broker” to include “any person who (for consideration) is responsible for and regularly provides any service effectuating transfers of digital assets”.

That could lead to increased Internal Revenue Service reporting requirements.

The “brokers” may also been forced to collect customer data including names, addresses and phone numbers.

“This definition is so broad, it could apply to nearly every economic actor in the US crypto industry, if read literally,” Mr Chervinsky said.

“This sounds insane, but it really might happen.

“Most crypto legislation goes nowhere, so it’s easy to ignore. Not this time.

“This provision is part of the bipartisan and otherwise popular infrastructure bill, which is moving quickly through Congress and is highly likely to pass.

“First, it defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry.”

The provision was included to essentially help fund the massive cost of the bill.

It must include “pay-for” provisions to raise revenue for new spending so that it’s revenue-neutral as a whole, Mr Chervinsky explained.

The Joint Committee on Taxation has projected that, collectively, the provisions in the bill would boost revenue by $68.87 billion.

IRS Commissioner Charles Rettig requested broader authority from Congress in June to collect information on cryptocurrency transactions.

Mr Rettig said that these transactions, by design, were often “off the radar screens”, while noting that the most recent market cap in the crypto world exceeded $2.7 trillion and more than 8600 exchanges worldwide.

An original revenue-raising provision that was struck from consideration after losing Republican support involved giving $50 billion to the IRS to beef up its enforcement and tax-collecting initiatives as means to crack down on filers who are not fulfilling their obligations.

Senate Majority Leader Chuck Schumer said he hoped to move forward with a vote on the infrastructure bill this week.

— with Fox News



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Ethereum

Panic Is Suddenly Spreading Among Bitcoin, Ethereum, BNB, XRP And Dogecoin Traders Even As The Market Soars Toward A $1.7 Trillion Price

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Bitcoin and cryptocurrency prices have soared this weekend, with the bitcoin price making significant gains over $40,000 (subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and discover crypto blockbusters poised for 1,000% gains).

The bitcoin price climbed to almost $43,000 per bitcoin last night, its highest since mid-May and almost $10,000 higher than its price this time last week. Meanwhile, the ethereum price has led the cryptocurrency market higher over the last 24 hours, with traders eyeing $3,000 per ether token. The combined crypto market has added $250 billion over the last week and is now nearing $1.7 trillion.

However, many crypto traders are feeling increasingly nervous due to the $550 billion bipartisan infrastructure bill that’s currently making its way through U.S. legislature and includes a provision to raise $28 billion from crypto investors, with some warning it could “kill” the industry.

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MORE FROM FORBESCrypto Price Prediction: Bitcoin Could Be Left In The Dust By Ethereum In 2021

“This is a deeply misguided provision that, if adopted, will do far more harm than good to U.S. interests,” Jake Chervinsky, a crypto-focused lawyer, wrote in a lengthy Twitter thread laying out how the bill could impact the burgeoning crypto industry and market.

The bill, which this week passed a preliminary Senate vote, proposes taxing bitcoin and cryptocurrency profits to fund U.S. infrastructure investment, with the definition of a broker being widened to the extent that crypto exchanges and wallet providers would need to collect far more information about their users than they currently do.

Any broker that transfers any digital assets would need to file a return under a modified information reporting regime, according to a draft copy of the bill seen by Coindesk.

“The provision includes updating the definition of broker to reflect the realities of how digital assets are acquired and traded,” the document said. “The provision further makes clear that broker-to-broker reporting applies to all transfers of covered securities within the meaning of section 6045(g)(3), including digital assets.”

“Things are moving fast, which can feel scary,” wrote Chervinsky, adding “don’t panic. This provision isn’t final yet and still can be changed.”

Chervinsky warned that “it defies logic to adopt a regulation for which compliance is literally impossible, unless the goal is to kill the industry,” and “this could mean a de facto ban on [crypto] mining in the USA.”

Since China’s bitcoin and cryptocurrency mining crackdown in recent months—in which those who use powerful computers to secure blockchains and validate transactions in return for new crypto tokens were expelled from the country—the U.S. has emerged as a potential new home for many.

However, lawmakers who fear bitcoin and crypto mining could accelerate climate change have signaled they’re unhappy with the industry’s U.S. growth.

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Bitcoin and crypto experts are warning the language used in the bill risks broadening definitions of brokers to the extent it includes those that provide hardware and software.

“Unfortunately, in the drafts, we’ve seen the categories of persons who would be obligated to report is so broad that it potentially covers persons who only provide software or hardware to customers, and who have no visibility whatsoever into user transactions,” Jerry Brito, the executive director of Washington D.C.-based crypto think tank Coin Center said via Twitter, adding he was trying to “fix” the bill’s crypto provision.

“It potentially also covers miners’ indexes, the saving grace is that arguably miners’ indexes for that matter do not have customers as defined by the tax code.”



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