In a statement that could incite a reaction from many who adhere to the strict tenets of cryptocurrency, a tax firm has suggested that anti-establishment attitude and defaulting on taxes owing to any Bitcoin or cryptocurrency transactions will only contribute to the slower adoption of cryptocurrencies on a wider scale.
The cryptocurrency tax firm, Bittax has said that doing so will only force governments to impose more and more roadblocks on the path of wider recognition and adoption of cryptocurrencies. It is essential that digital currencies such as Bitcoin go through the regulatory networks of tax laws and anti-money laundering initiatives, said Bittax’s Vice President Lokay Cohen.
He further went on to say that an improving regulatory mechanism for the cryptocurrency market offers better protection for traders. In a final blow to crypto-advocates, Cohen also warned that soon, an intergovernmental data sharing protocol will be in place, making transactions made in Bitcoin or other cryptocurrencies not as anonymous or secure from third party regulation as its supposed to be.
These statements are likely to get some reaction from many. Cohen’s statement implies the possible intervention of a third party in what is a completely decentralized market. This prediction will do little to rebuild confidence in what is still a struggling cryptocurrency market.
Cohen’s statement is also bad news for the many who were found to be not registering their cryptocurrency gains and losses with their tax authorities, in a study by Credit Karma. Whether such evasions were willfully done with criminal intent or not, evading taxes on cryptocurrencies furthers the underlining perception among many in the general public about the lawlessness of the cryptocurrency market.
Jibin M George is a graduate in International Relations and Law with a growing interest in the world of cryptocurrency and blockchain technology