Crypto Regulation News: Crypto Miners Get a Big Break With IRS Tax Exemption
Crypto is a big topic this week, thanks in large part to the massive exposure the industry gained over the weekend via the Super Bowl. But beyond the glitz and glam of the prime time ad showcase, there’s some important news coming out about taxation. Crypto regulation news is surfacing today via the Internal Revenue Service (IRS), which just cut crypto miners a big break.
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Crypto mining is an expensive and energy-consumptive process. Acquiring the hardware is a challenge itself, given the ongoing chip shortage. Retail prices have already inflated by hundreds of dollars, and scalpers are preventing would-be miners from accessing the hardware through price gouging. This of course doesn’t hold a candle to the even bigger issue of energy costs. Indeed, the power required to mine crypto is massively expensive, and environmentally conscious critics continue to rail against the practice.
These factors have theoretically hindered the industry, although it seems like crypto mining as an industry is healthier than ever. Even U.S.-based operations like Marathon Digital (NASDAQ:MARA), Greenidge Generation (NASDAQ:GREE) and Stronghold Digital (NASDAQ:SDIG) have been able to expand their businesses in the last year.
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So if costs aren’t the problem, what is? Crypto regulation. Regulatory measures seem to be a guarantee, with interest in policy heating up significantly in the United States. These measures will certainly affect miners, especially when it comes to reporting rules.
This week, new crypto regulation news is breaking out, and it will help help crypto miners.
Crypto Regulation News Gives a Boost to Crypto Miners
The crypto regulation news investors are seeing to start the week comes amidst an uncertain time for the industry. The U.S. government is crafting policies that will outline what investors must report, and standards for how exchanges and miners must operate. Of course, tax season is one of the first major financial events of the year. Thus, it’s the first opportunity to see these coming changes start to take shape. And this week marks a win for crypto miners when it comes to reporting.
The U.S. Department of the Treasury indicated last week that crypto mining companies would be exempt from from tax reporting obligations. The letter penned by the Treasury states that “ancillary parties who cannot get access to information that is useful to the IRS are not intended to be captured by the reporting requirements for brokers.” This wording is believed to exempt not only crypto miners, but stakers and wallet hardware and software manufacturers.
In addition to this huge statement, the letter also indicates the Treasury will be reevaluating its definition of a “broker” in the months to come. This definition, the body says, will come alongside its incoming regulations.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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