Regulators Crack Down on Cryptocurrencies Amid Money Laundering Concerns

The United States and European Union have been actively discussing cryptocurrency regulations to reduce financial crime and bring transparency to digital assets.

In 2020, the U.S. Treasury Department announced a more aggressive stance on cryptocurrencies, aiming to reduce financial crime and increase transparency in this complex asset class.

The Securities and Exchange Commission (SEC) views cryptocurrencies as securities like any other stock or ETF, subjecting them to capital gains taxes. The Internal Revenue Service (IRS) treats cryptocurrencies as property, charging short-term and long-term capital gains taxes accordingly.

Cryptocurrency owners are required to maintain records of their positions for tax purposes, including receipts, sales, exchanges, or other dispositions with the transaction's fair market value.