The days of guessing how crypto should be classified are coming to an end. Crypto is officially growing up.
Ether's a Commodity
This week, both the IRS and CFTC made significant announcements on the asset class. At the Yahoo Finance Summit Thursday, CFTC chair Heath Tarbert said he believes that Ethereum (ETH) is a commodity and falls under the oversight of the CFTC.
“We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether—until now,” he said. “It is my view as chairman of the CFTC that ether is a commodity.”
In a bullish nod to Ethereum, Tabert said he anticipates the CFTC allowing ETH derivatives to trade on the U.S. market soon. He also asserted his belief that the U.S. should be a leader in the digital asset space.
Taxes are Forked
On Tuesday, the IRS released updated guidelines on crypto taxes for the first time in five years. In short, the IRS maintained its stance that cryptocurrencies should be taxed the same as properties and capital gains but provided extra clarity around hard forks and airdrops.
According to the IRS, if you receive cryptocurrency through an airdrop or hard fork, you must pay tax on it. The tax is calculated on the “fair market value” of the coin at the time it was received, even if you never plan on selling it.
Leaders in the space were quick to criticize the IRS, claiming that their new guidelines proved how much they still have to learn about crypto. Many were annoyed that they will now have to pay taxes on something they never even asked for or wanted, noting that it's unfair to be taxed a “fair market value” for a coin that could drop in value at any time.
While lots of positive developments are coming to the surface, it’s clear leaders still have a ways to go in understanding and honoring the unique nature of crypto. Unfortunately, it may take the IRS another five years to amend their latest guidelines.
The U.S. Internal Revenue Service (IRS) has published its first guidance in five years for calculating taxes owed on cryptocurrency holdings. Read more.
The Chairman of the U.S. Commodities and Futures Exchange Commission has said the cryptocurrency Ethereum (ETH) is likely a commodity, and that the commision might be open to futures trading. Read more.
The prototype, launched today with a donation of 1 bitcoin and 10,000 ether from the Switzerland-based Ethereum Foundation, has signed agreements with Unicef USA, Unicef France, Unicef Australia, and Unicef New Zealand to start accepting cryptocurrency donations immediately. Read more.
Two of the most frequent questions that I get from people in the crypto community are: what do you invest in and what are the best investing strategies? As a general rule, the best investment strategy focuses on maximizing gains while minimizing risk. Read more.
A crypto startup is launching a token backed by government-guaranteed gold reserves, proposing it—perhaps somewhat ironically—as an alternative to volatile dollar-backed alternatives. Read more.
Samsung Pay now has an international remittance feature, utilizing a platform owned by Finablr, a London-listed Ripple partner. Read more.
As Facebook deals with the loss of PayPal‘s backing for its ‘cryptocurrency‘ Libra, the tech giant must now get ready to answer EU regulators’ questions about the potential risks posed by the project. Read more.
Bitcoin and ethereum, the two biggest cryptocurrencies by market value, suddenly soared yesterday despite the U.S. Securities and Exchange Commission (SEC) rejecting the latest attempt at creating a bitcoin exchange-traded fund (ETF). Read more.