Is the US Going to BAN Cryptocurrency?
Cryptocurrency is more popular than ever before, and it’s worrying a lot of people in Washington. Since the very beginning of the crypto trend, lawmakers in Washington D.C have tried to come up with new and unique ways of controlling or regulating cryptocurrencies, and some have even gone so far as to ask for a ban on cryptocurrency in general. In this article, I’ll be taking a look at how exactly cryptocurrency is regulated in the United States, what the future of this regulation might be, and what the likelihood of crypto getting banned in the US might be. So, without any further ado, let’s dive in!
As of 2022, cryptocurrency is completely legal in the United States. Anyone is allowed to buy cryptocurrency, sell it, use it as a medium of exchange, or reject it. But, that does not mean that cryptocurrency is completely unregulated.
In fact, there are currently many regulations in place for cryptocurrency, and it’s important for anyone who’s looking to invest in cryptocurrency to know what those regulations are. Crypto is generally regulated through laws that already exist, as opposed to laws created specifically for cryptocurrency.
But before I talk about those, let’s take a look at how lawmakers want to regulate crypto in the future. There have been a lot of plans relating to creating specific legislation for cryptocurrency.
This could potentially take away a lot of the freedoms that crypto users are generally used to. In 2022, Joe Biden signed an executive order that was supposed to specifically regulate cryptocurrency in the US for the first time.
So far, this executive order would help protect some crypto investors from scams and frauds by creating an actual framework for how “projects” can be made. In short, any crypto project that was created for rug pull or scam purposes, including pump and dump cryptos, could be made illegal in the US.
This is great news for a lot of people, but it also worries some other people. This could potentially be the start of a banning game for certain cryptos, and some cryptos might even be used in scams the creators never intended.
The executive order also asked the Financial Stability Oversight Council to find any gaps in the regulation of cryptocurrency. This means all the little loopholes that crypto users take advantage of to avoid regulations and taxes might eventually be found as well. In short, there’s no getting rid of the government.
But the most concerning part of the executive order is the “International Cooperation and U.S. Competitiveness” part.
On one hand, it’s aimed to increase exchangeability among cryptocurrencies, but on the other hand, it wants to create a framework to clamp down on cryptocurrencies being used in crimes. In theory, that sounds fine, but the government may be forced to take extreme measures to do so, and this worries many crypto investors.
Regulation isn’t necessarily bad for crypto. In fact, it might actually be good for crypto. You see, no matter how many laws any country makes, it’s impossible to actually control a cryptocurrency. This is because cryptocurrencies are decentralized.
By nature, there is no one person or organization that can simply take over and start making decisions. Cryptocurrencies will always be decentralized, but the way people use cryptocurrency is going to be regulated. Why is that good for cryptocurrency?
Well, it legitimizes cryptocurrency. With these so-called “regulations” in place, the government is officially recognizing cryptocurrency as a fact of life. It’s something that’s here to stay, and it opens the door for it to become more acceptable than ever before.
But now, let’s take a look at some of the ways the U.S currently regulates crypto with existing laws.
There are many different government organizations that regulate crypto in the US. The SEC, the CFTC, the IRS, and FinCEN. Crypto isn’t the legal tender of the US, as you probably already know, but it can legally be used to purchase other products, it simply can’t be enforced upon vendors.
The IRS considers cryptocurrency to be a legal “store of value”, which means that crypto-assets can be taxed under US law. That’s right, you actually have to declare all of your crypto assets in your tax returns, and failure to do so might even result in legal trouble that you do not want to get into.
One of the ways the US regulates cryptocurrencies is through exchanges. Crypto exchanges like FTX, Coinbase, and Binance are all legal in the US, and they all follow guidelines imposed by the Bank Secrecy Act.
But to some people, this regulation isn’t enough. Those people want to put an end to cryptocurrency, and they’re even in the United States Congress. A bill called America COMPETES Act has been tabled in congress by congresswoman Maxine Waters.
According to the congresswoman, this bill is aimed at countering the financial influence of so-called bad faith actors like China and Russia. The bill is around 3,000 pages long, and in between those long pages, there are certain things that have crypto investors terrified.