Crypto Panelists Advocate for Regulatory Clarity
At a recent summit held at the IRS headquarters in Washington, D.C., major players in the cryptocurrency exchange arena expressed their frustration with the current regulatory climate. Representatives from Coinbase and Kraken, along with experts from RSM US LLP, told the IRS that what they really need is clear, unequivocal guidelines instead of the vague, shadowy regulations that often leave them in a state of confusion.
The Unjustified Scrutiny of Crypto Companies
During the discussions, Sulolit Mukherjee from Coinbase and Lisa Askenazy Felix from Kraken argued that the level of scrutiny faced by their companies is disproportionate to their actual size and stature in the financial ecosystem. Askenazy Felix remarked, “Even the biggest companies within our space are really not the huge, publicly reported companies right now.” It’s almost as if crypto exchanges are stepping onto the field with foggy glasses—how can you play a fair game when you can’t see the rules?
A Growing Industry Under the Microscope
The panel emphasized that as a burgeoning industry, crypto firms find themselves constantly adapting to various domestic and foreign regulations. Mukherjee stated, “There is no benefit to a Coinbase or a Ripple to not doing the right thing,” underlining that compliance is in their best interest. Still, the challenges continue to pile up, and it appears that the IRS could use a little clarity in its own playbook.
Why Overregulation is a Problem
The representatives went on to illustrate the adverse effects of overregulation with a quirky hypothetical. Jamison Sites from RSM mentioned, “Imagine if email in the 80s, when all these startups were flooding in, the US Postal Service came in and said, ‘hey, this is unlawful delivery.’” It begs the question: how far can regulations stretch without smothering innovation? Askenazy Felix echoed this sentiment, saying, “I think most of us in the room would agree that there is no clarity today.”
The Disconnect Between Regulators and Innovators
For crypto companies, getting in the room with tax authorities feels like trying to persuade a cat to take a bath. Makings of a relationship built on mutual understanding is difficult when the two sides seem worlds apart. As Mukherjee noted, “Tax people are not always the most welcoming people in business conversations.” If only borrowing a cup of sugar from a neighbor felt as tough as negotiating with tax regulators!
Looking Ahead: A Path to Better Regulation
The hopeful outcome of this roundtable discussion is that the IRS will take these concerns to heart and pave the way for reasonable regulations that won’t inhibit the growth of an industry that’s still finding its footing. After all, we all want a fair playing field—especially when the game is as new and exciting as cryptocurrency!
