The current status of Bitcoin Regulations in the United States

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The current status of Bitcoin Regulations in the United States -

Now that Bitcoin recently passed the $ 1,000.00 threshold for the first time in his short life, a discussion on the regulatory status of Bitcoin in the United States ( "US") is in order. Online purchases of stories of drug hitmen, and other unsavory activities initially marred Bitcoin's reputation by linking it to transactions on the black market. However, for every story involving a drug deal using Bitcoin, there were positive stories related to Bitcoin, including the availability of the first Bitcoin ATM and the first law firm to start accepting Bitcoin payments for restraint .

in August this year, a judge of the Federal Court of Amos Mazzant district established in a Securities and Exchange Commission ( "SEC") trial, "Bitcoin can be used as currency. it can be used to purchase goods or services ... and pay for individual living expenses. the only limitation is that Bitcoin is limited to those places that accept it as currency. "earlier this November, the Senate of the United States held a hearing on Bitcoin and assessed the risks and benefits of wider adoption. Although the United States is moving towards the adoption of Bitcoin exchanges requiring that follow federal regulations, it recognizes the potential growth of Bitcoin over time. Mythili Raman, a deputy acting attorney general at the US Department of Justice ( "DOJ") stated at the hearing, "the Department of Justice recognizes that many virtual currency systems offer legitimate financial services and have the potential to promote more efficient global trade. "Chairman of the Federal Reserve Even Ben Bernanke wrote in a letter to the Senate Banking Committee that Bitcoin" can hold long-term promise. "Finally, Bank of Chicago Federal Reserve issued a letter to a senior economist in December 2013, providing a detailed primer on Bitcoin as an investment.

In response to negative reviews Bitcoin was used primarily for money laundering and criminal activities, Mrs. Raman replied that law enforcement has "been able to keep pace with this, and we were able to develop protocols and strategies to address them. "The US Department of Financial Crimes Enforcement Network of the Treasury (" FinCEN ") began accepting applications for Bitcoin exchanges as money services businesses (" MSB ") seeking to legitimize under US laws. FinCEN suggested to all unless the Bitcoin miners would likely have to register as a MSB because they create virtual currency units and sell them. the report also distinguishes FinCEN Bitcoin exchanges of traditional foreign exchange scholarships because to fall under the regulations of FinCEN an exchange must negotiate in the currency of both countries, that Bitcoin is not associated with a specific country. Similar to other registered money exchange, Bitcoin exchanges must also comply with the 1970 Act and banking secrecy the PATRIOT Act 01. compliance with these laws involve the implementation of the process of struggle against money laundering, record keeping customers current and suspicious transactions reports. The United States also requires compliance with strict state by state for trade in currencies recorded all exchanges on the basis of the United States must register the federal government and must also register and comply with each state intends to conduct business. Having to comply with both federal and multiple state laws, the current regulatory environment in the United States for startups based Bitcoin is heavy compared to countries that have taken a wait and see or laissez-faire to the regulation of Bitcoin .

for traders and speculators in the United States, the big question is how the Bitcoin transactions will be taxed. While the General Accounting Office ( "GAO") requested that the Internal Revenue Service ( "IRS") provide guidance on how to handle the gains from the sale of Bitcoin (s) he has not. The IRS and the Treasury Department have yet whether investments in Bitcoin is a commodity or a specific currency. The IRS has also not yet determined whether the gains from the sale of Bitcoin is a capital gain or ordinary income for tax purposes. The IRS has indicated that they are currently working on issuing guidance to taxpayers on how earnings by Bitcoin should be treated, so that this question will be answered soon.

As lawmakers consider how to integrate Bitcoin in the economy, the United States must be careful not to impose too many regulations, or he may lose the head start it compared with other countries interested in Bitcoin, such as China, the United Kingdom and Canada. China is already home to the largest Bitcoin exchange in the world, and Bitcoin provides an effective means for Chinese citizens to avoid the strict capital controls imposed by the government. Although the United States currently hosts the Bitcoin Foundation and a number of brokers third largest Bitcoin payment, it was reported that the Bitcoin Foundation and others have considered moving abroad given the state of the United States regulatory environment. Because countries such as the UK and China have taken a hands off approach to regulation of Bitcoin and Bitcoin transactions, the US may lose its competitive advantage as a leader of the Bitcoin economy if it continues to impose regulations that discourage Bitcoin investment and innovation.

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