Insufficient Clarity for Regulations And Taxes May Force US Investors Move On: Coinbase Tax VP

Coinbase's remarks highlight a serious challenge that Americas IRS have to address to prevent an outward diaspora of crypto capital.

The Chief Tax Officer of Coinbase, Lawrence Zlatkin, believes that lack of clarity in the US' crypto taxes could alienate prospective investors. He shared these sentiments during a Unitized panel held on July 7, where he joined Rob Massey and Jessica Reif-Caplan, who are also tax leaders at Deloitte and Fidelity, respectively.

According to the point of view of this panel, plenty of countries are advanced when it comes to crypto taxation, compared to the U.S. Therefore, a move to such jurisdictions will soon be a no-brainer if the Internal Revenue Service (IRS) does not match the global pace.

Most of the challenges in tax definition are a result of the complex underpinnings of crypto ecosystems. At the moment, digital assets are still in the grey zone with much ambiguity on operations, including tax issues. For instance, staking rewards that have gained popularity with the DeFi frenzy are still complex assets for a good number of crypto market stakeholders. Fidelity's Reif-Caplan reiterated that:

“There are so many differences between various digital assets, and staking alone is such a complicated thing to understand if you are not that close to digital assets.”

A Motive for Overseas Expansion

As the IRS continues to forge clarity in reporting crypto taxes, firms like Coinbase, which already operate in the U.S, are already considering a shift to countries with more solid frameworks. Currently, U.S citizens are required to report crypto in their tax filings despite the lack of proper guidelines.

Zlatkin noted that this uncertainty would eventually cause an outflow of capital towards countries with a more mature view on the digital currencies. Coinbase has already considered expanding its footprint beyond the U.S market. Zlatkin said,

“It's a growth model for us, just where we operate, accessing more customers, being able to trade more assets […]. Generally speaking, most customers in the space particularly would be from major jurisdictions like Canada, the U.K., the EU, and within Asia.”

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Edwin Munyui
Edwin Munyui
Edwin is a FinTech enthusiast with a particular interest in blockchain technology and cryptocurrencies. He has worked as an author in the blockchain space since 2017 and enjoys creating content that both crypto veterans and newbies can understand. His simple writing style and financial market knowledge have made him a reputable fundamental and technical analyst with the ability to handle any topic around blockchain and crypto over the years.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


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