Bitcoin is beginning to ruffle some feathers in Washington. Secretary of the Treasury Steven Mnuchin, when quizzed on Bitcoin this week, said that he was concerned about use of the currency for illicit activities.
“It’s something we are looking at very carefully and will continue to look at,” he said. “The first issue and the most important issue is to make sure that people can’t use bitcoin for illicit activities. So we want to make sure that you don’t have the dark web funded in bitcoins. And that’s something that is a concern of ours today.”
“So if you’re a bitcoin dealer in the United States, you have the…customer requirements and BSA requirements. And those are issues I’m discussing with all my international counterparts. So our number one issue is, we wanna make sure that this is not used for illicit transfers of funds.”
Although he didn't have a timeline for an official stance on Bitcoin and cryptocurrencies, he did confirm that the situation is being closely monitored by the government.
“There’s nothing specific. But we do have working groups that are looking at this. And again something we’ll be watching very carefully.”
Meanwhile, Internal Revenue Service (IRS) has requested information from Coinbase on roughly 15,000 users from USA, accounting for 9 million transactions in total. According to a release by the IRS, “US taxpayers, including Coinbase users, have made use of virtual currencies to avoid the reporting and payment of taxes.”
Coinbase is to ask for the demand from IRS to provide customer data to be rejected today in “US v. Coinbase,” which is to take place in US District Court in San Francisco.
The IRS currently classifies bitcoin and cryptocurrencies as property for which ‘owners are legally obliged to report the capital gains and losses incurred from their holdings during each calendar year.'
Bitcoin has enjoyed roaring success in 2017, multiplying its market cap seven-fold. It is little wonder that the government is looking for ways to regulate this space. Indeed, Citi CEO Michael Corbat feels that due to Bitcoin being a threat to the existing financial system, governments around the world may seek to issue their own version of cryptocurrency.