According to the announcement, transactions made with cryptocurrency valued over $10,000 will now have to be reported to the IRS. This is because there is a growing concern that cryptocurrency can and will be used for illegal activity, such as tax evasion.
The US Treasury Department says, “Within the context of the new financial account reporting regime, cryptocurrencies and cryptoasset exchange accounts and payment service accounts that accept cryptocurrencies would be covered. Further, as with cash transactions, businesses that receive cryptoassets with a fair market value of more than $10,000 would also be reported on.”
In a way it is kind of ironic that a currency designed to be unregulated is slowly becoming more regulated, but if you do hold a fair amount of cryptocurrency, these new rules are definitely worth paying attention to if you don’t want to find yourself in trouble with the IRS. The US isn’t alone in trying to regulate the technology. Over in China, the government has banned financial institutions from conducting business involving cryptocurrency.