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In an attempt to crack down on tax evasion and illegal activity, the U.S. Treasury Department has begun taking steps to mitigate potential problems relating to cryptocurrencies.
On Thursday, the U.S. Treasury Department announced a plan to tighten regulations on cryptocurrency markets and cryptocurrency holders.
The department worries that cryptocurrency could be used to facilitate tax evasion, among other illegal activities. Now it requires any transfer worth $10,000 or more to be reported to the IRS.
According to the CNBC, the move is a part of the Biden administration's broader plan to crack down on tax evasion. The treasury estimates the difference between taxes owed and taxes paid to the U.S. government to be nearly $600 billion in 2019.
The administration is looking for ways to ensure that the government gets the tax money that it is owed. Current proposals include increasing funding to the IRS, investing in new technology, and issuing more severe penalties for tax evasion.
News of the tightening regulations were likely to blame for the cryptocurrency slide over the last month. Bitcoin, for example, saw a 25% decrease in its value in the previous month.
Tesla recently stopped accepting Bitcoin after the company had cited environmental concerns, and the value of Bitcoin tumbled 15% as a response.
The Chinese government has banned financial institutions from conducting any business involving cryptocurrency, and warned against trading. The ban is not applied to individual holders.
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