The Influence of Cryptocurrency Regulation in the USA on the Activities of ICO and Blockchain Startups
The market within the United States is a very perspective way for any cryptocurrency project, which, however, is accompanied by state regulations. As a rule, many people in this country create official offices, but conduct ICO and issue tokens through other companies that do not fall under the jurisdiction limiting the cryptocurrency activities. Restrictive measures of companies towards citizens and residents of the United States are related to the current law and regulation by the Securities and Exchange Commission (SEC). Despite this, the US is still the most convenient country for the cryptocurrency business. Moreover, large hedge funds, cryptocurrency and stock exchanges, as well as other companies, the activities of which are connected with digital assets, are registered and operating on its territory.
Legal regulation of cryptocurrenciesThe US authorities have not established a framework for the legal regulation of cryptocurrency within their state so far. This is due to multiple disagreements between the legal structures of the country, which have been going on since the September of 2015. Therefore, cryptocurrency has not yet been recognized as an official means of payment in the United States.
Legal regulation of tokens and ICODigital coins can be considered securities if they meet the conditions set by the SEC in the July of 2017. The following tests are used for this: Howey Test, Family Resample Test, Capital Risk Test and others. Moreover, documents have been published to warn users of the risks that may accompany them during the ICO.
Legal regulation of cryptocurrency activitiesCryptocurrency activities are regulated through federal law and the legislative state at the same time. Activities of this kind can be legalized if this is established by the state. Thus, the identity of the user whose account is manipulated by a certain cryptocurrency company should be established in order to determine whether the user is involved in illegal activities or not in case of any suspicion. If suspicions are justified, then the company must inform the relevant authorities.
Taxation of cryptocurrency operationsQuestions about taxation are handled by the US Internal Revenue Service (IRS). In 2014 the IRS defined digital currencies as its own property. As a result, there is a tax for all operations related to them, as well as a tax for mining. In 2018, it was decided to tax only the completed cryptocurrency transactions.
Income taxesThe tax on cryptocurrency activities in the USA has two types and the corresponding interest rate:
- The federal tax depends on the volume of pure profit: from 15 to 35%;
- The state tax depends on the registration: from 0 to 10%.