FATF Rates US As ‘Largely Compliant’ In Crypto AML/CTF Report, But Still Has Work To Do

In its recent revaluation on whether the United States is compliant with the set worldwide regulations on counter-terrorist financing (CFT) as well as anti-money laundering (AML), the Financial Action Task Force (FATF), has rated the US as ‘largely compliant’.

According to a FATF report that was released on March 31, the US was evaluated on its laws and regulations dealing with virtual assets and cryptocurrencies and was rated as largely compliant. The evaluation exercise mostly focused on recommendation 15 which deals specifically with crypto.

The ranking means that the US’s compliance with the recommendations has not changed since the last assessment that was conducted in 2016. However, FATF has updated its guidelines severally since then with the recent one being in October last year on FATF travel rules. Therefore, the latest assessment involved deeper scrutiny than the previous one.

The report noted some notable awareness about the risks posed by digital currencies as depicted by different regulators. The report singles out the different task forces as well as reports that have been looking at money laundering and crime financing through cryptocurrencies.

The FATF also notes that the current US regulations are working well in dealing with various Virtual Asset Service Providers (VASP) as per the FATF guidelines as they cover crypto exchanges and custodians. Nevertheless, the FATF is concerned that the regulations do not adequately deal with a VASP which is incorporated within the US but does not operate in the country, Cointelegraph reports.

Firms dealing with cryptocurrencies are categorized as Money Services Businesses (MSB) and are subjected to a higher compliance standard. Majority of MSBs have to come up with their own AML as well as CTF standards and, according to the FATF they are generally sufficient.

The report concludes that the US regulators have been lax in pointing out crypto service providers when they are enforcing regulation. However, the issues identified by the body seems to be minor making the US to be awarded a ‘B’ as per the FATF grading system.

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Author: Joseph Kibe

SEC Reschedules Approval Decision on Wilshire Phoenix’s Bitcoin ETF Proposal to February

The US Securities and Exchange Commission (SEC) has yet again delayed their decision on whether to approve Wilshire Phoenix’s proposal for Bitcoin as well as US Treasury bond exchange-traded funds (ETF). According to the watchdog agency, a comprehensive decision will be communicated in Feb.. 26, 2020, CoinDesk reports.

In a press statement issued on Friday, the regulator stated that they are still assessing the proposal submitted earlier this summer and have committed themselves to making a conclusive decision on whether to approve or dismiss the Wilshire Phoenix’s ETF proposal on Feb. 26, 2020.

For two years now, the commission has rejected over 12 Bitcoin ETF applications pointing out the issues like market manipulation as well as surveillance sharing as the main aspects that should be addressed before an ETF application can be approved.

According to Wilshire Phoenix founder and head William Herrman, his firm is confident that it has addressed these aspects fully. Herrman says that his firm’s proposal which has been filed with NYSE can be described as a multi-asset trust that will safeguard it from Bitcoin’s price fluctuations.

Whenever volatility enhances, the trust will instantly rebalance itself and lessen its exposure to Bitcoin while enhancing Treasury bills exposure. Similarly, when volatility is low, exposure to Bitcoin will increase while reducing that of Treasury bills.

Herrman explains that on Dec 18, his firm also submitted a comment letter to explain the concerns raised by the SEC. The founder says that the comment letter expounded how Wilshire Phoenix’s ETF will be different from a Bitcoin-based ETP application.

Given the uncertainty, it is still unclear if the SEC will approve a Bitcoin ETF any time soon. The regulator recently rejected a Bitcoin ETF application by Bitwise Asset Management raising the same concerns. However, the regulator is reviewing that rejection but it is still unclear when a decision will be reached and communicated.

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Author: Joseph Kibe

The IRS Wants to Know If You Interacted With Cryptocurrency in Any Way in 2019

  • A new form has been released by the IRS looking to know whether you’ve acquired, exchanged, or sold a digital currency.
  • Earlier this year, the IRS sent a letter to taxpayers who’ve made transactions in cryptocurrencies to pay their taxes and file amended returns.

The Internal Revenue Service (IRS) has released a new Schedule 1 for 2019 tax season, putting out the details on above the line deductions, health savings account contributions, and tax break for student loan interest.

More notably, IRS has also thrown in a question regarding digital currencies, “At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”

This is the agency’s latest attempt to gather more information on taxpayers’ digital currency holdings.

“The biggest thing is that the IRS is asking this for a reason, and my question is how much have you increased your audit risk by checking ‘Yes’ in response?” asked Jeffrey Levine, CPA and director of financial planning at BluePrint Wealth Alliance in Garden City, New York.

As a matter of fact, the IRS has signaled that it would take a closer look at virtual currencies.

Earlier this year, the agency sent letters to over 10,000 taxpayers who made virtual currency transactions but may have failed to report income and pay taxes on what they owed.

Tax Basics on Cryptocurrency

Have you sold any of your cryptocurrency? Then, you need to report the transactions. And if you made capital gains on that, you need to pay the appropriate tax.

In case, you received cryptocurrency from your employer, it is subject to federal income tax withholding, just like wages and should be reported on Form W-2.

Independent contractors paid in cryptocurrency must pay self-employment taxes a well.

If you are involved in mining crypto, the fair market value of the virtual currency on the day of receipt should be included in your gross income, as per IRS guidance.

Failure to report these transactions can result in you getting audited and held liable for interest and penalties. One could also face a fine of up to $250,000 and prison time, in extreme cases.

“For tax purposes, the virtual currency is treated as property, similar to a security,” said April Walker, lead manager for tax practice and ethics at the American Institute of CPAs.

So, make sure you keep track of your transactions related to virtual currency along with the cost basis.

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Author: AnTy

Weekend factor? Altcoins looking to shine as Bitcoin (BTC) price stagnates around $10,000 USD

The weekend (Sat/Sun not the musician) always brings out the best in the crypto world –whether in volume, price, interactions or news flashes. As other markets close on Friday evening, the cryptocurrency markets keep running every second, minute, day and month.

Since the year began, weekends have had a rather significant impact in the growth of Bitcoin price from $3,500 at the start of the year to $10,100 USD as at time of writing. However, in the past few months, alternative coins (altcoins) have performed better than the pioneer cryptocurrency as reported by Bloomberg on Friday.

The Rise of Altseason?

BTC price momentum subsided in the past month and investors seem to have switched to altcoins. A number of top altcoins have outperformed the undisputed king of cryptocurrency in the last weeks as Ethereum, Ripple, and Bitcoin Cash (BCH) all experienced massive gains in the past fortnight.

Ethereum (ETH), the second-largest crypto in market cap outperformed Bitcoin in six of the past 10 weekdays according to daily closing prices. Furthermore, ETH’s price beat Bitcoin’s in 8 of the past 11 weekends in total daily returns showing investors increasing confidence in the largest altcoin.

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Source: Bloomberg

Ripple (XRP) has also witnessed a bullish momentum in the past week growing by 7.1% to trade at $0.28 USD as at time of writing.

Scott Freeman, co-founder and partner of JST Capital spoke to Bloomberg saying altcoins are on the verge of a breakout. As most projects gain real world use cases, investors are expected to increase their stake in the altcoin market Scott explained.

“With the realization that these technologies now are being adopted, they’re starting to solve real problems, and it’s coming to fruition at some level where the value proposition of these things is being recognized more broadly.”

– Scott Freeman

A Tough Mountain to Climb

Despite the latest heroics from altcoins in the past two weeks or so –a period that BTC’s price has remained rather stagnant oscillating around $10,000 USD – the top cryptocurrency is still way ahead of the other altcoins.

Since the start of 2019, ETH/BTC pair dropped by over 40% to trade at 21 million satoshis. XRP/BTC pair plummeted under the 3000 satoshi-mark earlier in the month, representing a 70% drop since the start of the year. XRP is currently trading at 2974 sats, as at press time, 3.3% lower in the past 24 hours.

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Author: Lujan Odera