To no one’s surprise, the government is trying to meddle with the cryptocurrency market. If there is a market, there is a government entity doing whatever it takes to manage or manipulate it. In previous articles, I have shown the trend in the dollar and Bitcoin. Bitcoin, the leader of the clubhouse, has moved quite high, along with Ethereum as the trend in the dollar continues to go lower. Initial Coin Offerings are exploding, and demand for a non-government banking system is, too. Legislation in several states is allowing blockchain and smart contracts to proceed without taxation. Nevada was the first state to propose such a law, introduced through Senate Bill 398 on March 20, 2017. Senate Bill 398 passed the Senate unanimously by a vote of 21-0 in April. Included in the language is, “if a law requires a record to be in a writing, submission of a blockchain which electronically contains the record satisfies the law, meaning the data from a blockchain can be introduced in proceedings.” Arizona has also accepted blockchain and smart contracts into state law as well. Introduced in early February, the bill passed the Senate on March 23rd, and Governor Doug Ducey signed the bill on March 29th.
The Federal Government, however, is doing what it always does: promoting more legislation that inhibits and bankrupts our nation. Senate Bill 2412 (Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017) was introduced on May 25, 2017. Senator Chuck Grassley of Iowa and Diane Feinstein of California introduced the bill. Language in the bill replicates what is already in place by the Financial Crimes Enforcement Network (FinCen) back in 2013-2014. According to a summary by Grassley’s office, the bill would move digital currencies closer to being a “monetary instrument.” Grassley and Feinstein’s bill would also add more language of what financial institutions are. A digital currency exchanger or tumbler, along with any issuer, redeemer, or cashier of digital currency is also covered. Additionally, the bill requests information from the U.S. Department of Homeland Security’s Customs and Border Protection agency about policies on digital currencies. Essentially, the expansion of this language allows penalization of individuals who do not disclose financial holdings. Additionally, this law targets prepaid devices, digital wallets, mobile phones, flash drives, and laptops that would contain information on digital currency holdings. Under this bill, cryptocurrencies will be brought under civil forfeiture. Those traveling with over $10,000 in assets would be required to file a report indicating the total sum. Those who fail to comply could be subjected to forfeiture or 10 years in prison.
Cheers,
Colin