Since the advent of the cryptocurrency industry, the government and the regulators of the United States have tried hard to pressurize the crypto industry.
Whether it is the crypto firms, mining firms, NFT marketplaces, or any other segments within the crypto-verse, the US regulators want to ban all of them.
However, the US administration and the regulators are well aware of the fact that the crypto industry has rooted itself within the country.
They know that it is not possible for them to get rid of the industry by increasing their aggression. Although the previous governments in the United States have tried doing that, they failed badly in dealing with the situation.
US Government has a New Objective
Given the current circumstances and the situation of the crypto market, the government has come up with a new strategy.
The Biden government has come up with a new tactic it wants to adopt to passively push the crypto industry out of its land.
They have come up with a new plan to impose stricter rules and regulations on the crypto mining firms with aim of pushing the sector out of its jurisdiction.
New Proposal by Joe Biden
The current President of the United States, Joseph (Joe) Biden has proposed a new budget where the crypto taxes have been mentioned quite prominently.
The new proposal is in the form of the fiscal year 2024 budget. The new proposal is subject to the voting session and approval by the Housing. If the House votes in favor of the new budget, it would see taxes being implemented on crypto miners.
In addition to the above, the new proposal is also implementing taxes on wealth. This is something that was unprecedented and is going to have a huge change in the country’s economy.
Although the new budget aims to lift the burden from the US locals, it is pressurizing the crypto mining industry.
Implementation of the Proposed Budget
According to the sources, if the new budget has the thumbs up, then it is set to be implemented by the end of the running year. To be precise, the implementation of the new budget would take place on December 31, 2023.
The new budget proposes a tax implementation that will be based on phases. The rate implemented from December 31, 2023, will continue adding up for three years.
The tax rate that has been proposed by the US Government is 10% on an annual basis. Therefore, with the initiation of the third year, the tax rate imposed on the crypto miners would be 30%.
It has been clearly stated in the proposal that the implementation would be on the electricity rates. The implementation would be enforced for cryptocurrency mining firms.
Although the implementation sounds sensible, the sources have drawn a different picture surrounding the matter.
As per the sources, the whole idea behind the implementation of the taxes is to cause discouragement among the miners. With a very high tax rate being implemented, the miners will have no choice but to withdraw from the country.
They may start looking for other options where the mining operations would not cost much. The best options that these mining firms may have would be Ukraine, Russia, Kazakhstan, and many more.
The situation of the Crypto Industry in the US
With the start of the year 2023, the government of the US seems to have given a huge task to the regulators. The task is to pressurize the crypto firms as much as possible so they have no choice but to retreat.
The regulators have been going after every project and the latest victims of the regulatory scrutiny include Circle, Paxos, Binance, Coinbase, Kraken, and many more.
Circle is the issuer of the USDC Coin (USDC) and Paxos is the issuer of the Binance USD (BUSD) stablecoin. Then there is Binance which is under scrutiny for operational reasons and Coinbase is facing the same situation.
As for Kraken, it recently settled with the US SEC paying up a huge fine and disabling the staking services for multiple tokens.