Businesses in the United States must now collect data about crypto users
In an unexpected data grab, the US government has mandated that firms provide information on their crypto users.
There is a tight deadline for the cryptocurrency sector to contest a new rule that would require U.S. companies to collect personal information on customers making digital asset transactions over $10,000 to acquire goods and services. The Coin Centre, a nonprofit with a focus on cryptocurrencies, and the Treasury Department are engaged in a court fight over the contentious law, which is scheduled to go into effect on January 1, 2024.
Therefore, Coin Centre had already sued the government, claiming that the rule amounted to unconstitutional surveillance and a violation of citizens’ right to privacy. A court ruled that their damage was hypothetical since the regulation hadn’t been put into effect. The pro-cryptocurrency group will not be discouraged, though, and will file an appeal.
In defence of the rule, the DOJ said that all it does is provide Congress more leeway to ensure that taxes are paid in full. Reporting requirements for cryptocurrency exchanges are to be made consistent with those for cash exchanges. Customers’ personal information, including names, addresses, and Social Security numbers, will need to be collected by businesses.
Proponents of the idea say it would help reduce tax evasion, while opponents worry about invasions of privacy. Many users’ need for anonymity in decentralized financial protocols is threatened by the inherent openness of blockchain, which permits detailed monitoring of transactions. In addition, the rule may make it difficult for certain companies, including legal firms, to accept crypto payments from customers without identifying their names.