Preventing avoidance of paying taxes on earnings on cryptocurrency assets or making it harder to circumvent anti-Russian sanctions. These are the main reasons for the upcoming expansion of cryptocurrency trading regulation.
New Rules for Cryptocurrencies
Regulation is due to be discussed by the European Commission next week. The rules, which until now applied practically only to traders with so-called NFTs (non-fungible tokens), are to be extended to cryptocurrency platform operators.
They will have to report data about their clients to the financial authorities of the Member States of the European Union as well as how much return they have made from cryptocurrency trading. The aim is to increase tax collection or prevent investors in cryptocurrency assets from avoiding paying taxes on the proceeds.
Talks in early December
“The obligation to inform about the proceeds arising from investments in cryptocurrencies will help the Member States of the European Union to obtain an overall overview for the purposes of collecting income taxes,” says in a document to be discussed by the European Commission on 7 December and available to the Coindesk.com portal.
In addition to avoiding tax evasion, the regulation also aims to make it harder to circumvent anti-Russian sanctions. Cryptocurrencies have become a popular means of exporting the assets of Russian oligarchs abroad after the outbreak of war in Ukraine.