Can the Fed Kill Bitcoin? Navigating the Chokepoints of Tax Law and KYC

Taxes. The one word that can kill any buzz in seconds flat. Whether you’re a libertarian ranting about how taxation is theft or one of those fabled creatures who is actually happy to file them as their so-called civic duty, one fact remains: those who don’t give the government a bite — or make mistakes in attempting to do so — can get chomped, and hard. Ominous tax laws and ever-increasing state requirements for exchanges have some wondering if these maladies could stall the Bitcoin revolution.

Also Read: From Spartacus to Satoshi: A Brief History of Economic Rebellion

Crypto Enthusiasts Anxious About Taxes

It’s often scary enough filing basic fiat returns, but crypto taxes are proving to be a whole new animal. First, the IRS seems almost intentionally vague on policy. This in combination with ever-constricting KYC and AML regulations on crypto exchanges, and one begins to wonder what bitcoin is even useful for. The whole P2P trustless money thing kind of flies out the window when you’ve got do anything and everything up to sending nudes and a DNA sample just to begin trading. The nightmare is real. Just ask this guy who wound up owing $400,000 even after losing most of his gains in 2018.

All this begs the question: by making the use of crypto such a tremendous pain in the ass for the average user, and a threat to their safety and that of their loved ones if they botch or “misreport” their taxes, can the Fed effectively kill Bitcoin?

Can the Fed Kill Bitcoin? Navigating the Chokepoints of Tax Law and KYC

Crypto Chokepoints

On a recent episode of CNBC’s Squawk Box the question was posed: “You’re the central banker for the United States — what do you do to kill Bitcoin?” To this Brian Kelly replied:

In terms of killing it, it’s very difficult. It’s very much like the internet. But the kind of, choke points and, at least where the AML/KYC, are the fiat on ramps … So where people are taking their U.S. dollars … and putting it into bitcoin, those are the points.

Of course this goes…

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