Two new cryptocurrency bills are being drafted by U.S. House representatives, focusing on consumer protection and maintaining the country’s competitiveness in the growing digital asset industry. These legislative efforts come amid significant market volatility, with Ethereum hitting a 19-month low and regulatory agencies delaying key decisions on crypto financial products.
Proposed Cryptocurrency Legislation
The first bill, named the Cryptocurrency Consumer Protection Act, mandates the Commodity Futures Trading Commission (CFTC) to produce a detailed report. This study would examine the potential for price manipulation in cryptocurrency markets and assess its broader economic impact.
The second proposal, the 2018 U.S. Cryptocurrency Markets and Regulatory Competition Act, aims to ensure that the United States remains competitive in the global blockchain sector. It calls for the CFTC to conduct a comparative analysis of international crypto regulations and recommend adjustments to U.S. policy.
Neither bill specifies detailed regulatory measures. Instead, both rely on the CFTC to propose appropriate rules after completing the required studies.
Market Performance and Regulatory Delays
Ethereum (ETH) has continued its downward trend, recently hitting a near 19-month low. According to Coinmarketcap, ETH fell to $84.63, marking a 24-hour decline of 17.48%.
In related news, the U.S. Securities and Exchange Commission (SEC) has postponed its decision on the VanEck/SolidX Bitcoin ETF until February 27, 2019. The proposal, initially submitted by investment firm VanEck and blockchain startup SolidX in collaboration with Cboe Exchange, remains under review.
Tax Reporting and Compliance Challenges
The Internal Revenue Service (IRS) is expected to receive a record number of cryptocurrency-related tax filings this year. According to Node40, a bitcoin tax software developer, many investors are likely to declare losses due to the sharp decline in crypto asset values throughout 2018.
While reporting losses can help offset other tax liabilities, Node40 warns that investors should be cautious. Large declared losses may attract additional scrutiny regarding the origin of funds and the nature of crypto transactions.
Industry Developments and Legal Challenges
UnitedCorp, a Miami-based company, has initiated legal proceedings against Bitmain, Roger Ver, Kraken exchange, and other individuals. The lawsuit alleges a coordinated effort to manipulate the Bitcoin Cash (BCH) network for personal gain.
In China, the blockchain project “Planet Alliance” by listed company 2345.com has nearly halted. Customers and agents have raised concerns about false advertising, and the project’s sales director has resigned. The company has since distanced itself from any association with digital currencies.
A fraudulent scheme involving the RusGas (RGS) token was also uncovered. After an initial ICO issuance of 10 billion tokens, the project creators minted an additional 850 billion RGS tokens within eight days, diluting the value until the token price approached zero.
Global Regulatory Updates
The U.K. Financial Conduct Authority (FCA) announced it will review cryptocurrency-based contracts for difference (CFDs) in the first quarter of 2019. The regulator also proposed making temporary restrictions on CFD trading permanent.
In Hong Kong, the Monetary Authority has rejected several virtual bank license applications and aims to begin issuing approvals by the first quarter of next year.
Industry Voices and Opinions
Vitalik Buterin, creator of Ethereum, shared a tutorial on CBC Casper via Twitter, stating he is attempting to explain the consensus mechanism.
Craig Wright, also known as “Satoshi Nakamoto,” commented that Bitcoin must achieve on-chain scaling to fulfill its security promises. He predicted that “only the largest blockchains will survive,” suggesting gigabyte-sized blocks by 2019.
Cryptocurrency analyst Joseph Young noted that the recent delay in the Bitcoin ETF decision was anticipated and should not be considered the cause of Bitcoin’s price decline.
Binance CEO Changpeng Zhao criticized Coinbase for applying to trademark the term “BUIDL,” suggesting that such a move could harm the company’s reputation and may lead to legal action.
Justin Sun, founder of TRON, proposed increasing the Energy limit on the TRON network to support dApp developers. He also announced a relief fund exceeding $100 million to assist developers from other blockchain platforms.
Frequently Asked Questions
What are the two proposed U.S. cryptocurrency bills?
The Cryptocurrency Consumer Protection Act requires a CFTC report on market manipulation, while the U.S. Cryptocurrency Markets and Regulatory Competition Act seeks to enhance competitiveness through regulatory comparisons.
Why was the VanEck/SolidX Bitcoin ETF decision delayed?
The SEC extended the review period to further evaluate the proposal, with a new decision date set for February 27, 2019.
How are cryptocurrency losses treated for tax purposes?
Investors can report crypto losses to offset other capital gains, though large claims may prompt additional inquiries from tax authorities.
What is the significance of the U.K. FCA’s CFD review?
The review aims to assess the risks of cryptocurrency CFDs and may lead to permanent restrictions to protect retail investors.
What actions are regulators in Hong Kong taking toward virtual banks?
The Hong Kong Monetary Authority is processing virtual bank license applications and plans to issue the first approvals in early 2019.
How can developers benefit from TRON’ proposed Energy increase?
The proposal aims to reduce operational costs for dApp developers, offering greater support and resources within the TRON ecosystem. 👉 Explore more blockchain regulatory updates