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The cryptocurrency community applauded the U.S. Senate’s decision to withdraw a contentious crypto tax law that compelled decentralized finance (DeFi) platforms to disclose user transactions.
Like centralized exchanges, DeFi platforms were required to record transactions involving cryptocurrency holdings above $10,000 under the legislation, which was first established in 2021 as part of the Infrastructure Investment and Jobs Act.
Crypto Tax Repeal Sees Optimistic Response
The clause was intended to improve tax compliance and stop illegal activity, such as money laundering, in the quickly expanding DeFi industry.
Nonetheless, some contended that the regulation was unduly onerous and would impede the advancement of decentralized systems by enforcing substantial expenses and technological difficulties.
Many in the cryptocurrency sector were worried that these rules may hinder innovation and push DeFi ventures elsewhere.
Additionally, it was feared that the rule’s ambiguous wording would inadvertently impose undue responsibility on developers and protocol builders for transactions over which they have no influence.
The Senate has now addressed these issues with the repeal, providing a more advantageous regulatory framework for the DeFi industry.
This action demonstrates the increasing awareness of the necessity for more complex crypto rules that strike a balance between the objectives of tax compliance and the significance of encouraging innovation in cutting-edge technologies.
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Trump’s New Government Dismisses Many Anti-Crypto Laws
Many anti-crypto laws and regulatory initiatives have been repealed or loosened during the current Trump administration, indicating a shift toward a more pro-crypto posture.
Significantly, the Trump administration relaxed stringent laws governing digital assets, facilitating commercial and personal cryptocurrency transactions.
In their clarification of their positions on cryptocurrency, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) have also placed greater emphasis on consumer safety than strict regulation.
In order to promote more market expansion and innovation, the administration also sought to bring cryptocurrency rules into line with international norms.
What Are Investors Looking From Trump’s Government Now?
The Trump administration’s prior efforts to relax laws on digital assets have given the crypto community optimism for more benevolent rules.
The repeal of anti-crypto legislation, the elucidation of regulatory positions, and initiatives to promote innovation were viewed as constructive actions by the current US government.
Clearer regulations, more liberal tax laws, and the advancement of blockchain technology for wider commercial applications are all expected forms of ongoing support from the crypto community.
The market expects the Trump administration to give priority to a well-balanced regulatory framework that promotes innovation while guaranteeing consumer protection, which will accelerate the acceptance and growth of cryptocurrencies as interest in digital assets increases globally.
Also Read: Trump Moves to Establish U.S. Bitcoin Reserve with New Executive Order Ahead of White House Meeting