Cryptocurrencies Facing Regulatory, Tax Clampdown, Expert Says
Cryptocurrency expert Garrick Hileman from the University of Cambridge said that regulators worldwide might soon impose tighter regulation on cryptocurrencies.
Garrick Hileman, an alternative finance expert from the University of Cambridge, said that Bitcoin, Ethereum, and Ripple are poised to come under a regulatory crackdown, and investors should also prepare for the involvement of tax authorities. The three largest cryptocurrencies are closely monitored by regulators and action may not be long in coming.
Asked whether crypto regulation is inevitable, Hileman responded “I think it is,” noting:
“Many regulators are trying to strike the right balance here between not crushing the sector and allowing innovation to foster and attract new investment to their local economies, job growth, etc.”
He said that regulators would want to protect investors who “may not have the resources to fully vet some of the purchases they are making.”
“It’s a really tricky balancing act for regulators,” he added.
In his interview with Express.co.uk at London Blockchain Week, Hileman also stressed that investors should be thinking about taxation as well:
“From a regulatory perspective, we are seeing growing interest from tax authorities. Securities regulators have been the main focus for the past six months or so, but tax authorities are getting more interested in crypto with the incredible appreciation.”
Hileman, who has acted as cryptocurrency adviser to the CIA and the US army, also gave some projections for 2018. He said that cryptocurrencies are trying to solve scalability issues by finding ways to boost the number of transactions that can be processed.
He might be right about looming regulations, especially after the World Economic Forum meeting in Davos showed that governments and economists have many concerns.
UK Prime Minister Theresa May has noted that cryptocurrencies like Bitcoin demand tighter regulation.
Billionaire investor George Soros said at Davos: “Cryptocurrency is a misnomer, and it's a typical bubble, which is always based on some misunderstanding...Bitcoin is not a currency. A currency is supposed to be a stable source of value.”