Foreign media: US Treasury hopes to include new encryption rules in $3.5 trillion budget reconciliation bill

On August 31, the Biden administration urged Democrats to include more tax compliance rules for cryptocurrency transactions in the upcoming $3.5 trillion budget reconciliation plan. The US government hopes to increase the reporting of information on foreign account holders by cryptocurrency companies so that the United States can share the information with global trading partners.

According to the Treasury Department, a surge in the number of shell companies set up overseas by U.S. taxpayers to avoid taxes, including on cryptocurrency gains, requires stricter reporting measures. The Treasury Department's proposal would enforce the new rules starting in 2023 and apply to digital "wallet" providers for cryptocurrency exchanges and account holders. Such "custodial" wallet providers include trading and investment platforms such as Coinbase and Gemini.