The Cryptocurrency Informer
A new round of IRS "Educational Letters"; A city built on crypto; Crypto-political update
This week, it looks like the IRS is again sending out educational letters to some crypto traders, a cryptocurrency city is being built, and a crypto-political update.
August 21st, 2020: A new round of IRS "Educational Letters"; A city built on crypto; Crypto-political update
(00:28) First up, the IRS educational letters are seemingly being sent out to more cryptocurrency users and traders. For reference, in July 2019 the IRS send out “educational letters” to more than 10,000 cryptocurrency users reminding them that they need to be including their crypto capital gains and losses on their tax forms. The letters were referenced as 6173, 6174 or 6174-A.
According to a number of independent reports, a new round of these letters are currently on their way out. Last year, we spoke with Alex Kugelman, a tax controversy lawyer, about these letters. Alex explained what these letters are and the difference between each of them: “The basic thrust is that the IRS has information that the recipient had some cryptocurrency account and may not have fully reported gains or losses from the activity. So essentially the 6174, 6174-A, and 6173 are essentially predicated on that. The 6174 is what’s been termed, or people have described as, a ‘soft notice’ – just putting people on notice of what the tax reporting obligations are. The 6174-A is a little bit more direct. The 6173 from my perspective is the letter to be taken more seriously by recipient because it requires a response. It has a response date, from what I can tell, of one month from the date of the letter.”
You can listen to the entire interview with Alex Kugelman by going to talk.bitcoin.tax.
(01:52) Next up, a city that’s runs on cryptocurrency is in the works. It’s being spearheaded by the entertainer/entrepreneur Akon and is appropriately dubbed Akon City. The city is currently being built in Senegal, a country in which Akon spent much of his childhood in.
Cryptocurrency plays a vital role in Akon’s plan for the city – according to Bitcoin.com: “At the heart of Akon City is the Stellar-based Akoin cryptocurrency. Akon aims for the coin to be used as a common method of payment allowing for easy exchange between Africa’s 54 countries so that citizens and entrepreneurs can engage in the digital economy with only a mobile phone.”
The Akoin whitepaper states that the currency, and its accompanying multi-currency wallet is powered by a “…proprietary Atomic Swap technology [that] enables immediate trade between major cryptocurrencies, our partners’ alternative currencies, and fiat currencies; both on the platform and in the local market.”
One of the main use cases of cryptocurrency is arguably the ability to transcend and overcome the imbalances and inequities associated with traditional financial systems. According to the Bitcoin.com report, this is one of Akon’s primary reasons for constructing the one-of-a kind city – he claims that crypto could “…overcome key hurdles, such as high inflation, government mismanagement of funds, and corruption.” Additionally, the report illustrates Akon’s belief that the Akoin ecosystem will alleviate the difficulty converting African currencies and the “rampant inflation” that exists.
The first phase of Akon City is planned to begin in early 2021, and will reportedly be completed by 2023. The entire Akon City is planned to be fully functional within 10 years. Of course, this seems like a lofty goal that is likely to encounter a number of hurdles – but, the funding is certainly there, and cryptocurrency could be harnessed to alleviate some of the issues associated with traditional fiat currencies. Only time will tell if this will be everything it sets out to be, or if it will be plagued by the same issues we see many crypto projects plagued by.
(03:43) Finally, some brief political cryptocurrency news updates…
A cryptocurrency advocate and former US representative named Cynthia Lummis, has won the GOP Senate primary in Wyoming. According to a report from NASDAQ, Lummis is favored to win in the general election against her Democrat opponent, and “should Lummis win, she may become one of the most crypto-friendly lawmakers in the legislative body”.
US congressman Tom Emmer will reportedly be accepting crypto donations for his re-election campaign. This isn’t too much of a surprise as the congressman is a chair of the Congressional Blockchain Caucus. According to Coindesk: “Emmer is not the first politician to accept crypto contributions. In 2015, U.S. Sen. Rand Paul (R-Ky) accepted bitcoin to fund his presidential campaign. Last year, Democrats Rep. Eric Salwell of California and Andrew Yang both accepted crypto donations for their presidential campaigns as well.” The congressman will be utilizing the popular cryptocurrency payment processor BitPay to process the donations.
That’s it for this week’s episode of The Cryptocurrency Informer. Don’t forget – if you want to read more about each of these stories, go to talk.bitcoin.tax and click on The Cryptocurrency Informer link. Every episode is accompanied by a number of relevant links for each story, so you can do your own in-depth research on the topics that interest you.
Check out our first interview-style episode of the Cryptocurrency Informer too! This week we spoke with Edward Kelso, CEO of Coinspice. Kelso gives us his perspective of the cryptocurrency world as a long-time crypto journalist turned CEO of his own crypto-news outlet. It’s a great conversation – one of many we will be sharing in the coming weeks. Make sure you subscribe on Apple Music, Spotify, and Google Play Music so you can catch every new episode we release.
Have a great weekend everyone – stay informed and stay safe!
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