Roger Brown, Lukka’s Global Head of Tax Solutions, addressed some of the most relevant regulatory issues facing the crypto-asset ecosystem as a panelist in the Crypto Connection 2021 Conference.
Roger went into depth on the state of crypto tax matters. He stated that “there is a big gap between the transactions that occur in the ecosystem and the guidance that has been published to date,” explaining that there are still rules just because there is no official guidance. Countries like the U.S. must look at relevant, analogous activity outside the crypto ecosystem as a starting point for taxing crypto activity. Without direction on the taxation of crypto assets, examples from traditional transaction types should be applied.
The panel addressed other regulatory questions facing the ecosystem. Roger noted how “Know Your Customer” (KYC) rules have been implemented across centralized exchanges rather ubiquitously but went on to explain that with the acceleration of decentralized exchanges and DeFi, “how one applies KYC to those is still TBD.” Roger stated that regulatory bodies like FinCEN had proposed rules and is leveraging new technologies to help enforce current standards, which he believes will help the ecosystem through sound regulation that allows further innovation.
Looking forward, Roger said he is confident that there’s a place in the crypto ecosystem for regulators. Traceability and surveillance of bad actors are possible thanks to the immutability of blockchain data and powerful software tools. He believes that sound regulation will continue to drive trust and adoption of these new technologies.
To learn more about what Roger Brown has to say about crypto regulation, watch the full panel interview. If you or your business is interested in speaking to Roger or other crypto data experts at Lukka, contact us today.