White House Budget Proposal: Expanding digital asset reporting requirements, overseas crypto accounts over $50,000 to be reported

The United States has seen several significant proposals in cryptocurrency regulation recently. The Biden administration's 2023 budget is set at $5.8 trillion and includes plans to expand tax reporting requirements for digital assets, with an expected revenue of billions over the next decade. The Treasury Department has also proposed that overseas crypto accounts with a value exceeding $50,000 must be reported to the Internal Revenue Service.

Expanding Tax Revenue, Aiming for $10 Billion

According to the budget proposal for 2023, the White House has proposed modernizing regulations on digital assets, primarily through expanding tax reporting requirements, with an expected $11 billion in crypto tax revenue over the next decade, and nearly $5 billion in tax revenue just next year.

The proposal states that by applying "mark-to-market" accounting rules only to "active traders" between the tax years 2023 and 2032, the government could generate $6.6 billion in additional tax revenue.

The annual budget will also allocate additional funds to the Department of Justice to hire more analysts as part of the government's strategy to combat crypto ransomware and related destructive activities.

Reporting Overseas Holdings Over $50,000

In addition to the White House budget, the Treasury Department has also released details in the Green Book, emphasizing that the Financial Stability Oversight Council (FSOC) faces increasingly severe threats to financial stability and will collaborate with the Treasury Department to expand regulatory oversight in the crypto field, focusing on climate change and digital asset risks.

The proposal mandates that U.S. taxpayers report foreign financial accounts valued over $50,000. The Treasury Department stated:

Tax regulations and enforcement actions on digital assets are rapidly growing issues, given the industry's complete digitization, allowing taxpayers to engage in transactions with offshore digital exchanges and wallet service providers without leaving the United States.