The United States federal government has attempted to use its existing regulatory and taxation schemes to regulate and tax cryptocurrencies, while many individuals are still unsure as to what cryptocurrency really is. The Securities and Exchange Commission and the Commodities Future Trading Commission have both asserted their jurisdiction over cryptocurrency, resulting in unclear guidance for developers in the cryptocurrency space and a failure to adequately protect investors. Further, the Internal Revenue Service taxes cryptocurrency like a security rather than a currency, which disincentivizes adopting cryptocurrency as a form of payment. Nevertheless, although cryptocurrencies are taxed like securities, there are tax breaks for securities and commodities activities that are not currently available for cryptocurrency activities. Under the United States’ current approach, investors will remain vulnerable to fraud, and businesses and individuals using cryptocurrencies for goods and services will be subject to an extra level of taxation.

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