Bitcoin and cryptocurrencies have been catapulted back into the public consciousness over recent months, not only because of the soaring bitcoin price but due to interest in bitcoin from some of the world’s biggest technology companies, including social media giant Facebook—which is planning to launch its own cryptocurrency next year.
The bitcoin price and cryptocurrency markets remained unfazed when U.S. president Donald Trump unleashed a scathing attack on bitcoin and crypto earlier this month, taking aim at Facebook’s libra project plans, but the year-to-date bitcoin rally was halted in its tracks by global opposition to libra.
Now, U.S. Treasury secretary Steven Mnuchin has warned that bitcoin will not be widely used in ten years time, while the Internal Revenue Service (IRS) is cracking down on cryptocurrency holders it thinks haven’t paid their taxes.
U.S. president Donald Trump caused consternation in the bitcoin and cryptocurrency industry earlier this month when he tweeted his opposition to bitcoin.
“I can assure you I will personally not be loaded up on bitcoin in 10 years,” Mnuchin, who earlier this month branded bitcoin and cryptocurrencies a “national security issue,” told CNBC this week.
Speaking at a press conference a couple of weeks ago, Mnuchin said he believed bitcoin and cryptocurrencies have been “exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,” echoing comments made by Trump just days earlier.
His latest comments suggest the Trump administration could be gearing up to crack down on, or even try to ban, bitcoin and cryptocurrencies, as has been tried in Russia, China, and Indonesia.
“I would bet even in five to six years I won’t even be talking about bitcoin as Treasury secretary,” Mnuchin added.
Meanwhile, the IRS has this week begun sending letters to some 10,000 U.S. citizens who own bitcoin or other cryptocurrencies that it thinks have failed to pay the appropriate taxes.
The bitcoin price has been climbing so far this year but has plateaued after global regulators said they will be taking a closer look at crypto.
“The IRS is expanding our efforts involving virtual currency, including increased use of data analytics,” IRS Commissioner Chuck Rettig said in a statement. “We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”
The IRS reportedly got the names from U.S. bitcoin and cryptocurrency exchange Coinbase, all of whom have bought, sold, sent or received digital currency worth $20,000 or more between 2013 and 2015.
The latest moves by the Trump administration to crack down on the bitcoin and cryptocurrency sector come after forensic accountancy firm BTVK warned the bitcoin and crypto “wild west” could be coming to an end, with global regulators closing in on bitcoin and cryptocurrency exchanges as a result of the spotlight brought by Facebook’s libra project.