With virtual currencies becoming more popular, the I.R.S. has started to seek oversight on these transactions in order to ensure that the proper tax regulations are being followed. Companies such as Coinbase have provided users the opportunity to anonymously store and exchange their digital currency. The I.R.S has requested that the company reveal their customers in order to ensure that any capital gains or losses are being reported correctly.
The advancement of digital currencies has finally reached a point where the government has recognized the need to develop a system of greater oversight. Untraceable transactions have provided an opportunity for users to hide capital gains and launder money. In order to prevent financial technologies from creating opportunities for fraud and tax evasion, the industry needs to work with legislatures to establish government oversight that is effective and does not impede the growth of financial technologies.
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