TaxDAO Crypto Compliance Policy Report for the First Half of January
This report combs through the key developments in global crypto compliance policy in the first half of January 2025.
In terms of taxation, the United States Internal Revenue Service (IRS) has implemented new regulations starting from January 1, 2025, requiring cryptocurrency transactions to follow the FIFO (First-In-First-Out) accounting rule, unless alternative methods such as HIFO (Highest-In-First-Out) or Specific Identification (Spec ID) are chosen.
But the IRS has also provided a temporary exemption, allowing cryptocurrency holders to avoid the default FIFO rule in 2025. Taxpayers can use their own records or tax software to determine the specific assets sold.
In addition, U.S. President Trump announced on his social media that he would establish the “External Tax Authority” on January 20, 2025, to replace the existing model that relies on internal taxation.
Regarding regulation, Frank Richard Ahlgren III, the first U.S. bitcoin investor convicted of tax crimes related to cryptocurrency transactions, has been sentenced to two years in prison and ordered to hand over the keys to his cryptocurrency assets.
Additionally, the UK Treasury has issued a notice clarifying that cryptocurrency staking will not be classified as a “Collective Investment Scheme” (CIS), providing convenience for users participating in staking on networks like Ethereum and Solana.
The Financial Services Commission (FSC) in South Korea plans to lift the ban on institutional investors participating in cryptocurrency trading, allowing them to open accounts on local cryptocurrency exchanges, and is currently developing supporting regulations for the Virtual Asset Investor Protection Act.
China’s foreign exchange regulatory authorities have issued new rules requiring banks to monitor and flag high-risk transactions involving cryptocurrency, imposing greater restrictions on residents’ purchase of digital assets.
Thailand plans to pilot a cryptocurrency payment project in Phuket, offering a new payment method for foreign tourists, to be implemented within the existing legal framework without the need to revise current laws.
# Recommended Reading #
1. U.S. Crypto Broker Rules: A Bitter Pill or Lethal Poison?
2. Japan Plans To Reduce The Tax Rate On Crypto Assets To Promote The Development Of The Web3
Click here now! Manage your assets and file your taxes for free with FinTax!
Part I Tax
Tax-USA-IRS offers tax breaks for cryptocurrency investors in 2025 (1.3)
Starting from January 1, 2025, new IRS regulations under Section 6045 will require cryptocurrency transactions to follow the FIFO (First-In-First-Out) accounting method, unless alternative methods such as HIFO (Highest-In-First-Out) or Specific Identification (Spec ID) are chosen.
FIFO mandates the sale of the oldest assets first, which can lead to higher taxable gains due to the typically lower cost basis of early investments. The IRS’s temporary exemption allows cryptocurrency holders to avoid the default FIFO rule in 2025.
Instead, taxpayers can use their own records or tax software to determine the specific assets sold. This flexibility is particularly valuable during bull markets, as FIFO can inadvertently result in higher capital gains.
Click here to read the original article.
Tax-USA-U.S. President Trump Announces the Establishment of the “External Revenue Service” on January 20, 2025 (1.14)
Donald Trump announced on his social media platform that he would establish the “External Revenue Service” on January 20, 2025.
This new agency would be specifically responsible for collecting tariffs, import duties, and other revenues from foreign sources, replacing the existing model that relies on internal taxation.
Click here to read the original ariticle
Part II Compliance
Compliance-USA–Bitcoin investor ordered to hand over private keys to crypto assets worth $124 million.(1.8)
Frank Richard Ahlgren III, the first U.S. bitcoin investor convicted of tax crimes related to cryptocurrency transactions, has been sentenced to two years in prison and ordered to hand over the keys to his cryptocurrency assets.
Court documents show that Ahlgren was accused of concealing at least 1,287 bitcoins through a mixing service, which are currently valued at over $124 million.
He previously pleaded guilty to underreporting $3.7 million in capital gains from bitcoin transactions and was ordered to pay $1 million in tax restitution to the U.S. government.
Click here to read the original article
Compliance-UK-UK Government Clarifies Crypto Staking Regulations(1.10)
The UK Treasury has made an important announcement regarding crypto stacking. It has been confirmed that staking will not be classified as a “collective investment scheme” (CIS), a category that includes investment funds and ETFs.
This is a big relief for people involved in staking, especially within networks like Ethereum and Solana, as it means they won’t face the same heavy regulations as traditional investment funds.
Click here to reaad the original article
Compliance-South Korea-South Korea’s Institutional Cryptocurrency Trading Ban May Be Lifted, Report Says (1.8)
South Korea’s Financial Services Commission (FSC) is reportedly planning to lift its effective ban on institutional cryptocurrency trading. According to Yonhap News Agency, the decision aims to gradually enable institutional investors to open trading accounts on local cryptocurrency exchanges.
Currently, South Korean regulations only allow retail traders verified using government names to trade in cryptocurrencies. In addition, the FSC is working on a successor regulation to the Virtual Asset Investor Protection Act, which came into effect last July.
Click here to read the original article.
Compliance-China- China tightens crypto trade oversight with new forex rules (1.1)
China’s foreign exchange regulator has introduced foreign exchange rules that require banks in China to monitor and flag risky transactions involving crypto assets. According to a report in the South China Morning Post on 31 December, the new rules in mainland China will make it more difficult for residents to buy digital assets.
Under the regulations, banks must monitor and report risky foreign exchange trading activities. This includes cross-border gambling, underground banking and illegal cross-border financial activities involving crypto assets.
Chinese regulators also require banks to track these activities based on the identity of the individuals and organisations involved, the source of funds and the frequency of transactions.
Click here to read the original article.
Compliance–Thailand–Thailand to pilot cryptocurrency payments in Phuket(1.9)
Thailand plans to pilot cryptocurrency payments in Phuket, one of the country’s most popular tourist destinations, in a move that is part of a pilot project to provide an alternative payment method for foreign tourists.
Thailand’s Deputy Prime Minister and Finance Minister Pichai Chunhavajira announced the new initiative at a seminar organised by the Marketing Association of Thailand on 8 January, according to The Nation.
Pichai said the pilot will be carried out within the existing legal framework and no changes to existing laws will be needed to implement the experiment.