China Wants To Regulate Crypto Using Tax Policies – Justin Sun
Justin Sun, the founder of TRON blockchain and head of Huobi, believes China is promoting crypto legitimacy by implementing taxes on cryptocurrency transactions. According to him, the action indicates that the Chinese authorities consider crypto assets a legitimate form of wealth.
Is China Finally Embracing Crypto?
Sun announced the news in a January 30th tweet, saying that crypto taxation might be the new way for China to embrace digital currencies. “China has advanced towards regulating cryptocurrencies by imposing taxes on crypto transactions. This indicates the country’s growing acceptance of digital currencies,” Sun tweeted.
Meanwhile, China has a longstanding ban on cryptocurrencies within its borders. However, the country’s tax policy has shown an acceptance of digital assets.
Last October, a report by Chainalysis (an on-chain analytics firm) states that China is one of the world’s most robust cryptocurrency markets. According to the report, China recorded over $220 billion in crypto transactions from June 2021 to July 2022.
In addition, Chainalysis reported that Mainland China continues to be the largest cryptocurrency market in terms of transaction volume in East Asia despite its ban on crypto trading and mining.
Zennon Kapron, the founder of Kapronasia, a fintech firm, said, “Chinese traders have utilized virtual private networks (VPNs) for a long time to bypass the ban.” Kapron added that some BTC mining activities have persisted at a reduced scale in China since the ban, even though they were not as extensive as before.
Wu Blockchain Accuses Huobi Of Sharing User Info
Meanwhile, Sun stressed that China is working on more reforms to provide stability and legitimacy to the crypto sector.
Furthermore, Wu Blockchain, a Chinese crypto reporter, tweeted that Chinese local authorities have initiated an enforcement action against whale crypto investors. The rule requires them to pay a personal income tax of 20% on investment profits.
Notably, there are allegations that crypto firms like Huobi are giving users’ information to China for tax purposes. Wu Blockchain noted that a whale reported that a Chinese tax audit company authorities contacted his firm asking to see his income tax, including crypto-related income.
The large cryptocurrency investor reportedly withdrew millions of Yuan recently and accused exchanges of disclosing his transaction history to Chinese tax authorities. However, Justin Sun rejected the accusations from Wu Blockchain, saying that Huobi does not reveal users’ info to tax authorities.
The Huobi executive argued that the firm would only release such details if the request followed proper legal procedures.
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