Cryptocurrency and Tax Evasion: Unraveling the Digital Knot for Global Governance

DOI

10.2991/978-94-6463-542-3_45How to use a DOI?

Keywords

Cryptocurrency; Tax Evasion; International Regulation

Abstract

In the digital age, the advent of cryptocurrencies such as Bitcoin and Ethereum was not just anticipated but has rapidly become a mainstay, heralding a paradigm shift in the financial ecosystem. However, their ascent has challenges for tax regulation and enforcement. This paper delves into the research background by highlighting the intrinsic properties of cryptocurrencies—namely, their anonymity, decentralization, and the absence of centralized reporting mechanisms—that complicate tax governance on an international scale. It articulates the thematic focus on the jurisdictional complexities and the pursuit of regulatory consensus through meticulously examining existing legal frameworks and illustrative case studies of cryptocurrency-related tax evasion. Methodologically, the study adopts a qualitative analytical approach to dissect the specific challenges digital currencies introduce to tax governance. It meticulously investigates the strategies leveraged to exploit these unique features for tax evasion and critically evaluates the capacity of existing legal frameworks, including the Fifth Anti-Money Laundering Directive and the Financial Action Task Force’s Travel Rule, to surmount these hurdles. The key findings illuminate the dichotomy presented by digital currencies. While they forge innovative financial pathways, they concurrently pave the way for novel forms of tax evasion and money laundering, exacerbating the complexity due to a disjointed international regulatory landscape. Conclusively, this research advocates for implementing incentive-based reporting mechanisms and embracing cutting-edge technological solutions to bolster transparency and compliance. It emphasizes the overarching conclusion that international collaboration is paramount in crafting a standardized and harmonized global governance framework for digital currencies. The perpetually evolving nature of digital currencies demands unwavering vigilance, innovative thought, and cooperative engagement from all stakeholders involved, highlighting the importance of adaptability and unity in addressing the challenges and opportunities they present.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Suet Yi Yan
PY  - 2024
DA  - 2024/10/15
TI  - Cryptocurrency and Tax Evasion: Unraveling the Digital Knot for Global Governance
BT  - Proceedings of the 2024 2nd International Conference on Management Innovation and Economy Development (MIED 2024)
PB  - Atlantis Press
SP  - 384
EP  - 396
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-542-3_45
DO  - 10.2991/978-94-6463-542-3_45
ID  - Yan2024
ER  -