Uncle Sam Wants Your Crypto
By Allen Kopelman, CEO, Nationwide Payment Systems
What a difference a year makes in the crypto world. Bitcoin 2022 was packed with attendees, exhibitors and big name sponsors. The park across the street had food trucks and an outdoor stage with live music. There were parties and afterparties thrown by sponsors and newly minted millionaires. It was a celebration – business owners were accepting Bitcoin and tokens as payment for goods and services. People were making money.
Fast forward a year. Bitcoin 2023 was the hangover after the party. The mood was less celebratory and people were talking about all the changes that had taken place since the last convention. In a keynote address, Robert Kennedy Jr. told the audience that free money is just as important as free speech. Governments that control currencies can turn countries into surveillance states, he said, adding that it’s already happening in other parts of the world.
Before our government decided to tax cryptocurrency out of existence, people were buying homes, condos, cars, boats, yachts and jewelry with crypto. And shoppers all over the world were paying crypto online for luxury goods made right here in the USA.
Transactions were easy – businesses would invoice customers and customers would click a pay link, select a token, whether Bitcoin, Litecoin, Ether, or other, and the software would tell the customer how much coin or token was required to complete the transaction.
The customer would then connect to their wallet and send the coin or token to the processor. The processor would convert the coin or token to Fiat Dollars and deposit them in the business owner’s bank account. So, the business owner would receive U.S. Dollars in their bank account.
Then the government created tax laws that sent the price of Bitcoin plummeting from $70K to $20K, and ever since then, Bitcoin has been hovering around $25K to $30K. These taxes are on the cryptocurrency holding, not just on the sale, and that is why the big investors pulled out of the market along with the day traders who were probably driving the prices up.
Other things went wrong, companies went out of business, people lost money and several exchanges either went under or moved out of the United States. Companies that were loaning money on “staked tokens” were not getting paid. Investors lost money, homes were bought with “staked” crypto were foreclosed. The leading company doing that, Celsius, is hanging on by a thread; in a recent news story, a few companies are trying to acquire their assets.
Silk Road, a marketplace, was shut down, and the owner went to jail; we also have the FTX fiasco, in which the owner, Sam Bankman-Fried, is sitting in a mansion instead of being in prison, where many people think he belongs.
The government should rethink cryptocurrency and develop solutions so that incidents like Celsius and FTX do not happen again. If we’re still a democracy, why not let the fair and open market decide if cryptocurrency is good or bad?
There is also a need for rules and laws to protect consumers. Congress needs to think outside of the box and bring in businesspeople to help solve the biggest issues facing the financial services industry. That Silicon Valley expression – that innovation is outpacing regulation – certainly applies to our elected officials.
Where is the sense of urgency on Capitol Hill? The idea that we need to have a meeting, stand up a committee, launch an investigation, might have worked in the 20th century but is out of place in the fast moving digital-first world, where business moves at the speed of light.
How long will we hear that our government is “looking into” AI? Some of our leading technologists and data scientists are warning about the dangers of artificial intelligence. And all while we are outsourcing critical tasks to self-learning AIs and machine learning.
It’s time to pass the torch to a new generation of leaders. We need business-savvy people who think like entrepreneurs and can make decisions, not endless meetings where nothing is ever accomplished.
Allen Kopelman co-founded Nationwide Payment Systems Inc. in 2001, providing concierge-style credit card processing and equipment to merchants. The company quickly grew nationally, adding products and banking partnerships and becoming laser-focused on technology. As a serial entrepreneur from a family of business owners, Allen first learned about business by working behind the cash registers at his father’s Miami clothing stores. In 2021, he launched the B2B Vault: The Payment Technology Podcast, where he educates merchants, drawing from his experiences as a payments industry consultant, master chef at hotels and country clubs, and former owner of a restaurant and catering company.