Last year was a breakout year for cryptocurrencies. At its
height, bitcoin's value increased by more than 20 times from
the start of the 2017, and ether and litecoin saw gains of more
than 80 times. As prices soared, the number of cryptocurrencies
also proliferated as thousands of companies, big and small, lasting
and ephemeral, sought to issue their own cryptocurrencies in lieu
of traditional financing.
Now that cryptocurrencies (and the blockchain technology
underlying them) have expanded beyond dorm rooms, garages and
basements, commandeering attention from mainstream investors and
Wall Street traders alike, regulators and other governmental
authorities are taking note. Given the combination of significant
gains in crypto asset values and the heightened potential for their
underreporting due to the nature of blockchain technology, it is no
surprise that the Internal Revenue Service is among the entities
most actively asserting itself.
