IRS Raises Concerns About Telegram-Based Crypto Trading

IRS officials say that users may use secret chats in the Telegram messenger to exchange cryptocurrencies, some of which originate from illicit sources. This was told to Decrypt by the agency’s commissioner, Kris Yanchevski.

He said the app hosts organized P2P exchanges that enable fast and confidential transfers of funds from one digital wallet to another. He noted that such groups worry him more than the activities of traditional exchanges and platforms like ShapeShift.

“Personally, I do not think these [types of exchanges] pose as great a threat as P2P exchangers that are traders from China, who are grouped on other exchanges. There is often an entire network of people seeking to convert cryptocurrency into fiat,” he added.

P2P exchanges on Telegram operate on a LocalBitcoins-like model, the publication notes. The intermediaries do not charge commissions, as Coinbase, Binance and other exchanges do.

Yanchevski said that buyers in such groups are often traders from countries where exchanges with lax KYC requirements operate. Users in this category typically have unrestricted access to the banking system, he noted.

The IRS is paying increasing attention to the cryptocurrency industry. At hearings held in June before the U.S. Senate Finance Committee, the agency’s commissioner Charles Rettig asked for additional powers to regulate cryptocurrencies.

The IRS also requested an increase in funding to bolster oversight of the crypto-asset sector. In 2022, the agency expects to receive an additional $32 million for this purpose.

In May, the U.S. Treasury clarified that the Biden administration’s proposal includes a requirement to transmit to the IRS information on cryptocurrency transactions worth $10,000 or more.