Regulatory bodies in the United States have pushed for regulations in the cryptocurrency sector for quite some time now. In the process, many crypto-related products and entities have got official recognition, some were banned and asked to cease operations, and some remain in the gray area. The newest move from the regulatory bodies led to taxation on NFTs. It comes at a time when South Korea just freed NFTs from regulations. Since NFTs are in essence works of art, many people do not see the rationale behind regulating them. However, the argument from the authorities cites the monetary value linked with NFTs, and how some NFTs are sold at exorbitantly high prices. There is also a growing suspicion behind using NFTs to make illegal transactions.
With all the factors working at the same time, taxation on NFTs would have a complex effect on the NFT ecosystem. The H.R.3684 Infrastructure bill makes it mandatory for entities to report any NFT-related transaction worth $10,000 or more. It would mean that most of the NFT sales that now go unrecorded would be accounted for.
NFTs show immense potential in the crypto ecosystem. Many deem it to be the future of cultural preservation and dissemination. The need to put taxes on NFTs was discussed for a long time and now is finally in effect. How these new rules work out for the NFT sector is a matter of time and speculation.
