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Cryptocurrency Price Check: Taproot Activated; AMC Accepts Crypto

Bitcoin's Taproot upgrade is activated, while AMC says it will accept cryptocurrency and federal tax laws are adjusted to include crypto.

Cryptocurrency prices were mostly higher Monday as bitcoin's first upgrade since 2017 was recently activated and movie theater chain AMC  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report said it would accept crypto.

Bitcoin, the world's largest cryptocurrency, was up nearly 1% to $65,206.93, at last check. Ether, the cryptocurrency that runs on the Ethereum blockchain, climbed 1.8% to $4.686.92, while dogecoin was off nearly 1% to 26 cents.

Zak Killermann, fintech and crypto expert with Finder, noted that "crypto investors went through an exciting week, with market leaders BTC and ETH hitting fresh all time highs."

Bitcoin's Taproot upgrade was activated on Sunday, the first major upgrade in four years. 

"Taproot won’t have any immediate, large impact on the bitcoin network, but instead gives developers a plethora of new tools to improve security, privacy and scalability," Killermann said.

AMC Entertainment, the world's largest movie theater chain, began accepting bitcoin, ether and other cryptocurrencies for online payments on Friday.

"Think of Taproot as better equipping developers with tools to build the future of bitcoin, to make things like AMC accepting crypto for payments even easier down the line," Killermann said.

He added that not everyone is happy to accept crypto. Indonesia’s council of religious leaders deemed cryptocurrency haram — meaning its use is banned for Muslims.

Killermann said that Coinbase Global  (COIN)  Chief Executive Brian Armstrong in October proposed the launching of a singular federal crypto regulator in the U.S. but the country has been slow to act despite crypto’s growing popularity.

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President Joe Biden is scheduled to sign the Infrastructure Investment and Jobs Act on Monday and the legislation includes new tax reporting requirements for digital assets like cryptocurrencies and NFTs.

David Lesperance, managing partner of immigration and tax adviser Lesperance & Associates, said that "any final illusions that crypto was going to be treated differently than fiat currency ended" when the act cemented IRS Section 6050i of the federal tax code to crypto assets.

"Under the new rules," he said, "the transfer of digital assets above $10,000 in value will be treated like cash. And failure to report the identity of the person or business sending the payment for the digital asset is considered a felony offense."

Lesperance said the penalty for noncompliance is up to five years in prison.

"For those who think they will be cute and only transfer $9,999 worth of crypto," he said, "they should know that the 'smurfing' (aka structuring) rules also now apply to crypto."

Winston Ma, managing partner of CloudTree Ventures, said that last week Tencent Holdings sent every employee a 23rd anniversary NFT, which is the company's logo penguin.

Each of the 72,000 pieces was different and there are 1,000 special shapes.

Ma said that "as China’s largest gaming and internet company, Tencent’s  (TME) - Get Tencent Music Entertainment Group Sponsored ADR Class A Report NFT initiative has excited its user community." 

"NFT has been one of the most significant contributors to crypto adoption these days due to the involvement of creators and fans from the entertainment and gaming sectors," he said. 

"The interplay of gaming and NFT at Tencent’s platforms likely will make Tencent a major 'metaverse player.'"