A Twitter/X post from John Reed Stark reminded me about an issue that may soon impact you if you are a professional gambler playing on one of the current US-facing sites such as Ignition or America’s Card Room (ACR). FINCEN (the Financial Crimes Enforcement Network) Form 8300 requires anyone in business–this includes individuals (sole proprietors), partnerships, LLCs, and corporations–to report cash transactions of more than $10,000. This law isn’t new, and like almost anything related to money laundering/FINCEN there are draconian penalties for not complying. What is new is that cryptocurrency is considered “cash” for this purpose under Section 6050I of the Infrastructure Act (which passed in November 2021). This section of the law takes effect on January 1, 2024.
Form 8300 requires you to inform FINCEN (or the IRS if you’re not subject to electronic filing rules) within 15 days of any transaction of more than $10,000:
Who must file. Each person engaged in a trade or business who, in the course of that trade or business, receives more than $10,000 in cash in one transaction or in two or more related transactions, must file Form 8300. Any transactions conducted between a payer (or its agent) and the recipient in a 24-hour period are related transactions. Transactions are considered related even if they occur over a period of more than 24 hours if the recipient knows, or has reason to know, that each transaction is one of a series of connected transactions.
This would include deposits onto gambling websites and withdrawals. It would include two $5,500 transactions if you deliberately split your withdrawal into two transactions or if the gambling website splits the transaction into two. (If you are outside of the United States when the entirety of the transaction occurs you are generally exempt.)
Today’s form doesn’t have a place for cryptocurrency, but I would expect that to be remedied by the end of the year (the last version of the form is dated August of 2014). Form 8300 can be paper-filed or electronically filed on the BSA efile system. (NOTE: Beginning January 1, 2024, if you are required to efile other information returns such as W-2s or 1099s, you will be required to efile Form 8300.)
While efforts exist in Congress to repeal the new Section 6050I, it’s highly unlikely these efforts will come to fruition. Indeed, very little of substance has come out of this Congress; given the political divide in the country, expect this law to be in force in five months. If you’re a professional gambler doing large cryptocurrency transactions (or, for that matter any business that accepts cryptocurrency) you will have more work ahead of you in the new year.