30 ms·

Coinbase and the IRS

276 points by barmstrong 10y ago

RichardHeart 10y ago
tldr; CEO: "Coinbase and the IRS have (I believe) a shared goal to ensure all U.S. customers pay their taxes. I believe a good option would be to use the same third party reporting mechanism that brokerage firms like Fidelity and Charles Schwab use today: the 1099-B form. We’d ideally like to see that structure applied evenly to all companies in the industry, but even if we’re required to go first, we’re ready to implement 1099-B reporting. With this potential solution, Coinbase (and other virtual currency exchanges) would issue a 1099-B at the end of the year to all U.S. customers, and send a copy to the IRS. This would make it easy for users of virtual currency to pay their taxes without violating their privacy."
- deleted 10y ago
  [deleted]
em3rgent0rdr 10y ago
These IRS witch hunts do little but inspire FUD about bitcoin, thus hampering widespread acceptance, and keeping the US financial system in a bygone era.
- drvdevd 10y ago
  Also, is there any idea about how much money the IRS could possibly recover through bitcoin? Is bitcoin even a significant source of loss for the IRS as compared to say, cash?
  - the_mitsuhiko 10y ago
    Large cash transactions require reporting so I assume that it's not a huge deal to confiscate there.
    - drvdevd 10y ago
      I was thinking more along the line of the many smaller transactions, e.g.: unreported cash tips, that the IRS loses money on each year.
      - the_mitsuhiko 10y ago
        Surely cash tips up to a level are tax excempt.
        drvdevd 10y ago
        Agreed. But from what I recall having worked in restaurants, etc, the IRS does take steps to encourage reporting of any cash wages by pressuring employers to notify their employees of that obligation. So it must be considered a signifcant source of taxable income to them. But of course thats just one example of possible cash income...
        aianus 10y ago
        No, they're not. Legally, you have to declare all tips that you earn.
        the_mitsuhiko 10y ago
        TIL. They are tax excempt where I live. However it looks like in that case it's even less of an issue because seems like the employer is required to report this for calculating medicare contributions anyways if I understand this correctly.
        aianus 10y ago
        It would be silly IMO for the taxman to officially discriminate against (poorer!) dishwashers vs. waiters in the same restaurant.
        URSpider94 10y ago
        If you live in the USA, then they are not tax exempt. They may be exempt from state income tax, but not Federal. All income, whether reported or not, whether cash or not, even barter or in-kind income, is taxable. That said, you have to make a personal decision on what level is worth tracking, and the IRS has to decide how aggressively it wants to audit.
  - deleted 10y ago
    [deleted]
  - chris11 10y ago
    I'd say one advantage of bitcoin is the lack of reporting requirements if you wanted to move money without letting the IRS know. So I could see how bitcoin could be a loss for the IRS.
    - drvdevd 10y ago
      Right, but the IRS has already classified bitcoin and provided guidance as to reporting requirements [1]. This situation isn't much different to cash wages. You can in theory not report any of it, but then you're breaking essentially the same law. My question is: don't losses from unreported cash wages vastly outnumber losses from unreported virtual currencies and isn't that likely to remain the case for the forseeable future? With this sort of action, is the IRS signaling a belief that virtual currencies will replace cash for average citizens in the near future? [1] https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan...
      - jsjohnst 10y ago
        I'm not sure there is the massive "losses from unreported cash wages" you seem to imply there is. There's two main forms of "cash wages" in the US. One being wait staff, the other being "under the counter pay" to workers, generally labor intensive. Wait staff who regularly under report their tips are easily identified by the IRS. In the second case, these generally aren't well paid jobs (thus wouldn't generate much, if any, tax revenue).
        vajrabum 10y ago
        There's underreporting and tax evasion in almost any business which can be conducted on a cash basis. I know of a heating air-conditioning contractor (now deceased I believe) who regularly got customers to write checks directly out to him and take those to a check cashing business. He was very clear he was doing this to evade taxes.
        EdHominem 10y ago
        They aren't implying there are massive losses. They implied that the losses from cash, whatever they are, would massively outnumber the losses from cryptocurrencies. (And thus that cryptocurrency-focused reforms are missing the point.)
ChuckMcM 10y ago
I think you are fighting the good fight Brian! In tin hat mode, its possible that the subpoena is actually being driven by the justice department not the IRS. As you point out there are a number of less invasive ways of insuring tax compliance but there are not better ways for unwrapping large number of bitcoin transactions involved in ransomware or other extortion or criminal activity. We saw from the MtGox fiasco that when their entire transaction record for all clients was analyzed it identified not only internal corruption but a variety of schemes being used to manipulate or defraud. Let's assume that Justice has the full transaction records for one or more of the non-US exchanges, by adding all of your records to the mix it would give them the visibility they need to unwind a lot of stuff. As I understand it, when you make the motion to quash you can compel them to tell you exactly how they were going to use the data. Don't let them be evasive on that point.
sneak 10y ago
They talk about having "invested" in the tremendous waste of time and effort that is "compliance", simply to enforce ridiculous jurisdictional fiefdoms' opinions about who you can or can't send your money to. Imagine a world where this terrible waste weren't mandated by the men with guns. Imagine a world where cryptocurrency executives didn't try to spin this huge coerced waste as a positive. This is the reason cryptocurrency was invented. Shapeshift is the right direction. Coinbase is the wrong one.
- icebraining 10y ago
  And when I start getting paid in Dogecoin, I'm sure Shapeshift will be very useful. Right now, I'm paid in government controlled currency, and I don't see why efforts to get people to trade it for cryptocurrency shouldn't be applauded by cryptocurrency enthusiasts.
sneak 10y ago
I offer a counterpoint: Taxation is theft, and cooperation with government tax collection authorities is unjust and immoral, even if a vast majority of those taxes collected weren't being spent on tools and research for more effective mass murder. Of course we know in the US that they are, so that's a double whammy of sorts. How can that be "the good fight", if each nonviolent person recognizes their own personal obligation to hinder improving the effectiveness or efficiency of collection of taxes for the war machine in every possible manner?
- nightfly 10y ago
  Public schools and roads are nice.
  - jeremyt 10y ago
    Public schools are not nice, in general. That's why anyone with any money at all sends their kids to private school.
    - whyenot 10y ago
      I didn't realize UC Berkeley was a private school.
      - jeremyt 10y ago
        See, I added, "in general", because I knew somebody was going to come behind me and give one anecdotal reference to a good public school. Yes, there are some good public colleges, and a whole lot of crappy public colleges. Yes, there are a few good public secondary schools and a whole lot of really awful ones.
      - withdavidli 10y ago
        same on what jeremy said. he specifically meant in general. not only did you pick a top ranked school as an example, but chose the #1 ranked public school as a representation of public schools in general. i went to 8 schools before graduating high school. ranging qualities really depends on neighborhoods' wealth, unless there's a magnet/charter type school.
divbit 10y ago
I used bitcoin quite heavily in 2016 through the 'shift' card that coinbase offers, and I think I'm going to hold off on further use in general until tax stuff is more clear / straightforward - I've made an effort to pay the bitcoin taxes correctly in previous years, but not personally being an accountant, had to hire one to check all the stuff (I'm not super rich, so this is a little bit annoying). The point of this comment is that I think it is a good thing coinbase is trying to standardize some reporting method - I also agree with the '1099 for each cup of coffee bought with bitcoin' seems a little bit much...
- barmstrong 10y ago
  We make it as easy as we can with the cost basis report https://support.coinbase.com/customer/portal/articles/1496488-how-do-i-report-taxes- https://support.coinbase.com/customer/portal/articles/149648...
  - divbit 10y ago
    Thanks - yeah, that is pretty helpful.
joering2 10y ago
They estimate it might cost them up to $1MM. Question - if IRS lose, can they recover most of legal fees??
- eli 10y ago
  Very unlikely. https://en.m.wikipedia.org/wiki/American_rule_(attorney%27s_fees) https://en.m.wikipedia.org/wiki/American_rule_(attorney%27s_...
  - joering2 10y ago
    But it seems like frivolous lawsuit - its a blanket request for all data.
rlp10 10y ago
> For tax purposes, gains on property do not have a de minimis exemption like currency. This would mean that even the sale of a small amount of digital currency (say to purchase a cup of coffee) would generate a 1099 form. Does that mean you could write a program that created virtual currencies and transactions between them (along with their required 1099 forms) in order to troll the IRS by submitting TBs of data?
- throwaway5752 10y ago
  You could do a lot of things, but antagonizing the IRS would not be a smart one.
beardog 10y ago
This is a good move for Coinbase, i'm glad they are defending their users. They are right that it is overly broad. I don't see how IP addresses and customer support transcripts are a matter for the IRS.
- hawkice 10y ago
  IP addresses could help them identify people trying to get away with smurfing by setting up multiple accounts [see: http://www.investopedia.com/terms/s/smurf.asp http://www.investopedia.com/terms/s/smurf.asp], and customer support for banking is typically about reconciliation -- if coinbase has any mutable records in their databases (likely) that'd be the only place to find the original information -- if they don't get it in the first court order they won't have a super good reason to ask for it later (a judge will ask them why they think the new order is needed, and if they suspect the information supplied to be false -- if they ask for it immediately it can be used to create a more detailed picture of how certain accounts developed). Not saying the order is justified, merely that the people asking for it want it for actual reasons.
vosper 10y ago
Offtopic, but why would a CEO make an important (for his company and customers) post like this on medium.com? Why isn't this hosted on blog.coinbase.com or something? I know that Medium is a popular platform these days, but I think it weakens the branding of any company or individual to be posting there.
- free2rhyme214 10y ago
  I don't think Medium weakens Coinbase's brand. Mishandling something like an IRS subpoena is a lot more fatal.
  - vosper 10y ago
    Of course mishandling the IRS would be worse, but I wasn't comparing the brand damage of the two actions (though you seem to contradict yourself by saying "doesn't weaken" and then "a lot more fatal"). I was making a general claim that hosting important information or communication about your company off-domain weakens the brand of the company. I could imagine a worst-case scenario where putting great content on Medium actually harms your SEO, and you end up with Medium outranking your business in search results that you would really want going to your domain.
- wcchandler 10y ago
  Seriously? As a user of their service I'm glad to see them offload an extraneous expense to someplace that's better equipped for the service provided. After evaluating this situation further, I felt further comfort in knowing there's an added level of authenticity to the post. They could have signed it with a GPG key which would've been nice, but not only would their core site have needed to have been comprised but also their medium account in order to deliver this news. Should this have been a security incident I would have been comforted by these additional ID confirmations.
  - vosper 10y ago
    Most companies don't regard brand-building and SEO as an extraneous expense. I'm sure Coinbase has spent their share of money on promotion. I'm also sure they could host a blog, or have someone else do it for them (does Medium have a self-hosted or custom domain option?)
hawkice 10y ago
Bitcoin is a technology defined by its community. That's why they made a public comment about a pending legal issue - to defend their reputation within that community. A community that, for instance, leads a HN discussion to be >50% arguments about whether government of any type is a bad idea. They'd get even more customers of they refused to comply with any subpoena, but then they'd be unable to interface with modern banking.
- drvdevd 10y ago
  Good point. Coinbase by nature has to walk a line between two communities very much at odds with each other. There is an onus on the bitcoin community to get more people to accept bitcoin directly as payment. Companies like coinbase could help that process along in theory, but they'll have to keep walking this line while they grow.
- polemic 10y ago
  > They'd get even more customers of they refused to comply with any subpoena. Dubious. They might capture more of an existing niche market. Coinbase is aiming to expand the market significantly to people don't see Bitcoin's murkiness as a feature. That is, the rest of us.
modeless 10y ago
Speaking as a Coinbase user I would love it if they could just send me a 1099. It would make filing my taxes a whole lot easier.
- scottcanoni 10y ago
  Coinbase offers a (beta) cost basis for taxes report via https://www.coinbase.com/reports https://www.coinbase.com/reports
- pmorici 10y ago
  At the end of the day unless you exclusively use Coinbase to handle your Bitcoin business they can't possibly know the correct cost basis for all your transactions. Kind of like if you transferred stocks from one brokerage to another. You are always going to have to do some amount of work.
aminok 10y ago
The income tax depends on throwing those who refuse to hand over a share of the currency they receive in private trade in prison, where they are kept in a small enclosure, and where they often develop mental illness and suffer from physical and sexual assault. It not only blatantly violates one's right to their own property, it necessitates the violation of privacy rights in order to enforce. It is a grotesque violation of human rights and should be abolished.
tga 10y ago
For some negative context on Coinbase, take a look at http://reddit.com/r/coinbase http://reddit.com/r/coinbase. It looks like, despite the shiny front and claims, they are still not a solid, trustworthy company, even though they play with a lot of others' money. In particular, the mechanics of their transactions are not obvious (e.g. long wait times), and their customer service is subpar, making some customers feel scammed, with no recourse.
- pmorici 10y ago
  People like to hate on Coinbase because they took a stance on the block size debate in the past that was at odds with powerful people in the Bitcoin world who also happened to control the main forums for discussing Bitcoin. I think most of the "problems" people have are just a thinly veiled attempt at a smear campaign. At this point they are the the standard in Bitcoin for what a trustworthy and ethical company should be. They have got to hold the record for longest period in Business w/o losing massive amounts of customer funds to fraud or theft.
  - NelsonMinar 10y ago
    Reddit is not a reliable place to discuss Bitcoin.
    - sayurichick 10y ago
      https://coin.dance https://coin.dance is a good site for data. There is a pro-blockstream agenda on reddit, and bitcointalk (theymos owns both). coin dance shows what % of users are running whatever fork, shows volume , transactions, node counts, etc. etc. Why does that matter? You can see the truth (data) for yourself rather than what people are saying/censoring.
  - chx 10y ago
    Given that Bitcoin isn’t the future of money — it’s either a Ponzi scheme or a pyramid scheme https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitcoin-isnt-the-future-of-money-its-either-a-ponzi-scheme-or-a-pyramid-scheme/ https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitco... it's somewhat hard to be "trustworthy" and "ethical". Are you rating the competing mob families on the trustworthy and ethical scale too?
galen211 10y ago
fwiw, Coinbase wouldn't be the first financial institution to challenge a John Doe Summons. The IRS issued one to UBS in 2008 (https://www.justice.gov/archive/tax/txdv08584.htm https://www.justice.gov/archive/tax/txdv08584.htm). UBS claimed it couldn't comply with the summons without breaking Swiss bank secrecy law, and the Dept of Justice ultimately came to an agreement directly with the Swiss government (under an existing tax treaty) to get the records it was seeking. Simultaneously, the IRS set up a voluntary disclosure program for Americans to pay a penalty on back taxes and avoid criminal prosecution. The amount of back taxes owed on bitcoin capital gains is probably less than the amount being sheltered by the Swiss in 2008, but it's not nothing.

276 points by barmstrong 10y ago

tldr; CEO: "Coinbase and the IRS have (I believe) a shared goal to ensure all U.S. customers pay their taxes. I believe a good option would be to use the same third party reporting mechanism that brokerage firms like Fidelity and Charles Schwab use today: the 1099-B form. We’d ideally like to see that structure applied evenly to all companies in the industry, but even if we’re required to go first, we’re ready to implement 1099-B reporting. With this potential solution, Coinbase (and other virtual currency exchanges) would issue a 1099-B at the end of the year to all U.S. customers, and send a copy to the IRS. This would make it easy for users of virtual currency to pay their taxes without violating their privacy."

deleted 10y ago
[deleted]

em3rgent0rdr 10y ago

These IRS witch hunts do little but inspire FUD about bitcoin, thus hampering widespread acceptance, and keeping the US financial system in a bygone era.

drvdevd 10y ago
Also, is there any idea about how much money the IRS could possibly recover through bitcoin? Is bitcoin even a significant source of loss for the IRS as compared to say, cash?
- the_mitsuhiko 10y ago
  Large cash transactions require reporting so I assume that it's not a huge deal to confiscate there.
  - drvdevd 10y ago
    I was thinking more along the line of the many smaller transactions, e.g.: unreported cash tips, that the IRS loses money on each year.
    - the_mitsuhiko 10y ago
      Surely cash tips up to a level are tax excempt.
      - drvdevd 10y ago
        Agreed. But from what I recall having worked in restaurants, etc, the IRS does take steps to encourage reporting of any cash wages by pressuring employers to notify their employees of that obligation. So it must be considered a signifcant source of taxable income to them. But of course thats just one example of possible cash income...
      - aianus 10y ago
        No, they're not. Legally, you have to declare all tips that you earn.
        the_mitsuhiko 10y ago
        TIL. They are tax excempt where I live. However it looks like in that case it's even less of an issue because seems like the employer is required to report this for calculating medicare contributions anyways if I understand this correctly.
        aianus 10y ago
        It would be silly IMO for the taxman to officially discriminate against (poorer!) dishwashers vs. waiters in the same restaurant.
        URSpider94 10y ago
        If you live in the USA, then they are not tax exempt. They may be exempt from state income tax, but not Federal. All income, whether reported or not, whether cash or not, even barter or in-kind income, is taxable. That said, you have to make a personal decision on what level is worth tracking, and the IRS has to decide how aggressively it wants to audit.
- deleted 10y ago
  [deleted]
- chris11 10y ago
  I'd say one advantage of bitcoin is the lack of reporting requirements if you wanted to move money without letting the IRS know. So I could see how bitcoin could be a loss for the IRS.
  - drvdevd 10y ago
    Right, but the IRS has already classified bitcoin and provided guidance as to reporting requirements [1]. This situation isn't much different to cash wages. You can in theory not report any of it, but then you're breaking essentially the same law. My question is: don't losses from unreported cash wages vastly outnumber losses from unreported virtual currencies and isn't that likely to remain the case for the forseeable future? With this sort of action, is the IRS signaling a belief that virtual currencies will replace cash for average citizens in the near future? [1] https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan...
    - jsjohnst 10y ago
      I'm not sure there is the massive "losses from unreported cash wages" you seem to imply there is. There's two main forms of "cash wages" in the US. One being wait staff, the other being "under the counter pay" to workers, generally labor intensive. Wait staff who regularly under report their tips are easily identified by the IRS. In the second case, these generally aren't well paid jobs (thus wouldn't generate much, if any, tax revenue).
      - vajrabum 10y ago
        There's underreporting and tax evasion in almost any business which can be conducted on a cash basis. I know of a heating air-conditioning contractor (now deceased I believe) who regularly got customers to write checks directly out to him and take those to a check cashing business. He was very clear he was doing this to evade taxes.
      - EdHominem 10y ago
        They aren't implying there are massive losses. They implied that the losses from cash, whatever they are, would massively outnumber the losses from cryptocurrencies. (And thus that cryptocurrency-focused reforms are missing the point.)

ChuckMcM 10y ago

I think you are fighting the good fight Brian! In tin hat mode, its possible that the subpoena is actually being driven by the justice department not the IRS. As you point out there are a number of less invasive ways of insuring tax compliance but there are not better ways for unwrapping large number of bitcoin transactions involved in ransomware or other extortion or criminal activity. We saw from the MtGox fiasco that when their entire transaction record for all clients was analyzed it identified not only internal corruption but a variety of schemes being used to manipulate or defraud. Let's assume that Justice has the full transaction records for one or more of the non-US exchanges, by adding all of your records to the mix it would give them the visibility they need to unwind a lot of stuff. As I understand it, when you make the motion to quash you can compel them to tell you exactly how they were going to use the data. Don't let them be evasive on that point.

sneak 10y ago

They talk about having "invested" in the tremendous waste of time and effort that is "compliance", simply to enforce ridiculous jurisdictional fiefdoms' opinions about who you can or can't send your money to. Imagine a world where this terrible waste weren't mandated by the men with guns. Imagine a world where cryptocurrency executives didn't try to spin this huge coerced waste as a positive. This is the reason cryptocurrency was invented. Shapeshift is the right direction. Coinbase is the wrong one.

icebraining 10y ago
And when I start getting paid in Dogecoin, I'm sure Shapeshift will be very useful. Right now, I'm paid in government controlled currency, and I don't see why efforts to get people to trade it for cryptocurrency shouldn't be applauded by cryptocurrency enthusiasts.

sneak 10y ago

I offer a counterpoint: Taxation is theft, and cooperation with government tax collection authorities is unjust and immoral, even if a vast majority of those taxes collected weren't being spent on tools and research for more effective mass murder. Of course we know in the US that they are, so that's a double whammy of sorts. How can that be "the good fight", if each nonviolent person recognizes their own personal obligation to hinder improving the effectiveness or efficiency of collection of taxes for the war machine in every possible manner?

nightfly 10y ago
Public schools and roads are nice.
- jeremyt 10y ago
  Public schools are not nice, in general. That's why anyone with any money at all sends their kids to private school.
  - whyenot 10y ago
    I didn't realize UC Berkeley was a private school.
    - jeremyt 10y ago
      See, I added, "in general", because I knew somebody was going to come behind me and give one anecdotal reference to a good public school. Yes, there are some good public colleges, and a whole lot of crappy public colleges. Yes, there are a few good public secondary schools and a whole lot of really awful ones.
    - withdavidli 10y ago
      same on what jeremy said. he specifically meant in general. not only did you pick a top ranked school as an example, but chose the #1 ranked public school as a representation of public schools in general. i went to 8 schools before graduating high school. ranging qualities really depends on neighborhoods' wealth, unless there's a magnet/charter type school.

divbit 10y ago

I used bitcoin quite heavily in 2016 through the 'shift' card that coinbase offers, and I think I'm going to hold off on further use in general until tax stuff is more clear / straightforward - I've made an effort to pay the bitcoin taxes correctly in previous years, but not personally being an accountant, had to hire one to check all the stuff (I'm not super rich, so this is a little bit annoying). The point of this comment is that I think it is a good thing coinbase is trying to standardize some reporting method - I also agree with the '1099 for each cup of coffee bought with bitcoin' seems a little bit much...

barmstrong 10y ago
We make it as easy as we can with the cost basis report https://support.coinbase.com/customer/portal/articles/1496488-how-do-i-report-taxes- https://support.coinbase.com/customer/portal/articles/149648...
- divbit 10y ago
  Thanks - yeah, that is pretty helpful.

joering2 10y ago

They estimate it might cost them up to $1MM. Question - if IRS lose, can they recover most of legal fees??

eli 10y ago
Very unlikely. https://en.m.wikipedia.org/wiki/American_rule_(attorney%27s_fees) https://en.m.wikipedia.org/wiki/American_rule_(attorney%27s_...
- joering2 10y ago
  But it seems like frivolous lawsuit - its a blanket request for all data.

rlp10 10y ago

> For tax purposes, gains on property do not have a de minimis exemption like currency. This would mean that even the sale of a small amount of digital currency (say to purchase a cup of coffee) would generate a 1099 form. Does that mean you could write a program that created virtual currencies and transactions between them (along with their required 1099 forms) in order to troll the IRS by submitting TBs of data?

throwaway5752 10y ago
You could do a lot of things, but antagonizing the IRS would not be a smart one.

beardog 10y ago

This is a good move for Coinbase, i'm glad they are defending their users. They are right that it is overly broad. I don't see how IP addresses and customer support transcripts are a matter for the IRS.

hawkice 10y ago
IP addresses could help them identify people trying to get away with smurfing by setting up multiple accounts [see: http://www.investopedia.com/terms/s/smurf.asp http://www.investopedia.com/terms/s/smurf.asp], and customer support for banking is typically about reconciliation -- if coinbase has any mutable records in their databases (likely) that'd be the only place to find the original information -- if they don't get it in the first court order they won't have a super good reason to ask for it later (a judge will ask them why they think the new order is needed, and if they suspect the information supplied to be false -- if they ask for it immediately it can be used to create a more detailed picture of how certain accounts developed). Not saying the order is justified, merely that the people asking for it want it for actual reasons.

vosper 10y ago

Offtopic, but why would a CEO make an important (for his company and customers) post like this on medium.com? Why isn't this hosted on blog.coinbase.com or something? I know that Medium is a popular platform these days, but I think it weakens the branding of any company or individual to be posting there.

free2rhyme214 10y ago
I don't think Medium weakens Coinbase's brand. Mishandling something like an IRS subpoena is a lot more fatal.
- vosper 10y ago
  Of course mishandling the IRS would be worse, but I wasn't comparing the brand damage of the two actions (though you seem to contradict yourself by saying "doesn't weaken" and then "a lot more fatal"). I was making a general claim that hosting important information or communication about your company off-domain weakens the brand of the company. I could imagine a worst-case scenario where putting great content on Medium actually harms your SEO, and you end up with Medium outranking your business in search results that you would really want going to your domain.
wcchandler 10y ago
Seriously? As a user of their service I'm glad to see them offload an extraneous expense to someplace that's better equipped for the service provided. After evaluating this situation further, I felt further comfort in knowing there's an added level of authenticity to the post. They could have signed it with a GPG key which would've been nice, but not only would their core site have needed to have been comprised but also their medium account in order to deliver this news. Should this have been a security incident I would have been comforted by these additional ID confirmations.
- vosper 10y ago
  Most companies don't regard brand-building and SEO as an extraneous expense. I'm sure Coinbase has spent their share of money on promotion. I'm also sure they could host a blog, or have someone else do it for them (does Medium have a self-hosted or custom domain option?)

hawkice 10y ago

Bitcoin is a technology defined by its community. That's why they made a public comment about a pending legal issue - to defend their reputation within that community. A community that, for instance, leads a HN discussion to be >50% arguments about whether government of any type is a bad idea. They'd get even more customers of they refused to comply with any subpoena, but then they'd be unable to interface with modern banking.

drvdevd 10y ago
Good point. Coinbase by nature has to walk a line between two communities very much at odds with each other. There is an onus on the bitcoin community to get more people to accept bitcoin directly as payment. Companies like coinbase could help that process along in theory, but they'll have to keep walking this line while they grow.
polemic 10y ago
> They'd get even more customers of they refused to comply with any subpoena. Dubious. They might capture more of an existing niche market. Coinbase is aiming to expand the market significantly to people don't see Bitcoin's murkiness as a feature. That is, the rest of us.

modeless 10y ago

Speaking as a Coinbase user I would love it if they could just send me a 1099. It would make filing my taxes a whole lot easier.

scottcanoni 10y ago
Coinbase offers a (beta) cost basis for taxes report via https://www.coinbase.com/reports https://www.coinbase.com/reports
pmorici 10y ago
At the end of the day unless you exclusively use Coinbase to handle your Bitcoin business they can't possibly know the correct cost basis for all your transactions. Kind of like if you transferred stocks from one brokerage to another. You are always going to have to do some amount of work.

aminok 10y ago

The income tax depends on throwing those who refuse to hand over a share of the currency they receive in private trade in prison, where they are kept in a small enclosure, and where they often develop mental illness and suffer from physical and sexual assault. It not only blatantly violates one's right to their own property, it necessitates the violation of privacy rights in order to enforce. It is a grotesque violation of human rights and should be abolished.

tga 10y ago

For some negative context on Coinbase, take a look at http://reddit.com/r/coinbase http://reddit.com/r/coinbase. It looks like, despite the shiny front and claims, they are still not a solid, trustworthy company, even though they play with a lot of others' money. In particular, the mechanics of their transactions are not obvious (e.g. long wait times), and their customer service is subpar, making some customers feel scammed, with no recourse.

pmorici 10y ago
People like to hate on Coinbase because they took a stance on the block size debate in the past that was at odds with powerful people in the Bitcoin world who also happened to control the main forums for discussing Bitcoin. I think most of the "problems" people have are just a thinly veiled attempt at a smear campaign. At this point they are the the standard in Bitcoin for what a trustworthy and ethical company should be. They have got to hold the record for longest period in Business w/o losing massive amounts of customer funds to fraud or theft.
- NelsonMinar 10y ago
  Reddit is not a reliable place to discuss Bitcoin.
  - sayurichick 10y ago
    https://coin.dance https://coin.dance is a good site for data. There is a pro-blockstream agenda on reddit, and bitcointalk (theymos owns both). coin dance shows what % of users are running whatever fork, shows volume , transactions, node counts, etc. etc. Why does that matter? You can see the truth (data) for yourself rather than what people are saying/censoring.
- chx 10y ago
  Given that Bitcoin isn’t the future of money — it’s either a Ponzi scheme or a pyramid scheme https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitcoin-isnt-the-future-of-money-its-either-a-ponzi-scheme-or-a-pyramid-scheme/ https://www.washingtonpost.com/news/wonk/wp/2015/06/08/bitco... it's somewhat hard to be "trustworthy" and "ethical". Are you rating the competing mob families on the trustworthy and ethical scale too?

galen211 10y ago

fwiw, Coinbase wouldn't be the first financial institution to challenge a John Doe Summons. The IRS issued one to UBS in 2008 (https://www.justice.gov/archive/tax/txdv08584.htm https://www.justice.gov/archive/tax/txdv08584.htm). UBS claimed it couldn't comply with the summons without breaking Swiss bank secrecy law, and the Dept of Justice ultimately came to an agreement directly with the Swiss government (under an existing tax treaty) to get the records it was seeking. Simultaneously, the IRS set up a voluntary disclosure program for Americans to pay a penalty on back taxes and avoid criminal prosecution. The amount of back taxes owed on bitcoin capital gains is probably less than the amount being sheltered by the Swiss in 2008, but it's not nothing.