5 ms·

The sec will put a stop to these at some point. Probably sooner then later.

by brighton36 9y ago

beaner 9y ago
This is a global phenomenon, not just happening in the US. How would they enforce it?
- openasocket 9y ago
  > This is a global phenomenon, not just happening in the US. So are many other kinds of financial transactions, there hasn't been a real problem enforcing that. That's basically the IRS's job.
  - drcode 9y ago
    There hasn't been any problem enforcing it PRECISELY because cryptocurrency technology didn't previously exist.
    - openasocket 9y ago
      I don't think cryptocurrency helps. When we're talking about regulation, we're talking about tax and tax evasion, right? They don't need to be able to trace the source and destination of all financial transactions. They just need to notice the guy who's reporting to the IRS he's working at minimum wage is driving around in a brand new sports car. Which is the sort of thing that will show up during a random audit. So the problem with using cryptocurrency for unregulated or illicit things is the same for cash: you need to launder your money. So you make a small business that sells stuff using a cryptocurrency, and inflate the profits with your dirty cryptocurrency. But then during an audit you have to show your reported income is legitimate, with proper sales receipts and such. And then we've entered the exciting, fast-paced world of forensic accounting! It's all pretty much the same story as a cash-based business.
      - drcode 9y ago
        > we're talking about tax and tax evasion, right? I was talking about unregulated securities offerings, where I'd say cryptocurrency DOES help. However, I see OP invoked the IRS for some reason- I agree cryptocurrency doesn't help much for tax evasion.
        tudorconstantin 9y ago
        I'd say it can help. You can have 10 million USD in crypto and live a normal life: pay rent, drive a usual car, etc. Nobody will notice you, not even the IRS. If you want to move your funds in another country, you simply have to move yourself and spend them there. You can't do that with fiat.
        openasocket 9y ago
        $10M in unreported income, that you're actually spending? That's tax evasion. It's literally the IRS's job to catch that behavior. And at the end of the day if you're spending more than what you've reported as income to the IRS you will be caught.
        drcode 9y ago
        Right, you could live a middle class life for 20 years and then retire in Nicaragua or something with 10 million USD... ...or you could just pay 20% (or whatever) cap gains taxes and immediately use your 8 million USD in the US- That seems like the preferable option.
- Rmilb 9y ago
  Who has jurisdiction over a functioning DAO (Decentralized Autonomous Corporation/Organization)?
  - spikew 9y ago
    My understanding is that, absent an explicit supporting legal structure, it would default to being treated as a general partnership. Which means that partners in the DAO would be liable for its activities, and could be held responsible in whatever jurisdiction they happen to reside. Thus, instead of having no jurisdiction, it could be answerable to up to as many jurisdictions as it has members.
  - a3camero 9y ago
    I would ask: who wrote the DAO code? Someone (or several people) tested, developed and then deployed the code.
    - kolinko 9y ago
      So did the authors of Linux, and nobody is chasing them when a hack appears.
- davidgerard 9y ago
  Much the same way they enforce that every crypto exchange that wants to touch US dollars has to follow US KYC/AML rules. (And even then, banks can be touchy enough that you still can't get any ActualMoney out of Bitfinex.)
eiliant 9y ago
Probably only in the U.S, and even so probably hard to regulate anyways due to nature of cryptos
- openasocket 9y ago
  What about crypto currency makes it hard to regulate? The US Gov regulates all financial transactions, including face-to-face exchanges of cash, which is just as untraceable as crypto currency unless you have the budget to follow everyone around in spy vans (which the IRS does not).
  - Rmilb 9y ago
    Hard to regulate it because it has properties of a scarce commodity, currency, speech, token used to access service, plus more.
    - patio11 9y ago
      I think the founders of e-gold and LibertyReserve can tell you all about how hard it is for the US to regulate financial services conducted over the Internet using databases and tokens but over the planet by actual people and corporations.
      - mostlyskeptical 9y ago
        Apples and oranges. You can't sieze the server or domain name and turn off cryptocurrency. That guarantees that the back end keeps running. Then your only way is to regulate the usage of it, but when that can be obfuscated with things like tor, VPN, public WiFi, etc it's going to be incredibly difficult to do any sort of meaningful enforcement. Add decentralized 'smart contracts' such as what ethereum has and it can be run beginning to end in a fully decentralized way.
  - kolinko 9y ago
    1. You cannot shut it down 2. Unless you coordinate internationally, the nations with less regulation will launch successful businesses on it and dominate the market - imagine US having some crazy internet regulations in 1996, and other nations not having them. We'd be having this discussion now not on Hacker News, but on Новости хакера, or on 해커 뉴스. And US economy would be a few (dosen?) trillion dollars poorer.

The sec will put a stop to these at some point. Probably sooner then later.

beaner 9y ago

This is a global phenomenon, not just happening in the US. How would they enforce it?

openasocket 9y ago
> This is a global phenomenon, not just happening in the US. So are many other kinds of financial transactions, there hasn't been a real problem enforcing that. That's basically the IRS's job.
- drcode 9y ago
  There hasn't been any problem enforcing it PRECISELY because cryptocurrency technology didn't previously exist.
  - openasocket 9y ago
    I don't think cryptocurrency helps. When we're talking about regulation, we're talking about tax and tax evasion, right? They don't need to be able to trace the source and destination of all financial transactions. They just need to notice the guy who's reporting to the IRS he's working at minimum wage is driving around in a brand new sports car. Which is the sort of thing that will show up during a random audit. So the problem with using cryptocurrency for unregulated or illicit things is the same for cash: you need to launder your money. So you make a small business that sells stuff using a cryptocurrency, and inflate the profits with your dirty cryptocurrency. But then during an audit you have to show your reported income is legitimate, with proper sales receipts and such. And then we've entered the exciting, fast-paced world of forensic accounting! It's all pretty much the same story as a cash-based business.
    - drcode 9y ago
      > we're talking about tax and tax evasion, right? I was talking about unregulated securities offerings, where I'd say cryptocurrency DOES help. However, I see OP invoked the IRS for some reason- I agree cryptocurrency doesn't help much for tax evasion.
      - tudorconstantin 9y ago
        I'd say it can help. You can have 10 million USD in crypto and live a normal life: pay rent, drive a usual car, etc. Nobody will notice you, not even the IRS. If you want to move your funds in another country, you simply have to move yourself and spend them there. You can't do that with fiat.
        openasocket 9y ago
        $10M in unreported income, that you're actually spending? That's tax evasion. It's literally the IRS's job to catch that behavior. And at the end of the day if you're spending more than what you've reported as income to the IRS you will be caught.
        drcode 9y ago
        Right, you could live a middle class life for 20 years and then retire in Nicaragua or something with 10 million USD... ...or you could just pay 20% (or whatever) cap gains taxes and immediately use your 8 million USD in the US- That seems like the preferable option.
Rmilb 9y ago
Who has jurisdiction over a functioning DAO (Decentralized Autonomous Corporation/Organization)?
- spikew 9y ago
  My understanding is that, absent an explicit supporting legal structure, it would default to being treated as a general partnership. Which means that partners in the DAO would be liable for its activities, and could be held responsible in whatever jurisdiction they happen to reside. Thus, instead of having no jurisdiction, it could be answerable to up to as many jurisdictions as it has members.
- a3camero 9y ago
  I would ask: who wrote the DAO code? Someone (or several people) tested, developed and then deployed the code.
  - kolinko 9y ago
    So did the authors of Linux, and nobody is chasing them when a hack appears.
davidgerard 9y ago
Much the same way they enforce that every crypto exchange that wants to touch US dollars has to follow US KYC/AML rules. (And even then, banks can be touchy enough that you still can't get any ActualMoney out of Bitfinex.)

eiliant 9y ago

Probably only in the U.S, and even so probably hard to regulate anyways due to nature of cryptos

openasocket 9y ago
What about crypto currency makes it hard to regulate? The US Gov regulates all financial transactions, including face-to-face exchanges of cash, which is just as untraceable as crypto currency unless you have the budget to follow everyone around in spy vans (which the IRS does not).
- Rmilb 9y ago
  Hard to regulate it because it has properties of a scarce commodity, currency, speech, token used to access service, plus more.
  - patio11 9y ago
    I think the founders of e-gold and LibertyReserve can tell you all about how hard it is for the US to regulate financial services conducted over the Internet using databases and tokens but over the planet by actual people and corporations.
    - mostlyskeptical 9y ago
      Apples and oranges. You can't sieze the server or domain name and turn off cryptocurrency. That guarantees that the back end keeps running. Then your only way is to regulate the usage of it, but when that can be obfuscated with things like tor, VPN, public WiFi, etc it's going to be incredibly difficult to do any sort of meaningful enforcement. Add decentralized 'smart contracts' such as what ethereum has and it can be run beginning to end in a fully decentralized way.
- kolinko 9y ago
  1. You cannot shut it down 2. Unless you coordinate internationally, the nations with less regulation will launch successful businesses on it and dominate the market - imagine US having some crazy internet regulations in 1996, and other nations not having them. We'd be having this discussion now not on Hacker News, but on Новости хакера, or on 해커 뉴스. And US economy would be a few (dosen?) trillion dollars poorer.