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Bitcoin and all of the other alt-coins are numbers on a screen. Few people pay taxes on them, and few places treat them as a real asset or fungible currency. W

Bitcoin and all of the other alt-coins are numbers on a screen. Few people pay taxes on them, and few places treat them as a real asset or fungible currency. Why then, do the authorities in the US and China aggressively pursue those people who ("steal", "lose") the coins of their depositors? Big Vern, Karpeles, Pirate@40, just to name a few. Sure, these guys lost people's coins. But I was there back then. It was all wild west stuff. Buyer beware. How can the government arrest someone for stealing an asset that doesn't really exist? Would they arrest someone who stole water from my pool? Edit: I don't know why I bother commenting here. A downvote without counterpoint? What do you gain from that? Grapple with my assertions with evidence. If you don't, it will just become even more of an echo chamber.

JumpCrisscross 9y ago
> Few people pay taxes on [their Bitcoin holdings] This is tax fraud. > How can the government arrest someone for stealing an asset that doesn't really exist? “Buyer beware” doesn’t exempt someone from fraud statutes. Honest services fraud is broadly defined in most jurisdictions to include any economic activity. > Would they arrest someone who stole water from my pool? Yes. At the very least, the perpetrator would have trespassed. Disclaimer: I am not a lawyer. This is not legal nor tax advice. Don’t commit fraud.
- quuquuquu 9y ago
  Have I committed fraud when I steal your World of Warcraft gold? Yes. Should I pay tax on that gold when I sell it for cash? Yes. Will the police help you when you call them to report it? I highly, HIGHLY doubt it. It's easy to put your head in the sand and just say "yeah that guy committed a crime", but in reality, enforcement is really a lot more nuanced than that. So like forgive me if I think it's a waste of tax money for Bharara and the courts and the police to go after Big Vern, while the Equifax guys are not pre-emptively detained while a fine is calculated.
  - JumpCrisscross 9y ago
    > Will the police help you when you call them to report it? I highly, HIGHLY doubt it With honest-services and securities fraud, the police are generally there to document, not enforce. If someone stole your WoW gold and you sued, you'd almost certainly have a case. If I were your lawyer (I'm not a lawyer), I'd send a letter to the relevant tax authorities and attorneys general, as a point of leverage during settlement talks. (This is not uncommon in lawsuits-- TL; DR No, one does not always get caught. I won't say I've always been faithful to every city's open-carry alcohol laws. But when you break such laws (a) it's still breaking the law which (b) exposes you to more than just the government. > So like forgive me if I think it's a waste of tax money for Bharara and the courts and the police to go after Big Vern, while the Equifax guys are not pre-emptively detained while a fine is calculated You're forgiven for having an opinion? I still disagree. We know there was criminal conduct on behalf of Big Vern. Not yet Equifax. Though on a higher level I agree, since ordinary people were harmed by Equifax. My sympathies for people who lose money in Bitcoin fraud is less, though I think that's a function of familiarity with the system.
    - quuquuquu 9y ago
      I did some Googling. WoW gold theft results in Blizzard suggesting you open a support ticket, despite the fact that WoW gold, like bitcoin, has unofficial street value. I will do more digging but I don't know if anyone has gone to the police for WoW gold theft. I'm not sure why WoW gold is treated differently from Bitcoin, which is apparently an honest to god bonafide US security in the eyes of the law. Re: your point about not always getting caught, then it sounds like we have an unequal application of the law/enforcement problem. Which I suppose is the crux of my entire argument. Why are we going after Big Vern when there are more pressing crimes to deeply investigate? I even used his exchange and I literally don't care. The coins were numbers to me, not dollars. Re: Equifax, plenty of suspected criminals are detained for years before any criminality is proven. Just look at all the pre-trial detentions on Rikers Island in NYC. You have young kids being accused of marijuana possession or etc, suspected trespassing, and then they don't go before a judge for many many months. Whereas with Equifax, you basically have smoking gun stock trade proof and admissions of guilt. It can therefore only be true that the reason an interrogation of these Equifax officials has not occured, is because the law/enforcement is being applied unequally.
- kwelstr 9y ago
  > Few people pay taxes on [their Bitcoin holdings] >>This is tax fraud. It is not; you only have a tax liability when you cash out, not when you hold, you could cash out and have a gain or have a loss and you need to reflect that on your income tax for that year.
  - JumpCrisscross 9y ago
    > It is not; you only have a tax liability when you cash out, not when you hold It depends [1]. If you receive the Bitcoins for goods or services, they are taxed as income. If you hold them as capital assets, the IRS won't tax you for holding, though your state or local jurisdiction may. Either way, not reporting those holdings is tax fraud. [1] https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Tax-Tips-for-Bitcoin-and-Virtual-Currency/INF29402.html https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Tax... Disclaimer: I am not a lawyer nor a CPA. This is not legal nor tax advice.
  - freeloop2 9y ago
    Anytime you trade one cryptocurrency for another, you also are taxed
  - AlexCoventry 9y ago
    You are mistaken, and your advice has the potential to severely harm people who take it. The IRS has been very explicit that, as with all barter, they want their slice and are entitled to it under law. The details are in their 2014 guidance, which you should read carefully if you're messing with cryptocurrency without competent legal or tax advice. https://www.irs.gov/pub/irs-drop/n-14-21.pdf https://www.irs.gov/pub/irs-drop/n-14-21.pdf
swfsql 9y ago
It's correct it's just numbers in the screen. But this is not to say we can't abstract anything form it, or it's worthless. After all, the internet and yourself are "just stuff flying around".
- quuquuquu 9y ago
  Child porn is a crime committed via Internet. It is vigorously prosecuted. Identity theft is a crime committed via Internet. It is lazily prosecuted. Stock fraud ("securities" fraud) is a crime that is also vigorously prosecuted. Bitcoin and alt coins, just like WoW gold, are not stocks. Therefore how can the state say Big Vern is committing securities fraud, and that we should spend millions of dollars attempting to "bring him to justice"? EDIT: Correct, I agree, but this occured in 2014 and would therefore be retroactive application of the law. From what I remember, we were operating in a complete and total vacuum. Big Vern's only mistake was being born a US citizen. If he was Russian, he would be a free man.
  - swfsql 9y ago
    I didn't comment exactly on THAT, only on your first points. Anyway, I actually believe Bitcoin is not private property to begin with. But I still think contracts are legally enforçable.
    - quuquuquu 9y ago
      I apologize, that's tunnel vision on my part from other comments XD I don't really understand what contract there is to legally enforce. Say I send some bits to Big Vern's site. One day, the bits aren't there anymore. If it was a legally incorporated real bank, and my bits represented real dollars or Euros or etc, then I would be fuming pissed and would be suing. But Big Vern did not run a site with any express guarantees, and I did not send him any legal tender. So we were effectively operating in a legal vacuum. One time I left my car at a repair shop. All the cars they had in the lot were stolen. The police didn't arrest the shop owner for negligence. They just went and tried to find the thieves.
  - 9y ago

JumpCrisscross 9y ago

> Few people pay taxes on [their Bitcoin holdings] This is tax fraud. > How can the government arrest someone for stealing an asset that doesn't really exist? “Buyer beware” doesn’t exempt someone from fraud statutes. Honest services fraud is broadly defined in most jurisdictions to include any economic activity. > Would they arrest someone who stole water from my pool? Yes. At the very least, the perpetrator would have trespassed. Disclaimer: I am not a lawyer. This is not legal nor tax advice. Don’t commit fraud.

quuquuquu 9y ago
Have I committed fraud when I steal your World of Warcraft gold? Yes. Should I pay tax on that gold when I sell it for cash? Yes. Will the police help you when you call them to report it? I highly, HIGHLY doubt it. It's easy to put your head in the sand and just say "yeah that guy committed a crime", but in reality, enforcement is really a lot more nuanced than that. So like forgive me if I think it's a waste of tax money for Bharara and the courts and the police to go after Big Vern, while the Equifax guys are not pre-emptively detained while a fine is calculated.
- JumpCrisscross 9y ago
  > Will the police help you when you call them to report it? I highly, HIGHLY doubt it With honest-services and securities fraud, the police are generally there to document, not enforce. If someone stole your WoW gold and you sued, you'd almost certainly have a case. If I were your lawyer (I'm not a lawyer), I'd send a letter to the relevant tax authorities and attorneys general, as a point of leverage during settlement talks. (This is not uncommon in lawsuits-- TL; DR No, one does not always get caught. I won't say I've always been faithful to every city's open-carry alcohol laws. But when you break such laws (a) it's still breaking the law which (b) exposes you to more than just the government. > So like forgive me if I think it's a waste of tax money for Bharara and the courts and the police to go after Big Vern, while the Equifax guys are not pre-emptively detained while a fine is calculated You're forgiven for having an opinion? I still disagree. We know there was criminal conduct on behalf of Big Vern. Not yet Equifax. Though on a higher level I agree, since ordinary people were harmed by Equifax. My sympathies for people who lose money in Bitcoin fraud is less, though I think that's a function of familiarity with the system.
  - quuquuquu 9y ago
    I did some Googling. WoW gold theft results in Blizzard suggesting you open a support ticket, despite the fact that WoW gold, like bitcoin, has unofficial street value. I will do more digging but I don't know if anyone has gone to the police for WoW gold theft. I'm not sure why WoW gold is treated differently from Bitcoin, which is apparently an honest to god bonafide US security in the eyes of the law. Re: your point about not always getting caught, then it sounds like we have an unequal application of the law/enforcement problem. Which I suppose is the crux of my entire argument. Why are we going after Big Vern when there are more pressing crimes to deeply investigate? I even used his exchange and I literally don't care. The coins were numbers to me, not dollars. Re: Equifax, plenty of suspected criminals are detained for years before any criminality is proven. Just look at all the pre-trial detentions on Rikers Island in NYC. You have young kids being accused of marijuana possession or etc, suspected trespassing, and then they don't go before a judge for many many months. Whereas with Equifax, you basically have smoking gun stock trade proof and admissions of guilt. It can therefore only be true that the reason an interrogation of these Equifax officials has not occured, is because the law/enforcement is being applied unequally.
kwelstr 9y ago
> Few people pay taxes on [their Bitcoin holdings] >>This is tax fraud. It is not; you only have a tax liability when you cash out, not when you hold, you could cash out and have a gain or have a loss and you need to reflect that on your income tax for that year.
- JumpCrisscross 9y ago
  > It is not; you only have a tax liability when you cash out, not when you hold It depends [1]. If you receive the Bitcoins for goods or services, they are taxed as income. If you hold them as capital assets, the IRS won't tax you for holding, though your state or local jurisdiction may. Either way, not reporting those holdings is tax fraud. [1] https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Tax-Tips-for-Bitcoin-and-Virtual-Currency/INF29402.html https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/Tax... Disclaimer: I am not a lawyer nor a CPA. This is not legal nor tax advice.
- freeloop2 9y ago
  Anytime you trade one cryptocurrency for another, you also are taxed
- AlexCoventry 9y ago
  You are mistaken, and your advice has the potential to severely harm people who take it. The IRS has been very explicit that, as with all barter, they want their slice and are entitled to it under law. The details are in their 2014 guidance, which you should read carefully if you're messing with cryptocurrency without competent legal or tax advice. https://www.irs.gov/pub/irs-drop/n-14-21.pdf https://www.irs.gov/pub/irs-drop/n-14-21.pdf

swfsql 9y ago

It's correct it's just numbers in the screen. But this is not to say we can't abstract anything form it, or it's worthless. After all, the internet and yourself are "just stuff flying around".

quuquuquu 9y ago
Child porn is a crime committed via Internet. It is vigorously prosecuted. Identity theft is a crime committed via Internet. It is lazily prosecuted. Stock fraud ("securities" fraud) is a crime that is also vigorously prosecuted. Bitcoin and alt coins, just like WoW gold, are not stocks. Therefore how can the state say Big Vern is committing securities fraud, and that we should spend millions of dollars attempting to "bring him to justice"? EDIT: Correct, I agree, but this occured in 2014 and would therefore be retroactive application of the law. From what I remember, we were operating in a complete and total vacuum. Big Vern's only mistake was being born a US citizen. If he was Russian, he would be a free man.
- swfsql 9y ago
  I didn't comment exactly on THAT, only on your first points. Anyway, I actually believe Bitcoin is not private property to begin with. But I still think contracts are legally enforçable.
  - quuquuquu 9y ago
    I apologize, that's tunnel vision on my part from other comments XD I don't really understand what contract there is to legally enforce. Say I send some bits to Big Vern's site. One day, the bits aren't there anymore. If it was a legally incorporated real bank, and my bits represented real dollars or Euros or etc, then I would be fuming pissed and would be suing. But Big Vern did not run a site with any express guarantees, and I did not send him any legal tender. So we were effectively operating in a legal vacuum. One time I left my car at a repair shop. All the cars they had in the lot were stolen. The police didn't arrest the shop owner for negligence. They just went and tried to find the thieves.
- 9y ago