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Treasury Calls for Crypto Transfers over $10k to Be Reported to IRS
- rantwasp 5y agoOnce all the cryptos crash this will be a moot point. Also all cryptos are bad for the environment. The reporting should be for transfers less than 5$. /s
- trcarney 5y ago> Also all cryptos are bad for the environment How is a proof of stake crypto worse for the environment than what we are currently using to verify transactions?
- VietnamTom 5y agoThe /s at the end means that the previous statement is sarcasm.
- delecti 5y agoHow does mining work in proof of stake models? This isn't intended to be a gotcha, I genuinely don't know. I've mostly just heard the term "proof of stake" without much explanation, and the Wikipedia doesn't mention mining at all.
- kemonocode 5y agoThe specific details vary on the implementation, but the analogue to mining in a Proof-of-Stake system is this: newly minted coin is distributed as a reward to whomever wins the block validation "lottery" for a given block. A validator is required to lock up a certain amount of coin before they can start validating (their stake in the system) and based on the more coin you lock up/the longer you've been locking it up/any other variable depending on the implementation, the greater the chances you'll be selected as a given block's validator, and if consensus is achieved, you get your reward. If your node goes offline or collusion is detected, you get penalized by losing a part/all of your stake, again, depending on the exact implementation.
- trsohmers 5y agoBecause there is no mining at all... The reward for new blocks is given on what can be thought of as a lottery system to those that have coins staked, and the reward is proportional to the amount staked. Effectively, payouts go out to everyone in the form similar to interest paid out on a CD.
- kadoban 5y agoIn short, anyone with coins can put them in a special state (they're unspendable temporarily) in order to vote on which chain is correct. So you vote with your "stake" (coins) instead of with your computational power. I don't think it's called mining in PoS usually.
- ulzeraj 5y ago> In short, anyone with coins can put them in a special state You mean exchanges. People aren't going to run a node and risk to be punished for bad configuration or a power outage. They are going to deposit to managed staking at Coinbase and Binance which will be the biggest validators. Congratulations. You've just recreated the current financial system with central banks and whatnot.
- xur17 5y agoMaybe - ETH staking was specifically setup with incentives to encourage self hosting as much as possible (downtime penalties are tiny, especially if they only comprise a small portion of the network). There are some "decentralized" staking options that don't give over custody of your funds (the node operator only has enough control to run the node, doesn't actually have the ability to take your funds). And even with centralized exchanges, at least this system gives people a choice. I can choose to run my own Ethereum staking node. I can't choose to operate a bank / participate in the fed's central banking system.
- jtsiskin 5y agoWait until they hear about Monero and Zcash…
- headmelted 5y agoYou'd need to be pretty confident you haven't made a mistake in laundering your money through a privacy coin. And that the logic is sound enough that they haven't been compromised without your knowing (or ever will be in the future). Better you than me..
- arcticbull 5y agoYes, it's interesting how so many people are now willing to just "do crime" because crypto. Certainly speculate about doing crime. At the end of the day, if you're willing to commit crime there's a lot of options.
- pessimizer 5y agoIt worked for AirBnB and Uber.
- wmf 5y agoI think there are a lot of armchair Heisenbergs on the Internet whose comments should be viewed as a form of ancap fanfiction. Ransomware and adjacent stuff is the only notable exception.
- BitwiseFool 5y agoLook, all I want to do is avoid paying capital gains taxes on internet money that I earned with no effort. Is that so wrong?
- matheusmoreira 5y agoWhy wouldn't you want to avoid paying taxes if at all possible? Do you enjoy paying taxes?
- snigacookie 5y agoMakes sense. Can’t allow hackers to hold up everything for Bitcoin
- tylersmith 5y agoThis won't disallow that.
- frockington1 5y agoThis would only apply to law abiding US Businesses
- pbreit 5y agoHow is that going to work?
- toomuchtodo 5y agoExchange reporting requirements, existing fiat bank reporting infra, as well as https://www.chainalysis.com/ https://www.chainalysis.com/ and similar chain surveillance products. From experience, Chainalysis is already in use with government financial regulators and law enforcement.
- ska 5y agoSame as it does for non-crypto transactions I expect. If you deposit a 11k check in your bank it gets reported, for example.
- pbreit 5y agoSo if I “email” you 1 BTC how would that get reported?
- alwillis 5y agoThis is for businesses, not individuals.
- toomuchtodo 5y agoSo far. Individuals will eventually be included, considering currency reporting requirements apply to them. https://www.fincen.gov/sites/default/files/shared/CTRPamphlet.pdf https://www.fincen.gov/sites/default/files/shared/CTRPamphle...
- gruez 5y agoIsn't this already required, sort of? AFAIK you have to report fiat transfers exceeding $10k. If you're cashing out at an exchange, and you sell $10K of bitcoins and then transfer to your bank account, that transfer would have to be reported. I suppose this requirement would cover crypto-to-crypto trades, but most of the volume aren't on US exchanges so I doubt this would do much. edit: misunderstood FINCEN requirements, only cash transactions over $10k have to be reported
- lawnchair_larry 5y agoDoesn’t matter if it’s on a US exchange. If you’re a US person, and you move bitcoin from one wallet to another without cashing anything out, this is potentially a reportable event now. And if you fail to do so, the public ledger has cryptographic proof of your crime.
- noofen 5y agoHere's a solution, though I don't know how the IRS views this: 1) Buy "dirty" ETH through a KYC exchange like Coinbase 2) Send to tornado.cash 3) Wait a few days, remove from tornado.cash 4) You now have "clean" ETH uncorrelated with your identity 5) Use one of the many DeFi non-KYC exchanges to get whatever crypto you want The blockchain trail would just show that you sent to tornado.cash, and nothing after. This could be an interesting problem for US regulatory pariahs. Whether tornado.cash survives will determine the future of ETH. Is it a free, global exchange network? Or will it cripple under regulatory pressure? As the US continues to debase its currency (and regulatory institutions), it will not go down without a fight.
- RichardHeart 5y agoCool, it's being treated just like the USD is. And it's for businesses only. Just like the USD regulation.
- conchy 5y agoGovernments are awesome at fighting the last fight
- seibelj 5y agoThis is already required, even for person-to-person transactions. Coinbase, Gemini, and Kraken do this. However I find it highly unlikely people do this voluntarily or will do this now voluntarily. Tools like Tornado.cash make it easy to “warp” funds into Defi land and then back out later with plausible deniability.
- criddell 5y agoWhat are some non-criminal uses of tools like Tornado.cash?
- aazaa 5y ago> “As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on,” the Treasury Department said in a report on tax-enforcement proposals released Thursday. Nothing to see here. It's part of a pattern of explicitly stating that for regulatory purposes, Bitcoin works like a currency, but for tax purposes Bitcoin works like an asset.
- sandworm101 5y ago>> cryptoassets with a fair-market value Lol. Good luck defining a "fair" value for a cryptocurrency. The day the IRS goes after people trading currency A everyone will leap onto currency B, hammering the value of A. Nothing in that market if fair or logical.
- Pfhreak 5y agoIt's not hard at all, any reasonable group of people will say, "what was the price on coinbase (or equivalent) when you sold?"
- Majromax 5y agoThat's also the valuation to be used for tax reporting, since exchanging cryptocurreny is a deemed disposition for capital gains taxes.
- gruez 5y agoI think you're reading this wrong. They're not going after coins that have values of over $10,000 (eg bitcoin), they're going after any crypto transactions that have value over $10,000. So it doesn't matter whether you're trading 0.25 BTC or 25000 DOGE, they both have USD value of over $10,000 and have to be reported.
- dahfizz 5y ago"fair value" is just a financial term meaning "price traded on the open market"[1]. It makes no qualitative judgement about if that price is "fair" in the colloquial sense. [1] This is trivial to do with equities (top-of-book bid/ask prices are the fair). Currencies are a little trickier because your relationship with the exchange determines the quotes you see. Certainly, currency swaps do have a fair, but defining it is a little trickier.
- ajkdhcb2 5y agoThis makes using crypto so unworkable that it practically makes every user with large amounts a criminal. Well, based on the author's implications, not on the quote that just indicates it is payments to a business
- munk-a 5y agoMandatory reporting laws don't make all reporters criminal - they exist to combat money laundering and, honestly, due to the difficulties in tracking money laundering this is one area where "The innocent have nothing to hide" is much less terror inspiring. Whenever you make large purchases with cash these laws also kick into effect - it's just usually that the consumer isn't the one the government is relying on to do the reporting. Generally vendors (like car dealerships) and financial institutions (like banks) will carry out the burden of reporting. In the case of crypto currency (similar to the case of cash gifts) this reporting needs to be handled manually. Edit: Also excuse me - it looks like this will only apply to businesses in the current iteration - sorry about any confusion!
- ajkdhcb2 5y agoI mean that the manual record keeping and reporting is completely infeasible. Some traders I know in USA end up with hundreds of pages of records
- munk-a 5y agoI think that's a fair point, but, to contrast, most average folks will end up with maybe 6-12 transactions over their lifetime that result in mandatory reporting requirements. Largely depending on how many cars they purchase plus maybe four from buying a house, renoing the house, retiring to a smaller house and then passing away.
- tehwebguy 5y agoBusinesses file 8300 forms, not customers. The cost will still trickle down to customers but they won't suddenly be required to fill out these forms.
- wand3r 5y ago$10,000 makes absolutely no sense in this day and age. The Bank Secrecy Act was made in 1970 and 10k was >250k in todays dollars. It is borderline authoritarian to audit all transactions over 10k now.
- nrmitchi 5y ago> 10k was >250k in todays dollars Source? A basic inflation calculator tells me that 10k in 1970 is ~70k in 2021. Yes, that's more, but it's significantly less than 250k.
- DataDaoDe 5y agoThis made me wonder if inflation is enough to account for price increases. For instance, it could be the case - I don't know since I'm not an acquainted with the field/data - that the costs of important goods such as homes, cars, education, health care, etc. has increased more or less that what that 10k approx. 70k figure tells you. For instance, maybe its the case that for a generic 10k its worth 70k distributed over all goods and services, but for those that matter most maybe its 250k or 20k, I don't know. Does anyone know more about this topic? I think they use a basket of goods to calculate inflation, but how has that basket changed / been updated over time? Can any economist weigh in here?
- JorgeGT 5y agoYou are right. Inflation is usually computed by tracking the price of a "basket of goods". But this only makes sense in the short term and doesn't account for profound societal changes that technology, ideology, etc. brings to that basket. Consider this quote by Agatha Christie (1890-1976): I never thought I would be so poor as to not have live-in staff, or so Rich as to have a car.
- distortedsignal 5y agoI think you're referring to the CPI (https://en.wikipedia.org/wiki/Consumer_price_index https://en.wikipedia.org/wiki/Consumer_price_index), which, as I understand it, is a pretty hotly contested tool in econ/business circles today. If you want to check out the raw data for the CPI that the US Federal Reserve uses, check out https://fred.stlouisfed.org/ https://fred.stlouisfed.org/ - though I couldn't begin to recommend how to navigate that site.
- munk-a 5y ago* Puts on tinfoil hat * Considering how long it takes decisions like these to roll out is it likely that Tesla recently dropped coin based payments in part to avoid being a party to any upcoming money laundering investigations? Companies at all associated with large coin based payments have probably been in the know about this coming up for quite some time now.
- mywittyname 5y agoIf not this exact thing, then probably due to some regulatory issue. As tech people, we love to complain about the bone-headed tech decisions that business leaders make. I have every reason to believe that accountants have the same complaints about leadership. It wouldn't be surprising if accountants over on Gaaper News were facepalming over this decision.
- newacct583 5y agoSeems like a stretch. For sure, the used Tesla market is hot and they are much more liquid than any other automobile you can buy. Still, all the tracking of VIN-related transactions would seem to make cars an extraordinarily bad choice of good to use in a laundering operation.
- munk-a 5y agoI was actually just thinking of buying a fancy Tesla being an end node for laundered money - it's fancy and flashy so I'd imagine that if you've got a fair amount of cash sitting around snapping up one of those is attractive. Also, I do agree that it seems like a stretch, that claim is entirely baseless and speculative - hence the tin foil hat prefix.
- arcticbull 5y agoIMO its more likely nobody used bitcoin to pay for teslas and they didn't think it was worth their while to deal with all the headaches.
- elliekelly 5y agoDefinitely not. The compliance obligations for Tesla would be identical to someone purchasing a vehicle with cash which, AFAIK, is still an acceptable form of payment.
- rawtxapp 5y agoI (and I think many others in crypto) have always assumed that any money/crypto transactions at any exchanges in the US is reported to the government or will be reported sooner or later. So not that big of a news imo.
- SavantIdiot 5y agoGood. No one is really using any cryptocurrency for anything other than gambling or illegal activities. Prove me wrong: who in their right mind would spend any crypto any literally anything right now when the price is going up and down like crazy?
- privilegizer 5y agoPrivileged take. You probably get paid in or have access to the USD or EUR. Consider majority of the world doesn't. https://bitcoinmagazine.com/culture/check-your-financial-privilege https://bitcoinmagazine.com/culture/check-your-financial-pri...
- lottin 5y agoWhat privilege? Can't you be more explicit?
- danaris 5y agoI mean, I think they were pretty clear: the privilege of having ready access to/being paid in USD or EUR. (I don't particularly endorse their view, but I did think their statement was clear enough.)
- lottin 5y agoI don't see how having access/being paid in USD or EUR is a "privilege", or the connection this supposed privilege has with crypto-currencies.
- djrogers 5y agoThey were pretty clear - the privilege of having direct access to USD or EUR.
- SavantIdiot 5y agoIf you have the means to access bitcoin, and can withstand the radical swings in exchange rate, you are already privileged.