8 ms·

> regularly providing any service effectuating transfers of digital assets I fail to see how this is a "privacy disaster." It looks like crypto brokers are goi

> regularly providing any service effectuating transfers of digital assets I fail to see how this is a "privacy disaster." It looks like crypto brokers are going to be treated like all other brokerages. Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099? Bitcoin is basically digital gold, and just like with gold, when you chose to buy or sell it the convenient way (eg. through an ETF instead of actual physical gold), it gets reported to everybody. You can always custody your own bitcoin and find partners to transact with directly and choose not to report it (like with physical gold), but, similar to physical gold, it will be extremely cumbersome, risky, and not worth your time to do so.

bgitarts 5y ago
Yes I call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government. Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099.
miracle2k 5y ago
The argument is that software developers or miners should not be treated as brokers, the later being akin to ISPs. If you are not going to engage with this argument, why bother?
- pembrook 5y ago
  Why argue against something that isn't actually in the legislation and is intended to scare people? Sure, if you bend over backwards and squint through one eye, you can contort yourself into the bad faith interpretation that developers will be treated as brokers--given they can engage in "transfers." But just because some entity can be considered to exist on the same "continuum" as crypto brokers, doesn't mean there isn't a clear division between them: https://rationalwiki.org/wiki/Continuum_fallacy https://rationalwiki.org/wiki/Continuum_fallacy One could also contort themselves into the assertion that convenience stores engage in transfers with "digital assets" (shifting credit via digitally created loans provided by Visa). Maybe I should publish an article saying this legislation will require 7-Eleven to report to the government every time you buy a twinkie? That'll really get some clicks!
  - RHSeeger 5y ago
    If this part is true > the proposal would seek to expand the definition of “broker” under section 6045(c)(1) of the Internal Revenue Code of 1986 to include anyone who is “responsible for and regularly providing any service effectuating transfers of digital assets” Then this appears to be false > something that isn't actually in the legislation Because "digital asset" is extremely broad and can easily be seen to cover things like video game inventory items. Is there a specific and detailed definition of "video asset" in the legislation?
    - JumpCrisscross 5y ago
      > Because "digital asset" is extremely broad and can easily be seen to cover things like video game inventory items I believe digital asset is a defined term in this legislation, though the quote doesn’t show any capitalisation.
      - cptskippy 5y ago
        That's the trouble with armchair legislation, no one bothers to read the text in full or understand the rules of the game. Most legislation has a dictionary to define the terms use within. These definitions are critical and updates to modify a definition without modifying the text can still have dramatic affect.
    - throwawaygh 5y ago
      See page 2435. Digital asset is defined as a digital representation of value recorded on a cryptographically distributed ledger or any similar technology. Practically, the Secretary and the courts will decide what this means. If you’re using in-game tokens to represent value and maintain a ledger, then sure, that could count. Which is good. why should it be possible to sidestep this law by creating a coin that is liquid and fungible and has etfs that track it but just happens to be used for in game purchases? That would be a silly and absurd loophole. If your in game currency is one-way, ie can’t be converted back to USD or any other assets, then it’s by (legal) definition not representation of value.
adolph 5y ago
Is it accurate to treat crypto facilities as equity brokers, or more like foreign currency exchanges? (Forex probably have their own reporting requirements, the question is about analogous service, not the reporting/privacy part.)
- pembrook 5y ago
  You probably don't want crypto transactions to be taxed like forex ones--unless you enjoy paying capital gains taxes before you've even sold: https://www.investopedia.com/terms/s/section-1256-contract.asp https://www.investopedia.com/terms/s/section-1256-contract.a...
  - dcolkitt 5y ago
    You're confused. Section 1256 applies to futures, not forex. Spot forex positions are taxed as ordinary capital gains under Section 988. Under very specific conditions a high-volume spot forex trader who never takes deliver may elect to be taxed under 1256, but that's completely optional. https://greentradertax.com/a-case-for-retail-forex-traders-using-section-1256g/ https://greentradertax.com/a-case-for-retail-forex-traders-u...
Communitivity 5y ago
> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099? Yes, I do. The IRS has slowly gathered power since 1913. Federal taxes were supposed to be short term and temporary, for war levies and such. Furthermore, the tax code within the constitution controverts itself: "all Duties, Imposts and Excises shall be uniform throughout the United States" - I.8.1
- api 5y ago
  I also must throw in the fact that IRS enforcement is disproportionately against "regular" people. The IRS doesn't go after enormous tax dodging billionaires very often, because going after some small business owner who mis-reported something or is trying to squeak something by is a better way to make quota. It results in yet another area where "laws are for little people."
  - deleted 5y ago
    [deleted]
zionic 5y ago
>Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Yes. Do you not? They have no right to that information. Why do so many in the "hacker" culture simp for the authority structure?
- capableweb 5y ago
  Be careful to attribute what you read on Hacker News to the entire "hacker culture". There are so many strongly held opinions I've never heard hackers say out loud in real life, most famous example must be about unions. I've heard zero hackers arguing that unions are bad in real life, while when the discussion comes up on Hacker News, the discussions seems to lean 50/50 on if unions are actually good or bad.
  - pksebben 5y ago
    I'm sure that isn't in any way Pinkerton astroturfing.
  - Matticus_Rex 5y ago
    Never knew any cypherpunk or cypherpunk-adjacent people, then?
- throwawaygh 5y ago
  Hi. I started hacking in 3rd grade in Apple Basic on an Apple IIe, published dozens of CVEs in my youth, helped start a hackerspace, build sota robots, etc etc etc. Pretty sure I get to call myself a hacker in any sense of that word. I’m a fan of KYC and paying taxes precisely because I’m a hacker and can immediately see how easy it is to hack civil society without those things. Also, this isn’t a forum for hackers in any definition of the word. It’s a public discussion forum run by and often for the benefit of a powerful and rich VC firm with substantial investments in alt fin tech speculation. are you sure you’re not the one simping?
  - 8ytecoder 5y ago
BurningFrog 5y ago
> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099? "Disaster" is a loaded word, but of course it would be a huge privacy improvement if they didn't!
dcolkitt 5y ago
> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099? This isn't like that at all. This would be like the government requiring Microsoft to KYC every single user of Excel, because people use their software to manage money.
- asdff 5y ago
  Not really, since excel can be used for everything from budgeting to making a list of your favorite movies. Cryptocurrency is for transactions and speculation, not much different than any other financial product when you shuck off the technical mumbo jumbo surrounding it. Why would that not be regulated?
  - nostrademons 5y ago
    Except it's not, if you look at the broader Ethereum & smart contract ecosystem. It's also for decentralized organizations (Aragon), incentivizing distributed storage (Filecoin/IPFS), pricing ad markets (Brave/BAT), supply chain management (VeChain), managing ownership (NFTs), and project governance and voting (many tokens). This is like saying "The Internet is for porn" because that's your only exposure to it. Yes, it's the most common early use - but it's very far from the only use.
    - 8note 5y ago
      Those things should be split out then, so there isn't a coin attached to it. If you couple things badly, you can end up with more responsibilities than you want
      - nostrademons 5y ago
        There has to be a coin attached to it because that is how you incentivize actors within the ecosystem to take certain actions (eg. "share their hard disk space" for FileCoin or "view ads" for BAT). The central premise of these projects is that humans make terrible decisions, markets make good decisions, so let's replace humans with markets whenever possible. Right now, some exec at Google determines how many ads you see on the Internet. The premise of Brave & BAT is that you decide whether you want to see ads on the Internet, you get compensated for viewing them, and if enough people decide the ads are not worth their time, they'll turn them off and drive the price of BAT up enough that people do want to view them. Right now, some exec at Amazon decides how much you pay for S3. The premise of FileCoin & IPFS is that lots of ordinary home users have spare hard drive space, and they should be able to be compensated for renting out that space to projects that need lots of distributed storage. The market price of FileCoin is that which equilibrates demand for storage with supply.
barnabee 5y ago
> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099? Yes. Clearly. My car doesn't keep an up to date record of my name and adress so it can report my position and speed to the authorities. Warrantless wiretapping is illegal in most (every?) form outside finance, and there's no justification for banks or investment firms being any different. Governments have a right to make laws, they don't have a right to continuously monitor every citizen to enforce them.
matheusmoreira 5y ago
> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Yes.

bgitarts 5y ago

Yes I call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government. Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099.

miracle2k 5y ago

The argument is that software developers or miners should not be treated as brokers, the later being akin to ISPs. If you are not going to engage with this argument, why bother?

pembrook 5y ago
Why argue against something that isn't actually in the legislation and is intended to scare people? Sure, if you bend over backwards and squint through one eye, you can contort yourself into the bad faith interpretation that developers will be treated as brokers--given they can engage in "transfers." But just because some entity can be considered to exist on the same "continuum" as crypto brokers, doesn't mean there isn't a clear division between them: https://rationalwiki.org/wiki/Continuum_fallacy https://rationalwiki.org/wiki/Continuum_fallacy One could also contort themselves into the assertion that convenience stores engage in transfers with "digital assets" (shifting credit via digitally created loans provided by Visa). Maybe I should publish an article saying this legislation will require 7-Eleven to report to the government every time you buy a twinkie? That'll really get some clicks!
- RHSeeger 5y ago
  If this part is true > the proposal would seek to expand the definition of “broker” under section 6045(c)(1) of the Internal Revenue Code of 1986 to include anyone who is “responsible for and regularly providing any service effectuating transfers of digital assets” Then this appears to be false > something that isn't actually in the legislation Because "digital asset" is extremely broad and can easily be seen to cover things like video game inventory items. Is there a specific and detailed definition of "video asset" in the legislation?
  - JumpCrisscross 5y ago
    > Because "digital asset" is extremely broad and can easily be seen to cover things like video game inventory items I believe digital asset is a defined term in this legislation, though the quote doesn’t show any capitalisation.
    - cptskippy 5y ago
      That's the trouble with armchair legislation, no one bothers to read the text in full or understand the rules of the game. Most legislation has a dictionary to define the terms use within. These definitions are critical and updates to modify a definition without modifying the text can still have dramatic affect.
  - throwawaygh 5y ago
    See page 2435. Digital asset is defined as a digital representation of value recorded on a cryptographically distributed ledger or any similar technology. Practically, the Secretary and the courts will decide what this means. If you’re using in-game tokens to represent value and maintain a ledger, then sure, that could count. Which is good. why should it be possible to sidestep this law by creating a coin that is liquid and fungible and has etfs that track it but just happens to be used for in game purchases? That would be a silly and absurd loophole. If your in game currency is one-way, ie can’t be converted back to USD or any other assets, then it’s by (legal) definition not representation of value.

adolph 5y ago

Is it accurate to treat crypto facilities as equity brokers, or more like foreign currency exchanges? (Forex probably have their own reporting requirements, the question is about analogous service, not the reporting/privacy part.)

pembrook 5y ago
You probably don't want crypto transactions to be taxed like forex ones--unless you enjoy paying capital gains taxes before you've even sold: https://www.investopedia.com/terms/s/section-1256-contract.asp https://www.investopedia.com/terms/s/section-1256-contract.a...
- dcolkitt 5y ago
  You're confused. Section 1256 applies to futures, not forex. Spot forex positions are taxed as ordinary capital gains under Section 988. Under very specific conditions a high-volume spot forex trader who never takes deliver may elect to be taxed under 1256, but that's completely optional. https://greentradertax.com/a-case-for-retail-forex-traders-using-section-1256g/ https://greentradertax.com/a-case-for-retail-forex-traders-u...

Communitivity 5y ago

> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099? Yes, I do. The IRS has slowly gathered power since 1913. Federal taxes were supposed to be short term and temporary, for war levies and such. Furthermore, the tax code within the constitution controverts itself: "all Duties, Imposts and Excises shall be uniform throughout the United States" - I.8.1

api 5y ago
I also must throw in the fact that IRS enforcement is disproportionately against "regular" people. The IRS doesn't go after enormous tax dodging billionaires very often, because going after some small business owner who mis-reported something or is trying to squeak something by is a better way to make quota. It results in yet another area where "laws are for little people."
- deleted 5y ago
  [deleted]

zionic 5y ago

>Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Yes. Do you not? They have no right to that information. Why do so many in the "hacker" culture simp for the authority structure?

capableweb 5y ago
Be careful to attribute what you read on Hacker News to the entire "hacker culture". There are so many strongly held opinions I've never heard hackers say out loud in real life, most famous example must be about unions. I've heard zero hackers arguing that unions are bad in real life, while when the discussion comes up on Hacker News, the discussions seems to lean 50/50 on if unions are actually good or bad.
- pksebben 5y ago
  I'm sure that isn't in any way Pinkerton astroturfing.
- Matticus_Rex 5y ago
  Never knew any cypherpunk or cypherpunk-adjacent people, then?
throwawaygh 5y ago
Hi. I started hacking in 3rd grade in Apple Basic on an Apple IIe, published dozens of CVEs in my youth, helped start a hackerspace, build sota robots, etc etc etc. Pretty sure I get to call myself a hacker in any sense of that word. I’m a fan of KYC and paying taxes precisely because I’m a hacker and can immediately see how easy it is to hack civil society without those things. Also, this isn’t a forum for hackers in any definition of the word. It’s a public discussion forum run by and often for the benefit of a powerful and rich VC firm with substantial investments in alt fin tech speculation. are you sure you’re not the one simping?
- 8ytecoder 5y ago

BurningFrog 5y ago

dcolkitt 5y ago

asdff 5y ago
Not really, since excel can be used for everything from budgeting to making a list of your favorite movies. Cryptocurrency is for transactions and speculation, not much different than any other financial product when you shuck off the technical mumbo jumbo surrounding it. Why would that not be regulated?
- nostrademons 5y ago
  Except it's not, if you look at the broader Ethereum & smart contract ecosystem. It's also for decentralized organizations (Aragon), incentivizing distributed storage (Filecoin/IPFS), pricing ad markets (Brave/BAT), supply chain management (VeChain), managing ownership (NFTs), and project governance and voting (many tokens). This is like saying "The Internet is for porn" because that's your only exposure to it. Yes, it's the most common early use - but it's very far from the only use.
  - 8note 5y ago
    Those things should be split out then, so there isn't a coin attached to it. If you couple things badly, you can end up with more responsibilities than you want
    - nostrademons 5y ago
      There has to be a coin attached to it because that is how you incentivize actors within the ecosystem to take certain actions (eg. "share their hard disk space" for FileCoin or "view ads" for BAT). The central premise of these projects is that humans make terrible decisions, markets make good decisions, so let's replace humans with markets whenever possible. Right now, some exec at Google determines how many ads you see on the Internet. The premise of Brave & BAT is that you decide whether you want to see ads on the Internet, you get compensated for viewing them, and if enough people decide the ads are not worth their time, they'll turn them off and drive the price of BAT up enough that people do want to view them. Right now, some exec at Amazon decides how much you pay for S3. The premise of FileCoin & IPFS is that lots of ordinary home users have spare hard drive space, and they should be able to be compensated for renting out that space to projects that need lots of distributed storage. The market price of FileCoin is that which equilibrates demand for storage with supply.

barnabee 5y ago

> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Or when Robinhood/Schwab/Vanguard/Etc send the IRS a list of all your stock transactions for the year in a form 1099? Yes. Clearly. My car doesn't keep an up to date record of my name and adress so it can report my position and speed to the authorities. Warrantless wiretapping is illegal in most (every?) form outside finance, and there's no justification for banks or investment firms being any different. Governments have a right to make laws, they don't have a right to continuously monitor every citizen to enforce them.

matheusmoreira 5y ago

> Do you also call it a "privacy disaster" when your bank account requires your name and address so they can report interest payments to the government? Yes.