4 ms·

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 an

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.
- RHSeeger 5y ago
  > but just happens to be used for in game purchases Because if I make a game where items drop, and players can transfer items between each other, but not convert any of it to real world money... then making the system, or possibly every single player, be responsible for reporting all activity and participants to the government is... to be blunt, bat-shit crazy?
  - throwawaygh 5y ago
    That would not be a representation of value. I address literally exactly this scenario in my comment.
    - RHSeeger 5y ago
      If it is possible to sell in-game items for out of game money (either using in game processes or an external system like a 3rd party site), then would this mean they are "value". If so, does that mean each player that sells items needs to report every transaction? Or that the game system needs to report every in game transaction (transfer of items from one character to another). And that reporting needs to include real life information about the players involved?
      - throwawaygh 5y ago
        Players already have to report substantial real gains on sales of game assets. If you’ve been doing this and not reporting income, especially if it’s beyond trivial sums (eg like 5 figures or so), talk with your accountant ASAP. Beyond that, it depends, but the answer definitely isn’t “no”. That’s true even today, btw: game companies can’t knowingly allow money laundering through their in game currency, for example, and gambling laws almost always apply if you can cash out and the game contains any type of chance component (eg loot boxes). Basically, if your game is setup in a way that could be trivially used for transferring real world assets between players, even existing regulations probably already apply. This is one of many reasons most games only support one way transactions — you can move money into the game but not back out (at least without breaking tos) “X but in a video game” is almost always actually really X when it comes to money and other assets that can flow into and out of the game easily. A VR Wells Fargo branch is still a bank.

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.

RHSeeger 5y ago
> but just happens to be used for in game purchases Because if I make a game where items drop, and players can transfer items between each other, but not convert any of it to real world money... then making the system, or possibly every single player, be responsible for reporting all activity and participants to the government is... to be blunt, bat-shit crazy?
- throwawaygh 5y ago
  That would not be a representation of value. I address literally exactly this scenario in my comment.
  - RHSeeger 5y ago
    If it is possible to sell in-game items for out of game money (either using in game processes or an external system like a 3rd party site), then would this mean they are "value". If so, does that mean each player that sells items needs to report every transaction? Or that the game system needs to report every in game transaction (transfer of items from one character to another). And that reporting needs to include real life information about the players involved?
    - throwawaygh 5y ago
      Players already have to report substantial real gains on sales of game assets. If you’ve been doing this and not reporting income, especially if it’s beyond trivial sums (eg like 5 figures or so), talk with your accountant ASAP. Beyond that, it depends, but the answer definitely isn’t “no”. That’s true even today, btw: game companies can’t knowingly allow money laundering through their in game currency, for example, and gambling laws almost always apply if you can cash out and the game contains any type of chance component (eg loot boxes). Basically, if your game is setup in a way that could be trivially used for transferring real world assets between players, even existing regulations probably already apply. This is one of many reasons most games only support one way transactions — you can move money into the game but not back out (at least without breaking tos) “X but in a video game” is almost always actually really X when it comes to money and other assets that can flow into and out of the game easily. A VR Wells Fargo branch is still a bank.