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So the threat is they get taxed on an unearned windfall? Spooky. It’s one thing to be afraid of a crypto exchange, quite another to be afraid of Johnny law. An

So the threat is they get taxed on an unearned windfall? Spooky. It’s one thing to be afraid of a crypto exchange, quite another to be afraid of Johnny law. And as far as getting doxed, well, more than one can play at that game. Not to mention that making that threat is not exactly earning them sympathy points. At some point crypto holders and organizations will have to decide whether they want the law involved or not. Is it a new decentralized form of money that doesn’t need the government, or not?

wrs 5y ago
The fact that getting taxed is even considered a “threat” is weird and disturbing. It’s not even a downside — 60% of a pile of free money is still a pile of free money.
- toomuchtodo 5y ago
  You are assuming it has enough value at the time you liquidate to pay the taxes at the cost basis the transfer took place. Very similar to stock options ending up worthless you owe $large_sum_of_taxes on because the value declined after exercise but before liquidity. 1099ing recipients and causing a race to unload would nuke them.
  - burrows 5y ago
    So, cash out right now?
    - toomuchtodo 5y ago
      I cannot recommend selling stolen property, whether to pay taxes on the ill gotten gain or to evade taxes. The government considers these assets either commodities (CFTC) or securities (SEC), so prosecution is straightforward.
      - systemsignal 5y ago
        What makes it stolen property? If the smart contract allowed it…
        toomuchtodo 5y ago
        The sender did not mean to send it, making it misappropriation or unjust enrichment. Edit: (Re Revlon) https://www.npr.org/2021/07/23/1019909860/banque-worms https://www.npr.org/2021/07/23/1019909860/banque-worms (NPR piece on the Revlon incident) > Elisabeth de Fontenay is a professor at Duke University's law school, and she used to be a corporate lawyer. > DE FONTENAY: When payments are made, for example, from banks to individuals like all of us in error, we have to give it back. And in fact, if we don't give it back, the banks actually will come after you. They will sue you, and sometimes they will bring criminal cases against you.
        spenczar5 5y ago
        Look at the Citibank Revlon case from last year [0]. In a clerical error, Citi sent $900m to a bunch of hedge funds, related to some Revlon debt. It asked for it back. It got about $400m. It sued for the other $500m… and lost in court. I’m not saying this is identical to that case, which depended upon New York law. But it is far from clear-cut and I think you are being way too confident in your view, since nothing like this has ever appeared in court. [0] the decision: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rrBrQQPB7_i8/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rrBrQQPB...
        ricketycricket 5y ago
        The document you cited actually supports toomuchtodo’s position: “The law generally treats a failure to return money that is wired by mistake as unjust enrichment or conversion and requires that the recipient return such money to its sender. Under New York law (which applies here), however, there is an exception to this rule: The recipient is allowed to keep the funds if they discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake.” I’m assuming no debt was owed to these random people.

wrs 5y ago

The fact that getting taxed is even considered a “threat” is weird and disturbing. It’s not even a downside — 60% of a pile of free money is still a pile of free money.

toomuchtodo 5y ago
You are assuming it has enough value at the time you liquidate to pay the taxes at the cost basis the transfer took place. Very similar to stock options ending up worthless you owe $large_sum_of_taxes on because the value declined after exercise but before liquidity. 1099ing recipients and causing a race to unload would nuke them.
- burrows 5y ago
  So, cash out right now?
  - toomuchtodo 5y ago
    I cannot recommend selling stolen property, whether to pay taxes on the ill gotten gain or to evade taxes. The government considers these assets either commodities (CFTC) or securities (SEC), so prosecution is straightforward.
    - systemsignal 5y ago
      What makes it stolen property? If the smart contract allowed it…
      - toomuchtodo 5y ago
        The sender did not mean to send it, making it misappropriation or unjust enrichment. Edit: (Re Revlon) https://www.npr.org/2021/07/23/1019909860/banque-worms https://www.npr.org/2021/07/23/1019909860/banque-worms (NPR piece on the Revlon incident) > Elisabeth de Fontenay is a professor at Duke University's law school, and she used to be a corporate lawyer. > DE FONTENAY: When payments are made, for example, from banks to individuals like all of us in error, we have to give it back. And in fact, if we don't give it back, the banks actually will come after you. They will sue you, and sometimes they will bring criminal cases against you.
        spenczar5 5y ago
        Look at the Citibank Revlon case from last year [0]. In a clerical error, Citi sent $900m to a bunch of hedge funds, related to some Revlon debt. It asked for it back. It got about $400m. It sued for the other $500m… and lost in court. I’m not saying this is identical to that case, which depended upon New York law. But it is far from clear-cut and I think you are being way too confident in your view, since nothing like this has ever appeared in court. [0] the decision: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rrBrQQPB7_i8/v0 https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rrBrQQPB...
        ricketycricket 5y ago
        The document you cited actually supports toomuchtodo’s position: “The law generally treats a failure to return money that is wired by mistake as unjust enrichment or conversion and requires that the recipient return such money to its sender. Under New York law (which applies here), however, there is an exception to this rule: The recipient is allowed to keep the funds if they discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake.” I’m assuming no debt was owed to these random people.