Bitcoin Forum

In the future I would like to buy some property with my BTC once it's worth a lot. Even small amounts made on signature campaigns in here could be worth a lot and may I want to diversify into real state in say 5 years or so.

I was wondering how would this be done? Im scared because we get daily news of any bank account that has to do with Bitcoin being frozen. I wouldn't like to be treated a criminal when I obtained my Bitcoin posting here... any help?

I have been selling my bitcoins earned from signature campaigns for more than a year now and never faced any problems with it. I sell them to local merchants in Localbitcoins.com and get the funds in my desired bank account and then i cash them out on ATM. There are no regulations regarding Bitcoin in my country and maybe that is the reason why i was never bothered by the bank or any authorities, but someone might have to answer a few questions if there are regulations implemented on Bitcoin in their country.

There's no need to worry about if the bank stands nothing about bitcoin or to be sure on what you are about to do, go directly to the bank and ask them.

AFAIK, there's still no implementation about bitcoin not unless you are operating a business that's registered on your local gov't.

And to break your fear, for sure there will be people who are willing to sell their properties 5 years from now for bitcoin.

This may be ok if you are just dealing with small amount of sales, but let's say in 10 years 1 BTC is worth $1,000,000

How do you cash out $1,000,000 or any other amount near that? you can't do it through localbitcoins, you would need a million different merchants to cash out that much money.

Also there's no way to buy a house without going through the taxman. You may be ok cashing out a small amount to buy a new phone, but im talking about buying real state with bitcoin gains. In this case, you are going to need to explain the origin of your coins, and im not sure how I would explain I made some BTC posting in some internet forum, this may not be convincing to them even if it's the truth. They are too paranoid of anything bitcoin related.

In my country too, the bank never questioned where our money came from. Maybe if someday, bitcoin really put in the list of taxpayers by the government, then we automatically have been taxed for it, for every transaction

It depends on the country, obviously. In my one there is no clear legislation, but the most likely scenario is that you have to declare them as if you were being paid for being a freelancer writing for a newspaper or a magazine, so your earnings here counts for your income tax.

Since it is often, it is considered as an extra income (if you have already a job), or as a freelancer income. So in both cases, you're supposed to pay the tax income.
However, as some countries haven't make it clear with cryptos, it could be considered as something else than job income (call it whatever it suits you) see the difference. Are you from Portugal? I heard you guys are not taxed on cryptos gains?

But it is the truth.

You should hopefully still be able to prove that you own the account that posted. You'll be able to point to the thread where you signed up. The thread will be there that describes the sig campaign and the pay rates. If you're sensible you'll retain the private key of the address that received the payments and lists each tx.

Screenshot everything now just in case.

People deposit millions in banks from selling art made out of their own sperm and turds. This is less weird by a long way and fully traceable.

That would really a big hindrance regarding on accumulating large amounts of money but i think it should be fine as long you are just gradually cashouting it not tend to make it on bulks because it would really turn out to be suspicious if you do such act.For now this is what im doing now which i indirectly cashouting my converted btc to local fiat into other payment options and saving it.

This is an issue worrying me too, how to declare this ? How to justify this income ? Since they will ask the details of your accounts, how to explain you made 120 000 dollars with a signature ? They'll just believe it's a bad way to hide fraud money

I have been selling my signature campaign earnings every month. I also fall under 20% tax bracket as per my country's rule because I have a day job from where I earn a decent salary. So let me clarify this for you. Whatever bitcoins you will earn from signature campaign, can't be considered for capital gain because you earned it and not invested out of your pocket. So treat this amount as your income only. Don't factor in the price fluctuation here.

I calculate the entire amount that I cash out in my local currency and then add the amount in my tax information filing. I add this amount under "income from other sources" head. You can follow the same as I have been doing this since last two years. You may pay some tax out of your pocket but it's totally worth it as you are not hoarding any black money. Whatever you have earned, you have declared it and paid tax on it. I hope this helps!

Hello to everybody. ı am new to the forums. CAn ı have some idea how to earn bitcois by posts.

Thanks in advance.

This is the main thread about them - https://bitcointalk.org/index.php?topic=615953.0

This is the forum where they appear - https://bitcointalk.org/index.php?board=52.0

To get the most money you'll need a higher ranked account. Newcomers may not quality for any campaign, or just very small payments.

I can't imagine tax authorities asking you for your Bitcointalk login or private keys. They certainly shouldn't, and technically that wouldn't prove ownership of the funds at the time they were paid. I'd archive the sig campaign threads in case the site gets nuked, but that's more about proving where funds are derived from and less about taxes.

I think the IRS really just cares that people are making a good faith effort to pay their taxes. It seems like signature campaigns would fall under regular "wages/salaries/tips" or "other income" and taxed at the standard tax rate for the cost basis, and capital gains for any gains from holding.

They won't really care. None of them care. You just tell them you have a screenshots and few bits and bobs that'll let them offload the problem on someone else if it ever arises, and it won't. They  won't even ask to see them.

i was only today talking to a friend about this.
Going forward how do we liquidate crypto to fiat ?(unfortunately it doesnt look like we can use crypto widely)
i am in europe and i know if there is any deposit made greater than 5000€ questions will be asked and potentially subject to tax.

This also even a risk to some 3rd world countries. Unlike those countries where bitcoin can be freely used. I guess this is the downside of taxless transactions. Some government banned bitcoin they though it will just bring their country into a bad demise. Also government cant really profit if that is the case. Some may say that bitcoin is some kind of tax evation but i think the only problem is dictating where you get your profit.

Mostly ive seen 3rd world countries isn't too strict with the compliance when it comes to bitcoin or on any taxation matters since they do only focused into legalized things and consider than bitcoin isn't still been legalized or adopted on most cases which means they aren't too strict or they cant really do nothing if a certain citizen would decide up to evade tax with bitcoin which is really possible indeed.

When citizens already come to a point that they are not paying taxes and decide to hide up assets on bitcoin form then it will surely put up the entire country into problem since we do know that tax do really play major role on the economy of a country and if people do not tend to pay up their obligations then it would really give negative effects.


Each country do have different limitations when it comes to max transactions which is normal because they do really need to impose laws that would really fight money laundering and tax evasions and other related cases.

Not less weird at all, it's very weird to them, and precisely because it's traceable, you must prove it, if you can't prove it, then how are you supposed to sell?

Again, suppose that I sent coins into Mintpal, traded 1 BTC for LTC, and sold this LTC when it went up for a profit of 4 BTC, I end up with 5 BTC, then I deposit this 5 BTC back into my wallet.

Mintpal dies out of nowhere and now you don't have your account anymore. How do you prove the origin? and if you can't prove the origin, you are fucked. This is why im scared to sell BTC. Yes you may be able to solve it with signature campaigns (and im still worried that I should have been paying taxes because it would be considered a wage in exchange of a work and not an investment). They may decide to tax you with an extra for all the months that you didn't pay taxes on what is considered a wage when they realize you had a lot of payments (because once they have your bitcointalk account, they can trace all of your payments ever here, not just what you are reporting).


Yes they will care and it's only going to get worse. Any money without a dubious origin is at risk of being confiscated so you better be able to prove you obtained it legally.

If you have a source of income you can probably just sell small amounts over time and it would not raise any red flags.  If you have nothing to hide and declare the income, if it's a larger amount, but it's not like bitcoin is illegal.  you just declare and pay taxes and the IRS won't care.

Do you want me to cash out for you? I really think you're over egging this somewhat. All the proof anyone needs is on this forum and in their wallet's history. That's just as much proof as a house sale or car sale and considerably more than getting several grand for cleaning some old lady's drains.

You can prove the origin of your coins, though. Let's say you have some signature campaign earnings as the OP indicates. Those transactions and the threads that describe them are archived. You can sign an message from your receiving address. Mintpal's wallets are (or can be) identified. You can show the transaction from your campaign receiving address to Mintpal, and you can show a withdrawal from Mintpal (on the blockchain) to an address you control.

Segwit's scripting complicates this, but this wasn't an issue in the days of Mintpal. :P

Similarly, if you wired money to an exchange to buy BTC, you can show bank records that reflect that. And you can show withdrawals on the blockchain that reflect your BTC holdings from that transaction.

As with other IRS investigations, they would need to prove that you received income that went unreported. The only way that your trading records can be disproven is by direct coordination with an exchange. If an exchange did not enforce KYC, this becomes difficult. I think that blockchain records reflecting the coins under your control during the relevant times are more than enough to show good faith effort. I think this is especially true in the case of exchanges that disappeared.

You have chosen the wrong example.

You said that you have sent coins to Mintpal, 4 of them
So , here we have the starting point.
Then you traded on Mintpal and you withdraw 5 BTC.

Really don't see the problem here.
In case your country has laws for this in place you're going to have to pay for the profit you have made from trading.
It will help us a lot if we discussed with clear numbers and location of the activity (your country).

PS.
Don't worry, in this case you could afford the best lawyers out there so you could probably get away with murder, not just taxa evasion.

In this case, you can't show the profits as capital gains. You received the coins as salary. So when you sell your coins for fiat, you are required to pay the income tax rather than the capital gains tax. But it is a bit complex. I am not sure whether the tax calculation will be based on the exchange rate at the time of the sale, or the one at the time when you received the coins as salary.

You will be taxed on income tax and on capital gains. Following the above example:


You would be taxed on 4 bitcoins as income tax (if you earned them on signature campaigns) and on the other 1 as capital gain. At least that's what would happen in my country. It doesn't matter if you traded them or simply the value of bitcoin in terms of fiat grew and when you sold them the value in fiat was higher than when you earned them in signature campaigns.

Can you explain how do I prove that:

1) I sent my coins to a Mintpal deposit
2) I withdrew the coisn to a Mintpal deposit

If mintpal doesn't exist?

Exchanges create deposit and withdraw amounts for each individual account and the exchange is dead, im not sure how this could be proved. All that there is is some transactions in the blockchain which would be anything.


About unreported income... if you receive an income here in exchange of working in signature campaigns, as soon as you give them one address, they could link it to an account, the look for every address ever that you used with your account and they could see how much money total you've made with your account, and then accuse you of not having reported that income when you sell a part or all of it. So im not sure how this could work out.

Every month I sell my Bitcoin that I get from signature campaigns. Till now I haven't faced any problem. But from this month onwards I heard that the government is going to be very strict towards cryptousers. In my country last month government raided all the important exchanges and collected the details of all bank accounts involved in trading. But I don't think government will take any action against them because it's not possible for them to register case against lakhs of crypto users.

If you deposited and withdrew BTC from Mintpal, those transactions are permanently recorded on the blockchain. It doesn't matter what transactions took place on Mintpal's internal database.

You sent BTC from Address A (which you can prove control of). You received a higher amount of BTC at Address B (which you can prove control of). The difference is your BTC profit, but what matters for taxes is the USD profit. Each trade on Mintpal is taxable, and the net of those gains determines your taxes due.

The fact that Mintpal no longer exists just makes it harder to disprove the records you provide for your Mintpal trades. That's why any good faith effort to pay taxes on the gains made between Address A and Address B is probably good enough. You made 4 BTC profit, which had a USD equivalent when you bought back BTC. That's your taxable gains.


How can they definitively link addresses together? Personally, I am extremely careful about linking wallet addresses together, even if it means paying higher fees to consolidate outputs.

In this particular case a lot depends on a country because each of them has the totally diverse limitations that should be learned thoroughly and taken into consderation so to avoid any possible issues in the future.

yeah some posts on this forum are no different in terms of quality or value  ;D
I have never heard about banks asking about the origin of your coins
unless you go over a certain threshold or they come from tainted or flagged sources
if you are totally afraid to use banks,sell for WU,Paypal or any other electronic currency
sell here or at localbitcoins
get yourself a bitcoin debit card and fund it with bitcoins and cash out at any ATM
your options are limitless

When you cash out an amount of any relevancy, you must prove the origin. There is no real way to prove that the addresses where you deposited and withdrew from, are from Mintpal or from a drug dealer or anything else, because Mintpal doesn't exist, so there's no way to link them properly into the exchange, unless you can prove me otherwise, because all we got is some addresses on the blockchain now, without the context of the website. I don't know about the US, but in other countries you MUST prove the origin is not ilicit, and if they don't like the evidence, you risk losing your money because they would confiscate it or tax it to ridiculous levels.

So again, you send 1 BTC to Mintpal.

You make 4 BTC from trading it against some altcoin.

You send back your BTC to your wallet.

You end up with 5 BTC.

Now prove these addresses belong to Mintpal. And no, you can't prove ownership of the deposit address, because you don't control the private keys of a deposit address of an exchange, so you can't sign them.



Well, if you are going to sell years worth of signature campaign earnings, they will ask where it came from and they will see the address is linked to your account where you posted at with a simple google search, then they could browse your posting history and track all of your receiving addresses for the signature campaigns.




They are not limitless, they are very limited, if the goal is to buy some real state. You basically have to be 100% transparent, pay all taxes, and be able to proof 100% that the gains are licit.

Real state, meaning that cryptocurrency is unreal to you, or were you trying to write real estate?


This is completely false and made up. Name me a at least 3 worldwide bank branches that target cryptocurrency users and block their accounts. And I'm not talking here about a single case because from time to time people get some transfers denied and it's not crypto related. I'm talking about specific, crypto related cases. Naming 3 should be easy if, like you've said, any account can be frozen.
I can claim that at any given time you can get an electric surge that will end up burning down your computer with all your precious sig campaign money and it will have as much substance as your claim about banks targeting bitcoiners.

The question was not directed to me, but I´ll give it a try. I admit that the following banks
are not active worldwide, but they are also not operating in a tiny 3rd world country and instead
are the 4 biggest banks in Australia:

-National Australia Bank
-ANZ
-the Commonwealth Bank of Australia
-Westpac Banking Corporation


https://www.zerohedge.com/news/2017-12-30/australian-banks-reportedly-freeze-accounts-bitcoin-users

I´m still waiting for a clarification of the mentioned banks in a new article, but this
is still a pretty shocking development for Australian Bitcoin users if the 4 biggest
banks in their country close accounts that deal with cryptocurrency.

I´m not based in Australia myself, but I also had problems with my bank that simply
refuses to process wires that originate from Bitcoin exchanges.

But you can show the origin. It's right there on the blockchain. Even if Mintpal is gone, why can't you claim the coins are from Mintpal? Why can't you claim trading records based on that? Tax authorities are interested in taxable income. You're paying that, yes? By paying taxes on cryptocurrency trading income from a defunct non-KYC exchange, you are going far beyond what most people are doing.

You may not be able to prove that the addresses belong to Mintpal, but if they truly did, I wouldn't worry about it. It can be easily determined by blockchain analysis companies (or possibly even Walletexplorer) that they did. You can sign a message from the address that you sent 1 BTC from. You can sign an address that held 5 BTC withdrawn from them.


That's why you should probably report income that is easily trackable. This makes it very important to avoid linking wallet addresses together. You should consider how you spend UTXOs and how that links your BTC holdings together on the public ledger.

That's interesting. I didn't know that people in Australia are having these problems.  I'm located in the EU and have been using a number of international banks since I got into cryptocurrencies and haven't experienced any difficulties. Much appreciated, I'll know which banks to avoid if I ever have to move out of here.

On the side, National Australia Bank is working closely with Goldman Sachs. GS was well known for their anti bitcoin stance but has recently switched sides and started a crypto trading desk. It's possible that they'll influence their partners.

As of now, the regulations towards Bitcoin is still not properly established here in my country which is why when having Bitcoins exchanged for cash, it is not taxed yet. I have not heard a situation where someone who sells their Bitcoin for cash has been taxed. I guess the bank only gets curious when the amount exchanged is more than hundred thousands, but with withdrawing from time to time in ample ampunt, it seems that there are no problems encountered.

Well it can be taxed 2 times first if you are earning it via signature campaign you will be taxed by income tax. Now if you are holding it in your wallet and its price grew you will now be taxed with your capital gains. Tax is really complicated much more if your money is growing with it. As if you are earning a considerable amount of money in a signature campaign you must always find out the dollar value equivalent of your earning and immediately cashing it out in Fiat currency in order for you to limit your taxes to only income tax but the problem here will be you won't be participating the growth of your Bitcoin.

Yes obviously I meant real estate.


Chase, Bank of America, CIBC... has frozen a lot of transactions.

Of course you can get irrelevant amounts, but try to get $800,000 in your account to buy a house and then see what happens.

Im not here to talk about what I have, I could be a multimillionaire or have 100 bucks, that's irrelevant. The point here is, when you try to put bitcoin into your account, and this bitcoin is not as easy to prove when and where it was bought (for example, buying it in Coinbase is easy, but money earned in exchange of a service like a sig campaign, a business where you accept BTC and never declared anything, a mining operation...) you will need to explain very clear every satoshi. This is what the thread is about. Now name 3 people that sold more than $500,000 worth of bitcoin, the bitcoin being obtained by offering a service and never having declared anything, or undeclared mining gains, etc, and explain how it went from them. Anyone that thinks it's as easy as selling it and just paying capital gains and that's all is a delusional idiot.

PS: The people that participated in early sig campaigns have made more than 100 BTC posting, that's more than 1 million bucks right now so stop treating it as a joke, so for these that started at the begining in around 2012 or so, they have a fortune doing that, so they better know how how report every single satoshi and the consequences of not having declared it in time when they attempt to buy real estate with it. The banks are not cooperating with bitcoiners, they will try to get as much money from them as possible if the origin of the money is not clear or there are mistakes (which is very easy that that will happen since you are supposed to present every single transaction and trade ever which is insane). This is what the thread is about.

What you can do is exchange your bitcoin into fiat once you are about to purchase the real estate or property. Whenever I earn from signature campaigns and want to spend it, I first convert it into fiat. It would also depend on the stand of your country of bitcoin. If they do not totally accept it yet, then it may be possible that your banks do not acknowledge bitcoin. If this were the case I advise you to convert your btc into fiat first before making any transactions as not to raise any suspicions for the authorities.

i think there is nothing to worry about this because bitcoin is legal anyway. And just recently my friend had been receiving money from bitcoin.

As far as you are withdrawing small amounts, there would not be any problems. But the moment you made any huge amount transactions, bank and other authorities may ask you the source of that money; so its better to prepare with all the answers.

I just saw this on reddit, a recent case of an example of how the banks will froze your account if you sell relevant amounts. This guy sold $100k to buy a house, this is what happened:


https://www.reddit.com/r/Bitcoin/comments/7pwj08/sold_off_100k_of_btc_for_a_house_thanks_to/

We all definitely need to get our shit together and know what's going to happen when we sell. If you made 1 BTC from signature campaigns, most likely you will have $100,000 BTC in 5 years or even more, so you will want to buy some real estate and then you better know exactly what to expect when authorities demand the info.

Im looking at this and it's giving me an headache. Will need to get everything compiled and tracked down to every single satoshi I want to sell to prove im not a damn criminal (I hate how im a criminal by default in the eyes of the State).

Also it seems clear that if you ever mixed any amount of coins, these mixed coins can never be cashed out because you cannot prove the origin. So maybe even trading with Monero will make it impossible for you to buy a house with the gains because you cannot prove the trace of your money through a blockchain that is masked.

Capital gains tax and Income tax are different

Capital gains tax: you invested money and you got a profit

Income tax: the system is based on "Trust". You report xxxxx$ per year, the institution trust you, they won't ask you to prove. But if by any chance they find out you cheated (whatever the method used), they won't forget you, and it is at this moment they will ask you some proofs (taxes control or fiscal control)

When you're working in a manufactory you don't give proofs of your income, right?. It's the same as a freelancer. You can't give them your Skype conversations, emails, etc showing you make an agreement with someone that you don't even know the name. It's the same, it's based on Trust

Also, you can always give your history from an exchange if they ask for proofs, that's why you can download a CSV file on exchanges.

As for the guy on Reddit, any decent bank will freeze or terminate your account when you receive such a big amount

In theory, you can have multiple personas via multiple wallets. One is your "legit" wallet and one has coins that can't necessarily be accounted for. As long as bitcoins are fungible, the latter wallet still has value. You just need to be careful about a) linking it to your "legit" wallet in any way and b) use the funds as cash under circumstances that don't require KYC.


Why is that so? Once you remove all connections to your old UTXOs, can't you fabricate a new "origin?" Here in the US, I'm fairly certain that cash transactions in the low thousands get very little scrutiny. Hypothetically, one could use some "cash" (wink wink) to buy those mixed coins, and hold them as an investment to be sold later. As a buyer, how could you have known you were buying "mixed" coins? And why would it matter?


If it can't be traced, doesn't that mean you can just hypothetically make up the transaction details? No one can prove otherwise, right?

Till now I haven't heard any news of bank account freeze due to bitcoin withdrawal amount in my country.
Tax policy on bitcoin income is not cleared at all. Even I was also talking about this problem with my accountant yesterday and he suggested that until any tax law does not form on crypto-currency, we should pay taxes as per the current tax slab of my country's revenue law. Also, the bitcoin price surge will be considered as the capital gain when it is converted to the fiat.

I don't know where you are from, but this is not true. If you are a freelancer, you must sign up in the government and specify what you are doing (for example, if you are making Youtube videos, I think you must sign up as "production of audiovisual content" or something like that) and you must present the receipts that Google pays you through Adsense, and you must also pay some taxes on all of this. I didn't had any idea of all any of this and im learning now. But forget about the concept of "im innocent until proven guilty", you are guilty by default and you must prove that the money you put in your bank account is legit. You may go under the radar for smaller amounts, but any relevant amounts and they will catch you sooner or later and if you don't have everything signed up and ready they will screw you up.

If you buy Bitcoin with cash, you can no longer put it into the banking system, because if you do and you get caught, they will ask you where the money comes from, and as far as I know, if you can't prove it (if there is no receipt of any kind that would prove it was a transaction for legal money) then who knows what will happen, from a very high tax to total confiscation of funds, this is why I was worried about selling some of the coins which I mixed one time to test a mixer out when it was a new thing and I was curious... now im stuck with these coins and I can't use them to pay a house.. I regret so much mixing these damn coins but BTC was worth a lot less back then.

Just because they can't prove it, it doesn't mean you are ok to go, otherwise anyone sellind drugs for cash could argue the same and put the money in the bank.

Honestly, tax authorities don't care where it was derived from. They care that income taxes are being paid. The IRS is happy to see drug traffickers paying their taxes; consider Al Capone. The IRS's position was (and is) that illegally earned income is subject to income tax. Therefore, if you are cashing out Bitcoin, show a blockchain and paper trail back to your original purchase. Pay the appropriate capital gains. If you paid with cash, you paid with cash; it's not as if that's illegal.

If you received coins from a mixer, they are fungible. Swap them for some new outputs (from an exchange, for example) if you are so paranoid about criminality. You can still show the timeline of your possession to tax authorities. You sent coins you owned to the mixer, you received coins back. So what? Pay the taxes you owe when you realize the gains.....

There is no legislation as well in my country so whenever I sell my btc for our local currency, I do not pay any taxes except for the fees in the exchange. Since income tax should apply regardless of what currency it is, once declared there may be some taxes imposed for btc that is exchanged. As long as it's part of your income, you would have to pay taxes as well.

It's best to find out first what is the legislation in your country regarding bitcoin and cryptocurrency and whether regulations are made for it.

Now our government has not intervened or managed so they taxed, but the future is how to wait

Yes it is true if we successfully transmit btc sales results that we give taxes to the government because the rules are the rules that must be enforced as good citizens we must comply with absolute government regulations. But now how to make the sale btc can be made a valid tax?

I think we are safe until we pay enough taxes for the government.I think US government has separate taxation system for crypto usage so you need to follow all of them to uase your bitcoin which is earned of made from signature campaigns.
But my country don't have any specific rules and regulation yet for bitcoin earnings so we are enough to pay the income taxes yearly to avoid these kind of situations.

Whatever you earn is taxed as income, and the change in exchange rate would be taxed as capital gains depending on your holding period. I recommend keeping very close tabs on your earning and trades if you ever want to cash out into fiat without being heavily fined or even worse.


You basically have to pay your taxes at the end of every year for whatever you've earned for signature campaigns.

And then capital gains once you trade your Bitcoin for another altcoin or fiat.

Maybe cashing them out in portions would be helpful if you know there is a chance of your bank account getting freezed because of the amount received. You should keep cashing them out over time and putting them in your bank, and when your target amount is reached, invest them wherever you want. Now you will surely have to sacrifice the extra profits you might get if the funds stay in Bitcoin for a longer time, but I think it is better than being marked a criminal, isn't it?

You are making big claims with no clear proof. I don't know how the IRS is, but in other countries, you aren't going to get away with it. And I doubt you can be selling drugs on the street for cash, then put it all on the bank and buy a house, c'mon don't be delusional.


If you mix the coins, when you receive them back, you receive them from an huge mix of outputs... at this point, you can't prove how you acquired them. You sell them to an exchange.. so what, it can still be traced back into your wallet. Exchanges generate one deposit address, so it could be traced and then reach the point in which you cannot prove how these coins came into your wallet because you receive them through the mixed address originally. This is the problem that now I face with a decent amount of BTCs and I don't know what to do...


The only coins I could clearly prove that I received are from the signature campaigns. 

And the coins that I deposited then withdrew in now dead exchanges are also a problem, since the exchanges are dead...

I don't know what the taxman will request specifically so I hope that if someone goes along with this posts their experience.

I don't see why the IRS would give a shit about where the money came from as long as it's taxed. There are other institutions that will be out to get you for illegal activities though.

Of course. You guys really have some serious problems... NOT.
I wish I had millions in BTC and the only thing to worry about was whether they'll ask where the money came from. I could say that it came from gambling, whoring myself out, being a slave to a wealthy woman whose hobby was mining cryptocurrency in 2011... You could even claim you got it from your parent who mined it years ago and then gave you as a gift.
That said I heard of cases where people were questioned for the origin of money. These things are rare, but happen from time to time. When it comes to cryptocurrencies they're easy to deal with since regulations don't exist. Addresses aren't assigned to IDs and there are no such requirements. if you say that you've mined the coins long time ago, or bought them for a few bucks, they won't be able to prove otherwise. There are no laws saying that you need to have access to all your old addresses to be able to prove that you owned them.

Actually, I gave a historical example: Al Capone. Read his Wikipedia section regarding tax evasion. He never got busted for racketeering; only for tax evasion. Money can be laundered; that includes cryptocurrency if necessary.

What kind of answer did you expect besides "make a good faith effort to pay your taxes?" There is no such thing as "proof" here given the lack of cryptocurrency-specific precedents, virtually everywhere in the world. I mention the IRS because I live in the US and am most familiar with US laws. The prevailing legal expectation is usually a standard of good faith. What countries are you even referring to? You never said.

And what "proof" do you have that "you aren't going to get away with it?" You asked about a question about taxes on signature campaigns, and even though all of this activity is perfectly traceable and legitimate, you continue with paranoia about "you aren't going to get away with it." Bitcoin is extremely transparent. If you are so paranoid about being associated with perfectly legal activities because they use Bitcoin.....maybe you should stop using Bitcoin. ;)


Your logic is simply wrong. Your tax authorities are extremely unlikely to ever see the internal databases of any exchange, especially if you aren't in the US. And very few exchanges don't allow generation of new addresses at this point. How exactly are your newly withdrawn coins going to be traced back to your original coins? And more importantly, who is tracing your mixed coins anyway? Why couldn't they have been legitimately bought, as they were?


I've never come across such bizarre logic. "An exchange shut down, so now any BTC I withdrew from there makes me a criminal!" If you win cash from a casino, and that casino later shuts down, are you this terrified to claim your gambling winnings?

Gamblers and traders keep books. Those are your tax records. There are literally no other tax records in this situation. You can either make a good faith effort to pay your taxes, or you can continue wallowing and complaining about how your are so paranoid and worried. You want experience? I've been paying taxes on altcoin trading for 4 years now. I traded on Mintpal. I paid taxes on it. Every trade is a taxable event; every position has a cost basis. Your books should line up your BTC/fiat trades and fiat withdrawals. It's really not that difficult.

If law enforcement agencies look into you for it, your coins are even clearly traceable to Mintpal, etc. You're simply being paranoid and treating your coins as worthless for no reason. If you really think those coins are simply non-fungible, then I'm happy to buy them from you for a fraction of the spot price. PM me.

More cases of frozen funds, this time a $40000 transaction:


https://www.reddit.com/r/Bitcoin/comments/7rfwec/warning_do_not_send_any_large_sums_to_coinbase/?utm_content=title&utm_medium=browse&utm_source=reddit&utm_name=Bitcoin


We are not Al Capone, and I suppose we are not trying to launder money because I would rather sleep at night than getting caught trying to launder bitcoins into a bank account. We are talking about keeping it legal once you decide to cash out.


Precisely because of the lack of precedents, it's safe to be paranoid. Have you or do you know anyone that has cashed out a decent amount of BTC earned in bitcointalk? How did it go? until we have this info, we are just speculating.



I asked about mixed coins and dead exchanges too. And like I said, we have no precedents, we don't know what we are dealing with. Maybe you think pointing to this forum is enough and they decide to fuck you up and decide it's not enough evidence, the government is totally clueless about bitcoin and they will take the cautious stance, meaning, at any doubt, they will declare that it's not enough proof.

Again, point me to a real case of people:

1) Selling coins that came from a mixed transaction
2) Selling coins that came from a dead exchange
3) Selling coins that came from signature campaign earnings




It doesn't matter what they "couldn't", what matters is what evidence you present. And if they are legitimately bought, you have the bank transaction into Coinbase with your name and ID and whatever. Now if you made some coins on a signature campaign and put them on Mintpal and trade for LTC or something then back to your wallet.. there are no traits of that, because the exchange is dead, and back then exchanges were completely anonymous, even in Poloniex I entered some fake name and location to trade because no one cared back then, you can look in this forum and everyone used fake names. This has now became a problem if I intend to sell these coins.


Yes, unless you can clearly prove that the gains come from gambling on a casino, you have a problem. Also there would be the bank transactions with your name on it and the destination to this former company, with crypto to crypto there's nothing.





How do you trade the coins back to Mintpal?

It's a mess of transactions, different altcoins, different wallets. I even did a bunch of micro trades worth satoshis. And I don't even have my trades that I did on Mintpal, I was going to save the trading history but when I went to the site the next day it was already dead, same goes for Cryptsy, how the fuck do I even report that.

What does that have to do with anything? Someone wired GDAX money and they didn't credit it properly. They are apparently wiring the money back to the customer. So what?


The point was that tax authorities want your income taxes, regardless of where it is derived. You are the one making the assumption that laundering is necessary. If you feel the need to launder it, you can. You've done nothing illegal; you are merely assuming that you are automatically tied to crime with no basis. And then you refuse to do anything about it. If you are so terrified of your bitcoins, sell them to me at a steep discount. If you've got enough, I'll travel internationally and pay you in your local currency (cash).

Or are you terrified of cash, too?


As I said, I've been withdrawing considerable income from cryptocurrency trading for several years. That includes dead exchanges. I've earned from signature campaigns as well, although that's peanuts in comparison.


I gave you an answer about mixed coins and dead exchanges, too.

Blockchain analysis companies (and therefore governments) acknowledge that even the vast majority of mixed coins are not illicit in nature. You, transparently, are not tied to illicit activity. If you're so paranoid, though, you really should probably stay away from Bitcoin. This kind of paranoia isn't good for your health.

You're basically taking the position that your government will seize your assets regardless of anything you do. If that's the case, you should consider changing your country of residence.


Maybe you should provide cases where any of these circumstances led to asset seizure or prison, on their own? I've done all of these things over the course of years without issue. So have countless other people around here.


Says who? Goods and services paid in bitcoins = illegal? Cash transactions are illegal? P2P transactions are illegal? Altcoin trading is illegal? If so, your country of residence is the problem. Consider moving.


Who cares? What possible evidence do you have that paying the appropriate taxes on what you owe isn't sufficient? You're basically saying that if you withdrew 5 BTC and eventually sold it, and paid the appropriate taxes on all fiat money that moved through the banking system, that you would have all your assets taken and maybe thrown in prison. What possible evidence do you have for that?


That's ridiculous. That means cash transactions are completely illegal where you live. I doubt that's true.

And FYI, when I go to the casino and play cash games, there are no tax forms. I've pulled out 5 figures from the cage (cash) without the casino reporting anything to the IRS. It is my responsibility to pay taxes on my winnings. It is not illegal to transact in cash.

If it is illegal to interact with cash where you live, you should move.


That sucks, but you should have saved your trading history years ago. I paid taxes on everything from Mintpal and Cryptsy several years ago. If your tax argument is that altcoin trading = like-kind transactions, then you could hypothetically just fabricate records to explain how 1 BTC became 5 BTC. Under that tax theory, it literally doesn't matter anyway. And there is no way in hell that anybody is going to be parsing through Mintpal/Cryptsy transactions to decipher tax evasion at this point.

Tbh i never heard that news about locked a bank account that have a transaction with bitcoin. Luckly the government here is never do that, i always sold my bitcoins from the campaign smoothly and never had a problem.

Wow 8k upvoted, that's why i never do transaction for more than $5k on bitcoin. It's to risky if you do it all on 1 transaction.

Bitcoins earned from signature campaigns and bounties count as ordinary income and they don't qualify for lower tax rates as capital gains. But then, the most important question is whether we should pay tax on those coins which are still in our wallet or not. Ideally, I would pay taxes only on those coins which I sold for fiat. But if Bitcoin is ordinary income, then we need to pay tax on all our coins, right?

Everything I said still applies, I don't know where you are @squatter but in countries from Europe which is where I am from, basically you are a criminal by default if you can't clearly prove the origin of the funds.

So no, you can't put any relevant amount worth of cash into a bank account without receipts that prove it was earned legally. You are delusional if you think you could get away with putting 5 figures worth of cash inside a bank account and not have the IRS equivalent here knocking on your door asking where that came from, and "I just made this from playing in the casino" without any receipts and clear trace back to the origin will not cut it.

You can't also put crypto earnings of any kind in an account without having full history of your earnings and being able to trace and report every satoshi movement including the movements inside exchanges.

About dead exchanges, unless you made a daily backup of your trades, chances are you would be unlucky and not have an updated trading history saved because exchanges die randomly.

It is only fair to be cautious and ask for precedents, and see what authorities would demand if you tried to cash out amounts that come from mixed origin, dead exchange origin, or signature campaign origin. The only clear and easy way is the usual one: buying them in an exchange where you are verified and selling them again: capital gains tax and you present the trades which are done in your name. Everything else is a grey area which im not willing to cross without having clear precedents because I don't want to get my bitcoins counterfeited.


In theory yes, but the problem is, if you've been doing this for years and never reported anything... once you do want to cash out to buy a house, what can one expect?

Bitcoin is not an ordinary income because you're unable to directly cash it out from your wallet. If I could pay my taxes in Bitcoin I'd gladly do so directly, but if i'm forced to use an exchange to convert to fiat and pay fees along the way, no thank you. Nobody will make me pay taxes from tokens that are lying on some address without my name on it and that I can't spend on anything in my country but have to use an exchange first. Next thing they'll make us pay taxes for tokens earned in computer games just because theoretically we can exchange them to money on ebay.

It is possible that it will not always be this way. You have to keep
in mind that the whole industry is still in its infancy and regulators
are still playing catch-up to keep up with the latest developments
in the cryptocurrency scene.

Nowadays, most ICOs require you to complete a KYC procedure. If you buy
tokens in an ICO where you are KYC verified it is entirely possible that one
day the tax agency of your country will come after the people, who participated
in the token sale and didn´t pay their taxes.

If you are afraid that your account will be frozen you can gradually sell your coins and keep the Fiat home. Why should you keep money in the Bank? You certainly can not earn due to the growth of prices for real money but you should choose the safe option. Then you take the mortgage and will extinguish the debt with their savings.

In order to work well together then establish the Credibility with the Bank
Strong KYC during the event generates tokens will make it easier to work with banks and follow AML rules. Voluntary compliance in token sales seems to give a project a stamp of legitimacy. Many potential regulators seem to be open to token sales. preferably transparent especially when dealing with potential regulators. Since regulatory agencies in many large markets (eg, US, Canada and UK) are leaning to classify ICO as a security, ICO should be more proactive and adhere to AML / KYC guidelines to operate in this market.
Any business that wants to succeed in the long run, and not just take the money and run it, needs to understand the existing legal framework and ensure compliance. Legitimacy can be determined by how well the initial crypto assets and governance contracts are designed and protected.

Yeah, but it's pretty obvious that the state is not going to care about what you think about it. You are right that since we can't even pay taxes, it shouldn't be counted as income, shouldn't be any different from virtual tokens in Second Life or poker tokens, but apparently they don't care and you must pay taxes as income, so signature campaigns for instance a repeated activity in time which would qualify as income tax, since we have not declared anything for years, my fear is that once you do you will get a big fine.

If someone has cashed out years of signature earnings (which are now worth a lot due BTC going $10k+) then talk about your experience and say exactly what info they requested and where are you from, also WHEN did you cash out and how much, it's important because I believe back then they would have cared less about details.

Luckily I can see my bitcoin earning without paying the tax as my government still forbid bitcoin but they still not make any legal policy yet !
In other side, I feel that bitcoin doesn't need to apply tax because it will broke it's decentralized itself , right

if you really want to deposit in the bank or buy a property using the money you get here in the forum. do not mention it in the  bank that the money you are buying for is came from bitcoin because im pretty much sure that your account will be frozen if you do that.

Like I said, your claim is that cash transactions are essentially illegal and that blockchain transaction history is inadequate (even though Bitcoin and altcoins are obviously used to transfer immense value). You should stop using cryptocurrency if that's your position. I'd like to see the statutes in question because you keep making these claims.

If you think that everyone "in Europe" is being treated as a criminal for cashing out of Bitcoin, then you are delusional.


Actually, you are completely wrong. Again, I have been doing this for years and I've always consulted competent tax advisors. Qualified accountants, attorneys and the IRS agree that this is how table game income works in the US (https://www.investopedia.com/ask/answers/052615/what-taxes-will-i-pay-if-i-win-lot-money-while-gambling-las-vegas.asp):



Says who? Show me the law.

And if that's really the case, then you should read between the lines. The fact that Mintpal (for example) has no records to refute you only works in your favor. It's clear as day that billions of dollars are transacted in cryptocurrencies every day. It's also clear as day that the vast majority of these transactions are not recorded in a way that can be transmitted to tax authorities systematically.

You can either work within that context and pay the taxes you owe, or you can keep complaining about how there is no systematic government-whitelisted approach to doing that. Your choice.


That's unfortunate but it's your fault and just indicates that you were never serious about paying your taxes to begin with. As I said, I paid all taxes owed on Mintpal and Cryptsy several years ago.

Fortunately for you, the fact that Mintpal and Cryptsy don't exist to refute your trading records actually works in your favor. There is functionally no difference between Mintpal trading records you fabricate today, and my real trading records from 4 years ago. But you continue to irrationally go on about "every satoshi movement inside exchanges" as if tax authorities could ever determine the truth.


There are no precedents. You might wait years for clarity. This is like the meme of the skeleton waiting for the Bitcoin price to dip.

The cautious move was to consult an accountant/lawyer years ago -- and certainly when tax liabilities for the previous trading year arose. Just because cryptocurrencies are a new asset class doesn't mean you could assume that taxes didn't apply like other assets.


That means you you didn't treat it as ordinary income, which usually triggers tax liabilities in the tax year you earned it. The honest thing to do is amend your previous tax returns to declare your income from previous years. Alternatively, there are a host of options, but none of them are technically honest nor legal. And since you believe that every satoshi must be accounted for including links to exchanges with KYC, it sounds like you are between a rock and a hard place.

Please learn to read, I said anyone putting any amount of money in a bank without a clear way to prove this money was obtained legally is a criminal, and by default, a government will think you are a criminal unless you can prove the former. Notice how I have pointed at several cases of accounts being frozen when they see they came from exchanges, it's because you have to prove that this money is legit.

And yes, cash transactions (of any relevance) are illegal, increasingly in more and more places. And no, you cannot put $200,000 worth of cash in a bank and don't expect problems unless you can prove the origin is legit clearly, same goes for a bitcoin deposit and so on, pretending the opposite is true is actual delusion.


This may be the case in your country (which is pretty weird, because makes money laundering trivial), but at least here you can't pretend to get any amounts of money in bitcoin you want into your bank account claiming that they are from a dead exchange's gains. Otherwise someone could sell a couple millions worth of drugs on the darknet, mix them, cash them out into your bank account and claim they are from a dead exchange's gains.

The burden of proof is on you (which is why I said "government treats you as a criminal by default"), and I doubt "it's from a dead exchange's gains" will cut it, even if it's the truth, which is why im worried about cashing out these coins, or coins which I mixed back in the day to text a mixer. Now there aren't clear traces about these coins.

So this thread has been ongoing for quite some time now. What have you learnt and what are you going to do? You seem to be locked into a particular spiral of doom and nothing anyone says is talking you out of it.

It will be different in some countries which have regulated cryptocurrency and applied tax on capital gains such as the US.
But most countries do not regulate cryptocurrency yet, so people can cash out without any question regarding their income.
I have converted bitcoin into fiat currency a couple of time through a local exchange in my country and it works just fine.
But the government has tried to learn about cryptocurrency in order to regulate or ban it, this will be a disaster for bitcoiners.

I have learned that I still haven't seen anyone cash out a relevant amount of signature earnings (let's say above $10000) at least in a place that's relevant to me, so I will remain skeptic and just hold it and see how I go about it in the future.

Im still worried about the mixed coins that I did mix to test a mixer out years ago (years ago 1 BTC was worth like $200) and so Im worried about cashing these out then not being able to explain where they came from and getting it counterfeited. Same goes for BTW that I withdrew from dead exchanges or lacking information of the trades in any way. Im not sure if I will ever be able to cash out any of these... so I may have to stick with signature earnings and other coins in which I can clearly trace the origin, otherwise it's extremely risky to cash them out because you don't know what the hell to expect.

Well, I've never sold any but I have spent plenty. Some of this was experimentally mixed just like you. Some of it was from sig campaign earnings from Bitmixer which may well be looked deeply down upon some day.

All of it, many thousands in total, went through Bitpay. They happily took it and I got plenty of tat in return for it. Go drip buy some gold or some race horses. No one is going to harm or kill you. Any vaguely clued up accountant will be able to join any dots that are questioned. There should be enough scraps out there to satisfy anyone.

This is also the area I'm looking at OP's worries - huge sum of fiat money transferred into an account, especially where it is above the stipulated amount for individual account.

Meanwhile on the other hand, I think to convince the authority about where the source of the money came from wouldn't be a difficult task, the authorities have a way of verifying facts because this forum is legitimate and some authorities are away of it themselves.

The point however is, if huge money transferred to an "unmerited" account as regarding specified amount for an individual account, it would then raise the curiosity of the government.

Whether you like it or not, the government want you to pay taxes on your signature campaign earnings and airdrop tokens. With each passing day, they are eliminating loopholes which can be used by crypto-users to avoid taxes. Very soon, we will be required to give details of our crypto-holdings. If we hide our holdings, then they will proceed with tax evasion charges.

It seems to me that you're oversimplifying the situation. The government is not interested in our taxes. They are concerned about the level of freedom which allows for the use of cryptocurrencies. I am sure that they have set for themselves the task of a complete ban on the use of cryptocurrencies. Paying taxes is only a formal reason to fight with cryptocurrency. Very soon we will understand but will be late. Now need to create the conditions for the cryptocurrency can be used directly without exchanging for Fiat.

Yes our local governments did not forced us to pay taxes on our bitcoin have from signature campaign in our country because they have nothing to do with crypto currencies. Besides now some banks of other countries and governments recognized bitcoin as a digital currencies that one of the assest of source of income. For me when you pay taxes when are going to cash out your bitcoin and covert to fiat when you cash out there's have a transaction fees on remittances or banks that's our taxes i think.

And how would they do it according to you. For instance the government can say they require all people to pay taxes on porn and declare how much porn they're watching a day. It would be as ridiculous as asking us to declare our cryptocurrency holdings, reveal all our addresses and pay yearly tax on coins that are in our wallets,
It would not only be a futile attempt, but also an enormous waste of resources on their part. And of course it would be against the law in most places because you can't require people to pay taxes on their whole wealth. If you have gold or jewelry you aren't obliged to calculate its value every year and pay a tax if it happened to gain some.

What is the deal with airdrops and tax? Presumably you have to move or trade them to be liable for tax.

I don't see how anyone can be liable for them unless they're provably utilising them somehow. And there are now so many I assume the vast majority won't ever touch them.

If I got some tax demand for a fork I hadn't redeemed I'd post them the old private keys and tell 'em to fucking sell it themselves. 

Which country are you from? Huge amount is really questionable to cashout especially if the exchange are regulated. Just provide the necessary proof that you accumulate your money through sig campaigns where you worked for years and not because you are connected in illegal activities.

I didnt encounter any problem converting my bitcoins to fiat directly to my bank account, I think it depends on the place where you are on how they deal in situation with high transactions.

Yep it only gets even more ridiculous when you factor in the forks.

We have money that we don't even know that we own, because there are forks all the time, so if you have 10 BTC, you have also 10 BTC worth of whatever other new fork of the hour that someone did and you are supposed to report these too, and reporting your actual BTC is already a problem if like I said before you have some mixed inputs in a bitcoin mixer from years ago when you did some testing, and you have some missing trading history due dead exchanges... it becomes a nightmare that keeps growing as your transaction history is the same on another different forked blockchain which would need you to move all of your BTC into other BTC addresses before accessing the forked coins.. it gievs me an hadache to even begin to think about ordering all of my transactions, forks, altcoin tradings... it's hell really. Fuck, I just wanted to buy a god damn house in a couple of years, looks like im going to have problems with it. We'll see what I can do about it. Im ok with paying taxes, but im not ok with the government stealing half of my earnings because they decide there isn't enough proof that I obtained them posting in here, trading altcoins in Mintpal or selling drugs, it's not fair, I worked hard for all of my coins and I did it all legal, I want my house.

cashouting huge amount of money everyday will become suspecios. but if you can prove where your money came from then nothing to worries. the government cannot forced you to pay some tax from the money you earn in signature campaign they are concern only about money laundering. if your country is open minded about btc then prove your hardwork so that you can freely buy property without fear.

Like I said before, this is easier said than done.

Bitcoin is too new, earning income with Bitcoin is too new. There are no precedents that I know off. Show me someone cashing out $10,000+ worth of signature campaign gains, and explain me how to the process went (and say where are you from too). Otherwise you are taking a risk because you don't know what will happen. You don't know what they will ask for.

And don't get me started if you mixed of your coins, or you lost some trading history because stupid exchanges are now dead (Cryptsy, Mintpal, etc)