Very smart move on Lukashenko's part. This bodes well for global regulatory matters. I'm sure that the Belarusians wouldn't make such a move if the Kremlin were likely to move against them. I'm still hoping that the rush to secure position in the cryptocurrency markets will prevent any coordinated attack by governments against Bitcoin and other cryptocurrencies. Only time will tell.

The more we see countries follow Japan, the more likely that cryptocurrency usage becomes normalized in society. If Russia followed in Belarus' footsteps here, that would be a real game changer.

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.

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.

The "Wild West" atmosphere that has always existed brings significant benefits. Increased attention from regulators, law enforcement and tax authorities means increased compliance costs for services and increased likelihood of government shutdowns (like BTC-E).

That's bad for innovation and market competition among service providers (increased risk and barriers to entry). It's bad for cryptocurrency users, who will undoubtedly lose choices as market competition lessens, and who will likely lose funds as more custodial services (like non-compliant exchanges) are shut down.

That's what I'm worried about. On one hand, I sympathize with the argument that national governments are in competition, therefore a coordinated effort to squash cryptocurrencies is impossible, as each government would be sacrificing potential tax revenues and market position in the crypto sector.

On the other hand, governments and central banks may not perceive Bitcoin as a threat to their ability to issue money and control the money supply. That may collectively change. If so, we better hope that Bitcoin is much more hardened against state attacks than it currently is. I wouldn't rule out the possibility that this wave of regulation is followed by a wave of prohibitions.

What would happen if the world's most powerful governments coordinated to ban mining and bitcoin payments? That could have devastating effects on hashrate and would cause most services to shut down or massively scale back. Sure, it won't "disappear" in a literal sense, but how sure are you that Bitcoin can survive a coordinated attack by governments? To date, they have simply allowed it to blossom, virtually unfettered. But what if Bitcoin truly is a threat to central bank monetary sovereignty? Will they just take it lying down? AML regulations =/= prohibition on mining and payments.


Is this referring to the Venezuelan tax proposal? I guess governments need to devalue your money somehow, even if you're not holding their fiat money.

Is that being fair? Not only is this open source software, but hardening LN against all edge cases is no easy feat. I'm also worried that massive amounts of coins will move into LN upon launch of publicly available wallets. Developers need to take the utmost care to ensure that coins aren't lost interfacing with LN.


Market share vs. altcoins doesn't matter. That's the wrong approach. "Move fast and break things because X or Y coin developers move quicker" isn't reasonable. Has Lightning been integrated into an altcoin? If not, why not?

Once LN is widely deployed, Bitcoin is likely to regain significant market share from any coin whose value is derived from fast/cheap transactions.

Looks like the rumors were true. I'm curious to see what the final regulations look like because it's not clear if this targets just exchanges, or both exchanges and customers. For example, they may just be requiring domestic Korean exchanges to enforce KYC procedures. This would still allow customers to trade anonymously on international exchanges.

SB 1241 in the USA will go further if passed. It will make it illegal for residents to conceal or misrepresent their identity. US-based exchanges are clearly already bracing for full KYC measures if they haven't already implemented them. But this might also deter US traders from trading on international sites (like Bitfinex or Bitmex) where they would have to conceal their US residence.


I don't see any emphasis on consumer protections. Just "More KYC! Passports out! More third party outsourcing of all your most precious personal information!" That's what pisses me off. Data security and identity theft are extremely relevant in this day and age, and I'm annoyed that people take it so lightly.

The P2P market may be exploding in volume, but how long do you expect that to last? The reality is that traders are using highly centralized services to maintain the OTC market -- Localbitcoins, Paxful, and messenger apps like QQ, Wechat, Telegram, and Slack. The government is quietly allowing the OTC market to boom, but it would be trivial for them to target these centralized services.

The infrastructure for decentralized P2P trading is virtually nonexistent.


I think Huobi's move here squashes hope that Chinese exchanges are returning. When the exchanges initially relocated to Hong Kong, it felt temporary and there were rumors of a new licensing system for exchanges. Seems like they are exiting the market for the long haul now.

I don't think that's true. The recent tax overhaul highlights why:



It doesn't matter whether altcoins are recognized as a currency or legal tender. The IRS made clear last year that "virtual currency [such as bitcoin] is treated as property for U.S. federal tax purposes." That means that Bitcoin and altcoins face the same tax procedures. The question for me is: At the time of of receipt, is it income? If I were being paid BTC or ETH, I would say yes. For many of the smaller altcoins, I'm not so sure. You can't easily liquidate them for USD without significant slippage (if at all).

Yeah, I wouldn't worry about that. Just saying, because I know people who have made millions of dollars trading altcoins and always thought they didn't have to pay taxes just because USD wasn't involved. BTC-denominated futures traders too. Lots of people are probably shitting their pants now that like-kind exchanges definitely don't apply to cryptocurrencies. I've always treated every trade as a taxable event (as horrible as that's been) and now I can breathe a sigh of relief that my taxes are still in order for the past few years.


This all depends on how you structure things. I think a lot of people incorporate and do their taxes on mining income as a business. Not a lawyer/accountant, but I'm assuming that income is "received" when coins are deposited into your pool account. The fair market value of those coins at the time of deposit would be the cost basis.

Did you even read the article, or just the title? The author isn't suggesting that Bitcoin must be "inclusive" or have "woman engagement quotas." I'm guessing you have some deep-seeded political views that you are projecting here.

The author is merely pointing out a correlation. Correlation =/= causation, but correlations are often quite valuable for analysis. There's no reason to get upset just at the mention of it. Anyone trying to project accusations of SJW intentions here is likely very biased and didn't actually consider the scope of the article.

There's only a few pieces of information that an identity thief needs to steal your identity: name, address, birth date, social security number, and driver's license number.  For whatever reason, unencrypted plain-text SSNs are widely used to verify identity -- banks and credit issuers, hospitals (for medical coverage), utility companies all use them to approve new accounts.

That's why it feels pretty shitty to give literally all the information one needs to steal my identity to shady exchanges. There should be some middle ground where we aren't required to hand identity thieves the keys to the castle.

To be fair, try to look at this from their perspective. If I were a manager at a large national bank, I would be extremely nervous about hundreds of millions of dollars in inflows and outflows to/from Bitcoin exchanges. I know there was a bill introduced earlier in the year regarding exchange regulation, but I believe nothing was passed.

So this is all still somewhat of a grey area in Australia. When the sector was tiny, the amounts of money were so small that it wasn't a major AML concern. But Bitcoin isn't tiny anymore. Major banks might be putting their ass on the line by acting as intermediaries for large exchange operations that may or may not be legitimate. Not sure how money transmitter licenses work over their either.


I think we'll see major crackdowns in the next year or two. I wonder how many of the early generation exchanges and businesses will survive. A lot of businesses could be crushed by compliance costs when targeted regulations start coming down the pipeline.

Cryptsy went down almost two years ago. None of that trade history should matter for the 2017 tax year (or any future years). The recent IRS comments on like-kind exchanges were just clarification of the existing law. All trading done on Crypsty incurred tax liabilities during the year trades were closed (2013-2016). Typically, a trader would export their trading history at the end of the year for their tax return. It makes sense to regularly export your trading history in case the site disappears (as so many have). As for proving the addresses belonged to Cryptsy, that should be obvious enough from blockchain analysis if anyone really wanted to investigate.


No exchanges send 1099s (or equivalent tax forms) to their customers at this point. So technically, exported trading history is all anyone (you or the exchange or the IRS) has to go off. Nobody can prove otherwise. As long as your taxes paid appear to have been made in good faith, I wouldn't worry too much.

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.

This isn't new. It's just a clarification of the tax code that any competent CPA already understood. Like-kind exchanges for altcoins were never allowed under the tax code. If you've been neglecting to report income because you were deriving that income from altcoins rather than bitcoins, you better hope you're not audited.


SSI are real assholes. Personally, I wouldn't let it keep me from mining. But they definitely consider mining income to be "additional income received" that would cause your SSI check to be docked. Technically, you're supposed to report it.

Why is it great? Even if they could verify people in a timely manner, why should I feel safe verifying with them? They are asking for a full social security number now, along with passport/DL and HD selfie! These guys been hacked before, too.

Equifax can't even secure our credit reports, so why not? -- Is this the logic now?


Yeah, tell that to all the people who have had withdrawals completely disabled over the past couple months.

Some people might see it that way. Most people are just complying with tax regulations because evading them can land you in jail.


Not having a bank account might have helped to keep you under the radar, but I assume you had to provide ID to Western Union on every trade? Those records still exist. The LLC definitely puts you on the IRS' radar, and if you are now running large transfers through bank accounts, banks file Suspicious Activity Reports to FinCEN. I believe that Western Union may file SARs on high value or structured transfers as well.


The IRS can't know identify your addresses just by looking at the blockchain. But they do work with Chainalysis to link addresses to identities, and fiat exchange is one of the easiest ways to do that.

If you trade above certain volumes, you are considered a money transmitter and you are supposed to register with FinCEN. You are also supposed to enforce some AML/KYC procedure to comply with money laundering regulations. Many people have been arrested for running unlicensed money transmitter services for exchanging Bitcoin for cash. But it should be noted that in most of the cases, there are additional investigations into guns and drugs underlying that activity.

That was their position in the DAO report. But SEC chairman Jay Clayton published a statement earlier this month that went further and was much more specific. The implication is that the vast majority (if not all) of ICOs as operated were securities offerings under US law:


In particular, I think that most ICO promoters made a grave mistake in touting the trading potential and potential resale value of their tokens. That likely puts them squarely in the sights of the SEC:

   

It's not an either/or situation. Yes, 2x (or more accurately 8x) would have led to more centralization. But let's not avoid the actual issues at hand. There are some edge cases where counterparty risk exists in Lightning. High on-chain fees may exacerbate this risk:



So, depending on the fee conditions of Layer 1, there can be additional risks to using Lightning. This risk entails that you choose your counterparties wisely, as John Light pointed out above.