1. It is my opinion that once you convert BTC to fiat, even if you leave the fiat on the exchange, it is still a taxable event both for income and capital gains. However, why would you leave fiat on a crypto exchange? Normally when BTC is converted to fiat it is with the intention of taking profit and withdrawing the cash.

2. I don't know much about usdt, but if the price is merely tied to USD then it is still a crypto-currency or token, and therefore you would not be converting BTC to fiat so not a taxable event.

3. I am licensed in Nevada. I do not know the laws of Arkansas and have never been hired to explore them.

4. I do not generally make public or private referrals on this site unless hired privately to investigate the same.

5. The questions in #5 are far beyond the scope of the free advice I provide on this site. In general the SEC, FinCEN and State regulators may  look into those who are acting as Brokers for others. This type of venture is much more complex than people initially assume. 

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

I think it is a great set of questions. First of all good for you! Currently, just holding Bitcoin, to the best of my knowledge, is not a taxable event. There are no money laundering issues here. You are not going to get in trouble with any authorities. It is perfectly legal to own BTC.

My advice going forward though is that you diversify. Spread it out a little bit. ETH seems to be a worthy investment. There are other coins out there that have utility and a following such as CURE coin. Also, consider taking some profit, that is, sell a little, then you would declare that as income and it would be subject to income taxe but so what, pay them. It is wise to take some profit and foolish to think that BTC will go up forever.

I do want to caution all, BTC is speculative. Yes, it has been going up in price and everyone is excited, but it could drop in price as well. If you have been around for a few years you will know this to be true.

George D. Greenberg, Esq.
www.attorneybitcoin.com

I'm sorry I do not have an answer to your question. Look into the country that you are a citizen of. That way you can be accountable for your actions and pay taxes for the country you live in.

George D. Greenberg, Esq.
www.attorneybitcoin.com

To the best of my knowledge converting to a different crypto-currency does not trigger a taxable event. Please consult a CPA as I am not an expert in tax matters.

George D. Greenberg
www.attorneybitcoin.com

I am not a tax expert but I do understand how confusing taxation is for Crypto-Currencies. There are 2 different taxes. Income tax and capital gains tax.

Income, to the best of my understanding, happens when you turn BTC, into fiat. It is considered income for that year and claimed in that year as part of your entire income, for income tax return purposes. 

Capital gains is a bit more complicated. It has to do with the gains you have made on investments. This type of tax is one of the most disliked. It's basically the difference between what you bought an asset for and what you sold it for.

The calculating of capital gains in the crypto-world can be quite complicated. If you buy a coin  and it increases or decreases in price, did you keep track of the price you bought it at and the price you sold it at? Is your trading platform tracking that? Then you use that coin and buy a different coin, then you sell that and buy another coin and so on and so forth; then you add some more funding to the account at the trading platform; are you tracking the added funding separately? Then you continue buying and selling the same coins which are all then grouped together in their own trading platform wallets. You get the drift.   

A C.P.A. will understand these things and be able to answer more specifically.

I hope that helps.

George D. Greenberg, Esq.
www.attorneybitcoin.com   

I vote for staying in the United States and paying taxes as a Citizen. We are all in this together and choose to live here.

Let me start by listing some elements of a successful coin or token. This list was put together by myself, a developer and an owner of a mining pool.

The list is not intended to be comprehensive and I welcome readers input.

Key elements of a successful cypto-currency:

1. Market Cap: While obviously important this is only reflective of how much money is invested into the coin; some from venture funds but more likely the majority from individuals who hope the coin will actually flourish and make them money. Most of those who buy/invest in any given coin are not likely to be sophisticated in what will make a coin flourish and last.

2. It Does Something Useful or Unique: Such as lend computing power for scientific or mathematical research, like CURE Coin; provides a unique platform for business such as Smart Contracts like Etherium; increases public acceptance and confidence; has uses in a particular industry such as online action/strategy games, adult audience, such as Gamecredits or Sex Coin; acts in a more anonymous fashion or acts in a fashion that is compliant with AML, KYC; it is a collectible item much like baseball cards or art; it targets a particular market or markets; it has a unique identity.

3. It Works: It works better than predecessor coins, it works quickly, efficiently, cleanly, securely and is highly resistant to hacking.

4. It has POS Staking/Inflation Balance or Effective POW Mining Access: If inflation is too high a coin becomes untenable for the long term. If it is too difficult to mine, then users lose interest. Interest paid via staking should be attractive and reward loyalty.

5. It has Several Sophisticated Developers: Ethical programmers and business persons, who remain involved with the coin for an extended period of time.

6. It has an Active Community: Investors who support, invest in, contribute to and believe in the coin as viable.

7. It has General Utility: It gains public acceptance and is used and accepted increasingly for various value transactions.

My focus here is on what I consider to be the most important functions, general and specific utility. Now, the underlying coin must work, must be viable, secure, well funded, inflation protected, protect against the 51% dilemma, work better than other coins or do something unique as well. These are key elements to the solid foundation. But in my opinion, if a coin is only collectible, or only anonymous, or only pays steady interest, or is only super secure or is only super fast, it does not meet the societal demands of long term success and contribution toward a better society.

There are those who disagree with me on this point and that is fine. But it is my opinion that general or specific utility are the key elements that make the complete package and bring about improvements to society as well as short and long term gains to investors.

What does it DO? Does it lend computing power for scientific research? Create a better way of tracking financial transactions or record keeping? Create a better way for parties to contract? Create a rapid, low cost and secure way for peer to peer transactions?  Provide a platform for marketing or socializing? Create a better way for artists, musicians and writers to create or market their products? Allow for a low cost way of remittance between countries? Provide an alternate and lower cost way of trading securities or commodities?

These things, which have been or are being done through crypto, are groundbreaking and remarkable. They are changing our lives in ways we do not even understand or see yet. 

UTILITY IS KEY.

George D. Greenberg, Esq.
www.attorneybitcoin.com

COINBASE AND BCC

I would like to comment and get comments on BCC and Coinbase. Coinbase may not have given a full and fair warning as to the implications of leaving BTC in Coinbase at the recent fork. If a user had transferred his BTC to say Bittrex, he would have been given BCC on or after August 1, 2017. If a user left his BTC in Coinbase he receives no BCC. I have seen talk of legal action. Now I have nothing against Coinbase. I have a wallet there and they are an industry leader; however it seems they have perhaps missed the boat on this one. The question looms, what happened to the BCC that was awarded to to Coinbase? What's missing here? Have I misunderstood?

Comments from Dev's would be greatly appreciated. I think there are many people affected by this. Thousands?

George D. Greenberg, Esq.
www.attorneybitcoin.com

Dear New Jersey:

As to FinCEN, yes, you are on the right track. Register as an MSB and make a reasonable good faith effort to follow their requirements. This will take some research on your behalf. You can hire a professional to summarize it for you and to help you set up a plan.

Money Transmitters. Every state that has these licenses has a division that oversees them. In Nevada it is under the Department of Business and Industry. You will have something similar in New Jersey. Look under banking regulations or money service business regulations for your state as a start.

They may or may not require you to have a M.T. license. If they do it won't be cost effective for a small business. You can write the proper state agency or have an attorney write them and state your business plan and ask if they consider it a M.T. activity that requires a license. Send the letter certified mail return receipt requested. It is known as a "no action letter." Meaning that you hope there is no action required by you and that they will take no action against you.

It will carry greater weight if sent by and attorney. I have sent many of these to many states.

Really, the biggest problem is banking. But that is another story.

Best:

George D. Greenberg, Esq.
www.attorneybitcoin.com

I like the tree idea. It is clever and creative. There is not much marketing to female crypto enthusiasts, this might be something they enjoy.  It does not look like gaming to me. It needs some more work but you are on the right track, keep working and thank you for the kind words.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

Your questions will require in depth discussions. Please PM me. Thank you for writing.

George Greenberg

Dear TheGodson:

Sure, it's legal if gaming is legal in your state and you have a gaming license in your state and you limit the wagering to people in your state.

That is unlikely so the answers are: 1) It is probably illegal, and; 2)You can face criminal prosecution.

I'm sorry I don't have better news for you. If you want to explore a gaming site online you might look into my home State of Nevada. You would have to live here though, get a gaming license here, and limit the gaming to in-state wagering. Honestly it doesn't sound very promising.

Keep looking for opportunities to make use of Bitcoin and other cryptos in business and best of luck to you Sir.

George D. Greenberg, Esq.
www.attorneybitcoin.com
 

Thank you for the kind and supportive words of appreciation. Best: GDG

I do not hide behind any screen Sir. You may see me in person at 7674 West Lake Mead #245 Las Vegas, Nevada 89128 or call me at 702 796 5221 anytime. I'm here every day of the week.

Thank you Sir. Not only have I given free advice from this site but from people who have called from my web site. I have done so for the past 2 years. I have paid my dues, contributed to the community and have earned the right to charge for my time and advice which has kept many out of trouble and saved many more, thousands of dollars.

Respectfully:

GDG

Really? How very cryptic. If you have anything you want to talk to me about please come to my office at 7674 W. Lake Mead Blvd. #245 Las Vegas, Nevada 89128 and say it to me face to face, man to man, or call me at 702 796 5221. I have no idea what you are referring to. My reputation is solid and I am an established 25 year attorney. If you have something to say come out and say it. Otherwise, please refrain from vague statements. And by the way, yes, please everyone research me. Unlike the statement above I put myself out there and am accountable for my statements and actions.

George D. Greenberg, Esq.

Are you trying to pin me down to a legal conclusion? Tell me, are you going to point a finger at me if my advice turns out not to be 100% correct? If you are going to manage others money and be an investor then you need to hire an attorney so you can get your "Just to be clear...." answers. I give only general advice here.

In general, it's just not that simple. Sorry but we are in the real world and the real world is complex. That is why attorneys and CPA's devote much of their lives to understanding the complexities, then people pay them for advice they can rely upon.

I'm beginning to tire of readers who think they are somehow entitled to have all of their problems solved without doing their own research and paying their way to solve the more complex issues. I don't mind your general questions but your "Just to be clear...." is a sign to me that you are not willing to put your money where your mouth is, all the while wanting to make money from other people's investments in you.

IN GENERAL SIR, you need to be careful about the sources of your token income as well as declaring any income on your taxes once you have converted the tokens to dollars (hint...hire a CPA.) In addition you need to be mindful of state regulations as to money transmission.   

Another looming issue here is whether or not this new breed of crypto fund owner/managers needs to send out 1099's. When regulators catch up they may very well have to do so.

To all readers; these issues cannot be simplified to a few words. There are no magic solutions as these areas of regulation and taxation are constantly evolving.

George D. Greenberg, Esq.
7674 W. Lake Mead Blvd Suite 245
Las Vegas, Nevada 89128
www.attorneybitcoin.com

It is not illegal to take USD and invest in stocks for yourself. The source of your money should be legal of course. If you are investing cash for other people you then have legal and regulatory issues that must be addressed.

As to the underlying crypto hedge fund, this really depends upon the amounts of money and the persons you are dealing with. There are AML/KYC issues with FinCEN. There may be state money transmission issues is you are dealing in cash at all. Even if you are only dealing in BTC/ETH and the like you must protect yourself from AML issues by registering with FinCEN and making a good faith effort to collect identities where needed and to report when required.

You will of course be on safer ground as to money transmission laws if your hedgefund is opened with purely crypto and dividends paid purely in crypto and you are in a state that does not regulate that.

Finally you are going to have banking issues. But everyone has that.

I hope I answered your question.

George D. Greenberg, Esq.
www.attorneybitcoin.com

The way to avoid trouble is not difficult. You need to register with FinCEN and make a good faith effort to comply. It need not be perfect. You also need to look to your state to see if your activities are considered money transmission.

In addition large deposits into banks on a frequent basis, particularly cash, without having done the above, are just asking for trouble.

Finally declare your income and pay taxes on it.

Generally, in my experience as an attorney, there is much more to each story than the excerpts that we read. It is more likely than not that the individuals charged were trying to avoid paying income taxes and it is also possible that they were dealing with individuals that may not have been model citizens. You have to ask yourself, what is your risk tolerance? The more risks you take, the more likely you are to get stung.

George D. Greenberg, Esq.

www.attorneybitcoin.com