To some, the attitude of crypto traders resembles the world of Dorothy in the Wizard of Oz.

They amble through the magical Land of Oz, following the yellow (gold) brick road, guided by a motley, sometimes bizarre, cast of characters, often oblivious to the dangers and realities of the world in which they live. 

In particular, the tax world in which they live.

Many crypto traders have believed that they are "off the radar" of tax authorities, who simply won't find out about their transactions. And, even many who do accept that they may have to report their profits from crypto have taken the position that they have no tax liability until they eventually receive "fiat" currency, and should not be taxed on coin for coin exchanges.

https://www.coindesk.com/owe-irs-crypto-crypto-trades/

"Would you stop running your full node if you found out that there was child porn encoded in the blockchain?"

The question, posed by ethereum developer Vlad Zamfir through a Twitter poll last week, has been discussed before, but it's recently resurfaced after a widely-publicized report from AWTH Aachen University found one graphic image of child porn and 274 links to content depicting child abuse stored within the bitcoin blockchain.

The report goes on to contend that because downloading or transmitting child porn is a sex crime, participating in bitcoin as a miner or node operator could be illegal.

https://www.coindesk.com/child-porn-bitcoin-blockchain-what-it-means/

Developers are preparing to go to lengths to keep one of the world's largest cryptocurrencies free from the encroaching interests of big business.

While a high-speed hardware known as an ASIC has been used to secure bitcoin transactions for years, mining hardware manufacturer Bitmain recently announced a new model, the Antminer X3, that has been purpose-built for mining the privacy-oriented cryptocurrency monero.

Yet rather than greeting the hardware as a welcome sign of increased interest, monero will go so far as to enact an emergency software upgrade in April meant specifically to change the rules of the system so as to block the effort entirely.

https://www.coindesk.com/crypto-kill-switch-monero-going-war-big-miners/

Productivity paradox
Proponents everywhere tout that blockchain will make the world more productive. I've even made the argument that blockchain will force auditors and accountants out of glorified administrative work so they can produce more value for society.

Whether it's in banking, logistics, or advertising, on the surface, it may seem logical that any technological change will create "productivity gains." But before we convince ourselves that blockchain will be a time saver, consider the Solow Paradox.

Also known as the Productivity Paradox, this is the observation that "... as more investment is made in information technology, worker productivity may go down instead of up."

I've witnessed the Solow Paradox in action while working in different offices alongside C-Suite executives and other consultants. I've seen working professionals barely able to work an Excel spreadsheet, let alone utilize the countless Excel formulas that could have made their work output more productive and efficient.

https://www.coindesk.com/warning-blockchain-rot-brain/

Marc Hochstein is the managing editor of CoinDesk.

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.

"We don't have them on the ropes yet but we definitely have them scared."

That was the assessment of CoinDesk reader FireFox Bancroft, commenting on our story last month about Bank of America's mention of cryptocurrency in the "risk factors" section of its annual filing with the Securities and Exchange Commission.

"Scared" might still be a bit of an overstatement. But it's clear from the latest round of annual reports (also known as 10-K filings) that financial institutions, ranging from B of A's gargantuan peers to regional players, are taking bitcoin and its brood more seriously than they did a year or even six months ago.

That change is a reflection of how far cryptocurrency and blockchain technology have come in a short time, not only in terms of valuation but also public awareness, even if widespread consumer adoption remains distant.

For Bank of America, the threat is twofold: cryptocurrency use could make it harder for the bank to trace financial flows in order to comply with anti-money-laundering laws, and the technology is a potential competitor to traditional financial intermediaries.

Echoing the latter concern, JPMorgan said some financial services business lines, including payment processing, "could be disrupted by technologies, such as cryptocurrencies, that require no intermediation." It was a striking acknowledgment from a company whose CEO famously called bitcoin a fraud (though to be fair, he did later express regret over that remark).

But it's not just Wall Street that's got crypto on its radar. Main Street banks like WesBanco in West Virginia and IberiaBank in Louisiana also mentioned potential competition from the technology in their 10-Ks. Again, these are not the too-big-to-fail behemoths that Occupy and Elizabeth Warren rail against; they're the successors to the Bailey Building & Loan in "It's a Wonderful Life," the institutions that host barbecues for the local chamber of commerce and march in the town parade. And they think they might plausibly lose some customers to crypto.

Perhaps the least surprising company to join this club was Goldman Sachs, considering that the investment bank started clearing bitcoin futures for clients toward the end of last year, though it's not directly touching crypto.

Square is, however, through its Square Cash app's bitcoin-buying feature, and one of the risk concerns cited by the payments company reflected this deeper involvement.

It warned that accounting rules for publicly traded companies aren't clear on how to treat cryptocurrency. So there's the possibility that if auditors or regulators disagree with method Square uses, it may have to restate previously reported results. Which is rarely good for a company's stock price.

https://www.coindesk.com/banks-finally-talking-crypto-filings/

Binance, the largest cryptocurrency exchange by trading volume, announced that it is officially developing a public Blockchain to create a new decentralized exchange, according a statement on March 13.

Binance’s vision that “centralized and decentralized exchanges will co-exist in the near future, complementing each other” inspired them to develop the Binance Chain, which  will be used for the transfer and trading of Blockchain assets. The move will also push the cryptocurrency exchange toward transforming from a company into a community.

https://cointelegraph.com/news/worlds-largest-crypto-exchange-binance-to-launch-decentralized-trading-platform

Goldman Sachs’ technical analysis team led by Sheba Jafari has recently made another Bitcoin (BTC) prediction, stating that the major cryptocurrency risks sinking below the February low, Business Insider reported on March 12.

On Sunday, the team sent a note to clients warning that the next BTC sell-off threatens dipping below the February low of $5,922. Jafari’s team suggested that the next sell-off would be caused by the break of short-term support at $9,210.

"The break is significant as implies [sic] potential for a more impulsive decline," Jafari stated. Her team warned investors to keep an eye on BTC price, predicting that, “The next meaningful level is down at $7,667 to $7,198.”

“Getting а сlоѕе brеаk thіѕ tіmе аrоund wоuld wаrn оf ѕtruсturаl dаmаgе, іnсrеаѕіng thе rіѕk оf nеw lосаl lоwѕ (<5,922). At thіѕ роіnt, nееd tо gеt bасk thrоugh 9,322 (thе Fеb. 26th lоw) fоr thіѕ tо ѕtаbіlіzе,” Jafari’s team wrote. 

Jafari, the head of technical strategy at Goldman Sachs, is known for criticizing Bitcoin. In July 2017, Jafari suggested that Bitcoin would hit the $4,000 mark by the end of the year. Later in November 2017, when BTC reached $7,000, Jafari made another prediction stating that Bitcoin would consolidate at $8,000 before going higher.

Bitcoin’s price rallied to $20,000 in Dec. 2017 from a modest $1,000 at the beginning of the year, before sinking down to $6,048 on Feb. 6 2018. Some experts believe that the cryptocurrency downturn is mostly likely due to a $400 mln sell-off by the attorney and bankruptcy trustee of Mt. Gox, formerly the largest global Bitcoin exchange.

https://cointelegraph.com/news/goldman-sachs-bitcoin-has-potential-to-drop-below-february-low-of-5922

Some advertisers using Google Adwords to promote cryptocurrency related businesses are seeing a drop in their ad views, with other users posting about suspension of both their ads and their accounts, Finance Magnates reported on March 8.

According to data given to Finance Magnates anonymously by an Initial Coin Offering

(ICO) marketing company, the views of its advertisements through Adwords have dropped by the thousands. Below is a table from Finance Magnates showing views of the company’s advertisements over a 24 hour period.

https://cointelegraph.com/news/crypto-advertisers-on-google-adwords-report-ad-suspensions-and-account-terminations

На прошлой неделе чиновники из небольшого городка Платтсбург Нью-Йорк подали запрос на мораторий майнинга биткойна, которые в настоящее время процветает в городе. Предложение было инициировано мэрией с отсылкой на чрезмерное использование электроэнергии и ее потребления.

Чиновники хотят, чтобы майнеры биткойна покинули их небольшой город. Некоторые политики Платтсбурга обеспокоены ситуацией, при которой старая бумажная фабрика полностью забита соответствующим оборудованием, а жители города озадачены масштабами потребления энергии. Чтобы изменить ситуацию, 2 марта на рассмотрение был предложен закон под номером §707-28-J, который налагает мораторий на коммерческие операции с майнингом. Его публичное обсуждение должно состояться 15 марта в палатах Общего совета.

Согласно документу мораторий будет действовать в течение восемнадцати (18) месяцев с даты вступления в силу закона.

Любая компания, физическое лицо, корпорация или предприятие, которое будет создавать, размещать, строить, возводить или каким-либо образом проводить коммерческие операции по криптовалютному майнингу, описанные в местном законодательстве города Платтсбург, будут оштрафованы на сумму в размере не более $ 1000,00 за каждый день или единицу времени, в течение которых произошло нарушение.

В феврале этого года мэр города Колин Рид в интервью New York Times сказал, что на майнинговые операции уходит около 10 процентов мощности города. Также он сказал, что наряду с потреблением электроэнергии он предпочел бы увидеть привлечение большого числа сотрудников, а не только работу машин. Рид упомянул компанию Mold-Rite Plastics, которая потребляет много энергии, но при этом имеет более 200 сотрудников. Вот что он сказал про майнинг:

Майнинговые компании? Они нанимают охранника и парня, который приходит, когда что-либо ломается.

Любопытно посмотреть, чем закончатся публичные слушания — вполне возможно, что этот бизнес останется в городе, выполняя общественные задачи, либо будет исторгнут из него по экологическим соображениям.

https://happycoin.club/plattsburg-gorod-dlya-mayninga/

Cryptocurrency mining specialist Bitmain may be quietly developing new facilities in America's Pacific Northwest, documents suggest.

While nothing has been stated publicly by Bitmain, the bitcoin mining hardware producer appears be connected to a new company called Ant Creek, LLC, that, reports say, is trying to build mining facilities in Washington state.

According to business data site companies-number.com, Bitmain's co-founder, Jihan Wu, is the sole governing person behind Ant Creek, which was founded on June 28, 2017 and is registered as an active for-profit entity in the state.

While the company does not have a listed address, the Walla Walla Union-Bulletin reports that the Port of Walla Walla, a city in Washington, is considering a land-use agreement with Ant Creek. Under the terms of the agreement, Ant Creek would lease land from the beginning of 2019, with an option to purchase up to 40 acres.

https://www.coindesk.com/bitmain-reportedly-developing-mining-facilities-in-pacific-northwest/

Mason Borda has been into initial coin offerings (ICOs) since the beginning.

Yet, the former BitGo software engineer, who helped set up Augur's wallet for its token sale in 2015, was hesitant to enter the market himself until last summer. That's when Borda, and security veteran James Poole, started building TokenSoft, a platform for helping projects manage their initial coin offerings (ICOs).

Revealed exclusively to CoinDesk, the project is officially launching today, and with the news, Borda is detailing for the first time a number of the platform's features that are aimed to combat what he sees as prevailing industry issues and pain points.

https://www.coindesk.com/compliant-icos-bitcoin-ogs-launch-regulated-token-sale-service/

Rumors seem to be feeding rumors as it relates to a spate of subpoenas sent out recently to initial coin offering (ICO) issuers by the U.S. Securities and Exchange Commission (SEC).

At press time, it's unclear when or whether the 80 or so subpoenas (or maybe it's 200) were sent out; or which group of enthusiasts - be it advisers, lawyers, the issuers or investors - received the outreach. Industry experts believe there is probably a theme uniting the subpoenas, but even that is unconfirmed.

https://www.coindesk.com/sec-going-saft/

PayPal is eyeing a way to boost the speed of cryptocurrency payments, a newly-released patent filing shows.

An application for an "Expedited Virtual Currency Transaction System" published on March 1 by the U.S. Patent and Trademark Office (USPTO) details a method by which private keys - the strings of numbers and letters used to transact or otherwise control one's cryptocurrency holdings - are swapped from a buyer to a seller behind the scenes.

https://www.coindesk.com/paypal-eyes-instant-crypto-payments-tech/

Комиссия по ценным бумагам и биржам США (SEC) разослала десятки судебных повесток технологическим компаниям и экспертам, включая юридических советников, вовлеченным в сферу ICO, в рамках официального разбирательства. Об этом сообщает Wall Street Journal со ссылкой на свои источники.


Как отмечает издание, ведомство нуждается в информации о структуре токенсейлов и пресейлов, которые на данный момент не регулируются в соответствии с нормами первичных публичных предложений (IPO). В SEC убеждены, что выпускаемые в ходе ICO токены являются ценными бумагами, о чем глава регулятора Джей Клейтон заявил на слушаниях в Сенате США.

Полный текст

https://forklog.com/sec-nachala-masshtabnoe-razbiratelstvo-v-otnoshenii-ico-industrii/

В Малайзии вступили в силу новые правила работы криптовалютных бирж. Теперь в соответствии с «Нормами по борьбе с отмыванием денег и финансированием терроризма в сфере криптовалют» Центробанка Negara Malaysia площадки обязаны строго верифицировать все учетные записи.


«Подотчетные учреждения обязаны проводить тщательную проверку всех клиентов и лиц, совершающих транзакции, в момент начала деловых отношений и в том случае, если у учреждения появляются подозрения, что имеет место отмывание денег или финансирование терроризма», — говорится в сообщении Центробанка.

В частности, в перечень необходимых данных теперь входят полное имя клиента, адрес его проживания и дата рождения, а также информация о целях, с которыми совершаются транзакции. В целом новые законы призывают криптовалютные биржи внимательнее относиться к вопросам сбора и проверки информации о своих клиентах, говорится в сообщении.

Как отмечает CoinDesk, принятию нынешних поправок предшествовали несколько месяцев обсуждения и консультаций. В декабре прошлого года представители Центробанка подготовили черновой вариант новых правил и вынесли его на всеобщее обсуждение. Впервые же информация об изменении малазийской нормативно-правовой базы в сфере криптовалют появилась в ноябре 2017 года.

В то же время представители Negara Malaysia подчеркнули, что новые правила не стоит расценивать как официальное одобрение криптовалют — цифровые активы в стране по-прежнему не являются легально признанным платежным инструментом.

«Гражданам по-прежнему рекомендуется тщательно изучать риски, связанные с торговлей цифровыми валютами», — отмечается в сообщении Центробанка.

Напомним, в Южной Корее анонимный криптотрейдинг запрещен с 30 января.

https://forklog.com/malazijskih-kriptotrejderov-obyazali-ukazyvat-tseli-soversheniya-tranzaktsij/

Japan’s largest e-commerce company Rakuten, with a market capitalization of over $12.5 bln, is planning to launch its own cryptocurrency called Rakuten Coin based on Blockchain technology and the existing Rakuten Super Points loyalty program.

The announcement was made by Rakuten CEO and founder Hiroshi Mikitani during his speech at Mobile World Congress in Barcelona on Feb. 27.

Mikitani described the newly announced asset as ‎a “borderless currency,” underlining Rakuten’s vision of differentiating itself from its online retail rivals, like Amazon, Alibaba or eBay and "recreating" the relationship between retailers and merchants.

“Basically, our concept is to recreate the network of retailers and merchants. We do not want to disconnect [them from their customers] but function as a catalyst. That is our philosophy, how to empower society not just provide more convenience,” Mikitani said.

Rakuten Super Points loyalty system was launched 15 years ago and has seen significant success since then, resulting in a total issuance of over 1 trillion Super Points to Rakuten’s customers, roughly equal to $9.1 bln.

The points are obtained every time a customer makes a purchase on the marketplace and can be used to discount future purchases or buy certain products or services on the shopping platform.

The company intends to implement the Blockchain-based loyalty program to attract and engage customers, and use the growing interest in cryptocurrencies to recruit new loyalty members on a global scale.

Rakuten, however, hasn’t released any details about the launch date for the service.

The latest announcement comes almost two years after the Japanese Rakuten acquired the intellectual property assets of Bitcoin payment processor, BitNet, and opened the Rakuten Blockchain Lab to explore applications for Blockchain in e-commerce and fintech.

https://cointelegraph.com/news/japanese-e-commerce-giant-rakuten-to-launch-its-own-cryptocurrency

What's your favorite food? The crypto industry seems to be partial to pizza.

At least that's the case today, with the industry celebrating (with some nostalgia) the first Lightning Network transaction used in the purchase of the Italian food favorite, one made by none other than the man who made bitcoin's first major purchase - Laszlo Hanyecz.

If that name doesn't immediately ring a bell, the transaction that made him famous will - on May 22, 2010, Hanyecz traded 10,000 bitcoins ($41 at the time) for two Papa John's pizzas.

The transaction went viral then and is legendary today, namely because bitcoin's price has increased so much that those bitcoins would be worth a whopping $100 million. But it is also heralded as the first bitcoin transaction in which someone bought something from a mainstream merchant, a couple years before the push for merchants to accept bitcoin began.

In that way, Hanyecz was seen as a bitcoin maverick, and now, he's made himself known again by purchasing pizza with bitcoin's in-progress (and still dangerous to use) off-chain Lightning Network, what many enthusiasts see as the cryptocurrency's liberator from its scaling and payments constraints.

"Good people, harken and know that on this day the one called Laszlo did buyeth the first Bitcoin Lightning Pizzas, bringing us into this new era of glory and cheesy goodness," blockchain researcher Brian Lockhart wrote on the Lightning mailing list.

And on Reddit, a user commented: "This dude Laszlo has nerves of steel and should be in the first batch of Mars colonists."

For Hanyecz, though, it's not about a dish or his daring, it's about making sure the vision of bitcoin as a cheaper, faster, altogether better online payment system fulfilled.

"On my [2010] pizza transaction, I paid a fee of 1 BTC, and it just didn't matter then because I was happy to get anything with it. I was spending this internet money to purchase a real good," Hanyecz told CoinDesk, adding:

"I came out to post about lightning because I do believe in it. And it's still in its very early stages, but the lightning network promises to bring back that functionality of being able to buy pizza with bitcoin."

More pizza please
Like Hanyecz's 2010 purchase, this most recent one may be only a small blip today, but its symbolic value could prove just as far-reaching. For one, it says much about bitcoin's technical direction, and the recent debates over this roadmap.

For those new to the industry, bitcoin's scaling debate was (and in some sense, remains) an exhausting ordeal, one that has pitted different parts of the community against each other.

On one side have been those insisting transactions fees were growing too high for businesses, necessitating an immediate change to the software. On the other, advocates for slow and steady changes that would encourage optimizations and the use of new network layers.

While all sides seemingly wanted the same thing, each had their own urgency and ideas about how that vision might be reached.

In the end, bitcoin's open-source developer team introduced Segregated Witness, a code change meant to impact scalability, and a competing cryptocurrency bitcoin cash broke away, showing off an 8 MB block size.

And all that started a new era of competing cryptocurrencies birthed from hard forks.

"A lot of the reasons that these altcoins got a big push this past year is that people have started seeing you know bitcoin, it can't process every transaction in the world, we need something better, and all these people came out of the woodwork promising something better," Hanyecz said.

But he remains very skeptical that any of these new coins are worth a slice.

"All these things that are supposed to be better, they're just kind of a copy and paste for the most part; they're not solving the problem," he said.

He continues, lamenting what he sees as salacious cash grabs between forks and initial coin offerings (ICOs), and firmly planting his stake in the ground as a bitcoin maximalist of sorts.

And with that, Hanyecz is very much interested in seeing the Lightning Network - which Bitcoin Core developers have been working on for years - to resuscitate bitcoin as a payment mechanism.

"You know it's not some new thing that somebody came out with to try to sell their coins, you know. It's not like they're issuing coins and getting rich off them, like these ICOs or whatever," he told CoinDesk, adding:

"This is a completely different thing and I could stand behind it because you know, I'm using it, I bought a pizza with it."

Slightly undercooked
Yet, even though Lightning development is nearing completion, issues - the biggest of which is the network's usability as detailed by Hanyecz's recent purchase - remain.

For one, because lightning relies on what is called a bi-directional payment channel, Hanyecz had to employ the services of a middle man.

With a bi-directional payment channel, both parties - the consumer and the merchant - would need to set up the payment channel in order to accept lightning payments. Because the pizza place Hanyecz was ordering from did not have the ability to set up a Lightning payment channel, Hanyecz paid a friend who set up the channel to facilitate the transaction.

So, like the 2010 transaction, where Hanyecz paid pizza seller Jeremy Sturdivant to make the pizza purchase, Hanyecz paid a friend who was also running a lightning node to purchase pizza's for him in dollars.

While using a middlemen isn't technically the point, the transaction "demonstrates the basic premise of how this works for everyday transactions," Hanyecz said.

Still, there were a couple other tricky technical hindrances (one that will likely need to be worked out before lightning is used widely) - Hanyecz had to prepay for his pizza, and needed to prove he'd made the transaction in a simple way, without any kind of invoice.

"I didn't want to prepay and end up with no pizza," Hanyecz said.

As an easy workaround, the pizza delivery driver was given the first few characters of the hex string, the transaction's unique payment identifier, and told not to hand the pizza over unless Hanyecz gave him that code.

Once the pizza arrived, Hanyecz flashed a piece of paper with the code, "7241-a8c1," and the pizza was handed over.

In response, Lightning mailing list regular Robert Olsson wrote that in the future this process could be facilitated with an escrow service of some kind, and urged the mailing list: "Start your brains, guys! Things are getting serious, there is pizza at stake!"

Seeing how far bitcoin has come since Hanyecz's first crypto-for-crust purchase, he doesn't believe the challenges interfacing with lightning will persist for long.

"I'm thinking that people will figure that stuff out pretty quickly, and they'll provide ways of doing it automatically so that people don't have to think about it," he said, concluding:

"The software takes care of it for you."

https://www.coindesk.com/bitcoin-pizza-day-2-lightning-payment-just-made-history/

Один из крупнейших канадских банков Toronto-Dominion Bank провел исследование криптовалютного рынка и принял решение запретить клиентам покупать цифровые валюты с помощью кредитных карт. Об этом сообщает Globe and Mail.


«Мы регулярно пересматриваем нашу политику и меры безопасности для защиты клиентов и самого банка», — заявил пресс-секретарь TD Bank.

Royal Bank of Canada, в свою очередь, разрешает клиентам приобретать криптовалюты с помощью кредитных и дебетовых карт только при определенных обстоятельствах. Однако в RBC предупредили своих клиентов о возможности резкого падения курсов цифровых активов и о рисках, сопряженных с невозможностью покрыть задолженности.

«Мы постоянно пересматриваем нашу политику поддержки клиентов и учитываем регулятивные меры, а также другие риски в сфере криптовалют», — подчеркнули в RBC.

Другие ведущие банки Канады пока что не определились с позицией в отношении криптовалют.

Ранее американские банки Bank of America и JPMorgan, британский Lloyds и индийские Citibank India и Kotak Mahindra запретили своим клиентам приобретать криптовалюты с помощью кредитных карт. При этом индийские банки расширили запрет и на дебетовые карты.

https://forklog.com/toronto-dominion-bank-zapretil-klientam-pokupat-kriptovalyuty-s-pomoshhyu-kreditnyh-kart/

Базирующаяся в Гонконге некоммерческая организация LGBT Foundation, созданная для поддержки людей с гомосексуальной и бисексуальной ориентацией во всем мире, намерена уже в этом апреле провести токенсейл для привлечения капитала под защиту представителей ЛГБТ-сообщества, которые подвергаются гонениям. Об этом сообщает Inc.




Как отмечает издание, ряд компаний из Сан-Франциско, связанных с ЛГБТ-сообществом, уже заявили о готовности принимать к оплате так называемый «розовый доллар». Социальная сеть для геев Hornet, основателем которой является президент LGBT Foundation Кристоф Виттиг , также добавит опцию оплаты ежемесячных взносов в новых токенах. Стоит отметить, что число пользователей Hornet достигает 25 млн.

LGBT Foundation планирует привлечь $50 млн в рамках первичного предложения монет.

«Мерчанты плохо осознают масштабы покупательского потенциала ЛГБТ-сообщества. Блокчейн позволит брендам предоставлять ориентированные на это сообщество услуги и получать более точную информацию о демографических условиях», — подчеркнул Виттиг, добавив, что сообщество геев тратит $1 трлн ежегодно, что намного превышает расходы других меньшинств.

Кроме того, в организации намерены направить часть вырученных средств на достижение важных для сообщества целей.

«Мы принимаем все необходимые меры для обеспечения безопасности участников инициативы, что принесет пользу как мерчантам, так и пользователям», — отметил Виттиг.

LGBT Foundation также сотрудничает с опытными криптовалютными инвесторами и аналитиками в сфере безопасности для создания «значимого» токена.

Ранее о проведении токенсейлов заявили Atari и Kodak.

https://forklog.com/gonkongskaya-lgbt-foundation-provedet-tokensejl/

Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes
After the newly written U.S. tax laws recently passed, cryptocurrency investors realized the tax-free exemption filing 1031 for IRS reporting is no longer applicable to their digital asset investments. The law also implies that a lot of people will have to pay taxes on every single transaction they processed throughout the past twelve months. However, there is one loophole available to cryptocurrency investors, but it involves gifting the funds to another person or charity.

Also read: How Dorian Nakamoto Became Satoshi Nakamoto

Gifting Cryptocurrencies: The Only Crypto-Tax Loophole
Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes
Robert Wood of Wood LLP.
The U.S. government is concerned about getting its taxes from American citizens who have invested in cryptocurrencies. Last year the IRS started to probe businesses that deal with digital assets like the exchange Coinbase. For the moment the tax agency is looking for individuals and groups who have spent over $20,000 using Coinbase. Following this initial probe, the San Francisco exchange has started to send customers the IRS tax form 1099-K. Additionally, investors have realized that 1031 tax-free exchanges won’t apply to digital currencies, and every transaction is also considered a taxable event.

Although, giving bitcoin as a gift is one way investors can avoid paying taxes on their cryptocurrency gains. Gifting money has to be more aligned with donating the funds as opposed to an employee bonus, and there is a fine line between the two financial events. According to Robert Wood, a tax lawyer based in San Francisco, an individual can gift up to $15,000 without documenting the transaction. 

“If you give crypto to a friend or family member — to anyone really — ask how much it is worth. If the gift is worth more than $15,000, it requires you to file a gift tax return,” explains Wood.   

For 2018, $15,000 is the amount of so-called “annual exclusion.” You can give gifts up to this amount each year to any number of people with no reporting required.

U.S. Citizens Can Gift $11.2 Million Per Lifetime
Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes
Dorian Nakamoto was gifted 67 BTC ($669,000 USD) after he was accused of being Satoshi Nakamoto.
Wood details that the gift doesn’t trigger income tax requirements for both the giver and the recipient. If the recipient calculates gains or losses (cashes out) from the gift in the future, then the funds will be taxable based on the value the day the gifting happened. Wood details that documenting the gift is helpful because donating money is often written off improperly. If the donation exceeds $15K, then U.S. residents are required by law to file a ‘gift tax return.’ “For 2018, $15,000 is the amount of so-called ‘annual exclusion,’” Wood details.

Further, Wood explains that in 2018 the amount a person or married couple can give per lifetime has increased quite a bit. According to the tax attorney, a person can gift up to $11.2 million tax-free during their lifetime, and married couples can gift up to $22.4Mn. If the individual gives the money to a recognized  501(c)(3) charity, they can get an income tax deduction for the spot value of the digital asset at the time of filing.

A few years ago Dorian Nakamoto was accused of being the ‘real’ Satoshi Nakamoto, and he received thousands of dollars worth of bitcoin. If Dorian kept track of the cost bases across all the bitcoin donations, he received he may have been able to claim the contributions as tax-free gifts. However, if he treated the gifted funds as ordinary income, his gifts would face significantly higher tax rates for his gains.

What do you think about gifting people bitcoin? Do you think this is a good way to avoid paying taxes? Let us know in the comments below.

Source is new.bitcoin.com
https://news.bitcoin.com/gifting-bitcoin-is-one-way-a-person-can-avoid-paying-crypto-taxes/