I hope BTC-e give them zero. Good luck finding them.  More and more, the BTC-e case looks like a perfect application of OPSEC on the BTC-e admin's part. Vinnik and Vasilyev both appear to be patsies who don't know anything more than the US government does. Didn't they seize a part of BTC-Es hot wallets when they took the exchange down? The US authorities mirrored their servers, but does that mean they were able to decrypt/compromise the hot wallets? BTC-e was never transparent about what the true losses were. Unlike the Silk Road and other busts, the government never announced seizure of any bitcoins -- or any money at all, actually. |
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That's the thing -- wasn't the purpose of buying them to leverage the brand? Letting the brand go to shit seems like a good way to shoot themselves in the foot. Placeholding made sense over a year ago but my guess is they've run into unexpected regulatory snags that have piled on the delays. I can't imagine things are going as Circle planned.
If you were planning on tokenising the world then your current customers are an irrelevance and that kind of seems how they're being treated. They'll be looking towards all the people yet to arrive, but unless they keep it ticking along relatively contentedly until then it won't occur to any newcomers to try it. That's why they look so stupid. They've destroyed their brand before they can even start on-boarding these "yet to arrive" customers. They already had a glitchy site with bad liquidity to start with. Now they're stealing from their lenders and moving offshore to Bermuda? They're just becoming a smaller and less trusted version of Bitfinex that steals from its customers. They have no future now. |
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I see a lot of responses where people seem to think it is safe to use one method but to have more than one device or account with that method. That for me is the same as using one method and you are still at risk <even if you have multiple accounts or devices> when a exploit is found in that method.  Let's say some hacker found some way to hack a Trezor wallet and you have 3 Trezor wallets, then all your coins on those wallets will be lost, if the hacker was able to access the wallet remotely.  It's not quite the same. Separating funds will protect you in certain situations. If you have 3 Trezor wallets in 3 different locations, 2 out of 3 may be saved in a $5 wrench attack scenario or a physical disaster like a fire. In terms of software/hardware exploits, you are correct though. That's why I use more than one type of wallet for my cold storage. |
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the problem with bitcoin price volatility stems from the small size of the market not the existence of speculators. and when i say "market" it is basically the handful centralized exchanges such as Coinbase, Kraken, Gemeni, Bitstamp and bitfinex where the price is decided. since these exchanges still have moderately small orderbooks with not enough bids and asks in them, whenever there is a surge in trades the price moves fast in one direction hence creating the volatility.
the solution would be to increase the size of these markets. it can be done with more adoption but also if these exchanges become more secure so that people feel safer trading and leaving open orders.
With increased demand and adoption -- and yes, more confidence in exchanges -- we would see more liquidity on the buy side. I'm not convinced the selling side would thicken up that much, though. For Bitcoin's whole life, very little of the total supply has traded on exchanges. It might just be like that forever. For that reason, in terms of price, I wonder if we'll see more flat plateaus in the future rather than deep bear markets like 2014. |
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I guess the mandatory requirement for registered exchanges requiring them to submit transaction records of their customers are really paying off. That's the only way they know that these citizens are holding and earning cryptocurrencies. If you mean the FATF travel rule, it hasn't been implemented yet. The US still needs to pass a new law requiring that exchanges comply with those rules. The recipients of these letters were most likely drawn from customer data Coinbase handed over to the IRS by court order. Here are some interesting insights from someone who supposedly worked at the IRS: They are almost certainly joining up some of their internal tax filing database tables with external datasets (probably coinbase) and trying to estimate how much they think you owe.
What they will most likely do is create a prioritized list of everybody who they sent letters to, and only pursue audits of a small minority at the top of the list who does not end up paying what the IRS is estimating (guessing) they still owe. They're looking for return on investment. They have a small team dedicated to this campaign (maybe 5 people part time) and are looking to generate more revenue from voluntary payments from the letter campaign then they spend on the staff running it. The small minority at the top of the list that they refer to the audit teams works the same way. Audits are resource intensive for the IRS and they are very short staffed. They can only afford to go after the biggest fish. Unless you have egregiously not been paying your crypto taxes, you won't be referred to the audit team, and you will most likely get forgotten about. |
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In our last Bitcoin meetup we discussed this as one of the proposed topics. Would you risk losing all your coins by storing it in one storage method or would you risk losing less coins more frequently by storing it in multiple methods. Never put all your eggs in one basket. As a bitcoin holder, you may be targeted for theft or subjected to highly effective malicious software or social engineering attacks. If/when that occurs, you don't want all your bitcoins stored in one place. Better to lose a fraction than everything at once. I have several different wallets, encrypted with different methods and keys, and cold stored in multiple physical locations. The last bit about multiple locations is also important in case of physical disaster like fire or flood. If all your keys are stored in your house, they could all be lost in one fell swoop. |
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since you reported and paid taxes on your crypto transactions, it's highly unlikely you will get one IMO. those sound like they are reserved for people who are definitely not compliant. There are several reports on the various reddit threads of people who reported and paid taxes correctly receiving the letters. There are also one or two reports of people who have only ever bought bitcoin, and never sold or traded (and therefore would have no taxes to pay) also receiving the letters. Not the one Brad is talking about, the 6173. I've seen several reports of people receiving the 6174 or 6174-A -- which don't require a response and suggest only potential misreporting -- after properly reporting their taxes. Never the 6173, though. The 6173 actually alleges noncompliance, requires the taxpayer's response, and signifies the IRS' intent to further investigate. The first two letters seem like a blanket mailing, but if you got a 6173 the situation seems more worrisome. It very much seems like the IRS have just blanket sent these to everyone from that Coinbase database (or whatever other source they are using), without actually looking at each account's activity or matching up the activity to the individual user's tax returns. I agree that most of this is probably from the Coinbase summons. However, there must be some reason they are sending 3 different letters. Agreed there, too. They can't audit everybody who has annual Coinbase activity in the low 5 figures. That'd be insane. But virtually everyone is scared of the taxman, so... |
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Banning US customers apparently isn't enough. That's why the CFTC began probing Bitfinex in late 2017, after they had already prohibited US residents from their exchange. The CFTC asserts that it has jurisdiction over spot exchanges simply by virtue of the fact that they regulate Bitcoin futures markets. That link above shows they've further asserted that this jurisdictions covers altcoins too.
That's why Binance needs to be careful, otherwise they'll have a market manipulation probe on their hands like Bitfinex already does.
If that's the case then CFTC will also need to convince not only themselves but also foreign courts. Perhaps there are already treaties in place which would aid them, but I'm not sure if they're that broad. Bitfinex is hiding in the BVI, Hong Kong and elsewhere but they apparently respond to and purportedly comply with all US regulator subpoenas. Why? Because these offshore exchanges know that even if the US can't manage to seize their bank accounts or cryptocurrency, they can completely destroy their brands overnight by indicting them and seizing their .com domains. I'm not sure exactly how broad the treaty is, but Malta is covered under the US-EU MLAT executed in 2006. Specifically, the treaty governs these issues, and CFTC requests would fall under "assistance to administrative or regulatory authorities": Since the United States and Malta do not have a bilateral mutual legal assistance treaty in force between them, the instrument is a partial treaty governing only those issues regulated by the U.S.-EU Mutual Legal Assistance Agreement, specifically: Articles 4 (identification of bank information), 5 (joint investigative teams), 6 (video-conferencing), 7 (expedited transmission of requests), 8 (assistance to administrative or regulatory authorities), 9 (use limitations), 10 (requesting State's request for confidentiality); and 13 (grounds for refusal).
With respect to the designations required by Article 15 of the U.S.-EU Mutual Legal Assistance Agreement, Article 1 of the Annex (identification of bank information) specifies that Malta's point of contact for the exchange of bank information under this Article is the Office of the Attorney General, and that, like the United States, Malta will provide assistance under this Article with respect to money laundering and terrorist activity punishable under the laws of both States and with respect to such other criminal activity as the States may notify each other. Article 5 of the Annex provides that requests for assistance to administrative or regulatory authorities shall be transmitted between the U.S. Department of Justice and the Office of the Attorney General of Malta. Binance's apparent plan was to egregiously flout regulations for a few years -- they still have never even registered with FINCEN! -- and then fall into line as regulators began catching up with them. That may work out, but they can't keep acting like it's 2015 and US regulators won't come after them. That was the mistake that BTC-e, 1Broker and others made. |
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Very weird to be honest. I used to roll my eyes on those people who said in the past that China has been "banning" bitcoin and releasing negative news just to drop the price of bitcoin so they could buy more, but I'm actually slowly being convinced. China just can't make up their mind.
Weird, indeed. I suppose it's worth noting that this is a commercial bank, not the central bank (People's Bank of China). It reminds me a bit of these sorts of articles from JPMorgan Chase. For all we know, the Bank Of China has ruffled some feathers in the government by publishing this. |
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Not a war, no, but a crackdown on regulatory noncompliance and tax evasion seems to be brewing. Dood, its reverse social engineering they are lining their pockets, they created it. Trust me USA government holds more coins than Bulgaria. They had hundreds of thousands of bitcoins after the Silk Road bust, yet they auctioned them all off in 2014 and 2015. Why didn't they hold onto them? |
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Here is an interesting part! On that weekend, one of the largest bitcoin buyers was JPMorgan and Morgan Stanley, according to Teeka Tiwari (Financial Writter). So here we have, people pushing down the price with their public statements and then buying the dip. Creating fear in order to get cheaper prices is not a new thing. IIRC, when people pointed this out via public disclosures, both banks said they were brokering Bitcoin products on behalf of clients -- not investing their own company funds. I do remember Chase's about-face though, from "fraud" to "the next gold." Suspicious, to say the least. |
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If Binance is turning a blind eye to wash trading -- implicitly allowing it on their exchange -- is that so much better than doing it themselves? I'm not sure exactly what their legal obligations are, but they ought to tread carefully. The CFTC regulates wash trading and has asserted that they don't merely have jurisdiction over Bitcoin markets, but rather all virtual currency markets. Being such a large exchange, I'm sure Binance has the CFTC and other regulators breathing down their neck. Stamping out most of the wash trading before public scrutiny surfaces might be a smart move. Any and all wash trading is obviously in the interest of an exchange, hard to say no to extra money, when they don't even know if their business is going to be around 3-5 years from now in this uncertain regulatory climate. CFTC is just another reason why Binance(and other exchanges) are banning US users from their exchange. Banning US customers apparently isn't enough. That's why the CFTC began probing Bitfinex in late 2017, after they had already prohibited US residents from their exchange. The CFTC asserts that it has jurisdiction over spot exchanges simply by virtue of the fact that they regulate Bitcoin futures markets. That link above shows they've further asserted that this jurisdictions covers altcoins too. That's why Binance needs to be careful, otherwise they'll have a market manipulation probe on their hands like Bitfinex already does. |
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In this kind of situation, would you be comfortable spending it if the amount of BTC you spent is replenished by an immediate BTC purchase, such that your net holdings remains the same?
How can one incentivize a new, average person to begin using BTC if the only reason that people buy it is with the hope that the fiat value will go up?
It's not easy considering Gresham's law. As long as weaker currencies like fiat money ("bad money") are widely accepted, people will opt to hoard away "good money" like bitcoins. If/when Bitcoin achieves a sustainable economy where there is no need for fiat inflows and outflows -- meaning supply chains and payrolls are covered in bitcoins -- this can change. If people are getting paid in bitcoins, they will feel more comfortable spending them. As it stands, spending bitcoins and rebuying them later could entail lost bitcoins because of conversion/exchange fees and rising price. For most people, it makes more sense just to hoard their coins and spend fiat money on consumer goods instead. |
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Again, I assume if you get the wicked 6173 form letter that you have to sign and send in stuff. They simply want to look over your
filed tax returns from 2013 to 2018? I don't think so. They already have all your past filings. They are basically saying, "We know you didn't report your virtual currency transactions. File your delinquent returns if you didn't file, and amend your returns if you did. Otherwise explain yourself and sign your statement under penalty of perjury so we can come after you later." The 6174 and 6174-A letters indicate more leniency, or lack of real suspicion at all if this is really just a generic mass mailing. |
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It will definitely impact those who still think crypto equals anonymity. I know enough people who think that crypto is one big criminal put where everyone is buying weapons and drugs because they can do it anonymously.
Even if crypto is really as anonymous as they think it is, nothing changes the fact that you are buying and selling coins through a centralized exchange. They will snitch on you to comply whenever they are asked to do so. That's the biggest question here -- is this just the IRS going after low-hanging fruit who used centralized exchanges with KYC and moved proceeds through their bank accounts? Or is there something more insidious happening? The IRS will never say one way or the other, of course. They want people to think they know all and see all. One thing to consider is the viability of their cases in court. The low-hanging fruit cases mentioned above would be easy to prosecute. But complex webs of transactions through non-KYC services where banks aren't touched? Maybe not. The super low $1,000 FATF threshold tells me they intend to pressure compliance through centralized services with KYC. |
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It's not like i prefer block size/weight increase, my point is while there are many on-chain & off-chain scaling (which i mentioned above), eventually block size will be needed.
I should emphasize block size/weight increase should only be used as last resort, not as first resort or not considered at all.
I believe that if a proposal requires a hard fork, and the network isn't in a life-or-death situation, then it will never gain enough support. It's not as easy as saying that "a hard fork will eventually be needed". That's my contention too. Some people believe that as technological improvements mitigate the technical reasons not to increase block size, that it will become easier politically to accomplish a hard fork. However, I think the fee market will just become the central political issue at that point. The question of whether fees alone can sustain adequate mining incentives (at 4MB block weight limit) could keep everyone debating for another decade. |
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As it turns out, Binance has been caught faking volume just like so many other exchanges. Maybe those wash trading bots have been turned off. No FUD intended, but that's what I would expect to happen if they were under heavy regulator scrutiny, like from the CFTC. It's often not even exchanges themselves participating in wash trading, but teams behind tokens/altcoins/whatever to lend greater legitimacy/social proof of their projects. I don't know about Binance but most exchanges also have minimal monthly (or daily averaged over the whole month) trading volumes, too low and the altcoin/token is bound to get delisted. If Binance is turning a blind eye to wash trading -- implicitly allowing it on their exchange -- is that so much better than doing it themselves? I'm not sure exactly what their legal obligations are, but they ought to tread carefully. The CFTC regulates wash trading and has asserted that they don't merely have jurisdiction over Bitcoin markets, but rather all virtual currency markets. Being such a large exchange, I'm sure Binance has the CFTC and other regulators breathing down their neck. Stamping out most of the wash trading before public scrutiny surfaces might be a smart move. |
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Does this come off as childish and unprofessional to anyone else? The Block wrote an article about the apparent ease with which NY residents can trade on Bitfinex. This was Bitfinex's response: They don't really have much of a choice, do they? They have to show they don't want to United States residents using their exchange, and discriminating based on IP addresses used would be unfair towards users using US-hosted VPNs, or bots hosted on US VPSes. The US government doesn't care one bit about articles from The Block nor Bitfinex's announcements. From an optics standpoint, I see nothing to gain from these outbursts. That announcement comes off like amateur hour, like a child trying to get out of being in trouble. Threatening to report customers to the authorities for clicking "I am not a US resident?" No authorities in the world care if anyone breaks Bitfinex's terms. It seems obvious that the announcement is just hot air and empty threats. That they felt the need to respond to a little crypto rag in this manner -- it just feels really pathetic to me. Can you imagine businesses like Bitstamp, Gemini or Coinbase talking in this way? Clearly, Bitfinex is a different caliber of exchange. |
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Does this come off as childish and unprofessional to anyone else? The Block wrote an article about the apparent ease with which NY residents can trade on Bitfinex. This was Bitfinex's response: Earlier today, we were contacted by Frank Chaparro of The Block seeking comment on a story about an unnamed person opening a Bitfinex account from New York and then withdrawing digital tokens from that account.
We have now identified this user. We correctly flagged this user’s IP address as being in the U.S. Notwithstanding the U.S. IP address — which may be used by Bitfinex customers, as appropriate — our system logs demonstrate that this user represented to us several times that he was not an individual resident in the U.S. This person has lied to Bitfinex on multiple occasions, deliberately and wrongly concealed his location, and flagrantly violated our terms of service.
We think it’s unfortunate that Mr. Chaparro would rather associate himself with these actions than actively attempt to help us uncover and punish fraudulent behaviour on our platform. This kind of ‘gotcha’ sting also speaks volumes about his and our other detractors’ true motivations.
We have disabled the account involved in this case. We reserve the right to report this and other fraudulent behaviours to appropriate authorities. Finally, we remind United States persons that they are not welcome on our platform and that we will continue to take action to enforce our rights and fulfill our legal obligations.
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When I use a Bitcoin ATM to buy Bitcoin, some BTC ATMs allow me to print a paper wallet with the private key printed. Now how can I trust that this private key is just generated and nobody else in the world knows the key? For that matter, when I buy a hardware wallet, how can I trust it to have legit private key? Is there way to verify the legitimacy of the private key?
You can't truly verify that the ATM is securely generating keypairs, nor that nobody else knows the private key. You should always sweep private keys in this situation -- spend the bitcoins to an address you yourself have securely generated. When you import/sweep a private key into a wallet like Bitcoin Core or Electrum, you can verify that it's legitimate. |
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