MT, will you be inspecting/verifying CoinLab's security measures?
... and complicance with Canadian laws and regulations? |
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Thank you for your answer. I also expect Coinlab to be able to answer this. There is one further question to you regarding 2). Yes of course it depends on Canada's tax laws, but it also depends on the tax treaty with the country where the entity I am dealing with is located. The first question my accountant or lawyer will ask me is: Is it Japan or the United States? So I must ask you this question again.
That's complex, because while you are currently dealing with MtGox Co. Ltd, a Japanese company, according to Japanese laws the trades do not happen in Japan. If you're in Canada, you're hitting our San Jose intermediate datacenter, which means that based on Japanese laws, trades happen there. Thank you for clarifying this. |
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It is not that simple. Canada and the United States are very different countries with very different laws. In fact when it comes to opening an account with a Canadian financial institution I would not be surprised at all if a Japanese citizen or entity would have have a way less problems than a US citizen or entity. The reason, which I suspect is the same reason behind this deal, FACTA. In any event here is a list of questions I placed in another thread on the Canadian issue.
Actually for a Japanese citizen or company, it is impossible to open a bank account in Canada, except if holding a Canadian visa or creating a Canadian subsidiary, while a US company can ask its bank to have a deposit method available in Canada and route transfers to Canada domestically. Some questions from the perspective of a Canadian MtGox customer.
1 ) What is the location of the assets held BTC and fiat held by MtGox on behalf of the customer Japan or the United States?
2 ) What is the location for tax purposes where the trades take place Japan or the United States. Furthermore which tax treaty will apply to the business relationship that between Canada and Japan or that between Canada and the United States?
3 ) Which country's privacy laws apply to personal information of the customer Japan or the United States?
4 ) Will the customer be required to change banking information for withdrawals already on file with MtGox?
5 ) Will a Canadian customer be able to continue to receive funds in US dollars into a US Dollar account with a Canadian bank?
6 ) Will the customer be required to provide an IRS form W-8?
7 ) Will withdrawal limits change as a result of this for Trusted and Verified customers?
8 ) Will there be any restrictions as a result of this for logging into MtGox by Trusted or Verified customers from outside of Canada and the United States for example while travelling?
9 ) Will USD on deposit benefit from FDIC pass through insurance?
and some more that I thought about later.
10) How will the Canadian dollar denominated MtGox accounts be impacted by this?
11) What measures if any has Coinlab to comply with Canadian financial laws and regulations. Has Coinlab completed any of the registrations required in Canada?
12) How familiar are the principals of Coinlab with Canada and its laws and regulations. Have any of them visited Canada?
13) How will Coinlab deal with the Canadian GST/HST?
14) Will Coinlab be providing service in French? This is a requirement in many parts of Canada
Welcome to Canada / Bienvenue au Canada
1) For now all BTC assets are still held by MtGox Co. Ltd. in Japan. Already explained this earlier, but basically we are waiting for CoinLab to have a deposit handling system secure enough first. 2) It depends in which country you are located (ie. on you own country's tax laws). For more details please contact an accountant or lawyer in your own country. 3) For Canadian customers who accepted CoinLab's ToS, privacy policies will be those specified in there. 4) Customer withdrawal data will be ported, however customer has the option to ask for his banking information to be removed (by contacting the support) prior to transfer. 5) Of course 6) No idea, it depends on US and CA laws. I believe CoinLab will be able to answer that. 7) It depends on US implementation of FATF rules, which I believe are mostly similar to Japan. I believe CoinLab will be able to answer that. 8 ) Shouldn't. 9) I guess it should since CoinLab is registered as MSB, however I'll let CoinLab reply to this. 10) No impact unless the holder is either Canadian or American. Canadian and american customers will see their balance in USD and CAD ported over to CoinLab upon accepting the CoinLab ToS. Any balance in other currency will have to be closed and converted to one of CAD/USD/BTC. 11~14) I'll let CoinLab reply to this. Thank you for your answer. I also expect Coinlab to be able to answer this. There is one further question to you regarding 2). Yes of course it depends on Canada's tax laws, but it also depends on the tax treaty with the country where the entity I am dealing with is located. The first question my accountant or lawyer will ask me is: Is it Japan or the United States? So I must ask you this question again. |
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Both Canada and Japan have way stricter privacy laws than the United States so I would not be surprised if a Japanese company denying service to Canadian customers because the latter choose not to waive their privacy rights to a level below that of both Canada and Japan is against the law in both Canada and Japan.
You realise a private company can refuse to do business with you for pretty much any reason which doesn't violate human rights agreements? They're well within their rights to stop servicing North American (or any other) customers, to change their ToS, to make all sorts of other changes you might not like. Your remedy is not longer dealing with them if you don't agree to those changes. Actually, US and Canada have many banking agreements and similar system, making it easy for a US entity to open an account in Canada or the other way around. It makes sense to handle both countries at the same time in order to reduce deposit/withdrawal fees at the same time. It is not that simple. Canada and the United States are very different countries with very different laws. In fact when it comes to opening an account with a Canadian financial institution I would not be surprised at all if a Japanese citizen or entity would have have a way less problems than a US citizen or entity. The reason, which I suspect is the same reason behind this deal, FACTA. In any event here is a list of questions I placed in another thread on the Canadian issue. Some questions from the perspective of a Canadian MtGox customer. 1 ) What is the location of the assets held BTC and fiat held by MtGox on behalf of the customer Japan or the United States? 2 ) What is the location for tax purposes where the trades take place Japan or the United States. Furthermore which tax treaty will apply to the business relationship that between Canada and Japan or that between Canada and the United States? 3 ) Which country's privacy laws apply to personal information of the customer Japan or the United States? 4 ) Will the customer be required to change banking information for withdrawals already on file with MtGox? 5 ) Will a Canadian customer be able to continue to receive funds in US dollars into a US Dollar account with a Canadian bank? 6 ) Will the customer be required to provide an IRS form W-8? 7 ) Will withdrawal limits change as a result of this for Trusted and Verified customers? 8 ) Will there be any restrictions as a result of this for logging into MtGox by Trusted or Verified customers from outside of Canada and the United States for example while travelling? 9 ) Will USD on deposit benefit from FDIC pass through insurance? and some more that I thought about later. 10) How will the Canadian dollar denominated MtGox accounts be impacted by this? 11) What measures if any has Coinlab to comply with Canadian financial laws and regulations. Has Coinlab completed any of the registrations required in Canada? 12) How familiar are the principals of Coinlab with Canada and its laws and regulations. Have any of them visited Canada? 13) How will Coinlab deal with the Canadian GST/HST? 14) Will Coinlab be providing service in French? This is a requirement in many parts of Canada Welcome to Canada / Bienvenue au Canada |
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Both Canada and Japan have way stricter privacy laws than the United States so I would not be surprised if a Japanese company denying service to Canadian customers because the latter choose not to waive their privacy rights to a level below that of both Canada and Japan is against the law in both Canada and Japan.
You realise a private company can refuse to do business with you for pretty much any reason which doesn't violate human rights agreements? They're well within their rights to stop servicing North American (or any other) customers, to change their ToS, to make all sorts of other changes you might not like. Your remedy is not longer dealing with them if you don't agree to those changes. I do but a private company cannot amend their TOS in order to circumvent privacy laws for example and if they do violate privacy laws then in Canada and I suspect also in Japan my remedies go a lot further than just refusing to do business with them. In this situation we can easily have a Japanese company telling a Canadian citizen living in Canada that he has in effect to comply with a US law that does not apply to him in contravention of both Canadian and Japanese privacy laws in order to do business with them. The key difference here is that while it is very likely perfectly legal and in fact a legal requirement for MtGox to force this on US citizens and residents, it does not follow at all that the same applies to Canadian citizens or for matter to citizens of countries other than the US living in Canada. The bottom line is that in this situation Canadian citizens and residents may well have way more rights then US citizens and residents. |
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We base this on various information, including source of funds and IP address. If you used Dwolla (which is only available to US customers) or if your bank reported you as a US citizen when sending funds to our bank, then you are automatically considered a US citizen.
Given your talk of citizenship rather than residence, would I be right in assuming FATCA was an element in this decision? It sounds like US citizens who live outside the USA will not be able to trade on Mt Gox at all. Indeed I suspect no exchange that's sensible will take them  I am not such a person fortunately, but I feel sad for those who are. That's what I think too, but it seems MtGox will also apply the same restrictions to Canadians, so I assume that Canadian customers were sold to Vess as a package deal. Both Canada and Japan have way stricter privacy laws than the United States so I would not be surprised if a Japanese company denying service to Canadian customers because the latter choose not to waive their privacy rights to a level below that of both Canada and Japan is against the law in both Canada and Japan. Treating Canada as the 51st state of the United States can open a huge legal can of worms here. |
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http://www.forbes.com/sites/jonmatonis/2013/03/02/bitcoin-exchange-deal-repatriates-assets-to-u-s/The latest article from Jon Matonis which in this case contains a serious error. ... Mt. Gox’s non-U.S. customers are not affected by the change and they continue with procedures as before the announcement. This is blatantly wrong since the deal involves MtGox Customers in both Canada and the United States and last I heard Canada is not the 51st state. Also the title of the artilce is missleading since since there is no repratiation of assets when assets owned by a Canadian are moved from Japan to the United States.
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IANAL. As far as I can see the statue requires that the money be issued by a government, so it would not apply to money that is not issued by a government. This would include Bitcoin, but also Gold, Silver, Linden Dollars, Ithaca hours etc.
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Why you are comparing bitcoin (an amazing invention that has a possibility of changing the world) with facebook (a crappy php social page that earns money via advertising)? They are as related as a space shuttle and Vegas airport<->casino bus shuttle. Yeah, they both need internet, end of similarity  +1 Facebook has way worse advertising revenue per visitor than many websites both large and small by at least an order of magnitude yet has to be among the worst when it comes to the users privacy. Their business model is completely broken. For very high risk investors looking for some diversification from Bitcoin selling Facebook short may be an option. PS. I felt that same way about AOL back in 2000. |
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There are very few alternatives that I like to Bitcoin right now. The stock market is way over valued and so is the real estate market in many parts of the world.
If the Bitcoin market gets over heated or for some diversification
Canadian 30 day Treasury bills in CAD, and / or CAD bank deposits CDIC insured, some CAD cash.
United States 30 day Treasury bills in USD, and / or USD bank deposits FDIC insured, some USD cash.
Gold (1oz gold coins). Possibly Goldgrams via GoldMoney.com
For high risk investors
Short stock positions either the market as a whole or some overhyped stocks. A short position on Facebook stock for example.
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Bitcoin to Precious Metals Platform Has Launched: Reputable Precious Metals Dealers are Beginning to Accept Bitcoin for Bullion - See more at: http://www.digitaljournal.com/pr/1094280Another Precious Metals Dealers accepts Bitcoin. When people ask: What can I buy with Bitcoin? A simple answer is: Gold. |
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I would like to remind all Canadians that http://cavirtex.com/ is an outstanding exchange I really feel i can trust them with my money ( and with more security improvements on the way!) . Keep using cavirtex! It is a great option and I use it regularly; however there are situations where one can make use of the additional liquidity provided by MtGox. I have accounts at both. |
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FATCA is likely one of the reasons behind this move. But why bring Canadians into this because of a US law that does not apply to them?
There may be some other trade agreement which sweeps Canada under similar provisions or they may be on the brink of entering this agreement. From a practical point of view, if you're already establishing a US base of operations it's probably easier to service Canadian customers from there even if there's no compelling legal reason to do so. The tax reporting requirements and thresholds for Canadians (CRA) and Americans (IRS) for foreign assets are very different. For starters the Canadian requirement is for more then 100000 CDN based of cost, while the US requirement is for more than 10000 USD. A factor of 10 or more in difference. http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/frgn/1135-eng.html. As for creating a US nexus in a business relationship between a company in Japan and their customer in Canada this can actually complicate things a lot. This is why I asked a series of questions in my previous post. One should not be applying US tax laws to Canadians doing business with a company in Japan. |
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People are probably unaware of the requirements the US is placing on foreign banks. FATCA has three main parts:
-It requires foreign banks and financial entities to find any American account holders and disclose their balances, receipts, and withdrawals to the US Internal Revenue Service (IRS), or be subject to a 30% withholding tax on income from US financial assets held by the banks or financial entities.[1][2]
- Owners of these foreign-held assets must report them on a new Form 8938 along with US tax returns if they are worth more than US$50,000; a higher reporting threshold applies to overseas residents.[3] Account holders would be subject to a 40% penalty on understatements of income in an undisclosed foreign financial asset.[1]
- It closes a tax loophole that investors had used to avoid paying any taxes on dividends by converting them into dividend equivalents.[4]
The reporting requirements are in addition to reporting of foreign financial assets to the US Treasury Department,[5] particularly the "Report of Foreign Bank and Financial Accounts" (FBAR) for foreign financial accounts exceeding US$10,000 required under Bank Secrecy Act regulations issued by the Financial Crimes Enforcement Network (FinCEN).[6] http://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_ActFrance, Germany, Italy, Spain, and the United Kingdom have consented to cooperate with the U.S. on FATCA implementation,[26][27] as have Switzerland and Japan.[28] It's just too much of a hassle for foreign banks to fuck around with this shit and some of them have decided not to play. As a result of FATCA, European banks such as Deutsche Bank, Commerzbank, HSBC, ING Group and Credit Suisse have been closing brokerage accounts for all US customers since early 2011, citing "onerous" US regulations, which FATCA will make more complex when it goes into effect in 2013.[12][13] FATCA is likely one of the reasons behind this move. But why bring Canadians into this because of a US law that does not apply to them? |
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Some questions from the perspective of a Canadian MtGox customer.
1 ) What is the location of the assets held BTC and fiat held by MtGox on behalf of the customer Japan or the United States?
2 ) What is the location for tax purposes where the trades take place Japan or the United States. Furthermore which tax treaty will apply to the business relationship that between Canada and Japan or that between Canada and the United States?
3 ) Which country's privacy laws apply to personal information of the customer Japan or the United States?
4 ) Will the customer be required to change banking information for withdrawals already on file with MtGox?
5 ) Will a Canadian customer be able to continue to receive funds in US dollars into a US Dollar account with a Canadian bank?
6 ) Will the customer be required to provide an IRS form W-8?
7 ) Will withdrawal limits change as a result of this for Trusted and Verified customers?
8 ) Will there be any restrictions as a result of this for logging into MtGox by Trusted or Verified customers from outside of Canada and the United States for example while travelling?
9 ) Will USD on deposit benefit from FDIC pass through insurance?
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... and what were the bullish emotions like when Bitcoin first broke the 1 USD barrier in February 2011? If someone had sold right at the top of that bull market they would be at a loss if they bought right at the bottom of the 2012 bear market.
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lucif bud, I'm still waiting for bitcoin to fall below $15 when's it going to happen this time?
When current wave up finished (off the $1.99 low) It is possible that the we do not drop as low as 15 USD in the next bear marker / correction. Consider this a rise to 100 USD followed by a crash to say 39 USD. One still has a very decent bear market, 61% down, but those who sold at 15 USD are still left out in the cold. |
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