The legality of sending money abroad using bitcoin - am I doing something wrong?

[AlexGambaryan]

Hi everyone.
I am new. I hope this is the right sub for this.

I work outside the US.

I tend to prefer to keep my balance in USD as opposed to the currency at my current place of residence. I have a US bank account of course.

What I do is cash out my salary and buy bitcoins with it. 

Then, I send the bitcoins to the american exchange I am using (Coinbase, Circle, or other), and issue a sell-order.

This saves me tons on fees (last international wire I did ended up costing me $70. That's outrages).

My question is about the legality of this. My intuition tells me there's nothing wrong with this (just a modern way of sending money), but I want to make sure I am in the clear.

The reason I have decided to ask, is because Coinbase emailed me asking for more information regarding this action. They are asking for the source of the funds, my line of work, and so on.

I will appreciate your advice or input on this.

Thanks so much.

Alex

[Petersen]

Coinbase email is normal anti money laundering procedure, I think there is nothing illegal with your actions, you should however check for possible taxes afterwards

[AlexGambaryan]

Thank you for your reply.

As far as taxes go, I am paying local taxes (they deduce it from my salary).

I was told that usually one cannot be taxed twice on the same income. So I assume I am in the clear. Is this correct?

Thanks again.

[European Central Bank]

I'm not totally sure about IRS rules but there might be a possibility they might hit you if they believe your coins have gained in value. I guess if you hang on to your transaction logs you'll be fine.

And there's nothing illegal about it. But that's not the problem. Places like Coinbase are so concerned about ass kissing the authorities they'll shut people down who are doing nothing wrong.

[PinkLlama]

What you're doing is good and there's no issue with that. If you've been buying for some time now, Coinbase has to check where your income is coming from and how you're buying Bitcoin. It's a normal anti-laundering/anti-fraud procedure. Since Coinbase is literally the PayPal of Bitcoin wallets,  they'll want as much information as possible. You just have to provide anything they ask for and have a nice attitude.

[Hazir]

From what I know there is no law against it. You are not doing anything wrong ATM - but bitcoin related laws are outdated - or as we may rather say - non existent.
And I would not be surprised that bitcoin remittance/exchanging will receive some legal treatment in the future and appropriate laws will be imposed on it.

[TheDreadPirateDickstein]

NEIN NEIN NEIN NEIN NEIN

Do not use coinbase, do not declare SHIT to any government authority......that is your human right to keep your finances and business transactions PRIVATE or as we like to call it in Murika, what USED to be the fifth amendment.

So the answer is as follows

https://www.youtube.com/watch?v=bj2KSiEeCcM

[BitcoinLoan]

Among of other things, for thats why was created Bitcoin! You are not doing anything wrong. Use technology and do not pay the banks!

[The Sceptical Chymist]

OP take all this free advice with a huge shaker full of salt.  And you're probably always going to be doing something wrong.   The laws are set up to fuck you, plain and simple.

[Syke]

I was told that usually one cannot be taxed twice on the same income. So I assume I am in the clear. Is this correct?

No, the US loves to double-tax foreign income. Fortunately, there are exemptions.

https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion

[Dinki]

No, you are not doing anything wrong. Coinbase cannot sue you for buying and selling bitcoins: that is what bitcoin trading is all about.

Bitcoin is completely anonymous, so Coinbase is just trying to make sure that the funds being transferred are not used for illegal purposes.

[BellaBitBit]

I was told that usually one cannot be taxed twice on the same income. So I assume I am in the clear. Is this correct?

No, the US loves to double-tax foreign income. Fortunately, there are exemptions.

https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion

I second this.  I know there are cases of double tax for foreign income.  It is good you are paying locally already but check out the IRS laws for sure.

[botany]

The country you are residing/working in matters.
You could be in violation of foreign currency/capital control regulations.

[odolvlobo]

Also, consider this: when you "send bitcoins", you are not really sending anything. That means that you cannot send bitcoins in or out of a country. The coins you send to Coinbase in the U.S. could exist anywhere or nowhere.

[botany]

Also, consider this: when you "send bitcoins", you are not really sending anything. That means that you cannot send bitcoins in our out of a country. The coins you send to Coinbase in the U.S. could exist anywhere or nowhere.

It might be tough to convince government authorities about this.
They are only ready to consider bitcoin as a currency or commodity.  

Moreover, your argument could apply to digital fiat as well.
When you send money abroad, what you do is only make a couple of ledger entries.

[odolvlobo]

Also, consider this: when you "send bitcoins", you are not really sending anything. That means that you cannot send bitcoins in our out of a country. The coins you send to Coinbase in the U.S. could exist anywhere or nowhere.

It might be tough to convince government authorities about this.
They are only ready to consider bitcoin as a currency or commodity.  

Moreover, your argument could apply to digital fiat as well.
When you send money abroad, what you do is only make a couple of ledger entries.

I suppose you are right. Legal precedents will be developed, but I believe that they will be generally ineffective.

I have a paper wallet with 1 bitcoin. If I carry it from U.S. to Mexico, have I moved the bitcoin from U.S. to Mexico, or have I just moved the key? If I left a copy of the wallet back in the U.S., then where are the bitcoins? U.S. or Mexico, or both, or neither?

[Syke]

I have a paper wallet with 1 bitcoin. If I carry it from U.S. to Mexico, have I moved the bitcoin from U.S. to Mexico, or have I just moved the key? If I left a copy of the wallet back in the U.S., then where are the bitcoins? U.S. or Mexico, or both, or neither?

Bitcoins are never in a wallet, just the keys are. The keys allow you to move the bitcoins from address to address, but the bitcoins never leave the blockchain. The blockchain is in the digital world, not any specific country.

[botany]

I have a paper wallet with 1 bitcoin. If I carry it from U.S. to Mexico, have I moved the bitcoin from U.S. to Mexico, or have I just moved the key? If I left a copy of the wallet back in the U.S., then where are the bitcoins? U.S. or Mexico, or both, or neither?

Tough one. You are right about precedents being developed.
The government will probably look at the answer which suits it and try to develop precedents along those lines.

[cjmoles]

It's probably not against the law yet, but that doesn't mean it wont be someday.  Not only that, but it doesn't mean they wont try to test its legality by forcing you into costly court battle at some point.  I think it's best to be as opaque as possible, while still obeying the law, to be on the safe side.  Give as little information out as possible....don't use the gateway if they're asking you for too much information.  It's your money; you paid your taxes; you're obeying the law; so you shouldn't have to jump through their hoops!

[Das]

My question is about the legality of this. My intuition tells me there's nothing wrong with this (just a modern way of sending money), but I want to make sure I am in the clear.

The reason I have decided to ask, is because Coinbase emailed me asking for more information regarding this action. They are asking for the source of the funds, my line of work, and so on.


[/quote]




You are definitely not doing anything wrong. Coinbase asked all those questions from you because of the KYC [Know Your Customer] regulation on ground for all bitcoin exchanges and wallets in the U.S. in order to curb money laundering.

You are not guilty of money laundering just because you want to do a cross-border transfer.