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Author Topic: Questions about ICO participation as a United States citizen  (Read 2728 times)
olubams
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August 24, 2017, 09:31:44 PM
 #21

Ya many ICOs are not allowing US members to participate. Recently EOS didn't permitted US members, but all other for it's ICO. Should we take that as a sign of a scam, if they are not allowing US members to participate in any ICO?

Its not necessarily means that they have the intention to scam likewise we have seen some gambling sites that would nande you accept the condition that you are not a US citizen before using their service can we also say they are scams the reasons why some of the reputable ones is because of the paperworks which is not only money consuming but also time consuming in which at the end only a fraction of the US population might get interested in which case the cost had overshadowed the benefit of such.

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August 25, 2017, 01:15:28 AM
 #22

Well if you really want to be avoided by being audited by the IRS you mus include your earnings from the ICO In your income tax report. It could be classified as 2 kinds you can either make it as an income or you can put it as capital gains like in real estate and stocks. It is really up to you on which it can be tax lower. Hiding your true income is really a pain in the ass, so if you don't want to be bothered by the IRS you must be truthful.

A note to all the bros on the board:

You do know the IRS knows all of us, personally, and has been tracking our transactions for years at this point?

Sit down and let me rap to you  Wink

https://www.coindesk.com/irs-using-bitcoin-tracking-software-since-2015/

Quote
The Internal Revenue Service is using bitcoin transaction tracing tools developed by startup Chainalysis, according to a new report.

Documents obtained by Washington publication The Daily Beast show that the tax agency has been using the startup's software since 2015.

Additional data from the General Services Administration, which handles the US government's logistics, indicates that the IRS has an active contract with Chainalysis that is valid through the beginning of September. To date, the IRS has paid Chainalysis more than $88,000.

The IRS states in the documentation that it's using the software to "trace the movement of money through the bitcoin economy," going on to explain:

"This is necessary to identify and obtain evidence on individuals using bitcoin to either launder money or conceal income as part of tax fraud or other Federal crimes."


Yes. This is why the dark markets, and exchanges, have been getting run on by the LEOs so much lately. Besides this particular piece of software, understand that the NSA has every reason in the world to watch this forum, esp. the Legal and Politics subs. Assume that there is a file on you, and that if you have every publically posted an address under one of your avatars, it is associated with your real life persona. Unless you have newly minted coins on a paper wallet, or coins that are completely "isolated", the IRS already knows what you have. If you have enough, and convert it to fiat, they are simply waiting to garnish your value. Low hanging fruit arent worth it; there are multimillionaires among us. Thats worth climbing the tree for Wink

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August 25, 2017, 03:30:56 AM
 #23

Well if you really want to be avoided by being audited by the IRS you mus include your earnings from the ICO In your income tax report. It could be classified as 2 kinds you can either make it as an income or you can put it as capital gains like in real estate and stocks. It is really up to you on which it can be tax lower. Hiding your true income is really a pain in the ass, so if you don't want to be bothered by the IRS you must be truthful.


That's the thing, I am 100% for paying rightful taxes and plan on doing so. From my understanding, you only pay taxes on a taxable event (like a trade/sell) correct? If I buy and hold without selling/trading, does this need to be reported also? This is a new field to a lot and I want to do it the right way.
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August 25, 2017, 03:33:22 AM
 #24

There is one ICO that I know of that is allowing sale of their tokens to US citizens.

They worked out some work around it so they are not under the rulings of SEC and this law that is not allowing the participation of anyone from the US in their sale or company ownership of their tokens.

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August 25, 2017, 03:53:18 PM
 #25

Well if you really want to be avoided by being audited by the IRS you mus include your earnings from the ICO In your income tax report. It could be classified as 2 kinds you can either make it as an income or you can put it as capital gains like in real estate and stocks. It is really up to you on which it can be tax lower. Hiding your true income is really a pain in the ass, so if you don't want to be bothered by the IRS you must be truthful.


That's the thing, I am 100% for paying rightful taxes and plan on doing so. From my understanding, you only pay taxes on a taxable event (like a trade/sell) correct? If I buy and hold without selling/trading, does this need to be reported also? This is a new field to a lot and I want to do it the right way.

If you are just holding, you are fine. When you convert a crypto to real world value,however, you have experienced a "capital gain" and would be subject to the relevant taxes. This isnt just sellig a crypto for a fiat; this would include purchasing anything with crypto that has an appreciable "real world value" and that could be sold for fiat (the government, while heavy handed, is not stupid). Make sure to establish your basis (purchase price) of the crypto each time you buy more, in your records. Exchanges track this for you, but you will have a much more organized record if you do it yourself, rather that examining your trading history across multiple exchanges with a shifting bitcoin rate Wink
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September 02, 2017, 05:21:37 AM
 #26

As far as I know, the SEC hasn't banned the participation of US citizens in the ICOs outright. They have just expressed "concern" over the rising number of ICOs and the shady people behind them. So unless the ICO explicitly bans US passport holders in its terms and conditions, you can participate in them. The federal income tax will be 39.6%, if your annual income is more than $418,401.

So there is really no penalty to be imposed by the government to someone who covertly joined an ICO even if the company doing the offer is clearly not accepting US citizens. Anyway, in this case, it is not anymore the fault of the ICO issuer but of the ICO buyer but they have to declare it once there is already a gain out of the transaction and must pay the right rate of tax. That announcement from SEC on ICO is just an introduction of the many possibilities in the future and definitely it was not detailed.

If the SEC wanted to flex muscle it would be against the ICO issuers.  I view this as being no different than the accredited investor rule in alternative securities investments.  I have not heard of any investor being sanctioned by a regulator for misrepresenting their accredited status in order to buy an alternative investment.  The issue for the investor would be difficulty seeking recourse against the issuer for losses incurred by fraud and misrepresentation in the offering when the investor misrepresented himself to the issuer.

FULL DISCLOSURE

I am a licensed attorney who practices securities arbitration in the securities industry.  The foregoing is not to be taken as legal advice and no attorney-client relationship shall be implied.
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January 22, 2018, 01:42:55 AM
 #27

Can we petition the SEC to allow US investors?  Would it help if we had a large number of signatures?
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January 22, 2018, 04:10:53 AM
 #28

You can't participate to all ICOs asking for the KYC, a lot after the futur regulations

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January 23, 2018, 09:24:10 PM
 #29

US CItizens are prohibited to participate in ICO's to safeguard their citizens from fraud/scam. ICO's to keep themselves safe from any legal obligation, they now ask for KYC information before applying/or at the time of distribution of token. So you can't  bypass VPN to participate in ICO's.  doubt you have much to worry about if you're thinking of using a bypass (VPN, for example) for short-term participation.

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February 28, 2018, 11:14:28 PM
 #30

US CItizens are prohibited to participate in ICO's to safeguard their citizens from fraud/scam. ICO's to keep themselves safe from any legal obligation, they now ask for KYC information before applying/or at the time of distribution of token. So you can't  bypass VPN to participate in ICO's.  doubt you have much to worry about if you're thinking of using a bypass (VPN, for example) for short-term participation.


" ICO uses KYC to keep themselves safe from any legal obligation". But what if ICO is not from the US and its tokens are utility tokens (not security)?
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February 28, 2018, 11:45:19 PM
 #31

US CItizens are prohibited to participate in ICO's to safeguard their citizens from fraud/scam. ICO's to keep themselves safe from any legal obligation, they now ask for KYC information before applying/or at the time of distribution of token. So you can't  bypass VPN to participate in ICO's.  doubt you have much to worry about if you're thinking of using a bypass (VPN, for example) for short-term participation.


" ICO uses KYC to keep themselves safe from any legal obligation". But what if ICO is not from the US and its tokens are utility tokens (not security)?



To my knowledge, it does not matter the location. The SEC has a global reach and power. If American citrizens are allowed to participate in that ICO, it automatically opens up that ICO issuer to the SEC. If Americans were unable to participate by the ICO issuer but do so anyways, the company has an argument against the SEC jurisdiction.
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February 28, 2018, 11:56:37 PM
 #32

As far as I know, the SEC hasn't banned the participation of US citizens in the ICOs outright. They have just expressed "concern" over the rising number of ICOs and the shady people behind them. So unless the ICO explicitly bans US passport holders in its terms and conditions, you can participate in them. The federal income tax will be 39.6%, if your annual income is more than $418,401.

Is the federal income tax the only tax that you are paying in us when you earn above $418,401?
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March 01, 2018, 12:15:12 AM
 #33

As far as I know, the SEC hasn't banned the participation of US citizens in the ICOs outright. They have just expressed "concern" over the rising number of ICOs and the shady people behind them. So unless the ICO explicitly bans US passport holders in its terms and conditions, you can participate in them. The federal income tax will be 39.6%, if your annual income is more than $418,401.

Is the federal income tax the only tax that you are paying in us when you earn above $418,401?


No, it is just part of the tax bracket as a whole. If you are making $418,401+, you will be taxed at the highest rate (currently 39.6%). There are several different tiers of income that have their corresponding tax percentage. If you research "2017-2018 tax brackets", there will be a spreadsheet that details everything.
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March 07, 2018, 04:57:24 AM
 #34

If a US citizen, using various VPN programs, invests in ICO projects and then shows his profits to the tax authorities, he will only be liable for violations of the ban on participation in the ICO. Therefore, it is necessary to look at what sanctions are set for this. I think that it can be either a maximum fine payment, or even there can be no punishment in this case.

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March 07, 2018, 06:03:16 AM
 #35

Ya many ICOs are not allowing US members to participate. Recently EOS didn't permitted US members, but all other for it's ICO. Should we take that as a sign of a scam, if they are not allowing US members to participate in any ICO?


Many good companies are not accepting the US people into their ICO because till now we didn't get any clearance from US governments about the ICO launching. Companies should follow a lot of documentation in order to accept people from the US.

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