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subwoofer12
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October 01, 2018, 12:19:24 AM
 #1

I'm an American that owns an offshore company located in Chile. I plan on opening a cryptocurrency exchange, but wouldn't have any American customers, I'd also block all US IPs as a precautionary matter. A friend of mine has told me repeatedly that I need to comply with the requirements of FATCA. This can't be correct, is it?

The way I understand this law, international businesses only need to comply if they have American customers
https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act#Provisions
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October 01, 2018, 03:57:19 AM
Merited by HeRetiK (1)
 #2

Why not ask the IRS rather than us lot?

This might be worth a read - https://www.linkedin.com/pulse/do-you-need-disclose-your-cryptocurrencies-anna-szkudlarek-acca

Even if you're blocking US ISPs it's possible you may end up with US citizens living abroad or US dual nationals. They'd still have to report their holdings. I know Americans in Europe often can't get any type of access to banking or finance because of FATCA. They're just too much trouble. That may mean the places that reject them aren't signed up for it.

Better to ask the source.

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October 01, 2018, 12:51:14 PM
Merited by milewilda (1)
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If you can afford and operate an offshore company like what you claim to then I think seeking a more professional legal advice will be affordable to you. Because I myself personally won't be asking my business matters that big in a forum where I would get different answers. So right now your best option is to go to a reputable legal firm and ask for consultation services and advice.

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October 01, 2018, 01:32:03 PM
 #4

Better to ask the source.

Definitely so, but even if you ask them, their okay sign right now doesn't mean much with how they can exploit so many gray areas, to later on still chase after you if they don't like what you're doing. It's close to impossible to not deal with them one way or another, and they may even play a dirty game themselves where they on purposely sneek in a couple of US citizens.

Honestly speaking, I wouldn't recommend anyone to start up an exchange with how hostile that part of the industry is. On top of that, the legal field will change dramatically as well as time goes by, and complying with all these sudden changes isn't the easiest thing to do, which clearly shows with how even the larger exchanges right now heavily struggle with that. I wish you the best of luck though if you do happen to proceed with your plans.

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October 01, 2018, 06:59:26 PM
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But on the contrary, I'm thinking legally that an individual has the right to choose the kind of patronage he or she aspires for in their businesses. This should be a matter of right and not of necessities. He can still consult with the required body anyway.

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October 01, 2018, 08:12:13 PM
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If you can afford and operate an offshore company like what you claim to then I think seeking a more professional legal advice will be affordable to you. Because I myself personally won't be asking my business matters that big in a forum where I would get different answers. So right now your best option is to go to a reputable legal firm and ask for consultation services and advice.
Best advice which i would definitely done the same thing but it isnt really bad to hear up some words on this forum or into this community but as being said this wont really give you any precise answers yet people arent
expert anytime with legal aspects.Therefore, seeking out legal advice would be the best way to clear up these questions on mind yet op is capable on paying up for a service that would give a sure answer related into this matter.

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October 01, 2018, 08:55:26 PM
Merited by gentlemand (1)
 #7

I'm an American that owns an offshore company located in Chile. I plan on opening a cryptocurrency exchange, but wouldn't have any American customers, I'd also block all US IPs as a precautionary matter. A friend of mine has told me repeatedly that I need to comply with the requirements of FATCA. This can't be correct, is it?

It sounds like you don't have an attorney to research and advise on compliance matters. Seriously, retain a competent law firm before opening a cryptocurrency exchange. You might just dodge a prison sentence.

Chile signed an intergovernmental agreement with the US regarding the implementation of FATCA in 2014, so you're officially on the hook for FATCA compliance if you fall under the definition of a "non-US ('foreign') financial institution (FFI)."

The way I understand this law, international businesses only need to comply if they have American customers
https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act#Provisions

The point of FATCA is to force foreign banks and other financial institutions to search their records for customers with any indication of 'US-person' status and report them to the US government. In other words, it goes beyond a simple requirement to prohibit US customers.

Bitfinex banned US users from its platform, but still mandates tax information for FATCA compliance.

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October 03, 2018, 10:01:05 AM
 #8

I'm an American that owns an offshore company located in Chile. I plan on opening a cryptocurrency exchange, but wouldn't have any American customers, I'd also block all US IPs as a precautionary matter. A friend of mine has told me repeatedly that I need to comply with the requirements of FATCA. This can't be correct, is it?

The way I understand this law, international businesses only need to comply if they have American customers
https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act#Provisions

Reading the provisions of FATCA, I don't see a way out that exclude because even if you stop US citizens from patronizing your services and block their IPs, the business would need to report you for having a stake in the company which is an asset to you simply because you are a US citizen. In the eyes of the law for a limited liability company, the business and the owner are separate individuals.

Quoting the link above, ...FATCA also requires such persons to self-report their non-U.S. financial assets annually to the Internal Revenue Service (IRS) on form 8938, which is in addition to the older and further redundant requirement to self-report them annually to the Financial Crimes Enforcement Network (FinCEN) on form 114 (also known as 'FBAR').[2] Like U.S. income tax law, FATCA applies to U.S. residents and also to U.S. citizens and green card holders residing in other countries.

My advise, start thinking of doing it right from the beginning and if you cannot avoid complying, then there is nothing wrong in opening up you business for US citizens but if you know you can handle yourself alone, you can still go ahead with the planned exclusion.

 
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