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Author Topic: Holding KYC Bitcoin and non-KYC Bitcoin  (Read 230 times)
LoyceV
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August 25, 2021, 08:28:12 AM
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 #21

I think you have misunderstood me here LoyceV. Let's say you spend $500 a month buying groceries using cash. So usually, you withdraw $500 a month from ATMs, and with that you buy groceries for the month.

Instead of buying them with your paycheck money, you go withdraw money from the non-KYC ATM and with that cash you buy the groceries. Then, with the money from your paycheck, the money you get paid from your job and is in your account, you make a transfer to Coinbase and buy Bitcoin.

You might say, well, someone at the bank might notice that you've underspent this month, which is what you've sent to Coinbase. Not necessarily, if you spend cash mainly for everything, buy clothes, put gas, etc. That you spend $500 less that month is irrelevant. That's why you can do it in small amounts and little by little. You can do $500 one month, $200 the next month, then wait for another month, etc.
That's my point: if you want to "launder" $100k, it's going to draw attention. But if you do $500 every other month, it's going to take a very long time.
That's why I suggested to just keep it legit: "I bought a Bitcoin for $100, I sold it for $100,000 after 10 years". If you have the blockchain to back it up, nobody is going to care who you bought the Bitcoin from 10 years earlier.

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That way you have spent Bitcoin of which you cannot justify the origin to have the same amount of Bitcoin (maybe a little less because of the fees) with an origin that you will be able to justify in the future.
I still think it's way worse: You're turning a Bitcoin that you bought for $100 years ago into many small parts that you bought for $500 each. Unless you're trying to avoid capital gains tax, or you didn't obtain the Bitcoin legally in the first place, I'd say that's a dumb thing to do.

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This is not just a theoretical problem
My bank questions me once in a while too. They want to know what I spend my money on (I don't think "hookers and cocaine" is the answer they're looking for) and how much savings I have in other bank accounts too. They really word hard to get their industry replaced, Bitcoin never asks me those questions!

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if it is true that you live in Switzerland
Nope, that's a nickname Lauda gave me.

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But in general you are going to face a big problem if you suddenly appear before the tax authorities of your country with a large sum, be it $100K or $1M and you cannot justify the origin.

In this example it is something simple but let's think about the people who mined in their day and then made trades in exchanges that no longer exist, and also passed their bitcoins through mixers. The bitcoins he has today have a lawful origin, but he cannot justify it.
If you have your original private key that shows you mined the Bitcoins, you can simply explain what you did.
I've seen several topics where people try to buy old private keys, I assume they want to use it for tax purposes.

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Yes, there are people who think that even if you can't prove the origin, since the authorities won't prove that it has an illicit origin (because it doesn't), you won't have any problem.
And sometimes it works out the other way, like this drug dealer who had 36 Bitcoin seized years ago, and now gets 33 Bitcoin back because the price went up by the time authorities auctioned it Cheesy

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And here I say that it will depend a lot on the amount, and you can face tax evasion charges.
That's very easy to prevent: pay your taxes Smiley As much as I dislike our very high taxes, paying it means I won't get charged years later.

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August 27, 2021, 03:49:13 AM
 #22

As always with these sort of threads, if privacy is not too strong a concern, it could be easier for someone to give a better answer if you mentioned your friend's tax residence, different countries have different law and realities, etc. Your friend may be unjustly worried but in some jurisdictions it may actually seem that for certain crimes guilt is presumed.

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September 07, 2021, 08:54:15 AM
Last edit: September 07, 2021, 05:32:13 PM by bitcoin_user
 #23

Maybe your friend could do a a bitcoin-backed loan? They don't ask about the origin of the bitcoins.

He can even do P2P lending (completely anonymous) with HodlHodl: https://www.coindesk.com/business/2020/10/22/bitcoin-hodlers-get-a-lending-option-with-no-kyc/
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September 07, 2021, 04:21:13 PM
 #24

A friend of mine bought a small amount of Bitcoin some time ago through Localbitcoins without KYC. As of today they have turned into quite a few thousand $. Apart from that, he has also bought Bitcoin on Coinbase.

We were discussing whether it would be worthwhile to continue holding non-KYC bitcoin, because if the price continues to rise, in the future he may have accumulated $100K or more of which he cannot justify the source.

One way to launder it would be to go to non-KYC ATMs, withdraw cash and that same money invest it in Bitcoin in Coinbase. This way he would end up having the same amount of Bitcoin but he would be able to justify the origin of everything.

The problem with accumulating a large amount of money in Bitcoin that you cannot justify is that if you want to use it, it will have a cost as well. You will probably have to hire a lawyer or a tax advisor, you may have to go to a tax haven and/or set up a company to launder it. All this has an economic cost as well and I think it is better to launder it now easily. You'll also sleep better.

I know some of you on the forum are big fans of privacy and non-KYC and I would like to know what you think about it.



Okay so wait... non kyc bitcoin is the best to have. You dont HAVE to justify it. You got it before KYC was a thing! So unless your nation or situation states you can't have more than a certain amount of assets then yeah. If you're in the USA you can sell at long term cap gain tax rate whenever you want to, OR even better, not pay taxes on selling by simply getting a loan and having your btc at collateral. You could buy a rental place or something pay it off and keep both and wait to sell when btc goes to a million one day idk. That one will link your name to your bitcoin but you dont trigger a taxable event in the USA afaik?

The ATMs are gonna RIP you sideways man. Unless you live in an area where they're more reasonable but the ones that you can sell btc for cash cut your legs off. Lets say btc is 100k, they will say okay we'll buy btc and give you cash but you're gonna sell btc for 60k to us. so you might as well pay cap gain taxes at that point.


Also, I wouldn't talk about laundering anything if I were you. At least use code words or something. if you live in the USA, and maybe a few other nations, the IRS/glow boys probably read these forums.

You're not laundering btc, you're cleaning it or legitimizing it or something. Dont criminalize yourself. and yeah ik you prob dont have any info connected to your account here but still. dont talk like that, only saying it to you any anyone else reading this because I support your game plan so I'm just saying.
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September 08, 2021, 05:57:14 AM
Last edit: September 09, 2021, 03:01:44 AM by Poker Player
 #25

As always with these sort of threads, if privacy is not too strong a concern, it could be easier for someone to give a better answer if you mentioned your friend's tax residence, different countries have different law and realities, etc. Your friend may be unjustly worried but in some jurisdictions it may actually seem that for certain crimes guilt is presumed.

No need, it's already clear, I'll wait a little bit to see if any more interesting answer comes up and I'll proceed to lock the thread. Anyway I don't trust giving data to someone who calls himself "malevolent", lol.

The ATMs are gonna RIP you sideways man.

I agree.

Lets say btc is 100k, they will say okay we'll buy btc and give you cash but you're gonna sell btc for 60k to us. so you might as well pay cap gain taxes at that point.

Not a chance. It doesn't work that way.

Also, I wouldn't talk about laundering anything if I were you. At least use code words or something. if you live in the USA, and maybe a few other nations, the IRS/glow boys probably read these forums.

You're not laundering btc, you're cleaning it or legitimizing it or something. Dont criminalize yourself. and yeah ik you prob dont have any info connected to your account here but still. dont talk like that, only saying it to you any anyone else reading this because I support your game plan so I'm just saying.

Yes, maybe "launder" isn't the most appropriate word, but I'm not talking about me to begin with, I'm talking about my friend, I don't have that problem. Besides, we are talking about a purchased amount of a few hundred that has turned into a few thousand. That is not a problem today. The IRS is not going to waste time starting an investigation, requesting IPs, etc. because someone supposedly has $3k that they have not declared (yet). It's not even a tax crime.

Edit: I am locking the thread, as there is another similar one and my friend went to consult a specialized tax advisor and he has already solved the doubt.




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