Bitcoin Forum
December 09, 2021, 02:56:25 PM *
News: Latest Bitcoin Core release: 22.0 [Torrent]
 
   Home   Help Search Login Register More  
Pages: « 1 [2] 3 4 »  All
  Print  
Author Topic: How to leave KYC for good  (Read 563 times)
o_e_l_e_o
Legendary
*
Offline Offline

Activity: 1498
Merit: 7989


Wear a mask, slow the spread


View Profile
September 07, 2021, 01:15:18 PM
 #21

That's weird: on one hand, it's not considered money, but possession (thus there is tax when BTC value increases & it's sold again), on the other hand a 'Bitcoin trade' is not seen as a trade of goods, but a sale and there is tax to be paid as well.
I obviously can't speak for other countries, but the US government will class it as whatever brings them the most benefit in that particular situation, with different branches of the government classing bitcoin as different things as the same time. When it comes to taxes, it is classed as a property, not a currency.

This is completely true, but for me personally it doesn't really matter... What matters to me is that the "bulk" of my funds is anonymous...
If that is your privacy model then that's fine, and your set up obviously achieves that, but your model does still leak quite a bit of information. I have no desire to let the guy I buy meat from at the farmers' market know that I've also spent x amount of bitcoin at an electronics retailer, sent y amount of bitcoin to an exchange, or received z amount of bitcoin from a signature campaign payment. Any and all coins I receive first go to ChipMixer or coinjoin or are swapped directly for Monero, sometimes a mixture of these three things in varying orders, any change outputs are rare, if consolidated are only ever consolidated with other non-privacy breaking outputs, and are fed back in to the CM/CJ/Monero cycle.

1639061785
Hero Member
*
Offline Offline

Posts: 1639061785

View Profile Personal Message (Offline)

Ignore
1639061785
Reply with quote  #2

1639061785
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1639061785
Hero Member
*
Offline Offline

Posts: 1639061785

View Profile Personal Message (Offline)

Ignore
1639061785
Reply with quote  #2

1639061785
Report to moderator
1639061785
Hero Member
*
Offline Offline

Posts: 1639061785

View Profile Personal Message (Offline)

Ignore
1639061785
Reply with quote  #2

1639061785
Report to moderator
1639061785
Hero Member
*
Offline Offline

Posts: 1639061785

View Profile Personal Message (Offline)

Ignore
1639061785
Reply with quote  #2

1639061785
Report to moderator
dkbit98
Legendary
*
Offline Offline

Activity: 1344
Merit: 2896


Powerful promotion strategy https://bit.ly/3cRVjFi


View Profile WWW
September 07, 2021, 02:06:13 PM
Last edit: September 08, 2021, 08:04:24 AM by dkbit98
Merited by o_e_l_e_o (4)
 #22

Is Bitcoin really fungible if we are already dividing it on KYC and non-KYC, or dirty and clean Bitcoin?
I regret that all this years nobody added any good privacy improving protocol code changes for Bitcoin protocol and all this talk would never happen today.
Sure, this could mean one more fork, but I am sure majority of people would support this change and that would kill other privacy altcoins.
Bitcoin is now so big that exchanges won't delist it because of that change, and regulators may complain but they would have to accept it sooner or later.

Option 1: Provably sell Bitcoin on KYC exchange again, then 'start fresh' by buying non-KYC Bitcoin and send to a new address / wallet.
How can you know the origin of Bitcoin you just purchased without KYC?
It can come from some hack or it can be connected with some other person who purchased that BTC with KYC.
This would make your second option useless in reality.

But why would the authorities ban Bitcoin and then try to confiscate Bitcoins from the people?
This doesn't make any sense to me.This is basically stealing financial assets from the population.
Isn't growing taxation of everything (maybe even breathing air soon) exactly that, stealing financial assets, and it's nothing strange for governments.
In past they confiscated gold, alcohol, land, weapons and everything they wanted if enough people didn't complain.
I would not be surprised if in future they try to confiscate Bitcoin or anything other than their CBDC tracking currency nightmare.... if people comply.

LoyceV
Legendary
*
Online Online

Activity: 2422
Merit: 9536


Thick-Skinned Gang Leader


View Profile WWW
September 07, 2021, 03:50:49 PM
 #23

I'm merely saying that in most western european country's, you'll have the right not to give incriminating evidence against yourself, so they can try to make you give you your ledger's pincode, but afaik, they cannot punish you if you don't (some exceptions might apply, but i don't think they'll cover a couple hundred euro's in tax evasion).
If it's a couple hundred euro's, nobody is going to care indeed. I was assuming larger numbers: what if you're sitting on 1000 Bitcoin? Would you prefer them to be anonymous, or rather be able to sell some when you want? It's not even enough to buy a decent jet!
More seriously, even 1 Bitcoin is enough nowadays to trigger alarms at your bank, and I wouldn't be surprised if 0.1 Bitcoin sets off similar alarm bells a few years from now.

As for assuming you're innocent until proven guilty:
A Minnesota appeals court has ruled that the presence of encryption software on a computer may be viewed as evidence of criminal intent.

Trying to be anonymous and to use mixer means that you want to hide something-your income and your wealth,which looks always suspicious in the eyes of the authorities.
Absolutely incorrect.
From a government perspective, davis196 is right. Wanting privacy is suspicious, and despite all privacy laws created by government, government itself doesn't follow them. Even the Dutch tax agency still doesn't comply with the GDPR, which became active 5 years ago.

I'll try to draw a diagram if i have some leftover time at the end of the working day...
Please draw it, because from the way you explain it, your wallets are very strongly linked together.

Change is one of the worst things for your privacy. I usually try to avoid creating change at all via careful selection of UTXOs or ChipMixer chips, buying additional goods or services, adding it to the fee, adding it to the payment as a tip, or donating it to charity.
I'll add a suggestion to your list: use an instant exchanger to convert the change into (custodial) LN (or any shitcoin you want for that matter).

So you recommend to hold non-KYC Bitcoin ('better safe than sorry' kinda approach), then when you want to spend them in the future, declare 'ok I have X BTC which I bought at the time Y for amount Z' and pay the taxes on it? As far as I know you don't have to declare everything you buy
Where I live, that will result in a fine for missed taxes in the past years. I'm not sure how it's calculated, but I sleep better without the risk. I don't have to declare anything I buy indeed, only the total I own (on my annual taxes). If all you have to pay is a one-time capital gains tax when you sell, that might actually work (if you can convince them the money didn't come from an illegal source).

Quote
Or what would be your recommendation to go from BTC to Lambo in 20 years?
It depends on where you are, and how much you HODL/HIDE.

However, i know that if i make things to complicated for myself, i'll probably mess up sooner or later... My method gives me a tradeoff that's reasonable for me personally: one wallet i cannot spend from, one wallet for spending... change always goes to the wallet i cannot spend from, and once some funds have accumulated in the wallet i cannot spend from they need to be mixed (or coinjoined) to top off the wallet i can spend from...
Would it be possible to keep the change amount in "the wallet you cannot spend from" small enough to just forget about it for years? If you don't consolidate them, nothing gets linked!

yat97
Member
**
Offline Offline

Activity: 139
Merit: 14


View Profile
September 07, 2021, 04:05:35 PM
 #24

One option. Buy bitcoin on any exchange KYC or not. Send the bought bitcoin to the Incognito wallet app, if it's not huge ammounts, or even if it is, convert to monero, send monero to an anonymous exchange.

Safepal has an anonymous binance international that still allows you to withdraw up to 2 btc a day. You can use the binance app part of the safepal wallet to conver monero back to btc.

And it's all cheaper than using a bitcoin mixer or other methods which are like 15 dollars or more per mix or transaction. this method costs pennies to mix on incognito, and that's probably all you need to do, but the monero transaction is just to be on the safe side and have a multi anon layer of protection.

n0nce
Member
**
Offline Offline

Activity: 112
Merit: 627

scio me nihil scire


View Profile WWW
September 07, 2021, 04:18:25 PM
 #25

Option 1: Provably sell Bitcoin on KYC exchange again, then 'start fresh' by buying non-KYC Bitcoin and send to a new address / wallet.
How can you know the origin of Bitcoin you just purchased without KYC?
It can come from some hack or it can be connected with some other person who purchased that BTC with KYC.
This would make your second option useless in reality.
I think the point would be that if they ask the exchange how much Bitcoin I have, as far as it’s concerned I have 0 since I sold them back as much as I bought from them.

Though I think it’s a valid point to consider mixing coins from an uncertain source to prevent being linked to some fraudster selling their coin on Bisq to get rid of them anonymously.
Otherwise it could happen that when you use the coins to buy something large irl (linking your identity to them) a link to the crime could be made.



One option. Buy bitcoin on any exchange KYC or not. Send the bought bitcoin to the Incognito wallet app, if it's not huge ammounts, or even if it is, convert to monero, send monero to an anonymous exchange.

Safepal has an anonymous binance international that still allows you to withdraw up to 2 btc a day. You can use the binance app part of the safepal wallet to conver monero back to btc.

And it's all cheaper than using a bitcoin mixer or other methods which are like 15 dollars or more per mix or transaction. this method costs pennies to mix on incognito, and that's probably all you need to do, but the monero transaction is just to be on the safe side and have a multi anon layer of protection.

From what I’ve learnt in this thread though, this leaves you with 2 issues:

* In case someone in the future will figure out you bought X BTC they will ask where it went and you don’t have a provable explanation.
* Even if you think of somerhing and get away with it, when you’ll want to spend the BTC, you won’t have a plausible explanation where it came from.

Reid
Hero Member
*****
Offline Offline

Activity: 2002
Merit: 617


View Profile
September 07, 2021, 04:42:55 PM
 #26

But why would the authorities ban Bitcoin and then try to confiscate Bitcoins from the people?
Authority. That's the whole definition of it.
This doesn't make any sense to me.This is basically stealing financial assets from the population.
Not declaring your assets (Bitcoin is considered as an asset, as of now) is also a form of stealing from the population. It should be taxed and that money will be used for the improvement of the country or other necessities.
OP,the whole topic seems a little bit paranoiac.Trying to be anonymous and to use mixer means that you want to hide something-your income and your wealth,which looks always suspicious in the eyes of the authorities.
They might assume that you are conducting tax evasion or other financial crimes
IMO, it's not a paranoid act. It's protecting the asset that you bought at an expensive price. If you have a gold bar from a shipwreck that doubles or maybe even quadruple its value, you won't like everyone having the knowledge about it. Secure it and zip your mouth. Same thing as what he is trying to do with his Bitcoin.

OP, sorry I don't have much knowledge to share about the meticulous part of sending back and forth or buy, mix, and sell.
DaveF
Legendary
*
Offline Offline

Activity: 2590
Merit: 2668


I DO NOT TRADE on Telegram or Skype or Discord.


View Profile WWW
September 07, 2021, 06:48:52 PM
 #27

It has been touched on but part of KYC vs No KYC also matters as to where you are and what your end goals are.
And....how much have you accumulated through KYC already.

If you bought 100BTC from coinbase when BTC was $600 and all you want to do is sell it when it gets back to $60000 then who cares.
It's not like you can hide $6 million from the tax man.

If you want to sell it off slowly, over years and years then that is a different story.


Same with general privacy. There is the saying 'any 2 people can keep a secret so long as one of them is dead'
If you have that 100BTC that you don't want people to know about, but your pissed off ex-wife / ex-husband, who you talked about it with knows, then everyone knows about it.
Even if it was just a casual conversation with a friend, who then mentioned it to someone else when they were talking about BTC.
If anyone wanted to know about your KYC or non KYC BTC then they could do a little digging and find out.


Now, if you just want your privacy it's easy.
Take any KYC coin you have, sell it, take the cash, pay your taxes (if any) and then take the rest of the cash and buy BTC face to face and be done with it.

Because just about any other way, there is a chance of someone figuring it out.
Even if you pass it through 3 anonymous exchanges, when you go to bitrefill.com to get a gift card for a burrito at Chipolte, you left a trace trace that can be followed.

-Dave

 

o_e_l_e_o
Legendary
*
Offline Offline

Activity: 1498
Merit: 7989


Wear a mask, slow the spread


View Profile
September 08, 2021, 08:02:29 AM
Merited by n0nce (1)
 #28

How can you know the origin of Bitcoin you just purchased without KYC?
It can come from some hack or it can be connected with some other person who purchased that BTC with KYC.
I don't really care where the bitcoin I purchase peer to peer comes from or if it is linked to someone else's KYC. All that I care about is that it isn't linked to my KYC. The first transaction I perform with it will to mix/coinjoin it all anyway.

From a government perspective, davis196 is right. Wanting privacy is suspicious, and despite all privacy laws created by government, government itself doesn't follow them.
Sure, I'll give you that, by what the government does is a poor benchmark what is ethically, morally, or even legally, right. Privacy is a fundamental human right, and not a crime.

I'll add a suggestion to your list: use an instant exchanger to convert the change into (custodial) LN (or any shitcoin you want for that matter).
I do do this to swap change to Monero, as I mentioned, but I've never thought about swapping change on to Lightning. Can you recommend a service?

And it's all cheaper than using a bitcoin mixer or other methods which are like 15 dollars or more per mix or transaction.
ChipMixer costs whatever you want it to cost, and your method still links the amount of bitcoin you initially bought to your KYC. Maybe no one can track where it ended up, but they will still be interested in the fact that you bought 10 BTC.

LoyceV
Legendary
*
Online Online

Activity: 2422
Merit: 9536


Thick-Skinned Gang Leader


View Profile WWW
September 08, 2021, 09:49:18 AM
 #29

Privacy is a fundamental human right, and not a crime.
That's kinda my point: governments act as if not answering them is suspicious.

Quote
I do do this to swap change to Monero, as I mentioned, but I've never thought about swapping change on to Lightning. Can you recommend a service?
I've used CoinPlaza and FixedFlat. The total fee depends on the on-chain Bitcoin fee when you make the transaction, so it pays off to compare rates. Alternatively, depositing to BlueWallet or Phoenix Wallet works too (again: fees apply). Even better: if you mix and match, it's less likely for your change to ever get tied together.

n0nce
Member
**
Offline Offline

Activity: 112
Merit: 627

scio me nihil scire


View Profile WWW
September 08, 2021, 10:10:27 AM
Last edit: September 08, 2021, 11:24:20 AM by n0nce
 #30

Quote
I do do this to swap change to Monero, as I mentioned, but I've never thought about swapping change on to Lightning. Can you recommend a service?
I've used CoinPlaza and FixedFloat. The total fee depends on the on-chain Bitcoin fee when you make the transaction, so it pays off to compare rates. Alternatively, depositing to BlueWallet or Phoenix Wallet works too (again: fees apply). Even better: if you mix and match, it's less likely for your change to ever get tied together.

No idea about CoinPlaza, but I used FixedFloat myself lots of times to go into and out of LN. https://boltz.exchange/ also comes to mind - this one is basically trustless since it does a submarine swap, while FF is trusted, more like a regular exchange. Though Boltz service fees were quite high for a long time so I didn't try it yet. Seem to be fine now though.

And it's all cheaper than using a bitcoin mixer or other methods which are like 15 dollars or more per mix or transaction.
ChipMixer costs whatever you want it to cost, and your method still links the amount of bitcoin you initially bought to your KYC. Maybe no one can track where it ended up, but they will still be interested in the fact that you bought 10 BTC.
That's correct. I think this whole topic leads us to a few points:
* First of all, small funds probably nobody will bother to worry about, but especially if you bought early and have lots of coins, in a future where the value will be even much higher than today, you'll get into issues when wanting to spend them.
* With larger amounts of Bitcoin, you will need to do your taxes correctly, else you'll be charged for tax evasion, which we don't want. I would still argue that there is no downside in acquiring the BTC without KYC, mixing them and dumping them into a receive-only wallet. It's possible that you need to provide proof of buy, but not sure if it's needed and where + if it's enforced. Let's say I claim I bought 100BTC at 1€ each over 10 years ago, therefore did not screenshot the exchange page and / or exchange went down and / or I switched computers and don't have the transaction info anymore. They will need to take my word for it. This would be my bet, but I'm not sure how it will really be handled. I doubt many people have receipts for their first / oldest Bitcoin purchases. Heck, what about all the p2p trades? Nobody gave you an invoice at least back in the day...

I gathered some info, adding to the initial post now. Any corrections are welcome!

LoyceV
Legendary
*
Online Online

Activity: 2422
Merit: 9536


Thick-Skinned Gang Leader


View Profile WWW
September 08, 2021, 11:37:25 AM
 #31

Let's say I claim I bought 100BTC at 1€ each over 10 years ago, therefore did not screenshot the exchange page and / or exchange went down and / or I switched computers and don't have the transaction info anymore. They will need to take my word for it. This would be my bet, but I'm not sure how it will really be handled. I doubt many people have receipts for their first / oldest Bitcoin purchases.
I've seen several topics about buying old private keys, my guess is it's for taxes. Signing a message from a formally funded old address will prove you owned Bitcoin at that time. But if someone else uses the same address to make the same claim to the IRS, you'll have some explaining to do.

n0nce
Member
**
Offline Offline

Activity: 112
Merit: 627

scio me nihil scire


View Profile WWW
September 08, 2021, 11:58:37 AM
 #32

Let's say I claim I bought 100BTC at 1€ each over 10 years ago, therefore did not screenshot the exchange page and / or exchange went down and / or I switched computers and don't have the transaction info anymore. They will need to take my word for it. This would be my bet, but I'm not sure how it will really be handled. I doubt many people have receipts for their first / oldest Bitcoin purchases.
I've seen several topics about buying old private keys, my guess is it's for taxes. Signing a message from a formally funded old address will prove you owned Bitcoin at that time. But if someone else uses the same address to make the same claim to the IRS, you'll have some explaining to do.
I don't understand why I should sell a private key; but yeah is there any potential issues if you have a wallet with mixed / anonymised coins & you declare that, but don't have receipts of the buys of those coins?
Of course, this is only really relevant for the countries where not a general capital tax is required, but capital 'gain' tax. Because in those people will need to subtract their buying price from the selling price to correctly specify the tax amount correctly.
However, there is no way to 100% prove when you bought if that wallet is long gone e.g...

Poker Player
Hero Member
*****
Offline Offline

Activity: 504
Merit: 834


Sucker at the table enthusiast.


View Profile
September 08, 2021, 12:00:53 PM
 #33

Let's say I claim I bought 100BTC at 1€ each over 10 years ago, therefore did not screenshot the exchange page and / or exchange went down and / or I switched computers and don't have the transaction info anymore. They will need to take my word for it. This would be my bet, but I'm not sure how it will really be handled. I doubt many people have receipts for their first / oldest Bitcoin purchases. Heck, what about all the p2p trades? Nobody gave you an invoice at least back in the day...

The larger the amount, the more risk you have of encountering a serious problem. Just think that Al Capone, with all the crimes he committed, was eventually convicted of Tax Evasion.

If you can sign a message as LoyceV says, it would be one thing, but showing up with 100 BTC with an origin you can't justify to the authorities is like showing up with $5M in bills you can't justify, you will most likely end up in jail.

This is what I was talking about in another thread.

.BEST..CHANGE.███████████████
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
███████████████
..BUY/ SELL CRYPTO..
n0nce
Member
**
Offline Offline

Activity: 112
Merit: 627

scio me nihil scire


View Profile WWW
September 08, 2021, 12:52:13 PM
Last edit: September 08, 2021, 01:14:18 PM by n0nce
 #34

If you can sign a message as LoyceV says, it would be one thing, but showing up with 100 BTC with an origin you can't justify to the authorities is like showing up with $5M in bills you can't justify, you will most likely end up in jail.
Alright, then I'll better try to find those pk's Roll Eyes Just to be on the safe side..

From the thread you mentioned, though I found this interesting, since it corresponds with what I'd assume would happen when asked about the origin of non-KYC coin:

None of the bitcoins that I own were obtained with any kind of KYC and I have absolutely no problem spending them or selling them in the U.S.

Gemini occasionally asks me where I got the bitcoins that I sell on their exchange (AML compliance I assume), and I tell them I obtained them anonymously many years ago (which is the truth). End of discussion.

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.

Absolutely untrue in my experience.
You write when you bought it, write that you got it in the past from a private person or anonymous exchange and pay the taxes on the gains (if you live in one of the countries that I listed in my OP which only cares about the sale of Bitcoins (income tax vs property tax)).

By the way; what if someone bought Bitcoin in 2012, mixed it, etc. and now has an equivalent amount of coin, but in another wallet; since the amounts are comparable, if they still got the keys to the 2012 wallet, they can prove they bought it a long time ago, right? Even though there is no clear paper-trail to their current wallet?



This convo went pretty much to this topic's boundaries and even a bit off it. I think for more discussion on taxes etc. this thread might be better suited, but I added tax info in my OP as well, please don't hesitate to comment if you know more about one of the exemplary places I listed and its laws and if something's wrong. Or if you want to have a place added.

I'd suggest to continue on the topic of going from KYC coin ==> non-KYC coin since that was the original idea, so any new suggestions except Options 1 & 2 are welcome! Option 3, I came to realise, is considered a sale of Bitcoin in most places, unlike my initial assumption that it would be handled as a trade of goods.

o_e_l_e_o
Legendary
*
Offline Offline

Activity: 1498
Merit: 7989


Wear a mask, slow the spread


View Profile
September 08, 2021, 02:08:04 PM
Last edit: September 08, 2021, 07:10:06 PM by o_e_l_e_o
 #35

This would be my bet, but I'm not sure how it will really be handled.
If you are unable to prove the time (and therefore the price) which you acquired an amount of bitcoin, then the most likely outcome is the IRS assumes your cost basis is zero, therefore charging you capital gains tax on the full price you sell/trade/spend it for.

If you can sign a message as LoyceV says, it would be one thing, but showing up with 100 BTC with an origin you can't justify to the authorities is like showing up with $5M in bills you can't justify, you will most likely end up in jail.
There has never been a time in history where people were freely giving away millions of dollars in bills, or could freely earn millions of dollars with a few hours of computing time. If you were in bitcoin early enough, you could earn 100 BTC from mining two blocks on your home computer, or claiming from a couple of faucets (which used to give out 5 BTC), or doing an odd job for someone, or even just asking nicely for someone to send you some. Or maybe win 600 BTC from playing a few hands of poker. I don't think simply having 100 BTC of unjustifiable origin is enough to land you in jail. I think you'd have to commit actual tax evasion first.

LoyceV
Legendary
*
Online Online

Activity: 2422
Merit: 9536


Thick-Skinned Gang Leader


View Profile WWW
September 08, 2021, 02:17:17 PM
 #36

I don't understand why I should sell a private key
It's the other way around: If you buy the private key from an address that held 100 Bitcoin in 2010, you can sign a message that proves you already owned 100 Bitcoin when it was very cheap. In other words: you earned from legal capital gains, and not from selling drugs on the dark web. So you'll pay taxes, but stay out of jail.

Quote
is there any potential issues if you have a wallet with mixed / anonymised coins & you declare that, but don't have receipts of the buys of those coins?
Here banks are much more curious than government. I get the feeling they want to make sure they're off the hook once government comes sniffing.

Quote
However, there is no way to 100% prove when you bought if that wallet is long gone e.g...
For what it's worth:
You should never delete a wallet.

By the way; what if someone bought Bitcoin in 2012, mixed it, etc. and now has an equivalent amount of coin, but in another wallet; since the amounts are comparable, if they still got the keys to the 2012 wallet, they can prove they bought it a long time ago, right? Even though there is no clear paper-trail to their current wallet?
Any decent mixer gives you a signed receipt. If the mixer is credible, it can act as a paper trail.

Quote
I'd suggest to continue on the topic of going from KYC coin ==> non-KYC coin since that was the original idea
"LoyceV" doesn't have a passport and didn't get Bitcoin through KYC. But I as a person I am not hiding them from taxes. So I'd say I'm a bit in between.

n0nce
Member
**
Offline Offline

Activity: 112
Merit: 627

scio me nihil scire


View Profile WWW
September 08, 2021, 03:30:36 PM
 #37

This would be my bet, but I'm not sure how it will really be handled.
If you unable to prove the time (and therefore the price) which you acquired an amount of bitcoin, then the most likely outcome is the IRS assume you cost basis is zero, therefore charging your capital gains tax on the full price you sell/trade/spend it for.
That's very good to know, thanks! I mean in a worst-case scenario, that's still better than having it seized or something. Especially for the early adopters I mentioned, who most might not have have the OG keys anymore: if one would sell a $1M Bitcoin in the future that they bought for e.g. 100$, taxing 999,900$ vs. taxing 1,000,000$ doesn't make too much of a difference.

I don't think simply having 100 BTC of unjustifiable origin is enough to land you in jail. I think you'd have to commit actual tax evasion first
I'd like to believe that as well, but I guess only future will be able to tell.

I don't understand why I should sell a private key
It's the other way around: If you buy the private key from an address that held 100 Bitcoin in 2010, you can sign a message that proves you already owned 100 Bitcoin when it was very cheap. In other words: you earned from legal capital gains, and not from selling drugs on the dark web. So you'll pay taxes, but stay out of jail.
Right, right, makes sense. I'll make sure to find the old private keys for the majority of my funds, for sure and try to spread awareness about this issue then! People need to know they need to basically keep the wallets on which they first receive their Bitcoin purchases (even if later moving funds to e.g. hardware wallet) until they sell for cash or use it to buy stuff.

Quote
is there any potential issues if you have a wallet with mixed / anonymised coins & you declare that, but don't have receipts of the buys of those coins?
Here banks are much more curious than government. I get the feeling they want to make sure they're off the hook once government comes sniffing.

Quote
However, there is no way to 100% prove when you bought if that wallet is long gone e.g...
For what it's worth:
You should never delete a wallet.
Damn, I just now realized how important this will be in the future. I feel, it should be as popular as "not your keys, not your bitcoin"! For sure it should be second after that phrase! And plastered over all decentralized exchanges and p2p marketplaces: "Please store the private keys on which you receive your BTC - even after sweeping!"

By the way; what if someone bought Bitcoin in 2012, mixed it, etc. and now has an equivalent amount of coin, but in another wallet; since the amounts are comparable, if they still got the keys to the 2012 wallet, they can prove they bought it a long time ago, right? Even though there is no clear paper-trail to their current wallet?
Any decent mixer gives you a signed receipt. If the mixer is credible, it can act as a paper trail.
Then they should boldly state "Keep this receipt until caching out for fiat!" as well.

Quote
I'd suggest to continue on the topic of going from KYC coin ==> non-KYC coin since that was the original idea
"LoyceV" doesn't have a passport and didn't get Bitcoin through KYC. But I as a person I am not hiding them from taxes. So I'd say I'm a bit in between.
I'm wondering (iirc in NL) how do you 'declare' your holdings? When filling out tax stuff, you put in the BTC amount that you hold? Or public keys? Or the EUR amount?

LoyceV
Legendary
*
Online Online

Activity: 2422
Merit: 9536


Thick-Skinned Gang Leader


View Profile WWW
September 08, 2021, 06:37:12 PM
 #38

Any decent mixer gives you a signed receipt. If the mixer is credible, it can act as a paper trail.
Then they should boldly state "Keep this receipt until caching out for fiat!" as well.
If you keep the receipt, you risk compromising your privacy, which is why you used a mixer in the first place. If you want all traces to be gone, you should not keep the receipt.

Quote
I'm wondering (iirc in NL) how do you 'declare' your holdings? When filling out tax stuff, you put in the BTC amount that you hold? Or public keys? Or the EUR amount?
They ask for the total amount, in euro, on the first day of the previous year.
Image loading...
Short translation: miscellaneous possessions, such as Bitcoin and other investments. This also includes for instance the 8 tonnes of gold you have in your basement.

o_e_l_e_o
Legendary
*
Offline Offline

Activity: 1498
Merit: 7989


Wear a mask, slow the spread


View Profile
September 08, 2021, 07:11:08 PM
 #39

This also includes for instance the 8 tonnes of gold you have in your basement.
I lost my basement in a tragic boating accident.

Poker Player
Hero Member
*****
Offline Offline

Activity: 504
Merit: 834


Sucker at the table enthusiast.


View Profile
September 09, 2021, 02:58:40 AM
Last edit: September 09, 2021, 03:14:43 AM by Poker Player
Merited by o_e_l_e_o (4)
 #40

There has never been a time in history where people were freely giving away millions of dollars in bills, or could freely earn millions of dollars with a few hours of computing time. If you were in bitcoin early enough, you could earn 100 BTC from mining two blocks on your home computer, or claiming from a couple of faucets (which used to give out 5 BTC), or doing an odd job for someone, or even just asking nicely for someone to send you some. Or maybe win 600 BTC from playing a few hands of poker. I don't think simply having 100 BTC of unjustifiable origin is enough to land you in jail. I think you'd have to commit actual tax evasion first.

Well, I think we already talked about this in another thread. I'm not convinced by your analogy because when it was easy to win 600 bitcoins playing a few hands of poker, those 600 bitcoins were not worth $30M.

If you suddenly appear today before tax authorities and declare 600 bitcoins, it's very suspicious that you haven't declared anything before. That's why I was giving the example of Al Capone, they couldn't prove that he had murdered, extorted, etc. The only thing they could prove is that he had more money than he could legally justify.

Let's say you have an average salary of $50k per year. You haven't sold (or declared) anything when those 600 BTC have turned into $100K, $500K, $1M, $2M, etc? That's very suspicious. Not impossible but suspicious.

This will also depend on the country and its tax authorities. I wouldn't gamble my wealth and my freedom trusting that the country's authorities will understand how Bitcoin works and that if I show up with $5-30M out of nowhere, they will let me pay taxes without any problems.

If you show up with $30M today in a country where there is Wealth Tax let's say from $1M onwards, you will have more problems.

From the thread you mentioned, though I found this interesting, since it corresponds with what I'd assume would happen when asked about the origin of non-KYC coin:

None of the bitcoins that I own were obtained with any kind of KYC and I have absolutely no problem spending them or selling them in the U.S.

Gemini occasionally asks me where I got the bitcoins that I sell on their exchange (AML compliance I assume), and I tell them I obtained them anonymously many years ago (which is the truth). End of discussion.

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.

Absolutely untrue in my experience.

Yes, but I asked him what amounts we were talking about:

Thousands, and yes I pay the income tax on the gains.

Not to suddenly declare $5-30M of which you cannot justify the origin.

.BEST..CHANGE.███████████████
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
██
███████████████
..BUY/ SELL CRYPTO..
Pages: « 1 [2] 3 4 »  All
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!