Both nominees are good they have different ways of earning merits we all know that EZ0010 earns many merits because of his honesty. And I do believe that we are all humans and we have that attitude too and we used that since we are a child and that is his choice he gives back the money.
cause he did a lot of things here in the forum he share his knowledge with everyone here. Here's some of his threads.
Why?As the topic title implies, I'd like to collect different ways to
unlink coins that people bought through KYC on-ramps without getting into trouble later down the road.
The goal is to hold Bitcoin without losing privacy, but still complying with the law. We're not trying to evade taxes, just to improve privacy.
This is not about evading taxes while trading! The idea is just to keep your privacy while still being on the safe side in, say, 10 or 20 years time, when you'll want to cash out your holdings (or buy something with them which is usually seen as the same thing). Also governments, laws, everything, might look a whole lot different from today. So if your country doesn't collect wealth tax, thus not requiring you to inform anyone about your holdings, you won't be subjected to potential confiscation or $5 wrench method.If you're further wondering why 'no KYC', consider giving this a read:
https://bitcoinqna.github.io/noKYConly/Within the Bitcoin space, ‘creeping KYC’ is a disease that is slowly spreading. If you purchase through one of these regulated entities, you essentially tag your bitcoin addresses to your personal identity. This makes it trivial for chain surveillance firms, the companies they work with, or worse, governments, to potentially…
- Track your spending habits
- Prevent you from using other regulated services
- Confiscate your bitcoin
- Come after you for tax liabilities
- Generally know more about you than they should
3 Possible Methods:I personally like to always recommend buying through
https://bisq.network/, but the reality is that many already have some amount of coin (or everything) bought from exchanges. I'm not a fan of 'having 2 stashes', as there's the risk to interconnect them through future (multi-input) transactions if you don't have separate devices / wallets.
To 'leave KYC for good', I came up with 3 options so far. As an end result, these methods all provide a wallet that has no links to your identity and contains the same amount of Bitcoin funds.
Option 1: Provably sell Bitcoin on KYC exchange again, then 'start fresh' by buying non-KYC Bitcoin and send to a new address / wallet.
+: Nobody can prove you own Bitcoin, not a company (exchange), not anyone they're selling your information to, and not anyone who goes asking like government.
-: Selling is usually (more info later) a taxable event and you will have to declare it.
For option 1, keep in mind: Also the non-KYC coin you will acquire need to be declared if your country collects wealth tax. Since they just want a fiat valuation and no public keys, you don't lose your privacy since your identity won't be linked to your addresses, unlike when owning 'KYC Bitcoin'.
Option 2: Mix the KYC Bitcoin through
https://chipmixer.com/ or
https://coinjoin.io/en and send to a new address / wallet.
+: No taxes to be paid, since Bitcoin is not sold.
-: The exchange will still know you hold X amount of Bitcoin and authorities can get that information very easily. You will still have your privacy since they won't know which address belongs to you, so they can't trace your purchases. In case your country collects wealth tax, you will also have to disclose your holdings anyway, but at least when disclosing non-KYC holdings, there won't be a potentially scammy exchange company
also having this data and potentially selling it.
For option 2, keep in mind: Also the non-KYC coin you will own after mixing need to be declared if your country collects wealth tax. Since they just want a fiat valuation and no public keys, you don't lose your privacy since your identity won't be linked to your addresses, unlike when owning 'KYC Bitcoin'.
Option 3: Provably buy something with Bitcoin you would have bought anyway (e.g. a car) and spend the cash you would have spent on that object on new non-KYC coin.
+: If your country accepts that this is an object-object trade, there will be no taxes and your identity will own no Bitcoin afterwards (keep a receipt to prove the trade).
-: Most countries don't see a trade with Bitcoin as a trade of goods, instead treat it as a 'sell' of your Bitcoin and you need to declare the sell & pay the tax. So it doesn't really bear any benefit over option 1 in these countries.
In my eyes, Option 1 is the safest. Let's say in the future, wherever you live, laws will be passed e.g. to confiscate or heavily tax Bitcoin gains or anything of that kind, you will be able to prove that you sold the BTC and don't own any. This doesn't work in countries with wealth tax though, since you need to declare holdings value annually.
Also keep in mind, in some countries you pay less capital gains tax when hodling coins longer, like Germany. According to https://dejure.org/gesetze/EStG/23.html Bitcoin gains are tax-free as long as you held for 1+ years. So in that case I'd make sure funds didn't move for +1 year, then sell at exchange and buy again via an anonymous exchange.
Option 2 will be easier to do (less steps) and tax-free short term (since you're not selling anything), but you might get into trouble in the future in case government wants to e.g. confiscate Bitcoin holdings or something like that, since they'll be able to prove you bought amount X of Bitcoin. The information that person A owns X amount of Bitcoin may also be sold by the exchange (or 'lost' in a 'hack') and used to try to scam you or stuff like that.
The last option is more a niche thing since you'd need to live in a country where Bitcoin is widely accepted but it will allow you to prove you spent the coin (e.g. on-chain transaction including hash of the invoice) and there shouldn't be any tax issues you need to make sure your country counts this as a trade of goods and not a Bitcoin sell.
General recommendations:1) Don't hide your Bitcoin from taxman if your country requires to show your possession at end of year.
2) Keep secret keys forever to prove you had a certain amount of Bitcoin at the time that you state you bought the coin at. Preferably also keep a paper trail up until a current-day wallet that you have, and if you mixed in between for anonymity, keep a receipt of the mixing.
It seems, it doesn't even make so much sense to go from KYC coin to non-KYC coin
if just holding. If you want to hold it anonymously, you can mix them, then if you'll spend a little part of it, you'll be more anonymous. But you'll have a proof of buy time through the exchange and the mixer receipt which shows how they ended up in your current wallet.
I see no issue in buying non-KYC Bitcoin but keeping the keys where those coins arrived and maybe screenshots of the trades (e.g. of Bisq user interface). This will be needed to prove you actually bought them as early as you state you did and that you were able to afford them at that point in time.
Declaring your BTC correctly - it depends a lot on where you live (who would have guessed ).Some information I gathered so far:
!!!CORRECT ME IF SOMETHING'S WRONG!!!* IT: Need to disclose your holdings end of year, but pay taxes on gains when selling a sum of over 51,000€.
[1]* FR: You pay taxes on the gains when selling, no need to disclose holdings earlier.
[2]* NL: You pay taxes on your holdings on 1st of January. Need to disclose your holdings end of year.
[3]* CH: You pay taxes on holdings, gains, or none at all depending on canton.
[4]* DE: You pay taxes on the gains when selling, if you held for <1 year. No need to disclose holdings earlier. (trading BTC for a material object or other coin is considered a 'sell', gains considered income & up to 600€ in gains from all of your appreciating assets together are tax free.)
[5]* AT: You pay taxes on the gains when selling, if you held for <1 year. No need to disclose holdings earlier. (trading BTC for a material object or other coin is considered a 'sell', no tax-free limit)
[6]* FI: You pay taxes on the gains when selling. No need to disclose holdings earlier. (trading BTC for a material object or other coin is considered a 'sell', no tax-free limit)
[7]* USA: Pretty good FAQ can be found on IRS webpage
[8]For all countries where I mentioned 'no need to disclose holdings earlier', I'm pretty confident it's fine to buy Bitcoin without KYC, not tell anyone, then when you'll sell or pay with the Bitcoin, you'll write down when you bought the Bitcoin and for how much fiat. If they don't trust you, you can use the private keys that you received the funds on (like Bisq private keys) to sign a message for them and prove you did buy when you say you did.
Also keep in mind I'd not recommend trading into and out of XMR over mixing, because trading
is taxed in most countries, so you'll have to keep records of those trades as well, and pay taxes on them, so it's really unnecessary instead just mix them or submarine-swap them into a Lightning wallet and out of it again. Keep in mind it will not be easy to transfer full coins over LN due to usually smaller channels.
An interesting point for EU in general:
The exchange of legal tender (e.g. Euros) for bitcoins or vice versa, is exempted from VAT according to the case law of the CJEU (see CJEU 22/10/2015, Case C-264/14, Hedqvist; UStR 2000 m.no. 759).
[1] https://www.ilsussidiario.net/news/bitcoin-come-pagare-tasse-in-italia-normativa-criptovalute-e-dichiarazione-redditi/2161267/
[2]https://cms.law/en/fra/publication/bitcoin-taxation-in-france
[3] https://blog.blockpit.io/en/crypto-taxation-regulations-netherlands
[4] https://blockpit.io/en/kryptowaehrungen-steuern/schweiz
[5] https://www.winheller.com/en/banking-finance-and-insurance-law/bitcoin-trading/bitcoin-and-tax.html
[6] https://www.bmf.gv.at/en/topics/taxation/Tax-treatment-of-crypto-assets.html
[7] https://www.vero.fi/en/detailed-guidance/guidance/48411/taxation-of-virtual-currencies3/
[8] https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactionsFinally, 2 Disclaimers:
Mining and even frequent trading are in part handled widely differently from buying & holding, all above mainly refers to HODLers!
This is obviously no financial advice, just collecting information - if anything's wrong, let me know I'll update the info!