KYC Requirement Getting Stricter Under the umbrella Of Tax

[BlackBoss_]

If KYC requirements is no more stricter, how will they achieve their targets from tax collections, their regulations will not be effective as well, so when we talk about government, expect them not to be friendly in their dealings, no minding the cost it may implies on us at the receiving end, we are getting there the more, because all these could be prevented if we have our privacy achieved and avoid centralized entities with the use of bitcoin.

People as citizens never feel happy with money they lost through tax collected by governments. It has higher chance of becoming more anti feeling and activities if governments are corruptive and only use money gathered from tax for their personal benefits or only for the national leaders or the elites in their countries.

If money from taxing citizens is used for wealthfare distributions and social security well enough, citizens would feel better and are more ready to pay tax. Surely in all nations, there are voices against governments with any policies including taxation on citizens.

I believe that as a young industry and market, there will be more regulations on cryptocurrency industry and users in the future but I hope that it will not be stricter than in stocks market, and I feel good if same regulations are applied for stocks and cryptocurrency market. I mean I only feel unhappy if KYC, AML or any policy that tax cryptocurrency users, investors, traders more than on stocks investors.

[Satofan44]

1. Privacy even while been fairylike is becoming mythical

If someone wants to avoid taxes legally or illegally, for whatever reason, there are and there will always tools and ways to do it. You should not believe everything that you read at least no on face value. A lot of the government systems tend to be described as if there were from a Sci-Fi movie, when in fact they are very rudimentary and easily bypassed. What they are trying to do here is not catch everyone, but cast a very wide net in hopes of catching as many people as possible. This does work for people who are not knowledgeable in this field, the most average people of all. If it didn't work, they would not do it. However, for those that are advanced this will not work.

The key for remaining anonymous is to have both your entry and exit from crypto be entirely anonymous. For people who are not rich or connected, doing this with bank accounts is impossible without huge risk. However, with cash this is doable and the industry is massive. Furthermore, I have even seen crypto mules that offer services regarding withdrawing to banks for a fee. When the laws and rules are stupid and Orwellian, people develop all sorts of risky solutions -- they do work, but they create risk and costs for everyone involved.

2. Things or tools that can help with privacy maybe seriously attacked to prevent any unturned stones

They already have been doing that, the impact of their attacks is limited. These things will always exist. Like I said, at best what it does is limit the number of average people who use these tools.

3.AML is going off the roof and cypherphunk mindset would be proudly tagged Villains

Will you think of the abused kids for once, what is wrong with you -- are you a monster?  

5. Tech developers could be 'regulated' to create compliance for such rules

No, that would be an extreme violation of human rights and as long as anything can be released anonymously this is not enforceable anyway. They can try, but they will just waste money and it will amount to nothing.

If money from taxing citizens is used for wealthfare distributions and social security well enough, citizens would feel better and are more ready to pay tax. Surely in all nations, there are voices against governments with any policies including taxation on citizens.

Fuck off, I am not paying more tax so that some stupid and addicted idiots can receive more free money just for existing. Almost all welfare should be abolished. It is time to grow up and take responsibility for your own actions, the state should not come to your rescue when you fuck up.

[Ucy]

The tax thing, in many cases, is used as a tool to know how much crypto a user has and spy on their crypto activities.
I think it could be used as bait or trap, expecting people to commit crime like lying about how much they have, to get them punished, send them to jail, blackmailed and even have the system use them.
The way out is to be more decentralized/independent, and less dependent on the centralized system, so that you owe it little to nothing. This will then put them in a position to exclude you from their tax scheme or become tyrannical. If they become tyrannical, you are then more qualified to use things like mixers, though the proper one that have ways of detecting, preventing or exposing criminal users without doing thesame to legitimate ones.. So, if you could prove to the mixer you didn't commit any crime or don't deserve to pay any tax, the decentralized system may let you go or protect you

[rdbase]

I remember when places such countries in the middle east were exempt from paying taxes.
But have recently began started charging residents a margin of taxes such as Dubai and Saudi Arabia.
Many people who were creating companies there to have a startup related to cryptocurrency flocked to these countries. But since they began charging these corporate taxes they have since moved their companies elsewhere that don't charge these sort of taxes.

[Webetcoins]

The whole point of KYC wasn't to make sure people were money laundering, it was to make sure governments could watch over your money. Without KYC, you could invest a million dollars and take out ten million dollars and they wouldn't know a thing, you could start paying things with crypto and nobody would know.

But, with KYC your every move is recorded and governments could ask for it, which means they can tax you anytime they want and for however much they want, this is the real reason for it.

[lionheart78]

So how about people who made loses in crypto investments during those same period, are they also going to be compensated by the government? Because if not, then I can boldly say that this policy is abruptly not fair in anyway to the crypto community, despite the fact that government have never for once liked Bitcoin, simply because they wanted to be in full control over all the money, and Bitcoin came to make us independent and have full control over our assets. Because with this policy where taxes are looking like a priority to most centralized exchanges who holds our KYC, then a think an urgent need for a massive switch to decentralized exchanges where we have full control over our assets is definitely needed.

Obviously, the people who made losses in crypto investment won't be compensated by the government.  They won't reimburse any losses because they think it is on you and not the government's fault why you made losses.  But once you make a killing, they will go after your profit and tax it, saying you are bound by the rule because you are under their jurisdiction.  Unfair, isn't it?

Yes, the government is here to milk its citizen of their money in the guise of taxes.  So if we don't want to be tracked, we must avoid centralized exchanges and make use of one of the strongest Bitcoin feature that make us independent from the centralized traces, the P2P transaction.

[Satofan44]

The tax thing, in many cases, is used as a tool to know how much crypto a user has and spy on their crypto activities.
I think it could be used as bait or trap, expecting people to commit crime like lying about how much they have, to get them punished, send them to jail, blackmailed and even have the system use them.
The way out is to be more decentralized/independent, and less dependent on the centralized system, so that you owe it little to nothing. This will then put them in a position to exclude you from their tax scheme or become tyrannical. If they become tyrannical, you are then more qualified to use things like mixers, though the proper one that have ways of detecting, preventing or exposing criminal users without doing thesame to legitimate ones.. So, if you could prove to the mixer you didn't commit any crime or don't deserve to pay any tax, the decentralized system may let you go or protect you

You can argue that most countries already operate as de factor tyrannies. They may not be using tanks, but there is a goal to achieve compete financial capture. You can manipulate people in this way because they usually consider tyranny with physical violence, which is a mistake. If you look at all the taxes that are being applied on people ranging from income tax over sales tax to capital gains tax, some countries routinely extract 60-70% or more of a person's real economic output. That's not somebody "contributing to tax", it is spread out confiscation that is designed to avoid a revolt. If all other taxes and fees were removed and all the capture was done through income taxes, people may actually revolt.

When it comes to crypto taxation, the situation is even worse. They do not care about this small revenue for now, the primary aim here is surveillance and gaining future leverage. Full asset transparency is an Orwellian nightmare that creates permanent financial suspects, this has nothing to do with the rule of law. To make everything worse, this very system is designed to trap people?

• Tax codes are intentionally complicated and long, they don't need to be.
• Rules sometimes change and can even be applied retroactively.
• Errors are criminalized while their wealthy partners are using holes designed for them to avoid paying taxes.
• At times enforcement is questionable and can be selective and political.

The conclusion is that we have a system which extract most of the value of the people, and which wants to monitor every single transaction to be able to punish people at will. In this case the system has already crossed the line, it is tyrannical and oppressive. In this case anyone is just to try to escape this system by every means possible, legal and illegal -- since the rule of law is deeply corrupt, most laws are designed at the expense of the average person and in favor of the connected and wealthy. Decentralization in this case is a means to escape the abusive system, it is about self-preservation.

Obviously, the people who made losses in crypto investment won't be compensated by the government.  They won't reimburse any losses because they think it is on you and not the government's fault why you made losses.  But once you make a killing, they will go after your profit and tax it, saying you are bound by the rule because you are under their jurisdiction.  Unfair, isn't it?

This is a dumb and mistaken argument. Not only would this invite even more abuse, it would increase the power and size of the state. The state should have fewer functions not more functions. Stop trying to increase the size of governments. Where do you think that the money for compensation would come from? From someone else's taxes or wealth. I am not going to pay for your stupidity and mistakes, fuck you and anyone who thinks like you.

[PrivacyG]

I agree with stricter identity restrictions if they include stricter controlling of exchanges and compensation for hacking and scam. Detailed tax data cannot be requested without strict data about their licenses, or forcing them to compensate those affected.

It is some sort of fallacy if you will.  They make you believe more restriction means the important things will be getting taken care of but in reality it is not at all like that. 

From some of the Exchanges abusing the law by treating customers as Criminals until they give up their Money to actual Criminals being able to escape using either fake IDs and other methods avoiding particularly the laws made to prevent such situations, I honestly do not see how things got any better compared to 10 years ago when most Exchanges did not have a mandatory identity verification.  I would rather say things got worse.  WAY worse.

[Ambatman]

I agree with stricter identity restrictions if they include stricter controlling of exchanges and compensation for hacking and scam. Detailed tax data cannot be requested without strict data about their licenses, or forcing them to compensate those affected.

Getting hacked or scammed isn't the only thing that can happen from a data breach
Impersonation and
People could loss their lives
Not a new thing where individuals were attacked because what they showed they own.
But you can avoid those risk of scams or hacks by not just sharing your data

[Findingnemo]

IMO, this is all just the process to lead the majority of people to use the centralized system and condition them that this is the normal thing just like how they did with the banking system when they were printing money overnight while everyone has to work their entire life to make that which makes it completely useless.

In reality the privacy is become expensive and inconvenient so we all need to set our priorities right.

[Outhue]

Here is the thing.

This can not and will not work for ever.  I believe we are still in a stage of disbelief where Developers still do not want to believe that simply being a code writer may end you up in jail.  But when this starts happening often, they will have no choice but to start hiding their faces while continuing their work.

They wait till they are been pushed to the wall, isn't it? This is why Nakamoto is different, they don't have to wait, anything that's privacy related or anonymous the developers need to not exist, they have to follow what Nakamoto did, I don't know why developers are not already doing this.

A new tax law is been introduced in my country starting from Jan 2026, I don't plan to pay tax on my crypto earnings, this is crazy and it is why I will have to find way to never pay such tax, this makes no sense to me, it is too much. I hope that solutions will come.

[rezakurnia66]

Its mean all user cryptocurrency trading data will know by government? can't believing if exchange want to sharing user data with the government exactly how much our cryptocurrency assets. However is allow only for exchange have regulation with the government but if any countries not legalizing many top global exchange market so government not has control to access user trading data?
talking about tax for cryptocurrency transaction already adopting in my country but using local exchange only, you must pay 0.12% every transaction for buy or sell your order and its not include and exchange fees transaction for trading. I pay every time taxes transaction every trading in local exchange market.

[Webutxo]

They wait till they are been pushed to the wall, isn't it? This is why Nakamoto is different, they don't have to wait, anything that's privacy related or anonymous the developers need to not exist, they have to follow what Nakamoto did, I don't know why developers are not already doing this.

A new tax law is been introduced in my country starting from Jan 2026, I don't plan to pay tax on my crypto earnings, this is crazy and it is why I will have to find way to never pay such tax, this makes no sense to me, it is too much. I hope that solutions will come.

I think Nakomoto was different because he started his work as full time privacy people. The new developers we have now already existed on the internet, going dark will means abandoning everything they have worked for and Bitcoin isn't the only work they have supported, some have their companies and other things they have build as their career growth and development, all that will be for nothing.

It's a a crime not to pay tax if your earnings are track able, tte government will ask you for accountability. My only problem with the tax law is trying to extort everyone when the government is providing absolutely nothing, this tax will only divide the country that is already in chaos.

[davis196]

1. Privacy even while been fairylike is becoming mythical

2. Things or tools that can help with privacy maybe seriously attacked to prevent any unturned stones

3.AML is going off the roof and cypherphunk mindset would be proudly tagged Villains

4. Centralized reporting creates more risk to data breaches and makes exchanges fat cows for hackers

5. Tech developers could be 'regulated' to create compliance for such rules

The people, who are using centralized crypto exchanges have never been concerned about their privacy. They would still use centralized exchanges, even after the regulations become stricter.
The people, who are truly concerned about their privacy would never use a centralized crypto exchange. They would find and use decentralized platforms to sell and buy crypto. I don't see as a problem the fact, that centralized exchanges will begin reporting the financial gains of their users to the government for tax purposes. Most crypto traders(more than 80%) lose money in the long run. If you lose money via cryptocurrency trading, you cannot get taxed.

[AbuBhakar]

If KYC requirements is no more stricter, how will they achieve their targets from tax collections, their regulations will not be effective as well, so when we talk about government, expect them not to be friendly in their dealings, no minding the cost it may implies on us at the receiving end, we are getting there the more, because all these could be prevented if we have our privacy achieved and avoid centralized entities with the use of bitcoin.

You are exactly right there. That's why they really want to regulate crypto because of taxes, and they force people to use a centralized exchange because they want to track all the transactions of each individual user. In our country, there is still a limit on depositing and withdrawing money as if it were not your money, so they can be that strict. Even the money you need to use has a limit of only xxx amount, and you can't leave money there and just hide it because it is not that secured, and you can still lose your crypto that you have saved if ever the centralized exchange you are using suddenly restricts the account you hold and blocks or bans you from using their exchange.

[Satofan44]

It is some sort of fallacy if you will.  They make you believe more restriction means the important things will be getting taken care of but in reality it is not at all like that. 

Name a few significant problems that some major government has effectively solved? There are almost no examples to give. It is all a scam. Often people are being manipulated with the same mantra, the government is not big enough or not collecting enough money to solve some problem -- yet no matter how large it becomes or how much money it collects, it never seems to accomplish its mission.

From some of the Exchanges abusing the law by treating customers as Criminals until they give up their Money to actual Criminals being able to escape using either fake IDs and other methods avoiding particularly the laws made to prevent such situations, I honestly do not see how things got any better compared to 10 years ago when most Exchanges did not have a mandatory identity verification.  I would rather say things got worse.  WAY worse.

The KYC/AML laws and their implementations are completely draconian. From the perspective of responsibility, if this happens to an unknowing user they are always at fault for not reading the terms and conditions. When it happens to a knowing user, then they are at fault for not accepting the consequences of the risks that they have taken here. Nevertheless, from the overall perspective the laws are intentionally designed to treat you like dirt. If you are unable to provide good proof, exchanges and swap services are able to hold your money indefinitely even if there is no proof that it is related to criminal behavior, as long as it triggers the right risk systems. Naturally, this hurts the people that cherish freedom and privacy the most. They are unlikely to have proof for most of their holdings and movements, as proof would constitute a huge privacy risk. Who has proof of where each of their cash bill comes from? In most cases, unless a person directly came from an ATM withdrawal -- they won't have proof for the history of a single cash bill. They may know how they got it, but proving it is a whole different issue.

Getting hacked or scammed isn't the only thing that can happen from a data breach
Impersonation and
People could loss their lives
Not a new thing where individuals were attacked because what they showed they own.
But you can avoid those risk of scams or hacks by not just sharing your data

The 2 key lessons of modernity is: Never do KYC/AML anywhere under no circumstance. Do not use any social media or any kind or share any identifying pictures, video or other content. With this, most security threats are already eliminated. You can add lessons such as "don't flash your wealth", but a person who does the 2 key lessons is extremely unlikely to not be aware of the other measures.

IMO, this is all just the process to lead the majority of people to use the centralized system and condition them that this is the normal thing just like how they did with the banking system when they were printing money overnight while everyone has to work their entire life to make that which makes it completely useless.

In reality the privacy is become expensive and inconvenient so we all need to set our priorities right.

It comes down to the level of development of the person. Underdeveloped people are more likely to value meaningless material things, and it is because of this that they primarily look at privacy based on a cost perspective. Someone who has developed higher thinking, and often thinks about more complicated topics, will have no problem paying a fee for privacy. I know plenty of such individuals. Obviously all of them would prefer that there were no fees for the privacy, but the reality of things is how it is. They accept the price for what they get.

[death69]

Privacy is already a mythical for most people. We just did not notice because the transition was slow, but then all at once. CARF is the all at once part. 48 Countries starting in 2026, another 27 in 2027.

The UK taking the lead on this does not surprise me either. They have always been ahead on the surveillance infrastructure, they just have been better at marketing it than others. Non-compliance is such a loaded word, is not it? But when did we agree to that? The framing matters. They are asking whether or not mass financial surveillance is justified and how to make it efficient.

Centralized reporting does produce honeypots for hackers. Though I believe it is worse than that. We have seen Coinbase fall to the victim of an insider threat attack. We have seen Binance lose in the billions. Now we are requiring every exchange to gather even more data and to exchange it with each other across borders?

Monero getting delisted everywhere. Samourai Wallet devs been arrested. The EU is banning privacy coins entirely by 2027. It is not subtle. The message is clear: privacy is for criminals. If you want privacy, you must be concealing something. That is the story that they are making and it is working as most people do not care until it is personal to them.

[Alpha Marine]

This can not and will not work for ever.  I believe we are still in a stage of disbelief where Developers still do not want to believe that simply being a code writer may end you up in jail.  But when this starts happening often, they will have no choice but to start hiding their faces while continuing their work.

It's not as simple as this. The government knows how to make things difficult for people who oppose it. If they make it illegal for developers to do what you say, it will be extremely difficult for developers to do it. When the government actually wants to fight something, they have different means of doing it. Of course, there will be developers who will do it underground, but it will be very few.

If things get to a level where code writers can be jailed for having an idea, that means the government has made it illegal, and at that point, fewer and fewer code writers will want to partake in it. Not many people love defying the government. They are still able to do it now because it's not illegal, even though the government is not on board with it.
I doubt we will ever have privacy like we used to.

[Abiky]

So the Crypto-Asset Reporting Framework (CARF) has set a rule that exchanges should record how much users make from sales of their cryptocurrency.

The first group of 48 countries is expected to begin recording transactions in 2026, with automatic information exchanges starting in 2027. Another 27 jurisdictions, including Canada, Australia, Mexico, and Switzerland, have until January 1, 2027, to begin collecting data, with exchanges scheduled for 2028

48 is quite something and others would like join in as time goes on
They can't turn a blind eye to it now they planning on finding a way to profit.

HMRC has been concerned for some time about high levels of non-compliance among crypto investors,” said Dawn Register, a tax partner at BDO,

And not surprising the UK are leading the front
And the statement of non compliance reminds me of privacy.

Source: https://www.mexc.co/en-NG/news/391751

Ms Register warns that anyone who made crypto gains in the 2024-25 financial year may have to file a tax return before 31 January, through a new dedicated section in the self-assessment form.

"HMRC is also looking to encourage voluntary disclosure where people have unpaid tax in earlier years and want to correct their affairs," she says

This Wowed me.

https://www.google.com/amp/s/www.bbc.com/news/articles/ckgl2je65klo.amp

We don't need a crystal ball to realise that

1. Privacy even while been fairylike is becoming mythical

2. Things or tools that can help with privacy maybe seriously attacked to prevent any unturned stones

3.AML is going off the roof and cypherphunk mindset would be proudly tagged Villains

4. Centralized reporting creates more risk to data breaches and makes exchanges fat cows for hackers

5. Tech developers could be 'regulated' to create compliance for such rules


What are your thoughts on this?

Nothing more than a blatant violation of our privacy. With such measures in place, centralized exchanges would become no different than banks. Developers who create privacy solutions will ultimately be prosecuted. We've already seen this with the imprisonment of Tornado.Cash's founder.

For the good of crypto's decentralization and censorship-resistance, developers must avoid disclosing their identities to the public. Why not follow Satoshi's footsteps? Nobody know who Satoshi is or ever was, making it impossible for governments to prosecute him and enforce the rule of law. We need more truly-decentralized exchanges with liquidity to help solve the increasing surveillance attempts from the government. I hope decentralization ultimately succeeds. Otherwise, we'll be doomed.

[X-ray]

This is just how it is.

The government will do anything to put KYC requirement for tax purpose because they know crypto has huge volume and most of the activity are taxable event.

They are most likely to pursue it until you're fully compliant about taxes, right now it's cex, in the future maybe dex that supposedly non KYC. So, expect more to come.

Some countries even already require you to write the self custody addresses you used for tax purpose.