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Author Topic: why people look to buy and sell bticoins outside exchanges?  (Read 2838 times)
bitconftw
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November 19, 2014, 05:57:32 PM
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hi

I saw this forum and later the india sub-forum and saw that people are trying to buy/sell bitcoins outside of exchanges.
like people asking for currency recharge, flipkart voucher, buying one-to-one with people, buying selling in local bit coins website, etc. I don't understand why people dont use exchanges for this.
is it not better in the eyes of govt if it is done via exchange?

if wanna start bit coin trading, which is better?exchange or directly to person?
I think the advantage of using exchange is govt will know transactions and it is legal (correct?)?
but disadvantage might be because bit coin is not regulated  and it is better to simply deal small amounts out of exchange and such central spots of attention. if we pay tax after buying/selling bit coin outside exchange, it is still legal,correct?

is using local bitcoins website a right way of doing this??
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November 19, 2014, 06:21:44 PM
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Using bitcoin for daily use like recharges and all makes the bitcoin strong.
I sell bitcoin in person, because I easily get cash for my bitcoins, involving banks for bitcoin transfers can cause you bank account to be seized( see the list of bitcoin hostile banks)
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November 20, 2014, 01:01:47 AM
 #3

hi

I saw this forum and later the india sub-forum and saw that people are trying to buy/sell bitcoins outside of exchanges.
like people asking for currency recharge, flipkart voucher, buying one-to-one with people, buying selling in local bit coins website, etc. I don't understand why people dont use exchanges for this.
is it not better in the eyes of govt if it is done via exchange?

if wanna start bit coin trading, which is better?exchange or directly to person?
I think the advantage of using exchange is govt will know transactions and it is legal (correct?)?
but disadvantage might be because bit coin is not regulated  and it is better to simply deal small amounts out of exchange and such central spots of attention. if we pay tax after buying/selling bit coin outside exchange, it is still legal,correct?

is using local bitcoins website a right way of doing this??


Look at the liquidity and number of transactions done on exchanges in India and you will get your answer.  Smiley
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November 20, 2014, 05:48:43 AM
 #4

Black Money. Simple.

He's Nick Sazbo from Washington. I've my answer. Or Hal? :O
bitconftw
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November 20, 2014, 06:57:37 AM
 #5

Black Money. Simple.
this was what I was worried would be the case.is it true? is this why people trade like this outside of exchange?

btw you can still declare income,pay tax even with hard cash, right?how is it black money then?
bitconftw
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November 20, 2014, 07:06:36 AM
 #6

hi

I saw this forum and later the india sub-forum and saw that people are trying to buy/sell bitcoins outside of exchanges.
like people asking for currency recharge, flipkart voucher, buying one-to-one with people, buying selling in local bit coins website, etc. I don't understand why people dont use exchanges for this.
is it not better in the eyes of govt if it is done via exchange?

if wanna start bit coin trading, which is better?exchange or directly to person?
I think the advantage of using exchange is govt will know transactions and it is legal (correct?)?
but disadvantage might be because bit coin is not regulated  and it is better to simply deal small amounts out of exchange and such central spots of attention. if we pay tax after buying/selling bit coin outside exchange, it is still legal,correct?

is using local bitcoins website a right way of doing this??


Look at the liquidity and number of transactions done on exchanges in India and you will get your answer.  Smiley

i don't know where to check. please tell me where.
please also tell me what your finding is from this Smiley
Benson Samuel
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November 20, 2014, 07:07:22 AM
 #7

Black Money. Simple.
this was what I was worried would be the case.is it true? is this why people trade like this outside of exchange?

btw you can still declare income,pay tax even with hard cash, right?how is it black money then?

There is also a factor of fear driving these 'out of exchange' trades - What if the person gets into trouble due to the Governments lack of stance on Bitcoin?

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November 20, 2014, 07:40:57 AM
 #8

Black Money. Simple.
this was what I was worried would be the case.is it true? is this why people trade like this outside of exchange?

btw you can still declare income,pay tax even with hard cash, right?how is it black money then?

There is also a factor of fear driving these 'out of exchange' trades - What if the person gets into trouble due to the Governments lack of stance on Bitcoin?

There is also a factor of ignorance driving "out of exchange" trades - What is a government gets into trouble due to the people's lack of understanding on Bitcoin?

He's Nick Sazbo from Washington. I've my answer. Or Hal? :O
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November 20, 2014, 07:50:37 AM
 #9

Black Money. Simple.
this was what I was worried would be the case.is it true? is this why people trade like this outside of exchange?

btw you can still declare income,pay tax even with hard cash, right?how is it black money then?

There is also a factor of fear driving these 'out of exchange' trades - What if the person gets into trouble due to the Governments lack of stance on Bitcoin?

There is also a factor of ignorance driving "out of exchange" trades - What is a government gets into trouble due to the people's lack of understanding on Bitcoin?

Yup, thats for sure.
But that is not the reason for driving 'out of exchange' trades. Should be the reason for the Government to be cautious though.

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November 20, 2014, 08:20:11 AM
 #10

Black Money. Simple.
this was what I was worried would be the case.is it true? is this why people trade like this outside of exchange?

btw you can still declare income,pay tax even with hard cash, right?how is it black money then?

There is also a factor of fear driving these 'out of exchange' trades - What if the person gets into trouble due to the Governments lack of stance on Bitcoin?

There is also a factor of ignorance driving "out of exchange" trades - What is a government gets into trouble due to the people's lack of understanding on Bitcoin?

Yup, thats for sure.
But that is not the reason for driving 'out of exchange' trades. Should be the reason for the Government to be cautious though.

Goverment are so cautious that no one hear as any idea. Maybe, you should ask you credible contacts who attempted PIL to dig more till they hit Office of Finance Ministry.

Oops! Again, my really really bad assumptions on personal level that hardly keep thread on track.

He's Nick Sazbo from Washington. I've my answer. Or Hal? :O
micky123
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November 20, 2014, 08:32:39 AM
 #11

hi

I saw this forum and later the india sub-forum and saw that people are trying to buy/sell bitcoins outside of exchanges.
like people asking for currency recharge, flipkart voucher, buying one-to-one with people, buying selling in local bit coins website, etc. I don't understand why people dont use exchanges for this.
is it not better in the eyes of govt if it is done via exchange?

if wanna start bit coin trading, which is better?exchange or directly to person?
I think the advantage of using exchange is govt will know transactions and it is legal (correct?)?
but disadvantage might be because bit coin is not regulated  and it is better to simply deal small amounts out of exchange and such central spots of attention. if we pay tax after buying/selling bit coin outside exchange, it is still legal,correct?

is using local bitcoins website a right way of doing this??


For me exchanges are just a big PITA. Not to mention i need to go ahead and pay them a transaction fee which is not very small imo currently. Also the hassle of collecting and transferring to my wallet where i incur additional transfer fees.
Exchanges would need you to register KYC information and to be totally honest, my KYC documents are just not in place thanks to our brilliant government who wants to make life difficult for the floating population. With Modi at the helm though, i am starting to see a few changes, so maybe the day will not be far when i actually buy BTC on an exchange!

I am all for paying taxes too, but there is no way the government can fix a tax slab when BTC is so volatile. For heavens sake, they are unable to even arrive to a conclusion on whether BTC is a commodity or a currency! It will be very difficult for them to regulate and i guess that is the whole essence and beauty of BTC, there is no centralization or regulation!
bitconftw
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November 20, 2014, 01:09:15 PM
 #12

ok, so consider 2 options:-

1. you trade outside exchanges. you give your bank account number to a buyer and sell him bit coins. he *knows* your identity because you gave him a/c number. if the government decided to have a negative stance on bit coin, they would look for active bit coin buyers/sellers and get hold of them and then get other contacts out of them.

2. you trade inside exchange. you give them your identity for KYC.
if the government decided to have a negative stance on bit coin, they would raid exchanges and get your info and contact you.

which option is better?please give me your opinions.


and micky123, bit coin's nature is lost when you convert it to rupees. i am talking about bit coin traders(those who sell/buy bit coins and deal with *rupees*). so i was talking about taxation from a rupees perspective. obviously government can't tax bit coins. it is if i convert it to rupees that i should tell the government about it.

adv.kanishk
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November 25, 2014, 04:10:09 PM
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ok, so consider 2 options:-

1. you trade outside exchanges. you give your bank account number to a buyer and sell him bit coins. he *knows* your identity because you gave him a/c number. if the government decided to have a negative stance on bit coin, they would look for active bit coin buyers/sellers and get hold of them and then get other contacts out of them.

2. you trade inside exchange. you give them your identity for KYC.
if the government decided to have a negative stance on bit coin, they would raid exchanges and get your info and contact you.

which option is better?please give me your opinions.


and micky123, bit coin's nature is lost when you convert it to rupees. i am talking about bit coin traders(those who sell/buy bit coins and deal with *rupees*). so i was talking about taxation from a rupees perspective. obviously government can't tax bit coins. it is if i convert it to rupees that i should tell the government about it.


I my opinion as a lawyer it is better to use the exchange as a mode of trading. Mainly because of two reasons-:

1. Trading through exchanges eliminates the risk of getting cheated. there are many people in this forum who have been cheated by one or various persons.

2. If you are trading in white money then it is always to have a paper trail which you can always refer to in case you want it. As I think most of the exchanges would be keeping a record of your transactions.

Now the second party of fear which every normal trader has "What if authorities take an action against us" -: As a lawyer I should save it for telling in my opinions for legal fee but since community as a whole has this issue I would like to tell that no government agency can arrest you for trading in bitcoin. Any regulation which may come in future cannot be in effect with retrospective effect (back dated). So if government bans it on 1.4.2016 (Example only) then any person who traded before 1.4.2016 cannot be incarcerated. Hope this information encourages people to trade in bitcoin without a sword hanging on their head.

Regards
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Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252
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November 25, 2014, 06:35:54 PM
 #14

ok, so consider 2 options:-

1. you trade outside exchanges. you give your bank account number to a buyer and sell him bit coins. he *knows* your identity because you gave him a/c number. if the government decided to have a negative stance on bit coin, they would look for active bit coin buyers/sellers and get hold of them and then get other contacts out of them.

2. you trade inside exchange. you give them your identity for KYC.
if the government decided to have a negative stance on bit coin, they would raid exchanges and get your info and contact you.

which option is better?please give me your opinions.


and micky123, bit coin's nature is lost when you convert it to rupees. i am talking about bit coin traders(those who sell/buy bit coins and deal with *rupees*). so i was talking about taxation from a rupees perspective. obviously government can't tax bit coins. it is if i convert it to rupees that i should tell the government about it.


I my opinion as a lawyer it is better to use the exchange as a mode of trading. Mainly because of two reasons-:

1. Trading through exchanges eliminates the risk of getting cheated. there are many people in this forum who have been cheated by one or various persons.

2. If you are trading in white money then it is always to have a paper trail which you can always refer to in case you want it. As I think most of the exchanges would be keeping a record of your transactions.

Now the second party of fear which every normal trader has "What if authorities take an action against us" -: As a lawyer I should save it for telling in my opinions for legal fee but since community as a whole has this issue I would like to tell that no government agency can arrest you for trading in bitcoin. Any regulation which may come in future cannot be in effect with retrospective effect (back dated). So if government bans it on 1.4.2016 (Example only) then any person who traded before 1.4.2016 cannot be incarcerated. Hope this information encourages people to trade in bitcoin without a sword hanging on their head.

Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252

Great to have you among us , legal clarity is also needed for clearing all the negativities related to BTC.
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November 26, 2014, 11:22:08 AM
 #15

ok, so consider 2 options:-

1. you trade outside exchanges. you give your bank account number to a buyer and sell him bit coins. he *knows* your identity because you gave him a/c number. if the government decided to have a negative stance on bit coin, they would look for active bit coin buyers/sellers and get hold of them and then get other contacts out of them.

2. you trade inside exchange. you give them your identity for KYC.
if the government decided to have a negative stance on bit coin, they would raid exchanges and get your info and contact you.

which option is better?please give me your opinions.


and micky123, bit coin's nature is lost when you convert it to rupees. i am talking about bit coin traders(those who sell/buy bit coins and deal with *rupees*). so i was talking about taxation from a rupees perspective. obviously government can't tax bit coins. it is if i convert it to rupees that i should tell the government about it.


I my opinion as a lawyer it is better to use the exchange as a mode of trading. Mainly because of two reasons-:

1. Trading through exchanges eliminates the risk of getting cheated. there are many people in this forum who have been cheated by one or various persons.

2. If you are trading in white money then it is always to have a paper trail which you can always refer to in case you want it. As I think most of the exchanges would be keeping a record of your transactions.

Now the second party of fear which every normal trader has "What if authorities take an action against us" -: As a lawyer I should save it for telling in my opinions for legal fee but since community as a whole has this issue I would like to tell that no government agency can arrest you for trading in bitcoin. Any regulation which may come in future cannot be in effect with retrospective effect (back dated). So if government bans it on 1.4.2016 (Example only) then any person who traded before 1.4.2016 cannot be incarcerated. Hope this information encourages people to trade in bitcoin without a sword hanging on their head.

Regards
--
Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252

Thank you for pitching in and sharing this information. I always had a little bit of a guilt and worry when trading in BTC as it may be subject to Govt. intervention in the future. This bit of information has set my mind at ease. I can now trade in BTC without any fear. Just to counter this possible incursion, every transaction in my BTC wallet has a note attached which explains where the funds come from or to where i send them.  Grin
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November 27, 2014, 02:11:45 PM
 #16

they hav a chance for having the trade at less cost

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November 28, 2014, 12:59:00 AM
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Now the second party of fear which every normal trader has "What if authorities take an action against us" -: As a lawyer I should save it for telling in my opinions for legal fee but since community as a whole has this issue I would like to tell that no government agency can arrest you for trading in bitcoin. Any regulation which may come in future cannot be in effect with retrospective effect (back dated). So if government bans it on 1.4.2016 (Example only) then any person who traded before 1.4.2016 cannot be incarcerated. Hope this information encourages people to trade in bitcoin without a sword hanging on their head.

Yes, that seems to be point about incarceration.

From the Constitution ,  
(20) Protection in respect of conviction for offences. —(1) No person shall be convicted of any offence except for violation of a law in force at the
time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.

(Electronic Page 5 of this file http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss%286%29.pdf)

So you may not be convicted for trading in bitcoins now, by the Government bringing in a retrospective law. But can they tax you with retrospective effect? What if they suddenly decide to pass a retrospective law stating that Bitcoin transactions are subject to 100% VAT. Aren't they well within their powers to do this? (I am thinking about the Vodafone case).
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November 29, 2014, 10:07:46 AM
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Now the second party of fear which every normal trader has "What if authorities take an action against us" -: As a lawyer I should save it for telling in my opinions for legal fee but since community as a whole has this issue I would like to tell that no government agency can arrest you for trading in bitcoin. Any regulation which may come in future cannot be in effect with retrospective effect (back dated). So if government bans it on 1.4.2016 (Example only) then any person who traded before 1.4.2016 cannot be incarcerated. Hope this information encourages people to trade in bitcoin without a sword hanging on their head.

Yes, that seems to be point about incarceration.

From the Constitution ,  
(20) Protection in respect of conviction for offences. —(1) No person shall be convicted of any offence except for violation of a law in force at the
time of the commission of the Act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.

(Electronic Page 5 of this file http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss%286%29.pdf)

So you may not be convicted for trading in bitcoins now, by the Government bringing in a retrospective law. But can they tax you with retrospective effect? What if they suddenly decide to pass a retrospective law stating that Bitcoin transactions are subject to 100% VAT. Aren't they well within their powers to do this? (I am thinking about the Vodafone case).
Even the vodafone case was decided in favor of Vodafone. Secondly, even if VAT or any other tax is imposed restrospectively (very remote chance) even then the issue of incarceration will not come into effect. Also, if these kind of regulation comes further a timeline will be provided to the traders to pay the taxes without any interest or penalty.

Hope the answer clarifies the doubts in your mind.

Regards
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Kanishk Agarwal
Advocate
CriTaxCorp
Criminal-Taxation-Corporate
www.critaxcorp.com
+919971666252
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November 29, 2014, 04:26:27 PM
 #19

Trading bitcoin for cash is easier and no one can track it. I sell btc and money is mine, no banks no shit
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November 30, 2014, 04:48:03 AM
 #20

Even the vodafone case was decided in favor of Vodafone. Secondly, even if VAT or any other tax is imposed restrospectively (very remote chance) even then the issue of incarceration will not come into effect. Also, if these kind of regulation comes further a timeline will be provided to the traders to pay the taxes without any interest or penalty.

Hope the answer clarifies the doubts in your mind.


I think we are talking about 2 different things. The retrospective law was passed after an existing case was decided in favour of Vodafone. People may not be worried about incarceration, but they could still be concerned about excessive taxes. Excessive taxes (imposed retrospectively) would effectively result in the government seizing your bitcoins (as taxes). Smiley
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