Bitcoin and NFTs

[ursus arctos]

https://twitter.com/alex/status/959313186112466946

[WOM]

Who'd a thunk?

[Ginger Yellow]

Like dollars, then.

More precisely, like US Treasuries. Which work as a risk free asset precisely because people buy them when they fear risk. Hence slightly perverse things like Treasury yields falling when the US got downgraded.

[Stumpy Pepys]

It's totally malware. It's malicious, harmful code running without your knowledge or permission. And it's literally stealing your electricity and processing capacity.

I referred to it as 'borderline malware' as it isn't persistent and doesn't harm your machine or OS. But yes, it's a sneaky and nasty practice and can continue during a session even when you close the offending website.

[ursus arctos]

These guys . . .

Dozens of entrepreneurs, made newly wealthy by blockchain and cryptocurrencies, are heading en masse to Puerto Rico this winter. They are selling their homes and cars in California and establishing residency on the Caribbean island in hopes of avoiding what they see as onerous state and federal taxes on their growing fortunes, some of which now reach into the billions of dollars.

And these men — because they are almost exclusively men — have a plan for what to do with the wealth: They want to build a crypto utopia, a new city where the money is virtual and the contracts are all public, to show the rest of the world what a crypto future could look like. Blockchain, a digital ledger that forms the basis of virtual currencies, has the potential to reinvent society — and the Puertopians want to prove it.

[Ginger Yellow]

Puerto Rico isn't subject to federal taxes? I mean, everywhere in the world is subject to US federal taxes. Why wouldn't an actual US territory be?

[WOM]

Dozens of California billionaires are selling their homes and cars to move to Puerto Rico? Really? Seems, you know, like the kind of place where a billionaire is going to be bored senseless in about a month, tops.

[ursus arctos]

It's complicated (of course), but as a general rule, bona fide residents of US possessions with their own tax systems (i.e., not places like Midway or Wake) aren't subject to US federal income tax on their possession sourced income. They are, however, subject to most other federal taxes and may be subject to income taxes levied by the possession itself.

It was traditionally seen as a way of retaining people in the possessions.

Basic information from the IRS

[Ginger Yellow]

Isn't the biggest tax hit for bitcoin billionaires going to be CGT?

[ursus arctos]

One would think so, though for individuals those are imposed through income tax

[Evariste Euler Gauss]

In relation to tax, I should mention that some of the statements on tax in the article linked several pages ago by Reginald Christ, and iinked again here:

https://www.howtogeek.com/141374/htg...-does-it-work/

are way off the mark in UK terms.

Because Bitcoin isn’t recognized as an official currency by any country, buying and selling Bitcoins themselves and using them to purchase goods and services isn’t regulated. So anything you buy with Bitcoins is not subject to a standard sales tax, or any other tax that’s normally applied to that item or service. This can be huge economic boon if you’re wealthy enough and interested enough to do a lot of business exclusively in Bitcoin.

Without being subject to most monetary laws, Bitcoin is effectively a barter system. Imagine your current supply of Bitcoins as a gigantic stack of potatoes: if you trade ten thousand potatoes for a new TV, the government won’t ask for a sales tax in the form of eight hundred potatoes. It simply isn’t equipped to handle any transactions not performed in its own currency.

I've no idea whether or not that's correct under US federal and state tax law, but it's total crap as far as Europe is concerned. Barter transactions are subject to VAT on the full value received in exchange, just as if you were selling for cash, so the idea that a trader can avoid charging VAT by taking payment in bitcoin instead of cash is absolutely laughable. Legally, at any rate, maybe some use it as a means of difficult-to-detect evasion.

[beak]

These guys . . .

at first my attention was grabbed by how much of an absolute fucking weapon this brock pierce chap looks in all his finery. i later had the misfortune to read on, and..

“What’s happened here is a perfect storm,” said Halsey Minor, the founder of the news site CNET, who is moving his new blockchain company — called Videocoin — from the Cayman Islands to Puerto Rico this winter. Referring to Hurricane Maria and the investment interest that has followed, he added, “While it was really bad for the people of Puerto Rico, in the long term it’s a godsend if people look past that.”

christ alive!

[ursus arctos]

Crypto purchases of goods are subject to sales tax in the US as well.

Some cryptoheads have complained that one of the things holding crypto back is that the state won't accept crypto for tax payments

[Guy Profumo]

Oh I so wanted to start a "running out of juice" thread -


http://www.bbc.co.uk/news/technology-43030677

[ursus arctos]

https://twitter.com/tomgara/status/963439881308573696

[Ginger Yellow]

Is there any shady enterprise Steven Seagal won't throw his, um, weight behind? This one seems to be partciularly scammy even by ICO standards.

[hobbes]

Let me assure you...

[Ginger Yellow]

Lots of interesting crypto developments while I was away, it seems. Switzerland has published its ICO regulation policy. Many ICOs are going via Switzerland in a (usually vain) attempt to get round US regulations. Perhaps unsurprisingly therefore, the Swiss policy is much more tolerant of utility token ICOs than the SEC appears to be. It also appears many ICOs would fall under (non-security) payment tokens by virtue of them conferring no legal rights on the holders - ironically, the more scammy you are as an issuer, the better off you are legally. Though you are still subject to AML law if you issue a payment token. On the other hand, if you sell a utility token before it can actually be used, it becomes a security. I don't really see how they intend to distinguish between payment tokens and pre-functionality utility tokens in practice, though.

[Ginger Yellow]

Uber vulture Elliott Management waxes lyrical about crypto

This is not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars.

I assume the ether reference is deliberate.

[ursus arctos]

https://twitter.com/wsj/status/968975250221387776?s=21

About time, guys

[Ginger Yellow]

To be fair, they have been steadily issuing enforcement actions in recent months. Mostly over the most obvious frauds, but also pushing the unregistered securities offering angle.

[ursus arctos]

True, as you have chronicled on this thread, but a lot of people have been waiting for news of something much more comprehensive

[Ginger Yellow]

Speaking of questionable securities offerings...

[ursus arctos]

Atletico Madrid’s shirt sponsors?

[Ginger Yellow]

Possibly? They're a CFD firm, a business line which has a rather questionable regulatory future in Europe (and Plus500 has a rather checkered regulatory history). Not the best time to be buying shares in them.