Topic: Bitcoin Attorney Will Answer All Questions: - page 4. (Read 19909 times)

1. second question:  ICO issuers may be cautious not to accept contributions from US citizens for fear of "selling unregistered securities" thereby possibily subjecting the issuers to SEC jurisdiction.

2. Interesting question.  Take a look at https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings.
The focus in the Investor Bulletin are sales by the ICO issuer.  It's not so much whether the investor broke the law rather to help the investor protect against fraud.  

Full disclosure, I am an attorney practicing securities arbitration.  The foregoing is not intended to be legal advice and no attorney-client relationship is implied.

1. It is my understanding that some ICO may not be accepting investments from U.S. Citizens in order to avoid being subject to SEC oversight.

2. This question is beyond the scope of my expertise.

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

Hello and thanks for doing this! I had some questions regarding the recent SEC decision on the DAO token, classifying them as securities.

I've been doing some research on this topic and have not found the exact answer.

1) Basically, I was wondering what are the legal/tax implications when participating in an ICO as an American citizen?
Let's say a US citizen uses a VPN to partake in an ICO. They double their money and then sell. They decide to cash out to fiat (USD) legally and pay the 40% short-term tax on that trade profit (as well as report it) to the IRS.
I heard that ICO providers prevent US citizens from participating to protect themselves legally from the American Government if a scam were to occur. Is this true? I basically come to realize this is a gray area.

2) If someone invests into a crypto months ago and then sells and the SEC determines that it was a security in the future, did that investor break the law? Can retroactive action be applied to this if no firm legal standing was enacted in the first place?

Thanks for the info. Though my original response is the same. I still plan to buy and accumulate bitcoin for myself only. I am just intending to use it as cash for personal use and not sell it nor provide financial services etc.

Hello Mr. Greenberg,

Prediction markets were shut down in the US a while back but now they seem to be doing well on blockchain.

I would like to add prediction market functionality to my website but I don't know if it's something I could get in trouble for.

Is there some legally safe way to offer prediction market services?

Thanks!

Ah, but that was not your original question. Your original question was regarding a website that you own and use to buy BTC globally, in order to accumulate for yourself only, and whether in so doing whether you would be considered a Money Transmitter or operating a Money Service Business.

Now that you have addressed my response to you I can proceed to discuss. It is my understanding that you would not be considered a Money Service Business by FinCEN. MT requirements vary by state. Your activity would not be considered as MT activity in the State of Nevada where I am located.

Now if you act in a manner that crosses over into regulated activity, such as being given other peoples money to invest, or if you were a business entity,  or you had partners and so on....then you might be considered as running a business in ways that States may view as as MT. There might also may be SEC issues.

There are potential tax issues. If you have been using your accumulated BTC to buy and sell for yourself and you are making a profit, this then becomes subject to capital gains taxes and income tax.

There are laws regarding countries that we are not allowed to conduct business with. This might be an issue if you are purchasing BTC from a person in one of these countries.

Finally, large transactions get the attention of FinCEN. You must be careful that you are not just turning a blind eye to larger transactions that may look suspicious without gathering some information about the seller.

My answers free and intended to be general and should not be relied upon in these areas. You should always seek out paid legal counsel.     

I hope that helps:

George D. Greenberg, Esq.
www.attorneybitcoin.com

Assuming that the bitcoins will be used for personal use and/or internationally, how does the business model determine whether or not I would be considered a MT/MSB if I am only buying and never selling?

It depends upon your business model, if any, and what you intend to do with the BTC. 

George D. Greenberg, Esq.

www.attorneybitcoin.com

No.

George D. Greenberg, Esq.
www.attorneybitcoin.com

Hi I have a question about using bitcoin. If I run a website where I buy bitcoin from users globally but I don't sell any, do I need to register as a money transmitter or money services business even though I am only buying bitcoins? Does such a website count as an exchange?

Hello Mr. Greenberg,
I aquire old junk laptops, computer, usb and hard drives for scrap and recycling (usually a as is deal or off the roadside). Let's assume there is a btc wallet stored on such a device, and possibly the keys as well. Assuming I can gain access to the wallet, would I legally be the owner of any coins ?

well i guess i shouldnt feel too bad that i couldnt find the answer on my own then

anything you find and can share i will greatly appreciate. last thing i want is the irs after me since i have done bitcoin taxes according to their rules since 2014. if i have to refile stuff prior to 2014 well so be it.

Good morning! I hope, you can give me some useful advices about my question. I've heard, that there can appear problems with cashing out of money, which were received from the ICO, if during the ICO we did not follow the KWC-policy. I mean that as i understood we must collect different personal information of our investors to identify them and to counteract legalisatio of crime money. And, if the only information we know about our investors is their e-mail adress and adress of their crypto-currency wallet there can be problems whith cashing out of money throuhg the cryptocurrency burse and bank. Is that true? What personal informaition of investors should we collect to avoid this kind of difficultis?

That would be "Mr. Greenberg," not "hey mr." Bitcoin does not have a direct tax. Fees from trading platforms and exchanges and remittance are simply fees from the companies handling the transactions. They are not taxes.

What you need to consider is when you convert BTC to U.S. Dollars. You would then generally consider the dollars as income under most scenarios. But let's take a closer look at this.

If I took after tax dollars, then bought BTC, then sold that same BTC at the same or lower price, would this then be income? Of course it would not be.

If I invested in BTC at 400 and sold it at 4,000 would the gain be considered income and/or capital gains? Well, yes. For clarification as to whether this would be income or capital gains or both please consult with a CPA.

If I perform a service and am paid in BTC and I convert that to dollars is this income? You bet it is. But there is no immediate tax due. I would declare this as part of my taxable income for quarterly estimated tax payments and year end income tax returns.

If I perform a service and I am paid in BTC and I use that BTC to buy other goods or services, is that BTC then considered income at the time of use? This is one of the hardest questions. It does seem to be income in this scenario. There are many variations to this fact pattern and the answers are not always clear. It would also be something that would be difficult for tax authorities to find, for now. However, the goal is not to cheat my own country out of my tax liabilities but rather to legally minimize my tax liabilities and to recognize and pay my lawful obligations so I'm not surprised with a big tax bill later.

Finally, If i MINE BTC, is this considered income when I convert it to fiat? I do believe so.

George D. Greenberg, Esq.

www.attorneybitocin.com

 

Great question that I don't know the answer to. Time for me to research.

Hi George.

1st thanks for this thread, your taking time for this is much appreciated.

my question is as far as i know the irs clarified its rules in bitcoin in 2014 for tax purposes.. what rules were in place before this clarification? such as mined coins being treated as income?

hey mr. does bitcoin have a tax ??
because i think that the tax we are paying when we are cashing out is like the handling fee of the remitance center does it legit legal??
thankyou in advance if this will have an answer

1. It is my opinion that once you convert BTC to fiat, even if you leave the fiat on the exchange, it is still a taxable event both for income and capital gains. However, why would you leave fiat on a crypto exchange? Normally when BTC is converted to fiat it is with the intention of taking profit and withdrawing the cash.

2. I don't know much about usdt, but if the price is merely tied to USD then it is still a crypto-currency or token, and therefore you would not be converting BTC to fiat so not a taxable event.

3. I am licensed in Nevada. I do not know the laws of Arkansas and have never been hired to explore them.

4. I do not generally make public or private referrals on this site unless hired privately to investigate the same.

5. The questions in #5 are far beyond the scope of the free advice I provide on this site. In general the SEC, FinCEN and State regulators may  look into those who are acting as Brokers for others. This type of venture is much more complex than people initially assume. 

Best:

George D. Greenberg, Esq.

www.attorneybitcoin.com

Hello. Thanks your for taking the time answer all these question. I have one I have been wondering about.
1.If I sell bit coin for usd, but the usd stay on an exchange, to be respent on more bitcoin, do I pay taxes on that capital gain? I wonder since the money never left the exchange and can't be used for anything but crypto unless I withdraw it.
2. Same scenario but instead of usd, I sell for usdt (tether) which is tied to the usd. Would this count as a capital gain? Or only when it is actual fiat USD?

3. I live in Arkansas. To your knowledge, what taxes would my profits be subject too. Is there any state laws here not found elsewhere pertaining to crypto currencies.

4.I know your not a tax attorney, but I'd appreciate your insight on these matters. Also, can you recommend a tax attorney in this area who deals with bitcoin?
5. What type of laws would apply to a bit coin investment and trading group? Many people I talk to would like to get into bit coin or invest, but don't have the time to monitor the market and reasearch. Several have asked if I could handle this for them. If I do this and charge a fee, what 
would/could I be liable for? What license's would be required and what license would probably be a good idea, if not yet required? Would these answers change if we started dealing with larger amount's of money? Like from 1000 invested to 100k invested.
Thank you once again
HP

I think it is a great set of questions. First of all good for you! Currently, just holding Bitcoin, to the best of my knowledge, is not a taxable event. There are no money laundering issues here. You are not going to get in trouble with any authorities. It is perfectly legal to own BTC.

My advice going forward though is that you diversify. Spread it out a little bit. ETH seems to be a worthy investment. There are other coins out there that have utility and a following such as CURE coin. Also, consider taking some profit, that is, sell a little, then you would declare that as income and it would be subject to income taxe but so what, pay them. It is wise to take some profit and foolish to think that BTC will go up forever.

I do want to caution all, BTC is speculative. Yes, it has been going up in price and everyone is excited, but it could drop in price as well. If you have been around for a few years you will know this to be true.

George D. Greenberg, Esq.
www.attorneybitcoin.com