Topic: Everyone Panic. There's a lawyer among us. [FinCEN Walkthrough on p2] - page 3. (Read 15227 times)

Sorry, Entropy. That's not something I can help with, and certainly not on a public forum!


The tax professionals I work with are investigating something similar to that right now.  The question is whether trading one commodity for a dissimilar commodity is a taxable event. I'm not a tax lawyer, so I don't have anything intelligent to say about that.

How much of an issue would it be if there can be found no definitive proof of buying BTC? Say Johnny bought MoneyPaks and threw away the receipt (cashloaded cards that have instant redeem-ability) to trade for someone's bitcoins? Months pass and he ends up with 10x as much BTC as he originally bought, but his original buy cannot be proved. '

Scenario 2: What if Johnny, instead of "cashing out," uses a service, such as amagimetals, to buy equivalent gold/silver directly for his bitcoin. Is this "realization?" I recall a quote from some government agency about virtual goods to real goods not needing to be... something.

Well, if Johnny was concerned with his tax liability for those trades, my sense is he would go to a CPA first, and then a tax lawyer if that was necessary.

Would, in this hypothetical scenario, this private day-trading investor be in best hands with a tax lawyer rather than a "business" lawyer?

We need more people like you in this world of crypto. Thank you.

Hi CoinEntropy.  I'll try to give a fact pattern.  Johnny lives in NYC and has a day job.  At night, on breaks and on weekends, he trades crypto in high frequencies and volumes.  It is all for his own account, and all for personal investment purposes.  He does not accept anyone else's money, has no "customers" and uses a (fictional) fully-compliant exchange.  Is Johnny an MSB under the BSA as interpreted by FinCEN's March 2013 guidance?

Unfortunately, there is no explicit exemption from the MSB classification for using a registered and licensed exchange.  This is one of the many curiosities to be found in the guidance, most of which result from the regulations themselves not accounting for digital currency (round peg-square hole).  Nonetheless, there is a threshold requirement for classification as an MSB under the March guidance: operating as a business.  There is no black and white definition that I'm aware of as to what constitutes a business. There are only factors. Here, in my mind, the factors weigh against classification as a business.  Johnny doesn't trade on behalf of any customers - only himself.  He has no investors.  He collects no fees for his services. In fact, he does have a job, and it isn't this.  He doesn't even trade during work hours.  Counting against this is the high volume and frequency of his trades.  It's not a slam dunk, and a court could disagree, but I would be comfortable arguing that Johnny is not operating as a business, and therefore not an MSB.  Hope that helps!

Is a day trader who uses an exchange that doesn't realize any USD and leaves their coin/fiat all in the exchange until they're ready to withdraw required to register as an MSB?

I should have clarified that it was a large state school.  University towns are awesome, but big state school towns are unlivable... for me at least. I prefer peace and quiet to drunken madness.  

And like our lawyer friend here who now takes bitcoin I am happy to live in a world where reason and bitcoin co-exist and thugs get arrested and tried when they kill unarmed and harmless young hoodie wearing kids.  

I always live in college towns.  They are dynamic and hopeful, though with chaos and angst around the corners.  But you would expect that attitude from me, I suppose.  I even get respected as an elder.

But yes, anarchy is not a valid social plan.  Civilization is very nice.  I like it when cars don't menace me when I am walking across an intersection.  I like it that I can move across the country and still speak the same language.  I will keep good records and pay proper taxes on my bitcoin earnings.  I will administer my wallet so that many of my transactions have a good audit trail.

None of that is anti-bitcoin, and none of that is anti-individualism.

I bet they are.  I once lived in a college town... then I grew up.

I once lived in FQ/NOLA just off Bourbon street.  Every day, many thousands of people go there wanting to be lawless.  They are surprised when they are surrounded by people who are acting lawless.

Go away criminal moron.  Yea, let's all live in in anarchy   

Interesting that a law firm crawls out of their fucking hole so soon after the FinCEN guidance.

Involved in cryptocurrency for a while you say?

You are just a benevolent community member, right?

What were the key words that convinced your law firm to accept bitcoin?

What a sad circus regulation and the law are.

Hey Marco!

Kudos on SPI. Nice work!

https://bitcointalksearch.org/topic/regulated-smart-property-trust-spt-252474

Enjoy,  

-MikeMark

Nice one mate!  Great to see!!  Take my hat off to you! 
Buena Suerte!!

Nicely done counselor!  Welcome to the club, we'll make an honest man out of you yet. 

Congrats Marco!

The community thanks you for taking this bold step!

WARNING: Shameless plug ahead...

http://btcbible.com/law-firm-accepts-bitcoin/

There are a few threads on this, but I have posted here: https://bitcointalk.org/index.php?topic=241314.320

I believe that is the definitive thread.

And here is the thread for discussing the foundations response:
https://bitcointalksearch.org/topic/2013-07-02-bitcoinfoundationorg-response-to-ca-dfi-warning-letter-248620