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Topic: Governs are coming for traders! - page 2. (Read 1173 times)

sr. member
Activity: 939
Merit: 256
November 20, 2019, 08:10:09 AM
#16
In your story, the Romanian government is investigating those accounts with questionable deposits and I assume that those are fiat deposits . My question is, are the gains on trading bitcoin still taxable even if they're not yet converted into fiat? I think that is one thing that should be clarified.

Another question, is the new law retroactive?


Most governments do not consider Bitcoin a currency but it is considered to be an asset, just like other assets it needs to pay taxes. However in my country it is taxable only when we convert Bitcoin into fiat currency, so if I keep Bitcoin or my Bitcoin increases due to profits when trading I do not have to pay taxes.
legendary
Activity: 2268
Merit: 18711
November 20, 2019, 07:49:21 AM
#15
Yep. I was talking more of in a general sense, including non cryptocurrency services.
Ahh sure. Obviously I have completed KYC at non cryptocurrency services, because otherwise I wouldn't have a job, a bank account, or a house, but I am I still very careful to provide the bare minimum to the fewest number of services/companies. I just don't trust any crypto exchange or other service to not leak my information and documents, either accidentally or intentionally, given how many hacks and scams there have been. Even the "big" exchanges like Binance and Coinbase have proven they can't be trusted in this regard.

I'm also a big fan of BISQ, and the majority of my buys and sells are done on there now. I used to use LBC a lot, but obviously stopped after their KYC requirements, but I hear LocalEthereum have rebranded to LocalCryptos and are going to start supporting bitcoin too, so I might check that out soon.
mk4
legendary
Activity: 2870
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Paldo.io 🤖
November 20, 2019, 07:27:55 AM
#14
Sometimes we really just need to submit them to use a certain service
And if you judge the utility of that service to you to outweigh the risk of submitting your KYC, then that's entirely your decision. I have, however, yet to come across any service which I feel fulfills that criteria, especially now that there are more DEXs entering the market and they are generally becoming more popular.

Yep. I was talking more of in a general sense, including non cryptocurrency services. But yea, almost unnecessary nowadays when talking about cryptocurrencies. I freakin love Bisq. If only it had at least the liquidity of a shitty centralized altcoin exchange.
legendary
Activity: 2268
Merit: 18711
November 20, 2019, 07:22:37 AM
#13
I like being able to clearly show crypto sales on my taxes and know the exchange and I are reporting the same numbers.
Sure, I can appreciate it might make life easier if you can get an exchange to export a list of your trades, but completing KYC is by no means necessary to properly declare taxes.

Sometimes we really just need to submit them to use a certain service
And if you judge the utility of that service to you to outweigh the risk of submitting your KYC, then that's entirely your decision. I have, however, yet to come across any service which I feel fulfills that criteria, especially now that there are more DEXs entering the market and they are generally becoming more popular.
mk4
legendary
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Paldo.io 🤖
November 20, 2019, 03:37:13 AM
#12
I agree completely with OP, and I have never and will never complete KYC proceedings anywhere.

I’ve completed KYC for a few different exchanges over the years. I like being able to clearly show crypto sales on my taxes and know the exchange and I are reporting the same numbers. It was also required in order to file mtgox claims with the court.

Yep. Contrary to popular opinion, KYC/AML isn't necessarily 100% bad. Sometimes we really just need to submit them to use a certain service or to at least make some stuff easier like in your case with taxes. The problem is mostly just people carelessly and unnecessarily submitting their personal information on multiple services like they're flyers.
donator
Activity: 4760
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Leading Crypto Sports Betting & Casino Platform
November 20, 2019, 02:43:36 AM
#11
I agree completely with OP, and I have never and will never complete KYC proceedings anywhere.

I’ve completed KYC for a few different exchanges over the years. I like being able to clearly show crypto sales on my taxes and know the exchange and I are reporting the same numbers. It was also required in order to file mtgox claims with the court.
mk4
legendary
Activity: 2870
Merit: 3873
Paldo.io 🤖
November 20, 2019, 01:04:57 AM
#10
Just about time. This isn't even close to being surprising. If anything, inevitable. Sure, one of the reasons that the government is doing this is for anti money laundering reasons, but let's not forget that this is potentially a good amount of tax money for them.

People really gotta start using great decentralized services we have right now like Bisq.
legendary
Activity: 2114
Merit: 1150
https://bitcoincleanup.com/
November 20, 2019, 12:36:03 AM
#9
Quote
And if everybody would use Bitcoin and the other cryptocurrencies instead of fiat money (meaning that all “cryptonians” would realize only crypto-to-crypto transactions), then there wouldn’t exist any taxable earning
Yeah. The moment Bitcoin and other crypto became a speculative asset, regardless if they were traded on CEXs or DEXs, that's the time when governments really stepped in and started taxing traders/investors. In a way, we are also responsible for what is happening with crypto regulations and gov't investigations.
legendary
Activity: 1680
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Fully-fledged Merit Cycler|Spambuster'23|Pie Baker
November 19, 2019, 12:29:15 PM
#8

I agree completely with OP, and I have never and will never complete KYC proceedings anywhere.

Cheers to you, mate! You are one of the blessed ones. This is also how I acted since the beginning!




The latter are probably the ones who contributed most to that list, probably reporting on anyone that received/sent from bank accounts related to exchanges.


Most likely it was like that... Your reply refreshed my memory with something and I edited OP. Please see also the edited section.
legendary
Activity: 2268
Merit: 18711
November 19, 2019, 12:02:12 PM
#7
The earnings are taxable only when going from crypto to fiat, as I stated also inside the OP. And this should be applicable worldwide.
It's not the same worldwide. In the US, for example, even trading from crypto to other crypto is a taxable event. If you use bitcoin to buy an altcoin, and later sell that altcoin for bitcoin, you've gone through two taxable events and the IRS want you to work out your total capital gains or losses and declare them on your tax return. Taxing trades with fiat I can understand, since the government in any country will general tax the sale of anything for fiat, but unfortunately some greedy governments will even tax trades that have nothing to do with fiat.

Even small Cex have more volume that the biggest dex. And volume is a large part of any trading market.
DEXs aren't really made for day trading. Even with a large volume, it would often take far too long to find a partner and wait for the transactions to confirm (plus the additional step of finding and sending to an escrow, if you are using one). By the time this is all done, any small movements in the market which a trader was trying to take advantage of would be long gone. DEXs are, however, very good for buying and selling without compromising your privacy and security like you must do on centralized exchanges.

I agree completely with OP, and I have never and will never complete KYC proceedings anywhere.
legendary
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November 19, 2019, 12:00:54 PM
#6
However, I wouldn't blame people for patronizing centralized exchanges as the alternative ~ Dexs (decentralized exchanges) haven't really lived up to expectations. Even small Cex have more volume that the biggest dex. And volume is a large part of any trading market.

Maybe this happens due to the lack of people knowledge about their alternatives to centralized exchanges... That's why I hope that reading this thread may help many others.
legendary
Activity: 2338
Merit: 10802
There are lies, damned lies and statistics. MTwain
November 19, 2019, 11:04:19 AM
#5
In Spain, this year 14.700 people received a pop-up notification whilst declaring their yearly earnings, indicating that the tax office (Hacienda) knew they had dealings with crypto, and therefore needed to declare their benefits accordingly. This came as a surprise, since it was the first crypto related warning to be sent from the tax office in a mass manner.

Over the last year or so, the Spanish Tax office has been retrieving information from (some) businesses that were either crypto-related, accepted crypto as a means of payment, and presumably banks. The latter are probably the ones who contributed most to that list, probably reporting on anyone that received/sent from bank accounts related to exchanges.
hero member
Activity: 2212
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Top Crypto Casino
November 19, 2019, 11:02:58 AM
#4
Time and time again, centralized exchanges have shown that government and regulatory bodies can make them bend the knee and cooperate even though they're operating in a decentralized space. However, I wouldn't blame people for patronizing centralized exchanges as the alternative ~ Dexs (decentralized exchanges) haven't really lived up to expectations. Even small Cex have more volume that the biggest dex. And volume is a large part of any trading market.
legendary
Activity: 1680
Merit: 6524
Fully-fledged Merit Cycler|Spambuster'23|Pie Baker
November 19, 2019, 10:51:40 AM
#3
In your story, the Romanian government is investigating those accounts with questionable deposits and I assume that those are fiat deposits . My question is, are the gains on trading bitcoin still taxable even if they're not yet converted into fiat? I think that is one thing that should be clarified.

Another question, is the new law retroactive?



The earnings are taxable only when going from crypto to fiat, as I stated also inside the OP. And this should be applicable worldwide. The OP presents a particular situation from Romania, but it is the same worldwide, that's why I tried to raise awareness about being careful those trading crypto to fiat, those who gave their private info to exchanges and those who (still) didn;t pay their taxes, in case in thei country the govern issued laws for taxing profits realized from crypto to fiat exchanges.

The law is not retroactive, not it should be. But governs are coming for the traders...and they should be either law abiding citizens, or to use Bitcoin as Satoshi designed it: as a substitute for fiat money. It wasn't build for crypto / fiat speculations.
sr. member
Activity: 882
Merit: 301
November 19, 2019, 10:25:24 AM
#2
In your story, the Romanian government is investigating those accounts with questionable deposits and I assume that those are fiat deposits . My question is, are the gains on trading bitcoin still taxable even if they're not yet converted into fiat? I think that is one thing that should be clarified.

Another question, is the new law retroactive?

legendary
Activity: 1680
Merit: 6524
Fully-fledged Merit Cycler|Spambuster'23|Pie Baker
November 19, 2019, 09:54:53 AM
#1
Hello,

After thinking a lot about it, I decided to translate this thread of mine for the benefit on the English speakers around the world. The thread was initially started in the Romanian section of the forum, but I think the information is relevant and should be spread to as many people as possible, in order to avoid being subpoenaed by governs or other law enforcing mechanism.




Autor: GazetaBitcoin
Topic original: Guvernul vine! ANAF si DIICOT ii urmaresc pe traderi




There is no joke.
I talked recently with a lawyer friend, who told me about the situation (about traders being chased by Romanian govern). To be more specific, authorities are investigating some of his clients, which have to explain some big amounts of money transferred to their bank accounts.

The traders came to the lawyer as they didn’t know how to justify their trading earnings. And the lawyer asked me if I can help him anyhow.

Basically, in Romania, the situation got worst this year after the law 30/2910 was issued. This law is about taxing the profits, including the profits from crypto, but the law enforcement is not just after those who are not paying taxes, but also after those with big amounts transferred into the bank accounts.

I told my friend that he could ask his clients to obtain any possible log from all the crypto exchanges they work with, in order to prove the acquisition price, but also the selling price. Another idea was to directly contact the exchanges, who act as companies and who are granted by the law to act as money processors, and to ask them extrasses with the transactions. If possible, stamped ones. Since the exchanges use KYC and AML, they should also offer official papers when it is needed.

My friend thanked me for my suggestions and he said he’ll try these methods.

TL;DR: governs are coming! Beware!
I was never a fan of centralized crypto exchanges, as they embrace exactly the opposite of the ideas behind Bitcoin: decentralization and pseudonymity. And if everybody would use Bitcoin and the other cryptocurrencies instead of fiat money (meaning that all “cryptonians” would realize only crypto-to-crypto transactions), then there wouldn’t exist any taxable earning. But nobody (or, almost nobody) acts this way. What remains though, is that the centralized exchanges maintain the idea of trusted third party, concept which Satoshi wanted to have it fully eradicated. And, if It would be used the way it was intended, Bitcoin would eliminate any trusted third party indeed.

Most of the users go to a centralized crypto exchange because for convenience, because they don’t understand the risks or because the lack of knowledge about their alternatives.
1. Convenience is understandable. Basically, you have your funds in a wallet (which you don’t own actually, as the exchange is the true owner of the money) and you can access them anytime. And you can make transactions also whenever you want.

2. Risks, however, are multiple. “Your” exchange wallet does not actually belong you, but to the exchange. Why? Because you don’t have the private keys. See what happened with Mt. Gox, Binance (twice), Criptsy, Cyptopia, Bitfinex etc. The same thing happens also if the owner of the exchange decides an exit scam. Without having the private keys, you don’t own the funds.

Another risk is determined by the fact that the centralized exchanges act as banks and collect customers’ private data, being forced by governs to have implemented KYC and AML (Know Your Customer and Anti Money Laundering) procedures. And the govern is the most hungry entity for personal data. Giving your private info, together with being totally careless about your own privacy / anonymity will only put in the frying pan, sooner or later, all those who used these “services”, as it happened with Coinbase clients. If the users have an evidence of all transactions and if they paid their taxes, they should be OK. Besides, everything should be OK also with those who bought at a higher price and sold at a lower prices, thus without earning any profit, but hey should present these evidences as well to the authorities. However, even the “law abiding citizens”, would certainly not like at all to be investigated by the authorities.

The main problem is about those who don’t have such evidence and with those who don’t pay the taxes. These ones, for the governs, will appear as criminals. As tax evazionists.

I agree, the question “if state doesn’t accept cryptocurrency as a form of money, why does it tax it?” is a good one. The answer is the following: because it generates earnings. Maybe, if there would be such thing as trading leaves, even the profits from selling leaves would be taxed.

Thus, we get to the question “how do we preserve our privacy?”.

3. Lack of knowledge about alternatives is one of the main reasons for what the crypto newbies head towards centralized exchanges. But alternatives exist.
A first solution is represented by the peer-to-peer decentralized exchanges, where the transactions are performed directly between the users, they are fully anonymous, and the role of the exchange is merely to help users to contact each other, without holding their money / private keys.
Besides, the cash-in / cash-out Bitcoin ATMs may be an alternative, because in this case there is no need to reveal personal information. Indeed, these terminals don’t use a friendly price for buying / selling crypto. But privacy has a price, though.
Finally, you can perform peer-to-peer transactions with people you know, or with people with high reputation in the field, but also with persons you don’t personally know, similar with Amazon / Ali Express transactions.

All of the above are suggestions for those willing to exchange crypto with fiat money. Only when doing this intervenes the pseudonymity and the exposure. However, while the transactions are entirely crypto-to-crypto, the anonymity can be preserved better. Besides, all of the above do not represent an advice for how to avoid taxes. Every citizen should pay his taxes. But working with centralized crypto exchanges is not just exposing the users to to governs, but also endangering their funds.

I’m closing here by admitting the contribution of centralized crypto exchanges in raising the awareness about cryptocurrencies. Perhaps, without them, fewer people would have heard about Bitcoin and other cryptocurrencies. The exchanges had and have an overwhelming role inside the ecosystem. But still, they may bring huge prejudices. Now, whoever chooses using them, can do it by fully understanding how they work.

Edit: just after writing the topic it came into mind another example of traders being chased by governs.

Also in Romania, after the first crypto exchange was closed BTCxChange, the owner made the paperwork for fully shutting down the company. Practically, in such a case, the site (operation) is shut down, but the company still exists in the registries until it is fully closed.

Max Nicula, the owner if the defunct BTCxChange stated recently that even today, 1.5 years after closing the exchange's site, he is unable to fully shut down the firm because ANAF (the Romanian version of IRS) started an investigation when he requested to close the operations. What is very important, he was requested to provide to the authorities all his customers names and data, which is also what happened at Coinbase. In that case, the company was requested forced to release the clients' data in order to function, while in this case the company has (still) to give out this data in order to be shut down.

Even more intriguing is that compared to Coinbase, where was applied a decision of a Court, in BTCxChange's case ANAF came with only a formal request. Max Nicula said he didn't keep the clients' data after closing the site, therefore the investigation is still ongoing, the company is still not closed, but that's another story.

What is important is that Coinbase history repeats and I suspect there are hundreds of other similar cases worlwide.

Edit 2: for more dangers associated with KYC please read also a topic which is complementary to this one: Why KYC is extremely dangerous – and useless.




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