Topic: Governs are coming for traders! (Read 1193 times)

This is a fully logical and well educated guess. And, of course I agree that 2+2=5! It can't be otherwise, since 1+1=3.

Indeed. So make sure they know nothing about your assets to start with. Never complete KYC, only trade peer to peer, obfuscate your transactions through mixers or coinjoins, run your own node, self host everything, and so on.

I was putting the first three things in the list as one category under "government spying", but I take your point.

Well, since you were talking about 1984, then I'm sure you'll agree 2+2=5.

This is debatable, dear JayJuanGee   Let's not jump to conclusions.

A long while back I stated that 1+1=3 and, since nobody else posted anything after my axiom (although it's been 3.5 years since then), it's clear that what I stated is an undeniable truth  

Having this axiom in mind I am sure that we can prove, with some brainstorming, that 4=2.

#attemptingtobehelpfulaswell

I tend to agree with "almost" everything that you have to say o_e_l_e_o - however, I am puzzled by your ways of counting, if that might be a proper label for such...  

Let me attempt to parse it:

>>>>>>KYC achieves two (2) things only -

1) mass surveillance,

2) data harvesting, and

3) control on behalf of your government and

4) a variety of three letter agencies, and innocent people having their identities stolen.<<<<<<

Unless I am retarded (or missing something "deep").. the last time I checked, back in grade school,

four does not equal two (4≠2)...  


#justattemptingtobehelpful...


   

The goal is having every detailed information about everyone in stock.
You see, even if I'll say they don't have full control over crypto - apart from some minor restrictions - you would wanna agree right?? But don't you think that as long as HODLERS are made to pay a certain percentage Which is invariably proportional to Thier staked coins, the governs still got our stock on Thier finger tips?? Cus from calculating the net expenditures/ profit annually, on due percentage stat, they could value your asset and decide to take actions from there... I meannn, these are all tools to enhance Thier policies... Meanwhile in crypto, pseudonymity rules over the system. Bitcoin has turned out the largest digital exchange and I bet they'll keep trying effortlessly to break the silence.
Edit: whatever trick that's composed behind the reasons for KYCs isn't even about them... Orwell's 84 tells us all.

Uhmm, you don't like it?  well, It's actually my preferred Monica; especially when it seemed we haven't got much successful women in here ... ^{Nobody cares about the gender anyways, but does that change the fact that I'm a cat?? Rhetorical...}  

Nail on head. KYC is about mass surveillance, nothing more.

And again. I've brought this up several times before - there is absolutely zero evidence that widespread KYC prevents money laundering or aids in tracking down criminals, just as there is absolutely zero evidence that mass surveillance prevents terrorism, or any of the other stupid reasons (tHiNk Of ThE cHiLdReN) that politicians give to justify monitoring everything you do.

KYC achieves two things only - mass surveillance, data harvesting, and control on behalf of your government and a variety of three letter agencies, and innocent people having their identities stolen.

This is so true. KYC is just another method used by Big Brother for a continuous surveillance of citizen. If you like reading books, Edward Snowden's Permanent Record is a very good book on this matter.
And, for same reasons, more and more governments try to replace cash money with credit / debit cards or with CDBCs. Orwell's 1984 is not just a fiction anymore. It here, all around us.

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I always wondered: why do you always add those emojis at the end of your posts and also your name? Everybody can see the post is made by "Sandra_hakeem"  

I sometimes see no true reason for the invention of KYCs other than enhancing the - monitoring and control policy. I believe it somehow has something in affiliation with the control and influx of cash in the economy; where an individual isn't expected to own much more liquid assets than the governs.... The simple prove-course for my objection is the act - when a certain billionaire's possession was siezed by his local bank,.. even though it was released, they gave restrictions on the terminals of where, how and what those funds were utilized for.
It's one of the insane reasons that brought about the idea of cryptography; since no one is ever able to control decentralization, they're simply placing sanctions and the whole move is made political. I haven't seen much improvement on money laundering cases since the inception of KYCs ... They only keep recording cases but the point is, IT HASN'T STOPPED.

Sandra 🧑‍🦰

Thank you FP91G for this translation! It was a nice surprise. I added it to OP and also to my other topic.
Please take a look as well at the PM I sent you.

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And this is why, in the end, it'll come to this: Governs' oppression of bitcoiners may turn against them.

Governments cannot stop this bitcoin revolution but can monitor bitcoin holders and tax them every time they receive money from selling bitcoins. That is what the governments of various countries are doing and will do. That's probably what many governments are planning.

The government sees crypto as additional revenue for the country, so they need to keep an eye on crypto holders, especially bitcoin holders. And for this reason, in several countries, crypto users are asked to include a report about the sale of their crypto assets so that the government can collect taxes from crypto users.

And if the government can cooperate with the local exchange market, it will increase the revenue for the country because from there, the government can find out who the whales are from their country and monitor them directly.

my translation for the Russian board
https://bitcointalksearch.org/topic/--5451225

All this KYC nonsense is based on the idea of the Four Horsemen of Infocalypse. Which are money launderers, drug lords, terrorists and pedophiles. The idea is greatly debated by Julian Assange in his book Cypherpunks: Freedom and the Future of the Internet. Other great minds are also part of the book, such as Jacob Appelbaum (TOR developer), Andy Müller (a hacker which is a member of Chaos Computer Club (CCC)) and Jérémie Zimmermann (co-founder of La Quadrature du Net).

Governs are emphasizing that all these decisions are based on combating these four horsemen, but it's a lie. The problems determined by the horsemen of infocalypse can be mitigated with other ways, not with KYC. Besides, make sure to read also 1miau's topic Why KYC is extremely dangerous – and useless which is complementary to OP.

Well, Spanish citizens are on the breach of having to declare the crypto the hold in light of the new anti-tax fraud bill, which has been submitted to the parliament for approval.

That opens a can of worms for people with crypto, who seemingly will have to decide between keeping it quiet (and perhaps encountering large issue when selling their crypto), or coming out clear (and perhaps have issues justifying where their crypto came from to begin with).

We’ll see how it plays out, and the associated fine print, but it seems to tighten the noose around crypto holders in Spain.

I am coming back to this topic to highlight an interesting aspect related to Laurentiu Baranga, the Romanian head of AML Department (which is called here National Department for Preventing and Combating Money Laundering).

The guy is in the middle of an investigation as the prosecutors found out that he falsified his high school diploma, which is a diploma he obtained at 32 years old. According to Romanian press, the guy obtained a false highschool diploma (so excepting the fact that he obtained it at 32 yo, the diploma was also false).

After obtaining the diploma his political ascension was extraordinary. His only job until then was in a fabric where he was employed as lathe operator. In 2012, when a political party launched a regional subsidiary, this guy became the chairman. Afterwards, he went to Senate then he became the chairman of his political party for a Bucharest subsidiary. In 2011 he managed to obtain a university diploma (which was also false) and he started to recommend himself as being a sort of Ph. D. Based on this title (probably), he got a job inside the National Registry of Classified Informations.

In Sptember 2020 the Prime Minister gave him the position of chairman of the AML Department and the press started to wonder how is possible for an ex-lathe operator, with no real job until he was 41 years old, with a falsified highschool diploma obtained at age of 32, with a false university diploma, to have such important positions.

Furthermore, he obtained another bachelor diploma from another university (what a smart guy hehe) then he tried to become bachelor of even one more university.

Now the prosecutor estimate that he prejudiced the State with 640.000 RON (~ 156.000$), being aware that the amount may be much bigger. At the moment the prejudice regarding the universities is unknown.

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Long story short: bitcoiners are forced to reveal their identities and finances in front of authorities managed by this kind of people! An underclassman like hacker or andulolika becomes the head of the AML Division of a particular country then it forces crypto users to reveal their privacy. Such guys force centralized exchanges to reveal their customers data to the govern. Such guys encourages the banks to freeze accounts of any transaction that may look suspicious to them and to contact AML for all the clients which had "suspicious" transactions.

What happens in Romnia may happen to many other countries. Beware!

These are the guys running the politics, the governs and the countries. They are corrupt and they accuse crypto users of corruption, tax evasion and other crimes. They don;t have any knowledge not just about crypto, but about their very jobs, they have positions offered through nepotism, based on false diplomas and they run the countries!

It;s time to stop them. Preserve your privacy! Be anonymous! Don't allow such hypocrites to rule your lives!

Arise, Cypherpunks!

So it means all the governments are, or will do, the crack down for the bitcoin traders. They do not want traders to earn tax free money or they do not want bitcoin to grow and adapted ?
In both cases, they may caught a few traders, but they cannot stop this bitcoin revolution.

They still are, and most governments around the world are heading down this path. Everything from using Facebook, Google, Apple, etc. to collect data on their behalf, having your ISP monitor your internet activity and pass it on to them, trying to make encryption illegal or place "backdoors" in end-to-end encrypted messaging services, phone tracking, facial recognition, accessing microphones/cameras/webcams, the list is endless. Data is rapidly becoming one of the most valuable commodities on the planet, not just for monetizing but also for controlling the population.

A monitored society is an obedient society.

Thank you  as well for reading  this thread and for finding it  interesting.

Regarding "Only wallets remain to not ask for personal docs", honestly, first time I understood something else than you meant. I thought you meant something like "only wallets (aka private keys) remained to be asked (from us) by the govern". I understood now what you meant, but a story came up in my mind when I first read (and didn't understand correctly) your statement. I'll detail it below.

A piece of history: when the govern wants to hold your private keys
Although I read incorrectly what you wrote, government's intentions to hold citizens' private keys is nothing new. I don't know if wallets will ask or private info at some point - maybe some of them will. Butt I hope there will still exist alternatives.

Coming back to the govern.

Maybe many forgot, or didn’t even know, but the creator of public-key encryption was Whitfield Diffie, in 1975. And his creation was given to the people for free. The first useful application of his invention was the RSA encryption algorithm, developed later by a few brilliant cryptographs.

The public-key encryption worked almost the same way as the public / private keys work today, but its use was for encrypting private messages sent / received.

It was an era when US govern was extremely eager to track everything in people’s lives. It was obvious that the invention would be considered a national danger and so it was. NSA stated that  the respective development represents “clear risks to the national security”. The agency fought hard to hide Diffie’s invention from the public. The American publishers were threatened with years in prison if they would publish such materials, the accusation  being breaking of the law regarding the export of military weapons.

In the  end, NSA crossed any imaginable line, when it came with the idea to ask the people to allow an escrow to hold their private keys. The escrow was, of course, in government’s hands, thus it would give out all the keys whenever it was needed. Obviously, in the name of the law. For the greater purpose.

Fortunately, NSA couldn’t realize that plan. And now we all benefit.

Thank you OP for sharing your analysis so to make think more clear for all of us. Seems like Govs wants to turn exchanges into banks dedicated for Crypto. Only wallets remain to not ask for personal docs  .

I don't have exact number of exchanges "called decentralised" who forced the KYC procedure during last months of 2019. IDEX and CryptoBridge are bright exemples. Many other swap apps started forcing KYC as well, remember ShapeShift.
It's not about centralised or decentralised services. Any company is suspected to reveal/sell/lost users Data if it asks for "revealing identity official documents", and i don't think we should blame them for the consequences. Users of those services should be aware about this from day one.

Totally agree with this !

I'm genuinely curious as to how many exchanges have admitted they are reporting all relevant details and trades to the relevant governments, and how many exchanges are suspected of doing so despite not admitting it. There was obviously the very public case with Coinbase last year, and many users are now receiving letters from the IRS based on those data. I don't really follow centralized exchanges all that much so I'm not sure if this is now becoming commonplace? What about cross border?

Of course not, but if you want the second part of my quote to remain true, "the exchange and I are reporting the same numbers" then you have to provide KYC to an exchange so they can properly report things to the government on their side.  The check and balance is where I see the value in KYC.

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.

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.

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.

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.

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. 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.

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.

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.

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.

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

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Most likely it was like that... Your reply refreshed my memory with something and I edited OP. Please see also the edited section.

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.

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.

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.

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.

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.

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.

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?

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.

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

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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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Translations (in chronological order):

• Română: Guvernul vine! ANAF si DIICOT ii urmaresc pe traderi, translation by GazetaBitcoin
• Pidgin: Governs dey come 4 traders!, translation by Agbe
• Polish: Rządy biorą się za handlowców!, translation by cygan
• German: Regierungen nehmen es mit Händlern auf! / Vorsicht vor CEX!, translation by Buchi-88
• Spanish: ¡Los Gobiernos ya vienen a por los traders!, translation by Porfirii
• Filipino: Pag habol ng goberyno sa traders!, translation by Peanutswar
• Indonesian: Pemerintah akan "mendatangi" para trader!, translation by Husna QA
• Portuguese: [TRADUÇÃO] - Os Governantes estão chegando p/ os traders!, translation by gagux123
• Russian: Peгyлятopы идyт зa тpeйдepaми!, translation by FP91G
• French: Les gouvernements s'en prennent aux traders !, translation by iwantmyhomepaidwithbtc2
• Bengali: সরকার ট্রেডারদের পেছনে লেগেছে!, translation by Learn Bitcoin
• Urdu: !حکمران تاجروں کے لیے آ رہے ہیں, translation by JunaidAzizi
• Ukrainian: Уpяди йдyть зa тpeйдepaми!, translation by DrBeer