Topic: Operation Hidden Treasure (Read 240 times)

You make a good point and I believe this is the strategy the operation hidden treasure will you to fish out tax evade but I am not saying they can't track down the sender's information and what I am saying is that they can't know the purpose of the money if the receiver doesn't tell them what the money is all about.

Why do you assume they can track it only from overseas?
They can track every payment as long as the final step happens in their country, if I send my friend a 1000E payment now via a bank transfer they will know. If I send him 1000E via PayPal he must do something to get that money from Paypal and it will end like all 3rd party payment processors with a link to your bank account and get tracked.
P2P anonymity is highly overexaggerated around here and I don't understand why, transactions between people who don't own a business and are not related by blood or don't live in the same are standing out like a skyscraper in the desert, how many normal users do you think are making more than 20 transactions a month with complete strangers? None?  Once they track a node (a trader on lb or bisq or whatever) they can link everyone who has had deals with him and it already happened tens of times.

Second, with taxes it's not the government who has to prove that money is from crypto, it's you in the first place that needs to tell them what are that money is for, and falsifying a document is a felony, that's what is stopping a lot of people.

I don't support the habit of tax evasion but the government will only track down p2p transfer which is from overseas and they won't be able to know if the teansaction was crypto since the payment received was in fiat.

Yeah, and you think that once cryptos are legal, which btw they are in the US, people will stop avoiding paying tax?
The reality of what's happening there proves they will not stop doing it just as marijuana is legal in a lot of states that doesn't stop people from growing it illegally without a license over the recreation amount.

Let's be serious, nobody likes paying taxes, and if there is an easy way to avoid them the majority will do it, probably I will be temped too if there is just a small fine to pay that turns out to be actually lower than the amount in taxes I should have paid. Small businesses and companies also do this a lot of times, it's nothing new and it will not end up with regulations. And of course, not when you have to pay amounts over 10% from your profits especially in situations like this when the state has not helped you one bit in all those years but it's quick to take a slice of the pie.


It doesn't matter where the exchange is situated, what platform you're using for p2p or where the guy with which you deal is, the government isn't interested in that, they know you reside in this country you have to pay your tax for all your financial gains.
And besides, as long as those p2p transactions are not cahs in face-to-face exchanges and involve banks or any other money transmitters are just as easy to track down.

Cryptocurrency cannot be totally regulated, the government can only regulate exchange that operated on their soil which the reason why KYC/AML was introduced then but they learned that some crypto users circumvent tax through the use of peer2peer exchange that's why trained their team on how to investigate people that partake in such activities and despite their training some people will still be able to circumvent the tax. However, tax circumvent is a serious crime and people should not partake in it.

Instead of forming this specialized team of criminal investigation professionals to track cryptocurrency tax evasion, it would have been better if they had formed a committee to regulate cryptocurrencies and make them legal in the country, that would have been much better, as long as there is no regulation of cryptocurrencies in the country, tax evasion will continue. I think this solution is a lot better than forming a tracking team.

Most personal data are already available, its just that it is the government that is holding that data so you have some assurance that you won't get any information leak because of bureaucracy that makes it difficult to request for your personal info. I have heard of this advice but I don't know if it is true but whenever you do something online you can always use fake credentials and still make it look legitimate, I wouldn't really go the tax avoiding route but if the part of what I am earning is going to be taken by an incompetent government then I might consider doing it.

If this will be the same reason for other individuals who are not in favor of KYC I think what the government needs to focus more on is the regulations and enforcement to businesses in the crypto industry like what they are doing to Japan and Korea where they have a screening process for crypto exchanges before they earn any licenses to operate. If the government will apply a stricter enforcement like what they are doing to banks and stock brokers with regards to security I think the issue for KYC will no longer be there. If they tried this I don't think they need to spend a lot of money on finding out ways on tracking our transactions like what they are doing now, it just makes the people feel that they are always hunting down crypto users with what they are doing.

Look I am not endorsing any form of tax evasion here. If I prefer the KYC-free alternative is solely because I tend not to give away my data & information to some companies which are not even capable of securing my data (ledger for example).
Reducing the use of bitcoin to evade taxes is a bit discouraging.

The implimentation of Taproot Taproot will be a welcome upgrade.
It will provide us with a new level of privacy.


Thank you for that link to the insightful article, everyone should have a read.

Its true, with governments efforts to catch us all in the TAX net I fear it will be
difficult to evade.

They are the government after all, this operation could have started if it weren't for the bureaucracy surrounding the operation and its approval to become operational. Companies have more leeway because they don't necessarily need to have any permits needed to fill out in the government, the money spent by the company is private so the government doesn't have that much say as to what they are going to spend their funds on, meanwhile in the government, taxpayer money is being spent and the government needs to make sure that it is spent the right way which doesn't happen quite often. I am glad that this operation is ready so we can finally stop bickering about mixers being used by wicked people.

Nicely put stompix.
For those who cannot see what is happening I suggest they would look more into what the main blockchain surveillance companies are doing behind the scenes of every exchange, for instance (with all their KYT, AI powered real-time blockchain transaction monitoring that go abck and forth several hops along the way).
And for those who will fight hard until the very end, do not forget there are a few arrows that can be thrown.
https://bitcoinqna.github.io/noKYConly/

Nobody said that keeping some financial freedom was ever meant to be easy. 

You're falling to the same misconception that the government has no idea about the new technology just because they don't listen to the newest band or haven't seen the latest tiktok video.
The US agencies had teams tracking the movement of coins, individuals doing transactions on dark markets, undercover officers posing as buyers on localbitcoins, and much more well before 99% of the people that are currently involved in crypto ever owned one satoshi or whatever shitcoin they've bought.

Just because the clerk at city hall in some god forgotten 20 people town doesn't understand how bitcoin works it doesn't mean there aren't people with the FBI/CIA/IRS who know probably more about crypto than all but a few of the members of this forum, and just thinking of some high quality topics here that is certainly possible.


Part of this delay was the legislation and the debate on how this was going to be taxed and part of it was that the sums were still small and most of them could be ignored, but that has changed and with the current US deficit looming if I'd be living there I would count ten times even the last satoshi before filing my tax forms.

We really don't have any choice here in the first place the governments will always have the control in everything we do the crypto industry has been under the radar ever since it's used in the dark web which it has been noticed by the authorities and I think with that first connection they have for Bitcoin in the dark web is something that has stuck to them that cryptocurrencies have the potential to be used in illicit activities that is why they are implementing these kinds of regulations and I think it should be fair to everyone where if banks are also under surveillance from the government other modes of sending/receiving money should be monitored as well. We should also know that not only banks have KYC but also other industries from remittance centers to even stock brokerage services also are under a form of AML laws and regulations so basically the government is not leaving any exemptions to anyone.

@Theb
If we'd have to speak the truth, and leave some bitcoin maximalism aside, I'd say yes we should give them some credit, but not too much.
It's thanks to companies that now make the blockchain even more transparent that old investors, funds, trusts, companies, wealth managers etc are here to pump the price up.
If it stays like this, it's fine by me but I'll always be very much concerned about my privacy when transacting with bitcoin.
1 satoshi is always equal to the next one and I don't care about its provenance.
This is what we do with cash every day because I don't think we all check if a banknote was used to buy drugs, to play poker and so on. If we'd do that, we'd be crazy.
Ending note: I'm eagerly waiting for taproot to be finally activated.

Won't be the first time seeing IRS do some kind of action with regards to crypto tracking they even go as far as rewarding 625,000$ to someone who can help track Monero transactions last year. But can we give them a little bit of credit? US departments here are actually just trying to prevent crimes from happening with the use of cryptocurrencies as compared to other countries where they see crypto itself as the main tool for illicit activities and they just give some sanctions hindering the use and trade for cryptocurrencies. I think crypto tracking is something we need to live in and this is something that we need to accept in order for it to be legal in our respective countries.

They are always 2 steps behind. 


But love their persistence to go after this tax evaders hiding on crypto though. So it's time for crypto enthusiast to make the next move, another cat and mouse game. I must say that we are still ahead of the game, but it's just a matter of time because government agencies will advance technologies and with help from blockchain analysis companies can break down everything.

Nonetheless, the financial world that you mention will have its own right to refuse to do business with you and to allow or deny your transactions to back and forth for the sole reason that you are a privacy preserving customer. These are the kinds of trade-off we are going to face in the future.
It is no different than having a suitcase full of cash and to try to open a bank account as they we will ask you the SoF.

On the one hand, I am very pleased with this news because bitcoin and other cryptocurrencies are beginning to take an active place in the financial world.
I believe there will be more decentralized projects in the future like https://tornado.cash/ for anonymity.
I am not going to break laws and use cryptocurrency for illegal activities, but I have the right to anonymity.

I think that it is artificial intelligence that will put the final point in the confrontation between the state in the person of the tax service and the owners of the cryptocurrency. As soon as the smart guys write, test and launch (if they have not already launched) such a system, its algorithm will display a simple table with the identification numbers of taxpayers and the amount of their debt after transactions with cryptocurrency. I wish it was fantasy - but something tells me that this is how it will end. Let's see how it will be in the future.

No matter how much time they will need to get ahead of the game they will eventually reach some great knowledge combined with the professional use of already available blockchain analysis software. Considering that the bitcoin blockchain is public and that they can go back and forth in time while applying some devil's magic AI to it... the future for our privacy does not look very bright.
I wonder how Taproot will mitigate this going forward.

It's taking them a long time to "get ahead of the game".

I know companies that have actively been trying to spot tax evasion on crypto since 2017 and before, getting to it in 2021 is kinda lazy.

The IRS has also changed its mind on how crypto should be taxed too at least once since its inception and make minor changes that people probably shouldn't be assumed to be able to keep track of (it'd be useful if governments sent out newsletters when laws change as the news don't want to cover it)...

https://www.forbes.com/sites/irswatch/2021/03/06/operation-hidden-treasure-is-here-if-you-have-unreported-crypto-its-time-to-get-legal-advice/

"Damon Rowe, the Director of the Office of Fraud Enforcement at the Internal Revenue Service announced yesterday at a Federal Bar Association presentation on fraud enforcement priorities that the office has “added some crown jewels,” including a dedicated team of IRS Criminal Investigation professionals who are working on “Operation Hidden Treasure.” Operation Hidden Treasure is comprised of agents who are trained in cryptocurrency and virtual currency tracking, and who are focused on taxpayers who omit cryptocurrency income from their tax returns. Operation Hidden Treasure is a partnership between the civil office of fraud enforcement and the criminal investigation unit to root out tax evasion from cryptocurrency owners."