Topic: Senate Bill S.1241 to prohibit the hiding of Cryptocurrency Ownership (Read 685 times)

I agree, I'm sure even if it's illegal a lot of people will still hide it because of the taxes they will gonna pay. For me, it's not a protection for the people, it's the government profit that is why they are doing this. Another tax that will shouldered by the community.

Yup to be worried on some point is normal as we are an individual who seriously wanted our privacy and security to be protected.. The gold vs bitcoin holders has to be address in the definition of the proposed law which is likely to be unfairly used.. In due time the people on that country especially the bitcoin investors and users needs to speak and be heard by the government officials that will handle this for transparency..

Well this is part of digital currencies regulation in which this is good to ensure the safety of US citizens from scams and other illegal activities such money laundering, drugs and guns  smuggling. There is nothing to worry or scary to reveal our bitcoin ownership as long as we are not doing things illegally but i think some holders want to hide their coins because they do not want to pay income taxes from bitcoin earnings. 

I've read over the bill and I also reached out to an attorney friend for his opinion. The "hiding of cryptocurrency ownership" seems to be a misnomer. There's nothing requiring citizens to declare their control of e.g. Bitcoin private keys. And if there were, it would be unenforceable. Logically, it would be hard to justify such a requirement for cryptocurrency but not for any other commodities, securities, or cash.

The clause in question refers to "ownership or control of an account or assets held in an account with a financial institution." Further, its worded such that the issue at hand seems to be concealing/misrepresenting the ownership of financial accounts. This would cover the multitude of people that presumably trade on exchanges using fake names/personal details.

The main problem with the bill is the expansion of the definition of "financial institution." It seems like any redeemer (broker?) of digital currency, exchange or tumbler would now be classified as a financial institution. It looks to me like they are trying to target fiat gateways, brokers and mixers -- "financial institutions" under the proposed bill. And they want to make it unlawful for anyone to then conceal their identity from these financial institutions, who regulators can then shake down anytime they want.

I am hoping the Congress will not really pass that way as it can be an intrusion into the person's privacy. Do we have the law also that requires all people to declare whatever cash they might have in their lockers somewhere? Now, in case lawmakers can be lead or swayed to vote yes for such a myopic law then it can easily be questioned in the court as to its legality and constitutionality. I am not so familiar with the constitution of USA but I am sure that a lawyer can find a provision to counteract this proposal. In addition, it would be so hard to implement such a law and if am a US citizen I would be using foreign-based wallet or exchange services for my Bitcoin transactions. There are many creative ways to stop the government from intruding our privacy though of course the government can get so creative sometimes.

Even if they know that the person crossing the border owns cryptocurrencies, how do they determine if the person is bringing them in? Are they legally allowed to check your mobile devices and computer? Even if they do find a wallet, what happens if you don't have your coins there? Heck, there may even be some people out there that has their recovery seeds memorized. I can already tell that this is going to be a nightmare, both for us and them.

But yeah, the government knowing your entire financial history in the blockchain is a pretty scary prospect. Bitcoin's growth is going to take a hit for sure.

That's crazy, you don't have to disclose all your stockmarket assets so why would you have to do so for bitcoin ? And you can't tax an asset so what's the point ?

If the bill reads that it will be illegal to hide ownership of cryptocurrency , it means it will be a crime not to declare it as an access or property. Then, that bill is tilting towards taxing on bitcoin or cryptos when passed to law

Blockchain is like a puzzle where knowing the ID of a person to whom the address belongs to allows you to fit the piece into place. The more pieces you got the easier it is to track money because at some point the coins will go through one of the pieces that you have in your database. They don't need to have everyone's ID to be able to track coins, especially since the same coins are going to be circulating in the system forever.
One thing is certain, in time they will be able to track every coin until it ends up on a known address. They will then knock on  the door and ask where you got that money from. You'll point at someone, that someone will point at someone else, and more pieces of the puzzle will fall into place.

Assuming this doesn't mean agencies like the FBI and whatnot, and only means the IRS, isn't it usually a crime to hide assets?   I have not read the legislation referenced in the link bit might do so later.  This is not the same thing as having to report crypto ownership to the government, right?  That would have a grave impact on bitcoin, I'm afraid.  And it goes against the spirit of what bitcoin stands for, and the mindset of many bitcoiners, including me.

https://news.bitcoin.com/irs-crackdown-tracking-bitcoiners-with-chainalysis/

They are already building a database. That's what makes this bill look like it's going to open the door to a whole new set of laws undermining privacy.

The anonymity of bitcoin is too exaggerated. If desired, you can track every transaction. Then link it to a user for special services will not be difficult. But I am saddened by the approach of the American authorities. They want to control not only the income from the exchange of bitcoins for Fiat but also the turnover of bitcoins.

I would say this bill would be useless because no matter how hard they try to impose such law if they cant even find out or traced out a single persons possible crypto holdings then they cant do nothing but ending up on having assumptions most of the time. Whose the one would easily tell or expose out on their holdings?If they do like to hide then no one would able to find it out.

So I read part of the bill and it mentions about SEC. 13. Prepaid access devices, digital currencies, or other similar instruments and freezing of accounts and concealed money laundering, but I was confused for a moment on how are they going to track this efficiently? If we were able to make a purchase with digital currencies and not associate our identity with it (for digital services for example) then I doubt it would make it easy to track. Also there are plenty of anonymous ways where people buy stuff on the dark net and don't get caught for it.

The section also mentions "detailing a strategy to interdict and detect prepaid access devices, digital currencies, or other similar instruments, at border crossings and other ports of entry for the United States;". Recently there have been events of people being questioned on ownership of bitcoins at airports in the US and isn't something new. There's a way around it and again it would make it very hard to efficiently detect this.

Let's try to clear this up as everyone still seems to be confused.


I've been reading up on the subject and it doesn't look like you have to declare every single address you have that has money in it. The bill seems to be limited to coins stored in accounts with a financial institution. The way I understand it, they really only changed the definition of "financial institutions" to include cryptocurrency exchanges. That means you have to disclose your exchange accounts like you would your bank accounts, which is hardly surprising as I imagine there are some people with more money in their exchange accounts than their bank accounts. Cryptocurrency wallets are not considered a financial institution, so it seems to be exempted. Your other addresses are very likely to be traceable from your exchange accounts though, so therein lies a problem, but at least people should be able to get away with not disclosing them.

I could be completely wrong though, of course, so please feel free to correct me.

this makes sense, and is a required "base regulation" in order to be able to enforce more complex legislation. consider, while this seems vague, this essentially says "if we can prove you have acted in bad faith, you have broken the law". this takes the legs out from under even a complex, studied legal defense. arguing the fine points becomes moot when a prosecutor can simply say "you didnt disclose this, so you were hiding it. and thats illegal. so you are a criminal, and now we have overwhelming legal authority to investigate other faucets of your affairs, in order to look for additional criminality".

this is pretty much the strategy being used to impeach the president. the violation of generally stated laws, in a manner that may define case law as it occurs .

Bill transaction should be anonymous, it can be in public if there are complains about it. Everyone's identity is an important issue and one of bitcoin's assets is it's anonymity, for example, if satoshi nakamoto put HIS/HER identity in public then maybe he would be a great income of media.

In the legislation of any country has such laws. At first glance they seem absurd but sometimes they become a reason to prosecute people. Then charges will be changed but it will be then. I doubt I'll be able to trade bitcoins and we will become inaccessible to the tax legislation.

It's worrisome, but I felt a bit better when I saw that Jerry Brito tweeted skepticism that it could be passed. He's executive director of Coin Center, and they've done a lot of advocacy and legal work on Bitcoin issues. As written, it's pretty worrisome indeed. It's pretty vague with regard to individual disclosure, and the case that one must declare bitcoin holdings but not gold is dubious at best.

It seems like the most troublesome aspect is the expansion of the definition of "financial institution" to include "redeemers of digital currency" and "digital exchanger or tumbler of digital currency." The word "redeemer" is super vague. And the next phrase definitely refers to exchanges, mixers and probably CFD brokers as well.

How can this stupid bill be implemented? Unless the user is either converting the crypto to fiat cash, or purchasing something using it, the authorities are never going to find out about his holdings. And even if the coins needs to be converted to fiat, the user can travel to another country to do that.

If this bill can only imposed to an exchanges that’s hold the client information then this is particularly relevant.. But if it is individually be mandatory for one to allow the authorities to harass a bitcoin holders is something we must be vigilant of.. If this will be passed the same in the country I’m residing now then it’s time to pack my things and stay to a more neutral environment for bitcoin users a country like japan..

nobody knows. it's pretty scary. cryptography itself is the science of coding and decoding messages. does that mean that by definition, encrypting wallet data would be considered "attempting to hide" it?

if it's simply a matter of declaration e.g. at the border or something, that's not a big deal. it's pretty unenforceable. but i can't tell, are they trying to build a database of cryptocurrency wallets linked to ID? that's pretty scary if so.

we can take some solace in the fact that they tried to pass another version of this bill in 2015 and failed. but now that bitcoin has the attention of regulators and the FED, i'm worried it might pass this time.

@darkangel11 I defiantly agree with you -- it all comes down to the definition of what "hiding ownership" is. As long as it's basically saying that I cannot go out of my way to hide ownership of my assets in the context of avoiding taxes, committing crimes, ect; but the terminology is a bit vague and I'm worried that it could end up being more than just that (or the doorway to something more) or that it could be combined with some sort of registry.

At the moment the bill isn't even passed though, and I don't go out of my way to hide assets at the moment, so I'm not all that worried.

Last, I'm sure many countries would follow suit (in the case that this is worse that it appears to be), so I don't think that moving would help all that much unless I don't mind living in a third world country.

If by hide they'd mean to deny possession if approached by the authorities, I'd say it's bearable. It would be only used as courts and such in cases where people would try to hide their money (divorces, bankruptcies, debts). We can assume nobody would go from house to house asking people if they have any cryptocurrency.
If they are trying to force people to submit their names and addresses so that coins can be assigned to an ID in their "system" it would be a serious thing. If I were a wealthy bitcoiner living in the US I'd start packing.
On the other hand there's not much they can do to make people send them such statements. Say you got something that is fully legal and widely used and they pass a bill saying it's illegal, what do you do? Take all your alcohol and throw it out because they said it's now illegal, or throw away all your painkillers because they are illegal?
I'd say this case is just as ridiculous. Nobody is going to run to the authorities saying here's my address please note it down.

For those who don't know, about news about Senate Bill S.1241 is going around. You can read the bill on here: https://www.congress.gov/bill/115th-congress/senate-bill/1241/text, basically (if passed) it would become illegal to hide (or attempt to hide) ownership of digital currencies.

What exactly "attempting to hide" a cryptocurrency would be interpreted as I do not know, just thought I'd get the news out.