Something’s going on with the regulation of crypto currencies. Hardly a day goes by without a central bank issuing a warning against digital currencies. But the crypto currencies don’t just cause negative headlines – some authorities also report positive news.
USA: Bitcoin loophole is property of the IRS says
The IS Internal Revenue Service published a report at the end of March in which the “mined” Bitcoin loophole is classified as taxable property as soon as it passes into ownership. In addition, Bitcoins are taxable when used as payroll or commercial means of payment: https://www.onlinebetrug.net/en/bitcoin-loophole/
The reaction of Bitcoin supporters in the USA was mixed. If the Bitcoin is treated as an investment, it gives access to preferential capital gains rates for all Bitcoins held for more than a year and a day. At the same time, however, it also provides a basis for recording the winnings of each Bitcoin sent or received.
For US taxpayers who treat the Bitcoin as a long-term asset that is good news. For those who primarily trade Bitcoins, however, it is rather bad news.
The subtleties and effects of the IRS announcement are likely to create a lot of discussion among Bitcoin enthusiasts in the coming months: for example, the IRS has not addressed whether the exchange of Bitcoins into other crypto currencies also entitles them to tax profits.
USA: Does Texas follow the New York example?
This week, the Texas Department of Banking published a letter addressed to all “virtual currency companies” that already trade in Texas or want to do so. The letter states that crypto currencies based on a promise to convert it into money at a later date or elsewhere do not constitute an act of money transfer in the state.
However, since the Texas Department of Banking represents only one government agency, the statement does not affect FinCEN’s registration requirement.
Texas has aggressively built up a business-friendly climate in recent years, attracting many high-profile and higher-tax companies. Most importantly, Austin is known as a progressive center for technology companies, including many Bitcoin startups.
USA: If the Bitcoin is not money, can money laundering be done at all?
On April 1, Ross Ulbricht, lawyer of the now disbanded online platform Silk Road, kicked off a debate to drop some accusations against his client. If the Bitcoin is not money, his client cannot be charged with money laundering.