General question. Currently money laundering is illegal (concealing money gained from unlawful activity) [i] and the IRS already asks you specifically if you own assets [digital currency] [ii], so i am honestly curious what this would change. If you own bitcoin and are not disclosing this to the government [irs] of such assets you are already breaking federal law. This just adds charges? Or does this help fund the feds to form task forces? Lawyers I have consulted mention trusts to legally hide assets [iii]. help.

[i] https://www.law.cornell.edu/uscode/text/18/1956 [ii] https://www.irs.gov/newsroom/irs-virtual-currency-guidance [iii] https://www.wsj.com/articles/SB912140808262492000

Currently, irs asks you if you have ownership on a foreign account, or finra or something asks you to declare money over 10k when you enter country. They also know your bank accounts by its centralized nature.

Now, if they ask you your wallets, not declaring could be considered unlawful if this bill passes.

Also technically, wince cryptocoins are commodities, or treated as such, you still need to declare them as a profit on tax forms. They didnt have a way to know so you could decide to not tell. You still can but the boundary gets blurry now - you can expect to be asked more about this during audits etc.

> you still need to declare them as a profit on tax forms

Not until you realize the gain, right? (at least unless you mined them)

mining is interesting, because mining is probably 'earned income' at the time the coin is rewarded. Then you have capital gains when you convert.

Right. But not for mining or splits that could be seen as income.

> "the IRS already asks you specifically if you own assets [digital currency] [ii]"

I don't see anywhere in [ii] where it specifically says that you have to disclose the mere ownership of personally-held bitcoins. That is just saying that you have treat bitcoin just like any other property.

Exactly. It is an asset. So you only disclose when you sell?

You don’t disclose assets to the IRS, only income. If you disclose your income and pay tax on it then convert it to BTC today you aren’t obliged to disclose it. In theory after you sell it you’d have a capital gain to disclose.

Not true. There are reporting requirements for certain foreign assets, including cash in overseas accounts.

Doesn't apply to crypto. Only have to report if the crypto is sold.

I guess the implication is that you have to report foreign assets specifically because it’s not easy for the IRS to obtain records from foreign financial institutions. Since it’s also not easy for them to obtain records from a decentralized crypto-currency then the same justification exists for adding these to a list of things you must report.

The law doesn't care whether the same justification exists. A bitcoin wallet in your house in US is not a foreign asset, since those bits (that representing private keys for bitcoin addresses) are physically in the US.

Right, the existing reporting law doesn’t pertain to assets stored decentralized “institutions” only foreign ones. Presumably that is why they are talking about changing the law.

Right. Exactly. They'll have to change the law so that it does care about personal bitcoin wallets.

How do implications work? Are there lawsuits that have set a precedence?

Implications can explain lawmakers actions and encourage said lawmakers to think about revisions to laws in the future. The article was about a proposed law. If X is similar to Y in some way, and X is treated by the law in a well-defined way, then a lawmaker might consider treating Y similar to how the law treats X.

Please stop using crypto to mean cryptographic currency. Crypto has a well defined meaning.

Words can mean different things and in this case the meaning is obvious from the context.

Fair but context implies I mean CC, as another mentioned. Meaning, devoid of context, is difficult to create. So, please, keep this in mind when you're nit-picking on what you mean.

Regardless of what your opinion is, using the word crypto to mean crypto currency is already in common use, you can't argue against that.

The collective unconscious decides the meanings of words. Language evolves. I guess the world looks pretty different all the way up on your high horse. This is a battle you have already lost but for some reason insist on continuing to lose.

Language certainly evolves, and personal attacks will get your account banned on HN. Please keep these things separate and edit the latter out of your comments here, regardless of how bad someone else's comment may be.

https://news.ycombinator.com/newsguidelines.html

https://news.ycombinator.com/newswelcome.html

fuck you ban me you cunt

I really wouldn't call it common usage. Among people who use crypto currency, sure, but not among others.

Asking someone not to use a word a certain way when it is already in popular use seems like a waste of time.

Didn’t know, can you elaborate on that?

Sorry for the delay!

https://www.irs.gov/businesses/comparison-of-form-8938-and-f...

operative word: "foreign". But your bitcoin wallet can exist entirely in US.

Yes, but where does the blockchain exist?

...on my hard drive? If I am running a node, that is.

And so it may be bound by your country's laws, and by the laws of all the other countries where it also exists on hard drives, even if they are contradictory, it's potentially a legal nightmare. The current official bitcoin position on this appears to be to stick one's fingers in one's ears an go "La la la I can't hear you"

If I pay taxes on my income earned in USD, then exchange it for Euros. If the Euros had a better exchange rate to dollars later, would I have to declare a capital gain if I exchange back for USD? What if instead of exchanging I just spent the Euros?

If you are a US citizen, then yes to both questions. Trading any asset for another (which would include spending EUR for goods) creates a taxable event, on which you must declare your gain on the sold asset based on its fair market value at the time of exchange. There are exemptions for certain types of property (notably section 1031 like kind exchanges for real property).

I am not a tax attorney, and more specifically not your tax attorney, nor a certified accountant.

https://www.law.cornell.edu/uscode/text/26

What does it mean to sell? People have already generated lots of taxable event when they started diversifying into other coins for example.

It is my understanding that trading one for another, (BTC to ETH, for example), is a taxable event thus has to be reported.

Yes, exactly the way i am thinking (and probably IRS will think).

This is the way it happens for stocks and pretty much everything.

Yup. That is a huge question.

Good old Dianne Feinstein, always protecting me from the scary terrorists.

Not only did she pretend to be incredulous about NSA spying, she put forward the bill to excuse most of it after completely redirecting the conversation to "metadata." Now Ajit Pai made it a partisan issue she's having screaming about being pro net neutrality but a few years back she co-sponsored the PIPA bill!

Worst of all she's considered to be basically impossible to replace. It would be very nice to see CA stop giving her money and put a significant challenger forward but it's probably not good ROI to attempt.

>Worst of all she's considered to be basically impossible to replace. It would be very nice to see CA stop giving her money and put a significant challenger forward but it's probably not good ROI to attempt.

The only type of person that has a chance is a celebrity. If Arnold can win governor as a Republican, then a left-wing celeb can definitely primary Feinstein.

Why would a left wing celebrity who is definitely a member of the guilded class want to primary someone who is a protector of a guilded class?

Because some people like being senator for its own sake.

Kevin de Leon is running against her and has some political and media support. Unfortunately, he's far to the left of her on the issue of gun control and that alone may nullify whatever small chance he had of getting elected.

Is his district (LA) particularly pro gun?

If he's running for US Senate, all of California will be voting for him or Feinstein. And parts of California are extremely pro gun, and parts are extremely anti gun.

Senate races are statewide and so districts are irrelevant.

Two words: Shia Labeouf

I have high hopes for Alison Hartson.

And freedom. Remember, freedom is scary.

To the downvoters: Seriously it is. For example: Can you imagine what would happen if we allowed people to have bars? People are expected to DRIVE to a BAR and DRINK! Can you imagine what people would do then, if we legalized the existence of bars? People would drive home drunk!

Banning bars is obviously the right thing to do!

I appreciate the spirit (I am no DF fan either!) but in the state of New Jersey if you serve alcohol at a party, you are responsible if you allow an inebriated guest to drive off and they mow down people.

If this is about gun control, there is no reason to panic. Your guns are safe.

LOL! I wasn't talking about guns, and no, guns are not safe, every year more and more guns are banned in this country. T he idea that guns are not being banned is just a lie that is told to pretend like not banning all of them outright isn't banning them.

But my point was that just because you have responsibility for inebriated people doesn't mean that drunk driving can't happen-- we should ban bars.

OF course the thing is, most people who go to bars don't drive drunk. They have the freedom of choice.

That's what's scary to HN people... who have been brought up to worship government and believe tyranny is a good thing.

Drivers and bartenders are licensed. Cars and booze are registered. Requiring a higher standard for risky stuff is how we handle everything.

Drivers should be licensed because they're operating a vehicle on shared public property. That's not the same as creating a gatekeeper that imposes a blanket ban on entire categories of private voluntary exchange (e.g. selling alcohol) that are only lifted on a case-by-case basis if one is approved by that gatekeeper.

>>Requiring a higher standard for risky stuff is how we handle everything.

Not really. There are no laws restricting high-risk sexual practices. In the civil sphere, we correctly recognize that individual liberty trumps the personal risk and even public risk posed by risky actions.

It's only in the economic sphere where we restrict private exchanges, and that's because rejecting economic liberty is a necessary precursor to taxing the public and creating regulatory moats to protect industry incumbents from competition.

You’re being downvoted for sarcasm.

I'm not being sarcastic in the least. I'm being downvoted because this is a site where critical thinking is not tolerated and it's overrun with millennials who have never had to use their brains.

Bank secrecy is dead*

To imagine that bitcoin could change that or not abide is foolishness.

* for poor people anyway, with poor meaning < $10 mil which affords you lawyers and offshore shell companies

Well, bank secrecy is as dead as governments can make it, for obvious reasons. However, for cryptocurrencies, it's mainly exchange interfaces with meatspace currencies that are hard to keep private.

If you use local wallets like Electrum, transact via Tor, mix thoroughly, and generally practice good OPSEC, your personas and their cryptocurrency can be as anonymous as you like. But only as long as you maintain compartmentalization from meatspace.

So long as you never use your currency to buy anything you've got a great anonymous currency. Sounds very useful.

You must compartmentalize. You can buy and sell anything that isn't linkable to your meatspace identity. With enough virtual wealth to hire the right consultants, you could probably retire comfortably somewhere.

I doubt you could retire. Creating a justification for why your meatspace identity now has money from an anonymous source without tying those identities together is money laundering.

Yes, it is. So you'd need to retire somewhere pretty laid back.

Is there somewhere “laid back” which is not corrupt, which has a functioning police force, and which has its own financial system?

I am curious its implications on capital gains. If you retire in a place with 0 capital gains, then would your home country tax you? I do not know the answer.

Depends on both countries. If I understand correctly, if you’re from the USA you owe taxes on worldwide income regardless of where you earned it. I have no idea if that applies to capital gains or not, nor how other nations treat worldwide income — not even my own nation.

If a coffee shop accepts bitcoin, your transaction is effectively as untraceable as cash is today.

The more that people use bitcoin, the more useful it gets and the harder it is to stop.

> If a coffee shop accepts bitcoin, your transaction is effectively as untraceable as cash is today.

How? There is no globally public record of all cash transactions, unlike with Bitcoin.

Because at no point is your identity tied to the address.

If you have an account with 100 mill in stolen bitcoins and use it at a coffee shop then looking at security footage is relatively trivial as there is a clear time stamp involved. Cash on the other hand might be traced at the bank, but it it's hard to directly link it unless their is a clear pattern of behavior. Even better, a random 5$ bill may not end up at the bank directly if someone get's change at the end of the day.

Worse it's not just the government that can track bitcoins. I can easily see a gang keeping an eye on transactions looking for people with large accounts so they can use physical means of persuasion to liberate it.

Cryptocurrencies can be mixed. If you engage in very basic precautions, such as doing something easy like transferring your money to monero, and then back again, it is effectively impossible to track where your money came from.

Once you get to the coffee shop stage, nobody knows where that money came from.

With today statistical analysis methods is trivial to track big flows through various block chains, even if some of them are totally hidden. And they only get better by the day, with your traces sitting there like a duck.

And you don't need to be 100% certain, it's enough to get a pool of suspects which then you can analyze/surveil with other methods.

How about monero?

Bitcoins's high transaction costs and low transaction rate prevent that from working.

Because you trust yourself, you don't have to outbid everyone to get your transactions on the blockchain immediately.

You still need to get on at some point. Plenty of people are willing to wait a few hours to get confirmed so the price never hits zero. Further, even if it did work you would make your mixing transactions stand out more while also vastly lowering the number of them.

But your identity IS tied to the address as soon as it is used in a physical transaction with youon camera.

That's the whole point. Know Your Customer and Anti Money Laundering is all about preventing anonymous online transactions where real world goods are bought.

So ultimately, how are you going to buy them? Send a homeless guy in to be on camera?

Yes, and all the coffee shop knows is that you paid them money from an account that has a couple hundred dollars in it.

You have your cold storage where most of your money is, and you have new wallets for the purpose of hold your X thousand dollars of general spending money.

In the same way that a coffee shop can notice that you have physical dollars bills in your wallet that you just pulled out to pay from.

If your coins were mixed (or transferred through monero and back again, or whatever), it can't be tracked where the money came from.

And this isn't even getting into the really interesting stuff that is coming down the pipeline, such at decentralized exchanges.

So now you are on the hook for using coins that have gone through a mixer.

The governments have the most leverage over exchanges and whoever "cashes out" Starbucks. If they tell them to stop taking coins that have been through a mixer then what are you going to do? China for example recently banned all exchanges period.

We need the majority coins to go through mixers same we need more people to use TLS / Tor / whatever for there to be any strength in numbers. And even then, Russia and China can do practically whatever the government wants:

https://www.google.com/amp/s/www.thesun.co.uk/news/2578222/v...

I mean, at that point you may as well say "what if the government just decides to ban bitcoin".

But they aren't doing THAT.

Blacklisting certain addresses is arguably 'harder' for the government to do than a simple straight up ban.

Blacklisting address is difficult, as the coins can quickly and easily be transferred to an unexpecting, innocent party. And now all of a sudden ALL coins are tainted.

What, is the average person going to track which coins are on the secret government blacklist and which aren't? If they don't do that then their coins are at risk of being tainted, and now THEY are on the ever expanding blacklist as well.

The government has only 1 option, a blanket ban on all cryptocurrencies. Anything else is just this impossible game of wakamole that will hurt innocents way more than the bad guys.

If they don't do the blanket ban, then the cat is out of the bag.

I think the proper way to blacklist is by posting an advisory on some list.

And then all payment processors / miners / etc. in a jurisdiction must respect that list.

And everyone else would do well to check the lists because their payment might become not accepted down the line.

You would have to modify bitcoin itself, probably through a hard fork, to implement such a blacklist. You don't need payment processors to transfer bitcoin, that's actually the point of it!

That's true only if you practice good OPSEC. You must be using a wallet that's not associated with your meatspace identity. Not in any way. Not through bank accounts, IP addresses, etc. Nor through any Bitcoin transaction. Once a wallet is associated with you, all past and future transactions involving that wallet are also associated with you. So it's prudent to have many wallets, and to always mix when transferring among them.

Not entirely. Monero enables this by default, though.

FYI, Bitcoin can't be used for coffee purchases anymore, due to throttling of transaction throughput, but Bitcoin Cash and Ethereum can.

Or you could just, use a secure anonymous coin like say monero and forget all this time consuming effort to try and anonymous a non anonymous coin.

Once Monero is accepted more widely, sure.

you mean, like bitcoin isn't?

You might be surprised at what's available for Bitcoin. Servers and VPN services. Consultants. Plus stuff via dark markets.

So the very niche market. I guess my point is, still bitcoin is mostly speculation - the stuff you talk about wouldn't add up to billions of dollars of marketcap, for example.

Yes, of course it's mostly speculation.

But it's funny for someone on HN to be characterizing what I mentioned as "niche market". I mean, what more than capital, servers and consultants does one need for a startup?

Why do you need bitcoin for that? I don't see the relation.

You might want it for privacy.

Bitcoin is not designed for privacy. Period. Monero is.

Yup. So is its little brother aeon.

Monero could. Fungible, and private by design.

Not in Switzerland -- as long as you are neither US citizen nor US resident.

The United States has divided into a privileged class vs commoners:

1) PRIVILEGED CLASSES: Easy cheap to create Off-shore shell company legal entity. Hide ownership of your money. It will auto-shift to a new country if government tries to uncover ownership. Offshore laws make it illegal for bank workers to uncover identity

2) COMMONERS: FinCen dominates over commoners. Every transaction tracked. Prison if you have Bitcoin privacy. They can put you in prison if they claim two transactions were because you were trying to get privacy from government.

Of course the justification is to "stop money laundering and terrorist financing".

Eh did you notice that huge tax cut they just gave the ultra-rich? They gotta start digging through the couch to pay for it ;)

The US has the most progressive taxation system among all developed nations. Nothing about that fundamental progressiveness has changed due to the tax cuts. The top 20% are paying 95% of all income taxes, that will continue.

For example, the US is radically more progressive on taxation than all of Scandinavia:

https://taxfoundation.org/how-scandinavian-countries-pay-the...

The (conservative) Tax Foundation article totally ignores that Norway also has an individual wealth tax (0.85% on assets above about USD $179,000), which is quite progressive compared to income taxes. They also have higher capital gain and dividend tax rates than the US (which the article mentions).

But the top tax rate has been steadily declining since the Eisenhower administration. This tax bill furthers that decline. Over that period we've seen an increase in inequality. Are they correlated?

I'm not sure the bit about what share of income tax is paid by the wealthy is meaningful here, outside of right wing think tank PR releases (your linked site is funded by the Koch Brothers btw. Just a heads up).

>The top 20% are paying 95% of all income taxes, that will continue.

You are comparing population with taxes, when you should be comparing wealth to taxes. Of course people in poverty with no tangible income or net worth don't pay income taxes. The wealthy in the US pay far, far less in taxes as a percentage of their wealth than any other developed nation in the world. In addition, the taxes paid by people in all civilized developed nations pay (either in part or in whole) for healthcare and education instead of bankrupting working citizens for basic needs. Working people in the United States pay far more in taxes and receive far less than any other developed nation - but at least we have our wars.

If you look at the statement "The top X% of the population hold Y% of the wealth and pay Z% of the taxes," it turns out that Z > Y for most values of X.

Until you get to values of x below 1%...

> The US has the most progressive taxation system among all developed nations.

That's extremely misleading; the US does functions other developed countries do via social welfare programs via the tax system (deductions and credits such as the EITC, tuition and student loan interest deductions, etc.)

Doing a like-for-like comparison—either removing the welfare system pieces out of the US tax system in the comparison or, even moreso, doing an all-in comparison of tax + transfer payments, would tell a very different story.

> income taxes

Oh, come on. Everyone here knows how this game is played.

*had. It's just been blown up.

Is there any evidence of Bitcoin being used by terrorist groups? Wouldn't that be a terrible idea for the terrorists?

Yes, it is a terrible idea for terrorists.

And currently, bitcoin is too hard to use for terrorists or most criminals. You have to be relatively sophisticated. Yah, you may have gotten your grandma a wallet, but that's not the same as mastering the level of opsec to fund a clandestine organization using cryptocurrencies...

And further, since every transaction is recorded forever in the blockchain if any future address is compromised, the entire network can be compromised instantaneously....

Bitcoin is really worse for terrorist financing than good old USD.

And we "lost" trillions of USD on Pallets in the Iraq and Afghanistan wars.

Yep, and Obama’s shipped a pallet directly to a state sponsor of terror. Why use BTC?

Good digital currency will be useful to terrorists just as a good internet is. But just as the internet creates a more connected and prosperous world that reduces conflict and terrorism overall, so will digital currency.

Also, it reduces the threats posed by governments against their own people. Government repression, like that seen in Venezuela or for a more extreme example, North Korea, can kill far more people than non-state terrorism, and tools that empower individuals help resist that.

I have no idea. But it's a great way to get relatively anonymous donations. At least, if you educate your donors to mix first. Also, properly mixed Bitcoin is great for anonymously leasing VPN services and servers, and for buying fake Facebook etc accounts, which are all useful for advocacy. And maybe black-market arms dealers accept Bitcoin now.

It has been used for ransoming such as HBO's case.

It’s it about bitcoin as Monero wouldn’t be a terrible idea though, another digital currency

But attempting financial sanctions as a way to deter use? That will be a waste of everyone’s time and money

One idea is if digital currencies get big enough then it will accelerate the insolvency of the state from its obligatory attempts to curb use. Far fetched now, less far fetched than a year ago

The text doesn't sound so much to me like it's criminalizing intentionally concealed ownership of cryptocurrency, as ownership of accounts at exchanges...say, by signing up for an exchange with a fake ID.

This link gives a little more background:

https://news.bitcoin.com/proposed-u-s-legislation-may-crimin...

> A ‘prepaid access device’ means an electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future.

To me that seems pretty clear they're targeting cryptocurrencies held outside of exchanges.

That description covers literally every thing that has ever been sold to a buyer.

The act of buying something makes it "prepaid access device" since it may possibly in the future be used to retrieve funds, e.g. via a sale, and may be transferred at some point in the future.

Yep. Something tells me that was the intention.

As written, it'd be easy to interpret even a private wallet as an "account", since there's a record of it on the blockchain.

That’s irritating. I’ve signed up for a few exchanges with fictitious details, on the basis that their being hacked seems likely. Still declare to HMRC when necessary tho

Your private bitcoin wallet (even in your home) is your bank.

You could just as well say that your home safe is your bank, just because you keep dollars in it.

How do you define "digital currency"? Under US legal tender laws BTC isn't money. You can incur capital gains when you exchange BTC for something over the basis you acquired it for, but you essentially gave smoothing of value away for something ephemeral.

I'm waiting for the law to get so vague, they accidentally cover in-app/in-game currencies with legislation that requires it to be regulated.

I suspect money laundering is already there.... they don't care, its all selective prosecution anyway. The purpose of the laws is not to stop crimes, but to make so many things a crime that if you resist tyranny they can discredit you and jail you.

Any game that has goods that can be exchanged by players is a potential for illegal money transfers even without the ability to get money back out of the game. For example, there's a shadow market for both CounterStrike weapon skins and Team Fortress 2 items. Here's how it works: I have a big supply of items. They have an assigned value. You give me money and the name of the receiving party. I send some items to a broker across the planet. They receive the goods, take their big, and give the rest in cash to the receiving party. We have now just made a wire transfer inside of TF2.

Where's the problem? Can someone explain? It's not like this bans owning Bitcoin.

What's the problem with being required to send a plaintext copy of every encrypted email to various government agencies around the world? It's not like that would ban using encrypted email.

What the problem with being required to report your income from various government agencies around the world? It's not like that would ban governments from existing, surely some people will continue to voluntarily pay some taxes on the honor system.

2nd layer solutions would provide fungibility and ultimate privacy. Cryptocurrencies like Zcash, Dash or Monero, especially Monero, could be illegal.

I say good. Those coins don't need to go mainstream so they can be held, pumped, and dumped. Let people use them for buying drugs.

I was about to disagree, then realized that I agree with you. Going mainstream would make these currencies less usable (and possibly more targeted), and then what would we use for our weed?

Monero is fascinating, unlike other pump and dump coins.

It is a violation of privacy rights.

Is there any right to keep your possessions private from the tax agency? Last time I checked, everyone had to specify everything of value owned, and sign for it, to calculate capital taxes due (I live in the EU). This includes BTC holdings. We have to trust the tax agency to keep tax data confidential.

It surprises me that the US needs to change laws to require this only now. I'd say the wording of the old laws were probably too specific, and after this change they probably still are. A public ruling by the tax agency should be enough to require this for new forms of value like digital currencies.

Very true. The difference is people like to be in the gray area, and treat btc wealth as hidden and nontaxable. Now they will have hard reason to declare their coins and the source of them.

On the flip side, i am not sure if there is any reason for "any body else" to know my networth, if i am not generating a taxable event.

> possessions private from the tax agency? Last time I checked, everyone had to specify everything of value owned, and sign for it, to calculate capital taxes due (I live in the EU). This includes BTC holdings. We have to trust the tax agency to keep tax data confidential.

The Us does not have that kind of tax. There is no wealth/capital tax here. There is no tax authority with that information here.

And to be honest, I find it abhorrent that you’ve been conditioned to accept that kind of invasion of privacy and mandated trust as normal and expected.

The income tax requires violating privacy rights, which is why many libertarians oppose it.

Only if you're committed to the practice of declaring for yourself arbitrary rights.

Excuse me for thinking I have a right to my privacy. Just because a right is inconvenient to social democratic ideology, doesn't make it illegitimate.

I don't see how this is any different from discovering years later that he had 10 pounds of gold buried in the backyard, a situation I'm sure you have some legal recourse in.

Not sure why you think you're banned, I can see your comment.

It appears flagged to me but I was able to see it before. Maybe it took a while to show up, so the user edited the comment to complain about Marxist moderation, unaware that it had not been removed by mods, causing the mods to remove it..?

It's flagged and dead, so you may need showdead on to see it, but it's still there.

AFAIK the mods never actually delete content from the site. I don't even know if they can.

They do actually remove threads sometimes, I've seen an off topic flame war disappear pretty quickly.

They delete content all the time... and they ban people all the time, without regard for whether they have done anything wrong.

Of course, since they delete the content you can't see the record of their actions.

I've seen dang insult someone, calling them names, while telling them they need to be civil. Total hypocrisy.

And that's why you never get any decent discussion here..... it's an echo chamber.

See anything in my comments that deserve a ban?

Why are you still here? Your profile says you left, and your comment history indicates that you're convinced everyone here is wrong (but you, of course), and/or actively silencing you. I really don't understand that kind of behavior!

I don't really, but lots of comments in same thread. Its probably really hard to moderate at hn scale, they brought on a new guy not too long ago who afaik still mods under dangs alias. Have you sent them an email to ask for an unban?

Uh, it says intentionally concealing, not owning.

Income from investments is supposed to be reported to the IRS. It’s silly that anyone would expect crypto currencies to be an exception.

This would be one of the few cases when the title should be updated.

> Income from investments is supposed to be reported to the IRS.

Bitcoin income has required disclosure since 2013, this bill seems to say that even bitcoin just sitting idle in an account need to be disclosed somehow, which is a MAJOR breach of privacy. This is like saying to someone "If you own a nice painting in your house you need to let us know about it" even if it generates no income.

They are basically saying "if you value your privacy you are a criminal, even if you aren't breaking any other laws" which should scare everyone.

Ish. it's not that different from status quo. 1. Government already knows all of your US bank accounts. 2. They ask you to declare foreign bank accounts. 3. Majority of countries have deals with US to inform them of US residents/citizens accounts, and many banks for this reason do not accept new accounts from us citizens. 4. US asks you to declare any monetary instrument as you enter country (above 10K) or so.

So if you think about it, they are not asking anything different from what they already do.

Bitcoin is more analogous to cash. The government does not mandate people reveal how much cash they have in their possession.

Cash-only transactions, maybe. But don't forget, the transactions are tracable, so technically, if you somehow transfer money to a "monitored account" that has ties to your identity (like, transfering money to DMV for your driver's license), your identity is revealed.

I do agree you are right about most of this...

One of the great things about bitcoin is it gives libertarianism a business model... and it's right out of SEK3's New Libertarian Manifesto--which was written in the 1970s-- SEK game theorized out what would happen with the Soviet Union, and proved to be correct 20 years later... now we are seeing the exact same game plan here in the USA with bitcoin and this law. But they are too late. Most likely outcome is this will get reversed or widely ignored.... but if they are successful, everyone smart will start leaving the country... or they will create an arab spring like response here, eroding respect for the government and police.

Gay rights couldn't be resisted in the age of the internet when everyone knew their cousin or that guy they went to work with was gay.... will be the same thing with bitcoin.

Question is, just how violent and authoritarian the tyrants in DC want to get.

Nobody will leave the country, i think that's a very bold prediction. The ones that would leave would be hidden bitcoin millionaires/billionaires.

I agree on the "they are too late" point, but think of it this way: US already knew about your financials. This law doesn't change that.

People are already leaving the country, and at an increasing rate. The rate of renouncements of US citizenship has been rising for the past 20 years but sharply under Obama. They have started making it HARDER to renounce, as some sort of attempt to keep people in-- one of the pieces of advice you will see often regarding renunciation is to never tell them you are renouncing for tax reasons.

That's one of the reasons they will refuse (yes, you have to beg permission to be let out of your slavery, er, citizenship)..... so the old saw of "you owe taxes because you choose to be here" is false..

More and more americans are leaving without renouncing, just going off the grid in asia or wherever, showing up only to renew their passports.

Once some country is smart enough to offer citizenship to educated americans, the trend will become a tide.

Nothing that i am actually worried about: https://www.usnews.com/news/best-countries/articles/2017-02-...

around 5500 in 2016.

There are countries giving citizenships already for the educated bunch. But most of this is catch22 - you have to have the smart people to attract even smarter people.

This would make "Satoshi Nakamoto" a criminal for not declaring the genesis block on his taxes.

Bitcoin wasn’t worth anything back then so there was nothing to declare

Only if Satoshi is American. And if he's still alive.

Or if he hasnt renounced his citizenship

Renouncing citizenship wouldn’t prevent you from owing uncollected or misfiled back taxes.

Good point. Educate me (since i am not sure about that part of taxes), would exercising your gains and converting them to fiat in a country which doesn't have capital gains taxes (singapore, i think is one?) generate backtaxes?

I am thinking: BTC=0 value when satoshi generated them. Now they are worth billions. There is capital gains, but assume he renounced his us citizenship before converting them to fiat. What would happen?

He'd pay taxes as if he sold at fair market value. This scenario has occurred time and time again when someone acquires a lot of wealth through investment.

His best option would probably be to create an irrevocable trust which pays him a percentage every quarter. Then he won't owe any taxes on what has already accrued.

Then he can consider expatriation or moving to Puerto Rico.

"I wasn't concealing ownership, I just thought I had lost the key to unlock my wallet. You see, it all started with my friend's unreliable boat."

Well, at the very least that'll change how numer.ai works, if this passes.

So, if this is taken to mean ownership or control of cryptocurrency wallet, what does that imply?

What defines ownership? Access? If someone holds a key to a house that doesn't mean they own the house.

What defines control? If a key is destroyed, and no one else owns that key, is is control lost? What if the key is lost? Is control lost until the key is recovered?

With the NSA permeating so much, how sure can we be a bitcoin was ever truly anonymous ?

Bitcoin was not and never will be anonymous if a user converts to fiat. There is always a way to trace a transaction through the blockchain, and from there to a fiat-Bitcoin exchange where you have an account tied to your bank.

I suppose the more anonymous option would be to 'buy' mining or use something like localbitcoins? You could still get caught, of course, but it'd be a lot more difficult.

It never was. Anonymity a property bitcoin never had nor tried to have.

Bitcoin is not anonymous, and it is tracable. Your identity is known as soon as you go to an exhange or convert to fiat.

Monero still ok?

Edit: Sorry, i misunderstood. The laws do cover monero and other cryptocoins, it seems like, but i am not a lawyer.

Treated the same as bitcoin in this law.

is it the same for gold?

Good, finally some concrete step by senate to stop block craze. Meh typical HN commenters "Taxes are great, except when its us who get taxed". The way I see its time to throw book at bitcoin holders, lets start putting Coinbase execs in prison.

People must declare their income from cryptos, but they like to be in gray area. Many many people has generated massive taxable events as they moved their cryptocoins into other cryptocoins as a means of diversification, for example. They just like to think of it as an "invisible" event that's not government's business.

But then, the same people complain about quality of public education, or why 101 sucks, or something along those lines that require tax money.

Currently, cryptocoins are seen as "have your cake and eat it too".