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Not So Fast on Bitcoin’s Anonymity As Taxman Can Find Out Who You Are

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  • Eric Eissler
    ⭐ Features

    Bitcoin isn’t nearly as anonymous as you think. In fact, the very nature of Blockchain is to preserve an auditable record. The taxman is watching.

Not So Fast on Bitcoin’s Anonymity As Taxman Can Find Out Who You Are
Cover image via u.today

One of Blockchain’s attributes is to allow for transparency of ledger transactions and creation of incorruptible files. It was made to be easily audited, and that could happen to millions of people who hide their gains from their representative tax authorities.

Tax season is in full swing in the US, and many people have a dilemma: whether to claim crypto gains from 2017 or not? That is the question of Q1 2018. Last year saw an explosion of Bitcoin and altcoins on to the mainstream.

Bitcoin mania enchanted millions in the final quarter of 2017. Many people believe that their funds are hidden and that the government cannot see their trading activity because their wallets are anonymous.

They are wrong. Essentially, Blockchain equals digital paper trail. The whole reason behind Blockchain is to increase accurate reporting and ease of auditing transactions. It is designed to promote transparency and reduce fraud with incorruptible ledgers of transactions.

Hidden links

All of your transactions are visible. There are companies such as Chainalysis that audit transactions and are partnering with government tax authorities to hunt for people who are not reporting their gains. According to the company’s website:

“Through formal partnerships with Europol and other international law enforcement, our investigative tools have been used globally to successfully track, apprehend, and convict money launderers and cybercriminals.”

While some wallets are anonymous, your bank account is not. If you’ve transferred any fiat from cryptocurrency sales to your bank account, there is a record of that activity. If you transferred over $10,000 in a single transaction, the bank will have already filed a suspicious activity report (SAR) flagging your account.

With relative ease, auditing companies working with government tax collection bodies can start to figure out who has not been reporting their gains. You might want to think about listing your gains and losses when you file your taxes this year.

Fuzzy descriptions, but determined

While the IRS still has a fuzzy description of what cryptocurrency is and how to tax it, the agency did go after Coinbase, the largest exchange and broker of cryptocurrencies. The IRS initially requested Coinbase to turn over the accounts of customers who bought Bitcoin between 2013 and 2015. During this time, the value of Bitcoin soared dramatically from around $13 to a high of more than $1,100 in 2013, then back below $200 in 2015. Not everyone was “Hodling” at that time- profits were made.

In nine short years, Bitcoin went from being an underground “nerd” currency to one bordering on the mainstream.

In the process, it has made tens of thousands of people wealthy and brought about incredible technology that will revolutionize our world.

Now that Blockchain, Bitcoin and cryptocurrencies are in the public eye, the regulators and the governments of the world want to claim their share of your profits.

The taxman is now savvy to Blockchain and will use it to his advantage to collect. You better check your taxes closely this season.

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About the author

Eric Eissler is based in Chicago and works in higher-education administration and finance. He is a freelance writer covering blockchain technology, fintech, cryptocurrency, the oil and gas industry, and international politics.

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XRP Price Likely to Hit $0.56 in Early December, Crypto Trader Says

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  • Yuri Molchan
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    A crypto trader analyses a crucial fractal on the chart, saying that a possible outcome could be $0.56 for 1 XRP by early December

XRP Price Likely to Hit $0.56 in Early December, Crypto Trader Says
Cover image via 123rf.com

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Despite the active expansion of the Ripple ecosystem and signing up over 300 new customers on RippleNet this year, the XRP price remains below $0.3.

At press-time, XRP is declining by 2.85 percent and is exchanging hands at $0.24.

XRP price CMC
Image via CoinMarketCap

A win-or-bust XRP forecast

The community has been eager for the price to surge throughout 2019. On Wednesday, U.Today published a story with bullish forecasts regarding the price.

Today, a crypto trader @TheCryptHawk has shared a chart on his Twitter page. It shows a possibility of XRP surging to $0.56 in early December if the fractal depicted on the chart in in play.

If not, the trader says, the price may collapse to $0.17-$0.18 and then – down to $0.12.

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XRP below the $0.25 support

A short while ago, XRP dropped below the $0.25 support level, where the coin had not been in several months. This is happening despite the recent Swell conference, which was expected to push the coin’s price way upward.

The community was expecting a bull run, since last year in November, as many believe, Swell triggered it. As a result, in January 2018 XRP hit its all-time high of over nearly $4.

This year, the loyal XRP community expects a bull run every now and then but all those expectations are in vain so far. This seems strange to many, since Ripple has indeed expanded its network significantly and provided a lot of actual utility cases for XRP.

Optimists are buying on the dip while the price is low (same as many doing when the Bitcoin price drops), hoping to reap their profits later on when XRP skyrockets.

 

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About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today.

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