US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin • Hacker News Board

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#71

Post by em3rgent0rdr » Sun, Dec 03, 2017, 12:57 AM UTC

ransom1538 wrote: post #68

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 fe…

> "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.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#72

Post by Maarten88 » Sun, Dec 03, 2017, 12:58 AM UTC

CryptoPunk wrote: post #36

TazeTSchnitzel wrote: post #7

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

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.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#73

Post by ransom1538 » Sun, Dec 03, 2017, 12:59 AM UTC

em3rgent0rdr wrote: post #71

ransom1538 wrote: post #68

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 fe…

> "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?

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#74

Post by EGreg » Sun, Dec 03, 2017, 1:00 AM UTC

teawrecks wrote: post #46

throwaway613834 wrote: post #41

Earlier quoted context omitted.

> 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.

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?

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#75

Post by tehlike » Sun, Dec 03, 2017, 1:01 AM UTC

ransom1538 wrote: post #68

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 fe…

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.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#76

Post by tehlike » Sun, Dec 03, 2017, 1:02 AM UTC

ransom1538 wrote: post #73

em3rgent0rdr wrote: post #71

Earlier quoted context omitted.

> "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?

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

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#77

Post by mirimir » Sun, Dec 03, 2017, 1:02 AM UTC

ben_w wrote: post #70

mirimir wrote: post #61

Earlier quoted context omitted.

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.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#78

Post by rubyfan » Sun, Dec 03, 2017, 1:02 AM UTC

ransom1538 wrote: post #73

em3rgent0rdr wrote: post #71

Earlier quoted context omitted.

> "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.

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#79

Post by StavrosK » Sun, Dec 03, 2017, 1:03 AM UTC

almostApatriot1 wrote: post #28

nlperguiy wrote: post #8

Earlier quoted context omitted.

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?

Re: US Senate Bill S.1241 to Criminalize Concealed Ownership of Bitcoin

#80

Post by stale2002 » Sun, Dec 03, 2017, 1:03 AM UTC

Retric wrote: post #59

teawrecks wrote: post #46

Earlier quoted context omitted.

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 th…

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.