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Coinbase: We Will Send Data On 13,000 Users To IRS (arstechnica.com)
Coinbase has formally notified its customers that it will be complying with a court order and handing over the user data for about 13,000 of its customers to the Internal Revenue Service. Ars Technica reports: The case began back in November 2016 when the IRS went to a federal judge in San Francisco to enforce an initial order that would have required the company to hand over the data of all users who transacted on the site between 2013 and 2015 as part of a tax evasion investigation. Coinbase resisted the IRS' request in court. But by November 2017, after a hearing, U.S. Magistrate Judge Jacqueline Scott Corley narrowed the request to only cover 13,000 particular individuals. The San Francisco-based startup is now required to provide "taxpayer ID, name, birth date, address, and historical transaction records for certain higher-transacting customers during the 2013-2015 period." Coinbase reminded its users that it is "unable to provide legal or tax advice." The company also noted, "If you have concerns about this, we encourage you to seek legal advice from an attorney promptly. Coinbase expects to produce the information covered by the court's order within 21 days."
Uh-oh. I think that some dumb people are going to be in a lot of trouble.
I don't respond to AC's.
What did you expect? Just declare the income (it's probably long-term cap gains anyway), pay your taxes, and move on. Don't mess with the IRS; government moves pretty slowly on most things, but it's going to get paid right now.
You don't have to pay taxes on it until you convert it back out of crypto-currency. I think a lot of people will hold onto it until they can cash out at a lower tax rate (either in retirement or by moving to a lower tax locale).
Large transactions have to be reported by financial institutions anyway.
Large transactions can be split up into small transactions.
The cash (fiat) would have to flow through either in or out of Coinbase through some financial instutution.
But not necessarily a financial institution in America. So I could buy bitcoin by transferring in some USDs from an American bank, wait for it to appreciate ten fold (normally this takes a few months) and they withdraw it in Syrian currency to a bank in Damascus.
http://www.coinoshi.com/52-ico...
... are a security vulnerability." - Nick Szabo.
Usable decentralized exchanges are almost here.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Shouldn't they need to have probably cause to pull the data from all 13k users?
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I'm NOT a Luddite, but... Which of course means I'm about to say something that will require a lot of clarification to avoid that accusation, eh?
I'm dubious that there is a legitimate need for cryptocurrency. I am NOT rejecting the broader idea of electronic currency. Apart from the convenience, which has some legitimate (though usually overrated) value, the special (narrow) thing about cryptocurrencies is the extra privacy that some people want. If using cryptocurrency makes you MORE vulnerable to intrusion into your privacy, then mission NOT accomplished. Even a YUGE FAIL, as #FatNixon would say. Of course you think you have a legitimate need for truly anonymous payments, but that's what all the criminals say, even if we stipulate that you, personally, aren't one.
Now for the big rub: Competition, as in there ain't any. There are an infinite number of possible cryptocurrencies that can be created, and no real value to any of them. There's slight prestige (which is supposed to have some value) attached to being the first one with some feature, but no way to prevent the creation of an infinite number of other cryptocurrencies that have that feature and any others you like.
That's the problem with infinity. Whatever value something might have, if you get to divide that value by infinity, you get nothing of real value. No one gets to carry an infinite wallet for the infinite sums you need to play that game.
The speculative value of cryptocurrencies is something completely different. The crucial problem here is actually best described as a Venn diagram. Some of those speculators were legitimate gamblers who just hoped to make a lot of easy money out of nothing, but there is an intersection with some actual criminals (especially tax evaders), and quite probably even including the thieves who ran off with the fake money that started this entire fiasco. Kind of hilarious if this extra bit of greed leads to their arrests, eh?
Now what about the LEGITIMATE use of personal information to build an EPR (Earned Public Reputation) that would help us deal with each other on fairer terms? Don't hold your breath, especially waiting for Slashdot to improve.
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
Feel free to move to the artic and use no tax payer fundes resources.
They don't have all they need. They are not tracking money here, they are looking for under-reported income. Just because you are moving money in and out of an exchange doesn't mean you have income to report. The need the data from Coinbase to determine if there were gains on which tax should have been paid.
Large transactions have to be reported by financial institutions anyway.
Large transactions can be split up into small transactions.
Let me introduce you to the concept of "structuring", which financial institutions in most western countries are required to raise a "Suspicious Activity Report" for (or the local equivalent), and can land you with criminal charges in the US under Title 31 Section 5324.
You haven't discovered the loophole.
I didn't use coinbase in that period of time but I now would just about fit into their parameter of minimum money transacted because of my large mining operation. Instead of just adding a separate line item on my taxes for a 1099-MISC or INT or whatever, I wrap it into my LLC's income because Nicehash mining is technically selling as service, not capital gains from creating spontaneous currency. But they would almost definitely audit me if I was in this list, which would be a needless hassle and it'd be based on NOTHING other than the fact that bitcoins are scary and we're all tax evaders, right? That's a rumor. What the IRS really needs is evidence and they have none. They better not waste my time with this BS in later years.
There are ways around that. Money laundering, as we are learning from recent high-profile indictments, can be done in a number of ways that circumvents this and avoid taxes. The bitcoin could be used as collateral for a loan, which is then used to purchase some expensive property or artwork or even commodities, for which there doesn't necessarily have to be a record of those items actually changing hands. The property is then "sold" for much less and the transaction is recorded as a loss, thereby washing money that was used to fund the loan AND avoiding taxes on the Bitcoin.
However well-funded the investigative agencies into financial crimes and tax evasion may be, they are never as well-funded as the crooks who are endeavoring to commit those crimes. Just ask the President.
You are welcome on my lawn.
I can't decide if you were misspelling "attic" or "arctic". Either one works for me.
You are welcome on my lawn.
the Coinbase guy seems to be making a valid argument and getting bitch slapped by the judge because he (she?) isn't a very good lawyer.
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The guy in the recent high-profile indictments I'm referring to got caught because he got desperate and got sloppy. He owed a lot of money to some dangerous people and tried to get out from under. Unfortunately for him, under is right where they wanted him to be.
You are welcome on my lawn.
Banks already have to do this to fight "money laundering" and "financing terrorism" (in actual reality, this is purely about tax evasion...) and companies like Coinbase are in some sense banks. They have no chance to deny such a request and, unless the cryptocurrency in question has strong anonymity (like Monero) and you are always strongly anonymized when accessing it or use your own wallet exclusively, there is no way the feds will not identify you eventually.
I am beginning to think that all this hype could have been about (really stupid, but rich) people trying to evade taxes and that the speculation angle actually is kind of a side-show.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
I'm NOT a Luddite, but... Which of course means I'm about to say something that will require a lot of clarification to avoid that accusation, eh?
I'm dubious that there is a legitimate need for cryptocurrency. I am NOT rejecting the broader idea of electronic currency. Apart from the convenience, which has some legitimate (though usually overrated) value, the special (narrow) thing about cryptocurrencies is the extra privacy that some people want. If using cryptocurrency makes you MORE vulnerable to intrusion into your privacy, then mission NOT accomplished. Even a YUGE FAIL, as #FatNixon would say. Of course you think you have a legitimate need for truly anonymous payments, but that's what all the criminals say, even if we stipulate that you, personally, aren't one.
Now for the big rub: Competition, as in there ain't any. There are an infinite number of possible cryptocurrencies that can be created, and no real value to any of them. There's slight prestige (which is supposed to have some value) attached to being the first one with some feature, but no way to prevent the creation of an infinite number of other cryptocurrencies that have that feature and any others you like.
That's the problem with infinity. Whatever value something might have, if you get to divide that value by infinity, you get nothing of real value. No one gets to carry an infinite wallet for the infinite sums you need to play that game.
The speculative value of cryptocurrencies is something completely different. The crucial problem here is actually best described as a Venn diagram. Some of those speculators were legitimate gamblers who just hoped to make a lot of easy money out of nothing, but there is an intersection with some actual criminals (especially tax evaders), and quite probably even including the thieves who ran off with the fake money that started this entire fiasco. Kind of hilarious if this extra bit of greed leads to their arrests, eh?
Now what about the LEGITIMATE use of personal information to build an EPR (Earned Public Reputation) that would help us deal with each other on fairer terms? Don't hold your breath, especially waiting for Slashdot to improve.
--UCiS--
1) Why would Coinbase need to collect things like dates of birth or physical addresses in the first place?
2) What motivation would anyone have to provide the correct details even if they did ask?
3) Why would anyone doing something dodgy use a coin exchange in their own country?
Well, there is 'getting around it' mechanically and 'getting around it' legally. The people doing the money laundering had found loopholes that kept the activity out of the automatic view. The overall results were illegal, but they take advantage of individual steps which are legalish.
I have multiple bank accounts. Transferring $1000 into any of them is a complete non-event to the bank, to me and to the AML authorities.
Transferring $1000 into 20 accounts in the space of a week would be trivial, could be spread across multiple tax jurisdictions and could be subsequently used to buy goods or services without needing to repatriate to my home country.
the law requires this to be detected and reported exactly the same, and the penalty for not reporting this is
..utterly fucking irrelevant if I choose to break the law and can't be detected.
Please just shut up if you don't know what you are taking about.
I think the IRS have demonstrated that you just told yourself to shut up.
As a currency exchange, wouldn't they already have to report transactions to the IRS?
So, are you and shanen the same person, or are you both robots shilling the same propoganda, or are you just trying to boost your karma rating by copypasting someone elses reply and tacking it onto a top level comment?
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
Or likely will be in Canada. I've always known that the exchange where I put my CAD in and take it out was reporting to Revenue Canada. I'm pretty sure most people with a large amount of crypto currency now it and are expecting to eventually be taxed. Now I also know enough people with enough money to make it worth their while to move somewhere with a lower tax rate when they do take the money out. Also most people with a large amount of crypto currency are holding it in wallets and multi exchanges.
I can think of a reason: There is no international money transfer method that is simultaneously affordable, fast and secure:
Paypal Is affordable and fast, but is not secure. They can freeze your founds for whatever reason they want to.
Swift transactions and wire transfer services like western union are expensive and bothersome.
CC are expensive and insecure, and not accessible to everybody qualifies for them
Maybe there are other alternatives I don't know of, but cryptocurrencies as a means of exchange, if successful, should introduce competition and lower the CC tax.
We've been slashing the IRS staffing so dramatically in recent years that it is rather unlikely anything would be done with that information.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
The "Art" in question is usually worthless.
AML doesn't care about $20k either.
But if you think it's a simple as keeping transactions under 10k you're incorrect.
Also, at least in the US, it's illegal to intentionally break transactions into smaller amounts to avoid the $10k reporting cap. If you think a whole bunch of $9999 transactions won't raise a flag then please go ahead and try it.
AML software is a good size business...and considering your transactions are logged (both blockchain and conventional) don't think that at some time a few years down the road someone won't catch up on illegal activity.
You can get rich if you own a politician, but you have to be rich to buy one in the first place.
Of course there are ways around everything.
And...then there are ways around the ways around. Your transactions are still logged and easily subject to review after the fact. If you figure out a trick and then that trick is figured out a year later, don't think they won't come back.
Now, anyone arguing AML rules on /. doesn't likely have enough money to launder for anyone to care...so it's just mental masturbation anyhow.
Unless you did something stupid like wasted $1000 on bitcoin when it was a buck... :)
You can get rich if you own a politician, but you have to be rich to buy one in the first place.
If you want to avoid the IRS it is profoundly dumb to do business with a US company.
Same as if you want to avoid the NSA, or the FBI, or the MAFIAA, or whatever.
For me, laundering money means throwing my pants in the wash with a $5 bill in the pocket.
You are welcome on my lawn.
This is the exact reason why I keep all my cryptocurrency under my mattress.