Better regulation needed to stop crypto tax evaders from running wild
Antivirus software pioneer John McAfee, the founder of McAfee Associates — the company that released the first commercial antivirus software, McAfee VirusScan, in the late 1980s, contributing to the birth of multibillion-dollar industry — was indicted on five counts of tax evasion and five counts of willful failure to file a tax return, which could result in a maximum sentence of 30 years if convicted. He could also expect to pay U.S. taxes and penalties, according to the United States Department of Justice. The DOJ’s charges were announced shortly after the U.S. Securities Exchange Commission revealed it had brought civil charges against McAfee related to cryptocurrency offerings.
McAfee has been a controversial figure in several countries, not only in the U.S. He went into “exile” after claiming he had been charged with using cryptocurrencies against the U.S. government, foolishly tweeting last year from a boat, boasting about the fact that he hadn’t filed any U.S. tax returns.
According to the DOJ’s indictment — which was unsealed following his arrest in Spain, where he is pending extradition to the U.S. — McAfee failed to file tax returns for four years, from 2014 to 2018, despite earning millions from consulting work, speaking engagements, cryptocurrencies and selling the rights to his life story to be used in a documentary. McAfee is accused of evading tax liability by having this income paid into bank accounts and cryptocurrency exchange accounts that were in the names of nominees. He allegedly also concealed assets in the names of others, such as a yacht and real estate property.
The sale or exchange of cryptocurrencies, the use of cryptocurrencies to pay for goods or services, and holding cryptocurrencies as an investment generally have tax consequences that could result in tax liability. Taxpayers who do not properly report the income tax consequences of cryptocurrency transactions may be liable for taxes, penalties and interest. The Internal Revenue Service oversees the enforcement of the global taxable implications of cryptocurrency transactions via a virtual-currency compliance campaign led by its Withholding and International Individual Compliance practice area. The campaign aims to address global tax noncompliance related to the use of cryptocurrency through “multiple treatment streams, including outreach and examinations.”
Nevertheless, despite the DOJ’s and IRS’s recent success in unveiling McAfee’s concealed cryptocurrency-related tax evasion, two reports — one released in late September by the Treasury Inspector General for Tax Administration, or TIGTA, and the other released earlier this year by the Government Accountability Office, or GAO — sound the alarm on how the IRS’ efforts to ensure compliance with tax obligations for cryptocurrencies have been inadequate.
These reviews were initiated to evaluate the IRS’s efforts to ensure the accurate reporting of cryptocurrency transactions, in light of the fact that the use of cryptocurrency as a payment method is growing in popularity and, amid the COVID-19 pandemic, is emerging as an alternative asset to the U.S. dollar or other fiat currencies.
Related: Not like before: Digital currencies debut amid COVID-19
Both the TIGTA and GAO audit reports find that the IRS has limited data on tax compliance for cryptocurrencies because of limited information reporting by third parties, such as financial institutions and crypto exchanges, due in part to unclear requirements and to thresholds that limit the number of cryptocurrency users who are subject to third-party reporting.
Related: The US plan to monitor illegal crypto activities more sufficiently
These audits focused on cryptocurrency exchanges because they play an important role in the transferability and stability of cryptocurrency by facilitating the buying and selling of cryptocurrencies for customers in exchange for fiat currency or other cryptocurrencies. While these exchanges are in a position to provide important information for use by the IRS in tax administration, information reporting on cryptocurrency transactions from the exchanges is lacking.
Related: Virtual currency exchanges and US customers beware, IRS is coming
The IRS’s most recent tax gap study, issued in September 2019, found that noncompliance varies with the amount of information reported by third parties, such as employers, banks and partnerships. Items subject to substantial information reporting and withholding (e.g., wages) have a net misreporting rate of 1% for individual income tax. However, the net misreporting rate for items subject to some information reporting (e.g., partnership income) is 17%, and the net misreporting rate for items subject to little or no information reporting (e.g., non-farm proprietor income) is 55%.
Related: Illicit crypto transactions are getting more attention from the government
Two years ago, during the G-20 meeting in Buenos Aires, the world’s economic leaders agreed that technology such as cryptocurrency and blockchain, given its borderless nature and increasing ability to automate tasks, is significantly changing the global economy.
The G-20 settled on characterizing cryptocurrencies as assets, thereby setting the stage for cryptocurrencies to be adopted as a new digital asset class. The group confirmed its commitment to following the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting framework, studying international nexus and profit-allocation concepts for taxing the digital economy, and developing a new approach by 2020 — when the COVID-19 pandemic forced governments worldwide to focus on bringing blockchain tech to their financial services.
Related: Latest pronouncements from OECD, EU & G20 allow fintech to flourish
Nevertheless, OECD’s global digital tax approach concerning international nexus and profit-allocation concepts has drawn criticism from the National Taxpayers Union, which is laid out in a new issue brief in response to a leaked draft of OECD’s most recent proposal. The NTU’s new report states that the plan put forward by OECD is aimed at U.S. consumers and businesses that operate internationally, attempting to levy a minimum tax on a poorly defined tax base. The NTU and its sister organization the NTU Foundation have previously expressed concerns about the approach that international bodies such as OECD are taking regarding taxing the digital economy. As NTU’s president, Pete Sepp, explained:
“One practical step should be to restore transparency and stakeholder engagement in the further development of Pillars One and Two — two principles which OECD had heretofore largely embraced but has recently made a low priority. Equally troubling is that there are currently no concrete plans at OECD to comprehensively assess the financial and compliance burdens of the proposals until after they are approved. […] Backward-facing tax policymaking is rarely a formula for success.”
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Selva Ozelli, Esq., CPA, is an international tax attorney and certified public accountant who frequently writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.
Renewed U.S. Stimulus Discussions Could Ignite an Explosive Bitcoin Rally
Bitcoin’s price has been fairly stagnant as of late, remaining stuck within its macro trading range between $10,200 and $11,200. It is now pushing towards the upper boundary of this range and may soon be able to rally past it.
If this level is broken in a sustainable move, it could indicate that serious upside is imminent for BTC, as it has acted as a crucial resistance level for nearly a month now.
While looking at Bitcoin in isolation, the cryptocurrency is expressing strength on both a technical and fundamental front.
This latest upswing came about due to Square’s announcement regarding their purchase of $50 million worth of BTC to be held as a reserve asset.
This news renewed investor sentiment in BTC and indicates that this could become a growing trend amongst other public companies that are looking to guard their capital against imminent inflation.
Now, external forces may also boost Bitcoin’s bull case, as the government is seemingly making progress on another stimulus package for U.S. citizens, which could ignite a massive stock market rally that creates a tailwind for BTC.
One analyst is betting on this being the case.
At the time of writing, Bitcoin is trading up just over 1% at its current price of $11,050, which is around where it has been trading throughout the entire day.
The cryptocurrency’s strength has been significant and has primarily come about as a result of speculators betting on Square’s decision to buy Bitcoin kickstarting a trend amongst other multi-billion-dollar companies.
The crypto still has some serious resistance it faces around $11,200. A failure to break above this level would lead to serious downside.
The global markets are trending higher today on renewed hope of a second round of stimulus, which has been held up by political quarreling.
A Wall Street Journal reporter spoke about the potential deal that is coming down the pipeline, stating:
“NEWS: Mnuchin is preparing to present Pelosi with a $1.8 TRILLION counteroffer when the two speak today… Kudlow said this morning POTUS has approved an offer.”
One analyst believes that this will help guide Bitcoin higher in the days ahead, should the traditional markets continue rising.
“Legacy looks good, BTC has been trending bullish since Thursday. I am actively scalping, favouring longs until market conditions change. Think we go higher, suspect a rocky road.”
Image Courtesy of SalsaTekila. Chart via TradingView.
If the potential stimulus package that is lifting the traditional markets higher falls through, it could place some serious pressure on Bitcoin.
Price analysis 10/9: BTC, ETH, XRP, BCH, BNB, DOT, LINK, CRO, LTC, BSV
Payments giant, Square, has become the second listed company after MicroStrategy to buy Bitcoin (BTC). Although Square’s purchase of 4,709 Bitcoin is much smaller than MicroStrategy’s haul of 38,250 Bitcoin, many investors feel that this is a welcome step in the right direction.
The acquisition of cryptocurrency by large listed companies such as Square could possibly inspire other companies to join the crypto bandwagon and it also suggests that Bitcoin’s image as an investment vehicle and store of value have improved.
The growing interest in cryptocurrency is not going unnoticed as several central banks are attempting to make themselves relevant in this digital age with the launch of central bank digital currencies.
Daily cryptocurrency market performance. Source: Coin360
China has been at the forefront in the development of a CBDC. Local news outlets in China also report that the city of Shenzhen is planning to do a public giveaway of 10 million digital yuan to about 50,000 people who will be chosen through a lottery.
China’s progress on the digital yuan has prodded other Asian nations to hasten the development of their own CBDCs. As proof of this, a recent report by the Bank of Japan outlined that the country plans to begin testing its own CBDC sometime in 2021.
The crypto market has reacted positively to all the newsflow, but is this recovery sustainable?
Let’s study the charts of the top 10 cryptocurrencies to find out.
Bitcoin (BTC) broke and closed above the symmetrical triangle and the 50-day simple moving average ($10,855) on Oct. 8. This shows that the uncertainty between the bulls and the bears has resolved to the upside.
BTC/USD daily chart. Source: TradingView
If buyers can sustain the price above the triangle for one more day, the breakout will be considered as valid and the BTC/USD pair could start its journey towards the pattern target of $12,434.
The bears are unlikely to give up easily and most traders expect stiff resistance at $11,178 and $12,000.
However, the 20-day exponential moving average ($10,744) has started to turn up and the relative strength index has also risen into the positive territory. This suggests that the advantage is currently with the bulls.
This bullish view will be invalidated if the bears pull the price back below the 20-day EMA. Such a move will suggest that the current breakout was a bull trap.
Ether (ETH) bounced off $333.039 on Oct. 7 and the bulls are currently attempting to sustain the price above the downtrend line. If they succeed, a move to the 50-day SMA ($371) and then to $395 is possible.
ETH/USD daily chart. Source: TradingView
The bears may mount a stiff resistance at $395. If the price turns down from this level, the ETH/USD pair could drop to the 20-day EMA. The 20-day EMA ($354) is flat and the RSI is just above 50, which suggests range-bound action for a few days.
However, if the bulls push the price above $395, the momentum is likely to pick up and the pair could rally to the 61.8% Fibonacci retracement level at $419.473 and above it to the 78.6% retracement level at $449.669.
Contrary to this assumption, if the pair turns down from the current levels, it may again drop to the immediate support at $333. A break below this level could retest the $308.392 support.
The rebound off the 20-day EMA ($0.244) for the past three days suggests that the sentiment has turned from sell on rallies to buy on dips. If the bulls can push and close (UTC time) the price above the horizontal resistance at $0.26, XRP will complete an inverse head and shoulders pattern.
XRP/USD daily chart. Source: TradingView
This reversal pattern has a target objective of $0.300288. The rising 20-day EMA and the RSI is in the positive territory suggests that the path of least resistance is to the upside.
However, if the pair turns down from the current level or from $0.26, a few days of range-bound action is possible. The trend will turn negative if the bears sink the XRP/USD pair below the $0.219712 support.
Bitcoin Cash (BCH) broke above the downtrend line and the 20-day EMA ($226) on Oct. 8, and the bulls are now trying to propel the price above the overhead resistance at $242.
BCH/USD daily chart. Source: TradingView
The 20-day EMA has started to turn up and the RSI has risen into the positive territory. This suggests that the bulls are attempting a comeback. If the BCH/USD pair breaks out and closes (UTC time) above $242, it could rally to $280.
Contrary to this assumption, if the pair reverses direction from the current levels and breaks below the 20-day EMA, a few more days of range-bound action is possible. The trend will turn negative on a break below $200.
Binance Coin (BNB) is in an uptrend, and the long tails on Oct. 7 and 8 show that the bulls are purchasing on dips to the 20-day EMA ($27.27). The altcoin has formed a symmetrical triangle, which usually acts as a continuation pattern.
BNB/USD daily chart. Source: TradingView
The rising moving averages and the RSI is in positive territory suggest that the path of least resistance is to the upside. If the bulls can push the price above the triangle, the BNB/USD pair could rally to $33.3888.
However, if the price turns down from the resistance line and breaks below the triangle, a drop to $22 is possible.
The bulls aggressively defended the $3.5321 support for the past three days and did not allow Polkadot (DOT) to slip below it. If the bulls can now push the price above the 20-day EMA ($4.27) the altcoin could move up to $4.6112.
DOT/USD daily chart. Source: TradingView
If the momentum picks up and the bulls drive the price above $4.6112, the DOT/USD pair could move up to $5.5899.
However, the bears are unlikely to give up easily. They will try to defend the $4.6112 resistance, and if the price turns down from this level the pair may remain range-bound for a few more days.
The trend will turn in favor of the bears on a breakdown and close (UTC time) below the critical support at $3.5321.
Chainlink (LINK) broke below the $8.7975 support on all the past three days, but the bears could not sustain the lower levels. This shows that the bulls were accumulating on dips.
LINK/USD daily chart. Source: TradingView
The LINK/USD pair has risen above the 20-day EMA ($9.89) and the bulls will now try to push the price above the downtrend line and the horizontal resistance at $11.1990.
If they succeed, it will suggest a likely change in trend and the first target on the upside is $13.28 and then $17.7777.
However, if the pair turns down from the downtrend line, the bears will make another attempt to sink the price to the critical support at $6.90.
Crypto.com Coin (CRO) has formed a descending triangle, but the bears have not been able to sink the price below the $0.144743 support. Unless the price breaks and closes (UTC time) below this support, the pattern will not complete.
CRO/USD daily chart. Source: TradingView
If the bulls can propel the price above the downtrend line, the bearish setup will be invalidated and that could result in a move to the 50-day SMA ($0.159) and above it to $0.171541.
The flattening 20-day EMA ($0.151) and the RSI just below the midpoint suggest that the bears are losing their grip.
Contrary to this assumption, if the CRO/USD pair turns down and breaks below $0.144743, a fall to $0.11 will be on the cards.
Litecoin (LTC) closed above the 20-day EMA ($46.74) on Oct.8, which is the first sign of strength. However, the sellers are unlikely to give up easily, as they will try to stall the recovery at the downtrend line and then again at the $51 resistance.
LTC/USD daily chart. Source: TradingView
If the price turns down from either overhead resistance level, the LTC/USD pair could remain range-bound for a few more days.
However, if the bulls can push the price above the downtrend line, a rally to $51 is possible. A break above this resistance will be a huge positive that may result in a new uptrend that could lead the price to $64.
Bitcoin SV (BSV) has once again risen above the 20-day EMA ($164), but it may face resistance at the 50-day SMA ($171) and then at $179.473. If the price turns down from either resistance, a few more days of range-bound action is possible.
BSV/USD daily chart. Source: TradingView
The 20-day EMA has flattened out and the RSI has risen into the positive territory, which suggests that the selling pressure has reduced.
If the bulls capitalize on this advantage and propel the BSV/USD pair above $180 the inverse head and shoulders pattern will complete and start a new uptrend to $227.
This bullish assumption will be invalidated if the pair turns down from the 50-day SMA and plummets below $155.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
Author: by admin
Bank Of Japan Plans To Start Testing Its Token In 2021.
The Japanese central bank has decided to speed up the work of creating its own token (CBDC).
This decision was taken due to the fact that China has already made great strides in the development of the digital yuan. The People’s Bank of China wants to make its cryptocurrency the main payment instrument in the Asia-Pacific region.
Beijing’s policy is causing great concern in Tokyo. Therefore, on October 9, the Bank of Japan released a report in which it announced the start of testing of its own digital currency by the end of 2021.
The regulator not only wants to create an infrastructure for processing transactions with the CBDC, but also to check to what extent this token can be used when paying for goods and services. In particular, the Central Bank wants to test the application options of the CBDC in the event of natural disasters, electricity and internet access issues in any region of Japan.
Note that this week the Japanese regulator, along with a number of other central banks and the Bank for International Settlements (BIS), released a joint report that outlines the basics and characteristics of regulated tokens.
Author: Souvik Sarkarhttps://news.triunits.comCrypto Expert And Blogger .
Bitcoin Rallies Above $11,300 Fueled By Latest News From Square
The price of Bitcoin rallies above $11,300 in the crypto news today, mostly influenced by the latest news from Square which showed Jack Dorsey (the owner of Square and Twitter) investing $50 million in the flagship cryptocurrency.
The news was well accepted in the community, and even though BTC was outperformed by several coins in the top 10 by market cap, traders knew that as Bitcoin rallies above new levels, it is a solid buy and a good thing that it has been pushed up above the critical $11,000 mark.
Today, @Square announced that it has purchased $50M in bitcoin. Square believes cryptocurrency is an instrument of economic empowerment and provides a way to participate in a global monetary system, which aligns with the company’s purpose. For more, visit https://t.co/HPhSMfVgac.
— Square IR (@SquareIR) October 8, 2020
Going up by more than 4% in the past 24 hours, Bitcoin is on fire. In the past 7 days, it has gone up by less than 10% which brought it to the current price of $11,380 this morning. The price is near its highest point recorded in the last 30 days of $11,142, but is still far from the highest price this year of $12,382.
According to Coinmetrics, the latest Bitcoin news show a BTC performance that is “remarkable” despite a number of factors that could have worked against it. As the analysts said, they “like what they are seeing on-chain from a fundamental growth perspective.”
1/9 Bitcoin has performed remarkably these past few weeks despite:
-Most of DeFi falling 50-80%
-CFTC charging BitMEX
-POTUS contracting Covid
-Delayed stimulus talks
-FCA announcing a derivative ban for retail
Why? Let’s see what we can find on-chain
— CoinMetrics.io (@coinmetrics) October 9, 2020
The firm also found that the number of Bitcoin whales continues to increase, which indicates a lot of positive expectations for the future of Bitcoin. The HODL activity increased, too, and the BTC transfer count is growing steadily. Scarcity may be higher than expected as only 6.8 million of BTC (or 36.7% of the total supply) have been active in the last year.
“Bitcoin’s Realized Cap has been steadily increasing just as it did before the 2017 bull market took off. If it continues as it did in 2017, 2021 should be an interesting year,” Coin Metrics said.
Meanwhile, analysts like Willy Woo commented that as Bitcoin rallies above $11,300, “we are seeing new HODLers on the market” and that “many other unannounced investors have been scooping coins off the market.”
Square’s buy of 4,709 BTC and Microstrategy’s 38,250 BTC is the tip of the iceberg. The last 8 months has seen a reduction of 250,000 BTC in the speculative stockpile sitting on exchanges signalling many other *unannounced* investors have been scooping coins off the market. https://t.co/OwsQvvG2eS
— Willy Woo (@woonomic) October 9, 2020
The global crypto market cap is at $361 billion, which represents a 4.67% increase over the last day, mostly fueled by coins such as Bitcon, Ethereum, Ripple, Bitcoin Cash and Binance Coin – which are all in the green today.
Author: By TeamMMG
Why Cryptocurrency Will WIN!!
US National Debt Balloons to $27 Trillion | DOJ Releases Crypto “Threat” Report | BitMEX CTO released on $5 million bond | Square Buys Bitcoin Worth $50 Million | Polkastarter (POLS) Partners With DIA for DeFi trading, pricing, and anti-slippage features | 1inch Partners Hacken HAI Over Security | A bridge connecting Ethereum to Solana – Wormhole
$27,052,995,507,253.19 (+) #NationalDebt
— National Debt Tweets (@NationalDebt) October 8, 2020
Today, the DOJ wrote an 83-page report about how cryptocurrency “plays a role in many of the most significant criminal threats our nation faces”.
They forgot to mention that the biggest financial criminal organizations are banks. pic.twitter.com/4B0lOLoL1L
— Altcoin Buzz (@Altcoinbuzzio) October 8, 2020
BitMEX CTO released on $5 million bond
1) Announcing: Wormhole – a secure, trustless bridge connecting Ethereum to Solana. 🚀https://t.co/FwGRRluAU5
— Solana (@solana) October 8, 2020
Author: by admin