This whole Dwolla to Mt.Gox shit has me pissed off. I've used Bitinstant before, but I've seen so many horror stories and transferring 4 figures worth of money sounds like bad news in the making... ugh.
Bitcoins/Litecoins/Virtual Currencies
- Thread starter Tripamang
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Arative
Ahn'Qiraj Raider
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Any problems with that? Might have to start doing that if they don't get this lawsuit stuff sorted out
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No issues at this point. Just a piece of advice: Beware of hidden wire fees. Their bank (in Japan) charges 2,000 JPY (about $20) for the outgoing wire, and my bank charges an additional $20 for receipt of the wire.
Swagdaddy
There is a war going on over control of your mind
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U.S. authorities seize accounts of major Bitcoin operator
ST. LOUIS, May 17 (Thomson Reuters Accelus) - U.S. authorities have seized two accounts linked to a major operator in the booming Bitcoin digital currency market, Tokyo-based exchange Mt. Gox. The move may prevent the firm from facilitating the purchase and sale of Bitcoins in U.S. dollars at a time when use of the currency and its value has mushroomed.
Bitcoin, which unlike conventional money is bought and sold on a peer-to-peer network independent of any central authority, has grown popular among users who lack faith in the established banking system.
The price of the volatile currency ballooned in March as a result of the Cyprus bank crisis. Authorities worry that a lack of regulation has left the currency vulnerable to money launderers and other criminals.
A seizure warrant obtained Tuesday by the Department of Homeland Security froze an account that an Iowa-based online payment processor, Dwolla Inc, held at Veridian Credit Union in the name of Mutum Sigillum LLC.
An affidavit filed by an agent with the department's investigations unit states that Mutum Sigillum, a Mt. Gox subsidiary incorporated in Delaware, was operating as an unlicensed money transmitter, in violation of federal law.
Treasury's anti-money laundering unit, the Financial Crimes Enforcement Network (FinCEN), in March issued guidance that dubbed digital currency exchanges money transmitters, a finding that obliged such businesses to register with FinCEN and obtain any mandated state licenses.
A search of FinCEN's online registration database Friday morning suggested that neither Mt. Gox nor Mutum Sigillum had registered. The affidavit cited Mutum Sigillum's failure to register with FinCEN as sufficient grounds to seize its accounts.
Both Mutum Sigillum and Mt. Gox, which says it handles 80 percent of Bitcoin trading, are owned by Mark Karpeles, the affidavit states. It adds that Karpeles opened an account in Mutum Sigillum's name at Wells Fargo in May 2011, and that when doing so completed a form in which he said it was not a money transmitter.
Karpeles did not immediately respond to a request for comment. Nor did Dwolla.
The Wells Fargo account was seized earlier this month as part of the same investigation that prompted the seizure of Mutum Sigillum's Dwolla account at Veridian Credit Union, the affidavit states.
It also notes that those wishing to use U.S. dollars to buy Bitcoins deposited money with Dwolla and directed that it be forwarded to Mt. Gox. When people wanted to cash out, Mt. Gox wired funds from an account at Sumitomo Mitsui Bank in Japan to the Wells Fargo account and U.S. dollars were sent to Dwolla.
An Homeland Security department informant based in Maryland engaged in such transactions, the affidavit states, presenting the informant's Bitcoin exchanges as evidence of Mutum Sigillum's purported status as a money transfer firm.
The seizure of the Mt. Gox-linked accounts may threaten the exchange's ability to do business in U.S. dollars. The impact on the overall Bitcoin market is unclear.
Some Mt. Gox customers have already taken to message boards to express concern about their ability to buy Bitcoins with U.S. dollars or liquidate existing investments. One user posting on a Bitcoin question and answer site suggested this problem was a grave one for the currency and Mt. Gox.
"Most of the trading volume is in dollars at Gox if I'm not mistaken, so this might be the death blow for them," the user's post stated.
Thomson Reuters' Compliance Complete reported last month that Karpeles said all of Mt. Gox's U.S.-dollar activity was accomplished via a Dwolla account.
When Compliance Complete asked at the time whether Mt. Gox had registered with FinCEN in the wake of the March guidance, Karpeles said that it had not, but that it planned to do so. He added that Mt. Gox and Dwolla were "discussing compliance issues on a regular basis."
A spokeswoman for Homeland Security declined to comment on whether the agency, or any foreign law enforcement agency with which it may be cooperating, plan to seize any other accounts linked to Karpeles, Mt. Gox, or other Bitcoin exchanges.
ST. LOUIS, May 17 (Thomson Reuters Accelus) - U.S. authorities have seized two accounts linked to a major operator in the booming Bitcoin digital currency market, Tokyo-based exchange Mt. Gox. The move may prevent the firm from facilitating the purchase and sale of Bitcoins in U.S. dollars at a time when use of the currency and its value has mushroomed.
Bitcoin, which unlike conventional money is bought and sold on a peer-to-peer network independent of any central authority, has grown popular among users who lack faith in the established banking system.
The price of the volatile currency ballooned in March as a result of the Cyprus bank crisis. Authorities worry that a lack of regulation has left the currency vulnerable to money launderers and other criminals.
A seizure warrant obtained Tuesday by the Department of Homeland Security froze an account that an Iowa-based online payment processor, Dwolla Inc, held at Veridian Credit Union in the name of Mutum Sigillum LLC.
An affidavit filed by an agent with the department's investigations unit states that Mutum Sigillum, a Mt. Gox subsidiary incorporated in Delaware, was operating as an unlicensed money transmitter, in violation of federal law.
Treasury's anti-money laundering unit, the Financial Crimes Enforcement Network (FinCEN), in March issued guidance that dubbed digital currency exchanges money transmitters, a finding that obliged such businesses to register with FinCEN and obtain any mandated state licenses.
A search of FinCEN's online registration database Friday morning suggested that neither Mt. Gox nor Mutum Sigillum had registered. The affidavit cited Mutum Sigillum's failure to register with FinCEN as sufficient grounds to seize its accounts.
Both Mutum Sigillum and Mt. Gox, which says it handles 80 percent of Bitcoin trading, are owned by Mark Karpeles, the affidavit states. It adds that Karpeles opened an account in Mutum Sigillum's name at Wells Fargo in May 2011, and that when doing so completed a form in which he said it was not a money transmitter.
Karpeles did not immediately respond to a request for comment. Nor did Dwolla.
The Wells Fargo account was seized earlier this month as part of the same investigation that prompted the seizure of Mutum Sigillum's Dwolla account at Veridian Credit Union, the affidavit states.
It also notes that those wishing to use U.S. dollars to buy Bitcoins deposited money with Dwolla and directed that it be forwarded to Mt. Gox. When people wanted to cash out, Mt. Gox wired funds from an account at Sumitomo Mitsui Bank in Japan to the Wells Fargo account and U.S. dollars were sent to Dwolla.
An Homeland Security department informant based in Maryland engaged in such transactions, the affidavit states, presenting the informant's Bitcoin exchanges as evidence of Mutum Sigillum's purported status as a money transfer firm.
The seizure of the Mt. Gox-linked accounts may threaten the exchange's ability to do business in U.S. dollars. The impact on the overall Bitcoin market is unclear.
Some Mt. Gox customers have already taken to message boards to express concern about their ability to buy Bitcoins with U.S. dollars or liquidate existing investments. One user posting on a Bitcoin question and answer site suggested this problem was a grave one for the currency and Mt. Gox.
"Most of the trading volume is in dollars at Gox if I'm not mistaken, so this might be the death blow for them," the user's post stated.
Thomson Reuters' Compliance Complete reported last month that Karpeles said all of Mt. Gox's U.S.-dollar activity was accomplished via a Dwolla account.
When Compliance Complete asked at the time whether Mt. Gox had registered with FinCEN in the wake of the March guidance, Karpeles said that it had not, but that it planned to do so. He added that Mt. Gox and Dwolla were "discussing compliance issues on a regular basis."
A spokeswoman for Homeland Security declined to comment on whether the agency, or any foreign law enforcement agency with which it may be cooperating, plan to seize any other accounts linked to Karpeles, Mt. Gox, or other Bitcoin exchanges.
No it's more like "The US government won't let transactions go through its banks that are easy to money launder through."
It's a Japanese company working as a money service business through an intermediary. I'm surprised it took this long.
It's a Japanese company working as a money service business through an intermediary. I'm surprised it took this long.
They can legalize taxing it if it gets to the point where they feel like they're missing out on revenues. I think at this point the governments biggest concern is that the Federal Reserve can't control the supply/value of Bitcoin
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They can't tax a Bitcoin. A Bitcoin is not a US Dollar, and therefore none of their damned business, especially when it's being mined by someone who isn't American and traded through an exchange that runs in Japan. Stopping Mt.Gox from trading through Dwolla is no problem. That wasn't entirely on the up-and-up. If anyone at the Federal Reserve or any other US Government department says something like "we need to control Bitcoin" (which I'm sure has already happened), they're out of their minds, as well as out of their jurisdiction.
Once that Bitcoin turns into USD, however, they can do whatever they want to those USD (and should probably tax incoming proceeds of Bitcoin trading, as that should be subject to the same rules as any other investment).
Once that Bitcoin turns into USD, however, they can do whatever they want to those USD (and should probably tax incoming proceeds of Bitcoin trading, as that should be subject to the same rules as any other investment).
Eomer
Trakanon Raider
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Yeah, the type/source of currency is pretty irrelevant to whether or not a government can tax someone on transactions in it. As a Canadian, just because I invested on the American stock exchange with American dollars, doesn't mean that the CRA can't come after me for income taxes on dividends or capital gains. If you're making money/income while living in a country, said country can tax you on that income, regardless of what currency you earned that income in. And the US is especially douchey in that regard, so long as you remain a US citizen they can tax your income no matter where it is earned, which is fairly unique as far as I understand it (most countries will only tax income earned by it's citizens in that country).Alkorin_sl said:
That said, I haven't really been following any of this latest stuff, so for all I know what the US government is doing is total bullshit.
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Right, so, the question is, where am I earning this income? It's not an investment, because I'm not actually investing money in a Bitcoin exchange. I'm using my computer to mine coins. The exchange I deposit to is in Japan, so is this a foreign investment? Is it foreign income if the pool itself is operated in the US? How do I report this on my tax return?
And that's assuming that I'm converting my Bitcoins to Canadian dollars, which I am doing on a fairly regular basis. I still don't believe that they can actually tax "1 BTC", because the value is so wildly variable. It would be like trying to tax you based on the number of stock options you have, not on their actual return in dollars.
CRA needs to be able to answer these questions or they're not getting a dime from me.
And that's assuming that I'm converting my Bitcoins to Canadian dollars, which I am doing on a fairly regular basis. I still don't believe that they can actually tax "1 BTC", because the value is so wildly variable. It would be like trying to tax you based on the number of stock options you have, not on their actual return in dollars.
CRA needs to be able to answer these questions or they're not getting a dime from me.
Arative
Ahn'Qiraj Raider
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I figured right now I'm earning small enough amounts that the IRS would never come after me. So I'm not reporting anything. I suppose if I was going to report it, I'd report it as capital gains.
I'd imagine it would work just the same as capital gains. You know your basis in however many coins you buy once your buy order goes through. Then whenever you sell the system would probably go by FIFO, so it's not hard to figure out your capital gains or losses.
If you're mining the coins it would just be all gain once you sell, unless you can find a way to expense or deduct the electricity it takes to mine a coin.
I also have no idea how you syrup jockeys do things up there.
If you're mining the coins it would just be all gain once you sell, unless you can find a way to expense or deduct the electricity it takes to mine a coin.
I also have no idea how you syrup jockeys do things up there.
Eomer
Trakanon Raider
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Yeah... no. CRA doesn't have to answer a goddamn thing. That's the way it works with tax authorities. You have to prove to them that you're not making income from it, for example because the cost of mining the coins in the first place (electricity + hardware) is more than they are worth.Alkorin_sl said:
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Er. No. I don't have to prove anything to them, because all they see is a wire transfer from my account to my account. I can keep my money wherever I please. As a matter of fact, unless I'm very much mistaken, I don't even have to tell them about anything in my Mt.Gox account unless it's worth more than $100,000 (which is asked on the tax return), because such piddly little sums aren't worth their while. Once that money is wired to my account in Canada, it becomes theirs to tax, but I'm not sure how to even report that "income". It sounds to me like it would be professional income, not a capital gain. So, yes, they are going to have to answer these questions, or no one will know where to write the numbers, and I'm not going to do their guessing for them.
I'm keeping track of the amounts, though, so that when they do actually figure this shit out and start demanding tax on it, I know exactly what I've earned via mining.
Edit: I should say that I'm not trying to commit tax fraud here. I'm trying to understand why I would do the CRA's work for them. If they don't have a provision for this kind of income on their tax returns, why would I voluntarily raise my hand and say "yo, CRA, I'ma let you finish, but Bitcoins go in field 123"?
I'm keeping track of the amounts, though, so that when they do actually figure this shit out and start demanding tax on it, I know exactly what I've earned via mining.
Edit: I should say that I'm not trying to commit tax fraud here. I'm trying to understand why I would do the CRA's work for them. If they don't have a provision for this kind of income on their tax returns, why would I voluntarily raise my hand and say "yo, CRA, I'ma let you finish, but Bitcoins go in field 123"?
Big Phoenix
Pronouns: zie/zhem/zer
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You do realize that all those people who win cars/boats/whatever on game shows pay taxes on those assets, right? I mean if you where to dig a million dollar gold nugget out of the ground you think you wouldnt pay taxes on it?
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Not until it became dollars or was otherwise valuated, no. If you dig up a gold nugget and store it in a box in your house, how would anyone know about it or its purported value? It has to enter the financial ecosystem somehow before it will have any value at all to anyone other than you.
Those people who win things on game shows have those assets transferred to them by someone else. Those things are already part of the financial ecosystem. Bitcoins that are created through mining have never actually carried a dollar value, and you're not "paying" for them directly, so what exactly are they worth, and how can they be taxed at a fixed value? What value would you use? BTC-USD on the day that you earned the coin (or fraction of a coin) itself, or the price on the day you converted to USD, or the amount you transferred to your US bank account, or... ?
Big Phoenix
Pronouns: zie/zhem/zer
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You also have to remember that when you're dealing with a tax agency it's a matter of, "Heads they win, Tails you lose."
You're really over thinking this. I'm sure it's reportable under other income or capital gains. Or whatever your other income is up there.
You're really over thinking this. I'm sure it's reportable under other income or capital gains. Or whatever your other income is up there.