{"id":14074,"date":"2017-09-15T07:20:27","date_gmt":"2017-09-15T11:20:27","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=14074"},"modified":"2020-12-10T15:35:03","modified_gmt":"2020-12-10T20:35:03","slug":"cryptocurrency-attack-us-government","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/cryptocurrency-attack-us-government\/","title":{"rendered":"Cryptocurrency is Under Attack by the US Government\u2026 again"},"content":{"rendered":"

Cryptocurrency is Under Attack by the US Government\u2026 again<\/strong><\/h2>\n

Unregulated decentralized digital money is revolutionizing financial markets. Governments are scared and banks are looking for ways to control the flow of capital and profit from the blockchain. In this post, we\u2019ll look at how the US government is attempting to limit and control cryptocurrency\u2026 and what you might do to avoid those controls.<\/span><\/p>\n

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How far will governments go to scrutinize one of the last freedoms of movement we enjoy?<\/b><\/h2>\n

It starts with, all banks in the US required by law to fill out suspicious activity reports on their customers. Next, banks all over the world that accept US clients must act as unpaid IRS agents under <\/span>FATCA<\/span><\/a>. These laws of reporting to the US government started expanding, then becoming morbidly obese, and are now expanding to include cryptocurrency.<\/span><\/p>\n

And each agency is looking at crypto differently\u2026 in whatever why gives them the most power to regulate or profits from taxes. \u00a0<\/span><\/p>\n

For example, the IRS has ruled that cryptocurrencies<\/a> are assets. When sold, they are taxed at capital gains rates, or 20% plus your state for the long term, not including Obamacare taxes that may be eliminated by Trump. <\/span><\/p>\n

But the SEC has ruled that ICOs must follow the same regulations as IPOs. That is, may only be offered to accredited investors and are subject to all securities regulations. So, raising Bitcoin is treated the same as raising US dollars by the SEC. <\/span><\/p>\n

Also, with recent changes to <\/span>Section 5312 of US Code Title 31<\/span><\/a>, the definitions expanded to include any business which issues or transacts with credit cards (that’s like 99% of businesses in the world) and prepaid things (such cards, phones, coupons, etc.), will have to file reports with the government.<\/span><\/p>\n

Watch out! Texaco, <\/span>Mickey-D’s, and KFC, are compelled to report your financial transactions. It seems like senators binge-watched Breaking Bad, and got inspired on money laundering issues.<\/span><\/p>\n

Through newly proposed legislation, <\/span>the Senate and the SEC are trying to target cryptocurrency under the anti-money laundering regulatory standards, by identifying Cryptocurrency as real money. <\/span><\/p>\n

The proposed legislation attempts to regulate Bitcoin by calling it cash and forcing sites to comply with money laundering regulations. But crypto is built upon privacy. To apply KYC and AML rules to this form of payment is incompatible with its intended use.<\/span><\/p>\n

Enjoy this podcast from The Expat Money Show<\/a> – Eryka Gemma<\/a> on Bitcoin for International Privacy.<\/strong><\/p>\n

The proposal <\/span>includes a list of monetary instruments that must be reported when entering or leaving the US<\/b>. In theory, leaving the US with more than $10,000 in Bitcoin or Ether, you would have to notify authorities or face the penalties, such as prison time, civil asset forfeiture, etc.<\/span><\/p>\n

Does anyone see what’s wrong with this? You want people, who think a bottle of lotion is dangerous at an airport, to identify sophisticated software transportation that essentially holds things online. Sure, like that\u2019s going to happen. I believe it will take a long time before officials are able to identify \u201ccriminals\u201d with + $10,000 of digital money in their \u201cpockets.\u201d<\/span><\/p>\n

For argument\u2019s sake, the obligation to declare amounts in any form over $10,000 exists, irrespective of whether customs officials have a way of detecting such holdings. Since digital currencies technically travels with the holder (like a bank account), wherever the holder goes, the holder would have to declare their entire crypto portfolio each time the holder travels in and out of the U.S.<\/span><\/p>\n