Alright so I've been seeing this headline circulate for what feels like weeks now, and I gotta say it's just flat-out odd. I'm not joking when I say that I've seen this exact same story hashed and rehashed at least a dozen times, and the same pattern just keeps popping up over and over again.
THE IRS IS COMING FOR YOUR CRYPTO OMG OMG OMG
So... yeah. Let's just dive right in so I can show you what I'm talking about.
IRS Can Now Hunt Down America’s Crypto Tax Evaders After Landmark Ruling
IRS steps up efforts to target U.S. taxpayers who failed to report and pay taxes on cryptocurrency transactions
US IRS Can Issue Summons to Bank Serving Crypto Broker SFOX Customers in Search of Tax Evaders
Got Crypto? The IRS Really Wants to Know
IRS Obtains Court Order Authorizing Summons For Records Relating To U.S. Taxpayers Who Failed To Report And Pay Taxes On Cryptocurrency Transactions
Judge Clears IRS to Seek Bank’s Crypto Customer Records
Open up, it's the IRS. We're here about the crypto tax you dodged
IRS seeks crypto tax cheats
What the fuck?
What is going on here? On and on the list goes down the line. There are so many more articles than this. On the crypto scale it's a relative shitstorm media blitz. Reuters is reporting on it. CNBC is reporting on it. Even justice.gov is reporting on it. WTF? Why though? What actually happened?
Let's check CNBC first because I didn't read that one yet and it's what sparked me to write about this issue.
The agency will issue a so-called “John Doe summons” requiring M.Y. Safra Bank to turn over crypto transaction data for SFOX, a digital currency prime broker that used the bank, with more than 175,000 users and over $12 billion in transactions since 2015, according to the U.S. Department of Justice.
Uh, okay?
The government is asking for KYC data on people who trade crypto. This is like... surprising to someone? I'm sure the whole John Doe summons thing might be new but honestly, why make such a fuss over this?
CNBC actually reports on this a little better than the rest of the articles I read. I was thinking sfox was some random exchange that barely anyone uses, which is why the news on this issue was even more surprising. Who gives a shit about sfox? Who uses that? I don't use it and I don't know anyone who does. Ah but then we see it's for "institutional investors". Ha, yeah. People with lots of money don't like their privacy being violated. Rules for thee, not for me, peasant! Now it makes more sense.
It’s not the first IRS summons for crypto records, but it’s unusual because the broker seems to be “quite small,” signaling the possibility of more to come,
Exactly... it's quite small, so why is everyone reporting on it like it's quite big? Pure speculation that this is just the beginning... which... is a weird assumption. In my opinion it's much more likely that law enforcement is attempting to track criminal activity and it led them to sfox where they hit a brick wall and needed a court and a judge to get involved to proceed following the paper trail. There's no reason to think this is a "landmark case" but that will be the next article I read to see if it has any merit. For now we are still on the CNBC version.
“The IRS has indicated this is a very high priority for them,” Gordon added.
Hm yeah... pointing to the idea that there's a very specific reason why they targeted this little-known organization... but everyone wants to blow it out of proportion like we are on the precipice of warrants going out in mass across the entire cryptosphere. This is such a strange gloom and doom narrative that I feel like only exists because we are in a perceived bear market. When it rains, it pours.
Looking into claims of "landmark ruling".
"The government is committed to using all of the tools at its disposal, including John Doe summonses, to identify taxpayers who have understated their tax liabilities by not reporting cryptocurrency transactions, and to make sure that everyone pays their fair share," Williams added.
Uh... okay... first of all, "paying their fair share" is kinda laughable. As if taxes are actually this community pool of money that all gets efficiently funneled into empowering the communities it was collected from. Let me be very clear: taxes are a sham and crypto has completely outdated them. If a community needs money to pay for something... they can just print the money and tax the community through inflation. We do this already on Hive with the reward pool, curation, the dev fund, and block rewards.
Inflation is the superior form of taxation because it requires zero paperwork, has zero loopholes, zero overhead, is impossible to avoid, and no one goes to jail for trying to worm their way out of it. This is exactly why the powers that be love tax laws in the first place: so they can worm their way out of it and pass the bill onto the lower class. Shit rolls down hill. Deal with it, peasants.
The very act of taxation intrinsically implies that the government does not control the money. If the government doesn't control the money, who does? Why is the Federal Reserve called the Federal Reserve if it isn't Federal? Why such deception? Why do private banks control the money, and in turn, control the government? It's a topic that many books have been written about.
My country was literally founded on the idea that we can't be taxed without representation. Yet, within the current system, representation is impossible because private banks have captured the government and created a smoke-and-mirrors republic in which the left and right think there is a choice, and believe that change can be made from within the system. This is laughable; at the very least this is the libertarian mindset.
Rule by fear; not actual enforcement
This is also a good example of how the establishment is going to attempt to 'regulate' crypto. Short answer? They can't. Just like with torrents and music and movies, they will go after a few people at the top that were the highest offenders and try to scare everyone else in line. We already know that doesn't work, but that's exactly what's going to happen and we get a little taste of it with this little FUD storm we are seeing.
“It is much better to come forward and file an amendment than to let the IRS audit you — or potentially even worse, for not reporting crypto,” Gordon said.
Hm yes... I've seen this before...
Has anyone seen Flick?
Flick? Flick who?
Everyone knows it's better not to get caught.
You see? Even children know that the propaganda is bullshit.
Come forward now and you'll get punished less?
What the fuck?
How about not?
All in.
Degens gonna degen.
Don't shit where you eat.
If you want more financial privacy... don't trade crypto on platforms that have your KYC info. I feel like that should be obvious but people just ignore the obvious to their own detriment. The "I have nothing to hide" argument is a very very very bad one. Privacy matters.
Innocent people go to jail ALL THE TIME. Look it up. It's a real thing. The Fourth Amendment of the constitution wasn't put there for fun. The empire is collapsing, and more and more of our rights will be infringed upon as time goes on. This is exactly why the Bill of Rights exists. The more they are violated the more authoritarian and totalitarian the government becomes. Or rather it's the other way around. You know what I mean.
So is this a "landmark ruling"
No, I read that entire article, and it gives literally zero explanation as to why this would be a landmark ruling or how it would be used as precedence in other cases. Once again this points to the idea that these news outlets are just trying to sell a story, and they are using fear to do it. This is a very common tactic that we see on a daily basis in the news. Fear is a strong motivator.
The U.S taxes crypto as investments rather than currencies
Wow... thank you captain obvious! Seriously how is the average writer on Hive better than 90% of these ridiculous professional shills? Wild.
It's going to get very awkward
We hear a lot of news stories about the government confiscating crypto, but how often does it get reported that the government CANT confiscate the crypto? Not very often... if ever. And yet we all know exactly how this works. Not your keys not your crypto. There are going to be some landmark cases were the defendant just tells the government to fuck themselves and refuse to hand over the Bitcoin. I wonder how many will use the classic, "I lost it in a boating accident," excuse.
Think about how easy it is to make sure the government doesn't get ahold of private keys. We only hear about the times that the government actually gets ahold of them or strongarms the person enough to surrender them. We never hear about the holdouts, except perhaps for the ones who say the keys are lost. Perhaps this is the best answer which is why the spread is the way it is. The only way to know for sure is to see if Bitcoin every leaves that particular wallet. By the time that happens the 'criminal' could be anywhere in the world and better setup to defend themselves.
Hive is even crazier.
So imagine I were to get raided or whatever and the government tries to take all my crypto. They're gonna need to hack my phone... and my hardware wallets... and get all my Hive keys. But what if I just have my lawyer or a friend recover my hive account and change the keys (assuming they even bothered to change the owner key). Would they even know what happened? Would they even notice within the first year? Think about how weird this could all get. Account recovery on Hive is going to be a nightmare scenario for regulators and the government compared to confiscating Bitcoin.
Conclusion
This entire story is a gigantic nothing-burger of FUD. You know who already reports to the IRS? Every single centralized exchange based in America. Kraken. Bittrex. Coinbase. How on Earth is this a "landmark case"? How is anything different now than it was before. Make it make sense.
What actually does make sense is that institutional investors are crying about their privacy being violated and that creates a lot more noise than anything else because institutional investors are more powerful than retail. It's pretty obvious that the IRS wanted this data for a specific case rather than just a blanket free pass on the entire sector. At the same time, there's absolutely no reason to assume that the violations of privacy won't continue to escalate, so there is that. Those new IRS agents are going to need something to do over the next few years.
Per the IRS's statement, SFOX has more than 175,000 registered users who have conducted more than $12 billion in transactions since 2015. The agency said it has identified "at least ten" – count 'em, ten – US taxpayers who have used SFOX but failed to report transactions.
Why yes, this is a perfectly good reason to violate the privacy of 175000 users.
Better 1000 innocent people go to prison than one guilty man be set free.
--- Dwight Schrute ---edicted
Excellent article here, but one misconception. The IRS actually focuses most of its audits on those who can't defend themselves well with lawyers. They actually make more money off the poor and middle class. People with >250K generally get bypassed because it will cost the IRS more than they collect due to legal fees.
Did I imply otherwise?
My mistake.
Yeah the attack on the middle class continues.
Soon they'll be trying to squeeze blood from a turnip.
I mean just look at the Ripple case with the SEC.
You know damn well they are regretting that clusterfuck.
From now on they'll only target low-hanging fruit that can't fight back.
I think you are a spook 👀
So am I
See you at the company picnic :)
Should I grab some cocaine out of the evidence locker?
People love when I do that at the picnic.
Better make it a double :)
😂
I am not rich enough for them to even look at, lol. They want you to think they are more powerful than they really are. It's all a ruse, they just want shit they didn't earn, really just like everyone else out there. I tell them if they want more money, go and get it back from Ukraine for this bullshit proxy war, the billions of military equipment left in Afghanistan, unwanted gender studies in Pakistan, and that's just recently. Let's not even get into the lazy asses in this country that sit on welfare... Don't even get me started on that, lol.
Anyway, I just have 1 word... Monero... LOL
I really want to try mining Monero but it's such an involved process.
Definitely need to get more involved in the privacy solutions.
If only to connect Hive to it.
Monero is easy to mine. It’s CPU based. Hell, I can even mine it on my MacBook Air M1 profitably. All you need is the software and a pool and you can mine away when you aren’t using your machine.
But yes, privacy coins are going to be a necessity!
I have actually mined it before and still have the software on my computer.
I just mean I want to set up a real mining operation where I'm making at least $10+ a day or whatever.
I also don't like the fact that Windows and all these anti-virus programs just automatically shut it down... would really like to figure out how to do it on Linux. Might be a pain but would be satisfying.
Dude, linux is easy these days. i recommend Linux Mint as a good starting point. Get yourself a cheap openbox laptop and install it and get comfortable with it. Then move your stuff over.
We need a news source where people can read about the cases where authorities can't get private keys (or don't understand what they are doing)
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Yes exactly...
I'm sure this is actually the standard.
But you never hear about it.
The IRS isn't even needed to collect tax revenue: the country did a good job collecting taxes prior to the legalization of the income tax over a century ago.
The IRS was created in part to provide a seed for the growth of a police state. Along with that seed and its growth came a move away from the founding principles of the nation. This is what happens when we place our faith in "experts" to tell us what to think rather than giving us information and letting us decide for ourselves.
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I've always said that if I make that much in crypto that it is worth taking it out, the government can have their 30% or whatever. I ended up paying them just about five figures last year on my taxes from crypto. Oh well, it's still less than I made!
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I'm not even listening yet. I figure if we get closer to bad stuff you will figure out my hive exit plan lol. The other stuff I have always assumed is very public and easy to get to.
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Ironically exiting is exactly what creates the tax event.
yeah, that's the part I don't think about. But eventually I will have to. I'll rely on the wisdom of the hive for the best way. Someone will have figured it out by then.
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The ultimate goal is to keep the value intact and not dump the liquidity pools through purchasing goods and services with Hive directly.
hmmmm.
Rules for thee, not for me, peasant! Now it makes more sense. - exactly! expecting one to do as they say and not as they do .
Regardless of this regulatory bodies wanting to clamp down crypto , crypto will and has come to stay . I mean no matter how a dog barks at the moon it can’t bring it down.
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I've come to very much appreciate your posts, your perspectives, and how you express it! Put another way, it is very satisfying reading your posts. 🙏 💚
deja vu
😉🙏💚
I wonder what the gov will do if they find out I have crypto and a big 🍆
I always enjoy your perspective, as well as how you express it…this one’s no exception. Nicely done, my friend!
Dear, @edicted
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If you havent tried playing CryptoBrewMaster you can give it a shot. Our @hivefest presentation available here on the YouTube with a pitchdeck of what we building in general
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Thank you!
thank you for writing this. so fucking tired of reading about how i'm going to get sued by the IRS lol
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It’s nice to hear you cover this topic. I’ve been following you since I joined Hive a handful of weeks ago, and I learn something new from you everyday- thank you for that :)! I knew that the right wallets etc should be enough to keep crypto safe, but it’s soothing to hear you reiterate it nonetheless! Do you have a particular wallet you would recommend to someone who knows very little about crypto? Googling KYC info didn’t help much hehe- I’m assuming that’s ID verification etc (like on coinbase 👎🏻)? Or am I missing some non-obvious way that your crypto can be traced to you?
I don’t have enough to worry about yet, but someday I’ll be a famous blockchain fantasy writer so I gotta plan ahead 🤪😂 In all seriousness though, focusing my assets in non-gov backed currencies securely is a very big priority to me. Why keep our labor locked away in benefit of oppressive institutions with fiat? 😁
Coinbase (or any fiat ramp that has your KYC info) is the most obvious way to be tracked.
It's less clear if exchanges like Huobi or Binance will share this info with our government.
In rare cases I can imagine them doing it but never full scale.
When things get really bad I'll be forced to report on privacy coins a lot more.
!PGM
!PIZZA