The New Normal: Cryptocurrency Goes Mainstream This Tax Season

Until quite recently, most cryptocurrency investors either did not know or did not care to pay taxes on the capital gains they accumulated buying and selling digital coins. The cryptocurrency community is now facing a hard truth: they have to pay taxes just like all the rest of us.


[Editor’s note: This is a guest article by Mario Costanz, CEO of Happy Tax]

Virtual currencies exploded onto the investment scene last year, due in large part to the astronomical rise in the popularity of Bitcoin and its many successors. Interest in this exciting new investment shows no signs of slowing, and soon cryptocurrency will be as ubiquitous as the other traditional securities traded daily on Wall Street.

Until quite recently, however, most cryptocurrency investors either did not know or did not care to pay taxes on the capital gains they accumulated buying and selling digital coins. The cryptocurrency community is now facing a hard truth: they have to pay taxes just like all the rest of us.

The attention that virtual currencies are receiving from federal and state regulators is a positive sign that this innovative technology is heading towards the mainstream. Of course, it has a long way to go until it gets there. In the meantime, however, cryptocurrency investors need to accept the reality of growing government oversight.

Paying Cryptocurrency Taxes is Not Optional

Bitcoin emerged from an anonymous source far on the fringes of the internet nearly a decade ago. For a time, cryptocurrency traders enjoyed an investment environment free from government oversight. This has caused many investors to turn a blind eye to increasing regulation, particularly from the Internal Revenue Service.

Tax liability for virtual currency investments is still a bit of a gray area in many respects, and new laws and policies are sketching out the boundaries. However, one thing is absolutely clear: if you trade cryptocurrencies, you must report your activity to the IRS.

Internal Revenue Service (IRS) Asked to Provide a Clearer Cryptocurrency Tax Framework

To the great dismay of many early virtual currency investors, the IRS declared virtual currencies to be taxable capital assets back in 2014. Like other capital assets, cryptocurrencies are subject to the capital gains rules. The tax rate depends on how long you held your coins before you sold them, as well as the price you bought in and the price you sold out. If your capital losses on your cryptocurrency investments exceed your capital gains, you can claim the loss as a deduction on your income tax returns, up to $3,000.

In other words, the same rules apply to cryptocurrency investors as taxpayers who trade stocks and other securities. This sounds simple enough for any seasoned trader, but unfortunately, things in the cryptocurrency world tend to get complicated quickly.

Most securities are used only in straightforward buy-and-sell transactions. However, cryptocurrencies are also intended to be used to purchase goods and services. Contrary to the popular belief – and wishful thinking – of many cryptocurrency investors, cashing out of your virtual currency investments isn’t the only taxable event in the lifespan of your investment. Rather, tax liability arises whenever cryptocurrencies are traded for other coins, cashed out into fiat currency, or used to purchase goods and services. So, for example, if you buy a new couch on Overstock.com using bitcoin, your purchase will be subject to capital gains tax in addition to any sales tax that may apply.

Paying Crypto Taxes Using Cryptocurrency

This type of double-taxation poses a real challenge to the integration of cryptocurrency into retail payment systems. Fortunately, however, it isn’t all bad news. Just last week, the Arizona State Senate passed a bill allowing residents to pay their state income taxes using “Bitcoin, Litecoin, or any other cryptocurrency” allowed by the state revenue department. While the bill still needs to go through the Arizona House of Representatives before it becomes a law, it represents a landmark moment in the cryptocurrency world.

The Arizona bill has been received with a mix of enthusiasm and skepticism. On one hand, the inherent value of cryptocurrencies is still up in the air. Virtual currencies have become legendary for their volatility. The price of Bitcoin more than doubled in the last two months of 2017 before falling again to half its value in the first two months of 2018.

Bitcoin Taxes

Well-known cryptocurrency critics, like Warren Buffett and JPMorgan Chase CEO Jamie Dimon, claim that cryptocurrencies offer little to any market value and that current market prices are fueled entirely by speculation. On the other hand, the blockchain technology that supports the virtual currency market is a groundbreaking innovation that has the potential to change the way people use money entirely.

The fate of the Arizona law is now in the hands of state representatives, and it remains to be seen how the saga will unfold. It’s a bold legislative move that may be tossed aside by the state’s more conservative House of Representatives. However, it’s also a sign of the times. Arizona recognizes the potential value of virtual currencies as a technology, not just a security or replacement for traditional cash.

As a result, the state is posturing itself as a cryptocurrency-friendly market in anticipation of greater adoption of virtual currency technology and its derivatives. While the long-term viability of any virtual currency remains to be seen, the integration of cryptocurrency into government revenue streams is a positive sign for the future of this exciting new technology.

Will you be paying taxes on your cryptocurrency income this season? Let us know in the comments below!


Images courtesy of HappyTax, Shutterstock 

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Bitcoin Price Will Double by End of 2018, Says Researcher

Analysts all over the world remain divided on the Bitcoin price topic. This currency’s value will likely soar to $25,000 in the next twelve months, say several respected analysts.

What Comes Next for the Bitcoin Price?

Bitcoin and other similar currencies have seen a major price drop in early 2018. Most markets lost nearly 50% of their value in a matter of weeks. Many people assume this is the end for cryptocurrency as we know it. True aficionados are not too bothered by this yearly cycle. Tone Vays, a New York-based analyst and consultant, remains positive about the future Bitcoin price.

In Vays’ opinion, Bitcoin will recover sooner rather than later. He is not too sure how high the value will go when the markets start to stabilize again. Reaching six-digit figures will prove to be virtually impossible at this stage. A more “modest” Bitcoin price of $25,000 by year’s end is in Vays’ books right now. Ronnie Moas, another famous Bitcoin enthusiasts, thinks along the same lines. His prediction puts the Bitcoin price at $28,000 at some point throughout 2018.

That optimism is not shared by everyone in the industry. James Rickards, strategic director at financial analytics firm Meraglim, is extremely bearish. Having a more balanced view from both sides of the spectrum is always needed. According to Rickards, the current valuation of Bitcoin is still far too high. Given the speculative nature of this cryptocurrency, it is evident the markets can swing in either direction. Rickards added :

“I don’t know how anybody could set and justify a price target that high for this year. I think bitcoin is going to go to $200. The only residual use is for criminals, and it will keep grinding down.”

Bitcoin Futures and South Korea

Speaking of interest in Bitcoin, there are some positive signs as well. We see a growing interest in Bitcoin futures offered by CME. Their volume for February 2018 currently sits at 1,101. It is the second-highest number for this week, indicating people have high expectations for the Bitcoin price moving forward. CBOE, on the other hand, has seen a volume of 4,225. These numbers are still low, but a definite improvement compared to a few weeks ago. The five-day average volume for both companies is rising. That won’t automatically translate to a higher Bitcoin price, though.

Last but not least, things are moving along in South Korea again. After a few rough weeks, the premium price for Bitcoin is increasing. This is often the result of lower market liquidity and people being forced to pay more per BTC. Bithumb and Upbit trade Bitcoin at nearly $11,400. The Western world trades $900 to $1,000 lower as of right now. This discrepancy has been present before as well. When it happened previously, the global value per Bitcoin soared to $19,000. History may very well repeat itself in this regard.

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ValueCash Launches ICO Backed By Decentralized & Self-Governing Blockchain That Allows Users To Earn Tokens While Using Crypto To Pay For Goods & Services

Many credit card companies offer the moon to consumers such as free gifts or reward spending programs, but those perks seemed to be missing in the world of Cryptocurrency, that is, until now. ValueCash is the first Cryptocurrency exchange ecosystem that rewards its users’ earnings and spending.


Los Angeles, CA – Feb 16th, 2018, ValueCash announced this week that they will be launching an Initial Coin Offering that is sure to stir up the competition in the world of cryptocurrency trading. ValueCash is a decentralized cryptocurrency and exchange where its token holders can make payments for goods and services while simultaneously earning new ValueCash through their purchase and acceptance. ValueCash is doing something never done before by offering rewards based on spending and other ICO’s are taking notice.

The ValueCash team has over 15 years of experience and is comprised of Developers, IT Consultants, Entrepreneurs and Cryptocurrency Enthusiasts. The ValueCash Ecosystem is designed to contribute its Distinct Protocol as a key component of the growing Crypto-Economy and a market driving catalyst to reform the existing status quo of the Commerce, Exchange, Escrow Sector and Blockchain Technology as a whole. ValueCash is limited; Decentralized and Community Driven Cryptocurrency that allows anyone to earn substantial rewards on a successful transaction.

ValueCash can be obtained through The PoT Protocol “Proof of Trade”, The POS “Proof of Stake”, and Buying. The PoT protocol is configured to put power into the hands of the Crypto-Community by becoming Validators of their transactions, while also creating 10% new ValueCash coin as a reward.

During a recent press conference, the company spokesperson for ValueCash was quoted as saying, “Cryptocurrency investors and users are going to love this ICO! Unlike other cryptocurrencies, we offer rewards to our users which will have consumers flocking to our exchange. The more users we have, the higher our token price goes, the happier our investors are! It’s an exciting time to be a part of ValueCash.” He went on to say, “We also kept our end users in mind and have been able to develop a blockchain with unmatched speed, security and of course NO transaction fees.”

The ValueCash ICO will open for public sales on March 5th, 2018. At that time 2 Million tokens will become available at a cost of $1.00 USD per token. Bonuses will also be given out depending on the level of investment. Once all tokens have been sold the ICO will close.

To learn more about the ValueCash ICO visit their official website at https://www.valuecash.com or download their Whitepaper directly by clicking here. You can also speak directly with the Team by clicking here.

Media Contact:
ValueCash
Attn: Media Relations
Singapore
+65 8883 2802
info@valuecash.com 


Images courtesy of ValueCash

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Bitcoin (BTC), Ripple (XRP), Monero (XMR), and TRON (TRX) Lead the Market

Bitcoin (BTC)

The cryptocurrency market has broken over the $500 billion mark early today.  Most of the coins in the top 100 are all seeing gains. It seems the total market is on a steady upward climb, which is a relief because it’s been a bumpy ride in 2018 thus far.

Here are some top coins on the market today.

Bitcoin (BTC)

Source: CoinMarketCap

As you can see from the 7-day chart above, BTC has been making steady gains this week. Many global regulations have pushed the entire cryptocurrency market …

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Swiss Financial Regulators Publish “Pretty Reasonable” ICO Guidelines

FINMA, the Swiss Financial Market Supervisory Authority, yesterday published guidelines explaining to organisers and investors how existing financial legislation would be applied to initial coin offerings. The document also details the criteria by which the regulator will judge each fundraising effort. The aim is to dispel uncertainty in the space and should allow investors and organisers alike to act with greater confidence.

A press release accompanying the document stated that FINMA felt the clarity the official guidelines would provide were “important given the dynamic market and the high level of demand”.

Amidst the guidance, the Swiss regulators state that each ICO will be judged independently. There will be no “catch-all” regulation. They admit that “financial market law and regulation are not applicable to all ICOs”. Therefore the Swiss agency will consider the manner in which the tokens issued will be used when deciding which existing legislation should govern a coin offering.

They define tokens in three ways: Payment tokens, utility tokens, and asset tokens.

Payment tokens have no other purpose other than to provide a means of payment. They do not interact with specific applications in any unique way. For the purposes of regulation, they must comply with existing anti-money laundering legislation. They will not be treated as securities.

Utility tokens are intended to provide access to an application or service. There will be no regulation of these tokens. However, it seems unlikely that many pure utility tokens will exist.

Asset tokens are more like securities. As such, they fall under securities legislation. They represent assets in a more traditional sense. If a token provides dividends, it’s an asset token. Likewise, if it represents shares in a particular company. Asset tokens will also fall under civil law requirements. In Switzerland, this is covered by the Swiss Code of Obligations.

FINMA clearly state that hybrid tokens can also exist. From the above guidelines, it appears that most of the existing tokens issued by ICO will fall under more than one of the classifications.

They go on to state that they acknowledge the revolutionary potential of the technology behind ICOs and cryptocurrencies and state that they are participating in the federal government’s Blockchain/ICO Working Group. Finally, they reiterate their warning to investors about the highly volatile nature of the space.

The regulation seems to have been well received in the cryptocurrency community. The price of most tokens and coins have been increasing since the document was released. Particularly notable is ICO platform NEO’s surge in the last 24 hours. The “Chinese Ethereum” quickly added over $1 billion to their market cap according to Coinmarketcap.

Elsewhere, other signs highlighted that the news is welcome. Serial cryptocurrency entrepreneur Erik Voorhees Tweeted that he thought they were “pretty reasonable”:

Such positive regulation out of Switzerland is a big deal. Whilst no one expected a harsh clampdown from the “Crypto Nation“, the clarity that the guidelines will bring to the space should help nurture, rather than stifle, creativity and innovation.

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Chicago Trader Steals Over $2 Million in Bitcoin and Litecoin Cryptocurrency

A Chicago trader is facing up to 20 years in prison for stealing over $2 million in Bitcoin and Litecoin cryptocurrency from his employer.


Most 24-year-olds would be quite happy to be attached to a new cryptocurrency unit for a major financial entity. That’s not a bad career path for someone who previously worked as a cryptocurrency trader in South Korea before joining Consolidated Trading LLC to become an assistant bond trader in July 2016. A new department looking to dive into the burgeoning crypto world is a great stepping stone for moving up. That is unless that person is a degenerate gambler. Such is the case of Joseph Kim, who stole over $2 million in Litecoin and Bitcoin cryptocurrency from his employer.

Chicago

Stealing Begins Almost Immediately

The cryptocurrency group was created by Consolidated in September 2017, and Joseph Kim joined the unit sometime during that month. He had his own personal cryptocurrency accounts, which he informed his employer of, and he was told to cease all personal trading to avoid a conflict of interest.

However, Kim transferred 980 litecoins (worth $48,000) on a weekend shortly after joining the new unit. When a supervisor found out, Kim said he transferred the coins to a “personal digital wallet for safety reasons” due to issues he was having with Bitfinex, the cryptocurrency exchange in Hong Kong. He then said that the coins had been transferred to a Consolidated wallet (which was untrue).

In November, the trader then sent 55 bitcoins (value of $433,000) from Consolidated into an unknown account. When confronted on this transfer, Kim said that the transfer had been blocked and that he was taking steps to unblock it. He later sent back 27 bitcoins into the corporate account, leaving 28 in his possession.

The Sizes Get Bigger

Eventually, Kim transferred 284 bitcoins (worth $2.8 million) from the company’s account into a personal wallet. He later sent back 102 of those coins into the Consolidated account, after which he then transferred the remaining 182 coins into a different account. Of that last amount, Kim lost a portion of it by personally trading.

Cryptocurrency gambling

When eventually confronted over all the transfers, Kim admitted to investing in short future positions using 55 bitcoins. He continued stealing cryptocurrency from the company to cover his margin calls, losses, and personal investments. After being arrested, Kim said that he was a degenerate gambler and admitted to converting the stolen Litecoin into Bitcoin for investment purposes.

Eventually, Consolidated managed to recover roughly 144 bitcoins from Kim’s various personal wallets. The financial company lost about $603,000 overall from the rogue trader’s gambling addiction.

In an email to his superiors at Consolidated, Kim said:

It was not my intention to steal for myself. I was perversely trying to fix what I had already done. I can’t believe I did not stop.

Investment gambling is real, and cryptocurrency is just a new avenue for some to indulge in the practice. The US Attorney has charged Joseph Kim with wire fraud, which could net him up to 20 years in prison. Kim has also made history, of a sort. He’s the first person in Chicago to be charged with wire fraud in regards to cryptocurrency.

Do you think that we’ll see more cases of traders pilfering cryptocurrency to fuel their gambling addiction in the future? Let us know in the comments below.


Images courtesy of Pixabay and Bitcoinist archives.

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NEO, China’s Ethereum, Soars as the Lunar New Year Kicks Off

Lunar New Year

The cryptocurrency market has remained strong towards the end of this week and is still climbing. Currently, the total market cap is just under $500 billion. The last time the market was this high was on the last day in January. The top 10 coin that is seeing the most gains on today is NEO.

NEO, China’s Ethereum, is soaring on the market today and it might have a lot to do with it being the first day of the Chinese New Year. This celebration lasts over two weeks long and follows the Lunar calendar every …

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ZeroEdge.Bet Opens New Office in London

ZeroEdge.Bet, a start-up that is building a blockchain based online casino network, is expanding its reach and will be opening brand new offices in London. The move was prompted by the unprecedented growth of the business, ahead of the proposed ICO dates later this year.

The ZeroEdge team is extremely excited to meet fans and followers of the Zero Edge online casino network when their new offices open within the next few weeks. The team, comprising of a range of experts in their respective fields including online gaming, cryptocurrencies, marketing, support, and much more, have put out the welcome mat for gamblers in the United Kingdom.

“This is a great news for us and our community. We are delighted to have our new office in London. One of the reasons for opening an office in London was the access to the skilled job market. Blockchain experts, gambling industry executives, marketing gurus are all there.  Therefore, will be looking to grow our team to help us with our development on every aspect of the business.” – said Adrian Casey ZeroEdge.Bet CEO

london, zero edge

UK gambling market is one of the largest in the world.

United Kingdom gambling market size exceeds £14 Billion each year. Zero Edge will launch first blockchain based gambling sites in UK market just after ICO finishes and all Zerocoins are distributed publicly.

It is not by coincidence that Zero Edge has chosen London as one of their main centers of operation. Aside from the fact that London is one of the most popular cities in the world, with a vibrant melting pot of global cultures, it also happens to represent one of the largest online gambling markets in the world.

Residents of the UK love to gamble online and do so around the clock at various top online casinos aimed at the UK market. However, up until fairly recently, UK gamblers have been facing the very same problem as gamblers in other parts of the world – playing at online casinos where, quite frankly, the house edge is out of control!

This is another reason why Zero Edge has chosen London to open their cutting edge new offices, to begin to roll out their plan to absolutely upset the entire online gambling industry with their unique 0% house edge concept, a first in online casino gambling (and gambling in general).

What is Zero Edge and How Does It Work?

Zero Edge online casino network is a brand new, revolutionary way of presenting online casino games to gamblers all over the world. While the traditional online casino focuses on making millions and millions of pounds off of your losses, Zero Edge is doing something entirely new. By offering 0% edge games demand is created for Zerocoin, which raises its value. Profits are made not from players loses, but from increased Zerocoin value. This model will disrupt the online gambling industry. Zero Edge casino is able to offer a true, guaranteed 0% house edge, making online casino games truly fair for the first time ever!

Additionally, ZeroEdge will also provide with an opportunity for entities to build and operate their own games on the ZeroEdge platform. This will allow anyone with minimal technical knowledge to run their own games and earn from the increased value of the ZeroEdge token. The game developers will be rewarded with ZeroEdge tokens for their contribution to the network depending on various factors, e.g. the popularity of the game, UI/UX levels, etc. This feature will create a highly competitive environment and will ensure a wide variety of available games on the platform.

What You Need to Know About ICO and Dates

Pre-ICO is set to start on the 28th of February 2018, closing out on the 15th of March 2018. While there is no soft cap set during the Pre-ICO stage, the hard cap is set at 1000 ETH.

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Jazzle Games Hopes to Deal a Winning Hand to Investors

Jazzle Games hopes to help its members strike it lucky with their platform, which allows members to invest in the construction of casinos and receive a part of the subsequent profits.


Gambling is a multi-billion-dollar industry which continues to grow as more and more people find their excitement, and sometimes wealth, through casinos. Even though online gambling is a lucrative industry, brick and mortar casinos are also pulling in the money, making casino owners and investors very happy.

Jazzle Games realizes this, and wants to give their investors an opportunity to yield high profits on their contributions, which is what we all want from our investments, right?

Taking a Gamble

Taking a Gamble

Jazzle’s platform offers contributors a chance to get in on the winning action by yielding a maximum result with minimal risk. Funds invested will go towards constructing casinos in free-trade areas. Through their turnkey business model, this includes finding and buying the land, building the casino and opening it. Once launched, investors will then be able to reap the profitable rewards.

Essentially, with investor funds, Jazzle Games will do the all of the hard work, including adhering to the legalities involved with launching the casino, while the investors can enjoy the profits once the casino is in business.

The platform has five investment options, allowing investors to contribute between $10 and $50,000. The wide range of options means that even non-whales can get in on the action and realize ongoing profits from their investment.

How to Get Started

Interested parties first need to register on the platform and then fund their account with Bitcoin, Ethereum, Dash, or any of the other many cryptocurrencies that are accepted. The funds will reflect immediately and members will be able to select their preferred investment option and contribute to it.

Any profits made can be withdrawn and will be sent to the payment wallet that is used to make the initial contribution to the account.

Make Even More Money

Jazzle Games also offers a referral system where, depending on how many people you refer, as well as other stipulated conditions, could elevate the investor’s status to that of a partner or a representative.

This system allows loyal investors and stakeholders to make an even bigger profit through the platform. Representative profitability is determined based on the following tiered structure:

  • Level 1 – Representative receives 12% of referral reward from the deposit of an investor attracted by him/her;
  • Level 2 – Representative receives 4% of referral reward from the deposit of a new client attracted by the investor working as your own referral;
  • Level 3 – Representative receives 3% of referral reward from the deposit of a new client attracted by the second-level referral;
  • Level 4 – Representative receives 2% of referral reward from the deposit of a new client attracted by the third-level referral;
  • Level 5 – Representative receives 1% of referral reward from the deposit of a new client attracted by the fourth-level referral.

According to the platform, Jazzle Games has already received more than $600,000 in contributions and has paid out nearly $130,000.

Visit the jazzle.games website for more information on Jazzle Games.

Do you think Jazzle Games is onto a winner by using digital currencies to construct real-life casinos? Let us know in the comments below!


Images courtesy of Jazzle.Games, AdobeStock

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Swiss Regulators Issue ICO Guidelines To Support Crypto Market

Swiss ICO guidelines

Swiss ICO guidelines: Switzerland’s financial regulators have issued new guidelines which would treat some locally sold ICO tokens as securities in support of the cryptocurrency market.

In its press release today, the Financial Market Supervisory Authority (FINMA) acknowledged the sharp rise in the number of ICOs launching in Switzerland. Currently, four of the 10 biggest proposed initial coin offerings are based there, according to PwC. This has prompted the financial authority to set out new rules and clarify how they are to be regulated given “the dynamic market and the high level of demand.”

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