Recent reports have provided new insight into the Internal Revenue Service’s concerns about Bitcoin tax evasion, and appear to indicate that only a small portion of Bitcoin users ever bother to report their profits and losses in their annual filings with the agency. The revelations came as the IRS formally filed a lawsuit in federal court to force the Coinbase exchange to obey the agency’s John Doe Summons requiring the release of exchange customer information.
A group of bitcoin exchanges recently released a statement to clarify their position with respect to the ongoing Bitcoin scaling controversy. As most in the community know, there has been an ongoing debate regarding the best way to scale Bitcoin and increase its transaction capability. These exchanges have now announced that if the current debate between the Bitcoin Core and Bitcoin Unlimited groups results in a hard fork and two competing currencies, the Bitcoin Unlimited coin would be listed under the ticker symbol BTU, while Bitcoin Core maintains the current BTC symbol.
Chinese regulators appear to be stepping up efforts to bring order to their nation’s digital currency landscape in the wake of the SEC’s denial of the Winklevoss twins’ ETF proposal. While People’s Bank of China director Zhou Xuedong recently acknowledged the importance of tech innovation, he also declared that regulation is essential to prevent illicit activities and financial bubbles. According to Xuedong:
Regulation is a touchy subject in the bitcoin industry. Many cryptocurrency idealists who truly believe they are invincible to government reach, also believe that the lack of bitcoin-specific regulation gives them a free pass. They may be in for a nasty surprise when they find out just how long ‘the long arm of the law’ really is. Governments around the world already have an arsenal of catch-all laws that can be used to fight tax evasion and other illegal activities that attempt to hide behind the anonymity of some cryptocurrencies and related services.
In 2016, Alaska legislators tried and failed to pass a bill that would have required digital currency companies to register under the state’s money services licensing regime. At least one member of the legislature appears undaunted by that bill’s failure to pass, and has introduced a new bill to regulate cryptocurrency firms. That proposed law, House Bill 180, was introduced this week by representative Kito Fansier.
One of the most popular bits of conventional wisdom in recent years has been the notion that Bitcoin and other digital currencies are ideal vehicles for money laundering and terrorist funding efforts. Those claims have been bandied about by government officials around the world, and seem to be accepted as gospel by many in the mainstream media. However, a new report from UK think tank Royal United Services Institute (RUSI) calls those assumptions into question.
Bitcoin Unlimited suffered a shutdown of roughly 500 of its 800 nodes on Tuesday, after attackers managed to exploit a vulnerability in the software’s protocol. The attack came after the vulnerability was discovered by developers, and resulted in the number of active nodes falling to its lowest level in five months. Bitcoin Classic suffered a similar attack a short time later.
Prosecutors in Norway are arguing that a trio of men charged with illicit online drug sales in that country should be forced to pay part of their criminal penalty using Bitcoins. If prosecutors get their wish, the three men would be required to pay a total of 120 Bitcoins, as well as an additional 3.1 million Norwegian kroner, as a penalty for their alleged drug sale activities on various underground websites.
The United States Securities and Exchange Commission (SEC) Today rejected Cameron and Tyler Winklevoss’ proposal for a Bitcoin exchange-traded-fund (ETF). The regulatory body cited the absence of digital currency regulation and the potential for fraud among its reasons for refusing the bid.
The three largest Chinese Bitcoin exchanges, BTC China, Huobi, and OKCoin, have all announced that their February suspension of Bitcoin withdrawals will continue indefinitely, pending regulatory approval from the People’s Bank of China (PBOC). The three exchanges announced the continuation of their self-imposed withdrawal suspension in separate statements released yesterday.
It’s always gratifying to see positive mainstream media coverage of anything related to digital currency or its underlying technology. With Bitcoin’s price increase in recent weeks, the coverage has ranged from descriptions of Bitcoin as the “new gold” to gloomier assertions that it’s destined to bring disaster for investors foolish enough to choose it for their portfolios. A recent special report on CNBC’s site leans toward the optimistic, noting a prediction by one analyst who suggests that Bitcoin’s price could reach $3,000 by the end of 2017.
A number of Indian cryptocurrency companies have banded together to launch a new initiative called the Digital Asset and Blockchain Foundation of India, or DABFI, to facilitate self-regulation of their industry, help create standards for anti-money-laundering and know-your-customer rules, and promote awareness and acceptance for digital currency and blockchain technology. The Times of India recently reported that global law firm Nishith Desai Associates has been retained to assist in the development of self-regulations for the nation’s crypto industry.
While most digital currency analysts agree that some type of regulation is needed for the industry, they’d also tend to agree that any government intervention needs to be reasonable. The recent cryptocurrency regulatory changes in Hawaii were questionable at best, and they’ve resulted in at least one major exchange suspending its services to customers in the state. Citing the added cost burden imposed by Hawaii’s new requirements, the Coinbase exchange has announced that it will not be serving Hawaiian customers for the foreseeable future.
Venezuelan Bitcoin exchange Surbitcoin is expected to resume operations this week, enabling Venezuelans to once again use the platform to trade in the digital currency. The exchange announced the resumption of trading in a social media post last week. In that February 22 post, the exchange announced that service would be restored in approximately one week from that date, and asked that customers share the news with their friends and relatives.
The West Virginia legislature has included cryptocurrency in a list of monetary instruments subject to a proposed bill defining criminal penalties for money laundering offenses. The bill, titled Creating felony crime of conducting financial transactions involving proceeds of criminal activity, has a total of eleven sponsors – ten Republicans and one Democrat, and is currently being reviewed by the House Judiciary Committee.
As regular readers no doubt recognize, we rarely comment on the ups and downs of Bitcoin’s rollercoaster price fluctuations. Sometimes, though, the topic simply cannot be avoided. Today is one of those times, as the world’s most well-known cryptocurrency did something that’s been more than three years in the making: Bitcoin hit an all-time new price high today, surpassing the $1,165.89 high that it reached in November, 2013 – only a few months before it all came crashing down after the Mt. Gox disaster.
California State Senator tony Mendoza last week submitted a bill designed to address the regulation of organizations that conduct charity raffles in the state. Noting that existing law already addresses raffles conducted by major league sports organizations, Senate Bill 741’s provisions would provide similar authorization to nonprofit organizations “established by, or affiliated with, a district agricultural association, county fair association, or citrus fruit fair association.” The measure has drawn some interest from the Bitcoin community, since it specifically addresses the digital currency:
A new report by Bank of Canada researchers suggests that Bitcoin and other digital currencies won’t succeed on a long-term basis without greater government regulation. To reach that conclusion, the report draws historical comparisons to a period in the 1800s when Canadians had access to government-issued currencies known as Dominion notes as well as other notes issued by private banks.
According to Coin ATM Radar, the world now has more than 1,000 Bitcoin ATMs in operation. According to reports, more than 60% of these machines – 621 – are at sites around the United States, with Canada coming in second in total Bitcoin ATM placement. The ATMs provide Bitcoin enthusiasts with easier access to Bitcoin transactions, and are viewed as an important tool for increasing awareness of the digital currency.
The Austrian capital of Vienna is now home to what is being referred to as the world’s first Bitcoin bank. The newly-opened “Bitcoin Bank” is owned and managed by blockchain firm Bit Trust, and has opened for business in one of the more popular Vienna shopping areas on Mariahilfer Strasse. The bank was launched to help simplify the buying and selling process for Bitcoin enthusiasts in the area.