The Stuttgart Börse, Germany’s second largest stock exchange, has announced it is launching a zero-fee smartphone crypto trading app, dubbed ‘Bison’
Bitbond, an online bank founded in Germany in 2013 by German Radoslav Albrecht, has found an innovative use case for bitcoin’s borderless nature: international loan payments. It was the first to use bitcoin to transfer credit in currency internationally, not only as loan collateral, and it’s currently processing about $1 million in loan payments per month. … Continued
The post German Online Bank Dismisses Swift, Favors Bitcoin for International Money Lending appeared first on CCN
Just recently a research group called Rapid7 published a report that reveals over a year’s worth of research regarding malicious activity tethered to Bitcoin Core (BTC) full nodes. By utilizing data collected from a network called ‘Project Heisenberg,’ and its internet scanner ‘Project Sonar,’ alongside intelligence from Bitnodes, the team had found quite a lot of exploits being shared between full blockchain nodes.
Study Finds Bad Actors Throughout Bitcoin Network’s Public Nodes
Bitcoin full node operators connect usually connect by default to a TCP service on port 8,333, but there are also over 600 alternative ports available. Rapid7’s recent research used data from the team’s Project Sonar which revealed the top three countries with the most port 8,333 nodes stem from the U.S., China, and Germany. The researchers began the blockchain surveillance back in August of 2017 and found more than 11,000 nodes per day. Moreover, the researchers collected data from more than 144,000 unique full nodes during the course of the study.
In addition to the Project Sonar intelligence over 900 nodes connected to Rapid7’s honeypot technology Project Heisenberg that revealed interesting and some malicious activities like the distribution of MS17-010 a critical Microsoft operating system vulnerability.
“Investigations into these interactions showed familiar patterns. Port scans and active reconnaissance with tools like Nmap were rampant, as was repeated attempted exploitation of MS17-010, largely from China,” explains Jon Hart a Rapid7 researcher.
17 hosts, mostly from the China IPv4 space, were actively slinging exploits for MS17-010.
The Bitcoin Network Three Times More Evil Than the Public Internet
As mentioned above most of the shady activities derived from confirmed malicious nodes with the most amount of connections the U.S. (178), China (154), and Germany (132). While the researchers note that not all of the findings found in full nodes can be deemed harmful the group observed the nodes used “curious scanning and probing behavior in the Bitcoin peer-to-peer network.”
The report concludes that the absolute number of bad actors found within the cryptocurrency’s network is fairly low on ‘bad days’ these nodes can account for up to 2 percent of the BTC network. Now the researchers say that the data collected may be considered low but compared to the “background noise” of malicious activity found on the entire IPv4 internet the figure is pretty alarming.
“Therefore, on a typical day, the Bitcoin network is approximately three times more ‘evil’ than the rest of the internet. On particularly active days, we see ten times as many malicious nodes in the Bitcoin network as we see on the regular internet, by volume,” explains the Rapid7 report.
If you are actively participating as a bitcoin miner, one takeaway is to recognize that there are a small number of participants in the bitcoin network actively taking hostile action against otherwise innocent nodes on the public internet.
What do you think about the research that states the BTC network of nodes is three times more “evil” than the entire IPv4 internet? Let us know what you think about this subject in the comments below.
Images via Shutterstock, Bitnodes, and Rapid7’s research report.
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University College London’s Centre for Blockchain Technologies has dissolved its ties with the IOTA Foundation amid controversy, affirming its support of “open security research.” #NEWS
European Union lawmakers want online platforms to come up with their own systems to identify bot accounts.
This is as part of a voluntary Code of Practice the European Commission now wants platforms to develop and apply — by this summer — as part of a wider package of proposals it’s put out which are generally aimed at tackling the problematic spread and impact of disinformation online.
The proposals follow an EC-commissioned report last month, by its High-Level Expert Group, which recommended more transparency from online platforms to help combat the spread of false information online — and also called for urgent investment in media and information literacy education, and strategies to empower journalists and foster a diverse and sustainable news media ecosystem.
Bots, fake accounts, political ads, filter bubbles
In an announcement on Friday the Commission said it wants platforms to establish “clear marking systems and rules for bots” in order to ensure “their activities cannot be confused with human interactions”. It does not go into a greater level of detail on how that might be achieved. Clearly it’s intending platforms to have to come up with relevant methodologies.
Identifying bots is not an exact science — as academics conducting research into how information spreads online could tell you. The current tools that exist for trying to spot bots typically involve rating accounts across a range of criteria to give a score of how likely an account is to be algorithmically controlled vs human controlled. But platforms do at least have a perfect view into their own systems, whereas academics have had to rely on the variable level of access platforms are willing to give them.
Another factor here is that given the sophisticated nature of some online disinformation campaigns — the state-sponsored and heavily resourced efforts by Kremlin backed entities such as Russia’s Internet Research Agency, for example — if the focus ends up being algorithmically controlled bots vs IDing bots that might have human agents helping or controlling them, plenty of more insidious disinformation agents could easily slip through the cracks.
That said, other measures in the EC’s proposals for platforms include stepping up their existing efforts to shutter fake accounts and being able to demonstrate the “effectiveness” of such efforts — so greater transparency around how fake accounts are identified and the proportion being removed (which could help surface more sophisticated human-controlled bot activity on platforms too).
Another measure from the package: The EC says it wants to see “significantly” improved scrutiny of ad placements — with a focus on trying to reduce revenue opportunities for disinformation purveyors.
Restricting targeting options for political advertising is another component. “Ensure transparency about sponsored content relating to electoral and policy-making processes,” is one of the listed objectives on its fact sheet — and ad transparency is something Facebook has said it’s prioritizing since revelations about the extent of Kremlin disinformation on its platform during the 2016 US presidential election, with expanded tools due this summer.
The Commission also says generally that it wants platforms to provide “greater clarity about the functioning of algorithms” and enable third-party verification — though there’s no greater level of detail being provided at this point to indicate how much algorithmic accountability it’s after from platforms.
We’ve asked for more on its thinking here and will update this story with any response. It looks to be seeking to test the water to see how much of the workings of platforms’ algorithmic blackboxes can be coaxed from them voluntarily — such as via measures targeting bots and fake accounts — in an attempt to stave off formal and more fulsome regulations down the line.
Filter bubbles also appear to be informing the Commission’s thinking, as it says it wants platforms to make it easier for users to “discover and access different news sources representing alternative viewpoints” — via tools that let users customize and interact with the online experience to “facilitate content discovery and access to different news sources”.
Though another stated objective is for platforms to “improve access to trustworthy information” — so there are questions about how those two aims can be balanced, i.e. without efforts towards one undermining the other.
On trustworthiness, the EC says it wants platforms to help users assess whether content is reliable using “indicators of the trustworthiness of content sources”, as well as by providing “easily accessible tools to report disinformation”.
In one of several steps Facebook has taken since 2016 to try to tackle the problem of fake content being spread on its platform the company experimented with putting ‘disputed’ labels or red flags on potentially untrustworthy information. However the company discontinued this in December after research suggested negative labels could entrench deeply held beliefs, rather than helping to debunk fake stories.
Instead it started showing related stories — containing content it had verified as coming from news outlets its network of fact checkers considered reputable — as an alternative way to debunk potential fakes.
The Commission’s approach looks to be aligning with Facebook’s rethought approach — with the subjective question of how to make judgements on what is (and therefore what isn’t) a trustworthy source likely being handed off to third parties, given that another strand of the code is focused on “enabling fact-checkers, researchers and public authorities to continuously monitor online disinformation”.
Since 2016 Facebook has been leaning heavily on a network of local third party ‘partner’ fact-checkers to help identify and mitigate the spread of fakes in different markets — including checkers for written content and also photos and videos, the latter in an effort to combat fake memes before they have a chance to go viral and skew perceptions.
In parallel Google has also been working with external fact checkers, such as on initiatives such as highlighting fact-checked articles in Google News and search.
The Commission clearly approves of the companies reaching out to a wider network of third party experts. But it is also encouraging work on innovative tech-powered fixes to the complex problem of disinformation — describing AI (“subject to appropriate human oversight”) as set to play a “crucial” role for “verifying, identifying and tagging disinformation”, and pointing to blockchain as having promise for content validation.
Specifically it reckons blockchain technology could play a role by, for instance, being combined with the use of “trustworthy electronic identification, authentication and verified pseudonyms” to preserve the integrity of content and validate “information and/or its sources, enable transparency and traceability, and promote trust in news displayed on the Internet”.
It’s one of a handful of nascent technologies the executive flags as potentially useful for fighting fake news, and whose development it says it intends to support via an existing EU research funding vehicle: The Horizon 2020 Work Program.
It says it will use this program to support research activities on “tools and technologies such as artificial intelligence and blockchain that can contribute to a better online space, increasing cybersecurity and trust in online services”.
It also flags “cognitive algorithms that handle contextually-relevant information, including the accuracy and the quality of data sources” as a promising tech to “improve the relevance and reliability of search results”.
The Commission is giving platforms until July to develop and apply the Code of Practice — and is using the possibility that it could still draw up new laws if it feels the voluntary measures fail as a mechanism to encourage companies to put the sweat in.
It is also proposing a range of other measures to tackle the online disinformation issue — including:
- An independent European network of fact-checkers: The Commission says this will establish “common working methods, exchange best practices, and work to achieve the broadest possible coverage of factual corrections across the EU”; and says they will be selected from the EU members of the International Fact Checking Network which it notes follows “a strict International Fact Checking NetworkCode of Principles”
- A secure European online platform on disinformation to support the network of fact-checkers and relevant academic researchers with “cross-border data collection and analysis”, as well as benefitting from access to EU-wide data
- Enhancing media literacy: On this it says a higher level of media literacy will “help Europeans to identify online disinformation and approach online content with a critical eye”. So it says it will encourage fact-checkers and civil society organisations to provide educational material to schools and educators, and organise a European Week of Media Literacy
- Support for Member States in ensuring the resilience of elections against what it dubs “increasingly complex cyber threats” including online disinformation and cyber attacks. Stated measures here include encouraging national authorities to identify best practices for the identification, mitigation and management of risks in time for the 2019 European Parliament elections. It also notes work by a Cooperation Group, saying “Member States have started to map existing European initiatives on cybersecurity of network and information systems used for electoral processes, with the aim of developing voluntary guidance” by the end of the year. It also says it will also organise a high-level conference with Member States on cyber-enabled threats to elections in late 2018
- Promotion of voluntary online identification systems with the stated aim of improving the “traceability and identification of suppliers of information” and promoting “more trust and reliability in online interactions and in information and its sources”. This includes support for related research activities in technologies such as blockchain, as noted above. The Commission also says it will “explore the feasibility of setting up voluntary systems to allow greater accountability based on electronic identification and authentication scheme” — as a measure to tackle fake accounts. “Together with others actions aimed at improving traceability online (improving the functioning, availability and accuracy of information on IP and domain names in the WHOIS system and promoting the uptake of the IPv6 protocol), this would also contribute to limiting cyberattacks,” it adds
- Support for quality and diversified information: The Commission is calling on Member States to scale up their support of quality journalism to ensure a pluralistic, diverse and sustainable media environment. The Commission says it will launch a call for proposals in 2018 for “the production and dissemination of quality news content on EU affairs through data-driven news media”
It says it will aim to co-ordinate its strategic comms policy to try to counter “false narratives about Europe” — which makes you wonder whether debunking the output of certain UK tabloid newspapers might fall under that new EC strategy — and also more broadly to tackle disinformation “within and outside the EU”.
Commenting on the proposals in a statement, the Commission’s VP for the Digital Single Market, Andrus Ansip, said: “Disinformation is not new as an instrument of political influence. New technologies, especially digital, have expanded its reach via the online environment to undermine our democracy and society. Since online trust is easy to break but difficult to rebuild, industry needs to work together with us on this issue. Online platforms have an important role to play in fighting disinformation campaigns organised by individuals and countries who aim to threaten our democracy.”
The EC’s next steps now will be bringing the relevant parties together — including platforms, the ad industry and “major advertisers” — in a forum to work on greasing cooperation and getting them to apply themselves to what are still, at this stage, voluntary measures.
“The forum’s first output should be an EU–wide Code of Practice on Disinformation to be published by July 2018, with a view to having a measurable impact by October 2018,” says the Commission.
The first progress report will be published in December 2018. “The report will also examine the need for further action to ensure the continuous monitoring and evaluation of the outlined actions,” it warns.
And if self-regulation fails…
In a fact sheet further fleshing out its plans, the Commission states: “Should the self-regulatory approach fail, the Commission may propose further actions, including regulatory ones targeted at a few platforms.”
And for “a few” read: Mainstream social platforms — so likely the big tech players in the social digital arena: Facebook, Google, Twitter.
For potential regulatory actions tech giants only need look to Germany, where a 2017 social media hate speech law has introduced fines of up to €50M for platforms that fail to comply with valid takedown requests within 24 hours for simple cases, for an example of the kind of scary EU-wide law that could come rushing down the pipe at them if the Commission and EU states decide its necessary to legislate.
Though justice and consumer affairs commissioner, Vera Jourova, signaled in January that her preference on hate speech at least was to continue pursuing the voluntary approach — though she also said some Member State’s ministers are open to a new EU-level law should the voluntary approach fail.
In Germany the so-called NetzDG law has faced criticism for pushing platforms towards risk aversion-based censorship of online content. And the Commission is clearly keen to avoid such charges being leveled at its proposals, stressing that if regulation were to be deemed necessary “such [regulatory] actions should in any case strictly respect freedom of expression”.
Commenting on the Code of Practice proposals, a Facebook spokesperson told us: “People want accurate information on Facebook – and that’s what we want too. We have invested in heavily in fighting false news on Facebook by disrupting the economic incentives for the spread of false news, building new products and working with third-party fact checkers.”
A Twitter spokesman declined to comment on the Commission’s proposals but flagged contributions he said the company is already making to support media literacy — including an event last week at its EMEA HQ.
At the time of writing Google had not responded to a request for comment.
Last month the Commission did further tighten the screw on platforms over terrorist content specifically — saying it wants them to get this taken down within an hour of a report as a general rule. Though it still hasn’t taken the step to cement that hour ‘rule’ into legislation, also preferring to see how much action it can voluntarily squeeze out of platforms via a self-regulation route.
Where do governmental authorities send arrested crypto assets and where do seized Bitcoins end up. #ANALYSIS
Germany’s VPE Wertpapierhandelsbank AG (VPE) has announced its institutional investor cryptocurrency trading services and claims them to be the first of their kind for the country. Armed with a Bundesanstalt für Finanzdienstleistungsaufsicht (Bafin) license, in expanding its brokerage offerings VPE purports to offer “best-in-class technology” to customers, “secure and regulated.”
VPE Launches Germany’s First Institutional Investor Cryptocurrency Trading Services
VPE Wertpapierhandelsbank AG spokesperson Katharina Strenski stressed, “Until now, institutional investors have faced high entry barriers to crypto trading. Our cryptocurrency trading services offer a much more convenient alternative.”
The world over, institutional investors, or whales, usually control vast sums of capital. They’ve been looking for ways to leverage cryptocurrency markets, but often run up against their own lobbying efforts in wielding government regulatory power to insulate themselves from competition. The consequences thus far include uneven access to a red hot and emerging asset class, arguably the future of finance in one form or another, cryptocurrency.
“Cryptocurrencies such as Bitcoin, Litecoin, Ethereum and others have become a promising asset class in recent years,” Ms. Strenski detailed. “To date, trading digital tokens has been restricted to crypto exchanges and online marketplaces. We are pleased to be the first German bank to offer our customers cryptocurrency trading services.”
VPE is a German centric exchange-based OTC trader. Financial corporations, private investors, and institutional investors (whales) get brokerage services, investment advice, and portfolio management. Under that umbrella, the bank offers clearing services, settlement of transactions in securities, contracts for difference, options, and futures.
Germany Is an Economic Powerhouse
Germany is an economic powerhouse, and so any entry its companies make into the crypto space will undoubtedly move the needle. It ranks as Europe’s economic engine and its largest economy, is a constant innovator, and is a giant exporter of goods. Routinely the country can boast Europe’s lowest employment rate, and its citizens average over $50K per capita.
All this could point to a boost for the digital asset sector as German institutional investors are among the most profitable companies in the world. For its part, as a “securities trading bank,” the bank’s press release continues, “VPE has an impressive trading track record and has access to the appropriate networks and technical requirements for processing individual transactions. VPE also meets all necessary KYC (Know your Customer) and AML (Anti-Money-Laundering) requirements.”
VPE also offers automated crypto trades, “developed in partnership with Solarisbank, the first banking platform with a full banking license, and with support from leading banking and legal crypto experts. VPE’s virtual currency trading account is held in escrow by Solarisbank. Customers will also receive access to an individual virtual currency wallet hosted by VPE. This will make trading fast and simple while ensuring the highest security standards,” the company insists.
Do you think German institutional investors will be a boost for crypto markets? Let us know in the comments section below.
Images courtesy of Shutterstock, VPE.
Need to calculate your bitcoin holdings? Check our tools section.
VPE will purportedly be the first bank in Germany to offer cryptocurrency trading services, albeit only to institutional and professional clients. #NEWS
German firm BITREAL Capital GmbH has been approved to launch the first hybrid cryptocurrency and real estate fund in Germany. #NEWS
German firm BITREAL Capital GmbH has been approved to launch the first hybrid cryptocurrency and real estate fund in Germany. #NEWS
We’re continuing to review the relationship between banks and cryptocurrencies - this time in Europe. #ANALYSIS
The same German online news outlet that broke the Savedroid supposed exit scam, turned gotcha publicity stunt, is reporting prosecutors just might have a legal case against the initial coin offering (ICO) outfit.
German Prosecutors Consider Legal Action Against Savedroid
Wirtschafts Woche, the same German source that announced a $50 million exit scam by ICO Savedroid, is reporting prosecutors in Frankfurt are examining the “extreme advertising campaign” of the startup. After an elaborate hoax was played on its investors and the public, the company has been doing heavy damage control. According to the online news group, prosecutors have begun a “preliminary investigation.”
A day or so ago, nearly every media outlet in the space ran headlines about tens of millions of dollars ghosted by a brazen ICO founder. He appeared on a beach, Egyptian beer in a frame beside him. Safedroid’s website featured a well-known meme, circumstantially suggesting yet another ICO has orchestrated an exit scam.
But this one seemed off. Veteran journalists, and these very pages, wondered aloud if this wasn’t just a publicity stunt. By later that evening, the site was back up, insisting they were joking and trying to educate the ecosystem about the potential of fraud. “That could have legal consequences for Savedroid now,” the German website stated.
Founder Yassin Hankir released a video statement, asking the public “let me apologize for the drastic campaign.” Indeed, even the company’s Telegram account ghosted during those hours. In situations like these, especially with new investors to whom ICOs are geared, dangerous emotions are often involved, including drastic measures of self harm. Losing considerable sums is no laughing matter, especially if it’s your money.
For Education Purposes
Mr. Hankir continued, “We’ve noticed in the past few months that there are a lot of scams in the industry and we believe this is just the tip of the iceberg. That’s why we wanted to use this very drastic method to show that even we, as a very heavily regulated German company, could easily have run away with all investments.”
Wirtschafts Woche also revealed that indeed police have visited Mr. Hankir to discuss the issue.
Would you invest in Savedroid now? Let us know in the comments section below.
Images courtesy of Shutterstock.
Need to calculate your bitcoin holdings? Check our tools section.
The post German Cops Look Hard at Antics of ICO Savedroid After Ghost Prank appeared first on Bitcoin News.
IBM and major int’l banking partners report first live pilot transactions from their Blockchain trade finance platform Batavia #NEWS
Today we’ve simply given-in to no nutritional value, guilty pleasure, lowest common denominator: bitcoin-related crime news. Start your day with laughs and head scratching, as we examine the purported Savedroid ICO exit scam, an international bitcoin heist escape, the fury of a scorned woman, a bear spray robbery, and some whole food violence.
Savedroid Appeared to Ghost With Investors’ Money
This can’t be real, right? This must be a publicity gimmick. Well, in any event, German online news source Wirtschafts Woche documents how Savedroid has apparently taken the money and run. The company website was replaced with a meme picture, “Aannnd it’s gone.” Founder and CEO Yassin Hankir tweeted a picture of himself on a beach, long gone. All this after having raised $50 million in an ICO.
Promises of artificial intelligence, curated portfolios, and a native credit card proved too much for investors, and they poured in money. Stranger than fiction.
Reads Like a Movie Script
A suspect involved in an Icelandic heist involving a dozen perpetrators, 600 missing bitcoin mining rigs, was able to evade authorities after they’d managed to arrest him. “Sindri Thor Stefansson” the BBC reported, “escaped the low-security prison through a window and fled to Sweden on a passenger plane that was also carrying Iceland’s prime minister, local media report. The ticket had another man’s name and he was identified through CCTV video. The stolen computers, which are still missing, are worth $2m (£1.45m).” It appears Mrs. Stefansson was also arrested, but he didn’t have time to circle back evidently.
Hell Hath No Fury
Speaking of angry women, the broader ecosystem has been accused as being too male. Well, here’s Tina Jones breaking through the digital glass ceiling. According to WGN, Ms. Jones was “charged after allegedly paying thousands of dollars via bitcoin to a company on the dark web to murder the wife of a man she had an affair with, according to officials. Tina Jones, 31, appeared at bond court Wednesday morning where a judge set bond at $250,000. She was charged with one felony count of solicitation of murder-for-hire.”
Bearly Escaped with Bitcoin ATM
The Irving Patch, a Texas local online news source, are attempting to help police find two men. Police claim they “entered a store […] and sprayed a clerk with bear spray before making off with cash from a Bitcoin machine …. They can be seen in security footage spraying the store clerk with bear spray, a powerful form of pepper spray, before heading to the back of the store where the Bitcoin machine was located ….The clerk was taken to a hospital for treatment after being sprayed but was later released.”
Well, He Warned Him
Government crackdown on legitimate cryptocurrency exchanges usually receive very positive media coverage. What both government and mainstream media often miss is how less online exchanges necessarily means more face-to-face encounters, which can be dangerous for reasons bitcoin traders are well familiar. Case in point: a Miami man wished to turn $30,000 cash into more than that in bitcoin. He met supposed crypto dealers at a public place, a local Whole Foods parking lot. The fellow with the cash brought a gun just in case something went wrong. Turned out to be a pretty good idea. He was jumped for the money, and as he was attacked, yelled to his attacker, “Back off, I have a weapon,” the Miami Herald details. The attacker didn’t listen, and was shot. He was later arrested after being taken to a local hospital.
Bitcoiners Wanted at Citi
A recent now hiring Linkedin post detailed how Citi is looking for a “Senior Vice President, Senior AML Compliance Officer —Emerging Risk,” in Tampa, Florida. “Knowledge of cryptocurrency and bitcoin monitoring” and “Certified Bitcoin Professional Certification a plus,” are among the job qualifications and requirements.
More Spring Cleaning
Clearing off some smaller stories, Riot Blockchain has been subpoenaed. The Securities and Exchange Commission of the Philippines issued a rather blunt warning about what it terms bitcoin “schemes” to defraud investors. It lists more than a dozen companies by name, and proceeds to go through steps to identify future scams. Josh Ellithorpe tweeted how he “Just released my first open source project at Coinbase. If you need Cashaddr support for your Ruby app then you should check it out!” here.
Do you think Savedroid really scammed its investors? Let us know in the comments section below.
Need to calculate your bitcoin holdings? Check our tools section.
The post Bitcoin in Brief Thursday: ICO Scares Investors with Ghost Prank appeared first on Bitcoin News.
The founders of cryptocurrency startup Savedroid appear to have exit-scammed investors following the conclusion of its initial coin offering (ICO). On Wednesday, the website for the German company unexpectedly went offline and has since been replaced by a single image — the “Aannd It’s Gone” meme, which first originated on South Park. And in case
The post ‘Over and Out’: $50 Million Savedroid ICO Makes Apparent Exit Scam appeared first on CCN
Cryptocurrencies are often criticized for failing to replicate some of the basic functions of fiat money. Governments are always ready to warn you that you can’t spend, or save, or trade, or make digital coins. This state of mind, however, is slowly but surely changing, as more benefits become apparent. Paying, saving, investing – bitcoin can serve all these purposes, and sometimes that happens with approval from authorities.
Failing to Be Fiat, Proving to be Money
Policy makers and central bankers often claim that cryptos are unable to perform basic functions of fiat money – means of payment, medium of exchange, store of value, and unit of account. Many times, however, they acknowledge one or more of these characteristics, especially when that serves their priorities. Filling the coffers is one such priority, if not the main one, for just about any government. Taxes are the major source of budget revenues for most countries with open market economies. Last year’s record highs have put cryptocurrencies in the spotlight of this year’s tax campaign.
But how do they tax something they pretend does not exist, or exists without permission?
Authorities had very little time to solve the dilemma. Only a few months separate the bull run that pushed bitcoin to almost $20,000 in December and Tax Day, which in many countries comes in April. That’s probably why we see some unexpected concessions in regards to cryptocurrencies.
“There is no plan to increase the use of private cryptocurrencies” – that’s what Latvia told Coppay, when the company inquired about crypto payments last year. “We consider them unable to fulfill money functions and a high risk means of payment,” the country’s central bank said in November. Latvijas Banka also “invited financial institutions and citizens to avoid engagement in crypto activities”. In April of this year, however, authorities in Riga decided that cryptocurrencies are “taxable”. They plan to collect 20% on gains from crypto deals now when the Finance Ministry recognizes them as a “medium of exchange”.
If Latvia is not big enough to be a major precedent, how about Germany? Authorities there decided not to tax bitcoin when exchanged with euros, but VAT is imposed on sales in bitcoin. Sounds like they are talking about a currency. Gains from long-term crypto holdings won’t be taxed. Isn’t that an acknowledgment that bitcoin can store value? By the way, crypto payments are doing well in the Federal Republik. Last summer the country’s largest online food delivery portal started accepting bitcoin (now both in BTC and BCH). In March, Germany’s Tourism Board announced it is also taking cryptos for its services.
Cryptocurrencies received another recognition in Switzerland (who would’ve thought?). A high-ranking Swiss National Bank official recently said: “Private-sector digital currencies are better and less risky than any version that might be offered by a central bank”. A government-backed cryptocurrency would deliver scarcely any advantages, but would give rise to incalculable risks, according to Andrea Maechler, member of the central bank’s governing board. What’s that supposed to mean? Decentralized money benefits financial stability?
Russia thought about a national cryptocurrency for a while, but eventually decided to put the “cryptoruble” on the back burner. Its central bank thinks it is “not appropriate”, and the finance minister says it’s not even possible. Instead, Russian authorities are now working to comprehensively regulate independent cryptocurrencies, with 27 digital economy bills expected by the end of the year. One of the draft laws aims to legalize the use of “digital money” for payments.
The Russian Federation has also been thinking about circumventing western sanctions with the help of cryptos. Different proposals in that direction have been made by both experts and officials. One of them suggests to use a crypto coin in international transactions with partners from the Eurasian Economic Union and BRICS. Centrobank has voiced its support.
Death, Taxes… Cryptos
There is a strong argument in favor of state money that’s hard to put down. No matter how deflated or useless a national currency may be, the government that has issued it is obliged to accept it as a legal tender. That’s not the case with cryptocurrencies, as there is no government or central bank behind them. However, an interesting development is worth noting. It is taking place in the land where “nothing can be certain, except death and taxes”.
Have you ever heard of a government accepting taxes in a foreign currency? Well, bitcoin is not exactly a foreign one, but it’s still a different currency. Nevertheless, it may soon be recognized as a legitimate payment option by tax authorities in at least two U.S. jurisdictions. Yes, Arizona and Georgia are working on that.
Reliable means of payment – ✓, secure store of value – ✓, popular medium of exchange – ✓… Many governments, central banks, and financial authorities have so far acknowledged one or two of the “real money” features of bitcoin. One more deserves a mention! Yes, they all like it a lot – “the technology behind it”, the blockchain, is what makes it a good unit of account – ✓.
Do you think bitcoin checks all boxes? Share your thoughts on the subject in the comments section below.
Images courtesy of Shutterstock.
This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.
The post The Government Dilemma: How To Tax Something One Pretends Does Not Exist appeared first on Bitcoin News.
Bitcoin in Brief today is slanted toward a crypto winter slowly thawing, as Pantera Capital bets on a moonshot price point. Also, the world’s most popular decentralized digital asset has been forked more than a plate of good pasta; there’s a growing list of countries who’re less likely to nab your crypto profits; Yahoo! smashes rumors; and a good-hearted wager between bitcoin core and bitcoin cash partisans exemplifies how ecosystem actors should treat one another.
Also read: Bitcoin in Brief Saturday: Hide Your Seed
A Panther’s Moonshot
Bulls have a panther as their advocate to help thaw this crypto winter. We reported this week, “Pantera Capital, an investment firm exclusively operating in the cryptocurrency and distributed ledger technology sectors, has published a letter predicting that bitcoin has established the low for its current bear market. Pantera cites a number of factors as informing its market outlook.”
Among those factors are taxes on capital gains, where estimates are in the many, many billions expected from enthusiasts. That in turn, the fund theorizes, dragged prices down, and bitcoin core has found a bottom at $6,500, as holders were forced to sell in order to pay government bills. We continue, “Pantera also states that ‘It’s highly likely’ for the price of bitcoin to exceed its previous record highs of $20,000 ‘within a year,’ asserting that ‘A wall of institutional money will drive’ the growth in price.”
Speaking of Taxes
Until that prediction comes true, readers should pack their bags to save money from the tax man! Start looking for places to stay in Germany, Slovenia, Denmark, Belarus, South Korea, Singapore, as they’re some of the most advantageous.
We stressed how many “jurisdictions have yet to update their tax laws to encompass cryptocurrencies. Rules governing taxation are often incoherent and very different even in countries that are part of a common space. In the European Union, for instance, tax rates in member-states vary between 0 and 50%.”
Be honest. You’ve never heard of Bitcoin Minor, Bitcoin King, nor Bitcoin Boy. How many times would you guess the Bitcoin network has been forked? During an extensive and really interesting investigation, we revealed nearly 70 times. That’s right, 70.
We summarized findings as how forking “bitcoin used to be a rarity. Then it became the norm. And then it became a meme, with anyone and everyone forking bitcoin on a weekly basis. There have now been a total of 69 bitcoin forks plus another 18 altcoin forks. Holders of bitcoin, monero, ethereum, and litecoin can claim almost 80 additional coins for free. Whether it’s worth their time to do so, however, is another matter.”
The Fork of All Forks Remains a Solid Option
The most famous of forks is, of course, bitcoin cash (BCH). Its being faster, sleeker, younger, and bigger (block wise) has lead those on the bitcoin core (BTC) side to take a stance on BCH’s long term viability. And while each side feels passionate about its coin, and the future that it entails, debate often become rancorous, turning everyone off.
We reported how two well-known advocates joked and ribbed one another about Core’s anticipated Lightning Network solution. They bet bragging rights if a demonstration of the solution failed a basic transaction. Loser would have to wear a t-shirt of the winner’s coin. Regardless of which won, the import is how the two men exchanged laughs and good humor, and the ecosystem needs more of both.
Japan Continues to Lead
No laughing matter is how the crypto winter continues its thaw as “Yahoo! Japan has confirmed that it is entering the crypto space by acquiring a stake in a Japanese cryptocurrency exchange that is already licensed by the country’s financial regulator. The company plans to launch a crypto exchange in the fall of this year,” we explained.
We Have the Best Readers in All of Crypto
Thanks to our readers liking and sharing, our post on aspects of Islam possibly opening to cryptocurrency was picked up and republished and referenced around the world. Some contend it was the root cause of bitcoin’s recent price rebound. Great job, gang.
The crazy good book by Wendy McElroy we continue to serialize brings in wonderful reader comments and observations. To wit:
Do you think bitcoin will continue to rise or to fall to new lows? Let us know in the comments section below.
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A growing number of governments can’t resists the temptation to get their hands on some of the bitcoins their citizens are making. Several states, however, think that leaving some breathing space for crypto users and entrepreneurs is a better idea in the long run. Crypto-friendly tax regimes can still be found around the world.
Tax Exemptions Offered Here:
Germany, Europe’s economic locomotive, has been quite careful with crypto taxation. Last month the Federal Ministry of Finance issued a notice which treats bitcoin as a currency. The Bundesrepublik is not going to tax cryptos when exchanged with euros. Purchases with bitcoin are subject to VAT, just like any other. No tax will be imposed, however, on long-term investments in cryptocurrency. If a trader sells a bitcoin more than a year after its purchase, the profit is exempt from taxation. The same applies to yearly profits of less than €600.
Capital gains of individual investors trading cryptocurrencies are not taxed in Slovenia. Its residents are not required to report them in their income tax returns. However, private individuals who receive their income in cryptocurrency, are obliged to declare the digital money and pay regular income tax. The country uses a progressive scale and rates vary from 16% on incomes of less than €8,000 a year to 50% on incomes exceeding €70,000.
Tax authorities in Denmark have said that fintech companies should pay taxes just like any other business. On the other hand, individual investors trading cryptos do not owe any tax on their gains.
Belarus has created a friendly environment for crypto investors, both corporate and private. Activities like mining, issuing, and trading coins were legalized in March. A presidential decree introduced tax exemptions for crypto incomes and revenues for a period of five years.
Gains from cryptocurrency transactions are still tax free in South Korea. The Finance Ministry and the tax authorities in Seoul are working on a legislation that is likely to change the situation. The new tax bill should be adopted in the first half of this year, according to officials. No concrete time frame has been set.
Buying bitcoin will save you taxes in Singapore. Digital coins are not considered commodities there and are not recognized as currencies. In the absence of special requirements, gains from crypto investments of private individuals are not taxed. Companies trading cryptocurrencies, however, are expected to pay taxes on their profits.
Incoherent Rules Govern Crypto Taxation
Many jurisdictions have yet to update their tax laws to encompass cryptocurrencies. Rules governing taxation are often incoherent and very different even in countries that are part of a common space. In the European Union, for instance, tax rates in member-states vary between 0 and 50%.
The situation in the US is also complicated. Several states have taken steps to become crypto-friendly jurisdictions. Wyoming passed a bill exempting cryptocurrencies from property taxation. Two other states want to legalize bitcoin as a payment option for tax purposes. Arizona has promised to become the first US state to start accepting taxes in cryptocurrency. Georgia may also allow its residents to pay taxes in bitcoin.
What taxes on crypto incomes and profits do you have to pay in your country? Tell us in the comments section below.
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A subsidiary of Börse Stuttgart, the second-largest stock exchange in Germany, is releasing ‘the first crypto app in the world to have a traditional stock exchange behind it.’ #NEWS