Monday, February 26, 2018

Bitcoin anonymity is no match for the IRS as largest U.S. exchange to hand over transaction records

On Feb. 23 the largest cryptocurrency exchange in the U.S. sent out official notices to over 13,000 customers of an impending data dump of their trading transactions to the Internal Revenue Service.

Focusing primarily on individuals who conduct high volume trading through the exchange due to a court ruling last year, the IRS is using the power of taxation to crackdown on Bitcoin and other cryptocurrency trading in U.S. markets.

US-based cryptocurrency exchange and wallet service Coinbase sent an official notice Friday, Feb. 23 to approximately 13,000 of its customers whose information it is legally required to turn over to the US Internal Revenue Service (IRS). 
The IRS had initially asked Coinbase in July 2017 to hand over even more detailed information on every one of its then over 500,000 users in an attempt catch those cheating on their taxes. However, another court order in Nov. 2017 reduced this number to around 14,000 “high-transacting” users, which the platform now reports as 13,000, in what Coinbase calls a “partial, but still significant, victory for Coinbase and its customers.” 
On Friday, Coinbase told the around 13,000 affected customers that the company would be providing their taxpayer ID, name, birth date, address, and historical transaction records from 2013-2015 to the IRS within 21 days. – Coin Telegraph
Back in 2013 a Federal court out of the jurisdiction of New York ruled that Bitcoin and other cryptocurrencies were determined to be securities, and as such subject to capital gains taxes.  And rather than attempt to fight the validity of what the industry itself calls 'digital currency', government and elected officials have remained neutral in choosing whether to attack cryptos on the grounds of legal tender laws and instead are focusing on using taxation as the means to regulate the industry.


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