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ICOs (Initial Coin Offerings) have skyrocketed in the past few years. A lot of attention has been given to regulatory matters than the potential tax issues that may soon arise for both investors as well as issuers. The IRS (Internal Revenue Service) didn’t issue any guidance related to the tax treatment of token issuances. Taxpayers are mostly left to apply existing-tax-rules, depending on regulations and models that offer flawed analogies to token issuances.

cryptocurrency and taxes

Cryptocurrency and Taxes

Overall, the facts of a certain token issuance, which includes the rights related to tokens must be scrutinized to regulate the proper characterization of the tokens for tax-related matters. A token has to be considered as an equity interest in the issuing entity, however, the tax consequences to the holders and issuers will rely on the buckets that token falls into.

The rules can be way too much complex if the equity interest is in a partnership, and if the taxable income partnership will surge over to the investors, so they may have a constant tax liability. Furthermore, if an investor uses “appreciated cryptocurrency” to get the tokens, it will end up in current-tax to the investor on the appreciated cryptocurrency, however, considering other facts, the investor may have the ability to claim that the cryptocurrency exchange for tokens was “tax-deferred.”

There are few token issuers that issue some of their tokens for free through an “airdrop.” Receivers usually sign up for airdropped-tokens through the website of the issuer, and sometimes they have to use social media platforms to disseminate information about tokens in order to receive them. For the receiver, the value of tokens that he/she receives in an airdrop is a taxable income.

Token issuers usually pre-sell some tokens via SAFT or SAFE-T. The holder, under a SAFT usually pays a fixed-amount for getting the right to collect a determinable number of tokens. SAFT often provide that the envisioned SAFT’s tax treatment is as a “forward contract.” If this treatment is appreciated, then the tax on the purchase amount must be delayed ’til the tokens get delivered to the SAFT holder.

Though, SAFT as a forward contract won’t necessarily be appreciated by the Internal Revenue Service, as the agency may pursue to re-characterize SAFT to extricate it from a traditional prepaid “forward contract.”

Based on SAFE (Simple Agreement for Future Equity), SAFE-T is planned to be considered as an equity instead of alterable debt. SAFE-T’s tax treatment is ambiguous; however, it comprises the elements of both SAFE and SAFT.

It’s quite clear from that there’s only a little guidance from the IRS about how token offering is treated for tax purposes. Determining how to describe these tools for tax-purposes is an exhaustive procedure. Issuers must look up for a tax adviser to get some help in organizing their token offerings.

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Buy Bitcoin in UK – 6 Best ways to buy Bitcoin in UK

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This article explains six easy methods of buying Bitcoin in UK. There are several options to choose from, such as buying Bitcoin using cash, card, or bank transfer. Based on your level of convenience, you can choose whichever you want.

Ways To Buy Bitcoin In UK

Method 1 – Buy Bitcoin With Credit Card In The UK:

The steps involved in buying Bitcoin with credit card in UK are:

  • Pick a Website: Some of the best sites to buy Bitcoin with credit card in the UK include Bittylicious, CoinCorner, and Circle. The process mostly includes some steps which are chosen service and follow their on-site instructions. A new arrival named ‘Circle’ may change this trend but they are newcomers and don’t officially support UK cards.
  • Enter the Amount You Want to Convert: The limits of transactions may be low at the start but they will increase after the first successful transaction or after finishing their verification procedures.
  • Enter the Bitcoin Wallet Address to which you want to transfer the coins.
  • Make the Card Payment.
  • Depending on restrictions and a time limit set by each site, you’ll receive your bitcoins.

Method 2 – Buy Bitcoin Using a Buying Service:

Some steps to buy Bitcoin using a buying service are:

  • Pick a service: The purpose of buying services is to make it easy to buy a small amount of Bitcoin. Best options in the UK include Bittylicious, SpeedyBitcoin, QuickBitcoin, CoinCorner, and CoinDuit. Some of them accept cards and some accept cash payments.
  • Enter the amount You want to exchange.
  • Enter the Bitcoin Wallet Address to which you want to transfer the coins.
  • You will pay them usually by Bank Transfer, and you must have the transaction reference which they provide you with.
  • Within 15 minutes after the payment, you’ll receive your coins.

Method 3 – Buy Bitcoin Using an Exchange:

  • Go to a Bitcoin Exchange as CoinCorner and CoinFloor and create an account. CoinCorner and CoinFloor allow you to pay directly in Pounds. You may also choose Bitstamp and Kraken but these Exchanges will involve a conversion of Pounds to Euros and also a SEPA transfer. Generally, this conversion results in an additional fee. This is the best option if you buy Bitcoin regularly or in bigger quantities as the Exchange rates are generally competitive. If you are just starting, you must prefer to use a different option.
  • Transfer money by SEPA or Bank Transfer.
  • Wait for your money to clear about 1 to 4 working days. This differs between Exchanges.
  • Transfer your money for bitcoins.
  • Transfer your Coins from Exchange to your Bitcoin Wallet.

Method 4 – Buy Bitcoin With ATM:

  • Check if there is a Bitcoin ATM nearby.
  • Make sure before going to the ATM that you’ve some Sterling notes because these machines don’t accept credit/debit cards.
  • Go to the ATM. You may also have to bring Proof of ID because some ATM machines require this.
  • Follow the on-screen instructions.

Method 5 – Buy Bitcoin From a Friend Who Owns Bitcoin:

  • Find a friend who already owns Bitcoin.
  • Check the exchange rate.
  • Decide a number of Pounds which you want to exchange.
  • Pay them your Pounds.
  • Provide them your Bitcoin Wallet address so your friends can pay you in Bitcoin.

Method 6 – Buy Bitcoin Using a Trader:

  • Find a Bitcoin Trader as Mycelium, BitBargain, and LocalBitcoins.
  • Choose a Trader with a respectable reputation score.
  • Send a message to Trader and ask further details about how to pay. For pay through cash agree the meeting place and time.
  • When the seller gets the payments, the seller issues the Bitcoin amount to Bitcoin Wallet address you provided.

These are some methods that you can use to buy Bitcoin in UK. Wishing you good luck with your purchase!

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Ripple Becomes The Second Only Currency With A Market Cap Of Over $100 After Bitcoin

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January 3 proved to be a historical day for Ripple. The crypto became the only currency after bitcoin to have a market cap of over $100 billion. At the time of writing, the valuation of Ripple is ~$121 billion.

$19 Billion Surge In 24 Hours:

Ripple’s native token, XRP, went up by more than 24 %, taking the coins value to $3. The huge value surge saw the valuation of ripple go from $95 billion to $116. As a result, Ripple further distanced itself from the third top cryptocurrency, Ethereum, and solidified its spot as the second most valuable crypto after bitcoin.

The daily trading volume of XRP is vigorously amassed in the South Korean market. Korbit and Bithumb are handling 40 percent of worldwide Ripple exchanges, representing more than $2.2 billion of Ripple’s daily trading volume.

On Bithumb, the second biggest digital money exchanging platform on the planet situated in Seoul, South Korea, Ripple stays as the most exchanged crypto, recording daily trading volume that is three times bigger than that of bitcoin.

Despite being the biggest and most liquid Ripple trade market, XRP is being exchanged with a high premium inside South Korean digital money market. On Bithumb and Korbit, Ripple is being traded at $3.5, with a 12 percent premium.

Brad Garlinghouse, the CEO at Ripple, and responsible for the advancement of the Ripple blockchain network, expressed that the “genuine use case” separates Ripple from other computerized assets.

However, as with any other digital money, Ripple met with some criticism. On January 3, P4man expressed that the vision of Ripple to develop into Swift 2.0 isn’t reasonable because for Ripple to become a Swift-like network, banks will need to pick up control over it.

“As for the moonshot of replacing Swift; most importantly, I have doubts over a worldwide agreement protocol being the correct approach. Banks presently control Swift. How likely is it they would give up control to a little startup and allow themselves to become indebted to its private currency, that they have no need for?” wrote P4man for Coindesk.

Story credit: ccn.com

Image: Google images

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Bitcoin Is Rapidly Overtaking Fiat In Venezuela

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A prolonged hyperinflation of the Venezuelan bolivar has made it just about unusable. Over the last couple of months, bitcoin has taken control over the country as the primary currency and the citizens have been using the digital currency to buy basic goods, medicine, and other key items.

Patricia Laya, Venezuelan Bureau Chief at Bloomberg, has revealed that the daily limit of country’s ATMs is set at 5,000 bolivars, worth around $0.05. Laya expressed that she had held up 20 minutes in line to get $0.05 in hyperinflated currency worth just about no value.

Because of the deficiency of money and the quick decrease in the valuation of the Venezuelan bolivar, the residents have started to investigate different strategies for payments since the start of 2017. Since the estimation of money has dove and the residents, organizations, and experts have effectively dismissed the cash, the majority of the Venezuelan population has started to opt for alternative forms of money.

Consistently, the fame of bitcoin inside Venezuela has surged, as a rapidly expanding number of individuals have begun to use the digital money as the primary cash, medium of trade, and store of value.

In a meeting with the Associated Press, Venezuelan inhabitant John Villar expressed that he has purchased two plane tickets to Colombia, his better half’s medicine, and paid his workers with bitcoin in the previous month. Villar stated that he plans to keep using bitcoin like the majority of Venezuelans.

“This doesn’t involve politics. This involves survival,” said Villar.

Currently, it is nearly impossible to buy any goods or services with Venezuelan bolivar, given its low value and adoption in the country.

In coming days, Venezuela may become the first country where bitcoin takes over the national currency and becomes country’s main financial system.

But Why Bitcoin, And Not Some Other Currency?

In Venezuela, the majority of the people have lost trust in the government, national bank, and banks. Its currency is almost broken and its esteem has dived to a point where no goods or services can be acquired with it.

Bitcoin is a decentralized and peer to peer currency framework, store of significant value, and a safe haven asset that shows a trustless ecosystem. Anybody inside the system can send and get payments from each other on a shared premise, without the involvement of intermediaries.

In future, bitcoin will probably rise as the real substitute to the declining fiat monetary standards. In the long term, bitcoin could even replace multi-trillion dollar fiat currencies like the US dollar, Japanese yen, and Chinese yuan, if it continues its current development rate and exponential increment in value.

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Floyd Mayweather – SEC Charges Legendary Boxer with ICO Fraud

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The U.S. SEC (Securities and Exchange Commission) has filed charges against the Centra Tech ICO (Initial Coin Offering), claiming that the legendary boxer, Floyd Mayweather promoted a token sale, which was allegedly a sham security offering.

According to the SEC complaint, the co-founders of Centra ICO are involved in the ICO fraud and made material misstatements as well as omissions that were intended to trick the investors whereas, the Centra ICO was also an “unregistered securities offering.”

ico fraud

SEC Ceases ICO

According to the Securities and Exchange Commission, Centra only pretended to have relationships with major financial institutions and lied about it. The major financial institutions which sent Centra several cease-and-desist letters are:

  • Visa
  • Bancorp
  • Mastercard

In addition to that, some of the executives showed in Centra’s advertising materials were also fake. The co-director of SEC’s Division of Enforcement, Stephanie Avakian stated:

“We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses.”

Furthermore, he added:

“As the complaint alleges, these and other claims were simply false.”

The Securities and Exchange Commission originally subpoenaed Centra in the month of February as part of its wide-investigation into ICOs.

Centra ICO Dependence

The Centra ICO is quite well-known because of its use of celebrity endorsements to advertise its product. Floyd Mayweather, who is known as a legendary boxing champion and has made paid-endorsements for numerous ICOs, had worked a lot on the promotion of the token sale on various social media platforms and got more than 5,600 like and 1,500 retweets. DJ Khaled was also hired by Centra for the promotion of the ICOs; however, no celebrity was named in the summons.

Steve Peikin also stated:

“As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme…. Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.”

The SEC has also cautioned that some of these ICO endorsements by celebrities might be illegitimate especially if the parties don’t make any obligatory public disclosures. On the other hand, Mayweather’s tweet promoting the token sale, such as, doesn’t specify that it is a paid advertisement.

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SEC Official: ‘Dozens’ of Crypto Investigations Are In progress

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on 15th March, Bloomberg BNA reported that Stephanie Avakian (Enforcement Division Co-Director) of US SEC (Securities and Exchange Commission) has confirmed that “dozens” of investigations have been conducted by the agency in the cryptocurrency space.

Press Report

It was reported in February that subpoenas have been sent by SEC to companies, that are suspected of having trouble with the security laws through their contribution in the ICOs (Initial Coin Offerings). The comment of Avakain follows these press reports as she said;

“We are very active, and I would just expect to see more and more.”

cryptocurrency companies

Statement Released by Securities and Exchanges Commission (SEC)

A statement was released by SEC on 7th March, prompting cryptocurrency trading platforms that they are under the control of the SEC as it monitors them and as an outcome, it must register as exchanges. It’s already clear that SEC holds the main responsibility for proposing securities rules, enforcing federal securities laws, regulating the securities industry, and other actions, which includes the electronic securities markets. SEC supervision ended up as three different companies were suspended from trading due to queries related to the cryptocurrency.

What has SEC done against the crypto-related companies?

Over the past few years, the SEC has taken more steps against cryptocurrency companies that it was seeing as flaunting securities laws. Bloomberg also reported that since September 2017, many actions have been taken by the commission against companies.

On 14th March, Mike Lempres (Chief Legal and Risk Officer at Coinbase) has highlighted in a testimony (before Congress) that the major financial regulatory organizations haven’t agreed on the nature of cryptocurrency. In the US, the regulatory framework for cryptocurrencies still remains unclear.

For SEC, it is a security, while the CFTC (Commodity Futures Trading Commission) deliberates tokens as a commodity. If we talk about the IRS (Internal Revenue Service), it considers tokens to be property, while tokens are considered as currency for FinCEN (Financial Crimes Enforcement Network).

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