Arizona — Last year, the state of Arizona went after the federal government’s attack on gold and silver by eliminating the capital gains taxes on precious metals. This paved the way to deal a massive blow to the Federal Reserve and end their monopoly on money. While the precious metals move was certainly noteworthy, the legislation passed this month by the Arizona Senate is nothing short of revolutionary as it officially recognizes cryptocurrencies as money by allowing residents to pay their taxes in it.
Arizona Senate Bill 1091, titled Income tax payments; bitcoin, was introduced to the Senate on January 10 and after going through several committees, on Feb. 8, 2018, it passed. It will now make its way to the House.
According to the bill’s text, it specifically names bitcoin and litecoin, as well as “any other cryptocurrency” recognized by the department as official forms of payment.
A TAXPAYER MAY PAY THEIR INCOME TAX LIABILITY USING A PAYMENT GATEWAY, SUCH AS BITCOIN, LITECOIN OR ANY OTHER CRYPTOCURRENCY RECOGNIZED BY THE DEPARTMENT, USING ELECTRONIC PEER-TO-PEER SYSTEMS.
After the state accepts the cryptocurrency, it will then convert them to US dollars, according to the legislation.
THE DEPARTMENT SHALL CONVERT CRYPTOCURRENCY PAYMENTS TO UNITED STATES DOLLARS AT THE PREVAILING RATE AFTER RECEIPT AND SHALL CREDIT THE TAXPAYER’S ACCOUNT WITH THE CONVERTED DOLLAR AMOUNT ACTUALLY RECEIVED LESS ANY FEES OR COSTS INCURRED BY THE DEPARTMENT FOR CONVERSION.
The bill now moves on to Arizona’s House of Representatives.
If the bill passes in the house, it will become adopted and Arizona would become the first state in the U.S. to accept cryptocurrency tax payments beginning from and after December 31, 2019, as stated in the bill’s text.
Referring to the tax bill, Arizona State Republican Rep. Jeff Weninger, told Fox News:
“It’s one of a litany of bills that we’re running that is sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for blockchain and digital currency technology in the future.”
“The ease of use, being able to do it in the middle of the night, being able to do it at home while you’re watching TV,” Rep. Weninger said. “I think in a few years this isn’t even going to be a question.”
One state could allow you to pay your taxes in bitcoin💰
Arizona bill among others that could lead the way in how
governments view digital ‘currency’
— Charlie Lapastora (@charlielap) February 7, 2018
Jack Bitlis, who owns Tag Employer Services also spoke to FOX News, noting that the blockchain and cryptocurrencies are the future. Bitlis stands by his word too as his payroll company allows employees to receive their paychecks through bitcoin and to invest part of their 401(k) into bitcoin.
“We’re living in just a hugely interesting time and, really, we just want to be a part of it,” Biltis said. “We just know that we could be, as Arizona’s chosen to be, at the forefront of this time and encourage these new technologies. That’s just an exciting place to be.”
Naturally, there are some less than optimistic lawmakers in Arizona who are applying Fear, Uncertainty, and Doubt (FUD) on the legislation, saying bitcoin could crash.
“If we had a bill that allowed people to pay their taxes in bitcoin directly, that puts the volatility burden on all other taxpayers because it would mean that that money goes to the state and then the state has to take the responsibility of how to exchange it,” Arizona State Senate Minority Leader Steve Farley said.
Speaking like a true shill of the Federal Reserve, and ignoring the fuvolatilityility of the US dollar, Farley followed up his FUD by saying, “these are American dollars. They’re good enough for me. They should be good enough for anybody else who pays taxes in this country.”
Countering Farley’s negativity and unfounded fear, however, Biltis noted, “It’s always a little scary and thrilling at the beginning, it was with anything (including) the Internet…The world is going to look so different in 20 years and the people that are going to be truly successful are the people that embrace it now and are on the leading edge of that curve.”
As for now, we are crossing our fingers that this bill passes the house and paves the way for a crypto-revolution.
After that, we just need to figure out how to stop the state from taking our tax dollars in the first place.
Bitcoin bounced back 24 percent to $8,280 after falling below $6,000. It is still 60 percent off the $20,000 peak seen on December 17. Bitcoin’s jump has positively affected other cryptos, as the overall market cap rebounded by nearly $100 billion in 10 hours. All 100 top currencies from Coinmarketcap were trading higher Wednesday, after nearly a month of declines. Ethereum added 30 percent to $824, ripple rose to wave of 20 percent to $0.78.
Wednesday’s uptick comes despite Goldman Sachs’ prediction that most cryptocurrencies will fall to zero, repeating what other analysts have said about the absence of intrinsic value in them. Prominent economist Nouriel Roubini also said Tuesday that investors “will hold their melting bitcoins all the way down to zero.”
It is unclear, what is driving the market for a return. Some analysts are saying that speculators are just closing their short positions on bitcoin, propping it up before another meltdown leading to even lower prices.
This week, a Finder.com website has polled several entrepreneurs and investors in cryptocurrencies, and despite the recent bearish news, they forecast that bitcoin will reach $15,000 by March and exceed $43,000 by year-end.
Cryptocurrencies have fallen dramatically over the last few weeks amid tighter bank regulation and government crackdowns and ongoing US investigation into market manipulation.
For more stories on economy & finance visit RT’s business section
Bitcoin is volatile, but traveling back in time to 2010 to buy Bitcoin instead of going to medical school is still a great career plan (helpful calculator).
The question for today is whether we can expect our least deserving rich folks to depart the U.S.
The typical rich bastard with unrealized capital gains can’t renounce U.S. citizenship, move to a tax-free jurisdiction, and then cash in, tax-free. The U.S. charges an “exit tax” for anyone trying to flee. Also the U.S. can disregard the renunciation and continue to try to collect taxes if it deems the citizenship renunciation to be insincere.
Consider the bitcoin billionaire (or at least $100 millionaire). His or her wealth is on a Post-It and nobody else knows about it. So the person who was clever enough to buy bitcoin in 2010 renounces in 2018, becomes a citizen of a country without income tax or one that doesn’t tax foreign holdings, and then starts cashing in without the U.S. government ever becoming aware.
Readers: What do you think? Will an American with secret-from-everyone Bitcoin gains stay and pay the tax? Or develop a sudden fondness for life abroad?
Bitcoin is the “biggest bubble in human history” and is coming down “crashing”, Nouriel Roubini, the chairman of Roubini Macro Associates has warned.
Bitcoin plummeted to a two month low of $7,695.10 on Friday, according to CoinDesk.com. The cryptocurrency fell 4.72 percent to $8,625.50 at 14:57 in London.
Speaking to Bloomberg, Roubini said: “I say it is the mother of all bubbles.
“It is also the biggest bubble in human history if you compare it to say the Mississippi bubble or the tech bubble or Tulip mania or the South Sea bubble.
Asked whether it was bigger than tulip mania, he said it was “much worse”. Tulip mania was a craze in the Netherlands in the 17th Century which saw the price of the flower skyrocket. This resulted in a crash of that market in 1637.
Roubini said: “Much worse, if you look at the peak in the bitcoin it was higher than tulip mania.
“Now it has crashed by about 60 percent compared to the peak of mid-December, has crashed 30 percent the last week and 10 percent today and it’s all the way down to zero.
“The fundamental value of bitcoin is zero.”
He also said that it was not just bitcoin that was experiencing the price plummet, calling all cryptocurrencies a “scam”.
He said: “First of all there are already something like 1,300 plus cryptocurrencies or ICOs and most of them are even worse and don’t have any intrinsic value like bitcoin.
“So if bitcoin is a bubble, they are bubbles to the power of two or three.
“There’s all the hype about blockchain saying okay, maybe bitcoin and cryptocurrencies are a bubble or a fad but blockchain is really a revolutionary industry.
“It’s [blockchain] been around for 10 years, the only application is bitcoin or cryptocurrencies that are a scam.
“In the early days of the internet people will say, well early days you had html, you had web, you had email, you had lots of other things you had millions of applications and hundreds of millions using them.
“After ten years what they can offer in the blockchain space, nothing, just a bunch of cryptocurrencies that are a scam.”
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Bitcoin fell below $8,000, shedding 60 percent of its value in a matter of 45 days, when a $20,000 record was broken.
Numbers two and three, ethereum and ripple, plunged 28 and 33 percent respectively. All but one of the top 100 cryptocurrencies on CoinMarketCap’s list were trading no less than 20 percent lower. DigixDAO was the only exception, with the digital currency trading 45 percent higher.
The decline followed reports on increased regulation in India and potential price manipulation at a major exchange. India’s Finance Ministry declared on Thursday that cryptocurrencies are illegal in the country and the government fully intends to eliminate their use.
The reports that two major exchanges, Bitfinex and Tether, had been investigated by the US regulators and the Facebook ad ban also spooked cryptocurrency investors this week.
The last six weeks have seen bitcoin’s biggest price collapse since December 2013.
For more stories on economy & finance visit RT’s business section
Cryptocurrency woes seem to be on the rise as more and more online exchanges come under fire for what some say are questionable business practices. The latest one to land in the regulatory crosshairs is Bitfinex, a cryptocurrency exchange that’s being accused of artificially propping up the price of Bitcoin through the issuance of its own private cryptocurrency, known as “Tether.”
The Commodity Futures Trading Commission (C.F.T.C.), a United States regulatory agency, decided to subpoena Bitfinex back in December after it was reported that the exchange’s issuance of Tether was being used, at least by some, to attempt to jack up the price of Bitcoin. The allegations suggest that some Bitfinex customers were buying into Tether for the sole purpose of immediately trading it out for Bitcoin, as Tether is backed by U.S. Federal Reserve Notes (FRNs).
It goes like this: Whenever investors hand over cash to Bitfinex, they’re automatically awarded an equal number of digital Tether tokens – one dollar equaling one Tether token. Because they’re supposedly back by U.S. dollars, these Tether tokens are said to hold inherent value that allows them to be traded for other things, including Bitcoin purchases.
Lack of audits, unusual corporate structure, and accountability issues call into question legitimacy of Bitfinex
There’s nothing fundamentally wrong with this setup, per se. But recent mass issuances of Tether combined with Bitfinex’s failure to procure a proper audit verifying that its practices are legitimate has raised some serious red flags that deserve further inquiry. Of pressing concern is the question of whether or not all of these new Tether tokens are actually backed 1:1 with U.S. dollars, or if Bitfinex is creating them out of thin air (much like the Federal Reserve does with FRNs).
Speculation about shady business practices at Bitfinex has been brewing for many years, in fact, as the company is said to have a confusing structure while being notorious for its lack of transparency. One example of this is the fact that the company has European executives, offices in Asia, and registration in the Caribbean – which, to some, isn’t all that reassuring from an accountability perspective.
Another concern is that whenever the price of Bitcoin has seemed to be heading south, large purchases of Tether were waiting in the wings to drive it back up.
“This became more and more concerning, because every time the markets went down, you have seen the same thing happen,” Joey Krug, the co-chief investment officer at Pantera Capital, which runs multiple virtual currency hedge funds, is quoted as saying to The New York Times (NYT). “It could mean that a lot of the rally over December and January might not have been real.”
Another point of contention regarding Bitfinex is the fact that the exchange has been hacked twice – once in 2015, and again in 2016. The Tether system itself has also been hacked (as was the NiceHash marketplace that deals in Bitcoin), with the combined losses of all of these thefts totaling more than $100 million. There have also been problems with Bitfinex customers trying to get their money in and out of the exchange, as multiple banks, including Wells Fargo, have cut ties with the company.
“Greater assurances are needed that the trades taking place are in fact legitimate and reflect buying and selling by independent actors,” comments Tyler Moore, the author of a paper published just a few weeks ago that accuses Mt. Gox, one of the largest cryptocurrency exchanges in the world, of having artificially inflated the price of Bitcoin back in 2013.
“Unless and until such oversight is implemented, we cannot trust the exchange rate to reflect only legitimate sources of supply and demand.”
To keep up with the latest news pertaining to cryptocurrencies and Bitcoin, visit BitRaped.com.
Sources for this article include:
One of the co-founders of a Russian cybersecurity firm recently gave a presentation in which she alleged that the popular cryptocurrency Bitcoin is a project of American intelligence agencies to fund their covert spying operations throughout the world.
Natalya Kaspersky, president of the “InfoWatch” group of companies and co-founder and ex-CEO of antivirus security software company “Kaspersky Lab,” wrote in a presentation slide that Bitcoin “was designed to provide quick funding for U.S., British and Canadian intelligence activities in different countries.”
She further made the implication that Bitcoin isn’t the decentralized, crowdsourced alternative to fiat currency that many people think it is. To the contrary, she says it’s a “privatized” technology just like the internet, GPS systems, and the TOR browser.
“In fact, it is dollar 2.0,” Kaspersky added in the presentation. “Its rate is controlled by the owners of exchanges.
A number of attendees of Kaspersky’s talk at I.T.M.P. University in St. Petersburg are credited with capturing photos of these and others slides that make such bold claims about Bitcoin. Another one alleged that Satoshi Nakamoto, the individual credited with creating Bitcoin, is not actually a person, but rather a “code name” for the collective of U.S. cryptographers that came up with it.
To keep up with the latest Bitcoin news, check out BitRaped.com.
Kaspersky: Smartphones are spy devices, not personal ones
Another claim of Kaspersky’s is that all those shiny smartphones that everyone walks around staring into all the time actually aren’t “personal” devices in the traditional sense of the word. Far from actually benefitting mankind, smartphones are actually attractive looking spy devices that are used to keep tabs on their users.
“(A smartphone) is a remotely controlled device designed for entertainment, work and at the same time for spying on its owner,” Kaspersky is quoted as saying. “The user in 99% of cases agrees to everything,” she adds, pointing to how smartphone “apps” are known data-mining tools that further spy on users.
This doesn’t mean that Kaspersky is necessarily a fan of the more traditional fiat system. She has similar criticisms for other online monetary systems such as PayPal, for instance. Owned by eBay, PayPal operates what Kaspersky says is a monopoly – and one that the company uses to target its political enemies.
“The eBay website (and its PayPal payment system) – Monopolist of world trade through the internet,” she says. “Arrangements or increased fees for Russia, to violate the economic balance and logistics of enterprises.”
Whether you love it or hate it, it is generally now agreed that Bitcoin is probably here to stay. But just how much it’ll actually be worth when all is said and done – and where it’s expected to plateau – is still largely unknown. Many new cryptocurrencies have hit the market, and with this increased competition could come lower prices for Bitcoin. At the same time, some are predicting that Bitcoin will only continue to rise in the longer term.
The other thing to look out for are more crackdowns on Bitcoin exchanges and other services associated with Bitcoin trading. As was seen with the recent shutdown of portions of the BitConnect platform, consumer confidence is vital to the long-term viability of cryptocurrencies, period. When that confidence is damaged by scandals or fraud, the price of Bitcoin has typically plunged.
“I think now in 2018 we have a lot of people that recognize that bitcoin is not going away,” stated Spencer Bogart from Blockchain Capital to the British news outlet Express. “But we have to go back and if we rewind to 2014 when bitcoin came off its highs of $1000 and started declining back to 300, we had the bust of the Silk Road and Mt. Gox.”
Sources for this article include: