{"id":1700,"date":"2013-10-05T11:40:38","date_gmt":"2013-10-05T10:40:38","guid":{"rendered":"http:\/\/www.ofcourseimright.com\/?p=1700"},"modified":"2013-11-03T21:15:05","modified_gmt":"2013-11-03T20:15:05","slug":"is-bitcoin-really-money-laundering","status":"publish","type":"post","link":"https:\/\/ofcourseimright.com\/?p=1700","title":{"rendered":"Is Bitcoin Really Money Laundering?"},"content":{"rendered":"

For those who don’t know, BitCoin is an attempt at a new type of currency, one that isn’t linked to any nation.\u00a0 In a way, bitcoin is a lot like gold or other commodities, only it differs in that you don’t actually have to ship anything around or even keep trading futures to stay in the game.\u00a0 Still it accrues similar benefits as gold. In fact there is a bitcoin to gold price, based on milligrams of gold.\u00a0\"\"<\/a> As you can see the number of milligrams one gets for a bitcoin has gone from about 300 in January to about 3,300 in October.\u00a0 Bitcoins have clearly paid off for some people.<\/p>\n

One of the other goals of bitcoin is that they be as anonymous as cash.\u00a0 This is where the problems start.\u00a0 Let’s say you want to sell a few bitcoins, and receive American dollars.\u00a0 One question is simply this: do you have to list the sale on Schedule D?\u00a0 I am no accountant, but I would think the answer would be “yes”.\u00a0 Now let’s say that instead of selling them, you are just holding them, and let’s for the sake of argument say that you have $500,000 worth of bitcoins.\u00a0 Do these represent foreign assets?\u00a0 If so, you are required to file forms with both the Treasury (TD-F 90-22.1) and the relatively new IRS Form 8938.<\/p>\n

Those who in any way behave like banks will find that the Treasury department expects them to do all the things banks do.\u00a0 That includes reporting on suspicious transactions or\u00a0any<\/strong> transaction over $10,000.<\/p>\n

This hasn’t stopped people from attempting to hide transactions.\u00a0 Here’s an article from CNN<\/a> about a guy who attempted to do all sorts of nasty things with Bitcoins.\u00a0 This led to a huge drop in their value, almost overnight.<\/p>\n

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So, now the question: are bitcoins here to stay or are they a passing fad (read: pyramid scheme)?\u00a0\u00a0 The entire technical premise of bitcoins is in fact that they can be anonymously traded.\u00a0 The bad news for people with bitcoins is that because there is no single management point that has guns (thus differentiating them from a classic currency), unless the likelihood is that those with the guns will want to limit or prohibit this sort of transaction; especially in large quantities.<\/p>\n

A similar situation arose in 2001 when the U.S. government began to crack down on those using the old mechanism known as Hawala<\/a>, even though the mechanism is legal.\u00a0 And so one question is simply this: are bitcoins really anonymous?\u00a0 A researcher named Sarah Meiklejohn will present a paper at SIGCOMM<\/a> this month on just what law enforcement capabilities there are.\u00a0 Watch that spot.<\/p>\n

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For those who don’t know, BitCoin is an attempt at a new type of currency, one that isn’t linked to any nation.\u00a0 In a way, bitcoin is a lot like gold or other commodities, only it differs in that you don’t actually have to ship anything around or even keep trading futures to stay in … Continue reading “Is Bitcoin Really Money Laundering?”<\/span><\/a><\/p>\n","protected":false},"author":172,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50,17,87,9],"tags":[484,35,485],"class_list":["post-1700","post","type-post","status-publish","format-standard","hentry","category-complexity","category-economics","category-internet","category-security","tag-bitcoin","tag-fraud","tag-sigcomm"],"_links":{"self":[{"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=\/wp\/v2\/posts\/1700","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=\/wp\/v2\/users\/172"}],"replies":[{"embeddable":true,"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1700"}],"version-history":[{"count":4,"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=\/wp\/v2\/posts\/1700\/revisions"}],"predecessor-version":[{"id":1718,"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=\/wp\/v2\/posts\/1700\/revisions\/1718"}],"wp:attachment":[{"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ofcourseimright.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}