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As Cryptocurrencies Grow More Popular, IRS Attacks Bitcoin Exchange

Currencies / Bitcoin Nov 23, 2016 - 12:59 PM GMT

By: Jeff_Berwick

Currencies

Coinbase, a popular American bitcoin exchange, is under fire by the IRS – one of the most ruthless government agencies –  for being suspected of “failing to comply” with tax laws.

Because of the “war on cash,” privacy concerns and price inflation, people are flocking into cryptocurrencies such a bitcoin. But such alternatives to monopoly-fiat paper money are hated by the handful of human overseers who control the monopolized central banking system.

Privately held exchanges like Coinbase facilitate the exchange of fiat currencies and commodities for a given amount of bitcoin depending on the price being quoted.


Without exchanges, bitcoin commerce would become at least improbable if not impossible.

Enter instruments of the state like the IRS.  The IRS is demanding information on all Coinbase user transactions from 2013-2015.

IRS officials claim Coinbase may be helping US citizens evade taxes. This is in spite of Coinbase’s track record as being “stringently compliant” with regulations in the past.

Bitcoin, being decentralized and deflationary is one of the easiest and safest cryptocurrencies for those seeking to protect their assets from being extorted through taxation. Lots of people use it, including presumably a lot of Americans.

Since anonymity is highly valued and respected in the bitcoin and cryptocurrency community, this probe has massive implications for both the future of Coinbase and its users. While their hands are likely tied to a certain degree, the exchange did say:

“We take user privacy very seriously and will work to protect the privacy of our users in broad information requests. We are taking a very careful look at this petition and the scope of the government’s authority as it relates to this request.”

However, should the exchange comply with the request in its entirety, the identities of its users would be revealed to the US federal government, which will put people’s financial lives in jeopardy. It will also likely mark the end of Coinbase’s popularity as its user trust is severed.

The IRS issued what they call a “John Doe” summons to Coinbase to seek users who have “failed or may have failed to comply with provisions of the internal revenue laws.”

The case has been assigned to US Magistrate Judge Jacqueline Scott Corley in San Francisco, though as of the writing of this article, there aren’t any scheduled hearings and Coinbase hasn’t filed a formal legal response yet.

The timing of the summons is at least dubious. Considering that this initiative started this week after a US Treasury audit earlier last week in which the IRS was heavily criticized for failing to recognize the potential for tax fraud by virtual currency users, it seems like there is a correlation.

Since the Bank Secrecy Act was passed in 2013, The IRS was assigned the task of  “advising the public on tax compliance while using virtual currencies” – something Treasury auditors claim it has failed to do adequately.

Even if Coinbase fails to fully comply, its users will still likely need some reassurance that their privacy is protected if they are going to continue using the platform.

This is especially true considering that the majority of bitcoin users are particularly well-versed in the way of government monetary intervention and manipulation.

Sadly, many of us, Americans more so than others, are living in a world where keeping all of your hard earned money is illegal. You’re expected to pay tribute (taxes) to an authoritarian crime syndicate who misappropriates and squanders the funds they claim they’re using for the betterment of the public.

Instead it’s used to fund the bombing of people – tens of thousands of children included – in foreign wars in the Middle East and Eastern Europe. The perfect example being that during 2015, under the US’s own Nobel Peace Prize winning O’bomber administration, the US military dropped 23,144 bombs – around 22,000 of which landed in Syria and Iraq.

So people who oppose the US government’s orchestration of genocide and who choose to avoid funding it by using cryptocurrencies like bitcoin to circumvent taxation, will likely be labeled criminals by … the ultimate criminals.

Even though the government has been and continues to go after exchanges like Coinbase, they can’t touch bitcoin itself despite their best efforts. This is what makes bitcoin so powerful and valuable as a medium of exchange. Its decentralized nature makes it nearly impervious to just about any governmental abuse – except in event that the internet or power grid is completely shut down. However, even if that were the case, bitcoin could still function, albeit much less efficiently.

Most people will be hurt financially and otherwise during these uncertain financial times, but you don’t have to be.

Here at TDV we keep up with all these trends to bring you the most pressing and timely financial information. Our team is constantly monitoring the news in real time to pick apart the nonsense and provide you with the best insights to help you survive and prosper through all this turmoil.

For people who are new to the cryptocurrency space, but want to learn the fundamentals about getting started with bitcoin, subscribe to TDV where you’ll gain access to a number of valuable resources including our new ebook Bitcoin Basics: A Guide for Cryptocurrency Newcomers which like all our ebooks, comes free with your subscription.

If you want to learn more about the war on cash being waged on other fronts such as in India right now where the 500 and 1000 rupee notes have been discontinued, check out one of my most recent Anarchast interviews with Balasubramanian S of the Cambridge certified TATVA School in Chennai, India HERE:

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

© 2016 Copyright Jeff Berwick - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Jeff Berwick Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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