Tag: mining bitcoin

North Carolina Sends Cease and Desist Order to Cryptocurrency Mining Company

By Mason Mohon | @mohonofficial

The state of North Carolina sent a cease and desist letter to cryptocurrency mining company Power Mining Pool (PMP) last week. It was found that PMP was in violation of multiple parts of the securities act:

The Securities Division found that PMP is violating the Securities Act by: a. offering unregistered securities in the form of ‘mining pool shares;’ b. offering securities while it is not registered to do so; and c. making material misstatements when offering securities.

 

PMP was told that they must not act as a securities dealer in any capacity unless registered with the state, according to Bitcoin.com.

PMP received a cease and desist letter on March 2, but made no effort to respond. On March 6, its website had gone down. The website itself is the only place of business, for there is no known physical location for PMP. The individuals running the organization are also unknown.

The company claims to be able to mine seven different cryptocurrencies, each of which it will mine less when the computer detects that it is not currently “profitable.”


Featured image source.

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The Free Market of Cryptocurrency is Under Attack

By Ryan Lau | USA

Last week, after a hard-fought legal battle in both the House and Senate, the Republican tax bill passed by a narrow majority. Since then, conservatives claiming to advocate for a smaller government have touted the move as a political success, and the biggest tax reform in decades. Though it does reduce some personal and corporate income taxes, the bill is in fact incredibly disturbing on a much different ground. In fact, the very people who claim to be calling for a reduction in government size have just taken a major step in killing the future of cryptocurrency. This tax bill, in its reclassification of the 1031 Exchange law, has in fact done more to extirpate any trace of legal economic freedom than any bill since the Affordable Care Act.

What is the 1031 Exchange, and why is it important? Essentially, this measure, an important part of our tax code, allows for investors to defer capital gains taxes, in the event that an investor is selling a property with the direct goal of purchasing a new one. This has been widely used by house flippers and cryptocurrency traders alike. However, the tax bill has removed cryptocurrency from the list of acceptable 1031 references. Though the IRS has classified cryptocurrency as a taxable capital gain since 2014, it previously was only taxable when exchanging large amounts of it for fiat currency. Hence, reinvesting and exchanging between cryptocurrencies was treated as a 1031 exemption, though this is no longer true. Now, the IRS has permission to tax any and all exchanges between cryptocurrencies, which is an attack on individual liberty and economic freedom.

What does this mean for the future of cryptocurrency? Though small investors will not be significantly impacted due to the simple fact that capital gains tax has a minimum threshold, the impact of larger investments is astronomical. A day trader, who may exchange cryptocurrency multiple times in one single day, he may now find himself subject to a 20% capital gains tax for each exchange. This new implementation will naturally take away some of the perks of trading, reducing the demand for such exchanges. Though investors may still leave their money in one single cryptocurrency for extended periods of time, this action naturally has a smaller maximum profit margin. Even so, the IRS is tight their fists around long-term investments, with a new Senate bill that threatens the future of all cryptocurrencies recently passing.

Though some coins, such as Monero, have greater levels of privacy than others, this ability to hide from the state is quickly shrinking. Action must be taken immediately to protect the rights of cryptocurrency traders, whether it be done through the law or the market. Though investing cryptocurrency in a 401K or Roth-IRA would currently avoid these taxes, these funds have virtually no liquidity, and there are very few, bleak alternatives, such as surrender of citizenship. One should never have to give up their United States citizenship or invest in an offshore account in order to avoid mass theft on personal property, yet with the government’s recent actions, is this fate inevitable? The IRS is concerned with losing out on income, yet forget that they are merely a collective of individuals with no legitimate claim to any individual’s income. This must be recognized, and this bill altered, if we are to protect the rights of the individual.

Senate Bill Threatens Future of Cryptocurrency

By Andrew Zirkle|WASHINGTON

Hidden within the “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017”, also known as S.1241, are far-reaching regulatory provisions expected to heavily affect users, traders, and holders of all types of cryptocurrencies, including Bitcoin.

The bill was pushed into a Judiciary Committee hearing on the 28th of November, without much notice to the public. The bulk of the 2-hour hearing focused on other elements of the bill, with the only mention of cryptocurrency happening very briefly during a discussion on money laundering. The hearing also featured a testimony from Kathryn Haun, who is on the Coinbase board of directors. She did not mention any information regarding cryptocurrency or its exchanges.

The bill, which contains 20 sections, was written under the guise of preventing illegal money operations. However, its relatively small changes to the legal status of cryptocurrency are expected to have far-reaching ramifications. Section 13 of the bill indicates that “digital currency” is to be added to the list of items that the US Treasury Department will consider as “financial institutions.” Although this change in legal definition may seem small, the impacts it would have for cryptocurrency users would be significant.

The owners of cryptocurrency would be required to report their holdings in cryptocurrency to the IRS as assets, and also may be required to pay a long-term capital gains tax of up to 25%, or regular federal income tax of up to 39.6%, on the revenue earned from selling cryptocurrency for more than its previous value. Holders of cryptocurrency who do not report their holdings as assets to the IRS would be subject to tax evasion penalties or jail time. The bill fails to address many of the complexities of digital currencies, including the tax protocol for exchanging US Dollars for cryptocurrency multiple times before selling back to dollars, as well as any tax burdens that may be held by cryptocurrency exchanges.

The measure also subjects holders of cryptocurrency to more government scrutiny, meaning individuals who are believed to be misrepresenting their crypto holdings or transactions could have their financial information seized by the IRS or subpoenaed in court. Section 13 of the bill also requires the “detailing a strategy to interdict and detect…digital currencies…at border crossings and other ports of entry for the United States.”  This means that even someone with basic electronic equipment could be questioned or searched by border and customs officials, as well as the TSA.

Although the bill does contain a lot of important updates to the criminal code regarding money laundering, many in the cryptocurrency community are calling for a re-examination of the bill itself and section 13, as it is widely believed that it does not properly account for the nature of cryptocurrencies in its attempts to regulate.

Bitcoin is Bigger Than Your Bank Account

By Spencer Kellogg | USA

Wow! We did it! No one can ever take this moment from us! 10,000 dollars for 1 BITCOIN! If not a revolution in decentralized currency and power then it is surely the greatest troll ever orchestrated by the powerless. At this rate, if I was a betting man (and I’ve shown myself to be a terrible one), I’d guess that John Mcafee’s member will not be dinner anytime soon. While many traders’ eyes are lost deep in their swelling bank accounts, we must sit back and marvel at the creation, spirit, and determination of the human being. Here in the strung out, psychedelic world of the shadow web, something is so genuinely afoot that no one can look away; Bitcoin. A cultural, economic and political revolution that is singular in its nature and completely borderless. Bottled in the sphere of a new monetary system it is a streaking asteroid aimed directly at the corporate power elite and career-minded politicians who have utilized our centralized banking system to their benefit.

Once a limitless playground for freaks and geeks alike, the internet has drudgingly been reduced to a whimper of censorship, central economic planning, and total philosophical control. While the American & Chinese governments are busy pushing forward plans to further regulate and monetize the world wide web, the cryptocurrency Bitcoin (along with a host of other platforms and tokens) have surged to unseen heights of cultural adoption and economic speculation. Politically, Bitcoin is a completely permissionless anti-state actor against the triumvirate that has long stood against the advancement of our modern democracies: banks, governments, and academia. Each of these three centralized power structures doubted and attacked Bitcoin labeling its users as nothing more than drug peddlers and intellectual neophytes. They continually called it a speculative bubble and denounced its support and implementation as mere fantasy. They were wrong.

Bitcoin is a wholly organic movement built on the simple idea that the power of money and governance should rest in the hands of its people. It is libertarian, it is utilitarian, it is collectivist, it is Marxist, it is democratic. It is a new political idealism rooted firmly inside the spirit of the technological age. This power, boosted by the freedom of information and buoyed by the spirit of individualism, is a direct shot against attempts to limit the internets’ openness, centralize economic power into the hands of the few and degrade the liberty and decency of the individual.

The blockchain can be a greedy sort. Nakamoto must’ve known it would be. I can’t imagine he/she/they intended it as such but truly free markets reveal themselves in the eyes and pockets of its traders. This is a global financial opportunity unseen in decades if not centuries. A bull run so wild that market traders with 40 years of experience would wipe the fog off their charred glasses in stunned silence as a parabolic wall of buys smashed thru the top of their Coinbase client.

Lost in this excitement is the dread of mainstream impact. I am the worrying type. I see how China, with its eyes dead set on the future, has toyed with the Bitcoin market in the past year while also preparing and investing in its future. Meanwhile, our politicians bicker over identity politics and sexual harassment as a tide of money and ideas are surging without reluctance all around them. I imagine what this will look like in 2 years when our Congress finally gets around to sinking its claws deep and I worry. Furthermore, when corporations and governments get around to simply moving their FIAT and banking structures onto the blockchain, what will be the countenance of a growingly statist public?

There is always the chance we will wake up one dull morning to find Bitcoin was indeed, a scam. That it was built on the backs of empty nodes in CIA labs simply to monitor the anti-government leanings of activists and commoners alike. Or worse, as we approach singularity, we could soon find that computers themselves have built a superior blockchain and outpaced the ‘slow minds’ of our human skin rendering Bitcoin worthless. I worry less about these things. Irregardless if they come true, it does not distort the shining truth that lies at the center of this movement: free people.

The next time you open your Blockfolio account to spectacular gains remember: Bitcoin is Bigger Than Your Bank Account.


Featured image by Black Falcon of blackfalcon.org