The risk with Bitcoin is that the government could simply change the definition of money. That is what they did to me back in 1980 because I was one of the three main market-makers in gold (perhaps the biggest). It was all a hunt for taxes, not concerning me but my clients. I have explained before why I retired from making markets in gold — the IRS declared me to be a BANK! When gold was legalized in 1975 and began trading on the COMEX in New York, the New Jersey Senate asked me to write the law on gold to make sure it would not be taxable to buy and sell gold bullion. I worked with Senator Foran and developed the language that “gold was not taxable unless converted to use.”
https://www.armstrongeconomics.com/world-news/cryptocurrency/bitcoin-being-declared-a-financial-institution-beware/
Now comes Bitcoin. The Judiciary Committee of the United States Senate is currently working on Bill S.1241 that aims to criminalize deliberate concealment of property or the control of a financial account. The bill was submitted in June, and the law would change the definition of “financial account” and “financial institution,” and thus also cover digital currencies and digital exchanges. Who is pushing it? None other than California’s Senator Dianne Feinstein, who maintains that the bill is needed to update existing money laundering laws because of terrorists.
This means that the miners of Bitcoin will become a “bank,” as I was declared. The operators of the trading platform Coinbase were forced by court ruling to notify the IRS of the identity of over 14,000 investors who were trading $20,000 in Bitcoin. Users were affected if their trading volume had exceeded $20,000 at the beginning of 2013 by the end of 2015. So this is NOT a single transaction, but accumulative. The IRS will now “presume” tax evasion. This is what I warned would happen. Been there done that! They can shut down Bitcoin in the blink of an eye by simply defining anyone who is a miner to be a financial institution.
The bill will change the definition of “financial institution” in Section 53412 (a) of Title 31 , United States Code. The text will read:
“An exhibitor, a redeemer or a cashier of prepaid access devices, digital currency or a digital exchanger or a digital currency.”
The regulation will remove the anonymity of Bitcoin and other cryptocurrencies defeating this idea that there is an alternative-financial-universe separate from government.
