Cryptocurrency is property

Cryptocurrency is property

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Cryptocurrency is property

Do you own cryptocurrency? Bitcoins, released in 2009, were the first decentralised cryptocurrency and since then over 6000 other types of cryptocurrencies have been created.

After the value of bitcoins skyrocketed from $998 in January 2017 to $19,783 in December 2017, some New Zealanders started trading in cryptocurrency, including through New Zealand-based cryptocurrency firm Cryptopia Limited. Unfortunately, Cryptopia Limited was placed into liquidation by its shareholders after its servers were hacked in January 2019 and around 9-14% of its cryptocurrency was stolen.

The liquidators of Cryptopia estimated that it held cryptocurrency worth about NZD $170 million at the time of liquidation, however, the issue arose as to whether the cryptocurrency belonged to the account holders, or whether it should be distributed amongst Cryptopia’s creditors. The appropriate course of action depended on whether cryptocurrency was property and capable of being held on trust for the account holders, and whether Cryptopia did in fact hold the cryptocurrency on trust for its account holders.

In a recent judgment, the High Court determined that cryptocurrency is property, and can therefore be held in trust. The Court held that cryptocurrency was property because:

  • The definition of “property” is very broad in New Zealand, and the definition of “assets” under the Companies Act is even wider.
  • Cryptocurrency is identifiable. Each unit of cryptocurrency has a “public key”, a unique string of characters that distinguishes one unit from another.
  • Each unit of cryptocurrency can be allocated to an individual owner by creating a new and unique “private key” after each transaction that inhibits the possibility of involuntary transfers.
  • Units can be traded to third parties.
  • The Court also considered recent international cases involving the question of cryptocurrencies as property and found that they were generally supportive of the conclusion that cryptocurrencies are property.

    The Court found that Cryptopia intended to create a trust when it created the exchange. It did not intend to, and did not, trade in the account holders’ digital assets in its own right.  Cryptopia was a platform to enable account holders to store and trade their own cryptocurrency.

    This decision is good news for account holders in Cryptopia Limited, as they are likely to be able to recover cryptocurrency stored in their accounts, to the extent that it wasn’t stolen in the original hack. However, the decision is a reminder of the risks that cryptocurrency holders and traders face due to the decentralised control inherent in cryptocurrencies.

    Source: www.tompkinswake.co.nz

    Author: VO2 Digital Thinking


    The situs of cryptocurrencies: an answer, but for how long?

    The situs of cryptocurrencies: an answer, but for how long?

    If you are an individual who invests in or trades in cryptocurrencies and you pay taxes in the UK, you should probably be aware that HMRC consider your virtual currencies to be firmly within their remit.

    The much-discussed volatility of the cryptocurrency market means that it is not an investment for the faint-hearted. This is proving to be particularly true during the current coronavirus pandemic as it puts to the test the theory that cryptocurrencies are an ‘uncorrelated safe haven’, with dramatic results: the price of a Bitcoin dropped from $10,367 on 14 February to $4,944 on 16 March, performing far worse than global stock markets, although to date it has recovered somewhat.

    Cryptocurrencies also pose challenges to HMRC, albeit of a different kind: how to obtain information about anonymous transactions which take place outside of the infrastructure of traditional financial institutions and how to tax this strange new breed of asset in a fair and consistent way. HMRC has, thus far, responded by announcing its intention to invest in technology to help close its intelligence gap by identifying blockchain participants who may be evading tax or committing money laundering offences, and by releasing a series of updates to its cryptocurrency tax guidance which it first published in 2014. It is also understood that a further HMRC cryptoassets manual dealing with some specific issues is being prepared.

    For a UK taxpayer wishing to correctly report their cryptocurrency holdings, the journey is fraught with issues. However, while there are many aspects of cryptocurrency usage which give rise to interesting, yet complicated, analyses from a tax perspective, one question which has gained attention recently is: where are cryptocurrencies located for tax purposes?

    For UK resident and domiciled individuals, this answer to this question is unlikely to matter, since they already pay UK tax on their worldwide income and gains. However, for UK resident, non-domiciled individuals (RNDs), and possibly also for former RNDs who are still UK resident, the answer may have important repercussions for their tax liability. RNDs only pay UK tax on their UK-source income and gains and on their non-UK-source income or gains that are remitted to the UK.

    On a strict reading, the question is doomed to be inconclusive: how can you identify the location, or situs, of an intangible, digital asset, which is essentially a string of numbers and letters, recorded on a decentralised ledger known as the blockchain? Many different approaches have been suggested to find a sensible rule that can be applied fairly to taxpayers. For example, one is that the situs should be where the wallet that holds the cryptocurrency can be accessed; another that it should be tied to the residence or domicile of the individual beneficial owner.

    On 20 December 2019, HMRC released an update to its 2018 guidance, in which they indicated for the first time that they will treat an individual’s ‘cryptoassets’ (at present limited to ‘exchange tokens’ such as Bitcoin and not, for example, security tokens received from an initial coin offering) as located in the jurisdiction in which that individual is resident. (It is assumed that ‘residence’ in this case means tax residence, although a small number of commentators consider that habitual residence is the proper test – the guidance is not specific).

    Secondly, HMRC have not given any guidance or assurances about how these rules will be applied retrospectively, if at all, and if tax is owed, whether interest and penalties would also be charged. Many RNDs and former RNDs who are still living in the UK may therefore need to review their historic reporting and decide whether to re-open earlier tax returns or otherwise make a disclosure to HMRC, in order to bring their tax reporting into line with this guidance. This might not be a concern if they are not planning to stay much longer in the UK or are planning to gift their holdings, but if they plan to sell off some of their cryptocurrencies or carry out another transaction which would be reportable while UK resident, it may be necessary to give this some consideration.

    Thirdly, as the guidance has been issued unilaterally without international cooperation, there may be instances where the UK’s rules conflict with other countries’ rules as they develop, which could affect individuals with dual residence, for example, and give rise to a complicated analysis of relevant double tax treaties.

    An individual’s UK tax residence usually has no bearing on his exposure to UK inheritance tax (IHT). This rule appears materially eroded if tax residence now determines where an individual’s cryptocurrency is located for IHT purposes. If this is correct, some RNDs may find that their potential exposure to IHT has substantially increased if they die while UK resident and owning cryptocurrencies. This may mean that some individuals need to reassess their estate planning and testamentary arrangements or the amount of life insurance cover they take out. The new rule also implies that common pre-deemed domicile planning strategies such as settling an offshore trust with non-UK assets to shelter such assets from IHT will not be possible for cryptocurrencies, and non-UK individuals who have already settled cryptoassets into trust (a topic on its own) will need to take advice if they intend to move to the UK. Confirmation from HMRC as to whether it is possible to use a situs blocker such as an offshore company to hold cryptocurrency would be welcome.

    Finally, a quirk of the rules is that an individual with no connection to the UK who gifts cryptocurrency to a UK resident individual will now find that they have made a potentially exempt transfer, which could result in UK IHT being levied at up to 40% on the value of the gift (after taking their available nil rate band into account) if they survive less than 7 years from making the gift. This is because the asset becomes UK situs as soon as it is received by the UK resident individual and the general rule for IHT is that, for non-UK domiciled individuals, IHT is only charged on their UK situs assets.

    HMRC’s duty is to come up with a rule that can be consistently and fairly applied in order to provide certainty to taxpayers. The new guidance certainly has the advantage of being very straightforward, in an area of great complexity. One of the more plausible alternatives would have been to link the situs of a person’s cryptocurrency holding to the location of the private key, since the private key is what gives ultimate control over the asset. This would have been much more difficult to assess since private keys can be held in a variety of ways, such as on a computer, on email or on paper, and they may also be split into parts for security. Moreover, a private key itself is not property as it is easily replicable, like a password.

    However, while HMRC’s solution may be relatively straightforward to apply (subject to the comments made above) and may be advantageous for some who now do not have to be concerned about making future remittances, it may have potentially inequitable results on some individuals. Given the complexity of the technology and the variety of ways in which it is used and accessed, it would not be surprising to see this rule changed or developed in future.

    It is to be expected that the rules, in some form or another, will be enshrined in legislation in future, which would (hopefully) provide more certainty as to their application. Despite the potential headache that the new rule may cause for some taxpayers, it is positive that HMRC is engaging with the difficulties of taxing this unique asset class which is still itself developing.

    If you own cryptocurrencies and are concerned that you may have made a taxable remittance or have other undeclared liabilities in respect of your cryptocurrencies, or if you wish to take advice about dealing with cryptocurrencies in your estate plan, please contact your usual Withers contact.

    Source: www.withersworldwide.com


    Bitcoin $9,666.32 Ethereum $215.69 Ripple $0.2043. Cryptocurrencies Price Prediction – American Wrap

    Bitcoin $9,666.32 Ethereum $215.69 Ripple $0.2043. Cryptocurrencies Price Prediction – American Wrap

    Bitcoin (BTC) has been locked in a tight range between $9,800 and $9,400 since Monday. At the time of writing, BTC/USD is changing hands below $9,700, mostly unchanged both on a day-to-day basis and since the beginning of Tuesday. On the intraday charts, BTC is supported by 1-hour SMA100 (currently at $9,600), while the resistance is created by 1-hour SMA50 on approach to $9,800. The ultimate bullish target is created by a psychological $10,000.

    Ethereum (ETH) is changing hands at $214.20, mostly unchanged since the beginning of the day. The coin has recovered from the intraday low of $209.22, but further upside seems to be limited so far. Ethereum’s daily trading volume has exceeded $14.5 billion, while its total market value reached $29 billion. 

    Ripple has moved lower on Tuesday and the price is now testing the 55 exponential moving average (EMA) once again. Historically looking at the chart, the 55 EMA has been respected on a few occasions. 

    If the daily candle does closer lower on the session then the 0.18 support zone could be retested again. During December the market hit the aforementioned support level and the price moved higher with dramatic effect. 

    Source: www.fxstreet.com


    HubMiner Cryptocurrency Mining Rigs Ready for Pre-order

    HubMiner Cryptocurrency Mining Rigs Ready for Pre-order

    TEL AVIV, Israel, May 20, 2020 /PRNewswire/ — Bitcoin has been hitting the headlines over the last couple of years thanks to its dramatic price changes. The surge in Bitcoin’s value has prompted people to look at Bitcoin as an investment opportunity. Cryptocurrencies can gain and lose value extremely quickly, primarily based on market trends that can be difficult to understand. Figuring out those market trends and how to spot new trends can be extremely helpful for your investment strategies. HubMiner recently unveiled its high performance Direct Liquid mining rigs: F-X8 Machine, F-X32 Machine, F-X16 Machine, F-X16 x 5 Rack. For more information about the miners: www.hubminer.com.

    Designed for Mining Power

    HubMiner mining chip 7nm ASIC HubMiner BoosterX is the result of brilliant hardware design that increases hash rates to maximum potential while keeping power consumption down. Both have a built-in controller and pre-installed software. After an intense period of testing, consisting of evaluating, prototyping, and extreme-condition pressure testing, the HubMiner F-X8 Machine, F-X32 Machine, F-X16 Machine and F-X16 x5 Rack hardware products are now ready for mass production.

    Pricing and Availability

    The HubMiner F-X8 Machine, F-X32 Machine, F-X16 Machine, F-X16 x5 Rack at a presale discount from www.hubminer.com. Pricing starts at $4,560. Customers can save $1,200 by preordering, from now until June 30, 2020.

    Delivery Fee and Custom Fee will be covered by HubMiner, the customer only pays for the unit and receives everything needed for setup without any hidden fees. “Consumers now know our competitors are beat. They can’t reach our power, and our extremely low power costs. We have huge mining power. It’s the best investment on the market,” said Richard McDermott, Operational Director, COO, HubMiner. “We have strived to give customers the first-rate possible investment in the market.”

    About HubMiner

    Founded in 2017, HubMiner, described as the world’s first dual-miner company, was established to develop and sell the world’s first leading dual cryptocurrency miners using SHA-256 or Scrypt technology. Starting with the HubMiner, our task was to provide more power at lower costs. HubMiner is headquartered in Tel Aviv, Israel, with offices around the globe. For more information, see www.hubminer.com.

    Contact:
    HubMiner
    Robin Silva
    [email protected] 
    +972765994656

    https://hubminer.com

    SOURCE HubMiner

    Source: www.prnewswire.com

    Author: HubMiner


    The value of cryptocurrencies in today’s world – Coin-Go-Coin

    The value of cryptocurrencies in today’s world – Coin-Go-Coin

    The rise of cryptocurrencies and “blockchain” technology linked to them has indeed revolutionized electronic commerce. Blockchain technology has great potential to fundamentally change global markets and the global financial system. Virtual currencies and blockchain technology can significantly contribute to increasing consumer welfare thanks to a great decrease in transaction costs of payments or money transfers.

    Despite the fact that cryptocurrencies were invented relatively recently (only about 10 years ago) their worldwide popularity is growing at a tremendous pace, and this also includes the RUBT cryptocurrency. Many countries develop legal and regulatory settings for the cryptocurrency market and its place in the economy. Companies in various countries start to increasingly accept cryptocurrency as payment method. Also, the use of cryptocurrency as an investment tool is growing rapidly.

    This could be explained by the fact that today we are affected by trends of globalization and digitalization, the development of digital technologies, the transformation of the banking field, the emergence of digital banks, the rise of artificial intelligence, machine learning, and data analysis. And in connection with all this, there is a need for a currency that does not depend on borders and banking systems. In recent years, services allowing you to quickly and inexpensively send money across the border have become popular, as well as services in the field of e-money and money transfers.

    How are cryptocurrencies comparable to fiat money and traditional payment systems?

    Cryptocurrency is a virtual alternative to conventional monetary symbols and existing electronic interbank payment systems. The main purpose of its creation is to eliminate intermediaries involved in the transfer of funds between people even living in different parts of the world. And cryptocurrency transfers are especially important in the undeveloped financial markets of Africa, Latin America, and Southeast Asia where it is often impossible to perform a traditional bank transfer due to the lack of banks or even passports for some citizens.

    A distinctive feature of cryptocurrencies compared to conventional bank transfers is the relative speed of transfers and much lower transnational fees. In this case, a payment becomes more profitable and fast, unlike, for example, the SWIFT network with a rather high transaction fee and the processing time of several days for some transactions (for example, money transfers involving a conversion).

    The key difference between cryptocurrency and fiat money (classical exchange means issued by governments in paper, plastic, metal coins, and also presented in a non-cash form) is that cryptocurrency has no physical expression. At the same time, at the information level, the coins are carefully encrypted which makes counterfeiting probability pretty much nonexistent.

    Cryptocurrencies and fiat money are similar in the fact that neither one nor the other is today backed by a product (for example, something like gold or another asset with a base value).

    The main difference between the price of cryptocurrencies and fiat money is that fiat currencies are supported by national governments and are recognized as legal currency for payment of public and private debts. Technically their value is based only on a government statement that they have a value and that the two parties to the transaction trust this value.

    Today, most countries use the fiat currency system, where central banks and monetary reserves control the money supply and, therefore, indirectly control inflation. The government is not more than an “official and properly established guardian supervising the behavior of the citizens and managing their spending”. Cryptocurrencies are not controlled by a centralized government or power authorities and in most regions are not accepted as legal currency. The cryptocurrency offering is usually fixed which almost completely eliminates any risks of its devaluation. This is one of the ways to resolve the contradictions laying in the foundation of the modern capitalist system and democratic society.

    Other than that, fiat currencies and cryptocurrencies have similar characteristics. Both can be used as an exchange medium for the purchase of goods and services and as a conditional store of value.

    Cryptocurrency in general (and RUBT coin in particular) is a convenient form of mutual settlements allowing you to complete transactions without banks and other institutions. A seller and a buyer from different countries can settle accounts among themselves using a secure Blockchain platform.

  • Low commissions that do not depend on the transactions, amounts, and location of the counterparty.
  • The platform operating around the clock.
  • A high degree of protection and safety for operations.
  • No possibility of falsification and counterfeit.
  • A dynamic rate, independent of government authorities.
  • No intermediaries and banks.
  • Anonymity.
  • Fast transactions.
  • Those are not all of the advantages of cryptocurrencies including RUBT compared to ordinary money, and transactions made using them. But at the same time there are also certain disadvantages that can be heard from some doubters:

  • Governments of several countries having a negative approach to cryptocurrency, the introduction of norms and bans on its turn-round, mining, and exchange.
  • The risk to lose everything you earned in case you’ve lost the secret wallet code.
  • Cryptocurrency not being backed by official reserve assets.
  • The volatility of the rate.
  • Many shortcomings and disadvantages are corrected and addressed in the standard operating mode since this form of mutual settlements and technology have not yet been fully developed. But the attitude of governments towards digital money is alarming and worrying, as a number of countries have already rejected their circulation. Algeria, Lebanon, China, and Kazakhstan are the countries which for unknown reasons introduced a number of such restrictions. The restrictions definitely do not contribute to the development and strengthening of cryptocurrencies. But the countries have to practice compulsory national centralization of exchange activities.

    For individuals the key advantages of cryptocurrencies and RUBT compared to fiat money are the following:

  • it is a cheap tool for large settlements;
  • there is the possibility of getting profit by investing in the cryptocurrency purchase and mining.
  • Source: coingocoin.com


    Cryptocurrency is property

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