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Regulation

U.S. IRS Starts Sending Warning Letters To Cryptocurrency Users

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U.S. IRS or the Internal Revenue Service started sending warning letters to cryptocurrency users urging them to start paying their crypto taxes as we previously read in the latest cryptocurrency news.

The U.S. IRS agency already sent three warning letters last month to multiple crypto traders advising them that they haven’t filed or have incorrectly filed their taxes. The agency is also telling some investors that they did report the wrong amount of income from the crypto transactions and they are now even willing to collect. According to one letter that was shared in the news with a taxpayer, he reportedly owed more than $4,000 in 2017 in taxes alone with another $200 in interest. The letter was sent out on July 29th, 2019. The co-founder of the tax software provider CoinTracker Chandan Lodha even stated that the IRS has started sending these CP2000 notices to many customers indicating that they are now hooked for revenue that it wasn’t reported. He stated:

 “The IRS is sending out these other notices and those are kind of like warning letters of varying degrees of how threatened they were. But the “CP2000 is a slightly different letter. Basically what it says is ‘hey we have a report from one of the financial institutions you use and the amount they reported to us the IRS is different than the amount you, the taxpayer, reported and this is the amount you owe’ and it’s a 30-day letter meaning you have to respond in 30 days.”

The co-founder and attorney of the tax calculator startup TaxBit Justin Woodward even noted that he has seen more of these letters starting to be sent out in August. According to the IRS website, a recipient of the letter should respond whether they agree with the tax assessment or not. Lodha added as we read in the previous altcoin news:

 “In terms of how the actual dynamic works, first they send you the CP2000, they send the proposed amount due and you say ‘yes, I’ll pay that’ or ‘no, and here’s the supporting documentation. I’m not sure if it’s a lack of understanding from the IRS or if they’re just blindly sending out these letters hoping people are too scared [or] too lazy to look at the letter and say ‘hey they made $13,000’ when they didn’t make $13,000.’’

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Bitcoin News

New European Regulations Force BTC Service Bottle To Shut Down

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The crypto news today show that the Bottle Pay service - which allowed users to send Bitcoin through social media accounts - is shutting down due to new European regulations. The service announced that it will be closing its operations due to the Anti-Money Laundering (AML) regulations.As the announcement shows, the funds will remain available for withdrawal until 13:00 GMT on December 31, 2019. Bottle Pay is a service developed by the United Kingdom based company known as Block Matrix. It enabled Bitcoin payments to any social media contact regardless of whether they had an actual account or not.Two months ago and before the new European regulations and AML standards, Bottle Pay raised $2 million in funding and had the main aim of increasing the user base by ten times over the next year. However, as a custodial Bitcoin wallet provider based in the UK, the company was subject to the new European regulations and was forced to comply with the 5AMLD EU regulation coming into effect from January 10, 2020.According to Block Matrix, the additional user information that the new regulations require would “alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community.”Meanwhile, the new European regulations led to new signups, deposits and social media bots going online. The funds that are already sent through Bottle Pay will not be claimed and returned to the sender within 7 days. On top of this, the withdrawal function will be taken offline too and all the wallets will close at 13:00 GMT on December 31, 2019. Any of the funds remaining in the Bottle Pay wallets will be donated to the Human Rights Foundation.At the end of the day, Bottle Pay is not the only service that shuts down due to the new European regulations and AML standards. Before it, we could see a similar service for micro payment tipping on Reddit which closed - but for different reasons. Tipjar, which was designed for sending Ether and was popular in the ETH news then, shut down due to lack of user interest.With the regulations getting more and more strict, businesses find operation a challenge unless they do something to obtain all certifications.
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Altcoin News

Lagarde Suggests ECB Has To Set Objectives For Digital Currencies

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Lagarde Suggests
Lagarde suggests that the European Central Bank will have to determine objectives for the cryptocurrencies taskforce in 2020 according to her speech at the first policy meeting. The ECB president Christine Lagarde is known to be one of the major supporters of crypto in the community.Following our latest cryptocurrency news, Lagarde suggests that the ECB will have to reconsider its status on crypto. The Governing Council met to decide about the interest rate and the monetary policies and Lagarde held her first press conference there along with the ECB Vice-President Luis de Guindo. She said that the central banks want to figure out new objectives for a digital currency before the first half of the year saying that the ECB will have to get ahead of the ‘’curve’’ on that matter.The ECB has to also set new priorities and determine what it wants to achieve with the new taskforce and Lagarde said:
‘’Are we trying to reduce costs? Are we trying to cut out the middleman? Are we trying to have inclusive finance at no cost? There is a whole range of objectives that can be pursued.’’
Lagarde admitted to the increased demand for stablecoins ignoring Bitcoin and referred to the interest shown by the Canadian and British counterparts as well:
‘’My personal conviction is that given developments we see, not so much in bitcoin but in stablecoins projects… we’d better be ahead of the curve because there is clearly demand out there that we have to respond to.’’
Last month, the bank was thinking about launching a digital currency and the proposal was a part of the new draft that seeks to ban the high-risk crypto projects. At that time, a target for ECB was Libra and the global digital currency projects developed by some entities such as Facebook which have been repeatedly criticized by European leaders. With a digital currency that will be parallel to the euro, the consumers will have a cheaper means of payment option and this will also have a huge impact on the bank’s fiscal policy.  The Central bank will also be able to inject funds into the economy to achieve inflation targets which the ECB left unchanged so far.
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Regulation

SEC Charges Shopin Founder For Its ‘Fraudulent’ $42 Million ICO

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The latest series of events in the cryptocurrency news show that the US Securities and Exchange Commission (SEC) is making moves to several ICO players as of lately. The most recent update shows us that SEC charges Shopin and its founder, Eran Eyal, with orchestrating a fraudulent ICO.The initial coin offering (ICO) which was carried out by Shopin is now under charge by the US SEC. A press release issued on December 11 confirms this and shows that the SEC charges Shopin as an ICO which raised more than $42 million from August 2017 to April 2018. According to the regulator, Shopin's actions constituted an unregistered securities offering on Shopin Tokens.As Eyal told investors, the funds will be used from the token sale in order to create blockchain-based shopper profiles. These profiles would be used to track customer purchase histories across online retailers as well as recommend products based on this information. Still, as SEC Charges Shopin's founder, we can see that he (Eyal) never created a functional platform.The Director of the SEC's New York Regional Office, Marc P. Berger, recently noted:
“As alleged in today’s action, the SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile [...] Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering."
Furthermore, he also told the public that Eyal lied about having forged partnerships with established retail outlets when in fact no such partnerships existed. The SEC also claims that Eyal misappropriated investor funds to pay for personal expenses. The SEC charges Shopin for this and the complaint clearly states:
“Eyal used over $500,000 of investor funds for expenses such as his rent, retail shopping, entertainment, tickets to philanthropic events, and a dating service, but omitted to disclose to investors that he would use any proceeds for his own benefit.”
The official charges show that Shopin was violating the anti-fraud and registration provisions of the federal securities laws. For that, it is seeking injunctive relief, disgorgement with prejudgment interest as well as civil money penalties.  
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Regulation

AML Chief: Crypto Companies Filed 7,100 Suspicious Activity Reports

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America’s Anti Money Laundering (AML) chief stated that the crypto companies filed up to 7,100 suspicious activity reports since May. In our cryptocurrency news today, we get more answers about the activity reports.According to Kenneth Blanco, the AML chief, and director of the Financial Crimes Enforcement Network, the reports explain how the banking security ACT which is the cornerstone of the US AML law, applies to virtual currencies. Since then, Blanco said that more than 11,000 crypto-related SARs have been filled with the FinCen and about 2,100 have been referenced directly to the guidance of dozens of new entities filed in the reports.The high numbers show that the virtual asset service providers such as the crypto ATMs and exchanges are keeping a close eye on the potential illicit activities that could move across their network:
 “It is encouraging that CVC entities, dozens of whom had never filed a SAR report prior to the May advisory, are using the red flags and reporting suspicious activity back to us.’’
Venezuela is one particular case where it seems that a hotbed of suspicious activity is forming according to Blanco. The Latin American country has its own oil-backed token- The  Petro, and it seems that it has spawned an increasing number of the unregistered money services businesses. The country is having a lot of issues with the high inflation and Petro was the tool that was supposed to help the country.Domestically, the crypto-related companies reported more darknet-linked customer transactions and scams along with a lot of activities that targeted the elderly who have limited knowledge about cryptocurrency and therefore are opened to risks. Blanco explained that all of the financial institutions have to re-consider the crypto SAR reporting especially those who currently don’t report any activities. He said:
 “If the answer is no, they need to reevaluate whether their institutions are exposed to cryptocurrency.’’
The remarks came as the crypto exchange and analysts firms both boost their efforts to expand suspicious activity reporting. As it was reported by Forbes, there was a noticeable existence of the confidential indicators of suspicion for Virtual asset service providers and also a playbook for easily picking out the suspicious activity assembled by the stakeholders themselves.
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