It is not often any branch of the federal government can be accused of having a sense of humor, but give the Securities and Exchange (SEC) for trying.
The SEC is using its attempts at humor for good by unveiling a new website aimed at warning investors about the risks associated with Initial Coin Offerings (ICOs).
“The SEC set up a website, HoweyCoins.com, that mimics a bogus coin offering to educate investors about what to look for before they invest in a scam,” said the SEC in a statement out Wednesday. “Anyone who clicks on “Buy Coins Now” will be led instead to investor education tools and tips from the SEC and other financial regulators.”
HoweyCoins employs satire as a way of informing investors about some of the tricks unscrupulous ICO purveyors use.
“We anticipate OVER 1% daily returns, with DOUBLE 2% returns on Tier 1 investors in pre-ICO stage secured purchases,” according to one section of the HoweyCoins site. “The average registered coin return over a two month period in 2017 was an amazing 72%. Based on market conditions, including record-setting prospects in both the digital asset and travel industries, we expect surpassing that BEFORE the Tier 2 offering closes.”
The fictitious HoweyCoin can be redeemed for luxury travel and there are even pictures and names of fictitious staff members on the site. HoweyCoins.com even features a complex white paper, another hallmark of ICO sites.
“The website’s name, HoweyCoins, is a bit of an Easter egg—a tongue-in-cheek reference to the Howey test that’s used to determine whether a transaction is an investment contract,” said the SEC.
Year-to-date, there have been just over 300 ICOs globally, raising a combined $7.34 billion. To this point in May, ICOs have raised just over $760 million. The Telegram ICO accounts for $1.7 billion of capital raised by ICOs this year.
“The rapid growth of the ‘ICO’ market, and its widespread promotion as a new investment opportunity, has provided fertile ground for bad actors to take advantage of our Main Street investors,”said SEC Chairman Jay Clayton.
IRS Coming For Your Crypto, Specific Crypto Question Added To 2019 Tax Forms
The IRS wants to know whether you traded cryptocurrency in 2019, a question it had never overtly asked taxpayers in the past.
In a new report on Monday covering fiscal 2019, the agency listed cryptocurrency and the gig economy as two key “emerging compliance areas that require attention” by the IRS. For crypto, that attention is taking the form of a new question on the 2019 Form 1040 (for additional income).
The question is at the very top of the form, and reads: “At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”
watch out crypto tax evaders – the IRS is coming for you with a mean new checkbox pic.twitter.com/Fi9qrAy5bv
— 𝘽𝙄𝙇𝙇 𝙎𝙒𝙀𝙀𝙏 (@billsweet) January 3, 2020
The IRS already had official guidance on cryptocurrency, first posted back in 2014: the agency classifies cryptocurrency as property, rather than as currency, and thus taxpayers would treat crypto selling as capital gains (or losses) and disclose it on Form 8949—if you choose.
In the past, the common attitude in crypto land toward disclosing crypto gains on your taxes was that there was little to gain from doing so—you’d risk an audit if you did, and would likely fly under the radar if you didn’t.
Now the IRS is getting more serious.
The phrasing of the question is also creating some confusion, since it mentions not just selling and receiving crypto, but also sending or exchanging it. That prompted some crypto folks on Twitter to wonder whether simply sending bitcoin from one digital wallet to another requires disclosure on your taxes. That answer is no. In an extensive FAQ about virtual currency transactions on its website, the IRS specifies, “If you transfer virtual currency from a wallet, address, or account belonging to you, to another wallet, address, or account that also belongs to you, then the transfer is a non-taxable event.”
The IRS, in its report this week, also disclosed that in 2019 it sent “educational letters” to more than 10,000 taxpayers “who may have failed to properly report virtual currency transactions.” And the IRS cautions: “Virtual currency, also called crypto currency, will remain an important focal point for the IRS in 2020.”
This article originally featured in Yahoo Finance.
Is The IRS Coming For Your Secret Crypto Stash?
Whether we like it or not, the IRS may be coming for our secret crypto stashes. According to a recently leaked internal training guide, in order to locate people’s secret cryptocurrency stashes, the IRS may start sending subpoenas to tech companies.
In order to help protect yourself and your stash, we recommend you check out the full guide. Initiated by Laura Walter, a CPA, the guide showcases an assortment of tactics that the IRS will be using to track down and detect undisclosed cryptocurrency. Some of these tactics include obtaining bank records as well as app download history and activity.
Just last month, the slides were presented to the staffers of the IRS at an event at the World Bank in Washington D.C. It has also been noted that the IRS will be presenting the training guide to law enforcement agencies as well as other partners from countless countries around the world.
This particular guide goes over the basic concepts and definitions surrounding the cryptocurrency world. It also outlines the tactics the agents will be using to track down hidden wallets. This includes social media monitoring as well as credit card statements, PayPal activity, bank statements, etc.
For those who are concerned about protecting their crypto stash, it is important to be informed about the actions of the IRS and their planned tactics. Awareness is key. Check out the guide and protect your assets!
DOGECOIN Gets Listed On Binance, Skyrockets 30%!
Starting at noon UTC today, the following dogecoin pairs will start being traded on the exchange: DOGE/BNB, DOGE/BTC, DOGE/USDT, DOGE/PAX, and DOGE/USDC. Furthermore, users can already deposit their dogecoin on the exchange in preparation for the trading.
As of press time, it looks like the coin in question reacted by reporting significant gains. DOGE is up about 31% over the last 24 hours, and most of the gains have been registered in about 30 minutes.