Banks Plan To Hoard Bitcoins
Recently several of London’s largest banks have said they are looking to stockpile bitcoins in order to pay off cyber criminals who threaten to bring down their critical IT systems.
The virtual currency, which is highly prized by criminal networks, because it is difficult to trace, is being acquired by blue chip companies in order to pay ransoms, according to a leading IT expert.
US government wants to bring cryptocurrency out of the shadows
And US government request to trawl through the personal data of millions of users of the cryptocurrency exchange Coinbase signals the start of an effort to pull digital currencies like bitcoin into the mainstream, experts have said.
Cryptocurrencies, digital assets which exist entirely online but are exchangeable for goods or services, have grown in popularity in recent years, in part because they grant a degree of user anonymity. Coinbase is the largest bitcoin exchange and its best-known brand.
But user confidentiality has also caused headaches for governments, who worry the currencies are being used for drug dealing, money laundering or tax evasion. Digital currencies are currently taxed as an asset like gold, with capital gains tax due when there is an appreciation in value. However, the extent to which bitcoin users with US tax liabilities have been declaring such assets is unclear.
In documentation supporting its petition, the IRS referred to three anonymous cases of taxpayers who had used virtual currencies to evade tax, two of which were “corporate entities with annual revenues of several million dollars” which used Coinbase wallets and concealed bitcoin transactions as “technology expenses” on their tax returns.
Several experts in cryptocurrency said that the IRS was on a “fishing expedition”, and pointed out that it followed an excoriating report by the US treasury’s inspector-general for taxation which said the IRS was not doing enough to regulate and investigate cryptocurrencies.
Some experts, though dismayed by what they saw as the overly broad and invasive nature of the request, said that more government scrutiny on cryptocurrencies was inevitable as they became more mainstream.
Others said that while they felt Coinbase was right to seek to narrow the scope of the request, some change was needed to bring bitcoin and its ilk out of the dark and into the world of mainstream finance.
In 2014, a US federal judge approved similar summonses for FedEx, DHL and UPS to produce information about taxpayers who use an offshore asset-management service called Sovereign Management & Legal, and in 2015 a judge approved another summons for US taxpayers with offshore accounts at Belize Bank International Limited.
Guardian: Bank of England: Cyberattacks A 'Clear and Present Danger':
