Feds Shut Down Allegedly Fraudulent Cryptocurrency Offering

DooKey

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The Securities and Exchange Commission (SEC) has taken action for the first time against an initial coin offering utilizing it's new cyber fraud unit. According to the SEC, PlexCoin is nothing but a fraud and the person trying to get ICO money is a "recidivist securities law violator". If the SEC is correct and the courts see fit to stop this allegedly fraudulent cryptocurrency then this is a good thing for everyone who is currently investing/speculation in cryptocurrency. It's time to bring order to the wild west of cryptocurrency.

The SEC isn't impressed and is arguing that PlexCoin has "all of the characteristics of a full-fledged cyber scam." The agency is seeking to freeze the assets of the PlexCoin project in hopes of getting investors' funds back to them.
 

DocFaustus

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There is a special subset of the bitcoin community that latch on because of their anti-government stance. You can recognize them when they scream "fiat currency" at seemingly random times. I cant wait to see how they reconcile the irony of the government's protection of crypto-currency by weeding out the scammers.
 

cdabc123

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I would much rather have the government just stay out as much as possible. At most regulate exchanges if your that worried about money laundering but there really is no reason to touch the actual cryptos they do a decent enough job of regulating themselves.
 

DocFaustus

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I would much rather have the government just stay out as much as possible. At most regulate exchanges if your that worried about money laundering but there really is no reason to touch the actual cryptos they do a decent enough job of regulating themselves.
So you would prefer that this scammer continues to operate and steal people's money?
 

DigitalisAkujin

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There is a special subset of the bitcoin community that latch on because of their anti-government stance. You can recognize them when they scream "fiat currency" at seemingly random times. I cant wait to see how they reconcile the irony of the government's protection of crypto-currency by weeding out the scammers.
Fiat currency or not the US government taxes currency holdings for capital gains just like stock shares. Couple interesting tax related consequences ensue.

Say you exchange some amount of USD for Euro and go to Europe. While in Europe the dollar collapses making your existing Euro cash worth 10x more. When you come back to the US all of a sudden they want to tax your cash for capital gains.

Most people would say this is totally legit and the US government has the right to tax your money.

Flip this around this and you can see the hypocrisy. Imagine you are in Zimbabwe and you get 10,000 USD. Then the Zimbabwe dollar inflates to worthlessness. Now their government wants to tax your USD for "capital gains". This is what the IRS does on a daily basis and gets away with it cause it's currently at the top.

When the dollar collapses because we defaulted on our national debt expect to be taxed on your "capital gains" if you have even 100 euro sitting in some drawer somewhere.

In many ways Bitcoin is the same.
 

cdabc123

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So you would prefer that this scammer continues to operate and steal people's money?
Surprisingly yes. When it comes to icos and crypto it is stupid easy to lose your money and if you act stupid your going to lose it. Be smart or dont invest, stupid money isn't the best thing to have in many markets.
 
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MarkVI

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Sep 30, 2014
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Fiat currency or not the US government taxes currency holdings for capital gains just like stock shares. Couple interesting tax related consequences ensue.

Say you exchange some amount of USD for Euro and go to Europe. While in Europe the dollar collapses making your existing Euro cash worth 10x more. When you come back to the US all of a sudden they want to tax your cash for capital gains.

Most people would say this is totally legit and the US government has the right to tax your money.

Flip this around this and you can see the hypocrisy. Imagine you are in Zimbabwe and you get 10,000 USD. Then the Zimbabwe dollar inflates to worthlessness. Now their government wants to tax your USD for "capital gains". This is what the IRS does on a daily basis and gets away with it cause it's currently at the top.

When the dollar collapses because we defaulted on our national debt expect to be taxed on your "capital gains" if you have even 100 euro sitting in some drawer somewhere.

In many ways Bitcoin is the same.
How exactly is this hypocrisy? If you trade currencies and make a profit where's the problem with taxing it? It isn't any different than taxing capital gains on stocks or other types of investments. Heck, taxes are lower on capital gains than on income from wages.

We all want things from the government (security, infrastructure, laws, etc.) and these things cost money. It's the headwinds/tailwinds asymmetry. If you've lived in a country with a functional government, you take it for granted and don't understand why you need to pay for services. I grumble about taxes when I have to pay them too, but ultimately I'll happily pay them to not live in a place like Columbia, Syria, or Sudan.
 

DigitalisAkujin

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How exactly is this hypocrisy? If you trade currencies and make a profit where's the problem with taxing it? It isn't any different than taxing capital gains on stocks or other types of investments. Heck, taxes are lower on capital gains than on income from wages.

We all want things from the government (security, infrastructure, laws, etc.) and these things cost money. It's the headwinds/tailwinds asymmetry. If you've lived in a country with a functional government, you take it for granted and don't understand why you need to pay for services. I grumble about taxes when I have to pay them too, but ultimately I'll happily pay them to not live in a place like Columbia, Syria, or Sudan.
Wow my post went waaay over your head.

I'm not saying there shouldn't be taxes. I'm saying that the US government double taxes you on fiat currencies and even on inflation.

If you have 1k USD that is in your bank you already presumably paid income tax on it. If you convert it to Euro you'll get 850 euro for that 1k.

If during that time the USD either collapses OR inflates against the Euro and now you exchange the same 850 euro back to USD and lets say for example it's now not 0.85 USD == 1 EURO but lets say instead it's 0.17 USD == 1 EURO so instead of getting $1000 back you get $5000. At this point you need to pay the IRS 15% on the "profit" or 15% of $4000.

My example was the reverse of the US position. Imagine if every country in the world taxed your USD as capital gains against their currency. You would rightfully be pissed off as your hard earned money gets double, triple, and quadruple taxed.

Also don't forget that capital gains LOSSES are capped at 3k so basically the government always wins and double dips as usual but doesn't share in losing.
 

c3k

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Based on the thread title, I thought this was going to be about the new Venezuelan Petro.
 
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