Mic Drop

Speaking of ETH as a security... check this out:

A very reputable news channel in India (NDTV) got hold of a cabinet note ahead of the proposed crypto regulation bill. This is a huge concern for Indian citizens.

The note also reportedly highlights that citizens will need to declare their crypto assets and keep them on Indian exchanges. They will no longer be allowed to keep crypto on foreign exchanges or in private wallets.

If BTC or any other crypto is held on Indian exchanges, how do we invest in NFT's or metaverse?
What if exchanges get hacked?
It's like creating a monopoly. Exchanges in India have very little liquidity, and they already function in an extremely poor manner. e.g. we cant deposit funds sometimes (especially during the dips). The system crashes.

Most of the Indians use exchanges based in foreign countries

What are your thoughts on this?

Full Article:  https://www.businessinsider.in/cryptocurrency/news/

Without doxxing myself, I've been a CPA (specifically, a tax accountant) in the US for about 10 years. Recently at my firm, I've been included in a small group of professionals forming a network of crypto tax consultants and specialists. As I truly love the crypto community, the best contribution to this sub I can think of is to try to 1) put together a few tax tidbits and 2) to answer every tax question that I can in the comments. Reading alot of comments and posts in the sub, I'm a bit concerned that my fellow crypto enthusiasts are going to put themselves at risk of the IRS by not fully understanding the extent of their activities. Now before I start answering, I'll add that anything I say should be used as a guide to either do further research on your own to understand your tax situation as it relates to crypto, or to acknowledge that your tax situation may be over your head and you should seek out a tax professional. There are tax resources such as koinly, and while I don't use them personally, I believe they are worth the investment - but I also want people to understand their own tax situation to make sure any paid service is handling your situation correctly.

Without further adieu, here are a few items of general knowledge and feel free to ask questions below and I'll try to answer everything (I'm operating under the assumption this post will generate probably 25 comments, so if for some reason it blows up, be patient and I'll try to get to everything). This will also be entirely US specific, anyone outside of the US, I'm sorry but I'm in no position to give tax opinions.

• Your exchange, wallet, etc will likely not issue you a 1099-B for your trading activity, so don't count on getting any help from them, other than your transaction details. This won't be required for a few years and was part of the infrastructure bill.
• Every crypto you swap, exchange, convert, sell, earn lending/bonding reward, mine, earn staking rewards, receive airdrops on is a taxable event in the current year.
• To emphasize the point above, this includes MOONS. Yes, all of those MOONS you receive via karma distribution should be picked up on your tax return. Same as BAT rewards by using Brave.
• The value you pick up on any rewards, mining, staking, airdrops, faucets is the fair market value at the time of receipt. You should be tracking this on your own or using a service.
• The amount you pick up into income is now your basis. Basis is "cost".
• Mining is considered self-employment income and should be reported on Schedule C, which differs from staking which would be picked up as other income, along with the other items not including selling, swapping, exchanging.
• Sending a crypto from one wallet or exchange to another is not a taxable event - though you should track your transaction fees to include in your basis.
• NFTs are treated the same way as everything above.
• Keep good records. If you do not maintain good records or lose them and are not able to substantiate your cost basis, the IRS could make it $0, which would increase taxes you owe.
• Holding period can give tax benefits. If you sell something you've held for a year, it's a long term capital gain and is taxed at preferential rates. Less than a year is at ordinary rates.
• You are supposed to report the date purchased, date sold, cost, and sales proceeds of EVERY sell (exchange, sell, swap). Even if this results in $0 gain or loss.
• Wash sale rules don't apply, however, selling something and immediately buying it back for tax loss harvesting could violate economic substance rules and on audit, the loss could be disallowed (it would likely be incorporated back into your basis).
• Monero won't save you from paying taxes. Nor will boating accidents.

You can trade crypto using crypto/bitcoin IRAs and the gains are tax free, but you can't pull out until retirement. I don't utilize these services, but they exist.

That's what I can think of for the time being, I'll make an edit if anything else important pops into my head. I hope this and any questions provide some useful information to people in this sub. Best of luck to all!

TLDR: Taxes are hard, if you don't have your arms around it, seek a professional and bite the bullet and pay. Feel free to ask tax questions below and I'll answer what I can.

Source

Ethereum should be treated as a regulated security.

Bitcoin appreicates at 200%/year on average. Are you comfortable getting 206.5% while giving up custody of your wealth?

Quote

"BTC is not a Proof of Stake coin so I assume they convert my BTC to another coin, stake that for higher than 6.5%, convert back after 3 months and pocket the difference?"
This is basically it. You don't stake your BTC, BTC cannot be staked. You can lend it to earn interest.
Is it safe? Maybe. Maybe not. A few exchanges have been closed down over the years, as well as lending services. Read up on Cred. It was one of the big crypto lending programs, like Nexo/Cryptocom/Celcius. It didn't stand the test of time, so anyone who lent their precious BTC was screwed over.
While if you kept your BTC in your wallet with proper backups and measures in place, you still have the same amount of BTC.

The term poker staking, or simply staking, refers to the act of putting cash up on behalf of a poker player in the hopes that he or she wins.

staking is lending

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What are the people offering you interest payments doing?  They are probably doing something risker to get a return so they can get profit and then give you interest (or you think the interest comes out of nowhere?)

Don't be stupid with money.

You'll just be making some "smart" person rich:

You lend to X. X turns around and lends to Mr. Shorter, for a higher rate. X makes money from your Bitcoins. You take all the risks. X has plenty of his own bitcoins, but, like me, he knows better than to lend them to Mr. Shorter.

Meanwhile:

‘Billions’ lost through hacks of crypto lending platforms

New research by blockchain analytics firm Elliptic showed that fraud and theft at decentralized finance platforms have led to $10.5 billion in losses so far this year.

. . .

However, the explosive DeFi growth came along with booming crime in the mostly unregulated sector, Elliptic said. Users have suffered over $12 billion in losses through crime at DeFi apps, lending platforms and exchanges since 2020, with the majority of losses coming in 2021 alone.

Those losses were mainly attributed to bug and code flaws, as well as a hacking technique that involves exploiting loopholes in how the DeFi service operates.

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So the returns on Bitcoin are assymetric. That means that while you can only lose your initial investment, the upside potential on it could be 100x for instance.

When you loan out your Bitcoin you actually flip that assymetry against you because of counterparty risk. Essentially, for an added 4 to 6% you’re taking on the risk that the borrower could default (or in most cases with crypto lending - the platform itself could go under). When you assume those risks you’re taking on the chance that you could lose all of your Bitcoin for a 4 - 6% added return when you could have had 170% (the average return so far - likely to be a little lower going forward as the market grows) annually by just holding it.

Fun fact: The word "proletariat" comes from the Latin word "proletarius", which means "maker of offspring".

In Ancient Rome, the proletarii were the people who were so poor that the only form of property that they had were their children, who could be used as soldiers.

Little has changed since then.

Here is the story:

Something else huge I missed in the video: