Alright so I've been seeing this headline circulate for what feels like weeks now, and I gotta say it's just flat-out odd. I'm not joking when I say that I've seen this exact same story hashed and rehashed at least a dozen times, and the same pattern just keeps popping up over and over again.
THE IRS IS COMING FOR YOUR CRYPTO OMG OMG OMG
So... yeah. Let's just dive right in so I can show you what I'm talking about.
IRS Can Now Hunt Down America’s Crypto Tax Evaders After Landmark Ruling
IRS steps up efforts to target U.S. taxpayers who failed to report and pay taxes on cryptocurrency transactions
US IRS Can Issue Summons to Bank Serving Crypto Broker SFOX Customers in Search of Tax Evaders
Got Crypto? The IRS Really Wants to Know
IRS Obtains Court Order Authorizing Summons For Records Relating To U.S. Taxpayers Who Failed To Report And Pay Taxes On Cryptocurrency Transactions
Judge Clears IRS to Seek Bank’s Crypto Customer Records
Open up, it's the IRS. We're here about the crypto tax you dodged
IRS seeks crypto tax cheats
What the fuck?
What is going on here? On and on the list goes down the line. There are so many more articles than this. On the crypto scale it's a relative shitstorm media blitz. Reuters is reporting on it. CNBC is reporting on it. Even justice.gov is reporting on it. WTF? Why though? What actually happened?
Let's check CNBC first because I didn't read that one yet and it's what sparked me to write about this issue.
The agency will issue a so-called “John Doe summons” requiring M.Y. Safra Bank to turn over crypto transaction data for SFOX, a digital currency prime broker that used the bank, with more than 175,000 users and over $12 billion in transactions since 2015, according to the U.S. Department of Justice.
Uh, okay?
The government is asking for KYC data on people who trade crypto. This is like... surprising to someone? I'm sure the whole John Doe summons thing might be new but honestly, why make such a fuss over this?
CNBC actually reports on this a little better than the rest of the articles I read. I was thinking sfox was some random exchange that barely anyone uses, which is why the news on this issue was even more surprising. Who gives a shit about sfox? Who uses that? I don't use it and I don't know anyone who does. Ah but then we see it's for "institutional investors". Ha, yeah. People with lots of money don't like their privacy being violated. Rules for thee, not for me, peasant! Now it makes more sense.
It’s not the first IRS summons for crypto records, but it’s unusual because the broker seems to be “quite small,” signaling the possibility of more to come,
Exactly... it's quite small, so why is everyone reporting on it like it's quite big? Pure speculation that this is just the beginning... which... is a weird assumption. In my opinion it's much more likely that law enforcement is attempting to track criminal activity and it led them to sfox where they hit a brick wall and needed a court and a judge to get involved to proceed following the paper trail. There's no reason to think this is a "landmark case" but that will be the next article I read to see if it has any merit. For now we are still on the CNBC version.
“The IRS has indicated this is a very high priority for them,” Gordon added.
Hm yeah... pointing to the idea that there's a very specific reason why they targeted this little-known organization... but everyone wants to blow it out of proportion like we are on the precipice of warrants going out in mass across the entire cryptosphere. This is such a strange gloom and doom narrative that I feel like only exists because we are in a perceived bear market. When it rains, it pours.
Looking into claims of "landmark ruling".
"The government is committed to using all of the tools at its disposal, including John Doe summonses, to identify taxpayers who have understated their tax liabilities by not reporting cryptocurrency transactions, and to make sure that everyone pays their fair share," Williams added.
Uh... okay... first of all, "paying their fair share" is kinda laughable. As if taxes are actually this community pool of money that all gets efficiently funneled into empowering the communities it was collected from. Let me be very clear: taxes are a sham and crypto has completely outdated them. If a community needs money to pay for something... they can just print the money and tax the community through inflation. We do this already on Hive with the reward pool, curation, the dev fund, and block rewards.
Inflation is the superior form of taxation because it requires zero paperwork, has zero loopholes, zero overhead, is impossible to avoid, and no one goes to jail for trying to worm their way out of it. This is exactly why the powers that be love tax laws in the first place: so they can worm their way out of it and pass the bill onto the lower class. Shit rolls down hill. Deal with it, peasants.
The very act of taxation intrinsically implies that the government does not control the money. If the government doesn't control the money, who does? Why is the Federal Reserve called the Federal Reserve if it isn't Federal? Why such deception? Why do private banks control the money, and in turn, control the government? It's a topic that many books have been written about.
My country was literally founded on the idea that we can't be taxed without representation. Yet, within the current system, representation is impossible because private banks have captured the government and created a smoke-and-mirrors republic in which the left and right think there is a choice, and believe that change can be made from within the system. This is laughable; at the very least this is the libertarian mindset.
Rule by fear; not actual enforcement
This is also a good example of how the establishment is going to attempt to 'regulate' crypto. Short answer? They can't. Just like with torrents and music and movies, they will go after a few people at the top that were the highest offenders and try to scare everyone else in line. We already know that doesn't work, but that's exactly what's going to happen and we get a little taste of it with this little FUD storm we are seeing.
“It is much better to come forward and file an amendment than to let the IRS audit you — or potentially even worse, for not reporting crypto,” Gordon said.
Hm yes... I've seen this before...
Has anyone seen Flick?
Flick? Flick who?
Everyone knows it's better not to get caught.
You see? Even children know that the propaganda is bullshit.
Come forward now and you'll get punished less? What the fuck? How about not? All in. Degens gonna degen.
Don't shit where you eat.
If you want more financial privacy... don't trade crypto on platforms that have your KYC info. I feel like that should be obvious but people just ignore the obvious to their own detriment. The "I have nothing to hide" argument is a very very very bad one. Privacy matters.
Innocent people go to jail ALL THE TIME. Look it up. It's a real thing. The Fourth Amendment of the constitution wasn't put there for fun. The empire is collapsing, and more and more of our rights will be infringed upon as time goes on. This is exactly why the Bill of Rights exists. The more they are violated the more authoritarian and totalitarian the government becomes. Or rather it's the other way around. You know what I mean.
So is this a "landmark ruling"
No, I read that entire article, and it gives literally zero explanation as to why this would be a landmark ruling or how it would be used as precedence in other cases. Once again this points to the idea that these news outlets are just trying to sell a story, and they are using fear to do it. This is a very common tactic that we see on a daily basis in the news. Fear is a strong motivator.
The U.S taxes crypto as investments rather than currencies
Wow... thank you captain obvious! Seriously how is the average writer on Hive better than 90% of these ridiculous professional shills? Wild.
It's going to get very awkward
We hear a lot of news stories about the government confiscating crypto, but how often does it get reported that the government CANT confiscate the crypto? Not very often... if ever. And yet we all know exactly how this works. Not your keys not your crypto. There are going to be some landmark cases were the defendant just tells the government to fuck themselves and refuse to hand over the Bitcoin. I wonder how many will use the classic, "I lost it in a boating accident," excuse.
Think about how easy it is to make sure the government doesn't get ahold of private keys. We only hear about the times that the government actually gets ahold of them or strongarms the person enough to surrender them. We never hear about the holdouts, except perhaps for the ones who say the keys are lost. Perhaps this is the best answer which is why the spread is the way it is. The only way to know for sure is to see if Bitcoin every leaves that particular wallet. By the time that happens the 'criminal' could be anywhere in the world and better setup to defend themselves.
Hive is even crazier.
So imagine I were to get raided or whatever and the government tries to take all my crypto. They're gonna need to hack my phone... and my hardware wallets... and get all my Hive keys. But what if I just have my lawyer or a friend recover my hive account and change the keys (assuming they even bothered to change the owner key). Would they even know what happened? Would they even notice within the first year? Think about how weird this could all get. Account recovery on Hive is going to be a nightmare scenario for regulators and the government compared to confiscating Bitcoin.
Conclusion
This entire story is a gigantic nothing-burger of FUD. You know who already reports to the IRS? Every single centralized exchange based in America. Kraken. Bittrex. Coinbase. How on Earth is this a "landmark case"? How is anything different now than it was before. Make it make sense.
What actually does make sense is that institutional investors are crying about their privacy being violated and that creates a lot more noise than anything else because institutional investors are more powerful than retail. It's pretty obvious that the IRS wanted this data for a specific case rather than just a blanket free pass on the entire sector. At the same time, there's absolutely no reason to assume that the violations of privacy won't continue to escalate, so there is that. Those new IRS agents are going to need something to do over the next few years.
Per the IRS's statement, SFOX has more than 175,000 registered users who have conducted more than $12 billion in transactions since 2015. The agency said it has identified "at least ten" – count 'em, ten – US taxpayers who have used SFOX but failed to report transactions.
Why yes, this is a perfectly good reason to violate the privacy of 175000 users.
Better 1000 innocent people go to prison than one guilty man be set free. --- Dwight Schrute ---edicted
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