Bitcoin Tumbles Most In A Month On CFTC ICO Anxiety, South Korea Tax Concerns

Tyler Durden's picture

After soaring to new record highs near $6000 last week (as China returned to work following its Golden Week holiday), the start of the National Congress last night, combined with CFTC comments on ICO crackdowns has spooked cryptocurrencies with Bitcoin down 8% - its biggest drop in a month..

Crytpos are down across the board...


With Bitcon back to a $5100 handle...


Some have suggested the weakness is due to US CFTC comments, as Bloomberg reports, in a primer on the asset class published Tuesday, the agency said virtual “tokens” used in initial coin offerings can come under CFTC oversight, a message that a market averse to scrutiny did not take well. But this seems old news since the U.S. Securities and Exchange Commission has already said tokens from some ICOs can be securities under its oversight. “There is no inconsistency between the SEC’s analysis and the CFTC’s determination” from 2015 that virtual currencies are commodities, the CFTC said.

Another possibloe catalyst is news, via Coinivore, that South Korea is preparing to tax Bitcoin use...

The South Korean government is preparing to tax Bitcoin use after the cryptocurrency’s trading volume largely increased past the country’s stock exchange Kosdaq. Han Seung-hee, the commissioner of the country’s National Tax Service, told lawmakers this weekend that the issue of how to best tax cryptocurrencies is being discussed, including the areas of capital gains tax, the VAT, and gift tax, reported.

South Korea’s lawmakers held a National Tax Service (NTS) hearing in Sejong last week on October 13th. The NTS Commissioner Han Seung-hee answered several questions about the taxation of cryptocurrencies.

Seung-hee was asked, “as the daily transaction value of virtual money grows beyond the Kosdaq, we must actively cope with the shift away from the conventional reservations. What is the taxation plan?” Business Post reported.

“I am still taxing business income, and I am discussing whether to tax the value-added tax or capital gains tax with regard to virtual currencies such as Bitcoin,”Seung-hee said.

According to Seung-hee, his department is currently discussing the VAT and capital gains tax issues with the Ministry of Strategy and Finance. Additionally, he stated that “the gift tax will be reviewed as it needs to be supplemented,” the publication wrote. The Commissioner further pointed out that the use of Bitcoin may lead to “gift tax evasion,” therefore valuations methods need to be implemented with respect to the taxation of cryptocurrency gifts.

In the meantime, he confirmed that “we are currently monitoring the status of the cryptocurrency transactions and will move forward quickly.”

And additionally, as CoinTelegraph reports, a group of Latin American Bitcoin businesses and entities has issued a joint letter expressing “deepest concerns” over SegWit2x.

The letter, signed by around 50 supporters from the Brazilian and Argentinian Bitcoin space, went live on Medium Wednesday.

The collective “opposition” to the forthcoming Bitcoin hard fork is the the latest to come from the industry, which has already seen exchanges and others signal public condemnation.

Last week, South Korea’s largest Bitcoin meetup released a similar open statement denouncing SegWit2x.

“We do believe the NYA signatories have the best of intentions in attempting to improve Bitcoin’s protocol, and we also recognize the invaluable service historically provided by the companies and the talented individuals associated with S2X,” the Brazilian-Argentinian letter reads.


“We profoundly disagree, however, with the means chosen to carry out such a plan. And therein lie all the discord, controversy, feverish debates, and even resentment for some actors.”

The group provided what it calls a “non-exhaustive” list of eleven factors influencing its decision, many of which match with reasons given by both South Korea and exchanges confirming they will not support any Bitcoin chain split.

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tmosley's picture

Peanutz could probably buy in at $5000 and get on this train, but they won't.

Oh well!

giovanni_f's picture

now: BTC down 8%. Three hours later: BTC up 12%.

Why is it so difficult to accept that we have finally reached a permanent high plateau of prosperity?

IH8OBAMA's picture

This isn't the big one.  That's yet to come - probably from a higher level and it's going to be fast and massive.


Zero_Ledge's picture

Definitely NOT A BUBBLE.  It's a currency, but mostly people just like to trade it, not spend it.  Hmmm.  But, yeah, not a bubble at all.


Didi Taihuttu, his wife, three kids and their cat bet all they have on bitcoin. The Dutch family of five is in the process of selling pretty much everything they own — from their 2,500-square-foot house, to their shoes – and trading it in for the popular cryptocurrency. They have moved to a campsite in the Netherlands, where they're waiting for bitcoin to really take off.

It's only been a few months, but the 39-year-old father of three says he doesn't regret a thing. "We were just like – sell it, sell it, what can we lose? Yeah, we can lose all the material stuff. Yeah, we can lose all our money. Yeah, we don't have three cars anymore. We don't have the motorcycle anymore. But in the end, I think we, as a family, will still be happy and just enjoying life."

He once mined for bitcoin, but now only trades it, along with other cryptocurrencies like ether, ripple, neo, dogecoin and XLM. The family is still in the process of liquidating assets and investing the proceeds in cryptocurrencies as they go. The income from trading is enough for food and necessities, which the family says is all it needs right now.

tmosley's picture

It's called Gresham's Law.

Crypto will see a great deal more use as national currencies start to collapse.

inhibi's picture

Wasnt there an article like a day ago about how volatility in BTC is a myth?


inhibi's picture

BTC is TIED to fiat, u rube. Holds no intrinsic value unless related to FIAT.

If fiat is worthless, BTC will be too. Because any transaction with BTC ends with dollars.

giovanni_f's picture


Pedophile asshole.

Dirty Bumn's picture

I already have plenty of legitimate securities to speculate with, why would I want to speculate on one with no underlying asset?

tmosley's picture

Because it is fundamentally better than fiat and is going to take over some large portion of the role of money.

But hey, you stick with your "securities". I'm sure they will weather and profit from a dollar collapse no problem.

Dirty Bumn's picture

Bitcoin and distributed ledger technology require vast amounts of electricity to verify transactions and keep the system alive. At some point, bitcoin "mining" will become prohibitively expensive and the entire pyramid will collapse. There is also NOTHING proprietary about distributed ledger technology, nothing Bitcoin has that will not become obsolete eventually.

tmosley's picture

>At some point, bitcoin "mining" will become prohibitively expensive

You demonstrate your ignorance. Mining uses as much electricity as it can while still being profitable. The difficulty is artificial, and exists to make it harder for attackers to compromise the network. It has nothing to do with the number of transactions.

Jay's picture

It's not written in stone that Bitcoin has to stay with proof-of-work or that they couldn't alter the amount of payment to reduce mining. Ethereum is moving to proof-of-stake. Bitcoin may go that way if most users agree with the change. 

IH8OBAMA's picture

But USERS don't have a voice.  A hand full of programmers decide the fate of the Bitcon software.


tmosley's picture

Yes they do. The market decides whether any given fork will be accepted. That is why BCH has value. A portion of the market likes it.

Dirty Bumn's picture

Bitcoin is not going to be the future of money, "Cashless" centralized ledger central bank crypto dollars are the future of money. You encourage and usher that bankers dream into existence by abandoning "cash". Good job asshole

tmosley's picture

>If you fight your enemies, they win

Gaius Frakkin' Baltar's picture

"centralized ledger central bank crypto dollars are the future of money"

That's speculation.

What's your alternative anyway?

To continue using cash which is controlled by the Fed and must go through third parties to transact across the world?

Rickety Rekt's picture

Well for one, there is actually volatility that allows you to actively trade it for a return. You can sell it at night so you don't get whacked while sleeping. I'd say the underlying asset would be the blockchain, although not tied to BTC it is tyhe fundamental reason it has value. 


I have learned that people that don't understand it see it as a security/asset. It isn't. IT IS CURRENCY. It is a small portion of my portfolio but I was sick of these asshats in their mom's basements becoming millionaires while I work my dick off to be in the same place or further back.


Buckaroo Banzai's picture

"why would I want to speculate on one with no underlying asset?"

You get that physical gold and silver in your possession have "no underlying asset", right? That they are not backed by anything but themselves?

Assets like gold, silver, or bitcoin are called "trustless" assets precisely because you do not have to trust anyone or anything to "back" them. They stand on their own, and are accountable to nobody, or nothing. BitCoin private keys, held securely in your possession, are simply the cyberspace version of gold and silver.

How is this so complicated?

takeaction's picture

I think all of us would have been happy to get in at a couple bucks.  Oooops.


On a side note...Just watched this amazing video of a Audio Forensic guy...he proves without a doubt there was a second shooter in Las Vegas.  Anybody who can counter this guys proof...please let it rip.  This guy will get "Suicided" if he is not careful.



Pliskin's picture

Aren't you the guy that rushed to the defence of Bitcoin last week on the 'Pedophile, dark web' story?

I'm surprised you can access to the internet where you are, Steven W. Chase.

Is that why you use the word 'peanutz' in every post?  Like some secret code to inform other members of your pedo club who you are?

Pedo's like you are not welcome here on ZH, go and hang youself in your cell.


tmosley's picture

Hahaha, you have so little self esteem you have to make yourself feel better by calling other people pedophiles?

Jesus Christ.

Cash2Riches's picture

Cryptos are a huge step forward for free money, but they are far from the solution to this economic nightmare we now find ourselves in. Only gold and silver will prove to be the solution to this monetary madness we now find ourselves in.

tmosley's picture

They introduce their own nightmare of testing and retesting coins for purity. Fakes are far too easily available now for secondary market silver or especially gold to hold its value.

Any problems that cryptos have can be overcome with upgrades. You can't upgrade precious metals.

TheSilentMajority's picture

Governments will be making cryptocurrencies worthless via outright bans or taxes and/or regulations in 3, 2, 1......

overbet's picture

Anything applicable to btc is also applicable to gold.

Fiat Burner's picture

Except gold has uses other than being a medium of exchange. Virtual tokens don't. 

tmosley's picture

If money also has an industrial use, that is a mark against its usefulness as money, not the other way around. Its use as money greatly increases its price as people hoard it. Higher prices on things needed for production of goods hurts the economy.

Imagine how much longer our electronics would last if we could make them out of gold. No more tin whiskers! No more corrosion!

aurum4040's picture

Ignorance is bliss to some. Especially in crypto. Ethereum for example is, FIRST and FOREMOST, a decentralized development platform running on any machine, any OS, anywhere, by anybody, at anytime that is only limited by the creativity of literally anyone in the world. In that regard alone Its intrinsic value dwarfs gold. And then theres the currency that is a side effect of the system. The currency is needed to fuel the network. 

PTR's picture

The smart contract function of/on the etherium platform is pretty cool.

therover's picture

So the other side of the coin, no pun intended, is that gold can conduct electricity, be worn as jewlery, and is created by Mother Nature, dwarfs crypto in that regard ?

Creativity of literally anyone ? Lots of creative, bad, vindictive motherfuckers out in the world.


tmosley's picture

They have done that multiple times. It has yet to work on any sort of continuing basis. It's like trying to wrestle with a shapeshifter.

PTR's picture

You can't ban something they can't "hold."  They only thing they can do is announce they penalties/fines/arrest for getting caught holding them/mining them.

The problem for them, is that there are hundreds of crypto currencies that people could move value into.

And what about usage tokens, like Etherium, Pillar, Populous, Veritasium. Ripple, etc?  Are those going to be banned?  IBM just cut a deal with Stellar, and Microsoft with Ripple this week.

This story line is going to get interesting.




koan's picture

Muh bits is in da pits.

lester1's picture

"Nobody can stop Bitcoin"


- Bill Gates

Honest Sam's picture

Not to be linguistically semantic, but "Nobody" can be somebody.  That means BTC can be stopped, or at least greatly reigned in by authoritarian governments owned by the Central Banks.

That's pretty much every government in the first world adopting a method to exploit BTC and it's descendants.

I don't see it happening that a phenomenon like BTC being substantially any different from the digital currency denominated in FRNs, or other currencies, that now exists. 

Back in 2008-2009 Ben Bernanke and Hank Paulson, then with Tim Geithner, Neel Kashkari, and Petey Orszag with the tacit approval of Congress who didn't so much as peep,  were able to digitally create the largest digital creation of new money in the history of the world and have been doing so for decades. Much of the bonus money the Jews took out of that TARP and other rescue packages can be used and probably has, to buy BTC's for their children's Christmas club accounts. Wihtout one 6 inch piece of green paper being printed.

When you go to take out a mortgage at your bank, the bank doesn't take someone else's cash, their hard-earned or stolen FRNs like they used to, to give you the insane price you pay for an 850 sq ft cold water walk up in Orange county. They just punch in the $850,000 with the numerical keypad on their laptop, and Bob's your uncle. Not one greenback has changed hands.  And this happens millions, tens of millions times a year.

We are already using 'crypto currency'----well, not us, but the banks, the FED and Mr Munchkin at Treasury. This is being duplicated in many countries all over the globe without any printing of currency. It's all  DIGITAL! and unless you can hack it, you and I do not have any of it in our pocket, under our mattress or invested in Amazon.  That makes it 'crypto' because you can't get any without the password and user name on J Yell's Iphone.


tmosley's picture

I have said this before and I will say it again, fighting cryptos is like fighting a thousand headed hydra that also has a thousand hearts. The hydra also becomes immune to any given method of attack after it has been used against it a few times.

Oh, and any of the heads that you kill come back later, also immune to the method used to kill it.

Its the grey goo of money, and it is going to devour EVERYTHING in finance. 

lester1's picture

Bitcoin is what an unregulated, decentralized, free market looks like.

Troy Ounce's picture

Buy the bits.

The price is $5 100

But the value is zero 

Txpl9421's picture

Render unto Ceasar and all that.

People who think they are going to pocket 10s of thousands of dollars without any tax copnsequences are idiots.

Shut up and pay the bill.

Or better yet, hold the asset.  It appreciates faster than your trading skills.

TeaClipper's picture

Tax is theft, and those thieving bastards will get neither my paper wallets or my gold and silver when i die. It will be passed on to my family quietly, and that is exactly as it should be.  In the meantime educate yourself, especially into the history of income tax.

Mister Ponzi's picture

Move to a country where the capital gains are tax-free.

Next Saturday, I have held my BTC for over one year and they will be tax-free then. Thanks God I have nothing to do with the US government.

Blue Snowflake's picture

I am too stupid to buy, sell, or otherwise interact with bitcoin.

When the collapse happens the hordes will eat my family and me.