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

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, Bitcoin.com 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.

Comments

Zero_Ledge IH8OBAMA Wed, 10/18/2017 - 12:10 Permalink

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.

In reply to by IH8OBAMA

Dirty Bumn tmosley Wed, 10/18/2017 - 10:33 Permalink

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.

In reply to by tmosley

tmosley Dirty Bumn Wed, 10/18/2017 - 10:37 Permalink

>At some point, bitcoin "mining" will become prohibitively expensiveYou 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.

In reply to by Dirty Bumn

Rickety Rekt Dirty Bumn Wed, 10/18/2017 - 10:31 Permalink

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. 

In reply to by Dirty Bumn

Buckaroo Banzai Dirty Bumn Wed, 10/18/2017 - 11:14 Permalink

"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?

In reply to by Dirty Bumn

Pliskin tmosley Wed, 10/18/2017 - 10:31 Permalink

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. 

In reply to by tmosley

tmosley Fiat Burner Wed, 10/18/2017 - 10:41 Permalink

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!

In reply to by Fiat Burner

aurum4040 Fiat Burner Wed, 10/18/2017 - 11:10 Permalink

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. 

In reply to by Fiat Burner

PTR TheSilentMajority Wed, 10/18/2017 - 11:00 Permalink

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.   

In reply to by TheSilentMajority

Honest Sam lester1 Wed, 10/18/2017 - 11:27 Permalink

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. 

In reply to by lester1

tmosley Honest Sam Wed, 10/18/2017 - 11:32 Permalink

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. 

In reply to by Honest Sam

Txpl9421 Wed, 10/18/2017 - 10:30 Permalink

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.