
US Commodity Futures Trading Commission Primer on Virtual Currencies [pdf] - thisisit
http://www.cftc.gov/idc/groups/public/documents/file/labcftc_primercurrencies100417.pdf
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LAMike
"Only invest what you are willing and able to lose."

Never thought I'd hear the government give positive/neutral investing advice
on Bitcoin.

I think all the agencies are going to fight to classify something they can
control. Is it a commodity, property, stock, a digital gold or something else?

~~~
dogruck
I wouldn't characterize the 20 slide deck as "neutral." Namely, 6 of the 20
slides warn about risks that can be summarized as "you have no recourse if
something goes wrong."

I think the primary publication motivation was to protect the CFTC. "Why
didn't you say something?"

~~~
Sangermaine
>I wouldn't characterize the 20 slide deck as "neutral." Namely, 6 of the 20
slides warn about risks that can be summarized as "you have no recourse if
something goes wrong."

How is that not neutral? It's just stating simple fact.

~~~
dogruck
If the CFTC writes a report about, say, Corn Futures, they talk about what the
rules are, and what you can do if you get scammed because a bad actor violates
those rules. The CFTC might say, "you have the right to appeal a decision"
yada yada.

But here, they're just saying, effectively, "look, we warned you."

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fnwx17
This reads more like an internal memo to the senior management of CFTC that
don't even use a smartphone.

Unfortunately it doesn't seem to offer any new information. Half of it reads
like a typical"what is a cryptocurrency? pros and cons" article from LinkedIn.

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thisisit
"The CFTC first found that Bitcoin and other virtual currencies are properly
defined as commodities in 2015."

Never heard of this before. What are the implications of this on ICOs if any?

~~~
iheartmemcache
(Not a CPA or tax attorney, consult your regionally certified folks for
specifics. Just parroting what the IRS has published for consumer-
consumption.)

At the national level, the IRS declared Bitcoin pretty clearly in Notice
2014-21 for 2015 onwards as strictly a capital asset and not as a currency
backed by a foreign nation state. Q/A #7 is the most pertinent.

The implications on ICOs for an investor under the dominion of the IRS would
be nearly nothing, as it's treated as a capital asset (valued upon purchase at
FMV, and then again upon sale, once again, at FMV). Think of it like buying
MSFT at $foo, selling at $bar, then paying capital gains on your gross less
fees. Relevant publications are the 544 if you're trading, the 525 if you're
mining. All service/product based income Bitcoin must be declared in a
1099-MISC.

The last page is dedicated to a love-note saying "hey, so listen, you're 100%
subject to the standard "failure to report (correctly or not) tax evasion
penalties, so uh pay us".

If you're offering an ICO yourself, things are going to get an order or two of
magnitude more complicated, I'd imagine. No idea how it's classified but I'd
imagine your regulatory reporting burdens will be somewhere between pink
sheets and a publicly traded NYSE post-Sarbox company

Edit: On second thought, it might be higher since you're very arguably
operating a FinEx. "Know your customer" rules a la banking regulations might
apply (i.e. filling out a SAR and filing with FinCEN). I'd definitely speak
with a tax attorney who's worked on FINRA secondary market filings though.

~~~
KasianFranks
> If you're offering an ICO yourself, things are going to get an order or two
> of magnitude more complicated, I'd imagine. No idea how it's classified but
> I'd imagine your regulatory reporting burdens will be somewhere between pink
> sheets and a publicly traded NYSE post-Sarbox company.

They are actually simpler, I know this from running an OTC for a few years.
The blockchain keeps people far more honest and transparent than Stock
Transfer Agents, IQCapital and DTCC combined. T

~~~
JumpCrisscross
> _They are actually simpler, I know this from running an OTC for a few years_

CFTC saying X is a commodity doesn’t exclude the SEC from also claiming
jurisdiction. Lots of FINRA-member firms offer CFTC-regulated trading
services. Congress had to write specific laws preventing this from happening
to commodities futures; no such exemption has been legislated for ICOs. That
said, yes, the CFTC is generally seen as an easier regulator than the SEC.

TL; DR the CFTC and SEC have begun fighting for ICO jurisdiction. Score is
kept with rule writing and prosecutions.

 _Disclaimer: I am not a lawyer. This is not legal nor any kind of advice.
Don’t break the law._

~~~
KasianFranks
You should be able to invest in anyone you want without restrictions but more
importantly, without manipulation of Finra, the SEC, CapitalIQ, stock transfer
agents. And, the DTCC is what everyone keeps its eyes on.

