Category: Virtual Money News

Bitcoin exchange Bitstamp founded by Slovenes Nejc Kodrič and Damian Merlak has a new owner–the Belgian investment company NXMH.

Up until now, they had many potential buyers, but Bitstamp was acquired by Belgium-based investment company NXMH. This is how Nejc Kodrič announced the news:

“Bitstamp has been acquired by NXMH, a Belgium-based investment company. Our team, leadership, and vision remain all the same. We believe this is the logical next step on our mission to be the most trusted digital currency exchange on the market.”

He ensured that after the takeover, customers don’t have to worry about their accounts or the company’s performance.

Kodrič expects that the acquisition will strengthen Bitstamp’s growth position, which will bring opportunities for better customer service. The amount Bitstamp was purchased for is unknown, as the management of both companies didn’t want to disclose this information.

According to an Older Rumor, the Price Was Set at $400 Million

A South Korean investor was ready to offer $400 million for Bitstamp in April this year. This information is not confirmed, but it came from the well-known technology journalist of The New York Times, Nathaniel Popper.

Along with all the other news about virtual currency exchanges, I've heard from numerous sources that one of the oldest exchanges, Bitstamp, is in the final stages of being sold to South Korean investors for ~$400m. Neither the exchange nor the buyers are commenting.

— Nathaniel Popper (@nathanielpopper) March 22, 2018

Nexon Korea CEO denied rumors of acquiring Bitstamp in April.

Nejc Kodrič remains as a 10% owner of Bitstamp after the deal with the Belgian company and will continue as CEO. Prior to that, his ownership share was 32%, which was the same as the ownership share of the other co-founder Damian Merlak.

Is Tokens.net a New Potential Success Story?

Merlak has designed a second exchange platform without his co-founder of Bitstamp Nejc Kodrič called Tokens.net. In an interview with MoneyMakers he explained:

“I am an innovator, I like new things, Bitstamp is licensed and therefore there’s no more room for rapid development,”

The crypto exchange Tokens.net is live and users can exchange cryptocurrencies and crypto tokens on the platform.

“We’re not like most ICO projects that haven’t yet delivered any product… the money collected from the ICO is used exclusively for the development of the platform. We listen to the community and stakeholders and deliver upon the requests which are in line with our vision for the platform.”

Although Bitstamp and Tokens.net are both classified as crypto exchanges, Tokens.net’s difference is that it doesn’t enable FIAT to crypto trading.

Tokens.net seeks to bridge the gap between ICOs and crypto exchanges by giving carefully selected ICOs a place to be traded. The company has already 11 employees. Merlak says:

“Tokens.net has a very bright future ahead and you will hear more about it soon.”

Featured image Twitter.

With the end of the year approaching, crypto investors have some planning to do. It’s typically a time for businesses to buy up tax-deductible expenses, pumping up their losses to take the sting out of taxes in April. But for crypto investors, the rules are still pretty unclear.

The IRS has only released one notice, in 2014, which CNN this year called the:

“first and only guidance on how tax principles apply to transactions using cryptocurrency.”

What Crypto Looks Like to the IRS

We do know that crypto assets are considered “property” and not currency, for tax purposes. If you bought bitcoin and didn’t sell, you have no gains or losses to report. Coin-to-coin trades are generally considered taxable events. Beyond that, things are less than clear.

Tax attorney and founder of Attorney IO Alexander Stern says:

“Bitcoin looks a lot more like a commodity. The latest ICO often looks a lot more like a security… Ultimately, one token could be regulated as both a security and a commodity.”

While people have been trying to figure out how to fulfill tax obligations regarding crypto, a strange loophole has appeared that’s allowing some investors to buy up crypto assets and count them as business losses.

Andrew Rossow, attorney and cryptocurrency contributor for Forbes says:

“From a legal perspective, we are watching regulatory agencies and institutions try to unpack the complexities of digital assets… With each ruling or advisory opinion, we are starting to see the molding of ‘boundaries’ on a scale that is still developing and expanding outward.”

Here’s What Happened

The Pareto Network is an investment research platform that offers a subscription package for premium-level investors. Those who qualify for the platform’s subscription services do so based on a score, and investors can build up their scores by accumulating tokens native to the platform, called PARETO.

Any money you put towards these tokens qualifies as a business loss, as it’s paying for the expense of the subscription service. You can deduct all that money as losses, and you still have your tokens as assets since you don’t need to spend them to access the research platform.

PARETO tokens have a market value and can be subsequently traded on various markets. Rossow continues:

“I’m not a tax expert, but I’ve always said that we’re all in this together as we define systems related to blockchain technology. What we are witnessing here are use cases, some inadvertently, as indicated here, and watching how they fit within the legal, tax, and ethical boundaries of what we know to be well-founded today.”

Through the way the Pareto Network set up their subscription package, they accidentally created a tax-deductible asset, allowing investors to buy up crypto assets and classify them as losses.

Crypto Investors – Keep Your Transaction Volume Low

Building up losses can be a powerful way to ease your tax burden and reinforce your business. But there are other strategies to keep your crypto more lightly taxed.

Take the advice of Patrick Camuso, a CPA with a special focus on crypto. He says that investors dealing in fewer transactions will have a much easier situation come tax time. On the other hand:

“when you have a high volume of trades, it does create a compliance burden… Day traders and algorithmic traders usually have the most unpleasant time around tax season from my experiences so far.”

He notes that when the value of your coin goes up and down, it’s not important for tax purposes. But when you trade it for another coin, the IRS wants to know.

“You need to track portfolios and for each trade you’re required to report it to the IRS. It’s a taxable event, it’s a reporting event.”

The intersection of crypto investment and taxation is still under exploration, and that, we can speculate, is a large part of the IRS’s lack of guidance. They’re just as new to it as investors, CPAs, and the CEOs of trading platforms.

While there isn’t much point stressing about the aspects we don’t have specific guidance on, crypto investors can at least enjoy the loopholes while they last.

Featured image from Shutterstock.

After a pretty much year-long bearish trend, the naysayers predicting Bitcoin’s demise seemed to be gaining ground. Yesterday, October 14, bitcoin price saw an abrupt increase from $6,300 to $6,410 within minutes. This caused a short-lived stir among the Bitcoin community since analysts had previously predicted that bitcoin would recover.

The partying on the streets soon ended with the price falling below the $6,300 mark to around $6,220. Until just a few hours ago.

October 15 just experienced a massive Bitcoin price surge from $6,300 to $7,500 in a matter of hours. This pushed up the market cap from $116.40B to $119.86B.

What’s behind the massive uptick that will have HODLers around the world waking up smiling?

The Bitcoin Price Surge Is Highest on Bitfinex

The price of Bitcoin have often been influenced by movements in stablecoin Tether (USDT). So, amid the news over the weekend of heavy Tether selloffs, it’s hardly surprising that Bitfinex, the cryptocurrency exchange behind Tether LLC is leading the charge.

All exchanges that have USDT integrated, including Huobi and OKEx, are seeing Bitcoin traded at a premium price, as traders continue to spark the largest selloff of USDT so far.

How Stable Is the Most Popular Stablecoin?

Tether has suffered a lot of negative press. It’s never sat well with people that the stablecoin is centralized and overseen by Bitfinex. Then there was the outright accusation in December 2017 that there weren’t actually enough dollars backing Tether, throwing its 1:1 parity into question.

Insult was added to injury with Bitfinex’s reluctance to open up its books. And while much of the community simply desist from buying Tether, USDT is still extremely influential on Bitcoin’s price.

This latest sudden dump has so far seen the “stablecoin” drop by 6%. And it’s this drop that’s pushing up the premium of Bitcoin value on Tether-integrated cryptocurrency exchanges.

So the Real Price of Bitcoin Isn’t North of $7,000?

No. All major fiat-to-crypto exchanges including Coinbase and Kraken are currently trading at around the $6,600 mark. Although, the fact remains that they did see the price of bitcoin surpass the $6,700 mark, which can be good news for Hodlers.

It doesn’t take a cryptocurrency market analyst to see the reasons behind this price spike. Look no further than TrueUSD if you want an example of a regulated, audited stablecoin that remains steady today.

It seems glaringly obvious that large amounts of Tether are being used to purchase both Bitcoin and Ethereum (that has also saw a large uptick in price, pushing it over $216 in the past few hours, $214 at the time of writing).

So, if this is the case, is there any reason for Bitcoin fans to celebrate? Maybe so, considering the general Bitcoin price surge on all major exchanges–by more than $400 over the last 24 hours. And over the past 12 hours, Bitcoin volume has shot up from $3 billion to $4.8 billion.

But the troublesome fact remains: For all those in the industry who believe that Tether has no effect on their holdings, it’s time they recognized the canary in the coal mine.

Featured image from Shutterstock.