Category Archives: Bitcoin

My New Project: The Week In Bitcoin

My New Project: The Week In Bitcoin

TL;DR – I’m starting a weekly curated email newsletter that covers the most important happenings in the world of Bitcoin – I’ll also be including some great articles from ‘cold storage’ for those new to Bitcoin. Best of all, it is totally FREE and you can sign-up HERE to get the first issue this Friday (23/01/2015).

I fundamentally believe that Bitcoin will change the way a whole array of industries are structured over the next decade. Basically, any industry that can take advantage of blockchain technology will be disrupted in a major way.

The future is exciting and I know many are hungry to learn about what’s happening in the world of Bitcoin (and cryptocurrency more generally).

For Bitcoin to have the impact that many of us believe it will, it is vital that great writing is dispersed evenly across the whole community – from those new to the space, to those wanting to keep up to date. I think that knowledge is crucially important for us to continue to have intelligent conversations about how to regulate, advocate and promote Bitcoin at scale.

However, one of the challenges many face when trying to learn about Bitcoin (and keep up to date, for that matter) is finding content that is well written that actually illuminates, not obscures, what is happening in the ecosystem. Anyone who has gone down the proverbial ‘Bitcoin rabbit hole’ will tell you that the quality of writing out there varies dramatically. What makes Bitcoin challenging to report on is the fact that it draws in so many disparate areas of knowledge – for example, cryptography, law, programming, security and economics.

Having said this, quality writing on Bitcoin does exist. In fact, this is one of the things that is often forgotten about when speaking of progress in the ecosystem. Bitcoin journalism is getting better – dramatically better. But, as with all things, the good stuff is damn hard to find. Unless you spend a disproportionate amount of time sifting through the noise, it can be really hard to get past the usual “Bitcoin is dead” articles.

This is specifically why I’ve started ‘The Week In Bitcoin’.

Some Thoughts On The ATO’s Bitcoin Guidance

Some Thoughts On The ATO’s Bitcoin Guidance

Earlier today the Australian Taxation Office (ATO) released its much anticipated guidance on the taxation treatment of bitcoin. Along with the guidance paper they released a slew of draft rulings.

In their media release the ATO stated that:

“[We have] consulted extensively with bitcoin experts, businesses, industry bodies and other external stakeholders to develop this guidance and explain the obligations of bitcoin users.”

Reading the guidance (and more so the draft rulings) it is clear that they have invested a fair amount of time in understanding what bitcoin is and how it’s being used. In many ways the ATO has released a very complete picture of how they see bitcoin for tax purposes.

Although many have been quick to find fault with the guidance provided by the ATO, the truth is that they have provided a great deal of clarity to businesses and consumers. Further, the depth of analysis provided by the rulings released today gives a solid grounding to the ATO’s view – which is more than what’s been issued by other tax authorities.

Some Important Points To Note

The guidance paper that was released by the ATO contains very little ‘meat’ and should be taken for what it is – a general guidance paper. Much of the interesting content is actually contained in the draft rulings that accompanied the guidance paper. For the most part, this is where lawyers and accountants will be spending their time over the next few days.

Having said this, it should be noted that the rulings released by the ATO are all still in draft form and still under consultation. This means that those who wish to engage with ATO can still do so.

Bitlicense Provides A Reality Check For Start-ups

Bitlicense Provides A Reality Check For Start-ups

If you’ve been paying attention to bitcoin news over the last few weeks, you would have heard about the release of the draft New York ‘bitLicense’ regulations. These proposed regulations have been met with a great deal of animosity from some portions of the bitcoin community, with many feeling that they are too onerous for nascent bitcoin start-ups.

Before going any further, it’s important to note that these are only in draft form. Specifically, they have been released for comment and feedback. In this regard, the final form of these regulations may be radically different to the ones currently presented in the “regulatory framework” – one way or the other. Having said this, the smart money is on these provisions being very similar to the final ones issued by the New York Department of Financial Services (NYDFS).

What’s The Big Deal?

By way of background, for those unfamiliar with the proposed ‘bitlicense’ regime, back in November last year the NYDFS signalled that they’d consider issuing ‘bitlicenses’ to those looking to operate certain types of virtual currency businesses in New York (See HERE for the press release). In January of this year, they held hearings on virtual currencies with many well known names from the industry asked to provide their views. During the hearings a number of heavy weights in the tech industry called for clarity on bitcoin regulation. After the hearings, the NYDFS noted that they’d take these comments onboard in coming up with any further guidelines around the licensing of virtual currency businesses. Then on 17 July 2014 they issued the proposed bitlicense framework for comment (See HERE for the press release and HERE for the framework).

ATO Delays Position On Bitcoin – But Does Offer Some Guidance Via Private Binding Ruling

ATO Delays Position On Bitcoin – But Does Offer Some Guidance Via Private Binding Ruling

This article does not constitute legal, accounting or tax advice. Any tax-related opinions in any part of this article are not tax advice, and were not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties or for promoting, marketing, or recommending to another party any transaction or matter addressed herein. Everyone should seek the advice of a competent, independent tax professional regarding their particular circumstances.

I make no claims, promises, or warranties about the accuracy of the information provided in this article. Tax advice cannot be provided on a general basis, and must be specifically tailored for each individual by their particular representative. Everything included in this article is the author’s opinion and not a concrete fact.

Yesterday, it was reported that the Australian Taxation Office (ATO) would be delaying its long awaited position paper on bitcoin until after they’d received advice from the Solicitor-General, Justin Gleeson SC.

Understandably, many in the bitcoin community feel that the ATO has been dragging its feet on providing guidance. Further, given that the process of receiving advice from the Solicitor-General can take months, many may end up being caught in limbo come income tax return lodgement time. Which could be a much bigger issue.

Does An ATO View Exist?

There have been murmurings that the ATO has in fact granted private binding rulings to a few taxpayers in relation to the tax treatment of bitcoin. In fact, CoinDesk reported in March that an ‘Australian bitcoin entrepreneur’ had received a ruling from the ATO regarding the taxation treatment of bitcoin. According to the article, the ruling suggested that bitcoin would (i) be subject to Goods and Services Tax (GST) and (ii) would be taxable on revenue or capital account depending on the activities related to the disposal and acquisition of the bitcoins. In other words, bitcoin would sit squarely in the middle of the Australian tax net (see HERE for the article).

However, this ruling hasn’t been made public via the ATO’s Private Binding Rulings Register (or it may have been removed), which does cast some doubt as to whether it has been finalised. In fact, up until recently there were no rulings which had been published by the ATO on the topic of bitcoin.

However, this changed a few days ago.