Bitcoin Buyers Don’t Need to Pay Sales Tax

The New York State Department of Taxation and Finance has said that bitcoin purchases will not be subject to sales taxes.
According to a tax guidance memorandum from the agency’s Taxpayer Guidance Division dated 5th December (hat tip Marco Santori), digital currencies are a type of “intangible property” and, as such, are not subject to a sales tax when purchased.
The move comes months after the US Internal Revenue Service (IRS) released its initial guidance on taxing bitcoin as a type of property, and provides an answer to a long-brewing question about how state sales taxes in the US may be applied to bitcoin transactions.

Only in certain cases

The document states that a sales exchange involving a digital currency would be considered a type of barter transaction. Under this definition, the agency writes, only certain goods and services exchanged for a digital currency would be subject to a sales tax or related reporting requirements.
The memorandum includes several examples outlining how one party may, or may not, be required to pay and report sales taxes when a digital currency is involved, stating:

“...if the party that gives convertible virtual currency in trade receives in exchange goods or services that are subject to sales tax, that party owes sales tax based on the market value of the convertible virtual currency at the time of the transaction, converted to US dollars. If the party that trades property or services in exchange for receiving convertible virtual currency gives the other party a sales slip, invoice, or receipt, the first party must separately state the sales tax due in US dollars on the sales slip, invoice, or receipt.”

The Taxpayer Guidance Division also clarifies that its treatment of corporate and personal income taxes related to digital currency “conforms to the federal treatment of convertible virtual currency”, referring to past guidance published by the IRS.

Tax a 'systemic risk' to digital currency

Santori, global policy counsel at Blockchain and attorney at law firm Pillsbury Winthrop Shaw Pittman, told CoinDesk one of the greatest systemic risks to digital currency adoption has always been that its purchase be subject to sales taxation by governments.

"This guidance is the first official statement we have on the matter, and it is excellent news. Because the guidance could serve as a model for other jurisdictions around the world, it is difficult to overstate its importance."

The issue has reared its head in other international jurisdictions as well. While the UK has chosen not to levy its Value Added Tax (VAT) on digital currency exchanges, others, such as Singapore, would apply the Goods and Services Tax (GST) in some circumstances.

Read More Here:
http://www.coindesk.com/new-york-state-tax-agency-bitcoin-buyers-dont-need-pay-sales-tax/

Bitcoin Developers and Miners Exempt from BitLicense

Developers, miners and individuals using bitcoin will generally not be regulated by the impending ‘BitLicense’ proposals, according to Benjamin Lawsky, superintendent of the New York Department Financial Services (NYDFS).
Speaking at the Benjamin N Cardozo School of Law, New York, Lawsky clarified that many individuals and companies working within the bitcoin space will not need regulatory approval or a BitLicense to operate in New York State.
“We are regulating financial intermediaries. We are not regulating software development,” he said, adding:

“To clarify, we do not intend to regulate software or software development. For example, a software developer who creates and provides wallet software to customers for their own use will not need a license. Those who are innovating and developing the latest platforms for digital currencies will not need a license.”

However, Lawsky stressed that companies involved in safeguarding customers’ money will not be exempt. “We do not, for example, let someone run a bank out of their garage,” he said.

Banking and tech ‘collide’

According to Lawsky, the banking industry and the tech industry are starting to “collide” and create new challenges for regulators.
The NYDFS was forced to operated with money transmitter regulations drafted at a time when there was no Internet or cryptocurrencies, he said, explaining that the department has an obligation to license and regulate such companies.
On a positive note, Lawsky said the NYDFS quickly recognised the potential of block-chain technology:

 “As we began looking at bitcoin last year and getting deeper into it, we began to see the power of the technology that underlies it.”

The technology has the potential to provide cheaper fees and remittances, he said.
New York residents who send money abroad usually pay fees of 8-9%, while digital currencies could operate with fees of about 1%, Lawsky pointed out. Digital currencies do not require people to disclose their credit card information and offer faster transactions, he added.

Lawsky clarifies provisions

The NYDFS started working on the first controversial BitLicense drafts following the fall of Mt Gox, earlier this year, said Lawsky.
The comment period for the original proposal was extended following requests from industry leaders. The revised proposal will take those comments into account and, once published, a new comment period for the revised regulation will begin.

We’re Not Out to Villainize Bitcoin

The Financial Crimes Enforcement Network (FinCEN) has been to date one of the most active – and more controversial – US federal agencies to address the bitcoin ecosystem, doing so through a number of published rulings aiming to provide clarity to the industry.
Founded in 1990, the US agency is responsible for collecting information about financial transactions that may be used to support money laundering, terrorist financing and financial crimes. FinCEN first addressed emerging virtual currencies in 2008 and has been simultaneously praised for engaging with the bitcoin ecosystem, while facing criticism from those who say its efforts have sometimes stifled innovation.
In a new interview with CoinDesk, FinCEN Director Jennifer Shasky Calvery has moved to counter this narrative, reiterating that while her agency’s foremost goal is to protect domestic businesses and citizens, FinCEN remains committed to minimizing the burden of bitcoin and digital currency startups that are making good-faith efforts to comply with regulation.
Calvery told CoinDesk:

“We don’t start at a product and villainize a product, we villainize the bad actors and find out what they’re doing with their money.”

Further, Calvery said that FinCEN is more broadly seeking to gain the support of the domestic bitcoin ecosystem, suggesting that the industry should seek to demonstrate how the technology could possibly be an aid to law enforcement agencies and organisations such as FinCEN:

“I would try to put the challenge out to the industry itself. [...] We ask that you think about it from an anti-money laundering (AML) perspective, what could you build in [to the technology]? [...] I would challenge your readers to think about it from our perspective and see if they can’t come up with some ideas.”

The comments come as part of wide-ranging interview with CoinDesk in which Calvery discussed developments in the field of digital currency, New York’s BitLicense proposal and what FinCEN expects from bitcoin businesses seeking to serve to the US public.

Bitcoin steps up to crime concerns

Throughout the interview, Calvery sought to make clear her belief that bitcoin as a technology is not more susceptible to criminal misuse than other financial services.
Rather, Calvery said that bitcoin’s status as a newcomer to the financial ecosystem has made it the target of bad actors.
She suggested that FinCEN believes the bitcoin community is taking steps to combat the technology’s use in dark markets and illicit commerce, but that some businesses are actively making it difficult for her agency. Overall, however, her tone was arguably softer than in interviews earlier this year, when Silk Road and its related law enforcement cases dominated headlines.
Calvery said:

“You see industry responding and trying to put controls on this. So you see industry springing up around some of these things, but at the same time, you also see businesses springing up trying to make it more difficult for law enforcement.”

Calvery indicated that FinCEN is currently researching ring signatures, a cryptographic signature in which an action is attributed only to a group, and tumblers, a type of mixing service meant to hide where transactions originate.

Informal bitcoin dealers on radar

Consistent with its mandate as chief AML regulator for the US, Calvery asserted that all members of the bitcoin ecosystem that fall under FinCEN’s guidance should follow its directives.
Of particular concern, Calvery said, are informal bitcoin dealers who may think they can operate outside of the agency’s oversight.

Read more:
http://www.coindesk.com/fincen-director-villainize-bitcoin/

Bitcoin’s Price Still Headed to $10k

Despite continued interest from major payments companies and thought leaders, the price of bitcoin has declined in recent weeks, as optimism surrounding New York’s proposed bitcoin regulation gave way to backlash and the market grappled with the widespread use of new and more complex financial tools.
Both factors were recently cited by bitcoin hedge fund Pantera Capital as reason’s that bitcoin’s price has declined since July. In that time, the price of 1 BTC has fallen from close to $650 amid heightened interest from investors at the time of the US government’s auction of roughly 30,000 BTC to a value of $472 at the time of publication.
Still, it’s arguable that no investor has been more exposed to this recent price decline than noted venture capitalist and Draper Fisher Jurvetson (DFJ) partner Tim Draper, who on 2nd July revealed he purchased all of the nearly 30,000 BTC seized from now-defunct online black market Silk Road and sold by the US government.
In a new interview with CoinDesk, Draper revealed he has been surprised by bitcoin’s recent decline in value, though he remains optimistic in its long-term value as an asset.
Draper told CoinDesk:

“I guess the markets aren’t seeing what I am seeing. An entire economy is being rebuilt. I have a price target of $10,000 in three years. Even that may be pessimistic.”

The remarks are notable given that, should Draper have paid market price for the BTC holdings, he would have lost roughly $5m on his investment to date.

Bullish in emerging markets

Draper also addressed his overall investment strategy and recent moves, most of which have targeted bitcoin startups in emerging markets.
The 56-year-old investor, who has contributed to recent funding rounds raised by BitPagos, Korbit and Volabit, told CoinDesk that he believes these companies will ultimately succeed in the face of steep challenges.
Draper’s remarks suggest that he foresees these companies being able to overcome any obstacles posed by regulation and a current lack of consumer awareness, stating:

“These companies are making it easier for people to do business in their countries. As long as the governments realize that they are better off when their people are successful, it should be smooth sailing for our bitcoin investments.”

Investors should buy bitcoin

Price decline aside, Draper said he believes that investors should continue to seek opportunities in the bitcoin market, saying he would “encourage people to buy bitcoins and spend them”.
When asked what advice he would provide to investors and entrepreneurs observing the market, he pointed to bitcoin’s long-term utility as well as its low-cost transaction network.

Find more here:
 http://www.coindesk.com/tim-draper-bitcoins-price-still-headed-10k/

Ben Lawsky: New York Can’t Risk ......

The New York Department of Financial Services (NYDFS) announced today it would extend the comment period for its proposed bitcoin regulations by 45 days, citing significant public interest in the rules as a key reason behind the decision.
In an exclusive interview with CoinDesk, NYDFS superintendent Benjamin M Lawsky opened up about the decision, emphasizing that he felt the extension both necessary and reasonable given his agency’s need to ensure that the proposed laws, when enacted, have the desired consequences.
Lawsky told CoinDesk that the aim of the agency is to put forward the best regulation possible, adding that while the agency wants to move quickly to put in place policies, it doesn’t want to do so at the risk of getting crucial elements wrong.
Lawsky explained:

“We’re not the kind of agency that thinks we have a monopoly on the truth and that we’re always right. We feel strongly about a lot of the provisions in the proposed regulations, but we get that there might be things we can improve.”

For instance, he clarified that the law is intended to relate only to financial intermediaries and financial service providers, not software providers as widely interpreted.
He confirmed the NYDFS aims to put out a revised proposal by the end of October, and that following any material changes in the law, an additional 30-day comment period would allow the industry more time to influence the final rules.
“I think the sooner we get the regulatory framework out there, I think ultimately the better, but we don’t need to move so fast that we risk getting something wrong,” he added.

International influence

Though the NYDFS said that letters from US companies and citizens had an influence on the decision in the formal release, Lawsky acknowledged to CoinDesk that the broader global effects of the proposal were also a motivating factor.
Noting this global influence, Lawsky said:

“I think that gives us an additional responsibility to do our very best to get it right, and the best way to get something right is to try and get as many viewpoints as you can when you put a complicated regulatory framework, consider them carefully and make the best decisions possible.”

The response is notable given a recent comment filed by China’s three largest bitcoin exchanges BTC China, Huobi and OKCoin, which alleged the language of the laws would require them to perform enhanced due diligence on non-US customers.

Expected reaction

Lawsky also commented on the reaction from the digital currency community, which, while initially positive about the regulation, has been more vocal in recent weeks about its more restrictive aspects. For example, Circle CEO Jeremy Allaire went so far as to suggest his company would refrain from serving New York customers should the laws pass in current form, a viewpoint echoed by other prominent business leaders.
Noting that he wasn’t surprised by the reaction, Lawsky remarked:

“I think the most surprising thing has been that certain provisions in the regulation that I think when we drafted it initially that we thought would be pretty clear in terms of the breadth, were read by some much more broadly than we intended.”

Still, he praised the responses the NYDFS has so far received, noting that he has been impressed by the number of companies and individuals that take the industry seriously and care about its underlying technology.

Unintended consequences

Specifically, Lawsky suggested that he was surprised that the digital currency industry’s software providers had implied that the law was meant to govern their actions.

Read more at:
http://www.coindesk.com/ben-lawsky-bitcoin-regulation/

Also find out why states can't stop bitcoin
http://www.cryptonews.biz/states-cant-stop-bitcoin/

Price of Bitcoin Falls to $500

The price of bitcoin on the CoinDesk USD Bitcoin Price Index (BPI) dropped below $500 today.
At 2.30pm UTC, the price had fallen nearly 9% to $496.27, its lowest level since 21st May, when concerns about restrictive regulation in China were widespread.
Notably, the decline below $500 was short lived, with the BPI quickly rebounding over the $500 mark to reach $512.26 at press time.

No clear cause

Though no one news event could clearly be linked to the price decline, speculation was rampant on Reddit and other bitcoin community mainstays as to what factors were contributing to the market decline.
In its most recent BitBeat report, the Wall Street Journal suggested that the recent US Consumer Financial Protection Bureau warning and Bitstamp’s announcement that it had changed banking partners were both potential factors.
However, WSJ acknowledged that uncertainty over US regulation may have also been a contributing cause.
Vytautas Karalevičius, Spectro Coin co-founder and CEO, told CoinDesk he believes all three events to be contributing factors, though he said Bitstamp might have been the most important of the three, adding:

“Bitstamp changing its bank provider from Unicredit to Raiffeisen might have two effects. Firstly, some deposits to old Unicredit account are bouncing back, so people who were willing to buy bitcoin these days do not support the demand for it. Also, it shows a potential problem [even the] most liquid exchanges face.”

Though the proposal was first introduced last month, a growing number of bitcoin’s business leaders have started moving to formally contest the proposed framework. Boston-based bitcoin startup Circle even declared yesterday it would not serve New York customers should the laws be enacted.
Speaking to CoinDesk, Shawn Sloves, CEO of global bitcoin exchange network Atlas ATS offered a different take. He suggested that overall saturating in the bitcoin exchange market remains a contributing factor. New York regulation, regardless of the form in which it passes, will be a boon for the industry, he added.

Read more at:
http://www.coindesk.com/price-bitcoin-falls-500-lowest-level-since-may/

25 Of The Most Creative Sculptures And Statues From Around The World

Every city that you visit has its own unique sculptures and statues, but some really make you look twice—and then some. The most unique and amazing sculptures known to capture the eyes of all who pass can be found tucked along secret streets and broadcasted in popular city squares.

There are many sculptures and statues (both new and old) currently provoking conversation and intrigue. Join the fun looking through these photos of the top 25 most incredible statues and sculptures found throughout the world.

1. Expansion, New York, USA

As light creeps out of the cracks of this statue’s body, a world of messages are portrayed by artist Paige Bradley. All of the pieces are cast in bronze and made to float separately from one another.

 

See all 25 here:

http://themindunleashed.org/2014/08/25-creative-sculptures-statues-around-world.html

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