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ECON Bitcoin to be declared a financial institution - Martin Armstrong
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  1. #1
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    1 Bitcoin to be declared a financial institution - Martin Armstrong



    The risk with Bitcoin is that the government could simply change the definition of money. That is what they did to me back in 1980 because I was one of the three main market-makers in gold (perhaps the biggest). It was all a hunt for taxes, not concerning me but my clients. I have explained before why I retired from making markets in gold — the IRS declared me to be a BANK! When gold was legalized in 1975 and began trading on the COMEX in New York, the New Jersey Senate asked me to write the law on gold to make sure it would not be taxable to buy and sell gold bullion. I worked with Senator Foran and developed the language that “gold was not taxable unless converted to use.”


    I was making the market to buy gold scrap from all the stores you see with “WE BUY GOLD” signs. They buy the jewelry and it has to be refined. To do that, you needed a minimum lot of 100 ounces, which was the contract size on COMEX. When gold was $800, that meant one 100 ounce bar was valued at $80,000. The refining period was 6 weeks. Therefore, all of these small operations could not afford the float. If they bought 100 ounces per week, then they would need $560,000 in working capital. That would not work for most of these small shops buying gold.


    I made the market. The shops could ship whatever they bought that day and I would buy it at the daily price. I gathered all the gold sold by countless stores. The gold was shipped by armored cars to Englehard for refining (PhiBro or Philipps Brothers who eventually bought Saloman Brothers). I was doing tens of millions per week back then and refined a mountain of gold.


    First, the NJ tax authorities walked in and declared me to be a merchant. I said gold was not taxable unless converted to a usable product. They said their “interpretation” was that the “use” was investment. I refused to pay and opted for a trial. Of course, you do not get a jury, just a judge who rules always for the government. I was not allowed to testify at my own trial for they said whatever the Senate had asked me to write, I may have misinterpreted their intention. Senator Foran was so angry that he demanded to testify at my trial. The government objected and he was allowed to testify ONLY as a private individual citizen. I moved to subpoena the full Senate. The judge denied me, and I lost.


    Simultaneously, the Feds walked in and declared me to be a BANK. They then declared that I had to file forms to report when my clients bought or sold more than $10,000. Their interpretation was that gold was NEVER formally declared not to be money in 1971, so I was a BANK. They threatened me saying that the fine was $50,000 up to the full amount of every transaction I failed to report. They said they knew I perhaps did not “realize” I was a BANK and would forego the fines if I would allow them access to audit all my clients. I had no choice. They set up shop in my office. I walked by, noticing that they were pulling out names of those whose transaction were even $5,000, and I asked what was going on. The agent turned to me and said very aggressively, “You have a problem, keep your mouth shut!” The next day in rolled the vans and they took all my business records and began an audit over 3,000 of my clients for the next three years.


    That is why I retired. I neither wanted to collect sales taxes on bullion nor be a BANK and report on my clients. Since I was the biggest, they were starting with me. People doing business outside of New Jersey would not have the sales tax problem and the IRS was interested in me because of my size. They would not do the same for small shops. So it was time to get out of the business. Clients wanted the research to continue, so that was spun-off as a new company in 1981.


    Now comes Bitcoin. The Judiciary Committee of the United States Senate is currently working on Bill S.1241 that aims to criminalize deliberate concealment of property or the control of a financial account. The bill was submitted in June, and the law would change the definition of “financial account” and “financial institution,” and thus also cover digital currencies and digital exchanges. Who is pushing it? None other than California’s Senator Dianne Feinstein, who maintains that the bill is needed to update existing money laundering laws because of terrorists.


    This means that the miners of Bitcoin will become a “bank,” as I was declared. The operators of the trading platform Coinbase were forced by court ruling to notify the IRS of the identity of over 14,000 investors who were trading $20,000 in Bitcoin. Users were affected if their trading volume had exceeded $20,000 at the beginning of 2013 by the end of 2015. So this is NOT a single transaction, but accumulative. The IRS will now “presume” tax evasion. This is what I warned would happen. Been there done that! They can shut down Bitcoin in the blink of an eye by simply defining anyone who is a miner to be a financial institution.


    The bill will change the definition of “financial institution” in Section 53412 (a) of Title 31 , United States Code. The text will read:


    “An exhibitor, a redeemer or a cashier of prepaid access devices, digital currency or a digital exchanger or a digital currency.”

    The regulation will remove the anonymity of Bitcoin and other cryptocurrencies defeating this idea that there is an alternative-financial-universe separate from government.


    https://www.armstrongeconomics.com/w...tution-beware/
    What is the lake of fire? What is it's purpose? Is the lake of fire eternal hell? Is there any hope of escape for those cast into this lake?
    http://bible-truths.com/lake1.html

  2. #2
    Show me a institution, or a individual who controls bit coin, it by nature is diversified and requires no institution to function except software that is out there everywhere.

    having reflected on it, it is possible that you mean those who trade bitcoins for various other fiat currencies. They individually could be singled out, but bit coin is beyond reach except one individual at a time.

    They would have to find (good luck) each individual with a wallet, and compel them to give the security protocols for their wallet to them and collect those bunches of 1's and 0's and figure out what to do with them.

    That is the banksters problems, they cannot get their mind around a non centralized control of money.
    Dosadi

    III


    My family & clan are my country.

  3. #3

    Interesting.

    Howdy, Folks!

    I wonder when Apple, Inc. with their Apple Pay (and other companies with financial services like it) will be declared a Bank/financial institution.

    Peace and Love,

    Donald Shimoda

  4. #4
    Join Date
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    The dollar use to be backed by gold, but that stopped a longtime ago. Now here comes Bitcoin, with nothing that backs it up either.

    Is Bitcoin part of the cashless society? Bitcoin is how the world and younger generation seems to be going. The Bible talks about our world becoming a one world government and a cashless society.

    What's your thoughts on all of this?

    Suzieq

  5. #5
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    Very interesting!
    Hfcomms http://www.timebomb2000.com/vb/showt...77#post6692077

    . . . . . . Now comes Bitcoin. The Judiciary Committee of the United States Senate is currently working on Bill S.1241 that aims to criminalize deliberate concealment of property or the control of a financial account. The bill was submitted in June, and the law would change the definition of “financial account” and “financial institution,” and thus also cover digital currencies and digital exchanges. Who is pushing it? None other than California’s Senator Dianne Feinstein, who maintains that the bill is needed to update existing money laundering laws because of terrorists.

    This means that the miners of Bitcoin will become a “bank,” as I was declared. The operators of the trading platform Coinbase were forced by court ruling to notify the IRS of the identity of over 14,000 investors who were trading $20,000 in Bitcoin. Users were affected if their trading volume had exceeded $20,000 at the beginning of 2013 by the end of 2015. So this is NOT a single transaction, but accumulative. The IRS will now “presume” tax evasion. This is what I warned would happen. Been there done that! They can shut down Bitcoin in the blink of an eye by simply defining anyone who is a miner to be a financial institution.

    The bill will change the definition of “financial institution” in Section 53412 (a) of Title 31 , United States Code. The text will read:

    An exhibitor, a redeemer or a cashier of prepaid access devices, digital currency or a digital exchanger or a digital currency.”

    The regulation will remove the anonymity of Bitcoin and other cryptocurrencies defeating this idea that there is an alternative-financial-universe separate from government.

  6. #6
    The Feds and IRS can't have people gaining income tax free. As it is now every FRN dollar of income is taxed right away at 15% plus compliance.

    Now, they treat bit coins like stocks, no tax untill you convert/sell to FRNotes/digits. However some retailers are selling stuff or services for bit coins, I don't think they will let that continue. If they do then that will be the end for the Fed and IRS.

    Seems to me thats where the kryptonite will be for these new currencies. Once the new bitcoin and alike bankers and miners realize that they have to pay that 15% plus compliance....things will change.

    It's almost like the IRS is not looking the other way, but are just letting out a lot of rope....

  7. #7
    Quote Originally Posted by West View Post
    The Feds and IRS can't have people gaining income tax free. As it is now every FRN dollar of income is taxed right away at 15% plus compliance.

    Now, they treat bit coins like stocks, no tax untill you convert/sell to FRNotes/digits. However some retailers are selling stuff or services for bit coins, I don't think they will let that continue. If they do then that will be the end for the Fed and IRS.

    Seems to me thats where the kryptonite will be for these new currencies. Once the new bitcoin and alike bankers and miners realize that they have to pay that 15% plus compliance....things will change.

    It's almost like the IRS is not looking the other way, but are just letting out a lot of rope....
    UM if one person buys something by taking a dollar out of their pocket and giving it to another person (In private) how is anyone to know that exchange took place? There is no record kept of that exchange except between the two people who traded it unless they reveal it.

    And without voluntary informing on yourself (something the fifth amendment says one need not do is self criminalize), only those in the darwin award of the gene pool will be weeded out.

    It is the stuff of tyrannical control freaks nightmares.

    And few people actually see how it works.

    Also there are almost no miners left, and those speculating and selling bit coins and advertising that they do are far fewer than those just trading them between each other.

    And let us not neglect that if one purchases something online with a bit coin transfer out of the FUSA that no reporting will take place.

    The size of the army to watch every single potential trade as there is no central clearing house for it is not mathmatically / logistically possible.

    The banksters pray people stay fooled into thinking that they need them.

    They pray and fear.
    Dosadi

    III


    My family & clan are my country.

  8. #8
    Quote Originally Posted by Dosadi View Post
    UM if one person buys something by taking a dollar out of their pocket and giving it to another person (In private) how is anyone to know that exchange took place? There is no record kept of that exchange except between the two people who traded it unless they reveal it.

    And without voluntary informing on yourself (something the fifth amendment says one need not do is self criminalize), only those in the darwin award of the gene pool will be weeded out.

    It is the stuff of tyrannical control freaks nightmares.

    And few people actually see how it works.

    Also there are almost no miners left, and those speculating and selling bit coins and advertising that they do are far fewer than those just trading them between each other.

    And let us not neglect that if one purchases something online with a bit coin transfer out of the FUSA that no reporting will take place.

    The size of the army to watch every single potential trade as there is no central clearing house for it is not mathmatically / logistically possible.

    The banksters pray people stay fooled into thinking that they need them.

    They pray and fear.
    The states actually are a more powerfull regulator of transactions than the Feds, IMO.

    Your right in what you say. But any large or real gains in income the states tax men will be on it like flies....

    Just saying, one needs to stay real small and real smart on any income one gets with out declaring it.

    And thats the problem also with cash. Still say the IRS and the States are still just giving lots of rope at this stage of the game. And that makes sence. Really, let people gain assets and fat piles of digits, rather in FRNotes or crypto currency, then pounce on it as ill gotting gaines.

    Just can't see the PTB letting these new currencies go un taxed. They must be just letting the rope out.

  9. #9
    Quote Originally Posted by Suzieq View Post
    Is Bitcoin part of the cashless society? Bitcoin is how the world and younger generation seems to be going. The Bible talks about our world becoming a one world government and a cashless society.

    What's your thoughts on all of this?

    Suzieq
    ^^^ BINGO ^^^

  10. #10
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    Quote Originally Posted by Dosadi View Post

    They would have to find (good luck) each individual with a wallet, and compel them to give the security protocols for their wallet to them and collect those bunches of 1's and 0's and figure out what to do with them.

    That is the banksters problems, they cannot get their mind around a non centralized control of money.


    Apparently that has already been done or is in process. From Armstrong's blog at the top to the thread;



    The operators of the trading platform Coinbase were forced by court ruling to notify the IRS of the identity of over 14,000 investors who were trading $20,000 in Bitcoin. Users were affected if their trading volume had exceeded $20,000 at the beginning of 2013 by the end of 2015. So this is NOT a single transaction, but accumulative. The IRS will now “presume” tax evasion. This is what I warned would happen. Been there done that! They can shut down Bitcoin in the blink of an eye by simply defining anyone who is a miner to be a financial institution.


    One thing you can be assured of is that the government will always get their pound of flesh.
    What is the lake of fire? What is it's purpose? Is the lake of fire eternal hell? Is there any hope of escape for those cast into this lake?
    http://bible-truths.com/lake1.html

  11. #11
    Quote Originally Posted by Hfcomms View Post
    Apparently that has already been done or is in process. From Armstrong's blog at the top to the thread;



    The operators of the trading platform Coinbase were forced by court ruling to notify the IRS of the identity of over 14,000 investors who were trading $20,000 in Bitcoin. Users were affected if their trading volume had exceeded $20,000 at the beginning of 2013 by the end of 2015. So this is NOT a single transaction, but accumulative. The IRS will now “presume” tax evasion. This is what I warned would happen. Been there done that! They can shut down Bitcoin in the blink of an eye by simply defining anyone who is a miner to be a financial institution.


    One thing you can be assured of is that the government will always get their pound of flesh.
    Yes, and about $5000 plus compliance and fines in just FICA taxes on $20000 would destroy the hype of these currencies PDQ.

  12. #12
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    Quote Originally Posted by West View Post
    Yes, and about $5000 plus compliance and fines in just FICA taxes on $20000 would destroy the hype of these currencies PDQ.

    Admittedly there are many people who know a whole lot more about digital currency than I do. On a peer to peer basis say I will buy a ATV from you for one Bitcoin and we conduct the exchange among ourselves and enthusiasts will say that this is an untraceable transaction and that the IRS [or any entity won't know about it and won't be able to tax it] But that transaction still has to go thru one of the trading platforms in order to inform all the other computers that ownership of that Bitcoin has now changed. And as I understand it and I'm totally open to being corrected that these are the records that Coinbase was forced to turn over to the IRS.

    Several months ago I signed up for a digital wallet and wanted to get into one of these exchanges in order to speculate on some of the coins that are not as advanced as Bitcoin thinking if I could spend $100 or so on coins that cost just pennies but looked like they could perform that might be a reasonable gamble. I did some investigation to find the best exchange to sign up with that everyone recognized. In order to comply with financial reporting and identity requirements they wanted a digitized photo of the front and back of my drivers license as well as a utility bill statement in my name as well. I thought 'there goes your anonymity'. They say of course that they are the only ones who will have the information and they won't share it but we saw with the Coinbase example all it takes is a court order and they have to turn it over.
    What is the lake of fire? What is it's purpose? Is the lake of fire eternal hell? Is there any hope of escape for those cast into this lake?
    http://bible-truths.com/lake1.html

  13. #13
    Quote Originally Posted by Hfcomms View Post
    Admittedly there are many people who know a whole lot more about digital currency than I do. On a peer to peer basis say I will buy a ATV from you for one Bitcoin and we conduct the exchange among ourselves and enthusiasts will say that this is an untraceable transaction and that the IRS [or any entity won't know about it and won't be able to tax it] But that transaction still has to go thru one of the trading platforms in order to inform all the other computers that ownership of that Bitcoin has now changed. And as I understand it and I'm totally open to being corrected that these are the records that Coinbase was forced to turn over to the IRS.

    Several months ago I signed up for a digital wallet and wanted to get into one of these exchanges in order to speculate on some of the coins that are not as advanced as Bitcoin thinking if I could spend $100 or so on coins that cost just pennies but looked like they could perform that might be a reasonable gamble. I did some investigation to find the best exchange to sign up with that everyone recognized. In order to comply with financial reporting and identity requirements they wanted a digitized photo of the front and back of my drivers license as well as a utility bill statement in my name as well. I thought 'there goes your anonymity'. They say of course that they are the only ones who will have the information and they won't share it but we saw with the Coinbase example all it takes is a court order and they have to turn it over.
    Also to get that ATV in your name you will need to declare it as a asset. And I will fill out a release of liability so you can't sue me when the grandkid brakes his neck becuase I used bailing wire to hold the brakes on.

    Also in some states they fly over your property taking pictures, and if it was a tractor we traded, well that gets taxed every year, so on and so on...

    Better, (if I was a PMs bug) just give me 20 silver dollars for the ATV and I'll give you a $20 bill of sale.....

  14. #14
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    Traders at top bitcoin exchange claim they have no access to their money
    Published time: 6 Dec, 2017 13:06



    Another question about the safety of cryptocurrency transactions was raised this Wednesday. Clients of a major Las Vegas bitcoin exchange Bittrex say they can’t withdraw their money and the company doesn’t explain why.

    The clients of Bittrex, which processes about $1 billion of cryptocurrency payments per day, are angry about the delays, Business Insider reports.

    They claim to have verification problems but get close to no feedback from Bittrex about the situation.

    The company admitted to "significant delays" in handling the issues, but said they affected only "a small percentage of our overall user base."

    New identification procedures are being implemented to comply with the US anti-fraud banking regulations.

    One of Bittrex users, who asked the media to call him only by his middle name, commented on the problem.

    “Bittrex has two levels of verification. Basic Verification, which I completed, but it said it could not find any public record to match what I entered. Then [it] gives you the option to submit what they call Enhanced Verification where you have to submit Gov ID, Passport, Selfie, etc. I, in turn, did this, but that one also failed, saying 'Name Mismatch Error.' To top it off, they do not provide any settings page to correctly make the name change if [there] truly is a name mismatch,” he said.

    “The next step is for you to submit a support ticket, which I then completed. My support ticket was opened on November 6 with not a single response from anyone at Bitrrex. This is going on for almost 30 days now. I updated the ticket many times to no avail," he added.

    Another user complained that when he made the deposit, no verification was required.

    “Support doesn't work at all, I don't sleep at night because of that, when I put money there nobody asked about verification! And now my money is blocked," he said.

    https://www.rt.com/business/412109-b...e-money-stuck/
    What is the lake of fire? What is it's purpose? Is the lake of fire eternal hell? Is there any hope of escape for those cast into this lake?
    http://bible-truths.com/lake1.html

  15. #15
    Quote Originally Posted by Donald Shimoda View Post
    Howdy, Folks!

    I wonder when Apple, Inc. with their Apple Pay (and other companies with financial services like it) will be declared a Bank/financial institution.

    Peace and Love,

    Donald Shimoda
    Never. They likely have lobbyists enough funneling cash into the trough to keep such horror at bay.

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