Japan to regulate and tax Bitcoin trades - Nikkei
The Japanese government will set rules for trading bitcoin, including imposing taxes on transactions with the virtual currency, that will become the basis for guidelines applicable to similar currencies in future, the Nikkei reported.
Japan's government is still trying to explain the collapse of Mt. Gox - once the world's once largest bitcoin exchange - and figure out how the Tokyo-based company could lose nearly half a billion dollars in bitcoins, Finance Minister Taro Aso said on Tuesday.
Mt. Gox filed for bankruptcy protection in Japan on Friday, saying it may have lost some 850,000 bitcoins due to hacking into its faulty computer system.
The guidelines proposed by the Japanese cabinet will call for taxing bitcoin transactions, defining the virtual currency as a commodity rather than a currency, the Nikkei said.
Gains from trading bitcoins on online exchanges, purchases made with bitcoins, and companies earning revenue from bitcoin transactions will be subject to Japanese tax, the financial newspaper said.
Banks will be also be prohibited from handling bitcoins while securities firms will be barred from brokering bitcoin trades, the Nikkei reported.
Bitcoin is a digital currency that, unlike conventional money, is bought and sold on a peer-to-peer network independent of central control. Its value has soared in the last year, and the total worth of bitcoins minted is now about $7 billion.
The virtual currency has engendered a new wave of creative criminality from hacking online platforms to steal bitcoins to their potential for use in money laundering, bribery and purchases of illicit products.
Last week, U.S. Federal Reserve Chair Janet Yellen said the U.S. Congress should look into legal options for regulating virtual currencies such as bitcoin.
Shanghai-based BTC China, the world's largest bitcoin exchange by volume, has imposed new regulations to curb bitcoin trade weeks after Beijing banned financial institutions from trading in bitcoin due to the risks involved.
Russian authorities have issued warnings against using bitcoin, saying treating it as a parallel currency is illegal.
Britain, however, has supported bitcoin and is preparing to abort its plans to tax bitcoin trading, according to a Financial Times report.
Virtual currency to remain, but is bitcoin the future?
Virtual currencies have gained traction in the five years since the first bitcoin was created , but it’s less clear if bitcoin itself will be the virtual currency of the future.
“The banking system has come to the realization that digital currency isn’t going away,” said Barry Silbert, chief executive of SecondMarket. His comments came during a panel discussion at the MarketWatch Investing Insights event “Bitcoin: Boom and Bust” late Tuesday in New York.
But there is a chance that bitcoin could be replaced by a better second mover, just like Friendster was ousted by Facebook Inc. FB +0.28% , said Todd Harrison, founder and chief executive of Minyanville Media.
The collapse of the bitcoin exchange Mt. Gox last week thrust the virtual currency back into the limelight. Tokyo-based Mt. Gox, once the main exchange for trading bitcoin, disclosed Friday it had lost about 750,000 of its customers’ bitcoins as it filed for bankruptcy in Japan.
The announcement came after it abruptly wiped its website clean of information and halted all trading earlier that week, raising questions about the security of investing in a virtual currency that isn’t regulated by governments.
That could change. SecondMarket, the platform known for letting investors trade shares of Facebook before it went public in 2012, is currently working on creating a U.S.-based bitcoin exchange with input from regulators. The company expanded into the bitcoin space last year when it launched a bitcoin investment vehicle for accredited investors.
Silbert said Tuesday that the SecondMarket board has approved a proposal to spin off its bitcoin business into a separate company, which will include the bitcoin exchange.
“We are officially moving forward with it,” he said.
Seems that we are going to be doomed to bitcoin like money. That way they can take as much as they want whenever they think they need it (our money)
Online sleuthing by Mt. Gox dispossessed throws up few clues
Some of those who have lost bitcoins in the collapse of Mt. Gox have turned to internet sleuthing to find out where their money has gone - but they're unlikely to have much luck.
That's because the crypto-currency is a lot more complex than it looks, even to those who believed in it enough to invest their savings, bitcoin experts say, illustrating the scale of the challenge facing investigators trying to unravel the multi-million dollar mess at what was once the world's dominant bitcoin exchange.
Forum websites like Reddit and internet relay chatrooms have attracted hordes of users as the Mt. Gox debacle unfolded in recent weeks. But their crowdsourcing investigations have uncovered little in the way of real evidence about what happened.
"The crowdsourcing so far has been a miserable failure," said Emin Gun Sirer of Cornell University, who posted his own analysis challenging several theories about what may have happened at Mt. Gox.
The problem, Gun Sirer and others say, is two-fold: users of such forums are not always methodical or disciplined in their research on one hand, and on the other, bitcoin's combination of transparency and complexity invites the unwary to draw false conclusions.
Mark Karpeles, the 28-year-old French CEO of Tokyo-based bitcoin exchange Mt. Gox, filed for bankruptcy on Friday admitting that some 850,000 bitcoins - worth more than $560 million at today's prices, and about 7 percent of all bitcoins minted - were missing. Karpeles blamed hackers for the theft, based on a so-called "malleability" bug in bitcoin software.
The collapse of Mt. Gox has left thousands of bitcoin users bereft. Driven in part by a desire to find the missing bitcoins, and in the absence of any solid explanation by Mt. Gox or Karpeles, Reddit users and others have shared links, studied bitcoin transactions and traded rumours online.
It started in 2011 and now they are inventing hackers. Come on. lain and simple ponzi that ended as they have planed and now they are trying to get out without being punished. Electronic money, my ....
Man called Bitcoin's father denies any ties, wrangles free lunch
A reclusive Japanese American man thought to be the father of Bitcoin emerged from his Southern California home and denied any involvement with the digital currency, before leading reporters on a car chase leading to the headquarters of the Associated Press.
Satoshi Nakamoto, a name known to legions of bitcoin traders, practitioners and boosters around the world, appeared to lose his anonymity on Thursday after Newsweek published a story that said Nakamoto lived in Temple City, California, just east of Los Angeles, and included a photograph.
Dozens of reporters encircled a modest two-story house thought to be his residence on Thursday morning. No one answered the doorbell, though several times, someone pulled back the drapes on an upstairs window, suggesting the person was keeping an eye on the street.
In the afternoon, Nakamoto stepped outside and told reporters he had nothing to do with bitcoin but was looking for someone who understood Japanese, to buy him a free lunch.
An AP reporter said yes, and the two made their way to a nearby sushi restaurant with media in tow, before leaving and heading downtown.
According to a Los Angeles Times reporter, who followed his car, Nakamoto was driven to the Associated Press offices in downtown Los Angeles, where he again denied any involvement with bitcoin.
Bitcoin enthusiasts have come under fire in recent weeks, following the sensational collapse of Mt. Gox, once among the largest of the bitcoin exchanges, and the closure of Canadian bitcoin lender Flexcoin.
The collapse of Mt. Gox has shaken confidence in the digital currency, which advocates believe will smooth financial transactions across the world. Opponents criticize it as a risky, unregulated investment.
Bitcoin is a digital currency that, unlike conventional money, is bought and sold on a peer-to-peer network independent of central control. Its value soared last year, and the total worth of bitcoins minted is now about $7 billion.
Administrator...please move post #198 to "traders joking" thread...
Isn't the whole bitcoin story a big joke
not for "ABC" agency that created it ...
Japan decides bitcoin is not a currency
The Japanese government officially said Friday that it doesn’t consider bitcoin to be a currency and has no plans at present to regulate it as a financial product.
As it tries to cope with the fallout from the bankruptcy of the Tokyo-based Mt. Gox exchange, the government said that the crypto-currency would be treated like other goods and services, with commercial sales of bitcoin itself and bitcoin-based transactions subject to sales tax. In addition, any gains on exchange rates will be taxed as well.
“Any bitcoin transactions are taxable when they fulfill requisitions stated by laws on income tax, corporate tax and consumption tax,” the government said in its statement, which came in response to questions over how bitcoins will be regulated.
At the same time, the statement ruled out treatment of bitcoin as a currency or a financial instrument.
“Bitcoin are neither Japanese nor foreign currencies and its trading is different from deals stated by Japan’s bank act as well as financial instruments and exchange act,” according to a document released by Prime Minister Shinzo Abe’s cabinet.
It also said that banks won’t be allowed to offer bitcoins to their customers.
But the statement also suggested that the government remains uncertain over how to deal with bitcoin, which aren’t widely used in Japan even though Mt. Gox was itself the market leader with an 80% share of the trading at its peak.
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