As cryptocurrency trading becomes more widespread, some government agencies have begun auditing taxpayers to capitalize on their digital coin earnings. One such agency is the South Africa Revenue Service (SARS). They recently began sending audit requests to taxpayers, requesting coin holders to disclose their crypto trading activities.
According to a South Africa-based tax consultancy that has been fielding audited taxpayer inquiries, the agency’s audit requests have included numerous crypto-specific questions. Among these questions, taxpayers are being questioned about their reasons for buying cryptocurrency and they are being asked to provide bank statements, as well as details about crypto exchanges they have used.
It appears that SARS is attempting to crack down on crypto traders who have not been compliant with the country’s regulations. Specifically, they seem to be going after traders they suspect of not disclosing their crypto profits. This comes as part of a broader attempt to control crypto in that country as regulators there are pushing for increased oversight of crypto trading overall.
While government agencies’ targeting of crypto projects is nothing new, the effort at pursuing crypto coin traders represents an escalation in their attempts at control. Questions remain regarding how SARS has selected these particular taxpayers for this audit. In general, most democracies today tend to believe (in principle) that free markets are critical to success and that equal treatment under the law is a right and not a privilege.
Yet, when it comes to cryptocurrencies, a different standard seems to apply. Crypto was designed precisely to be a frictionless decentralized system and that has been key to its rapid success and increasing coin values. As crypto is increasingly obstructed by regulatory actions and taxpayers endure needless harassment, maximizing wealth potential becomes more challenging.
This story demonstrates the fact that the more power and control that citizens allow governments to have, the more intrusive and controlling they will become. It is like an abusive relationship – the more the abuser senses he can get away with anything, the more abuse occurs. The only way to succeed in this high-stakes game is to focus on buying digital coins that are private, global and jurisdictionless like META 1 Coin.
Unlike public exchanges and coins that essentially function as extensions of regulatory agencies (and which report coin holders’ activities to them), private coins and exchanges represent the classic qualities of private trade. When one engages in trade privately with another party, it is not publicly broadcast to the world by the other party. While blockchain provides public transparency for all transactions, there is a respect for freedom and privacy in private crypto that protects coin holders instead of increasing their risks.
Each coin holder is responsible for reporting their income to their respective countries’ tax authorities and it is not the responsibility of parties involved in private transactions to report these to every nation’s governments. META 1 Coin Trust respects the laws and responsibilities of being a citizen of any nation. We also respect that coin holders are responsible adults who can take care of their own private financial matters without us having to handle them for our coin holders.
The Secured Party Creditor status and Private Non-Statutory Trust which we set up for our coin holders provides additional ways to retain one’s freedom in commerce in general, as well as in crypto. Contact us today for more information.