Posts Tagged ‘Bitcoins’

The Deep State and Cryptocurrency

Thursday, May 17th, 2018

There have been plenty of articles about the “Deep State” vis-a-vis President Trump. I’m not going into that; if you’re interested, Google is your friend. Rather, I’m going to look at the Deep State and cryptocurrency.

On May 1st the Wall Street Journal published an article titled, “World’s Second Most Valuable Cryptocurrency Under Regulatory Scrutiny” [pay link]. In the article, the Journal discusses possible regulatory action against Ether:

Bitcoin has largely escaped government oversight, but regulators are examining whether other widely traded cryptocurrencies should be regulated as securities, according to people familiar with the matter.

And today I received an email from the Securities and Exchange Commission (SEC):

If you’ve ever been tempted to buy into a hot investment opportunity linked with luxury travel, the Securities and Exchange Commission has a deal for you.

Check out the SEC’s Office of Investor Education and Advocacy’s mock initial coin offering (ICO) website that touts an all too good to be true investment opportunity. But please don’t expect the SEC to fly you anywhere exotic—because the offer isn’t real.

The SEC set up a website, HoweyCoins.com, that mimics a bogus coin offering to educate investors about what to look for before they invest in a scam. Anyone who clicks on “Buy Coins Now” will be led instead to investor education tools and tips from the SEC and other financial regulators.

“The rapid growth of the ‘ICO’ market, and its widespread promotion as a new investment opportunity, has provided fertile ground for bad actors to take advantage of our Main Street investors,” said SEC Chairman Jay Clayton. “We embrace new technologies, but we also want investors to see what fraud looks like, so we built this educational site with many of the classic warning signs of fraud. Distributed ledger technology can add efficiency to the capital raising process, but promoters and issuers need to make sure they follow the securities laws. I encourage investors to do their diligence and ask questions.”

The website features several of the enticements that are common to fraudulent offerings, including a white paper with a complex yet vague explanation of the investment opportunity, promises of guaranteed returns, and a countdown clock that shows time is quickly running out on the deal of a lifetime.

As poker players know from “Black Friday,” regulators believe that which is not clearly legal is illegal. And regulators make up the deep state, and have made it quite clear what’s coming on the horizon. The regulators are going to act.

Are there legitimate ICOs? Of course, but given what regulators view as rampant fraud and abuse in cryptocurrency, the regulators are going to act. The Journal has this quote:

Peter Van Valkenburgh, director of research at Coin Center, said declaring ether a security “would make a shambles of U.S. innovation policy. It’s going to throw up a lot of barriers that aren’t necessarily sensible.”

Mr. Van Valkenburgh may be right, but there’s no doubt in my mind that’s the direction regulators want to, and will likely, go.

Bozo Tax Tip #1: Ignore Cryptocurrency Sales!

Friday, April 13th, 2018

Last week (as I write this), I met with a new client. He purchased a lot of cryptocurrency in 2016 but didn’t sell any of it until around Thanksgiving of 2017 (he had one small sale). He asked me if he had to report it; I told him he definitely did: I haven’t found anything in the Tax Code that exempts cryptocurrency from US taxation. We entered it, and the gain was duly noted on his return. He then asked me about his other purchases of cryptocurrency. He had heard about Coinbase complying with a summons (indeed, he received notification about this from Coinbase) and wondered about that. I told him there was nothing he need do about his purchases. The IRS ruled that cryptocurrency is property, so only disposals of cryptocurrency need be noted on tax returns. Your records may be going to the IRS, but there’s nothing you need to do about it or anything to worry about.

Contrast that with a different individual; let’s call him John. I met with John last week. Our Engagement Letter now specifically notes that cryptocurrency transactions must be included on tax returns. John said he had over 3,000 transactions of swapping various cryptocurrencies and, “There’s no way in hell I’m going to tell the IRS about them.” I told him it was nice meeting him, and he would need to find another tax professional to prepare his return because there’s no way in hell I’m going to be an accomplice to tax evasion.

I’m not enamored by the IRS’s decision to tax cryptocurrency as property rather than currency. If cryptocurrency were taxed as currency, calculating gains would be simple and straightforward. True, for some individuals who have bought a single cryptocurrency and have few trades, cryptocurrency taxation isn’t a big deal. However, we are dealing with lots of clients with huge trading volumes. And then we have the forks, airdrops, and who knows what else.

The IRS is looking for help in how to tax a fork. Is the correct analogy a stock split? Or do we have a stock dividend? Peter Reilly argues that the best course for individuals in this situation is to file an extension and hope that the IRS issues guidance by late summer. Unfortunately, no one knows when the IRS will issue guidance.

But there is one certainty: Ignoring your cryptocurrency realized gains is a bad idea. The IRS issued a reminder about this. An excerpt:

The Internal Revenue Service today reminded taxpayers that income from virtual currency transactions is reportable on their income tax returns.

Virtual currency transactions are taxable by law just like transactions in any other property. The IRS has issued guidance in IRS Notice 2014-21 for use by taxpayers and their return preparers that addresses transactions in virtual currency, also known as digital currency.

Taxpayers who do not properly report the income tax consequences of virtual currency transactions can be audited for those transactions and, when appropriate, can be liable for penalties and interest.

In more extreme situations, taxpayers could be subject to criminal prosecution for failing to properly report the income tax consequences of virtual currency transactions. Criminal charges could include tax evasion and filing a false tax return. Anyone convicted of tax evasion is subject to a prison term of up to five years and a fine of up to $250,000. Anyone convicted of filing a false return is subject to a prison term of up to three years and a fine of up to $250,000.

So if you’re a Bozo, just ignore that million you made selling Bitcoin. They’ll never catch you…you hope.

SEC Reportedly Launches Cryptocurrency Probe on ICOs

Wednesday, February 28th, 2018

The Wall Street Journal is reporting (pay link) that the Securities and Exchange Commission (SEC) has issued “scores of subpoenas and information requests” regarding digital tokens (aka Initial Coin Offerings, or ICOs).

That regulators are starting to look into this market shoudn’t come as a surprise. The US government doesn’t move fast, but regulators have been giving messages regarding ICOs (and they’ve generally been, “You need to comply with securities laws”) for some time.

As someone involved in the poker industry before “Black Friday”, this has all the signs of a repeat performance (except in the world of cryptocurrency rather than online gambling). Before Black Friday US government officials said that online gambling was generally illegal (to be offered). The SEC sent a release in August 2017 on ICOs; the implication was that some involved market manipulation and other illegal activity. The Commodities Futures Trading Commission (CFTC) has also sent a release. And the chairs of the SEC and CFTC wrote an op-ed in the Wall Street Journal in January. An excerpt:

Market participants, including lawyers, trading venues and financial services firms, should be aware that we are disturbed by many examples of form being elevated over substance, with form-based arguments depriving investors of mandatory protections…The CFTC and SEC, along with other federal and state regulators and criminal authorities, will continue to work together to bring transparency and integrity to these markets and, importantly, to deter and prosecute fraud and abuse…Distributed ledger technology may in fact be the next great disruptive and productivity-enhancing economic development. If history is any guide, DLT is likely to be followed by many more life-changing innovations. But we will not allow it or any other advancement to disrupt our commitment to fair and sound markets.

Coinbase To Comply With IRS Summons

Saturday, February 24th, 2018

Two of my clients received an email from Coinbase:

Dear Mr. Smith,
In December 2016, the Internal Revenue Service issued a summons demanding that Coinbase produce a wide range of records relating to approximately 500,000 Coinbase customers. Coinbase fought this summons in court in an effort to protect its customers, and the industry as a whole, from unwarranted intrusions from the government. After a long process, the court issued an order that represents a partial, but still significant, victory for Coinbase and its customers: the order requires Coinbase to produce only certain limited categories of information from the accounts of approximately 13,000 customers. We are writing to let you know that the above-described court order requires us to produce information specific to your account. If you have concerns about this, we encourage you to seek legal advice from an attorney promptly. Coinbase expects to produce the information covered by the court’s order within 21 days. For your reference, the court’s judgment can be found here. The case was filed in the United States District Court for the Northern District of California, Case No. 17-cv-01431-JSC. In addition, we also want you to know that because Coinbase received a summons on December 8, 2016, and more than six months passed before our challenges to the summons were resolved by the court, the period of limitations under sections 6501 and 6531 of the Internal Revenue Code (title 26 of the U.S. Code) were suspended beginning as of June 8, 2017 and continuing through the final resolution of Coinbase’s response to the summons. This may be relevant to the tax returns that you have filed for the 2013, 2014, and 2015 calendar years. If you have questions about your tax liability for those years, we strongly encourage you to consult with your tax advisor.
Regards, The Coinbase Team

Let me clear up a few points made by Coinbase:

1. This is not a significant victory for Coinbase. As most tax professionals thought, Coinbase must comply with US law and comply with most of the IRS summons.

2. The statute of limitations for impacted taxpayers was extended for about nine months by the battle over the summons. Coinbase is absolutely correct about this. Where this gets important for individuals who may not have included all of their Coinbase transactions on their returns is if they substantially underreported their income. Timely filed 2013 tax returns are “beyond the statute date,” even including the extra nine months. (They were due in April 2014, so adding an extra nine months takes to the normal three year statute of limitations takes us to January 2018.) However, timely filed 2014 returns impacted by this will have an extra nine months added to the statute date (until January 2019).

Additionally, anyone who substantially understated their income (20% or more) has a six-year statute length rather than three years. Timely filed 2013 returns are well within the extended statute length.

3. Coinbase’s suggestion of consulting with your tax advisor is an excellent one. If you file an amended return before the IRS comes after you or has knowledge of your error, you generally are looking at just paying tax and interest. Coinbase has told those impacted by this that you have less than 21 days to correct your mistakes; take advantage of that now!


If you included your cryptocurrency transactions on your tax returns, you’re likely not going to be a target. But if you didn’t, you have been given a short period of time to file amended tax returns.

Finally, this is not the end of this issue; expect the IRS to send summonses to all the other US-based Exchanges. I would not be surprised if the IRS targets foreign Exchanges that service Americans. This is a black and white issue under US tax law: Any accession to wealth not exempted from taxation under the law results in taxable income. Cryptocurrency gains are not exempt from taxation under US law.

Are Cryptocurrency (Bitcoin) Transactions Always Short-Term?

Saturday, December 9th, 2017

One of my clients sent me a link to a tweet (on Twitter) from Peter Brandt:

Mr. Brandt is apparently an accomplished author and writes a trading newsletter. I strongly suggest to him he stick to that, and avoid giving tax advice (perhaps excluding, “You should consult your own tax advisor”) because he’s wrong.

Whether a capital transaction is long-term or short-term is determined strictly by the holding period. This is noted in the Tax Code, 26 U.S.C. § 1222. Here are the first four paragraphs of 26 U.S.C. § 1222:

For purposes of this subtitle—
(1) Short-term capital gain
The term “short-term capital gain” means gain from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent such gain is taken into account in computing gross income.

(2) Short-term capital loss
The term “short-term capital loss” means loss from the sale or exchange of a capital asset held for not more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.

(3) Long-term capital gain
The term “long-term capital gain” means gain from the sale or exchange of a capital asset held for more than 1 year, if and to the extent such gain is taken into account in computing gross income.

(4) Long-term capital loss
The term “long-term capital loss” means loss from the sale or exchange of a capital asset held for more than 1 year, if and to the extent that such loss is taken into account in computing taxable income.

This is law; the IRS cannot make an exception that all cryptocurrency transactions are short-term. Whether any capital transaction is long-term or short-term is determined strictly by the holding time. It doesn’t matter if it’s a stock, bond, real estate, cryptocurrency, or any other type of property.

Thus, whether a sale of cryptocurrency is long-term or short-term is determined solely by the holding time. If you hold Bitcoin for more than one year (the sale date is at least a year and a day after the date of purchase) the transaction will be long-term.

IRS Mostly Wins Coinbase Summons Fight

Wednesday, November 29th, 2017

The IRS has been battling Coinbase, the United States’ largest cryptocurrency exchange, in a fight to obtain information about individuals who sold Bitcoins during 2013, 2014, and 2015. The IRS issued a summons to Coinbase–basically, an administrative demand for information. Coinbase didn’t respond, so the IRS filed a lawsuit in an attempt to force Coinbase to comply. After the summons was narrowed to just individuals who bought, sold, sent, or received at least $20,000 worth of Bitcoin during those years (but not individuals who only bought and held or who were issued a Form 1099-K), Coinbase still refused to comply. Yesterday, a federal court in San Francisco ruled that Coinbase must (for the most part) comply.

That the IRS won isn’t a surprise. The IRS demonstrated that only 802 returns were filed in 2015 which claimed Bitcoin sales; I prepared 40 such returns so I prepared 5% of all returns that included Bitcoin sales in 2015! The IRS demonstrated there was noncompliance, and they further showed that the Coinbase records would help with tax administration. As for Coinbase’s arguments:

Coinbase argues that the Government committed an abuse of process because it seeks to enforce “a summons that lacks a proper investigative purpose” and “the production of a vast array of documents relating to 14,000 accounts, without any proper foundation.” The Court, however, finds that the Government has met its burden of showing that the Narrowed Summons serves the legitimate investigative purpose of enforcing the tax laws against those who profit from trading in virtual currency. And the information the Court has ordered produced is relevant and no more than necessary to serve that purpose. Coinbase’s novel insistence that it has met its burden to show abuse of process by virtue of the Government having narrowed its summons is unpersuasive. No court has even suggested such a rule, and this Court declines to be the first.

As for the order itself:

Coinbase is ORDERED to produce the following documents for accounts with at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013 to 2015 period: (1) the taxpayer ID number, (2) name, (3) birth date, (3 [sic]) address, (4) records of account activity including transaction logs…, and (5) all periodic statements of account or invoices (or the equivalent).

The IRS asked for records on “Know Your Customer” diligence, agreements regarding third-party access, and correspondence between Coinbase and third party users related to the opening and closing of accounts. The court denied the IRS’s request for those records. The Court explained both the IRS’s reasoning and why that portion of the summons was denied:

At oral argument the Government explained that it included such broad swaths of records in its summons so that it will not need to return to court to ask for them if and when needed. The Court is unpersuaded. Especially where, as here, the Government seeks records for thousands of account holders through a John Doe summons, the courts must ensure that the Government is not collecting thousands and thousands of personal records unnecessarily. Moreover, if the Government later determines that it needs more detailed records on a taxpayer, it can issue the summons directly to the taxpayer or to Coinbase with notice to a named user — a process preferable to a John Doe summons.

Coinbase can appeal this ruling, but they would appear to me to have a very difficult case. The IRS has demonstrated the need, and the law is on their side.

This is not going to be the last effort by the IRS, either. There are other US-based exchanges, and the IRS will likely be calling on them. Additionally, I expect Congress eventually to mandate reporting of cryptocurrency transactions (or the IRS to issue regulations attempting to require such reporting). If you’re an American who used Coinbase and left out some cryptocurrency sales, now is a good time to amend your tax returns.

Can You Use a §1031 Exchange to Defer Gain with Cryptocurrency?

Tuesday, September 5th, 2017

I recently wrote an article noting that if you exchange one cryptocurrency for another you have a capital gain (or loss). I was recently asked if you could defer such a gain by using a §1031 Exchange.

What Is a §1031 Exchange? A §1031 exchange is a way of deferring the capital gain on a property by exchanging it for another property. And didn’t the IRS rule that cyrptocurrency is property? So let’s look at the statutory language of §1031:

26 U.S. Code §1031 – Exchange of Property Held for Productive Use or Investment
(a) Nonrecognition of Gain or Loss from Exchanges Solely In Kind
(1) In General No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.

Well, there’s the first two hurdles: Is cyrptocurrency held for productive use in a trade or business or for investment? Well, cryptocurrency likely isn’t held for productive use in a trade or business but it certainly is held by some for investment.

But that wasn’t all of 26 U.S. Code §1031. There is property that is not eligible for like-kind treatment. Let’s now look at §26 USC 1031(a)(2):

(2) Exception This subsection shall not apply to any exchange of—
(A) stock in trade or other proprety held primarily for sale,
(B) stocks, bonds, or notes,
(C) other securities or evidences of indebtedness or interest,
(D) interest in a partnership,
(E) certificates of trust or beneficial interests, or
(F) choses in action.

There’s a problem here: The closest analog to how cyrptocurrency should be treated are stocks and bonds. And §26 USC (a)(2)(B) states that you can’t do a §1031 exchange for stocks and bonds.

“But Russ,” you say, “cyrptocurrency isn’t stocks or bonds. It’s a virtual currency. So if I exchange Bitcoin for Ethereum, that should be ok, right?” Let’s assume that §26 USC (a)(2)(B) doesn’t apply. Are Bitcoin and Ethereum like-kind property?

Unfortunately, the answer is a maybe, with “no” more likely than “yes.” The IRS has been asked to look at exchanging gold bullion for gold coins, gold coins for other gold coins, and gold bullion for silver bullion as §1031 exchanges. You can use a §1031 exchange to exchange Mexican 50 peso gold coins for Austrian 100 corona gold coins and gold bullion for Canadian Maple Leaf gold coins. However, you cannot use a §1031 exchange to exchange gold bullion held for investment for silver bullion held for investment (different metals used in different ways), $20 gold numismatic-type coins for South African Krugerrand bullion-type gold coins (different underlying investments and different valuation bases), and Swiss Francs for US Double Eagle Gold Coins (numismatic versus circulating currency).

I believe the IRS would likely rule that Bitcoin and Ethereum are two different underlying investments and do not qualify for like-kind treatment.

But let’s further assume I’m wrong, and they do qualify. You go on a Bitcoin exchange and swap n Bitcoins for x Ethereum. Is that a §1031 Exchange?

Well, there are numerous technical rules regarding a §1031 exchange. First, they must be reported on IRS Form 8824 so the idea of simply ignoring them on your tax return is a certain way to make sure your transaction is not a §1031 exchange. There are 67 pages of regulations on §1031 exchanges (search for “1031” in the link for them). Most §1031 exchanges use a Qualified Intermediary. Certainly the dealer I use is that Qualified Intermediary, right?

Well, almost certainly not. When you use an Exchange to buy a cryptocurrency, the dealer almost certainly doesn’t meet the technical requirements listed in the regulations. There is no paperwork; the trades occur close to instantly (not over the months it takes to complete a §1031 exchange); and several other issues with a dealer.

“But Russ,” you say, “my friend Scott has x Ethereum and is willing to swap it for my n Bitcoins. We agree to directly swap our positions. That would be a §1031 exchange, right?”

This is the most likely to meet IRS scrutiny, but only if the IRS considers Bitcoin and Ethereum to be like-kind. The tax professional community has asked the IRS to give guidance on this, but the IRS (to date) has ignored this issue. You could request a Private Letter Ruling from the IRS. A Private Letter Ruling is a means to get an answer from the IRS given a specific set of facts. The Private Letter Ruling binds the requestor and the IRS. However, you must pay for a Private Letter Ruling; the cost will be at least $2,400. It also takes time to receive the Private Letter Ruling (think months, not weeks).


The conclusion I’ve drawn is that most exchanges of one cryptocurrency for another do not qualify as §1031 exchanges and it’s more likely than not that the IRS will rule that two different cryptocurrencies are not eligible for like-kind treatment.

The IRS Is Coming! The IRS is Coming!

Thursday, August 24th, 2017

As first reported by Bob McKenzie this morning, the IRS has purchased software to help them identify Bitcoin transactions. The IRS is reportedly using a product from Chainalysis, Inc., a New York-based supplier of products used to analyze Bitcoin activity.

The Daily Beast notes that “The purpose of this acquisition [by the IRS] is…to help us trace the movement of money through the bitcoin economy.” Chainalysis’s products appear to include features that can locate specific Bitcoin users and anyone connected to that user.

Government may be slow in acting, but it’s clear the IRS and other federal law enforcement agencies are very interested in Bitcoins. As noted in a previous post, IRS records show that only 802 individuals included Bitcoins on their 2015 returns. The IRS has issued a summons to Coinbase (this is currently in litigation); I expect further IRS enforcement activity against both domestic and international wallets. And I doubt the IRS’s interest will stop at Bitcoins; other cryptocurrencies will be examined, too. I’m also aware of other federal law enforcement agencies investigating Bitcoin users.

If you’ve been including your Bitcoin sales on your tax return, you can (generally) ignore this kerfuffle. Your taxes are correct, you’re following the law, so there’s not much for you to directly worry about from a tax standpoint. However, if you’ve been thinking, “No 1099, no reporting,” think again. And if you’re acting as an active seller, now is an excellent time to make sure you’re in compliance with money transmittal business laws (on both the state and federal level) and tax law. It’s very clear that the IRS is coming on the Bitcoin front.

Taxes When a Cryptocurrency Splits Into Two

Monday, August 21st, 2017

The IRS ruled that cryptocurrencies are treated as property (like stocks and bonds). What happens when a cryptocurrency splits into two separate cryptocurrencies?

Let’s start with the analogous situation with a stock. Suppose Acme Industries, Inc. spins off its subsidiary, SubCo Inc.; on October 1st stockholders of record will receive one share of SubCo for every share of Acme they own. This is almost certainly a tax-free event. (For those who care, Internal Revenue Code (IRC) Section 355 governs corporate spinoffs. Tax-free spinoffs can be accomplished either by distributing shares based on current ownership or by giving shareholders the option to exchange shares for the new spun off entity.)

Now, let’s examine a cryptocurrency split. Let’s take HYPO, a hypothetical cryptocurrency. On October 1st everyone who has 1 HYPO will still have their HYPO but will also now own 1 THET. The published goal is so that more transactions can be run through the blockchain. Will this be a tax-free event?

Probably. IRC Section 355 doesn’t apply here; this is not a corporate spin-off. That said, the analogy should hold: Presumably nothing of value has been created. If HYPO was selling for $1,000 prior to the split, the sum of 1 HYPO and 1 THET should be worth the same $1,000 after the split. If that’s the case all that’s happened is that your basis in HYPO must be split into HYPO and THET. For example, if you purchased your 1 HYPO for $500, your basis post-split in HYPO and THET must add to the same $500. There wouldn’t be a capital gain based on the split. (The allocation should be based on the fair market value of HYPO and THET immediately after the split.)

One other question that must be answered: Do you obtain the same holding period for the spin-off as you had for the original cyrptocurrency? If it’s a true split into two cryptocurrencies, definitely.

Given there has been one cryptocurrency split already (and others will certainly follow) this will give you an idea of the basics in this situation. Something that absolutely holds is keep good records! Taxes when you have good records is fairly easy. When you don’t have good records, it’s definitely not.

On Tulips and Bitcoins

Sunday, August 20th, 2017

When I was in junior high school, I remember being taught about the 17th century tulip mania. Tulips in 1637 cost more than a house! That was a bubble (though some economists think there may have been rational explanations, let’s just call it with what it was considered to be), and my gut feeling is that cryptocurrencies are also bubbling.

I’m not the only person who has made this comparison. There’s an article on CNBC that quotes Elliott Prechter stating that cryptocurrencies are in a bubble comparable to tulips. The head of the Dutch Central Bank has also made the same comparison.

But there’s something else with cryptocurrencies: government. While the US government hasn’t formally stated that it wants cryptocurrencies to go away, the policies of the Department of the Treasury and the Department of Justice show that’s the case.

Let’s look at what two agencies within the Department of the Treasury have done in regards to cyrptocurrencies. First, the Internal Revenue Service had a choice: Should cryptocurrencies be considered currencies or should they be considered property? If currencies, most taxpayers would just enter one number on their returns for the gain (or loss). (Currency trading falls under Section 988 of the Internal Revenue Code. Gains and losses are simply entered as Section 988 transactions as part of line 21 (“Other Income”) on Form 1040.) This would be simple and straightforward. Instead, the IRS ruled that cryptocurrencies should be treated as property. That means each time you use or sell a cryptocurrency you have a reportable capital gain or loss. That’s a much tougher recordkeeping requirement.

Meanwhile, the Financial Crimes Enforcement Network (FINCEN) ruled exactly the opposite. For FINCEN purposes, cryptocurrencies are currencies, not property. That means cryptocurrencies fall under the purview of FINCEN. If you are an active seller of cryptocurrencies to others, you may have to register and are subject to the money transmittal rules. (FINCEN has said “miners” and investors of cryptocurrency are not money transmitters.) FINCEN has gone after foreign (non-US) based wallets, too.

The US Department of Justice has prosecuted US individuals who have been selling Bitcoins.

Perhaps I’m cynical (well, I know I am), but it appears to me that the US government’s actions are designed to make cyrptocurrencies appear more unattractive. That to me is more likely than not to put downward pressure on cryptocurrencies.

I should point out that friends of mine who are far smarter than I am think that Bitcoins will be worth $10,000 in the near future (as I write this, the price of a Bitcoin is about $4,100). I don’t see that. I was in the dot-com industry when that was booming and the NASDAQ would “obviously” reach 100,000. Then the bottom fell out. The cryptocurrency craze of today reminds me of that and of tulips.