[ExI] bitcoin again

[Stathis Papaioannou]

On Sat, 26 Nov 2022 at 16:41, spike jones via extropy-chat <
extropy-chat at lists.extropy.org> wrote:

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> *From:* extropy-chat <extropy-chat-bounces at lists.extropy.org> *On Behalf
> Of *Stathis Papaioannou via extropy-chat
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> >>…Damn I have grown cynical in my old age.  Billw, how can we not be
> cynical?
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> >…I don’t really understand what you think the problem is with crypto and
> taxation. It’s not that difficult to monitor if someone has realised a
> capital gain from crypto. If you can figure out a way to reliably hide
> capital gains from large crypto transactions, please share it with us.
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> Stathis Papaioannou
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> Stathis I don’t think there is a problem with crypto and taxation, I just
> think taxes were not paid in this case. Because Bankman Fried didn’t
> actually make profits (as far as I can tell) he didn’t owe taxes.  He stole
> investors’ assets, but one doesn’t pay taxes on stolen money, ja?  He
> invested shrewdly in retail politicians, which is why I don’t think he will
> be prosecuted in criminal court.  He didn’t invest in IRS goodwill, because
> it isn’t at all clear how he could have done that without actual legal
> profit.
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> In any case Stathis, I am OK with waiting to see how all this plays out.
> We should know in the next several weeks the legal consequences and what is
> likely to play out.  About a year from now we will be able to read about
> the outcome in the history books.
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SBF’s model was that of tech startups burning up venture capital. The
investors in such enterprises understand that they might make massive gains
but also that more likely than not they will lose all of their money. If
one investment makes a 10x return and nine investments are made rotten off,
they break even. This isn’t a Ponzi or a fraud, it’s just the way it works.
Also, the companies that fail don’t pay taxes, but the one that succeeds
does, and brings other businesses and jobs to the area, enriching everyone.
That’s the idea, anyway. In the case of FTX, there was possibly fraud in
that it wasn’t just venture capital money that was wasted, it was also the
money of customers who thought they were just using its exchange facility,
which should have been segregated from the speculative side of the
business. These customers, prior to the bankruptcy, would have been paying
tax in their country of residence on any gains they made trading while the
company was operational, even if FTX itself did not pay tax because they
offset income against expenses. Most taxes paid trading shares or
currencies are paid by the traders making gains, not by the platforms on
which they trade. It is the same for crypto.

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Stathis Papaioannou
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