Coinbase Has Signed a Deal with the IRS to Track Your Bitcoin Wallets
Back in May, news broke that Coinbase had signed a deal to work with the U.S. Secret Service in their blockchain analytics and tracing programs... dubbed "Coinbase Analytics"
This software is obviously under wraps and most of the information about it is not public.
The software is intended to do a great deal of tracking and tracing related to Bitcoin payments and various crypto wallets. If you've ever owned crypto on Coinbase and sent it out via their network, then you can almost certainly guarantee that Coinbase Analytics has kept track of your digital assets as they spread out into the world.
Their deal with the U.S. Secret Service makes their government involvement clear... but to make matters worse, Coinbase has just signed ANOTHER deal with the U.S. IRS for their crypto tracking program.
This tracking software will undoubtably be used by the IRS to try and nail more people in the crypto space for tax-related purposes.
Using Coinbase Gets Worse by the Day
I used to like Coinbase and I think many others would claim the same.
Now they are no better than any other centralized Wall St. firm.. actually they may be worse thanks to these government contracts.
"Coinbase CEO Brian Armstrong has attempted to downplay the significance of his firm’s government ties. On July 11, in response to community pushback, he argued on Twitter that blockchains are traceable whether his firm does the job or not." Source
What's hilarious is that Brian Armstrong is trying to refute the claims that Coinbase is now in bed with the government.
His argument is that blockchains are traceable whether he and his firm do the tracing or not... isn't that like saying that people will die whether you kill them or not?
Tell me what you think in the comments, but I will personally never touch Coinbase with a ten-foot pole after these announcements.
Posted Using LeoFinance
It makes little difference to me as I report my crypto earnings anyway.
The biggest risk, in my opinion, is that the IRS will use the data to "prove" that your filing is wrong by comparing your data against theirs.
If they're going to go through the trouble of checking my transactions, I'd prefer if they sent me a report that I can use to file my taxes. It would save me about $200/yr for my tax calculating subscription. It would be annoying to file my taxes, then have them kick back my filing for inaccuracy because my numbers don't match theirs. Or, worse, have an audit.
Posted Using LeoFinance
Filing your taxes properly (or at least, following the rules available) is always recommended.
The thing that many in the space dislike, including me, is that this is not just an issue of taxation but a complete breach on all of our crypto data.
For example, if you were to buy ETH on Coinbase, send it to your ledger wallet and then participate in DeFi apps, are we to believe that the government won't keep an eye on every little detail happening there? Transaction data, taxation, privacy.. it's all a bad spiral in my opinion.
I am all for following guidelines and paying taxes as needed, but a major part of crypto is privacy and personal ownership.. the government dipping their toes into all of our transaction history is a scary notion. I hope that we see continued developments on privacy coins/coinjoining/coinmixing protocols that allow us to take back more of our own data.
Posted Using LeoFinance
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Thank you for your information of coinbase. What would you recommend in place of coinbase ? I would rather find the right way to keep track of my spending of crypto and the statements involved in filing my taxes.
Happy to spread the word. I personally don't buy much crypto these days as I have accumulated much of what I want long-term. I think the Cash App is what I would use these days if I wanted to buy crypto with my fiat. Im waiting for DEX alternatives to arise in the states
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