How Crypto Could Bring Tax Evasion to the Masses
Loopholes in lending laws are allowing cryptocurrency users to escape taxes — and the government can’t keep up
Wealthy families and merchants first conjured up the idea of offshore banking in 19th century Europe, seeking a place to store funds away from tax-hungry governments in the aftermath of the Napoleonic wars. Since then, it’s been a race to the bottom. Over the course of the last two centuries, deregulation and lenient financial laws have allowed the rich to tread the fine line between legal tax avoidance and illegal tax evasion.
But blockchain, which first emerged as a concept in 2008, is now offering ordinary people the same possibilities. Using cryptocurrency, anyone with a little technical know-how can open what is effectively the equivalent of an offshore bank account — albeit offshore in cyberspace.
On the genesis block — the first block ever mined on the bitcoin blockchain — an ominous message was inscribed: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” The words foreshadowed the development of an asset that would provide an alternative to centralized banks. For a time afterwards, bitcoin became the de facto darknet currency, at least until traders realized that because every transaction on the…
