Taxing crypto down under; Privacy coins spike in value | The Daily Forkast
Tax season is here and the ATO wants to make sure Aussies pay their taxes for crypto earnings. Also, Privacy coins have surged over the past weeks.
Australian tax authorities to contact 400,000 citizens about coming clean on crypto trades.
1 in 4 Australians are willing to accept part of their income in crypto.
More fallout from China’s crypto crackdown as mining difficulties drop.
We’ll have more on that story — and other news shaping the cryptocurrency and blockchain world — in this episode of The Daily Forkast, May 28.
Welcome to The Daily Forkast, May 31st, 2021. I’m Angie Lau. Let’s get you up to speed from Asia to the world.
There are still jurisdictions that don’t tax your crypto holdings here in Asia — except strike Australia off that list. Crypto getting taxed down under. The Australian Tax Office, or ATO says to its citizens crypto profits are not tax free. ATO assistant commissioner Tim Lowe said the office will be contacting 400,000 Australian citizens — whom they apparently already know about. Citizens who already file taxes but should also be reporting crypto trades. A chance to come clean on crypto.
“They’re really after the people who aren’t reporting anything. And if you’re not doing that after a few prompts by the ATO, you could be up for really hefty penalties.”
And that could be a game changer for the 4.7 million Australians looking to earn their pay in crypto. That’s nearly a fifth of its population. According to a Finder survey, nearly one in four Aussies are willing to accept at least a part of their income in Bitcoin. Some of that sentiment is being driven by the bullish outlook on the cryptocurrency by a lot of people.
“Yes, there’s a government regulation. Yes, there’re these warnings. There’s a lot of also strong regulation in Australia, a lot of actual acceptance of the currency being the commodity in Australia. It’s different in other countries, but it’s clear and it’s also getting clearer.”
With cryptocurrency gains now in the spotlight, Australia also playing its part in pushing a lot of those gains. Monero, Dash and Zcash — some of the world’s most popular privacy coins are witnessing a bit of a resurgence. Together, they’ve averaged a 16% increase in the past week. That hike also coincides with the launch of trustless atomic swaps between Monero and Bitcoin courtesy of Australian Research Group Comit Network.
That means Monero can now be exchanged for Bitcoin without the need for third party or an exchange. Comit cited the rising demand for private transactions is the reason behind their latest launch.
But just how hard is it to track or monitor transactions involving these coins? Well, Professor Joseph Liu of Monash University, one of the coin’s coders says it’s possible, but not easy.
The sender’s identity is hidden among a set of other public keys. So if you set it to a very small number such as 15, then it may be possible for you to chase or possibly trace the transaction. But suppose if I am a bad guy. If I want to hide myself, I may choose a very large number, say 1,000 or tens of thousands in every transaction. In that case, the tracing difficulty will become exponentially large.”
So just how did Bitcoin do on the day? Well, it fell down just a tad, down half a percent as of 4:00 pm local Hong Kong time May 31st. And in the top ten for crypto currencies, we saw XRP surging in a sea of red, up 12.8%.
And finally this, more fallout from China’s crypto crackdown. It’s becoming easier to mine Bitcoin. On Sunday, Bitcoin mining difficulties dropped about 16%. The mining difficulty refers to how hard it is for a miner to dig out Bitcoin. That difficulty depends on global hash rates. If the total hash rate declines, well, the Bitcoin mining difficulty will accordingly also decline. The recent hash rate decline may be due to the recent policy tightening in China from the top to crack down on crypto mining, which forced many to shut down or move overseas.
And that’s The Daily Forkast from our vantage point right here in Asia. For more, visit Forkast.News. I’m Editor-in-Chief Angie Lau. Until the next time.