Global Macro Trading Journal

I dont think this Mnuchin financial patriot act is going to do much against crypto though. People are going to figure out solutions, they can buy their coins at Coinbase/Paypal/etc. Transfer them to their own non-US based hardware wallet or to a software wallet like Electrum.

Since they both the sender and receiver of the transaction, the KYC is already done (at the account opening). Then they can transfer to whoever they want. And if they try to do something about this, they will just VPN/Tor their way out of this. At the end of the day, crypto is unstopabble like Tor, Bittorrent, etc.
The only real way to stop it is to arrest millions, but those millions are the ones who put these assholes in power, so they can't do that

Also, BTC is still in its infancy as a payment solution, its not very efficient yet. So it doesnt hurt its story now, the story is its role as a store of value. And no transfers are needed to hold it as a store of value
 
Daal said:
I dont think this Mnuchin financial patriot act is going to do much against crypto though. People are going to figure out solutions, they can buy their coins at Coinbase/Paypal/etc. Transfer them to their own non-US based hardware wallet or to a software wallet like Electrum.

Since they both the sender and receiver of the transaction, the KYC is already done (at the account opening). Then they can transfer to whoever they want. And if they try to do something about this, they will just VPN/Tor their way out of this. At the end of the day, crypto is unstopabble like Tor, Bittorrent, etc.
The only real way to stop it is to arrest millions, but those millions are the ones who put these assholes in power, so they can't do that

Also, BTC is still in its infancy as a payment solution, its not very efficient yet. So it doesnt hurt its story now, the story is its role as a store of value. And no transfers are needed to hold it as a store of value
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I would not underestimate the threat of this "attack" on the self-hosted wallet. I think lots of crypto folks are going to find themselves in a lot of trouble if they do.

Plausible-deniability (or lack thereof) is what I see as the biggest threat of this. All other stuff you mentioned in previous posts are in-play (in combination), FATCA, FATF, Fincen of $250 or higher amount transactions.

So, let's play this out, the rule got passed on self-hosted wallet need to be KYC'ed. You decide to withdraw 0.1 btc to your electrum wallet address #8. The electrum wallet has a total of 5 bitcoins on different addresses, let's say address 5 has 1 btc. What's going to happen when you want to send 0.11 btc to someone or somewhere? It's going to pull 2 inputs in addition to the address 8, guess what, that other electrum address (let's say 5) is now linked to your KYC on address 8. The people in charge know this, if you want to go to court and try to deny you don't own address 5, good luck. And the more transactions you perform on this electrum wallet, the more the addresses get linked to your KYC, even as you use other inputs and the change addresses get used as inputs for other transactions. This is part of the chainanalysis companies services for the USG.

How to protect against this? You can have many electrum wallets and be aware of which KYC from which exchange was used. You can use advance coin controls on Electrum to send max on that KYC'ed address or the change-address if there's leftover coins after a transaction, if you're adventurous and confident you won't make a mistake.

Use Dex to sever KYC addresses, but at some point you may get asked in court where did you send those coins you got from Coinbase to? Powers that be know Dex addresses and it may put you in provably guilty of evasive actions.

This is why we sold off when the news came out, imho. Some cryptos owners may be thinking this is the time to send to the exchanges and sell and pay the taxes now, rather than deal with non-kyc'ed coins later trying to explain where they got them.

Either way, this is a mess when you add to your previous posts, it's well coordinated and well though out. They're getting advice from experts and they know what they're doing. Ltos of cryptos folks are just dismissing it and it's not good...
 
"Some cryptos owners may be thinking this is the time to send to the exchanges and sell and pay the taxes now, rather than deal with non-kyc'ed coins later trying to explain where they got them."

From what I've read about the rule, it will affect more crypto businesses like Coinbase. How are they are going to enforce this on the individual level? I never heard of a country trying to enforce KYC in the individual level (whether criminally or at the civil level). I recall more than 10 years ago Henry Paulson getting grilled in Congress about all the unpaid taxes leading to hundreds of billions of dollars to the Treasury. He said

"Paulson also spoke against a number of other proposals that have been bandied about on Capitol Hill, describing them as “bad tax policy” and “unnecessarily painful, expensive and time-consuming for taxpayers.” He specifically pointed to calls that would require individuals to file 1099s reporting their transactions with service providers, such as their doctor, auto mechanic and dry cleaner; eliminating cash transactions in favor of electronic transactions, with card issuers and banks providing statements to the IRS so the payments can be matched with a business' reported income; or doubling or tripling the number of IRS agents and audits.

“In theory, each of these measures could bring in some additional revenue, but the cost of compliance for individuals and businesses -- most of whom already pay what they owe -- would far outweigh the gains,” Paulson said. “In many cases, such measures would also raise privacy concerns due to the government's heavier focus on the daily transactions in each of our lives.”

https://www.accountingtoday.com/news/paulson-no-easy-answers-on-closing-tax-gap

This would be similar

The US is nuts and they could go down to that level, especially if there is a big criminal case where someone used crypto but it will be a void law imo. It will not be enforced and people will break it all over the place. What can they do about it? Indict hundreds of thousands of people? What if there are millions?

Its like downloading pirated music off Bittorent, it was illegal but it happened anyway. I bet even some members of Congress did it
 
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But yeah, they might come up with an IRS type Form people will need to file in order to send crypto to other people. And they could try to enforce it through chainanalysis as you say, but this will affect more US citizens trying to make transfers with crypto.

They can still hodl with no issue. To me, right now this bull market will be more about the hodl factor than the payment part. Lightning still is not widely adopted, BTC fees are too still high but yeah, US citizens are fucked, as the government considers them their property and they will do whatever they want with them.

I gave up on the US, today I even changed my base currency at IB to Euros, to help my mental conditioning as I'm fighting more than 15 years of thinking the US is the place to be. IB already sets my account to IB UK Limited (Regulated by the FCA), so I'm not affected by the US financial police state as much and I'm planing to transition more and more to European and Asian markets. I'm still going to invest in US listed stocks and ETFs but I no longer want to be too involved with this police state. When I think they can't dig any deeper on this lunacy, they just break all my expectations
 
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Daal said:
But yeah, they might come up with an IRS type Form people will need to file in order to send crypto to other people. And they could try to enforce it through chainanalysis as you say, but this will affect more US citizens trying to make transfers with crypto.

They can still hodl with no issue. To me, right now this bull market will be more about the hodl factor than the payment part. Lightning still is not widely adopted, BTC fees are too still high but yeah, US citizens are fucked, as the government considers them their property and they will do whatever they want with them.

I gave up on the US, today I even changed my base currency at IB to Euros, to help my mental conditioning as I'm fighting more than 15 years of thinking the US is the place to be. IB already sets my account to IB UK Limited (Regulated by the FCA), so I'm not affected by the US financial police state as much and I'm planing to transition more and more to European and Asian markets. I'm still going to invest in US listed stocks and ETFs but I no longer want to be too involved with this police state. When I think they can't deep any deeper on this lunacy, they just break all my expectations
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You're in good shape. I like what you said in a previous post "Go East, young man (just not China, lol)". It's multi-level attacks. The first and main thing is identity-reveal in real life. Bitcoin (cryptos) are pseudonymous. It's difficult to prove in court this bunch of characters belong to you, unless you willingly confirmed it performing KYC. Self Incrimination :)

But this KYC does not mean you're a criminal or else no one would do it. It's about control and you acknowledging you're still part of their financial system and under their control and if you do something they don't approve, that's when they will use this against you.

These threats are nothing new. The bitcoin OG's have contemplated these ideas as far back as 2013 (and maybe even earlier) when I first got involved. It stems from tainted coins, colored coins, newly mined coins and how not all coins are equal (fungibility).

They're setting up a bitcoin system with classes (i.e. coins owned by institutional investors/wallstreet, exchanges and KYC'ed versus tainted coins used in darknet or hacking/ransomeware, versus unknown coins).
 
Its funny watching all these finance gurus and legends change their mind on Bitcoin. They claim to be so smart and to do their due diligence yet they are all changing their mind at the same time. What they were doing rather, was superficial analysis (full of biases) and now they are engaging in a herd like behavior

Larry Fink in 2017: "BlackRock CEO Larry Fink calls bitcoin an ‘index of money laundering’"
2020: "CEO of World’s Largest Asset Manager Says Bitcoin Can Possibly ‘Evolve’ Into Global Asset"

Goes to show not to rely on the opinion of others, even legends like Druckenmiller.
They didnt do ANY work in bitcoin in 2017, their "contrarian" biases wouldn't let them. The information was all for them to see, nothing has changed since them (except with a few upgrades on the Bitcoin Network, nothing material). Yes there is more QE, but so what, bitcoin went from 5 cents to 20K with the previous levels of QE anyway. Levels that didnt do that much for gold
 
Daal said:
Its funny watching all these finance gurus and legends change their mind on Bitcoin. They claim to be so smart and to do their due diligence yet they are all changing their mind at the same time. What they were doing rather, was superficial analysis (full of biases) and now they are engaging in a herd like behavior

Larry Fink in 2017: "BlackRock CEO Larry Fink calls bitcoin an ‘index of money laundering’"
2020: "CEO of World’s Largest Asset Manager Says Bitcoin Can Possibly ‘Evolve’ Into Global Asset"

Goes to show not to rely on the opinion of others, even legends like Druckenmiller.
They didnt do ANY work in bitcoin in 2017, their "contrarian" biases wouldn't let them. The information was all for them to see, nothing has changed since them (except with a few upgrades on the Bitcoin Network, nothing material). Yes there is more QE, but so what, bitcoin went from 5 cents to 20K with the previous levels of QE anyway. Levels that didnt do that much for gold
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"This year’s Bitcoin rally has caught many smart people by surprise. Last week’s high was just below the peak of the last rally ($19,892 according to the exchange Coinbase) in December 2017. When Bitcoin subsequently sold off, the New York University economist Nouriel Roubini didn’t hold back. Bitcoin, he told CNBC in February 2018, had been the “biggest bubble in human history.” Its price would now “crash to zero.” Eight months later, Roubini returned to the fray in congressional testimony, denouncing Bitcoin as the “mother of all scams.” In tweets, he referred to it as “Shitcoin.”

Fast forward to November 2020, and Roubini has been forced to change his tune. Bitcoin, he conceded in an interview with Yahoo Finance, was “maybe a partial store of value, because … it cannot be so easily debased because there is at least an algorithm that decides how much the supply of bitcoin raises over time.” If I were as fond of hyperbole as he is, I would call this the biggest conversion since St. Paul."

https://www.bloomberg.com/opinion/a...he-covid-19-monetary-revolution?sref=5WhxeTw6

Another idiot that didn't do any real analysis work on Bitcoin in 2017 but still felt that he could scream his opnion from the rooftops. Now he joins the herd like behavior of institutions "if so and so said BTC is fine, I guess I must have missed something". Yeah you missed something, like analysing things with an impartial eye
 
Here are some other names that will change their mind on BTC in the future:

Hugh Hendry, John Hempton, Ray Dalio, David Tepper

They all suffer from the issue of not having done any real due diligence on it so as a result, they dont even know what they are looking at. But they are not dumb and at some point they will realize their mistake
 
The Brazil government just raised USD bonds at:
5 year USD bond - 2.2%
10 year USD bond - 3.45%
30 year USD bond - 4.5%

Usually the government law for these bonds is NY

I'm not sure what are the implications of this but I thought this was an interesting fact.
I bought some of these BR USD bonds back in 2016, IIRC, the yields were 7-10% for maturities of 5-10 years
 
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