Just recently Bitcoin.com has been covering the ongoing case between the U.S. tax agency, the IRS and its dealings with the cryptocurrency exchange Coinbase. However, bitcoiners are not the only ones being observed by taxation officials as regulators are growing concerned about ethereum traders this year accumulating millions of dollars in gains in a pseudo-anonymous manner.
Also read: The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000
ETH Trader Tells the Public He Netted Over $200 Million in Gains This Year
According to a recent report from Bloomberg, a cryptocurrency trader started bragging online that he made a cool $283 million by investing $55 million into ethereum. The pseudo-anonymous trader revealed his ETH address showing the public his 413 percent profit accumulated this year.
“I get many private messages asking how much ether I have,” explains the ethereum trader. “One of the cool things about Ethereum is that all wallets around the world are transparent and open for everyone to see. And this is my wallet’s savings.”
A New Millionaires Club
The trader is not the only one who has made considerable gains this year as ethereum tokens were roughly $10 per ETH back in January and now are priced at $190. The cryptocurrency also hit an all-time high of $425 per ETH just a month and a half ago. According to Bloomberg’s statistics, there are a lot of individuals who invested in ethereum and became millionaires in just a short period of time. The publication and the financial news outlet Zerohedge suggests that “nobody knows who to tax” when it comes to these profits.
There are a few well-known figures who’ve detailed publicly they have made quite a bit of profit off the cryptocurrency’s rise in value. For instance Michael Novogratz, a former executive from Fortress Investment Group, says he’s made 10 percent of his net worth by investing in ethereum in just one month. The news publication estimates that Novogratz made $90 million investing in the cryptocurrency according to the firm’s Billionaires Index. Joseph Lubin, the founder of Consensys, is also estimated to be worth millions in ether according to sources familiar with the matter. Further, the inventor of ethereum Vitalik Buterin explained in a forum last month that his ETH holdings are worth roughly $117 million.
Publicly Announcing You’ve Made Millions in Gains Investing in Cryptocurrency May Not Be the Brightest Move
The publication Zerohedge details that regulators are likely watching individuals make significant gains off of ethereum and various other cryptocurrencies. The U.S. Internal Revenue Service (IRS) has been investigating tax evaders using cryptocurrency for quite some time but just recently announced they would be focusing on looking for higher volume players. The tax agency will seek records from Coinbase and likely many other U.S. exchanges that show “at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year.”
Curating a system that tries to monitor pseudo-anonymous individuals making large gains with cryptocurrencies will be a significant task for the IRS. Even the notorious whistleblower Edward Snowden stated last year that cryptocurrencies might provoke large tax protests in the future. However, when ethereum traders and investment types detail they are making millions in gains on public forums online, the job may not be so difficult for tax authorities worldwide.
What do you think about ethereum traders and investors telling the public about their cryptocurrency gains this year? Let us know what you think in the comments below.
Images via Shutterstock, Pixabay, and Etherscan.
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