How to Hold Cryptocurrency in a Retirement Account without Feeses

Hold Cryptocurrency without Fees. More and more, savvy investors are sewithout feeseking to diversify retirement funds into nontraditional assets. It’s natural then, that many are considering cryptocurrency. With a potential for tremendous appreciation, it can make sense to invest in cryptocurrency through an IRA so that those gains will escape taxation.

With a potential for tremendous appreciation, it can make sense to invest in cryptocurrency through an IRA so that future gains will escape taxation.

However, holding cryptocurrency in a retirement account has traditionally been difficult. When you hold funds in an IRA (or Roth IRA), the Internal Revenue Code prohibits “direct holdings”. All retirement funds must instead be held by a custodian, which must be a bank or a “nonbank custodian” approved by the IRS under Treas. Reg. 1.408-2(e).

The first obstacle many investors hit is that most custodians will not permit cryptocurrency within retirement accounts. There are a few “Bitcoin IRA” custodians out there which will allow investments in Bitcoin, however, they typically hold the private keys and charge large fees for doing so. Often these custodians operate a multi-sig wallet for the funds, meaning they don’t have complete control, but even then the fees charged make this option unrealistic for many investors.

The good news is that there is a way to hold cryptocurrency directly that eliminates almost all of these middleman fees. You can even be in control of your private keys. This type of retirement account is a “checkbook IRA”. With a checkbook IRA, the custodian maintaining your IRA holds only one asset: an LLC owned solely by the IRA.

The IRA is 100% owner of this LLC, however, the manager of the LLC is you. As manager, you handle the day to day affairs and investing of the LLC. When fiat currency is invested into the IRA, the IRA immediately turns around and contributes it to its wholly owned LLC. 

Perhaps the most important step in the process is to find an attorney with expertise in “checkbook IRAs”. 

From there, as manager, you control how those funds are invested. This includes the ability to invest in cryptocurrency. No approval from the custodian is required, as the investment is legally held by the LLC, not the IRA. The IRS does issue some “prohibited transaction rules”. These rules outright prohibit IRAs (and LLCs owned by IRAs) from investing in certain assets.

The good news is that cryptocurrency is not one of those asset classes.  There are additional “prohibited transaction” rules that may apply to your situation, however, so be sure to consult with an expert to avoid violating them on accident.

Perhaps the most important step in the process is to find an attorney with expertise in “checkbook IRAs”. An experienced attorney will not only set up the IRA and LLC for you, but also draft the operating agreement needed for this setup and provide assistance with opening the LLC’s checking account (which will be important, as described later). It’s very important to note that under IRS rules, all contributions to an IRA must be made in US Dollars, not cryptocurrency.

After receiving the US Dollars, the IRA custodian then transfers those funds into the LLC’s checking account. From the LLC’s checking account, the US Dollars can be used to purchase cryptocurrency. An obstacle here is purchasing cryptocurrency in the name of the LLC, rather than in your personal name.

One option is to purchase directly from a private party. There are numerous websites that connect private party sellers to buyers. Many such sites require you to add “real name” to your Buyer profile. To be extra careful with regard to the prohibited transaction rules, I suggest listing your name like this “Joe Smith, as Manager of ABC LLC”. It is also important that the LLC not purchase any cryptocurrency from a party which is “related” to you, as this is a prohibited transaction under IRS rules.

The other method is to use one of the cryptocurrency exchanges which allow opening accounts in the name of an LLC rather than in the name of an individual. Not all exchanges will allow this. Be extra sure that the account is in the LLC’s name (not yours) and that the linked bank account is an account owned by the LLC (not you).

You’ll also need a wallet for holding your cryptocurrency. If your cryptocurrency holdings are small, you may choose to leave them in your exchange trading account. But if they’re larger, you may wish to transfer them to a more secure external wallet. The LLC must own the wallet, not you personally. This is because any exchange of assets between you and your IRA (or your IRA LLC) is a “prohibited transaction” under IRS rules.

 The best solution is probably cold storage, which is easily “owned” by the LLC and is also very secure. A hardware wallet, or even a paper wallet can fulfill this function. Important: This article is provided is for educational purposes only. Readers should consult with a tax professional and are solely responsible for their own due diligence not only with regard to tax issues, but also in making investment decisions and choosing a custodian and exchange@BPI

Korban MT Gox Segera Mendapat Ganti Rugi, Petaka Yang Menguntungkan

Ganti Rugi Korban MT Gox. Ada angin segar untuk para korban MTGox karena pihak pengadilan di distrik Tokyo telah memerintahkan secara resmi kepada MTGox untuk memberikan kompensasi ganti rugi. Tentu saja masih mudah untuk di ingat, bahwa tahun 2014 lalu, bursa MTGox ini telah banyak merugikan penggunanya. Sebesar 850.000 Bitcoin berhasil diretas dari bursa besar yang saat itu volume perdagangannya mencapai 60% – 70% lebih volume perdagangan bitcoin di dunia.

Pada bulan Nopember 2017 tahun lalu, banyak pihak yang telah dirugikan akibat insiden itu sempat membuat petisi kepada MTGox. Petisi itu garis besarnya meminta agar pihak MTGox segera memberikan ganti rugi kepada para konsumen mereka.

Baca juga : 16.000 Bitcoin Berpindah Dari Wallet MT Gox

Tepat tertanggal 22 Juni bulan ini, pihak MTGox juga memberikan pengumuman secara resmi. Pengumuman tersebut sekaligus memberikan respon atas perintah pengadilan di distrik Tokyo, dalam rangka pemberian kompensasi.

Menariknya, pada saat pihak MTGox menyatakan bangkrut tidak lama setelah insiden peretasan itu, telah menyatakan bahwa kompensasi yang akan diberikan adalah tidak berdasarkan pada kurs fiat dengan rate saat itu.

Artinya, jika pada tahun 2014 tersebut harga per 1 bitcoin adalah senilai USD 483, maka pengguna yang juga akan mendapat kompensasi bukanlah berdasarkan dari nilai rate tersebut, melainkan tetap berdasarkan jumlah bitcoin pada saat itu.

Padahal, harga bitcoin saat tulisan ini dibuat berkisar USD 6.114 atau setara dengan 86,6 juta rupiah per BTC. Situasi dan kondisi atas rencana pemberlakukan kompensasi itu secara tidak langsung memberikan keuntungan tersendiri bagi investor yang telah dirugikan pada insiden MTGox tahun 2014 lalu. Terang saja, karena dari harga bitcoin di tahun 2014 hingga 2018, harga bitcoin telah naik berkali-kali lipat.

Ragnar Lifthrasir, salah satu pengguna bitcoin dan sekaligus pendiri Ibea.org dalam cuitan di akun twitter pribadinya mengatakan bahwa korban MTGox semestinya berterima kasih kepada pihak MTGox karena telah menyimpan (Hodling) bitcoin mereka.

Mt Gox customers will finally be paid back – in bitcoin.

Many or most customers probably would have traded away their bitcoin a couple of years ago. So they should thank MtGox for hodling their bitcoin for them!

— Ragnar Lifthrasir ⚑ (@Ragnarly)June 23, 2018

Sekaligus, informasi tentang mekanisme pemberian kompensasi ganti rugi itu dinilai justru telah menyelesaikan kemelut dan insiden paling tragis dalam sejarah Bitcoin selama ini. Sampai sejauh ini, pihak MTGox masih menyimpan sejumlah 137.891 BTC di cold storage, salah satu jenis wallet bitcoin yang bersifat non online.

Petaka yang membawa untung untuk korban MTGox, namun di sisi lain justru menimbulkan kekhawatiran. Tidak lain, kekhawatiran itu mengingat adanya potensi penjualan bitcoin dalam jumlah yang besar di bursa-bursa bitcoin. Ujungnya, penjualan bitcoin secara besar-besaran itu dikhawatirkan akan mendorong harga bitcoin turun jauh.

Nobuaki Kobayashi, seorang pengacara yang bertanggung jawab dalam penyelesaian kasus itu sejauh ini dianggap sebagai pihak yang telah melakukan devaluasi saat melikuidasi ribuan bitcoin di bursa-bursa kripto. Menangkis kritikan itu, Nobuaki menilai bahwa penjualan itu tidaklah akan mempengaruhi harga di bursa kripto. Alasannya, Nobuaki beranggapan bahwa penjualan itu bukanlah penjualan biasa di bursa kripto@BPI

Can You Trust ICO Ratings?

Trust ICO Ratings. When the ICO market exploded in 2017 it was promptly following by the emergence of dozens of ICO rating agencies — but to what extent should they be relied on when making investment decisions?

With the rise of ICOs also came the rise of the 'ICO economy', which refers to the economic activity that has sprung out of the boom in initial coin offerings, which require a range of peripheral services to succeed. Developers, copywriters, digital marketers, social media managers, PR agencies, lawyers, strategic advisors, media outlets, and ICO rating agencies are all participants in the ICO economy, and everyone is benefiting.

This is arguably an excellent development that shows how cryptocurrencies and blockchain technology are creating jobs and are a driver for economic activity. However, as we know from the wave of ICO scams, underperforming ICO-funded blockchain ventures and questionable ICO marketing practices, some participants in the economy have little regard for business ethics. Unfortunately, some self-proclaimed ICO rating agencies reportedly fall into this category.

How to buy a good ICO rating

According to a recent report by Swiss startup Alethena, it is very easy for a blockchain startup that is launching a token sale to buy a good rating on a popular ICO rating website. In the article, Alethena co-founder Markus Hartmann details how, shortly after its ICO was listed on popular ICO rating platform ICOBench, his company was contacted via Telegram by people selling positive ICO reviews on said platform.

Alethena was reportedly contacted by two separate individuals who ended up selling the startup four positive ratings for around $1500 worth of ether (ETH) that resulted in it receiving an inflated ICO rating on the site. This deceptive practice went as far as allowing the startup to write its own review under the name of supposed blockchain 'expert'.  Funnily enough, the “expert opinion” written by Alethna contained the letters S-C-A-M at the beginning of each paragraph, which the startup purposely wrote to highlight these dubious backroom Telegram deals.

It needs to be noted that ICOBench compiles reviews of several individuals who claim blockchain expertise as opposed to offering an evaluation itself, which means this practice of paid-for ICO reviews may happen without the knowledge of the platform’s operators. Having said that, despite the publication of Alethena’s report, its paid-for ICO reviews remained visible on ICOBench.com for some time. In a delicious irony, after the fake reviews were removed, one of the other experts who had previously rated the company's management team a '3' dropped that to a '1' saying he "originally ranked this as 3,3 and 3 , but reduced team to 1 as it has been proven they were paying for ratings."   

Of course, is it easy to argue that a startup that is raising funds through a token sale to build an ICO rating agency itself, is highlighting the flaws of its competitors only to position itself in a good light. Nonetheless, the report illustrates what many industry experts have been suggesting for a while, which is that ICO ratings are often not as independent as they claim.

Should you look at ICO ratings at all?

To answer the question: “Can You Trust ICO Ratings?” the answer is not a simple yes or no. There are ICO rating platforms that employ ex-Wall Street analysts who conduct in-depth research on token sales before sharing their verdict on the project. These ratings can be valuable indicators of a project’s viability and potential profitability and are definitely worth a look as part of an investor’s overall research into a project.

Then, there are platforms run by “online entrepreneurs” and Internet marketers who simply want to cash in on the ICO boom while they can. Their ICO ratings are de facto worthless as these platforms do not employ experienced analysts nor are they run by individuals who have the knowledge or skillset to evaluate startup projects. These are also the “rating agencies” that are more likely to encourage startups to buy a high ICO rating on their platforms. Needless to say, these “rating agencies” need to be avoided as they provide no added value to investors.

Of course, Issues with rating agencies are not a new phenomenon. For example, the 2011 Financial Crisis Inquiry Report stated that at the time of the global financial crisis, the world’s three leading credit rating agencies (Moody’s, Standard & Poor’s, and Fitch) were “essential cogs in the wheel of financial destruction” and were “key enablers of the financial meltdown.” And this was in a sector that, compared to the current ICO space, was thoroughly regulated.

The dominant business model for rating agencies at the time was ‘issuer-pays’. This means the organisation issuing the security was the one that paid for its rating review. With rating agencies competing against each other for clients, there was an incentive for securities to be rated highly to keep the clients happy and the business rolling in. The same issuer-pays model still exists today in the traditional financial sector, and it is also now the dominant model in the ICO rating business.

In light of the malpractice in the ICO rating space, it is more important than ever for investors to conduct their own research before investing in a new blockchain project. Relying solely on ICO ratings could lead investors to place funds into mediocre projects or even into ICO scams that simply paid for good ratings and reviews. Hence, the old cryptocurrency investing acronym “DYOR” (do your own research) cannot be repeated enough@BPI

Cryptocurrency Issued By The Central Bank Can Be More Stable, But Critpo Too Fluctuate

Central Bank Cryptocurrency More Stable. Researchers at the Kiel Institute for the World Economy have identified the digital currency issued by the central bank as an opportunity for a more stable financial system, while at the same time, they reject cryptocurrency.

Kiel researchers published a report on Tuesday (26/6), which will serve as a guide to the "Monetary Dialogue" on the ECON Committee of the European Parliament. According to the report, cryptocurrency is not an alternative to the traditional currency issued by the central bank.

"Currently, cryptocurrencies such as Bitcoin can not replace traditional currency to a significant degree. Available technologies face scalability-related limitations. In particular, the cost would be very expensive to do a moderate part of the transactions that are now handled through the traditional currency, "Kiel researchers wrote in the report.

The Kiel Institute report confirms that instead of being a medium of exchange cryptocurrency and related assets has been used as a means of financial speculation. Since they are not based on a fixed value, they can not be rationally assessed. This will lead to strong price fluctuations, which in turn will attract more speculators. Lack of regulation also increases the effect of non-transparency.

In addition, the report also states that digital currencies can be an opportunity for central banks, even if they "interfere" because they do not use traditional bank accounts.

"To avoid instability from the banking system, commercial banks will come with more reliable funding sources than deposits. Because the fractional reserve characteristics of the current banking system can be a major source of instability, these disturbing changes are not necessarily bad developments, but ultimately can pave the way for a more stable financial system, "wrote Kiel analysts in the report.

Some global banks have considered introducing their own digital currencies, such as the Bank of Thailand and the Central Bank of the Bahamas. Even the governor of the Bank of England, considered a heavyweight in the international monetary system, said he was open to the idea of ​​the central bank's digital currency. @ BPI

Why Litecoin Prices (LTC) Up and Down In The Market?

Litecoin Price Stability (LTC). Litecoin (LTC) is a peer to peer crypto currency and an open source project licensed under the MIT / X11 license. This is a decentralized network. It was released by Charlie Lee on October 7, 2011. Litecoin market capital crossed 1 billion USD in November 2013. Litecoin has reached at most 350 USD per coin.

Reportedly LEE has worked for GOOGLE and COINBASE. He also has experience in IT companies, he worked in some of them for almost 7 years. He was inspired by Bitcoin technology and he became a fan of crypto and developed his own Litecoin crypto (LTC) currency. He gave all his shares in Litecoin and reportedly will leave Litecoin in the future. But he insists and believes that LTC has a bright future ahead of him.

Litecoin (LTC) got a big blow in recent months where its price fell from 300 USD to 80 USD.

From the market, LTC price prospects will not fall again but will likely rise due to the fact that the UK-based platform has just started the market for litecoins. So by adding a new platform that most definitely gives a boost to its volume in the market, so its value will undoubtedly rise. Litecoin is one of the strongest and fastest crypto in the crypto financial market. It has low transaction costs and high processing speed.

Very unlikely LTC will drop to 50 USD and at that point the investor will push the price back up to 100 USD based on the basics.

After recovery begins, it is assumed that LTC will be one of the fastest crypto currency to recover. LTC processes blocks every 2.5 minutes, faster than Bitcoin which processes the blocks every 10 minutes. LTC has a strong blockchain network and functionality is also legit so that it will regain market value and market capitalization.

Litecoin (LTC) uses scrypt in its algorithm, much more complicated. It's much more difficult and expensive to complete, so mining a new LTC is harder than the Bitcoin mining process.

Litecoin (LTC) is currently lying low and its value is down from 80 USD to 78.81 USD. Currently a large number of companies are using Litecoin and we will also witness some serious partnerships in the future, it talks with amazon to convince them to adapt to LTC as a payment method. If this deal is solved then it could be a big boost for Litecoin (LTC) and can start to recover from below@BPI

Lupa Password Wallet Anda? Apa Yang Anda Lakukan?

Lupa Password Wallet. Keamanan bitcoin memang cukup menjanjikan untuk penggunanya. Namun bagaimanapun, seseorang tetap bisa saja melakukan kesalahan, seperti lupa password wallet sendiri. Pada berbagai jenis atau varian wallet dalam dunia kripto telah ada begitu banyak versi, baik yang bersifat hot storage maupun cold storage.

Berbagai karakter wallet apapun bentuknya, pada dasarnya berfungsi sebagai media untuk menangani dan mengelola key pair antara public dan private key saja. Kedua key pair tersebut dipergunakan bersama-sama sebagai akses mutlak pada wallet tersebut.

Untuk pengguna yang tidak begitu mengetahui hingga perihal teknis tentang bitcoin maupun kripto secara umum, kadang-kadang juga tidak terlepas dari kesalahan yang diperbuatnya sendiri. Termasuk juga, urusan soal lupa password walletnya sendiri tersebut. Password wallet ini, sebagian besar menjadi sebuah fitur tambahan di sebagian besar versi wallet kripto yang ada sekarang.

Kenyataannya, memang telah banyak juga pengguna bitcoin yang telah kehilangan hak aksesnya di wallet mereka. Padahal, jika kita menengok perjalanan harga bitcoin dari beberapa tahun sebelumnya hingga saat ini telah menjulang tinggi. Tentu saja nilainya juga akan menjadi meningkat lebih tinggi jika aset itu telah tersimpan beberapa tahun sebelumnya.

Lantas bagaimana jika memang lupa password wallet dan kesulitan lagi untuk mengaksesnya? Sebenarnya, jika password wallet ini hilang, atau bahkan lupa private key maupun seed yang berelasi dengan wallet itu, maka sama saja hak akses mutlak atas wallet itu juga hilang. Terlebih, jika tingkat kerumitan password wallet itu terdiri dari 15 karakter lebih.

Hampir tidak ada cara yang bisa dilakukan untuk bisa mengembalikan password tersebut kecuali pemiliknya sendiri yang mungkin di kemudian hari mengingat betul password yang digunakan. Namun ada secercah harapan, mengingat sejak tahun 2013 lalu, ada sebuah layanan bernama Walletrecoveryservices yang mungkin dapat membantu persoalan itu.

Meski demikian, tentu saja ada beberapa kondisi bakal menjadi dasar, namun berdasarkan apa yang dijelaskan di situs itu, pihaknya menyebut bahwa layanan mereka bisa menangani untuk banyak varian wallet yang ada saat ini.

Jika layanan itu terbukti dapat membantu kasus lupa password wallet, mengapa tidak sekalian saja mengambil atau mencuri sejumlah aset kripto tersebut? Pertanyaan ini tentu saja adalah pertanyaan logis yang cukup mempunyai dasar yang kuat.

Jangan terlalu cepat memberikan konklusi dulu, mari kita tengok bagaimana kemungkinan itu bisa dilakukan tanpa harus mengungkapkan private key yang berelasi dengan wallet tersebut. Untuk bisa membantu, yang dibutuhkan hanyalah beberapa bagian saja dari file wallet yang digunakan, namun tidak berelasi dengan file private key itu disimpan.

Kalau kita melihat pada bitcoin misalnya, pada bitcoin core, file wallet bitcoin tetap akan tersimpan di dalam perangkat yang digunakan. Sedangkan, setiap seseorang menggunakan bitcoin pertamakali, sebenarnya secara otomatis akan membuat hingga 100 address baru yang langsung tersimpan ke dalam “key pool” (tempat key pair disimpan). Dalam hal ini, hanya sebagian saja informasi dari address yang umumnya tidak pernah terpakai itu. Karena sebagian besar pengguna, kebanyakan hanya menggunakan satu atau beberapa address saja, kecuali jika pengguna itu adalah pengguna aktif dan mengetahui betul bahwa memang sebaiknya 1 address bitcoin, digunakan untuk sekali transaksi saja. Address bitcoin ini, bisa digenerate sendiri sebanyak yang kita mau.

Potongan informasi tersebut, selanjutnya dikombinasikan dengan metode brute force decryption. Cara itu adalah satu-satunya cara yang memungkinkan dapat dilakukan. Namun tentu saja hal itu akan membutuhkan resource yang cukup untuk bisa menanganinya. Namun jika password tersebut terdiri dari 15 random karakter lebih, maka itu menjadi cukup sulit untuk untuk dilakukan, terlebih untuk wallet bitcoin@BPI

Japanese Finance Minister Wants To Change Crypto Tax Rule, But People Doubt

Japanese Crypto Tax Rules. Japan's Finance Minister thinks that the public doubts if he will make changes in the taxation of cryptocurrency transactions, Cointelegraph Japan reported.

During the current meeting of the Upper House Budget Committee, Senator Fujimaki asked the Japanese Deputy Prime Minister Taro Aso whether crypto transactions should be taxed through a "separate tax settlement," rather than their current classification as "other income." Aso said that his prospects were " "By the public and expressed concern over the public reaction due to" tax justice. "

The current tax rate for maximum crypto transactions is 55 percent, and Aso plans to change to 20 percent similar to stock or forex trading.

Aso noted that the position of cryptocurrency in the international financial sector is uncertain. He also talked about the importance of developing blockchain technology, but added that he supported the controversial technology, given it underlies the cryptocurrency.

The Japan Financial Services Agency (FSA) issued a business improvement notice for the crypto exchange market as part of its ongoing regulatory oversight following a $ 530 million theft in the Japanese crypto exchange market, Coincheck in January.

On Monday (25/6) yesterday, two vice presidents of the Japanese foreign exchange crypto exchange market resigned after the two exchanges each received notice of increased FSA business last week@BPI