- Some consider Bitcoin and privacy coins (Verge, Monero,…) a threat
- ZCash, ZenCash,… are using encryption to ensure privacy
Governments around the world worry that cryptocurrencies could become future tax havens.
The loudest among world leaders are Indian Prime Minister Narendra Modi and British Prime minister Theresa May. They have spoken about the alarm at the rise of virtual cash which is moving offshore. After a month of hearings, The U.S. Congress held it is clear that this is considered one of the priorities of several governments. Treasury Secretary Steven Mnuchin called on the world’s 20 biggest economies to work together to make sure cryptocurrencies don’t become the next tax havens.
Some say that is already happening with the likes of David Drake. His New York-based family office has more than $10 million in cryptocurrency and blockchain investments. Allegedly he is using digital money like an offshore bank account – a place to legally park overseas business profits and reduce his taxes.
There is an increase in demand for fresh ways to hide assets after European and U.S. regulators which already clamped down on traditional banks. KYC which is an abbreviation of ”know your customer” and anti-money-laundering rules and forced offshore financial institutions are forced to disclose their clients’
information. Several leaks such as Panama Papers prompted the campaign. That revealed more than 11.5 million documents, many high-
profile politicians such as at the time British Prime Minister David Cameron and Icelandic Prime Minister Sigmundur Davíð Gunnlaugsson. Just in European Union, the annual loss of revenue was around €160-190 billion. And that was conservative estimate.
Demand for tax evasion is high and keeps rising, which is great news for the owners of privacy tokens. However, with all this water they shook and fear they created in policymakers a change might be on its way.