Recently, Bitcoin.com followed up on the ongoing case between the US tax agency, the IRS and its dealings with the cryptocurrency exchange Coinbase. However, bitcoiners aren’t the only ones being watched by tax officials, as regulators are increasingly concerned about ethereum traders pseudo-anonymously amassing millions of dollars in profits this year.
ETH Trader Tells the Public He Netted Over $200 Million in Gains This Year
According to a recent Bloomberg report, a cryptocurrency trader started bragging online that he made $ 283 million by investing $ 55 million in ethereum. The pseudo-anonymous trader revealed his ETH address showing his cumulative profit of 413 percent this year to the public.
“I get a lot of private messages asking how much ether I have,” explains the ethereum trader. “One of the interesting things about Ethereum is that all wallets in the world are transparent and open to everyone. And these are the savings in my wallet. ”
A New Millionaires Club
The trader is not the only one to have made substantial profits this year as Ethereum tokens cost around $ 10 per ETH in January and are now priced at $ 190. The cryptocurrency also hit an all-time high of $ 425 per ETH. only a little while ago. a month and a half. According to Bloomberg statistics, many people have invested in ethereum and became millionaires in a short time. Point of sale and financial news publication Zerohedge suggests that “no one knows who to tax” when it comes to these profits.
Ethereum millionaires could attract the attention of regulators
There are some well-known figures who have publicly detailed that they have made a nice profit as the cryptocurrency increases in value. For example, Michael Novogratz, a former executive at Fortress Investment Group, says he earned 10% of his net worth by investing in ethereum in just one month. The news publication estimates that Novogratz made $ 90 million by investing in the cryptocurrency according to the company’s Billionaires Index. Consensys founder Joseph Lubin is also estimated to be worth millions in the ether according to sources familiar with the matter. Additionally, ethereum inventor Vitalik Buterin explained in a forum last month that his stakes in ETH are worth about $ 117 million.
Publicly Announcing You’ve Made Millions in Gains Investing in Cryptocurrency May Not Be the Brightest Move
The Zerohedge publication explains that regulators are likely watching people make significant profits with ethereum and other cryptocurrencies. The US Internal Revenue Service (IRS) has been investigating tax evaders using cryptocurrencies for some time, but recently announced that they would be focusing on finding higher-volume players. The revenue agency will look for records from Coinbase and likely many other US exchanges showing “at least the equivalent of $ 20,000 in any type of transaction (buy, sell, send or receive) in any year.”
Curating a system that tries to monitor pseudo-anonymous people making large profits from cryptocurrencies will be an important task for the IRS. Even infamous whistleblower Edward Snowden said last year that cryptocurrencies could spark major tax protests along the way. However, when ethereum traders and investment types explain that they are making millions in profits on public online forums, the job may not be that difficult for tax authorities around the world.