Cryptocurrency vs. Kleptocurrency

Here’s the chart, in case you’d like to edit it or compare to other time series.


I own a small quantity of ether and ripple. One of the reasons I bought only a little is the fear that the state, a.k.a. slavers, can somehow ban it. I don’t know if that is possible, since I don’t sufficiently understand blockchain. I do know that my accountant, in his annual tax organizer questionnaire (which runs to about 25 pages [my 1040 filing is usually over 100 pages and I am not a business owner, trader or big-time entrepreneur] already asks about crypto ownership, dates acquired and cost basis. Even if they can’t kill it outright, I suppose they can subject it to “special” treatment, as they do for precious metals, and tax it at an even more exorbitant rate than other capital gains. I even recently read that they plan to tax crypto holdings annually at market value, even if none is sold - a “wealth tax” on crypto.


Like having information, don’t like slavers.


Richard Epstein has said that under any sane interpretation of the language of the 16th Amendment (“lay and collect taxes on incomes, from whatever source derived”) there is no way a wealth tax would be constitutional, since never in the history of accounting has wealth fallen under the definition of income. However, it seems to me that the notion that U.S. jurisprudence has any connection to sanity or the meanings of English words passed its “best by” date some years ago, so you never know.

What many in the crypto world have been talking about is the proposed measure in Biden’s Bankrupt America Act which would require banks to report all transactions, in and out, greater than US$ 600 to the IRS. This is seen as a dagger aimed at the heart of crypto, which at the moment is, apart from buying or selling precious metals for cash, about the only transaction remaining which does not go through an intermediary who reports it to the IRS. This would effectively bring crypto transactions under the same scrutiny as any other security, which would make it unusable as a means to escape kleptocurrency and confiscation and, by recording purchases, would paint a target on the back of whoever bought it. This would go a long way to killing crypto, which is what they want.

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