Lendo comes to the aid of Bitcoin owners
As Bitcoin, in its role as the №1 virtual currency, increased in value by over 1,300% in value during 2017, it inevitably attracted attention from governments and regulatory bodies. The prospect of millions of people potentially making millions via this ‘asset’, was something that simply couldn’t be ignored, especially by the tax man, which means it is time for owners of Bitcoin and other cryptocurrencies to consider how this will play out.
However, the tax collector is not the only challenge crypto owners face at the moment. The second challenge is ‘cashing out’ from the exchanges: a problem that is tightly connected to tax issues.
Cashing out crypto
Whilst some crypto owners may have been able to make large purchases with their crypto assets, others are having conversations online about how difficult it is to turn their crypto assets into fiat currency without either being watched, or stopped, by third party payment processors. It isn’t as easy as you might think to extract BTC to the value of $100,000 and have those funds sent to your bank account. On the one side, the crypto exchange might cancel the process, and on the other side, a bank may try to stop you cashing out a large sum from your account: some banks have even frozen accounts.
What is the underlying cause of this? Basically, it is the prospect of money laundering and/or tax evasion. The limits on unverified deposits vary between jurisdictions, but for example in the USA there will be a question mark over anything between $5,000 and $10,000. Where did your funds come from is the question? The answer that they came from Bitcoin will make someone at the bank and tax office wake up and start asking more questions.
The tax man is watching
As we all know, the tax man is always looking for ways to collect more taxes and crypto currencies have presented them with a new gold mine. In India, for example, the Income Tax Department of India (ITDI) has been watching Bitcoin fever grip India with great interest and consider the “taxability of Bitcoin” assets. According to reports, they are looking at the biggest exchanges and are scanning data to see if individuals who have profited from the rise in Bitcoin’s price have reported those gains.
This is not to say that the exchanges are against the involvement of the tax man. Coinsecure said that it viewed the move as positive, because it would bring cryptocurrencies closer to taxation regulations and give them a recognised status.
Lendo solves the problem for cryptocurrency owners
Lendo is a UK-based Fintech start-up that allows crypto owners to realise their assets in fiat currency via a personal loan. The platform has been constructed to enable conventional lenders to provide a loan to buy a car, pay off debts or for whatever is needed, and the crypto assets will be held as collateral in an ultra secure, specially constructed Crypto Vault.
This solves the problem of withdrawing the crypto assets from an exchange into a bank account. And, because it is a loan, it is not taxable. This does not mean that Lendo supports tax evasion; like the exchanges, it recognises that regulation is coming. However, in the meantime, it offers a way for crypto owners to spend their assets in a new way while the tax collectors of the world figure out their rules and regulations.
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