Will Bitcoin hodlers be the reason more countries adopt wealth taxes?
Opinion by: Robin Singh, CEO of Koinly
Is there a catch for Bitcoin hodlers, with the asset’s price up over 600,000% since the beginning of 2013?
Perhaps — if governments keep waking up to Bitcoin’s value, the whole “you only pay tax when you sell” mantra could soon be a thing of the past.
What if a wealth tax is the answer for revenue-hungry tax agencies with no time to lose? It’s a yearly tax on a person’s total net worth — cash, investments, property and other assets — minus any debts, applied whether or not those assets are sold or generating income. The idea is to boost public revenue and curb inequality, mainly by taxing the ultra-rich. A wealth tax takes a clip off what you own, not what you earn.
Countries such as Belgium, Norway and Switzerland have had wealth taxes baked into their tax systems for ages, yet some of the world’s biggest economies — like the US, Australia and France — have largely steered clear.
That might be changing. More governments are eyeing wealth taxes for crypto. In December 2024, French Senator Sylvie Vermeillet took it a step further, suggesting Bitcoin (BTC) be labeled “unproductive,” which would mean taxing its gains every year — whether or not it’s ever sold.
Yep, every asset holder’s favorite word is unrealized capital gains tax. It would be naive to assume other countries are not thinking about the same idea.
With Bitcoin’s significant gains and industry executives such as ARK Invest’s Cathie Wood eyeing a $1.5-million price tag by 2030, I’d bet a magic 8-ball would say, “Signs point to yes.”
The growing global interest in wealth tax
It might seem far-fetched, but it is hard to ignore the gains. The average long-term Bitcoin holder is already sitting on significant profits.
The incentive is obvious. Switzerland’s wealth tax goes up to 1% of a portfolio’s value, and governments know there is plenty to collect.
Countries catch on — sooner or later. Consider how capital gains tax became the norm.
The US introduced capital gains tax in 1913, the UK jumped on board 52 years later in 1965, and Australia followed in 1985.
Governments likely considering the wealth tax
Governments are likely entertaining the idea — whether they admit it or not. If any country seriously considers it, Germany could be a prime candidate, even though it scrapped its wealth tax back in 1997.
Recent: Ukraine floats 23% tax on some crypto income, exemptions for stablecoins
In July 2024, offloading 50,000 seized BTC at $58,000 might have seemed like a smart move for the German government, but when Bitcoin hit $100,000 just months later in December, it became clear they left a fortune on the table.
In retrospect, a costly mistake…
Will this be remembered as a blunder on par with Gordon Brown selling half of the UK’s gold reserves at $275 an ounce?
Imposing such a rule on the wealthy comes with obvious risks.
To understand the real effect of taxation on a country, just follow the money — specifically, where millionaires are moving. Recent data shows that high-net-worth individuals are leaving countries like the United Kingdom in droves, heading for tax-friendly havens like Dubai.
The potential repercussions of a wealth tax
Will nations risk losing these individuals to tap into unrealized gains on Bitcoin and other assets?
Bitcoin is volatile and full of unknowns. While some events could lead to massive losses, governments may still push forward with policies that ultimately drive away millionaires, only to realize the trade-off wasn’t worth it.
Conversely, US President Donald Trump recently signed an executive order establishing a Bitcoin Strategic Reserve — a clear nod to the hodl mentality. No doubt, this has other nations considering a similar move.
If nations are embracing the hodl mindset, could that mean wealth taxes are off the table in those countries? Only time will tell.
One thing is sure: Bitcoin hodlers have amassed enough wealth to put themselves on the radar of tax authorities. Whether this sparks fundamental policy changes or just political grandstanding, the crypto community won’t sit back quietly.
Opinion by: Robin Singh, CEO of Koinly.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Eric Council Jr., the SIM swap hacker who helped compromise the Securities and Exchange Commission’s X account last year, made $50,000 performing similar attacks and even searched how to tell if the FBI is investigating him, recent filings show.
The recent filing was part of the prosecutor’s request to sentence him to two years in prison over his role in the hack, which saw the SEC X account publish a false announcement that a spot Bitcoin exchange-traded fund was approved, shaking up the markets.
Council searched: “How can I know for sure if I am being investigated by the FBI” and “How long does it take to delete Telegram account,” US prosecutors discovered following a search warrant of his house, car and devices last June, according to a May 12 court filing.
While Council’s Telegram chats were set up to be removed after two weeks, US prosecutors still found chats of Council discussing SIM swaps with others believed to be located overseas.
Council also admitted to law enforcement that he received around $50,000 for performing SIM swaps for clients between January to June 2024. He advertised himself as a SIM swapping expert on Telegram under the username easymunny, offering services for payment between $1,200 and $1,500.
How Eric Council Jr. pulled the hack off, then got caught
Council executed the SIM swap by creating fake identity documents to specifically impersonate someone that his co-conspirators identified as having access to the SEC’s X account.
These fake documents were then used to trick a staff worker at telecommunications firm AT&T into reassigning the victim’s phone number to Council’s SIM card.
Council had to share the last four digits of the victim’s Social Security number and driver’s license to effectuate the SIM swap.
He then bought a new iPhone from an Alabama Apple store, inserted the new SIM and shared the access codes to the SEC’s X account with his co-conspirators, who later posted the fake news about the spot Bitcoin ETFs on Jan. 9. The Bitcoin products received official approval the following day.
Council received payment for the SEC SIM swap in Bitcoin (BTC) and other cryptocurrencies, the prosecutors said.
However, Council’s luck ran out on June 12, 2024, when surveillance agents observed him attempting to execute a SIM swap at an Apple store, impersonating another victim.
Law enforcement executed a search warrant six days later and recovered several pieces of circumstantial evidence, including templates for fake identification cards on his laptop.
He pleaded guilty on Feb. 10, after a federal grand jury returned an indictment charging him with Conspiracy to Commit Aggravated Identity Theft and Access Device Fraud last October.
Related: SEC Chair: Blockchain ‘holds promise’ of new kinds of market activity
The fake post accumulated over 1 million views before the SEC confirmed it had been hacked roughly 15 minutes later.
The two announcements resulted in Bitcoin’s price initially rising $1,000 before abruptly falling nearly $2,000 shortly after, wiping out tens of millions of dollars worth of market positions.
The security team at X confirmed that the SEC didn’t have two-factor authentication installed on its X account at the time of the incident. The SEC claimed it initially had 2FA enabled but was erroneously removed by X Support following a request by an SEC staff member.
Magazine: Japanese porn star’s coin red flags, Alibaba-linked L2 runs at 100K TPS
The list of the top holders of US President Donald Trump’s memecoin has been finalized ahead of background checks to apply for a dinner and “VIP tour” with the president on May 22.
In a May 12 X post, the TRUMP memecoin project said it would stop considering additional purchases for a dinner with the president, adding that the top tokenholders had been notified to apply for background checks if they wanted to attend.
According to data provided on the project’s leaderboard, the top 220 wallets held more than 13.7 million tokens as of May 12, worth roughly $174 million at the time of publication.
It’s unclear who, if any, of the wallet holders will choose to apply for and attend the dinner with Trump, or the “exclusive reception” expected to be in the White House for the top 25 holders, on May 22. A May 7 Bloomberg report suggested that the majority of tokenholders were based outside of the United States, leading to potential security concerns and conflicts of interest.
Many US lawmakers and figures in the crypto industry criticized the president for launching the memecoin just days before taking office on Jan. 20. In the wake of his dinner announcement on April 23, the calls for congressional oversight and allegations of corruption have intensified, with one senator calling for Trump’s impeachment and other representatives refusing to consider crypto-related legislation until their concerns were addressed.
Related: FT report suggests advance knowledge of Melania Trump memecoin launch
Companies also apparently seeking influence over Trump’s policies have invested in the memecoin. In April, Freight Technologies said it would invest $20 million in the token, suggesting that it could affect the president’s trade war between the US and Mexico, where the firm conducts some of its business. As of May 12, the company had not announced whether it qualified to send a representative to the dinner.
Not Trump’s first appeal to crypto users
During his 2024 campaign, Trump hosted a dinner with supporters who purchased his “mugshot” non-fungible tokens, which featured a picture of the then-presidential candidate at his surrender to authorities on charges he attempted to overturn the 2020 election.
Many of the “mugshot” attendees publicly shared their identities on social media ahead of and during the event, but at the time of publication, no one appeared to be claiming they would apply for the memecoin dinner. Wallets with the usernames “Sun” and “elon” have led to speculation that Tron founder Justin Sun and Tesla CEO Elon Musk — both Trump supporters who have financial interests tied to Trump’s presidency — could be among the attendees.
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
New York City Mayor Eric Adams announced partnerships between the city and financial firms as part of his crypto plans.
In a May 12 press conference at Gracie Mansion, the the city’s official mayoral residence, Adams said June Ou, founder of financial services company Figure, and Richie Hecker, CEO of private equity firm Traction and Scale, would be assisting the city in its crypto efforts. He spoke of Ou and Hecker acting as advisers for New York City’s next steps in “economic development and opportunities to serve the public using digital assets.”
“We are focused on the long-term values of these technologies for our city and its people, not chasing memes or trends,” said Adams, adding:
“If you’re in the crypto, blockchain, Web3 or the fintech space, New York City is open for business.”
Adams made digital assets a large part of his policy platform after assuming office in January 2022, when he announced plans to accept his first three paychecks in Bitcoin (BTC). In a 2023 financial disclosure, the mayor reported holding between $5,000 and $54,999.99 worth of Bitcoin, but suggested it was worth more in a December 2024 press conference.
Trump DOJ dismissed the corruption case against Adams
Adams had been facing corruption charges over alleged illegal donations from the Turkish government, but Justice Department officials appointed by US President Donald Trump stepped in and directed local authorities to intervene. The case was dismissed with prejudice, meaning it cannot be reopened, in April, and Adams traveled to the White House on May 9 to reportedly thank Trump for his “words of support” during his 2024 campaign.
Related: 8 major crypto firms announce US expansion this year
It’s unclear whether Adams’ May 12 announcement was related to his meeting with the president, who has also pushed significant policies related to digital assets since taking office. Cointelegraph reached out to the mayor’s office for comment, but had not received a response at the time of publication.
Adams announced in April that the city would be hosting its own crypto summit on May 20.
Magazine: Crypto City: Guide to New York
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