Legal Nature Of Cryptocurrency As Property

Question 1

Is crypto currency property

Answer 1

Yes, it is the widely held consensus

Question 2

Why is it difficult to classify cryptocurrencies in English law

Answer 2

It is nether tangible nor embodies an enforceable right so it becomes difficultly to deduce wether it is a chose in action or poession

Question 3

Why is it difficult to deduce damages when cryptocurrency is alterd or stolen

Answer 3

Because its value is highly volatile

Question 4

What solutions are there to classifying cryptocurrencies as a type of property

Answer 4

Either to define it as other or to expand the chooses in action ms definition to become everything that is not choses in possession

Question 5

Is cryptocurrency an asset

Answer 5

Yes as it can gain value, is controlled by the owner and is theirs due to past events such as purchase and mining

Question 6

Is cryptocurrency cash

Answer 6

No because they are not the main medium of exchange and are not suitable to be a unit of measurement

Question 7

Is cryptocurrency cash equivalent

Answer 7

No because they cannot be converted into a predictable amount of cash and have no maturity date

Question 8

Are stable coins cash equivalent

Answer 8

Maybe if their collateral is sufficient, 60% is apparently doubtful

Question 9

Why can cryptocurrency not be financial instruments

Answer 9

Because financial instrument constitutions a contract of liability from one party to another. Which crypto is not except maybe stable coins which promise to be exchangeable for daras as long as their reserves are not crypto’s

Question 10

Can crypto be accounted as inventory

Answer 10

Yes if they are sold in the ordinary course of the business except maybe in the us

Question 11

Can cryptocurrency be accounted as intangible assets

Answer 11

Yes

Question 12

Why might the value if crypto be distorted in the balance sheet when treated as inventory or intangible assets

Answer 12

Because then it cannot be written ti be of higher value than its cost, only lowered through loss

Question 13

When may you measure crypto at fair value when used day to day

Answer 13

If it is accounted as commodity inventory aka if they buy and sell them for others

Question 14

What are the problems with accounting crypto at fair value

Answer 14

The market value if cryptocurrency is often unclear

Question 15

What issues are there to accounting crypto at fair value as intangible assets

Answer 15

There are rarely efficient markets where you can see the fair value, it is risky costly and complex

Question 16

What is the difference between tax evasion and tax avoidance

Answer 16

Tax evasion is illegal misleading authorities about the tax owed or simply withholding owed tax. Tax avoidance is minimizing taxes through legal methods, although for example making transactions with the sole intent to avoid taxes can still be dismissed

Question 17

When is crypto currency taxed in honcong

Answer 17

If accounted as inventory it is liable to profit tax in trade but when accounted as intangible assets tax may be avoided through the transaction taking place outside the jurisdiction

Question 18

What is the dangers with a capital gains tax on crypto

Answer 18

Double taxation where both the income and value increase of an asset is taxed

Question 19

What is the lock in effect

Answer 19

Distorting the value of companies by applying a tax on the sale of assets which makes the reluctant to sell as it would give them less money than is booked

Question 20

What problems exist with taxing cryptocurrencies

Answer 20

It is a nucince for those that use it as a method of fay to day payment

Question 21

Do you have to pay vat tax on crypto in the eu and uk

Answer 21

No at least not on bitcoin as purchase if currency and such is excerpt if vat tax and there was a precedent begore people started speculation and cryptocurrency began to be considered an investment