It’s not, but “give us our money back or we’ll report you to the IRS” strongly implies that they were willfully assisting in tax avoidance before. It might even legally be blackmail, if they’re aware of any crimes their customers have committed.
Except that recent events regarding Citigroups incorrect $900M payout on the Revlon bond shows that in fact grown up finance will sometimes say, actually, the law is the law and the contract doesn't cover this, so thanks for the money.
This was a case where the bond holders did have some claim to the money, but it was clearly an error.
> This was a case where the bond holders did have some claim to the money, but it was clearly an error.
You refer to recent events, and I don't know how recent, so maybe I missed something; but my understanding was that the finding was that it was reasonable for Revlon to believe when they received the fund that it was a legitimate payment, not just an error. Of course in retrospect (e.g., when Citigroup calls and says so!) it is clear that it was an error, but the legal argument, whether or not you buy its truth, was that it was not clear at the time. I think that this sort of finding in which both grown-up financiers decide not to be chummy about misplaced funds, and the law sides with them in not requiring them to do so, is comparatively rare.
I'm a little foggy on details, but I remember reading that the bond holders had been kind of mistreated before all this. Something to do with reorganizing or splitting off valuable parts of the company. The bond holders weren't too happy as it was beginning to look like they might not get their money back. So it makes sense why they would not be quick to cooperate and return what they initially thought were early payments.
"Better" is debatable. If you've ever actually wired money to scammer, you'd know that the banking system isn't one giant kumbaya circle run on gentlemen's agreements to Do The Right Thing, and you were rolling your eyes through the whole thread[1].
At most, it works like that for anyone rich or working on behalf of a big firm, which isn't exactly a ringing endorsement. And don't you worry, cryptocurrencies are just as capable of reversing transactions of those with the real power! [2]
I think what that twitter thread points out is that #2 is harder and less common in crypto (for better or worse) in the current state. What would be a trivial correction in the normal system isn't here.
There are also a lot more ways for regular people to reverse transactions, but I take your point about how hard it is to reverse wires to scammers.
founder is clearly an asshole but "reporting it as income to the IRS" probably doesn't count as "threat of initiating criminal proceedings" as it's likely something that they are enjoined to do anyways.
Amusing as the founder then would be outright saying he knows what criminal activity has been going on and exactly who is up to it ... and is willing to use that info if he see fit.
That would seem to present all sorts of risks for his users, and himself, legal and otherwise.
Not really? There are things that you're not required to report to the IRS that others can use to underreport income -- for example, the identity of which contractor you made small cash payments to. Reporting their identities to the IRS is not illegal, but neither is failing to.
(Also, I assume you mean tax evasion? Avoidance is the legal one.)
Not sure that makes any sense... if users held the assets before, they have an asset with unrealized gains. When it transfers ownership, those gains are realized.
> [...] strongly implies that they were willfully assisting in tax avoidance before.
It does nothing of the sort. It's a enormous leap based on an assumption of bad faith to go from expecting protocol users to sort out their own personal tax situation to "willfully assisting in tax avoidance."
> It does nothing of the sort. It's a enormous leap based on an assumption of bad faith to go from expecting protocol users to sort out their own personal tax situation to "willfully assisting in tax avoidance."
There are obviously lots of subtleties here, including places where no-one knows how the legal implications will shake out, but "expecting … users to sort out their own personal tax situation" isn't always an option; for example, my bank isn't allowed to assume I'll sort out my own personal tax situation and must report my interest earned, whereas, say, Amazon is allowed to make that assumption, and so need not report the items that they have sold to me. It could be that this is a more Amazon-y situation, but it could also be that it's a more traditional-bank-y situation. Probably even the IRS and Leshner, but definitely those of us who aren't involved in the situation, don't know which it is.
Precisely, which is why the jump to "strongly implies willfully assisting in tax avoidance" comes off so poorly. In my opinion, it not only mischaracterizes what is happening, it imputes ill intent to boot. Guidance for DeFi apps is poor currently and policy in this area is actively being legislated. In the meantime, shifting the onus for tax reporting back onto individual users !== willful assistance in tax avoidance any more than companies not witholding income taxes from payroll pre-WW2 was willful assistance in tax avoidance.
Further, since these transactions are all captured on a public ledger, anyone using this for tax avoidance is really just electing to pay their taxes later with massive penalties and possible jail time once the IRS gets around to tying addresses with unreported transactions to fiat on/off ramp transactions that are KYC'd.
