Bitcoin and Taxes: How to Protect Your Assets
By Smartmix / 09.12.2018 02:12 h

As cryptocurrency adoption grows, so too does the worry that governments and tax agencies will find ways to monitor, regulate, and tax crypto assets. Unfortunately, governments are already partnering with blockchain analysis firms to identify the owners of bitcoin wallets. It's not a question of if governments will crack down on crypto assets, but rather a question of when, and how hard.

Tax agencies are on the offensive. The cryptocurrency boom has shaken traditional financial institutions to the core, and governments are scrambling to match real-life identities with the public wallet addresses and transaction listed on the blockchain. It's easy to imagine a future where you receive a letter from a tax agency detailing your personal crypto transaction history and demanding taxes owed.

If this hypothetical troubles you, there's good news. There are still steps you can take to keep your bitcoin holdings private online. A good first step is to maintain your own bitcoin wallet and stay away from exchanges that collect customer information. However, even this isn't enough to keep your transactions from being tracked. Using a mixer like breaks the connection between your old wallet and transactions and any new wallet you've created, giving you a fresh start on the blockchain any time you think a transaction might have compromised your anonymity. Any mixing service is only as effective as the strength of their algorithms and the size of their mixing pool. With an established service like SmartMix, you can rest assured that you are taking the responsible step to protect your identity and your digital assets from prying eyes.