Is cryptocurrency fraud also in rural coffee shops and Instagram? Beware of get-rich-quick schemes!

Hello everyone, Instagram! I only have an account@xi10jun1.

Bitcoin seems to be falling while Bitcoin Cash is rising.

A pattern where funds move to other currencies due to convenience and transfer costs. This will likely continue, so it’s something to keep an eye on.

※This column is designed so half of it can be read for free, a generous setup. Of course, if you read up to the paid portion (updated weekly for 400 yen per month, so about 80–100 yen per column), I would be very encouraged, and I would be happy if you subscribe as a tip!

This week’s results (2017-12-15 to 2017-12-21)

First, as usual, the results. I will announce the changes first.

Last week (until 2017-12-14) assets: 59,453 yen
This week (until 2017-12-21) assets: 59,576 yen
Change: +123 yen

This week was a difficult market with tools slowing down at trading times... I had trouble getting in.

It feels harder to find favorable moments to make profits nowadays.

By the way, speaking of something else, a regular at my favorite cafe was approached by the sinister hands of cryptocurrency fraud. Even in a rural area, cryptocurrency talk... Unfortunately it was a scam.

Recently, similar fraud seems to be rampant on Instagram as well, with unscrupulous people trying to lure young people.

So as the year ends, I’ll write a column about how to prevent cryptocurrency fraud.

Cryptocurrency fraud

There are mainly three types of cryptocurrency-related fraud.

Bogus products: products or emails that claim “will definitely rise” etc.
Scam coins: malicious cryptocurrencies intended for fraud (e.g., “Some Asian organization has issued a coin”)
HYIP (High Yield Investment Program): investment products offered with high yields (daily interest of a few percent, etc.). When investing with cryptocurrency, many problems include no high returns and no refunds.

Let’s look at them in order.

Bogus products (information products, emails)

First, bogus products or emails. This is fundamental for investors to know.

Products or emails claiming “will definitely rise!” or “○○ guaranteed” are all scams, so beware.

Scam coins

Next, scam coins. Now over 1,000 kinds of cryptocurrencies exist, and many scam coins are out there.

But it’s easy to tell scam coins apart. If you know which cryptocurrencies are on the government’s whitelist for licensed exchanges, you can avoid issues. Everything else is likely fraud.

Currently 20 currencies are tradable, as follows:

BTC: Bitcoin
BCH: Bitcoin Cash
ETH: Ethereum
ETC: Ethereum Classic
XRP: Ripple
XEM: NEM
LTC: Litecoin
MONA: MonaCoin
ZAIF: Zaif
FSCC: Fisco Coin
NCXC: Nex Coin
CICC: Caica Coin
XCP: Counterparty
SJCX: Storage Coin X
PEPECASH: Pepe Cash
ZEN: Zen
QASH: Qash
BCY: BitCrystal
CMS: XEM
CMS: ETH

In the future, additional currencies may be added due to hard forks, etc., so for details see the Financial Services Agency page →List of registered cryptocurrency exchange operators - Financial Services Agencyhere

HYIP (High Yield Investment Program)

Lastly, HYIP. It’s read as “high-yield.”

A general term for high-yield investment products, especially international investments raised with cryptocurrency.

Not hard to imagine, but there are cases where the invested cryptocurrency does not return, causing trouble. Pyramid schemes and Ponzi schemes are among them.

Not only promising high returns, but also not being registered operators, and making overly convincing claims, which can mislead you. Be cautious.

Free summary: Trade only with registered operators and whitelist currencies

There have already been crackdowns on scam coins and fraud in Japan.

To avoid buying meaningless currencies in the hope of Bitcoin-like gains, it’s safer to trade only with registered operators and currencies on the whitelist.

Of course, there are always price volatility risks, operator risks, and credit risks, so be sure to check those as well.

Now for next week’s column, I’ll take a year-end break. We’ll resume on Friday, January 5, 2018. Happy New Year, everyone!

So this paid column will discuss future outlooks.

Ending Section 1: Latest Tax Information! Updated December 8, 2017

The National Tax Agency’s site has updated the latest legal views on Bitcoin.

That is here →No.1524 Taxation on profits from using Bitcoin｜Income Tax｜National Tax Agency

According to this, profits gained from using Bitcoin are considered “miscellaneous income.”

So for me, profits from margin trading like mine are generally miscellaneous income. As I’ve noted in the ending section before, as described in this blog post (→I filed taxes for Bitcoin margin trading (BTCFX)! Comprehensive taxation of miscellaneous income? Separate filing for taxation? | yutori generation investor jun), it seems netting is not possible. I wish this could be improved...

Also, according to NewsPicks comments by BitFlyer president Yuzo Kano (No.1524 Taxation on profits from using Bitcoin - NewsPicks), if you bought Bitcoin for 100,000 yen and used it to buy something worth 500,000 yen, a 400,000 yen profit is recognized.

When you use Bitcoin to purchase goods or services, if the price of Bitcoin at the time of purchase exceeds the price when you bought, that portion is recognized as profit. So when you shop with Bitcoin at FANCY, this also applies, so keep that in mind.

And on December 1, 2017, the National Tax Agency posted a document on how to calculate income.

Here it is →How to calculate income related to virtual currencies (pdf)｜National Tax Agency

※ Laws and tax interpretations may continue to change, which could alter filing or tax payment methods. Before filing, be sure to check with your local tax office or a tax accountant.

After all, BTCFX profits remain miscellaneous income. I wish they would move to separate taxation with a 20% tax soon...

Ending Section 2: Shopping with Bitcoin!

In fact, the overseas EC site “FANCY” allows you to buy products with Bitcoin! It’s a bit pricey shipping-wise, but you’ll find stylish items you won’t see in Japan.

For how to use FANCY, please refer to this blog summary.

→Explanation of creating an account, registration, settings, and flow to purchase on FANCY | yutori generation investor jun
→How to purchase items on FANCY with Bitcoin (BTC) | yutori generation investor jun

※ This is the free portion. The following sections are detailed analyses and future outlooks, so they are paid. If you want to read more, of course, subscribing as a tip would be very encouraging. Thank you for your continued support!