Cryptocurrency Compensation Caveats

April 20, 2021

PSA: I do not endorse illicit behavior unless it enforces accountability or counteracts illicit behavior; definitions and judgements lie with the beholder.

As cryptocurrency payments gain traction, it is imperative to recognize the seemingly unavoidable scrutiny of regulation via taxation. Businesses log expenditures - whether via the obligation of taxable accounting, or as a means of minimizing tax burden via taxable write-offs. The books can be cooked, but the measurements will be balanced. Surely, there are creative exploits to shadow financial activity, encapsulate financial concerns, and bypass standard regulation, but the receiver loses recourse - the guarantee of compensation; at least in the traditional sense. In this scenario, the contract of a physical, legally binding agreement forfeits its efficacy for both parties; either one at risk of indictment for regulatory fraud.

Perhaps blockchain smart contracts could solve this issue by minimizing losses of either party with the deployment of strategic events defined at the contract level, throughout the transaction lifecycle. As long as the accounts of all parties involved are guaranteed to be disconnected from financially regulated institutions, this appears a viable solution. Until all financial data is available to the public, the integrity of these contracts cannot be realized. How ironic the current state of financial privacy restricts the ability to circumvent public regulation, the ultimate caveat.

Market volatility aside, navigating a complicated maze of legality will be cumbersome and resource consuming. You might want to reconsider the risk of worth conducting business transactions with with cryptocurrencies.

Join my Newsletter


Consider a Donation

Greg Morrison - 2019 ©