Running a crypto-only business

[Burak]

- B2C Digital products, paying suppliers* in crypto
- Getting paid directly to private wallets
- Holding crypto and cashing out with P2P (cash and metals)
- Not dealing with any banking / payment processor at all

* Using a dormant (not sure if this is correct word, but it doesn't have any accounted activity) company to deal with suppliers (KYC / KYB). I don't think they report as they are taking crypto payments privately.

I'm aware this is what most people / my competitors do, but is there any possibility you get in trouble? Especially at big scale, when you send 7 digits to supplier per month.

 

[JohnnyDoe]

No problems at all. Just keep proper accounting, and don’t commingle corporate and personal funds.

 

[Burak]

No problems at all. Just keep proper accounting, and don’t commingle corporate and personal funds.

Can you elaborate what you mean by proper accounting, I thought company doesn't have any official activity as it doesn't receive payment from any payment processor.

 

[JohnnyDoe]

Can you elaborate what you mean by proper accounting, I thought company doesn't have any accountable activity as it doesn't receive payment from any payment processor.

I mean that you have to prepare financial statements as required by the laws of the country where the company is incorporated.

 

[void]

I thought company doesn't have any accountable activity as it doesn't receive payment from any payment processor.

obviously wrong - you have to have accounting even if you get paid in potatoes which is equally legit

 

[Burak]

obviously wrong - you have to have accounting even if you get paid in potatoes which is equally legit

Yes, but in my case I don't collect payments as company. Only place I use company's name is KYB docs, in the theory I send funds on behalf of company but suppliers are also from other countries and I highly doubt they report somewhere.

 

[JohnnyDoe]

Yes, but in my case I don't collect payments as company. Only place I use company's name is KYB docs, in the theory I send funds on behalf of company but suppliers are also from other countries and I highly doubt they report somewhere.

Quite a stupid way to try to be smart.

 

[spagge123]

Are cashing out with P2P to the company’s bank account then?

 

[daniels27]

Are cashing out with P2P to the company’s bank account then?

No

 

[Sols]

Yes, but in my case I don't collect payments as company. Only place I use company's name is KYB docs, in the theory I send funds on behalf of company but suppliers are also from other countries and I highly doubt they report somewhere.

This is naive and short-sighted. What do you do if your business becomes successful and a bank, a payment processor, the police, or the tax man for some reason wants to see how you earned your money and paid all taxes due?

Quite a stupid way to try to be smart.

Straight up poetry here.

 

[daniels27]

Yes, but in my case I don't collect payments as company. Only place I use company's name is KYB docs, in the theory I send funds on behalf of company but suppliers are also from other countries and I highly doubt they report somewhere.

Which docs are we talking about? I never met any supplier asking for company docs. Why would a guy taking crypto do this? If you local hooker also asking your date of birth while all supermarket guys aren't?

Can you elaborate what you mean by proper accounting, I thought company doesn't have any official activity as it doesn't receive payment from any payment processor.

If you are 100% illegal, what do you need a company for? Buy a gold membership it read the other open forums for solutions. There is a good thread about Georgia from yesterday.

This is naive and short-sighted. What do you do if your business becomes successful and a bank, a payment processor, the police, or the tax man for some reason wants to see how you earned your money and paid all taxes due?

I doubt this will happen.

 

[wellington]

- B2C Digital products, paying suppliers* in crypto
- Getting paid directly to private wallets
- Holding crypto and cashing out with P2P (cash and metals)
- Not dealing with any banking / payment processor at all

* Using a dormant (not sure if this is correct word, but it doesn't have any accounted activity) company to deal with suppliers (KYC / KYB). I don't think they report as they are taking crypto payments privately.

I'm aware this is what most people / my competitors do, but is there any possibility you get in trouble? Especially at big scale, when you send 7 digits to supplier per month.

I was looking at this, i came to the conclusion the following -> Panama with a services contract with another entity *HK*

I.e Panama for the company, and HK for your income (via contract) -> cash out via HK is easy enough to do, and the Panama company is ideal for a number of reasons, not least because it's impossible to bank, but also the accounting side of things.

Then lastly -> where you are based will factor into that working, if in HK there's tax, if say living in XYZ then it's tax free in HK but might have tax where you are based.

No problems at all. Just keep proper accounting, and don’t commingle corporate and personal funds.

One thing keeping accounting (normal)
Another one "Submitting Accounting".

 

[daniels27]

I was looking at this, i came to the conclusion the following -> Panama with a services contract with another entity *HK*

I.e Panama for the company, and HK for your income (via contract) -> cash out via HK is easy enough to do, and the Panama company is ideal for a number of reasons, not least because it's impossible to bank, but also the accounting side of things.

Then lastly -> where you are based will factor into that working, if in HK there's tax, if say living in XYZ then it's tax free in HK but might have tax where you are based.

The problem is that most likely they won't accept the offshore claim as he has not paying taxes where the company is managed from. And then it is still illegal but with a 8000 USD overhead.

 

[wellington]

I actually built a system like this previously (so it can be done) the entire front-end, back-end operates on rails the MAS system operates like a entity / human / corporation -> if your business is completely or nearly completely automated and not functioning in centralised applications (say Amazon) i.e front end user interactions isn't operating on a store front etc on a 3rd party centralised service, and your product/service is digital.

You can essentially create a AI system that packages the entire product/service within (and hook into 3rd party solutions operating on-chain) and then have the corporate side work from within the MAS basically taking all HUMAN and ALL CORPORATE elements PLUS ALL DIGITAL SERVICING into a AI multi-agent system -> from there it's basically everywhere but nowhere, its operations occur on-chain and are enacted by a node the other-side of the world, millions of nodes across the globe.

Its able to pay, collect, invoice etc and manage its reserves as they build up.

Basically the AI becomes a corporation, you on the other hand just bill the 'corporation' for contract work, either directly or indirectly via a corporation (say HK).

The Gov can only hold you accountable for 'tax evasion' if you operate the MAS (have control over it) they can't if its legitimately decentralised and operationally self sufficient.

You are therefore a employee/contractor that negotiates/bills the AI

the end clients deal with the AI much like people deal with Digital companies today.

Likewise you can withdraw (rug your ai) when you are sufficiently non-taxed exposed (jurisdiction) by 'negotiating' its retirement.

hat most likely they won't accept the offshore claim as he has not paying taxes where the company is managed from. And then it is still illegal but with a 8000 USD overhead.

Not sure i follow

Quite a stupid way to try to be smart.

He's using a dormant company for

- KYC/KYB
- Payments (crypto) paid on behalf of?
- Not doing Accounting?
- Telling the Gov its dormant?

He's fucked.

I actually built a system like this previously

I've since built a much larger system that operates as a MAS but has a team operating it (as i had a heart attack and opted to step away).

Basically almost any digital company can be moved into a MAS based system (means letting go of the company/tech) but it makes it tax exempt - in theory (as operations) as its not operational anywhere and operates within the lines via world wide nodes.

 

[Simon4466]

But if they can show that you created the MAS won't they just look at it as business automation? Especially if you're the only one using it (closed source), could be different if it is a DAO or something of the sorts without a central point of control (the creator, i.e. you who is able to adjust the code), or am I missing something?

 

[Burak]

Are cashing out with P2P to the company’s bank account then?

I don't use banking at all, only face-to-face P2P to cash or gold. I understand this results in non-SoF funds, but I'm okay with that.

Which docs are we talking about? I never met any supplier asking for company docs. Why would a guy taking crypto do this? If you local hooker also asking your date of birth while all supermarket guys aren't?

Personal KYC and incorporation documents for KYB. They take bank payments normally, crypto privately.

He's using a dormant company for

- KYC/KYB
- Payments (crypto) paid on behalf of?
- Not doing Accounting?
- Telling the Gov its dormant?

He's fucked.

I might be fucked for real. Regarding to solution you mentioned, if I don't need cashout/banking at all, should any offshore justriction (with minimal accounting requirements) work? I was looking at Marshall Islands (no accounting) and Seychelles (easier to form).

I don't have problems with keeping accounting, but receiving thousands of payments from random crypto wallets, what people care is privacy in this industry and not sure how to do "proper accounting" with maintaining privacy of clients

 

[wellington]

But if they can show that you created the MAS won't they just look at it as business automation? Especially if you're the only one using it (closed source), could be different if it is a DAO or something of the sorts without a central point of control (the creator, i.e. you who is able to adjust the code), or am I missing something?

No, laws don’t work that way

Once it’s in the wild it’s in the wild - sure there’s gonna be court cases over this in the future but it’s basically arguing for sentient enslavement - ergo you are required to pay the taxes of your creation (child)

Do not do Seychelles if involved in crypto

Seychelles

 

[daniels27]

But if they can show that you created the MAS won't they just look at it as business automation? Especially if you're the only one using it (closed source), could be different if it is a DAO or something of the sorts without a central point of control (the creator, i.e. you who is able to adjust the code), or am I missing something?

As it is not a DAO and after the talks with the local tax guys, my best guess is that they will argue that as you are the only person who has access to the bank account / private keys to the cryptos, you are the ultimate manager as you control it. If you claim you do not control it, it is called money laundering: lending access to bank accounts is a crime by itself or by virtue of money laundering.

The problem is that most likely they won't accept the offshore claim as he has not paying taxes where the company is managed from. And then it is still illegal but with a 8000 USD overhead.

Not sure i follow

I really like the creativity here in the forum. But I personally believe that the proposed structure is quite expensive and ultimately does not solve the main problem of tax evasion. It would be better to look into relocating first to solve the problem at their root, rather than experimenting with expensive structures that are far from guaranteed to work as you state yourself:

Once it’s in the wild it’s in the wild - sure there’s gonna be court cases over this in the future but it’s basically arguing for sentient enslavement - ergo you are required to pay the taxes of your creation (child)

It sounds more like a lottery, to be honest.

I might be fucked for real. Regarding to solution you mentioned, if I don't need cashout/banking at all, should any offshore justriction (with minimal accounting requirements) work? I was looking at Marshall Islands (no accounting) and Seychelles (easier to form).

I don't have problems with keeping accounting, but receiving thousands of payments from random crypto wallets, what people care is privacy in this industry and not sure how to do "proper accounting" with maintaining privacy of clients

US LLC + some personal tax residency for the sake of having it (Thailand) and then just travel like a nomad.

Personal KYC and incorporation documents for KYB. They take bank payments normally, crypto privately.

I personally wonder who in such a place would do KYC/KYB. I would recommend checking on that first and they see if there not cheaper versions to bypas it.

 

[wellington]

who has access to the bank account / private keys to the cryptos, you are the ultimate manager as you control it.

Hence you do not retain access to them, the AI generates its own.

more like a lottery,

Yet becoming reality.

A lot of us have been experimenting with it for years and you will see a few come online in due course.

 

[daniels27]

Hence you do not retain access to them, the AI generates its own.

But how you get the money out then?

Yet becoming reality.

A lot of us have been experimenting with it for years and you will see a few come online in due course.

I would expect laws in regards to accountability on AI quite soon. Once, the creator takes full accountability of its AI actions, you will also be certain to be the ultimate manager.