| WinstonFisk | 07-15-2021 05:13 AM |
Cryptocurrency tumbling...?
Crypotcurrency has garnered attention from the HMRC, and it is important to be aware of the rules regarding this.
The mere purchase of cryptocurrency tokens does not incur any sort of tax liability...however, the acquisition of them via mining does. No liability is owed where the value is less than £1000, or your total other taxable income does not exceed £2500.
Contrary to popular belief, bitcoin is not entirely anonymous. The blockchain is a public ledger and publicly accessible, and with a little homework (and believe me, HMRC certainly has both the resources and inclination to chase it up); the recipient and sender of the transaction can be identified.
Tumbling/mixing is a service where the original transaction of the blockchain ledger is obfuscated with a new one, providing the recipient privacy and increased security.
And therein lies something of a legal grey area: theoretically, ANY sum of money can be subject to and seized under Anti Money Laundering Regulations 2002.
If bitcoins or any other crypto was acquired through illegal activity (drug trafficking, arms dealing etc), then yes, the use of tumbling would constitute money laundering.
However, it would appear as it stands that tumblers in and of themselves do not for UK purposes constitute money laundering vehicles. The flip-flopping the UK govt has done so far regarding the actual legal definition of crypto (there are calls for its current status as tokens to be classed as legal tender) only further complicate things.
Only time will tell what will be the ultimate fate of it. | 
