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10 hours ago, Zerponaut said:

I can theoretically prove that the 'coins' I traded today are NOT the same 'coins'

It is not about being the same but rather about being interchangeable.

 

10 hours ago, Zerponaut said:

crypto isn't strictly fungible

Cryptos are 100%/ stricly fungible.

 

10 hours ago, Zerponaut said:

If crypto was fungible how can transactions be traced?

I don't understand, I think you are mixing things here.

 

10 hours ago, Zerponaut said:

Doesn't the transaction on the blockchain specify the (group of) 'coins'?

Absolutely not. A transaction (a payment given your example) on the blockchain specifies a transfer of value from one address to another (with vanilla attributes: quantity, time, etc.). A ledger specifies a group of transactions.

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I kind of look at the same way I look at cash. More than likely every piece of cash I touch has trace amounts of cocaine on it. So far it hasn't been a problem, but it is a talking point.

To have been indirectly involved in illegal activities on the XRP Ledger?  Maybe not. But the question is legitimate. Everyone, as an individual or entity (company), operating on the XRP Led

That is the reason why the blockchain is fascinating, you can know where are the first "coins" you have sent. Imagine you could recount/ trace the first bank note you we have spent, capturing lik

On 12/6/2019 at 12:09 AM, cmbartley said:

Where did you read this? Do you have a link?

I guess it depends on which country you're in - and previously the rule of thumb to be safe was to use FIFO - but I was looking for a relevant link and this one was interesting (read under 'Cost Basis').

It says a new ruling has been introduced. "specific identification" can now be used. This basically seems to give the green light for FILO accounting because, if your wallets are set up correctly you can specify when each unit was acquired and when it was disposed of. Interestingly this confirms that if you can't specify units you are to default to a FIFO method.

See below from the first link (https://www.cryptotrader.tax/blog/new-irs-cryptocurrency-tax-guidance which is paraphrasing the official IRS page)

To specifically identify a unit of cryptocurrency, you must include the following information:

1. The date and time each unit was acquired,
2. Your basis and the fair market value of each unit at the time it was acquired,
3. The date and time each unit was sold, exchanged, or otherwise disposed of, and
4. The fair market value of each unit when sold, exchanged, or disposed of, and the amount of money or the value of property received for each unit

If you are unable to specifically identify your cryptocurrencies, you are to default to a first-in first-out (FIFO) basis. Source: A36, A38

There is also newly created guidance from the IRS (page updated 6 Dec): https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

This is great news for us, well for those of you in the U.S. If my tax dept follows I would be very very happy.

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On 12/3/2019 at 10:38 PM, Lumpy said:

To have been indirectly involved in illegal activities on the XRP Ledger? 

Maybe not.

But the question is legitimate. Everyone, as an individual or entity (company), operating on the XRP Ledger, is entitled to ask the question. Regulators often highlight the fact that decentralised exchanges (DEX) are by nature more subject to criminal activities. Yes, indeed. You don't need to be "KYCised" to create an account and transact value within a DEX. 

In some cases and taking the example of the XRP Ledger, you can even participate in a fraudulent payment without even noticing it. How? At the exception of direct XRP payments, any payment that involves a IOU (I Owe You, basically a debt instrument) can take multiple paths before reaching its beneficiary, using other existing offers to deliver the best option/ path. 

I have created a little python program that will tell you if you have been, through one of this type of payments, involved with a crook! Obviously, the progam will tell you if you have been also directly (without the payment path feature of the XRP Ledger) dealing with a scammer. Or even more...if you are identified as one!

Eventually, I think it opens fascinating questions. When an account (wallet address) is identified as fraudulent, could an individual block / blacklist the address? Could the network detect and block automatically the address? As the relationship between an individual and the possible number of wallets is 1 to n, would the action of blocking a wallet, considering its activity, be fruitless? 

On the code side. Please note that, although I have quite a decent knowledge of tech, I am (absolutely) not a developper. I coded it because I found the use case interesting.

I use https://xrpforensics.org/ as the base for wallets identified as scammers.

Run it, it will tell you.

Peace

https://github.com/TiGowa/xrp-ledger-forensics

 

Python script updated. Script:

- goes through all transactions (+1000) of the specified wallet

- gives the hash of the dubious tx when relevant

 

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