Tax-loss harvesting with cryptocurrencies Cong, Lin William; Landsman, Wayne; Maydew, Edward ...
Journal of accounting & economics,
11/2023, Letnik:
76, Številka:
2-3
Journal Article
Recenzirano
Odprti dostop
We describe the taxation landscape in the cryptocurrency markets, especially concerning U.S. taxpayers, and examine how recent increases in tax scrutiny have led to changes in crypto investors' ...trading behavior. We argue conceptually and then empirically document that increased tax scrutiny leads crypto investors to utilize conventional tax planning with tax-loss harvesting as an alternative to non-compliance. In particular, domestic traders increase tax-loss harvesting following the increase in tax scrutiny, and U.S. exchanges exhibit a significantly greater amount of wash trading. Additional findings suggest that broad-based and targeted changes in tax scrutiny can differentially affect crypto traders’ preference for U.S.-based exchanges. We also discuss other gray areas for tax regulation related to new crypto assets, such as Non-Fungible Tokens and Decentralized Finance protocols, that further highlight the importance of coordinating tax policy and other regulations.
Over the last decade, the green shoots of a new economic order have emerged as decentralized technologies challenge traditional financial systems. Decentralized finance (DeFi) holds the potential to ...transform international business (IB) by offering accessible financial services across borders, disrupting traditional intermediaries, and promoting financial inclusion. While traditional fintech has challenged banks, DeFi operates outside legacy systems, leveraging blockchain technology and smart contracting to introduce a new range of products and services that provide first-movers with an upper hand to both expand their business across the globe as well realize cost savings on existing business. Despite offering advantages like efficiency, transparency, and security, DeFi faces regulatory uncertainties and scalability, adoption, and stability concerns. Our study explores how DeFi can seamlessly integrate into the IB space while addressing these challenges. In addition to offering insights for investors, multinational firms, and regulators, we also lay the groundwork for future IB research in the fintech domain. As the DeFi innovation unfolds, understanding and harnessing its potential can empower stakeholders to engage responsibly and effectively in this transformative landscape.
ABSTRACT
This study examines whether we can learn from the behavior of blockchain‐based transfers to predict the financing of terrorist attacks. We exploit blockchain transaction transparency to map ...millions of transfers for hundreds of large on‐chain service providers. The mapped data set permits us to empirically conduct several analyses. First, we analyze abnormal transfer volume in the vicinity of large‐scale highly visible terrorist attacks. We document evidence consistent with heightened activity in coin wallets belonging to unregulated exchanges and mixer services—central to laundering funds between terrorist groups and operatives on the ground. Next, we use forensic accounting techniques to follow the trails of funds associated with the Sri Lanka Easter bombing. Insights from this event corroborate our findings and aid in our construction of a blockchain‐based predictive model. Finally, using machine‐learning algorithms, we demonstrate that fund trails have predictive power in out‐of‐sample analysis. Our study is informative to researchers, regulators, and market players in providing methods for detecting the flow of terrorist funds on blockchain‐based systems using accounting knowledge and techniques.
