Cardano Investors In Japan Come Under Fire For $6 Million In Underreported Taxes
October 06 2021 - 6:00PM
NEWSBTC
Cardano investors in Japan have come under scrutiny after
authorities reported that investors in the asset had underreported
their taxes from their trading activities. It was reported that
multiple cities in the country had seen profits from trading in
Cardano’s native token ADA but had not reported the earnings made
from investing in the digital asset. Authorities are now beginning
to strengthen taxation laws around cryptocurrencies given that
citizens have taken to using digital assets as a way to evade tax
liabilities. Japanese citizens are investing more in
cryptocurrencies and avoid paying taxes on them due to their
legality being yet to be determined. Related Reading | FinTech
Behind Cardano’s First Stablecoin Launches Bank Accounts And Visa
Debit Cards Cardano Investors Cutting Corners A report from
Japanese publication Nikkei revealed that tax authorities had
carried out a simultaneous audit of a number of regions in the
country. The large-scale tax audit uncovered 1.6 billion yen in
under-reported taxes from profit from digital assets. $12.6 million
in missing taxes were identified to be from dozens of people who
had not reported their earnings from digital currencies. ADA price
struggling around $2.1 | Source: ADAUSD on TradingView.com The
report also showed that the tax evasion techniques were not limited
to individual investors alone. Companies had also taken advantage
of these “tax-saving measures” by investing in cryptocurrencies. Of
these cryptocurrencies investors had chosen, Cardano ranked as the
top choice for investors. According to the report, about half of
the missing taxes, $6 million, were attributed to profits made from
investors who had bought ADA. Japanese tax authorities are carrying
out investigations on proper ways to acquire tax information to
enable them to process the taxes due from crypto investors. It has
although brought to light how important it is for there to be legal
clarifications surrounding cryptos as they are still a legal grey
area in the country. Getting Listed In Japan And Subsequent Rally
It is important to note that up until two months ago, Japanese
investors could not directly access Cardano in their country. This
is because the country’s rules for listing cryptocurrencies on
exchanges are quite stringent. So investors had to rely on overseas
exchanges like Binance in order to gain access to the digital
asset. ADA had finally been listed in Japan after five years since
the asset was created and Japanese investors could now directly buy
and sell the cryptocurrency on their native exchanges. Related
Reading | Grayscale Report Shows The Good, The Bad, And The
Ugly Of The Cardano Network At the time of the listing, ADA was
still trading low around $1.2. The months following the listing had
then seen the price of the digital asset rally. ADA had then grown
about 200% from the time of listing to its peak at the start of
September, and the $6 million in underreported taxes from Japanese
investors were said to be mostly from the bull rally that occurred
about a month after the listing. Tax authorities continue to
monitor trading activities in Cardano, known as “Japanese
Ethereum”, in the country. Audits have been carried out in six
assets so far, but authorities are paying more attention to ADA
given the volume of underreported taxes from its investors.
Featured image from Ethereum World News, chart from TradingView.com
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