Industry News Crypto and Taxes in the Wake of Pandora Papers

Crypto and Taxes in the Wake of Pandora Papers

October 12, 2021

Financial dealings of the powerful, famous, and wealthy are something that naturally generates the interests of the wider public. This applies to almost any country in the world, regardless of its political system or who those same figures are. At the same time, from a broader social standpoint, this type of interest is actually very healthy for any society that aims to become more transparent and democratic. That is why another massive leak of documents from offshore companies and tax havens, dubbed the Pandora Papers, once again raised both the interest of the wider public and journalists who worked on these for months. Previously, there has been a lot of discussion about powerful policymakers in the US trading in stocks and taking on other financial avenues. 

These led to the resignation of several presidents of Federal Reserve banks, but also put the spotlight on Fed Chairman Jerome Powell and his potential renomination. But, these were minor news in comparison to the big bombshell that was to come out of Pandora Papers. At the same time, these dealings once again give a new perspective on cryptocurrencies and why these are of growing importance in a global world where so many people of means work overtime on obscuring the pathways of their immense collective wealth.

Damning Papers

Following in the footsteps of the previous massive offshore data reveals, this case also included a huge investigation. The International Consortium of Independent Journalists headed it for a number of months, working on the treasure trove of documents. That included nearly 12 million individual files of different levels of importance. In the age of social media, esports, and many other digital and interconnected ventures, this number might not be that impressive. 

But, among them, the Pandora Papers revealed 35 present and former world leaders, but also 330 politicians and all manner of public officials. These come from 91 countries and independent territories. The papers also include a spate of all manner of murderers, international fugitives, con artists, and other criminals that moved their assets to offshore havens. All of them also included trusts and shell companies, among many other business organizations to hide their financial and business dealings. All of them also evaded many trillions of USD in taxes in their home territories. 

Same Old

Many ordinary citizens across the globe could be tempted to simply dismiss these findings as nothing new under the sun. For others, this is just confirmation of the things so many already knew too well, including that ever-present need of the rich and powerful to siphon off money away from their visible ventures and holdings. Also, there is an additional layer of legality on top of it all – most legal experts believe that in most of the mentioned cases, nothing technically against the law took place. Instead, they utilize completely legal mechanisms that are available to the rich and powerful to manage their wealth in a way that is simply not accessible to those with modest means. 

But, that also once again showcases the same old harsh truth of the present day – the duality of the economic system. While the law is equal to all who participate in it and no one is above it, Pandora Papers show that a million or two USD will make a drastic difference not just in the quality of vehicles and homes a person has, but also the financial services they can employ for the betterment of themselves and their loved ones. In the heart of all of this is a centralized system of finance and banking that allows for all of that. Cryptocurrencies could offer not just a solution to that problem in some theoretical manner, but also a workable alternative that is already on the table for all of those of more modest means. 

Question of Trust

Money, in all of its shapes and sizes, usually boils down to the issue of trust. Do the populations that use any currency actually believe that it can help them in a regular, steady, and predictable manner? Does a national fiat currency live up to the promise of its denominations in all circumstances or does it fail in some or even all setups? All of these are issues that in critical moments can make or break any currency. This happened before many times – from Weimar Germany to the 1990s Yugoslavia, from Zimbabwe to Venezuela.

It is happening now as well and will continue to do so in the wake of the biggest healthcare crisis of the last 100 years. It might even spur on new conflicts that transcend their regional borders and expand globally in some kind of new cold war. So, all currency is a question of trust and many believe that the vultures are now circling around the USD, which props up so much of the global economy. Until now, the USD held up for most of the globe and built the present planetary financial system. Pandora Papers, among other things, show that the rich and powerful are hedging their bets, even when it comes to the USD. 

Bitcoin for All

For the crypto evangelist, the solution to all of these issues is clear – bitcoin BTC tokens, along with all other altcoins, for all! With everyone having access to digital currencies, they too attain a range of possibilities that allow them to make their own offshore pipelines. At least to a point, but still provide much more in that sense than any traditional fiat currency, and more importantly, they circumvent all of their institutions that are so restrictive to ordinary citizens and so forgiving to the millionaires of the world. 

However, that is a simplistic solution that does not address the inherent issue with transparency and privacy. Here, blockchain and crypto mechanics could do much more and do it now – with tools of digital analytics, the ability of law enforcement to follow the trail of money could go up drastically, while it also preserves privacy. That is why the ultimate case for crypto, taxes, and offshore havens is not one or the other, but the use of all tools in the pursuit of a somewhat more accountable financial world.

Source: Coindesk