Following the discovery of a smart contract bug, BatchOverFlow, which allowed attackers to generate tokens and deposit them in a wallet freely, the Hong Kong-based exchange has halted all Ethereum ERC-20 transactions on their platform on April 25, 2018.
BatchOverflow Bug Targets Smart Contracts
The blockchain security startup PeckShield discovered the smart contract bug. have developed an automated system to scan and examine the transfer of ERC20 tokens on the blockchain. The security startup its finding on the company’s Medium page on April 22, 2018.
The PeckShield system flagged off as it detected an unusual transaction associated with the BeautyChain () token. The unusual activity recorded an operation trying to send large amounts of BEC tokens to two different wallet addresses.
After taking a closer look at the code of the affected smart contract, a new vulnerability was discovered that led to the attack. Additional information revealed that the hack affected 12 different ERC tokens. PeckShield team successfully transacted using this method with a non-tradable token to confirm the bug’s functionality,
At a time when several countries of the world are busy slapping hefty and entirely unreasonable tax rates on bitcoin-related transactions, the French Council of State has drastically reduced the fees bitcoiners will pay to the government with effect from April 26, 2018.
Movable Property
According to , French authorities have declared that the profits generated from transactions will henceforth be treated as capital gains of “movable property” hence, they attract a lower tax rate than what was obtainable previously.
Notably, back in 2014, the French Ministry of Economy and Finance made it compulsory for all revenues generated from cryptocurrency transactions to be taxed, even though the state did not officially recognize at the time.
A spokesperson for the French ministry told local news outlet, , in April 2014:
“For the time being, there is no declarative obligation in what concerns bitcoin. All taxpayers are required to declare all their revenues, including those originating from abroad. This said, there is a certain tolerance [from the state authorities] regarding minor and irregular revenues, for instance from occasional sales.”
Surprisingly, in July 2014 the government introduced a new regulation to govern its digital currency ecosystem in a bid to curb the growing rate of illicit use of virtual currencies. Additionally, the guideline declared that bitcoin would also become subject to capital gains taxes.
The report :
“We have proposed a threshold on the margin tax of EUR 5,000 ($6,039.70). We believe that France should let people try, invest and develop business with bitcoin before we tax it.”
Crypto Tax Payers Protest
Fast forward to 2018, and taxpayers have appealed to the highest French administrative court to review the enormous tax rate on and other digital currencies since July 2014.
Per Le Monde, gains from the sale of cryptocurrencies are treated as industrial and commercial profits (BIC) when these transactions are made on a regular basis, and as non-commercial profits (NBC), if the sales are occasionally made. These classifications attract up to 45 percent tax rate from income tax for the wealthiest taxpayers in addition to the 17.2 percent of generalized social contribution (CSG) also levied.
Bitcoiners to Pay a Flat Rate of 19 percent
The Conseil d’Etat has partially ruled in favor of taxpayers, stating that the “sale of bitcoin” was “in principle of the category of capital gains of movable property.” The ruling further explains that
“Movable property, in tax language, refers both tangible and intangible assets such as cars, jewelry, patents and copyrighted materials. Once these assets are sold, they are subject to a flat rate of 19 percent. “Which, even adding the CSG, induces a tax rate significantly lower than that reserved for BIC and BNC,” Le Monde reported.
Possible Exceptions
In its report, the Council of State has however made it clear that ”certain circumstances specific to the transaction” of cryptocurrencies “may imply that they fall under provisions relating to other categories of income.” The regulatory watchdog has reiterated that small-scale activities fall under the BNC category, while large-scale mining operations must adhere to the BIC taxation terms.
To some extent, this new regulation is fair enough as compared to what is obtainable in some other where bitcoin and other cryptos are taxed as properties.
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