Is income from crypto-currencies taxed?
Mining is income at the value at time of earning, I would use an index like XBX to determine price. Asset appreciation is capital gains. These aspects of crypto-assets are not a gray area in the US financial sector, and have been addressed for almost half a decade now. In Canada, it is similarly taxed as CQM states. Mining is considered business income and you need to file a T1 form. Capital appreciation is no different than treating gains from stock.
it looks like using an ADR is the way to go here.  michelin has an ADR listed OTC as MGDDY. since it is an ADR it is technically a US company that just happens to be a shell company holding only shares of michelin. as such, there should not be any odd tax or currency implications. while it is an OTC stock, it should settle in the US just like any other US OTC. obviously, you are exposing yourself to exchange rate fluctuations, but since michelin derives much of it's income from the US, it should perform similarly to other multinational companies. notes on brokers: most US brokers should be able to sell you OTC stocks using their regular rates (e.g. etrade, tradeking). however, it looks like robinhood.com does not offer this option (yet). in particular, i confirmed directly from tradeking that the 75$ foreign settlement fee does not apply to MGDDY because it is an ADR, and not a (non-ADR) foreign security. Given your premise is correct:  How do you cash in a large sum of YetAnotherCryptoCoin shortly after it´s ICO? The crypto-exchanges take some time to add a new currency, if they do at all. And even if they already have, trading volume is usually low.  I think that´s what really makes it unattractive for Investors as opposed to tec-enthusiasts (aside from the high volatility). Total lack of any reliable trading capability. "Fees & liabilities Yes, the first problem is that liabilities are being improperly booked. If the fee you charge is fixed upon deposit then the fee should credit ""Revenue"", the fee charged to you should be booked by crediting cash and then debiting ""Expenses"", and the remaining should be booked as a liability. If the fee is fixed upon withdrawal then this will become more complex because of the fact that a change in the fee can occur before it can be applied.  In this case, the current fee should be credited as ""Revenue"" and some ""Allowance for fee increase"" should also be credited.  The amount owed to the withdrawer should be booked as a liability as before. Multiple currency bookings I will assume that this is for a cryptocurrency service of some sort considering the comments in your question and your presence on bitcoin.se. Accounting can become very dangerous when mixing denominations.  This is why all major accounting standards mandate books be maintained single currency. In your case, if the deposit is in USD, for example, and the liability is in BTC then two books must be maintained, one for each. To account for your operation properly using single currency accounts, the denominations must be exchanged internally and balanced across the two sets of books. For a deposit of BTC/depository of USD, the operation would be the same as described above, but then the cash should be credited away and the liabilities debited away from the USD books with simultaneous cash debits and liability credits on the BTC books. Considering the extreme volatility of cryptocurrency exchange rates, denominating accounts on the wrong set of books will quickly lead to insolvency or loss from improper accounting or both. From revenue to income Revenue can be construed as a liability since it could theoretically exist on the balance sheet. I mention this because all books, despite their name and quarter, are really simply long T accounts, like a blockchain.  A blockchain could be subdivided into users' individual income statements & balance sheets, as the reverse of this concept. Revenues are credited, expenses are debited.  The difference, ""net income"", is debited away with a credit to ""owners' equity""." They can only do that because Coinbase interfaces with fiat currency. As more transactions and holding become denominated in crypto, it will be more difficult for them to tax (if you are using an unlinkable crypto). If I pay someone with Monero or most coins, then the government won't know who was involved in the transaction. A) a tax treaty probably covers this for the avoidance of double taxation. Tax treaties can be very cryptic and have little precedence clarifying them http://www.irs.gov/businesses/international/article/0,,id=169552,00.html B) I'm going to say NO since the source of your income is going to be US based. But the UK tax laws might also have specific verbage for resident source income. sorry it is an inconclusive answer, but should be some factors to consider and point you in the right direction. More likely I miswrote.  Yes, we're talking about capital gains.  But who, outside of the moneyed elite, have enough capital gains to incur substantial taxes?  Many don't and never will despite how hard they work or how productive they are.  Also, doesn't taxing income more than capital gains discourage production?  I always hear how high capital gains tax discourages investment and growth. Could you not just say that you had bought it when it was pennies on the dollar and made the millions that way? There isn't much of a transaction record, is there? I also just realized that I don't understand how taxes work in that situation. If you have a different currency from the U.S. Dollar, and it increases in value greatly, do you have to pay tax on that increased value relative to the U.S. dollar? They don't when it's minimal increases. It would depend on whether it's considered capital gains or not. A brief Google search suggests that it is; this means you're only required to pay tax on it once it's traded for actual currency, goods, or services. It also means you get some nice tax advantages as long as you hold it for longer than a year.