I was chatting to a close friend of mine yesterday with regard to his crypto exit strategy and how I thought his strategy was flawed. I did not want to burst his bubble, but more about make him realise that he is putting himself at serious risk of being flagged by the tax man. This friend of mine is what I would call a proper retail investor and generally has no clue what he is doing.
He was originally going to copy my strategic plan and then changed his mind after seeing the banking app Revolut had his coins listed. His plan is now to sell his coins on Revolut and send the money straight into his Revolut bank account.
This may seem nice and convenient in his way of thinking as he lives in South Africa and he has given a UK address for his Revolut account. This is where his banking debit cards were delivered plus he gave them a copy of his British passport.
The way I see this is if his crypto is worth $4K then the chances are he will be ok, but what happens if his crypto is worth $200K or more? Someone being the British or SA government will want a slice of his profits and he will be in full view of the British HMRC at best if they do not share his info with the SA receiver.
The bull cycle has not really started yet, but we know once it does crypto comes under the spotlight rather quickly and the tax man will be hopping around hunting for revenue. The SA Government has a black hole of R72 billion they need to fill which is roughly $4.1 billion. The first R40000 is free from tax once declared and the remaining is taxed at 40%. The UK is £3,000 free and then depending on the amount between 18% and 24% which makes the UK the better option out of the two.
Putting things into perspective I have not touched Binance since April this year after they announced they were recording and monitoring those registers in SA. If you deposit or withdraw you have to fill out a separate pop up box which they say now is getting ready for crypto regulation in SA and is part of their license agreement with the SA receiver. This for me is a red flag as who do you trust as who says they are not handing over that information already or keeping it on file.
Having a strategic plan in order to exit our crypto investments is not that straight forward and is not something I have had to contemplate before. The last cycle was more of a look and learn process and this cycle is to implement what knowledge was garnered over the entire 2 cycles. Taking profits for the first time with everything I have being 100% profit so there is no chance I am squandering 40% and giving what has been hard work over 8 years.
I have some questions for Pallapay and it would be good to sit down with them personally and find a way that works avoiding the exchanges.
Remaining under the radar and away from prying eyes is the key sticking to the shadows and finding undetected safe routes. Those that follow me know I am flying to Dubai in the coming weeks (16th -19th) and whilst there besides sorting an off shore bank account I am sorting my exit strategy for crypto. There is a company called Pallapay which handles over 160 cryptos as a gateway on and off ramp direct to and from your bank account. I will be visiting them and chatting with them to find a solution that works and will share my findings here. Getting this right knowing what steps to take is that important for the future as we know regulation is going to happen and clamp down on all of us sooner or later. This is about staying ahead and being prepared ahead of time whatever happens.
The question is have you thought of what you are going to do with your portfolio and have you tested an exit route or still thinking of an idea? I am not exiting crypto fully and will be buying back in when the Bear market is in full swing again. HIVE will remain whether in HBD or HIVE as that is a different type of investment and does not count as that is way too personal for what it holds and offers.