In the wake of the spectacular fall of Tokyo-based bitcoin exchange Mt. Gox, Japan is now looking for ways to tax bitcoin transactions, this according to media reports on Tuesday. Mt. Gox had recently made public a half-billion dollar heist of their funds, and Japan is now mulling if it should look for possible rules that would govern transactions using the crypto-currency.
According to a report in the Yomiuri Shimbun newspaper, it is Japan’s Finance Ministry, working together with the national tax agency, that is spearheading this initial attempt at taxing bitcoin. Ministry insiders say that there is a possibility charging bitcoin transactions with consumption and corporate taxes, even though the digital currency is not considered as legal tender. But the same report also reveals that there is very little progress on this effort, saying that ministry officials are still unsure how to treat bitcoin. “Many countries including Japan do not have concrete frameworks to levy taxes on bitcoin transactions,” the report revealed.
There is a lot of confusion regarding the bitcoin currency, although supporters of the crypto-currency say that the system is sound. The stunning collapse of Mt. Gox has not done anything to solidify bitcoin’s bid for legitimacy. The once-mighty Tokyo-based bitcoin exchange at one time processed around 80 percent of the world’s bitcoin transactions, but last week was brought down to bankruptcy – the firm admitting that it had lost well over US$500 million in a theft that had gone on for a long time under their very noses. A company lawyer revealed that 750,000 bitcoins belonging to customers had been stolen, including 100,000 of Mt. Gox’s own stash of the currency. The estimated value was worth around US$575 million, calculated by the value of bitcoins on CoinDesk Tuesday last week.