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Mintos Marketplace Review

Mintos is a Latvian P2P marketplace for investors that links different lending companies with investors and borrowers. According to AltFi Data, it currently leads the continental Europe marketplace with a 38% market share. Launched in 2015, the platform serves over 60 loan originators and more than 146,000 investors from 70 countries. Mintos offers an accessible and transparent option to the traditional banking system. In 2017, Mintos reached profitability with EUR 2.1 million in revenue and EUR 196,000 as net profit.

How it Works

Both retail and institutional investors can invest in fractions of loans from across various loan types and continents. Mintos connects loan originators to the marketplace and offers instant access to investors looking to buy loans

Opportunities for investment include personal unsecured loans, mortgage loans, invoices, secured car loans, and small business loans. Many of the marketplace loans are secured. This means the borrower has to attach an asset with their loan application. In case the borrower defaults, the loan originator can engage to sell the asset and redistribute the money to investors. This lowers any potential loss in case of a default.

Buyback Guarantee

Mintos buyback guarantee is usually with secured loans. This is a promise from the loan originator that they will intervene and refund you back the invested principal plus interest earned. This is inclusive of the 60 overdue days a borrower fails to make repayments. Though this method is not risk-free, it transfers the risk from the borrower to the loan originator.

Campaign Rewards

Mintos introduced campaign rewards in 2018. This allows you to get cashback when you invest in loans from a certain loan originator. In some cases, the loans may even be repurchased if the loan agreements change. In such a scenario, you’ll receive your invested principal plus earned interest which you can withdraw or invest in new cashback loans.

Mintos Auto-Invest

Auto-invest is a Minto tool that automatically completes your investment of choice strategy. Once you choose your investment criteria, Auto-invest will invest in suitable loans on your behalf. Auto-invest is accessible anytime and you can follow your portfolio activity in real-time. The tool is efficient as it saves time spent on investment matters. You can even access newly placed loans in the system before manually-made investments.

Auto-invest has three investment strategies

  • Primary market with a 14% interest rate and buyback guarantee within any duration.
  • Primary market which features a buyback guarantee, 13% interest rate, and a 12 months duration.
  • Secondary market which features loans with buyback guarantee, 14% interest rate and a 60 months duration.

As a new originator, you need to choose and fine-tune your strategy when there’re new campaigns or when interest rates change. Failure to adapt may lead to cash drag when no loans fit your benchmark. If you set your benchmark low, you can even miss on higher-interest loans.

The main advantage of Mintos is the variety of options to diversify your investments. But you must exercise caution as it could also be another fraud. This is partly due to the many loan originators and options making it difficult for new investors to choose the best investments. Despite some doubts, the generous buyback campaigns offer Mintos a trusted P2P platform with a long working history and various diversification options.

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What is Peer-to-Peer Network

The history of P2P and its eventual mainstream acceptance is thanks to Napster. In 1999, the file-sharing application made it possible to store music or film files across multiple computers. The peer-to-peer architecture allowed millions of internet users to connect, and form groups. Users could then perform as user-created virtual supercomputers, file systems, and search engines,

What is Peer-to-Peer Network?

The idea of a P2P network is to create equal peer nodes that together serve as both “clients” and “servers” to other nodes on the network. Network participants then record and interchange information. The network model is different from the traditional client-server model where the exchange of information is to and from a central server. No central storage point eliminates the need for a dominant authority. This means no single individual can use the network to own or control it. If users secure it, they become the true owners of their data.

Peer-to-Peer Services

Some P2P services don’t involve a buy and sell transaction. However, they connect individuals to collaborate on joint projects, communicate and share information without intermediation.

When a third party is not involved in a transaction, there is an increased risk the provider may not deliver, the service may be of lower quality or the buyer may default. To mitigate such risks, transaction costs and prices are lower. This is done by creating businesses that facilitate P2P transactions.

Today, online merchants provide the lion’s share of P2P services. Popular examples include:

  • AirBnB – property owners can lease all or a section of their property to short-term tenants.
  • Open-source software – the software code can be modified or viewed by anyone.
  • Uber – riders and car owners have a shared platform that offers a uniform service for taxi rides.
  • Etsy – producers of homespun goods and other crafts can sell their goods directly to the public.
  • BitTorrent – the anonymous file-sharing platform allows users to meet and swap media and software files.
  • eBay – interested buyers can access a private marketplace with different private vendors.
  • Spotify – you can stream real-time audio content on-demand using P2P networking.

Peer to Peer Trading in Blockchain

Blockchain can reduce the inefficiencies in share settlement as peer confirmation settle shares. There’s no need for auditors to verify trades, a custodian to confirm the number of shares held or a clearinghouse. Eliminating the middleman from the back office means lower record-keeping costs, as well as lower trading costs on the platform.

Unlike the current settlement of three working days, peer confirmation of trades allows for almost instantaneous settlements. For this to happen, blockchain requires participants to already have the money and shares to exchange. Shares would be a more liquid investment and the higher liquidity will translate into more investment into your shares.

The evolution of the P2P network and its central role has seen it cut inefficiencies within blockchain technology. Blockchain has made the domineering third party irrelevant as users can deal with each other across a secure decentralized network. Although each peer participating in the network is open to viewing, blockchain conceals participants’ data through cryptography.

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Assetz Capital P2P Lender

As the traditional banks continue to be less supportive in providing finance to many small and medium enterprises (SMEs), there’s increasing interest in peer-to-peer lenders willing to bridge the gap. Assetz Capital is one such P2P lender that we’ll review in this article.

Who is Assetz Capital?

Assetz Capital is the leading property-secured business P2P lender in the UK and Europe. They offer secured business loans to small and medium SMEs and are the second biggest general business P2P lender, behind Funding Circle. They offer loans to property developers and SMEs in the UK, funded by individuals and several institutional investors and companies.

Investment Accounts

Assetz Capital has a minimum investment amount of £1 and is open to international investors. However, you need a UK bank account and if you don’t have one, you can open it at Transferwise. There are no fees for investors and all Assetz Capital investment accounts are protected by a provision fund except the MLIA.

30 Days Access Account

For the most part, this account is hands off. You can deposit a small amount which should be credited in your account in less than two hours. The new 1% cashback offer on Assetz Capital 90-Day Access Account replaced the initial customer promotion. Investors who took advantage of this promotion will still receive their cashback payment.

Quick Access Account

The quick access account offers a 3.7% target rate, designed to provide immediate access to cash for investors in normal market conditions. There’s over £19 million invested in this account.

Other account types include the Green Energy Income Account (GEIA) with a 7% target rate, the Great British Business Account (GBBA) with a 7% target rate, and the Manual Loan Investment Account (MLIA) with 5.5% to 18% gross rate.

The Access Accounts are popular as over half of the investors utilise them and they’re approaching £170 million in investments. The lender has processed over £1 billion of withdrawals to-date from the Access Accounts.

Despite the underlying loans within the Access Accounts being between one month and five years in duration, the high investment flow into the accounts has allowed users to withdraw funds on time consistently. But supply and demand can vary while exit times are not guaranteed.

Whom Does Assetz Capital Lend To?

The lender comprises two divisions: Assetz SME Capital and Assetz Development Capital.

Assetz SME Capital provides secured loans to SMEs that have been trading for more than two years.

Assetz Development Capital provides secured lending to established property developers who have been trading for more than two years. Additionally, they offer “lend to let” secure loans to overseas clients wishing to invest in the buy to let property sector in the UK.

How Can You Use the Loan?

For Assetz SME Capital, loans are available to assist in business projects and future growth. For Assetz Development Capital, the preference is to lend for prime property purchases in prime locations. In the case for “lend to let” scheme, funds are availed towards buying quality buy to let properties.

With a loss rate of 0.46%, Assetz Capital ticks the correct boxes for a safe investment in the peer-to-peer lending for first-time investors. However, some Assetz Capital reviews online are discussing how the platform is confusing and frustrating, with some investors unhappy with the returns and manual investment process involved in some of the products.

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Can Dozens Money App Rival Monzo And Other Similar Fin-tech App Services?

Dozens is not a bank. They offer access to savings and current accounts while making them profitable. For only £100, you can earn a 5% return on your savings. Launched in January 2019, over 2,100 Dozens cards have since been issued, with 100 cards a day being sent to the more than 3,000 people on the waiting list.

How Dozens Work

Dozens offer a current account that helps you grow your money, encourage saving and finally invest. It offers several financial services including:

1). Current account – Dozens is yet to have a full banking license, so it’s currently not a full UK account. But, it will have an account number and sort code.

2). Cash savings – This will enable you to set aside money regularly, according to the set rules you decide. You will not earn interest on the savings, but you can transfer them back to your main account anytime.

3). Investment bond product – Already listed on the NEX stock exchange, the bonds will be £100 each and earn a 5% annual interest paid monthly.

4). Investment account – Yet to be launched, Dozens will allow you to invest your money. The minimum buy-in will be £1,000, and same as any investment, there’re risks of losing some or all your money.

5). A card – Dozens is already issuing cards to people on the waiting list. The cards are MasterCard and a bright yellow in color.

6). Great App – There’re four sections to the Dozens app: spend, save, track and invest. Spend is the current account, save is the savings account, track is your budgeting and invest is for stocks and shares investments.

7). Spending report – This feature shows your spending according to location, category, and size.

8). Budgeting service – You can save automatically by setting your own rules. Occasionally, Dozens will encourage you with cash prizes.

The 5% Interest Bonds

This is one of Dozens best features. Such high rates often mean a risky investment but the money you deposit with Dozens isn’t invested anywhere. The bonds are held within stocks and shares which are put into a separate trustee-controlled account. As a result, Dozens cannot touch it, your tax-free returns will not vary and the capital isn’t at risk.

The bonds are not risk-free as Dozens issued the bonds on the NEX stock exchange as a way for raising money. If the worst should happen, the FSCS offers investment protection up to £50,000, if your investment company fails.

In a bid to reward investors with smaller saving pots, Dozens will weight smaller funds more favorably. Bonds will be allocated from the smaller bids, scaling up until it depletes the monthly availability. This means the lower the bid, the more likely you are to get the bonds.

Should you get Dozens?

Same with any new banking ventures, due diligence is advisable before making any sizable investments. For Dozens monetisation plans to be a reality, people need to save and invest before any monies can be realised. The 5% bond is competitive enough and the fee-free overseas spending is likely to attract frequent travelers. If you have a small savings pot, the app might give you enough flexibility to get started.

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Seedrs Review And What To Expect

It’s now easier to invest in startups thanks to a new online trading platform called Seedrs. The platform allows you to invest in new businesses in the seed stage, or that are yet to raise any cash. You can invest as low as £10 to a maximum of £150,000.

About Seedrs

Seedrs is a UK based crowdfunding platform launched in 2009. It assists new businesses or investment projects to raise funds from individual or institutional investors. 2018 is Seeds best year yet with £195M invested on the platform and 186 successful pitches. It was also named the “Most Trusted” Global Equity platform in 2018.

How it Works

Startups can pitch to raise money offering investors an equity stake in the company. You can also call it equity crowdfunding or peer-to-peer (P2P) equity. The startup provides information about its product, plans, market dynamics, and achievements.

Apart from UK residents, Seedrs is open to international investors. Once you sign up, you can browse the pitches that are currently raising money. A pitch will remain open for 60 days but may close earlier if the startup achieves its goal early.

The equity share offered is stated. Say for example it’s 5%, and the startup wishes to raise say £50,000. To define the valuation the startup has applied, £700,000 will be the pre-money. So post-money, after the startup valuation is complete, will be £1M. The 5% equity share of the new investors represents 5% of £1M = £50,000. The valuation is based solely on what the startup deems appropriate. But if the startup aims higher than the investor demand, the funding will fail.

What Happens After the Funding?

As Seedrs acts as the nominee for the investors, it will complete all the paperwork with the startup. The nominee model means the startup only deals with Seedrs who represents all investors rather than deal directly with each one of them.

When funding a startup, investors don’t have to pay any upfront charges. But entrepreneurs have to pay a 7.5% charge once the startup achieves the cash target. Seedrs will charge the investor a fee of 7.5% on the profits the investor makes.

In return, Seedrs will manage your investment on your behalf. Although Seedrs may limit your voting rights in the startup’s AGM, you’ll receive quarterly updates on the startup’s progress.

Tax Advantages

The startup’s prospectus or pitch will highlight if the startup is eligible for EIS or SEIS. This can benefit British residents depending on individual circumstances and is subject to change. For more detailed advice, contact a qualified and certified tax advisor.

Seedrs Pros and cons

Pros

  • Strong track record with over £540M invested in startups
  • Large investment portfolios
  • Strong underwriting team
  • Regulated
  • Auto invest tool available

Cons

  • Investing in startups is risky and you can lose money as there’s no guarantee of returns.

Having provided assistance of over £500M for startups, Seedrs has managed to create a big database of investors. However, the company cannot make any investment recommendation for you. That will be your prerogative. Crowdfunding is not for the faint-hearted, but for sophisticated investors who are not afraid to take risks.

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What is NKN?

NKN (New Kind of Network) is a decentralised data transmission network powered by Cellular Automata. Incentivised by blockchain, the open-source group plans to change the design of the internet by improving security and ensure network neutrality.

Cellular Automata will operate the same way as Filecoin and IPFS but in the network domain. This means you’ll receive a token reward based on your data transmission capacity, instead of your storage space as is common with IPFS. But despite NKN’s ambitious goals and the relative infancy of the project, its support team is a group of talented individuals.

How Does NKN Token Blockchain Internet Work?

NKN wants to create a contemporary enhanced version of the internet. It will build the new version on blockchain technology with the aim of creating an internet that is decentralised, safe, active, shared, and owned by the community. This innovation is a decentralised data transmission network (DDTN). The extensive network of independent nodes will transmit data, acting as cellular automata which will change state based on a combination of received inputs and the state of its neighbors.

The team at NKN believes blockchain technology has already revolutionised two “pillars” of internet technology, including computing power (with bitcoin and Ethereum proof of work systems), and storage (with systems such as IPFS and Filecoin). NKN now wants the network infrastructure to run on blockchain.

NKN’s dense whitepaper mentions that the service will simplify the creation of dapps (decentralised applications) due to its low intermission, large bandwidth, and high scalability. But unless the group releases an API, it’s not clear how developers will use it. The company claims it will “tokenise” the network, encouraging users to share their bandwidth in exchange for currency.

NKN Service Analysis

Though relatively young, the NKN platform is planning to release a beta version of its network in the first quarter of 2019, and a full version in the third quarter. But as of March 2019, it’s not crystal clear what the company will release to end users. Currently, NKN seems more focused on creating back-end solutions that developers or service providers can use.

On the group’s Twitter page is a small internet service provider called Speedy Net. It offers fast broadband to rural areas as an early adopter of the technology. NKN claims the provider is based in the American Midwest, but a quick internet search yields result for a tiny British company. Though no information is available for this company, it’s encouraging to see interest in applying the technology.

Bottom Line

There’re many groups working with blockchain claiming to have created an innovative product. But most are using jargon to advance a rehashed and often ineffective product.
NKN is the opposite as they’re developing an amazing product. However, they need to improve their marketing to better explain it to the public. Computer scientists seem to have written the scholarly publications, but a robust public relations initiative could attract more investment and early adopters. Nevertheless, chances are high NKN’s technology could become universal in the future.

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Uphold Review: What Is It and How Does It Work

Although there are many cryptocurrency exchanges that are active within the crypto market, few are reliable and completely trustworthy. Exchanges such as Uphold have carved a niche at the top of the crypto food chain. This down to several unique features, transparency, attractive fee systems, and different noteworthy security features.

What is Uphold?

Uphold is a cloud-based platform with several functionalities including trading in cryptocurrencies and, offering a cloud-based digital wallet for storage. It offers services in over 184 countries, across 30-plus currencies’ (fiat and crypto), commodities with frictionless foreign exchange, and cross-border remittance for members around the world. Since its debut in 2015, Uphold has powered over $3 billion in transactions.

The Uphold platform combines an app model with payment connectivity to offer financial services to a global market. The platform empowers innovation in financial services by allowing app developers, and fintech partners to leverage the reach of Uphold through licensed relationships with banks and financial institutions around the world.

Uphold Core Features

Uphold allows members to convert, transact money assets, and secure storage. It currently supports popular cryptocurrencies including Bitcoin, Bitcoin Cash, Bitcoin Gold, Litecoin, Ethereum, Ripple, Dash, and Basic Attention Token. Members can exchange over 20 fiat currencies as well as four precious metals.

Uphold acts as a virtual wallet for its members as you can use the wallet to store both cryptocurrencies and fiat money. This feature alone makes Uphold more appealing than other exchanges as few offer such as complete package.

Uphold members get support for MasterCard and Visa. Members can send both crypto and fiat from one uphold member to another without limitations, and at no extra charge.

It’s worth noting that unlike other crypto exchanges and typical financial institutions, uphold stands out as a real-time transparent and verifiable service. This means anyone interested in viewing operations such as assets, transaction volumes, solvency, and other features can do so.

As part of its transparency features, Uphold boasts Reserve ledgers and Reserve chains. Reserve ledgers is a public record with all the exchanges made to Uphold assets. The latter is a real-time public record of all member transactions on the platform.

The main drawback is that Uphold is not an anonymous exchange, fees are on the higher side and it doesn’t have a 24/7 customer support service which relies on a ticket system.

How Does Uphold Work?

Registration on Uphold is free. Users enjoy various privileges including converting, transacting, transferring, storing, and withdrawing fiat and cryptocurrencies. In regards to cryptocurrencies, you can buy and sell all supported coins.

To access this feature, you have to qualify as a “verified member”. The verification process requires a member to submit several details. They include the date of birth, an active mobile number (to act as two-factor authentication), place of residence, ID passport or driver’s license details, and a clear passport photo.

The simple and straightforward exchange process even allows members to fund from a debit card. But you must first add funds in a traditional currency such as USD before transferring to the cryptocurrency of choice. Sending and receiving funds from one member to another is free. For currency conversions, variable mid-market exchange rates take precedence.

There’s no doubt Uphold stands out from other exchanges with its comprehensive services. It boasts one of the most versatile exchange platforms which acts as a wallet service, catering for the needs of almost every member. Furthermore, it’s one of the few regulated exchanges and their website is innovative and easy to understand.

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Cred Launches Secure Easy-To-Use Cryptocurrency

If you have enough balance in your crypto wallet but lack a healthy traditional credit history, it may be impossible to get a loan from a conventional lender. Thanks to blockchain technology, there are new lenders who assist crypto enthusiasts use their crypto assets as collateral to access finance. One of these lenders is Cred. Formerly Libra Credit, Cred offers fiat and cryptocurrency loans backed by digital currency and aims to provide access to credit anywhere, anytime.

What is Cred?

Cred is the brainchild of ex-PayPal executives Lu Hua and Dan Schatt. It made its debut in 2017 with the aim of providing “credit for the real world”. Its token sale in 2018 raised over $26 million in funding. A desktop platform for crypto-to-crypto/fiat lending went live in Q3 2018, while the mobile app was launched by close of 2018.

Cred’s mission is to solve the main issues that bedevil cryptocurrency consumers such as transparency, ease-of-access, and understanding. Many are the times’ consumers feel intimidated when looking to invest in cryptocurrency. According to Brendon McQueen, Founder & CEO of Cred, this is because consumers lack education, in the crypto industry, lack of trust in the industry, as well as confusing product offerings.

The unique position of Cred will address this issue head-on by offering an easy-to-use platform that allows users to track the progress of the cryptocurrency invested, receive daily market recaps, news updates, and learn about each coin before investing.

Cred Loans

Cred offers loans in a decentralised lending ecosystem based on the Ethereum blockchain. These loan products are ideal for the demand for credit that traditional banks cannot fulfill. The main target is people with crypto assets, first-time borrowers and citizens in developing countries.

The Cred ecosystem comprises a proprietary AI-based credit model for risk assessment and multiple partnerships with e-wallets, decentralised exchanges, stable coins, identity verification, and KYC.

You can access loans in a seamless digital lending process which involves 5 steps. This includes application, verification and credit assessment, confirmation, collateral deposit, and disbursement. A borrower can pledge any crypto- asset as collateral and receive loans in their desired assets.

Key features of the platform include:

  • Extensive exchange partnership network
  • Diversified sources of credit funds including individual lenders, financial institutions, and stable coin providers.
  • A collateral grade algorithm to verify the volatility of collateral assets
  • In-house proprietary AI-based credit models
  • Identity-verification platforms to outsource the verification process
  • Reduced-interest repayments when you use LBA (CRED’s native token) as collateral
  • Single digit interest rates
  • Fast access to credit

Why Buy Cred?

The blockchain ecosystem is easy to explore and conquer. According to the World Economic Forum, 10% of global GDP will be on blockchain by 2025.

In 2017, roughly 2.2 trillion of new corporate bonds were issued in comparison to $780 billion in new corporate equity. But despite its massive size, the debt markets face a myriad of issues. They include

  • Liquidity risks
  • Barriers to interoperability between markets and regions
  • The heavy concentration of players crucial to market operations create a single point of failure

Cred has one of the strongest team with solid development after ICO. Partnerships with UPA, Uphold, and Binance labs could help mass adoption of the platform, as well as create opportunities beyond the exchange listing. Given that 40% of the world’s population is unbanked, Cred could open the door for everyone to lend, borrow or invest. Though not completely risk-averse, blockchain-based lending platforms such as Cred can offer borrowers and lenders a transparent, global, rewarding experience.

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The Royal Mint Digital Silver Coin

The Royal Mint is offering investors tired with the poor returns from low-interest rates an opportunity to invest in silver in its new trading platform. Collectors and investors can now buy, trade and store bullion coins from The Mint which offers a range of three silver coins. They include the Britannia fine silver coins, Lunar coins of the Shengxiao Collection, and the Queens’s Beasts range of 2oz and 10oz silver bullion.

Why Invest in Silver Bullion?

Bullion is the term used to describe silver in bulk form. To calculate its value, you first base the mass and purity of the coin or jewelry which are traded via brokers, online platforms or in auctions.

Whatever your budget, Signature is an ideal way to trade and invest in physical silver coins or jewelry. With a minimum budget of £20, Signature allows you access to the precious metal market where you can buy a fraction of silver. Royal Mint will offer you a vault, which is one of the most secure sites in the UK to store your silver.

Investing in precious metals such as silver has many advantages. For starters, you have the benefit of touching or holding the silver coin. A bullion investment will also provide useful alternatives for diversifying your investment portfolio during uncertain economic periods. Despite silver recently falling 18% in value to $17 an ounce, it still boasts a big demand, particularly for jewelry in the emerging markets and among coin collectors.

It’s worth noting silver Britannia and Lunar bullion coins are exempt from UK Capital Gains Tax for UK residents, as its considered legal tender.

Why Invest in Silver?

After the introduction of silver bullions, the precious metal market is now accessible to the average investor. This is because smaller silver coins produced by The Mint provide a cheaper means for entering the market.

Investing in coins is seen as a more suitable option for investors making a modest outlay in precious metals. Considerations you should bear in mind when investing in bullions include:

  • Capital Gains Tax – Capital Gains Tax is an important consideration to make when investing in bullions. This is because all The Mint’s current range of silver bullion coins have legal tender status and are exempt from UK capital gains tax, for UK residents. But silver bullion coins are subject to VAT at the standard rate.
  • Resale – After you buy bullion, consider how you will sell it. As bullion coins have a certain coin collectors appeal, they are easier to sell than gold bars, which tend to sell for their intrinsic value.
  • Purchase premium – In terms of cost, as the quantity of silver bullion increases from 1g upwards, the purchase premium decreases. This is partly due to The Mint’s lower storage and manufacturing costs.

Other Investment Platforms

BullionByPost offers a service that allows investors to buy and sell a range of coins and bars. They store your metals for 0.65 % per year based on the value of the precious metal held in the vault. The minimum charge is  £10 per month inclusive of insurance.

Another service is BullionVault which allows users to buy and sell metals from each other, at prices set by the service provider. It allows clients to hold their silver in vaults controlled by BullionVault in either London, Zurich, Singapore, Toronto, or New York, depending on the client’s preference.

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UK Crypto Tax Policy Report

Her Majesty’s Revenue and Customs (HMRC), is the UK’s government agency responsible for collecting taxes, and overseer of other forms of the nation’s coffers. In December 2018, the tax agency released a comprehensive report explaining how it views crypto assets and taxation on holdings.

The report’s focus is on how to tax the crypto assets you own. The agency will further publish information on the tax treatment of crypto asset transactions involving businesses and companies.

Which Taxes Apply?

The HMRC document is a continuation of previous reports which treat assets more like property rather than a form of currency. The agency doesn’t consider crypto assets to be currency or money. This is a reflection of the position set out by the report from the Cryptoasset Taskforce (CATF). The taskforce categorises cryptocurrencies as either utility tokens, exchange tokens or security tokens.

According to the report, how to treat a token for tax purposes depends on the token’s use case, rather than its definition. The report explains that you will be liable to pay Income Tax and National Insurance contributions on crypto assets you receive from:

  • Your employer as a form of payment, transaction fee, from mining or airdrops
  • If you invest in tokens hoping their value will increase

Additionally, there may be instances where you could be running a business, which is carrying on a financial trade in crypto assets that have taxable trading profits. Though uncommon, Income Tax would take priority over the Capital Gains Tax rules in such cases.

Securities or Not?

Note that the HMRC doesn’t consider crypto trading to be the same as gambling. Such assets are more of securities. To simplify tax calculations, you can combine different assets rather than calculating the gains and losses on each specific asset. Look at the total value placed in the pool and compare that with the value at the end of the tax period.

Forks and Losses

Hard forks occur when one blockchain splits another one for improvements. The document outlines how forks of a blockchain may affect taxation, especially hard forks which cause the chain to split forming new tokens.  The document explains, “A new crypto asset can only be disposed of if the exchange recognises the new crypto asset. If the exchange doesn’t recognise it, the position of the blockchain will not change, to show individual owning units of the new crypto asset. HMRC will consider difficult cases as they arise.”

Other provisions account for assets which lost value, if tokens are defrauded from the investor, stolen, or if you lose your private keys. In regards to the latter, HMRC advises that you can now claim your crypto asset has a “negligible value” which could if approved allow you to claim a loss.

Crypto asset exchanges may only keep records of transactions for a short period. In some instances, the exchange may no longer be in operation when you complete a tax return. It’s your prerogative to keep separate records for each crypto asset transaction. This includes the type of crypto assets, transaction dates, number of units, bank statements, and the cumulative total of investment units held.

The HMRC document is precise and well-written.  It’s also rejuvenating to see the British government shun the ‘Crypto bad’ mentality, popular in some quarters. Treating crypto assets as regular income or investments will make trading in them much easier as most taxpayers, and tax professionals will be more familiar with the processes.