Japan considers regulation of bitcoins in wake of Mt Gox failure
After the failure of the Mt Gox exchange in the wake of a huge theft, authorities are struggling to find ways of regulating digital transactions
Japan is looking at ways to tax bitcoin transactions, a report said yesterday, in the wake of the spectacular failure of the Tokyo-based Mt Gox exchange after a half-billion-dollar theft.
The finance ministry and the national tax agency are studying possible rules that could govern transactions using the digital currency, the newspaper reported.
Authorities believe purchases made with bitcoins can be subject to consumption and corporate taxes, even though the unit is not a legal currency, the said without citing sources.
"However, many countries including Japan do not have concrete frameworks to levy taxes [on bitcoin transactions]," the said, leaving officials basically stumped.
Japan's sales tax is set to rise from 5 per cent to 8 in April.
Mt Gox, which at one time reportedly processed 80 per cent of global bitcoin transactions, last week sought bankruptcy protection from the Tokyo District Court and admitted that it had lost half a billion US dollars worth of the digital currency.
