PUGNATORIUS S.A.

31/12/2023

BITCOIN MORTGAGE VS. BITCOIN SALE

A Bitcoin-backed mortgage is the meaningful alternative to the concept of paying for a beach villa, city condo, or trophy property in Bitcoin. It opens up the traditional buy-borrow-die concept to Bitcoin millionaires. Especially in times of high potential price increases, it should be seen as a superior choice to liquidating Bitcoin wealth and subsequently witnessing the numbers go up.

In most cases, purported offers to pay for real estate in Bitcoin are not wallet-to-wallet transactions. Instead, it describes the use of a financial intermediary ("Bitcoin mule") as a middleman who takes his hefty cut of the cryptocurrency conversion margin from the real estate transaction. This has already been described in great detail.

The Bitcoin mortgage market is still in its infancy, but funding should not require a down payment, tax returns or credit scores. Depending on the jurisdiction, regulatory uncertainties should be avoided through sophisticated deal structuring.

The article below describes the transformation of the buy-borrow-die concept into a new buy-offshore-hodl-mortgage-die strategy. Don't sell your Bitcoins for rapidly depreciating assets while 2024 holds exciting promises for Bitcoin investments.

Bitcoin offshoring is the key factor in adapting the classic BBD (buy, borrow, die) strategy for Bitcoin millionaires and other crypto asset holders.

30/12/2023

BITCOIN - BETTER AND STRONGER THAN OWNERSHIP

To understand Bitcoin, you have to realize that the game-theoretic background is its qualification as "stronger than ownership". Implemented by its code, all the weaknesses that a buyer of an asset faces (am I buying in good faith from the real owner? Is the seller competent to complete the transaction, is there any reason to contest and legally challenge? etc. etc.) are not relevant. The transfer from wallet to wallet is immutable, no one can undo the transaction.

There is no need to "protect" Bitcoin by analogous application of ownership rules. Bitcoin needs no such protection. Whoever has the exclusive knowledge of the private keys owns the Bitcoin. The seller loses his right, because his private keys no longer grant him those Bitcoins.

The Bitcoin thief (this term is technically incorrect for cryptographic ownership) may be obligated to return the "stolen" goods, but these ownership-related terms are misleading in the blockchain world. Compensation can't be enforced on the blockchain, even if the Bitcoins are blacklisted by blockchain analysis tools.

So don't call Bitcoin "the best form of ownership," because that doesn't do Bitcoin justice. The article "Bitcoin corporate ownership" describes why Bitcoin does not grant ownership, why corporate can't hold Bitcoins, and why it is a good idea to offshore your Bitcoin wallet.

BTCOwnership

Ostentation, rather than cool thinking, is behind the decision to own Bitcoins as a business. There are sound reasons why it remains so unpopular and rare in the corporate world. Economic aspects such as business flexibi...

29/12/2023

THE HODL, BORROW, DIE CONCEPT FOR BITCOIN MILLIONAIRES

The concept of "buy, borrow, die" refers to a financial strategy introduced more than 30 years ago that involves purchasing appreciating assets, borrowing against them, and ultimately passing them on to heirs while minimizing tax implications. This strategy is often associated with estate planning and wealth preservation.

Wealthy investors purchase assets that have the potential to increase in value over time, such as real estate or stocks. They then borrow against the acquired assets. By leveraging these assets, individuals can access liquidity without triggering capital gains taxes. When the individual dies, the assets are transferred to heirs. The key advantage here is that the stepped-up cost basis at death can significantly reduce or eliminate capital gains taxes for the heirs when they eventually sell the inherited assets.

In general, the BBD strategy can be used by Bitcoin millionaires for the same purpose. However, there are specific aspects to consider that are inherent in the nature of Bitcoin and other crypto assets. Long-term investment strategies like BBD could be perfectly combined with Bitcoin Offshoring, a modern digital asset protection strategy. The article hints at some of these aspects, and more should be analyzed based on the specific case and needs of the Bitcoin holder.

Bitcoin offshoring is the key factor to adjust the classical BBD (buy, borrow, die) strategy for Bitcoin millionaires and other crypto asset hodlers.

08/12/2023

DIR GEHÖRT DEIN BITCOIN ÜBERHAUPT NICHT!

Es ist eigentlich völlig unstreitig, und so steht es beispielsweise auch in einem Rechtsgutachten des Justizministeriums NRW in Düsseldorf, aber es ist trotzdem nicht bei jedem angekommen: Am Bitcoin gibt es keinen Besitz und kein traditionelles Eigentum, sondern nur eine Rechtsposition neuer und ganz eigener Art. Man kann sie Kryptoeigentum nennen, aber das bedeutet nicht, dass die deutschen gesetzlichen Regelungen zum Eigentum direkt oder analog anwendbar wären.

Der Beitrag erläutert die Einzelheiten und die daraus folgenden rechtlichen Konsequenzen. Bitcoin funktioniert aufgrund seiner faktischen Eigenarten auch ohne nationale sachenrechtliche Regelungen.

Die kryptographisch gesicherte Inhaberschaft am Bitcoin ist kein Eigentum im herkömmlichen zivilrechtlichen Sinne. Diese Einordnung als Rechtsposition eigener Art (sui generis) führt zu ungewohnten Konsequenzen.

05/12/2023

BITCOINRECHT - ES GIBT KEIN EIGENTUM AM BITCOIN

Die kryptographisch gesicherte Inhaberschaft am Bitcoin ist kein Eigentum im herkömmlichen zivilrechtlichen Sinne. Diese Einordnung verleiht dem Bitcoin-Inhaber daher kein absolutes Recht. Die Rechtslage bedarf an vielen Stellschrauben dringend einer höchstrichterlichen Klärung oder einer gesetzlichen Anpassung.

Die kryptographisch gesicherte Inhaberschaft am Bitcoin ist kein Eigentum im herkömmlichen zivilrechtlichen Sinne. Diese Einordnung verleiht dem Bitcoin-Inhaber daher kein absolutes Recht. Die Rechtslage bedarf an vielen...

19/11/2023

TOKENIZATION IS THE MODERN-DAY VOODOO DOLL ON THE BLOCKCHAIN

The term voodoo doll commonly refers to an effigy used in magical-religious practice, which aims to connect spirits with mortals. These dolls are attached to humans by spiritual force, for example by weaving a person's strands of hair into the doll. This makes it possible to harness malevolent spirits to harm such a person. He or she can be controlled, especially hurt, by inserting needles into the doll's body. The concept rests on this voodoo doll being the material incarnation of a person.

Tokenization puts voodoo on the blockchain. Being the same concept, the tokenized asset is neither marked nor governed by any blockchain legislation. The owner does not need to know if there is one or many tokens representing his asset. He falls under traditional ownership and transfer legislation. Nonetheless, the token owner has the voodoo religious belief that the blockchain gives him control over the asset owner and the asset, with the pegged token being the incarnation of the real-world asset.

It is quite unclear in which cases the tokenization shamans truly believe that the blockchain itself has a magical effect on a real-world asset, a spooky remote effect where the laws in the textbooks are overridden by "I want to believe". Or it's just blockchainwashing, a technique to use the term blockchain to mislead an ill-advised customer into an investment.

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Tokenization is the modern-day voodoo doll on the blockchain: The term voodoo doll commonly refers to an effigy used in magical-religious practice, which aims to connect spirits with mortals. These dolls are attached to ...

15/11/2023

BITCOIN OFFSHORING PROTECTION AGAINST ROBBERY

Bitcoin Offshoring is a modern digital asset protection strategy to shield crypto assets from government intervention. Such intrusion includes the obligation to report Bitcoin wealth and have that data made public. Would you like to know more?

"Sweden is probably one of the least safe countries to be active in the cryptocurrency sector in at the moment. I've personally left Sweden and I don't expect to return until the laws around personal privacy change," said Eric Wall.

14/11/2023

CORPORATE BITCOIN OWNERSHIP - AN ILLUSION?

Cryptographic ownership is based on the question of who knows the private keys of the wallet and who possesses the piece of paper containing the seed words. A legal entity itself cannot "know" the private keys. The knowledge of its organs and other natural persons cannot be easily assigned, unless that person has the intention, and sometimes the obligation, to know on behalf of the corporation. The wallet is not really controlled by the company, "control" being a factual concept.

While the company's ownership is documented in accounting and shown on the balance sheet, there is no documentation or evidence of who actually holds and controls the private keys. This is an inherent design feature of the unique and decentralized nature of crypto assets. For audit and corporate governance purposes, the key holder will not willingly disclose the public keys. Corporate ownership accountability and control justifications are not based on sound principles.

Under the "not your keys, not your coins" doctrine, it may even be arguable whether the company has true legal ownership or only economic ownership as the ultimate beneficial owner of the Bitcoins. This shows once again that cryptographic ownership (digital ownership) does not fit easily into the traditional property law regime.

There are other uncertainties and doubts. What are the legal consequences of passing private keys or seed words to another person? This is typically not a coin transfer, but something in the middle of a transaction. Although such a scenario is not reserved for the corporate sector, it could be considered as a tool and module for corporate tax planning and asset protection strategies.

None of this has anything to do with multi-sig transactions with multiple participants. The ability to use Bitcoin's Taproot upgrade to require, say, two out of three participants to sign a transaction with their individual keys leaves the discussed corporate ownership issues unresolved.

After all, the impossibility for a legal entity to have its own individual knowledge creates a serious disadvantage against a human being who can be the exclusive owner of the private key.

Bitcoin Offshoring is a modern digital asset protection strategy to shield crypto assets from government intervention. Its typical process involves the transfer of Bitcoins from the investor's wallet to a separate offsho...

12/11/2023

BITCOIN OFFSHORING - BEWARE OF THE COPYCATS

Just a few days after my speech at the Adopting Bitcoin conference in San Salvador, the topic was cheaply copied by Knightsbridge Exchange, a dubious institution that obviously does not comply with any exchange regulations.

We see this product piracy as a recognition of the need for . However, the conference keynote did not reveal any Bitcoin offshoring secrets of this modern digital asset protection strategy.

Bitcoin Offshoring: Navigating Global Finances Bitcoin

10/11/2023

THE TRAVEL RULE AS A LEVEL ONE BITCOIN BAN

Starting November 17, 2023, crypto exchanges under the Travel Rule legislation will only allow outbound transfers to other registered TRUST VASPs (Travel Rule Universal Solution Technology Virtual Asset Service Providers). Highly regulated and restricted entities will no longer allow their customers to send their own Bitcoin to wallets that aren't controlled by other highly regulated and restricted entities.

In other words, the Travel Rule Compliance jurisdictions are starting a Level 1 Bitcoin ban. The TRUST VASPs are forced to close the borders to self-hosted wallets and act completely against the free and open nature of the Bitcoin protocol. This provides an easy off-ramp for higher levels of Bitcoin bans. Bitcoin can't be blocked until they do.

Transferring Bitcoin outside of travel rule restricted countries is therefore a reasonable concept. The need for is becoming more and more obvious. Those who fail to prepare are prepared to fail.

Bitcoin Offshoring is a modern digital asset protection strategy to shield crypto assets from government intervention. Its typical process involves the transfer of Bitcoins from the investor's wallet to a separate offsho...

06/11/2023

is the misuse of the brand by falsely associating activities and businesses with the cryptocurrency or its technological advantages without actually requiring or utilizing Bitcoin's characteristics or capabilities.

01/11/2023

GOOD REASONS WHY COMPANIES SHOULD NOT BUY BITCOIN

MicroStrategy Inc. under its charismatic CEO Michael J. Saylor has been investing its corporate profits in Bitcoin for some time now. These Bitcoins are directly held by the U.S. public company and appear on its balance sheet. However, tens of thousands of other corporations worldwide have analyzed whether to follow this behavior and have decided not to do so. Contrary to Mr. Saylor's predictions, MicroStrategy is, until today, the only major company on the global stage to invest its profits in Bitcoin.

Notwithstanding this failure of adopting Bitcoin in the corporate sector, crypto exchanges and virtual asset service providers are increasingly promoting and offering Bitcoin for businesses. The main reason might be that these new B2B markets are not as cost competitive and make it possible to add paid consulting services by their crypto sales agents. Also, corporations might be more naive Bitcoin buyers and an easier prey for crypto-marketing schemes.

The disadvantages of corporate Bitcoin ownership can't be denied. On a global scale, the tax treatment for individual Bitcoin ownership is more tax friendly. Also, the individual is much more flexible in case of a tightening of the tax regime. He is even able to leave the tax jurisdiction, while his company is typically unable to do so. As another aspect, Bitcoin reporting requirements, audit issues and various other bureaucracy make corporate ownership a hassle and in the worst case a nightmare.

Corporate Bitcoin purchases are typically more expensive, while the private Bitcoin buyer has significantly lower transaction fees. Worse, the corporate purchase process is more cumbersome and slower than the quick individual purchase. Typically, know-your-client regulations require more customer due diligence for a business than for an individual. This includes more documentation, more investigations, and a slower off-ramp process.

However, there is an easy and fully compliant shortcut to bypass the company's purchase of the Bitcoins from the exchange or middleman/broker. The entrepreneur simply needs to buy the Bitcoins himself and, after a grace period, sell them to his company at arm's length. If such a process is properly executed, it can't be qualified as a problematic straw purchase.

After all, it is not an insurmountable hurdle if the money is in the company and not with the investor. If a distribution of profits is not desired, the funds can flow from the company to the shareholders as a loan and be used there for private Bitcoin purchases. There are proven and tested structures for a simple and solid solution.

The article will be continued soon with a second part, which will show the problems of holding the Bitcoins for the company (multi-sig, etc.) and a third part, which will explain how the drawbacks of corporate ownership can be turned into an advantage in the case of Bitcoin Offshoring.

Bitcoin Offshoring is a modern digital asset protection strategy to shield crypto assets from government intervention. Its typical process involves the transfer of Bitcoins from the investor's wallet to a separate offsho...