Transcription
In just 8 months, governments will know all of the crypto transactions you have ever done on centralized exchanges and even on some DEXes. The era of keeping a little stack of undeclared crypto on the side will be a thing of the past.
Now, we've read the comments, too. A bunch of crypto maxis saying, "Why cash out? Just keep everything on your cold wallet and take what you need for living expenses through P2P." The problem once these automatic crypto reporting rules come into force, nobody's going to want your undeclared coins, especially in the European Union and the UK and Australia, Canada, the US, they are closely following suit.
Over the next few minutes, I'm going to break down the last few countries where you will be able to cash out your cryptos directly even after 2026. So you can bookmark this video and watch it in a couple of months when the trap snaps shut. So let's dive in how cashing out will look like after the crypto asset reporting framework comes into force as well as the last tax-free havens that will give you some breathing room.
Here's the problem. Governments, they know that they can't outright ban crypto. That would be impossible. It's decentralized. You would literally have to cut off the internet in order to stop it. So, they're going for the next best option, and that's sealing off every single exit ramp. Soon, cashing out your coins without declaring every single detail about yourself will be like smuggling cash through airport security.
Starting with January 1st of next year, all exchanges operating in the European Union and the UK and soon to be also the US, Canada, and Australia will automatically report all of your crypto transactions to the tax man. And that includes sales, transfers, wallet balances, airdrops, NFT flips, even staking income, all tied to your verified identity. You can think of DAC 8 and KARF as the crypto versions of the banking surveillance you know very well FATCA and CRS. Under DAC 8 all of the EU countries will get your information and under KARF the five eyes countries are trying to implement the same exact dragnet.
Now I bet a bunch of hodlers watching this are just going out of their minds saying why doesn't this guy get it? Just keep your cryptos on a cold wallet. Only cash out on a need to basis P2P. And I'm trying to tell you that those coins on that cold wallet will become unwanted. Let me explain to you in a simple way. If you don't declare your coins to tax authorities, it will be a crime. Just ask Roger. They'll be considered tax fraud. But I bet you that if I didn't declare these 5, heck, it even came from a bank heist a crime. Every single small business out here would still accept it. And by the way, it has a serial number. So technically speaking, it could be traced. They could call up the bank and all, but on a large scale, cash is untraceable.
Meanwhile, that serial number for cryptos is etched on a public blockchain except for Monero. And with AI surveillance sharpening every single year, with chain analysis getting better, all of your cryptos that you've been storing on that cold wallet for years untouched can still trigger alarms. And if you'll want to spend the crypto from the cold wallet or cash it out via P2P, the burden of proof to prove the source of funds shifts to the person receiving your crypto. They'll be the ones who will have to explain to the tax authorities or the banks where that crypto came from. And if they can't, then all of a sudden their accounts get frozen. They'll be questioned, not you.
And that's why we actually believe that OTC dealers are going to pretty much vanish from CARF countries like the EU, the US, or Canada. And if they don't, then the commission rates are just going to skyrocket. Most people, they'll have to do OTC deals in offshore jurisdictions like Thailand, the UAE, or Turkey. But the thing is that the OTC dealer is going to give you a wire from an undesirable country. So, you'll still have to do a bunch of accounting work to prove the source of funds to the banks.
Now, since I believe that 90% of you won't have an exit plan until these regulations come into force, let's lay it out as if we are post 2026. You can come back to this video then. when those regulations hit and get some insights.
The first and easiest option to cash out undeclared, no source of funds crypto is Northern Cyprus. Why? They just really don't care where the money came from. It's as simple as that. And more importantly, because it's an unrecognized country by pretty much every place in the world except Turkey. Your home country can't ask it for any information. You can literally be sitting in your home country, buy as much property, cars, whatever, enjoy it in the island, and nobody will know about it. Unless, of course, you're some Pablo Escobar type figure.
Now, when we mentioned it a couple of months ago, it was a bit difficult for foreign non-residents to open bank accounts. And now in parliament, they're actually discussing an asset peace law where for a 3% tax, they're pretty much allowing you to bring in as much money as you want into the country and open bank accounts. That includes with cash, with gold, silver, with euros, dollars, and obviously crypto. No source of funds required. And then you can buy your properties, cars, whatever. If you don't want to pay any tax, you can still obviously go through the free zone company, though it requires more bureaucracy.
Now, the second option would actually involve you relocating physically to a crypto friendly country. Right now, CARF is being implemented by 53 jurisdictions. The usual suspects being Australia, Canada, Europe, UK, the US, but interestingly enough, even some tax havens like the Cayman Islands, Gibraltar, the Channel Islands. So you look into the countries and Dubai is not on the list. So that would be one place to start with. They obviously have zero taxes on cryptos and no income tax for personal gains. If you have crypto with documentable sources, it's clean. Then you can just buy yourself a property. You can get tax residency. Pretty straightforward.
If not, there is still one legal loophole. It would be paying yourself a salary from a foreign company. though you would need to register a branch locally. The key is structure. You want to make sure that you do not trigger permanent establishment rules and that means your job can only be auxiliary or preparatory. That means human resources, accounting, market research, IT support, data collection. In plain simple English, the job cannot be something that brings in the money into the business. It can only be backend support. And if done right, your salary is taxed at 0%. You get a clean banking statement with a residency, a local ID, and you can even build up your credit score to buy property with loans from banks. But don't think that you can just declare a million dollar salary for your market research gig. That'll raise red flags. They'll just look up the average salary for your job position. you're basically capped at a midlevel income. Dubai is really starting to enforce these rules. It's no longer 2-3 years ago. So for larger sums, you're actually going to have to build an offshore structure with real accounting, real compliance, real substance. It's no longer the plug-and-play turnkey approach.
Now, if Dubai is too expensive for you or you just don't like the city vibes, then the next option that comes to mind is Thailand because it's very crypto friendly as well as livable and pretty cheap. Now, just like Dubai, on paper, it seems like Thailand is restricting its tax laws and enforcing them, but in reality, the bureaucracy is super slow and cash is still king. If you have the source of funds for your cryptos and you can actually prove that you made it prior to 2024, you can actually legally cash it out into a Thai bank without paying any taxes. But that's not what most foreigners do. Russians and many expats, they use the unofficial OTC dealers that are littered all across the island and they'll give you very favorable rates. They'll give you the Thai baht exchange all of your USDT.
Here's the caveat. Thailand is part of the Common Reporting Standards and just a few days ago they actually raided a few of these unofficial crypto exchanges. So if you're going to be moving there for tax purposes and become a resident, you're basically gambling that they're going to be dragging their feet, that enforcement is going to be minimal, but there's a chance that you'll have to relocate in a couple of years.
Other countries not on the CARF list that are good for larger crypto cash outs will include Panama, Turkey, and Georgia. Panama will actually give you a permanent residency for $300,000 in a property. It is a bit on the pricier side, and the banks aren't really great for keeping crypto long-term. You're better off with an offshore EMI or a foreign bank. Turkey, on the other hand, is a bit more expensive to get residency. It's $400,000, but you get a passport as well. With Turkey right now, they don't really care where your crypto came from, but it's a similar situation to Thailand where they're now discussing the MKK and ESPA regulation. Who knows when it comes into force and how stringently they will enforce it.
And then finally, Georgia used to be cheap, now a bit more expensive due to the Ukraine war. The problem with Georgia again is cashing out into banks. They don't really like cryptos. So, you would have to buy the property directly. You can't really use OTC cash outs into fiat.
Here's a pro tip. If you're going to be buying property in Georgia or Turkey, do not buy directly from the developers. What they do is a lot of times they actually advertise that they take cryptos directly. So, it seems very easy, seamless. The problem is though that they take fat commission checks and their prices are inflated. you're not going to make a return on your investment. Instead, you can use a local lawyer and they're the ones who speak the local language. They can negotiate on your behalf and they will get the secondhand real estate. Basically, what the locals are buying.
Now, all these offshore paths absolutely work, but it involves one thing, leaving. You actually have to get residency somewhere else, and that includes with Northern Cyprus. If you want to ever cash it out from the island, if you want to stay home, spend your crypto in your own country and cash it out into first-tier banks like HSBC, BNP Paribas, or UBS. That takes more structure. You're going to have to have a proper business structure with real accounting, flexible accounting, and make everything look good on paper. And I know in my previous video, a lot of people they said blah, that's too much hassle, too much bureaucracy. Well, that's what it costs to get a lot of money into reputable banks, not just some EMI or a second-tier residency option. And for a lot of people, it's absolutely worth it if you get to buy stuff back home.
Another angle that we're currently trying to explore is cashing out large amounts in Monero. It's one of the best privacy coins out there. I mean, there's a reason why both exchanges are delisting it and governments are banning it. It works. The problem is cashing out larger amounts, which is why I'll be speaking at Monero in two months in Prague. and hopefully we'll meet a couple of good OTC dealers over there and maybe meet some of you in person.
Anyway, if you want to see my previous video on a bigger outline on how flexible accounting works for crypto cash outs into reputable banks, you can check it out over there. But that's it for today's presentation. If you enjoy this type of content, share with a friend or comment down below. It will help boost the YouTube algorithm. But that's it for today. I'll be seeing you next time. Bye-bye.