Vous êtes sur la page 1sur 36

Are You Prepared for a Crypto Tax Audit?

By Teeka Tiwari October 18, 2018

“My cryptocurrency taxes are a nightmare.”

Over the last year, I’ve received hundreds of emails from subscribers asking about
cryptocurrencies and taxes, such as:

Hi, Teeka. I’ve been following you for over two years and followed your crypto
recommendations with reasonable success. However, I’m disappointed that you
haven’t provided any tax-related information about your recommendations. Several crypto
exchanges you recommend are outside the United States. This has caused me a significant
accounting effort… and I suspect many of your subscribers have no clue about this filing
requirement that comes along with heavy penalties for the failure to file. – Robert T.

Gentlemen, is there an internet source that helps with the accounting required to do income taxes
based on crypto trading? (Doing this by hand is a killer!) – Roger R.

Many of us who have been with you for a while and have made several trades have reporting
requirements to make with the IRS. I would like an article on how to best meet these requirements. –
Dennis E.

I share these frustrations. I’ve wanted to offer my readers a definitive tax solution since 2016, but it’s been
impossible for a couple of reasons…

First, the IRS is useless when it comes to providing direction. (You can read the IRS’ “guidance” on the tax
treatment of virtual currencies right here.)

And second, even trusted certified public accountants (CPAs) flounder when answering the most basic
crypto-related tax questions.

For instance, I gave one CPA (who came highly recommended) my 2017 crypto tax file. He just about had a
stroke when he saw how complex it was.

At $200 per hour, he billed me enough to pay for a nice addition to his house. And even then, he still gave me
bad advice. (I’ll tell you more about that in a moment.)

To make matters worse, the IRS is getting serious about enforcing taxation on crypto gains.

For instance, the IRS paid blockchain intelligence firm Chainalysis nearly $2 million to look for tax cheats.
And in February 2018, crypto exchange Coinbase said it would turn over 13,000 client account records to the

The writing is on the wall. Very soon, the IRS will be able to peer into every single crypto transaction on any
U.S.-based exchange.

Obviously, I can’t provide you with tax advice. I’m not qualified to do that. That’s why I’ve been scouring the
world for a tax solution I could recommend to you.

In May 2018, I uncovered a young man working on a solution to this important problem.

He’s created a tool you can use to collect and organize all of your crypto trade data into a usable format.
Your CPA can use it to figure out your tax liability.

It’s a solution I wholeheartedly recommend.

From Rescue Choppers to Rescuing Taxpayers

Standing outside a crypto meeting in Brooklyn, New York, I found myself rapid-firing questions to an earnest-
looking young man. As we talked, I found he was a start-up entrepreneur with the most unlikely background.

This millennial has the youthful appearance of a Starbuck barista—but the academic and professional
background of a seasoned corporate operator.

He has a chemistry degree from the U.S. Air Force Academy and an MBA from the University of Chicago
Booth School of Business. (That’s the same Chicago Booth that spawned more Nobel laureates in
economics than any other school, save Cambridge University in the UK.)

As a mission commander for the U.S. Navy, he commanded four search-and-rescue choppers. He was
deployed to Iraq twice, and his mission was a simple: to rescue wounded civilian and military personnel.

His name is Pat Larsen.

When I discovered he was working on a tax software for cryptocurrencies called ZenLedger, I was intrigued.

He told me about his project, and I immediately knew it was a service my subscribers needed to hear about.
At the time, Pat asked me not to write about it. He said it wasn’t ready for primetime yet… but it would be by
October 2018.

Pat’s a man who can hit a deadline. To his credit, his project is now up and running… and it’s awesome.

So in this month’s issue, I’m not making a new crypto recommendation. Instead, I’m going to recommend the
best crypto tax software I’ve found to date.

Although this isn’t a traditional Palm Beach Confidential pick you can invest in, it’s one of the most important
issues you will ever read.

Let me be clear… Neither my publisher nor I have any financial stake in Pat’s service. And we don’t receive
any payment for recommending it.
But I’ve used it, and I love it. It’s given me a credible and defendable position to take if the IRS asks how I
accounted for my crypto taxes.

Come tax season, you’ll be thankful you used it, too.

A Nasty Tax Surprise

One big surprise I learned from Pat’s ZenLedger software was that if I held more than $10,000 in a
foreign crypto account (i.e., Binance), I would have to file a Foreign Bank Account Report (FBAR, or
FinCEN Form 114) with the Financial Crimes Enforcement Network (FinCEN). This is a compulsory
disclosure of a foreign account.

According to the FinCEN site:

A United States person that has a financial interest in or signature authority over a foreign
financial account must file an FBAR if the aggregate value of the foreign financial account
exceeds $10,000 at any time during the calendar year.

I had asked my CPA about the FinCEN filing requirements, and he assured me I didn’t have to file.

It was only last week when I went through the final ZenLedger website that I discovered I do have to
file an FBAR. The CPA I used was no slouch, either… But he clearly gave me bad advice. I contacted a
new CPA, and we rectified the situation by filing an FBAR.

Again, I can’t tell you what to do. But if staying compliant to the best of your ability is important to
you—it certainly is for me—I suggest you talk to your CPA about the FBAR.

Welcome to ZenLedger
As I told you, the name of the software is ZenLedger. And I recommend it because it just works.

(It bears repeating: I’m not a tax accountant, so I’m not qualified to provide tax advice. What I’m sharing with
you in this month’s issue is just what I’ve learned… But you should neither rely on it nor construe it as tax
advice. For tax advice, please consult a qualified CPA or tax professional.)

ZenLedger is a web-based application that collects and organizes your cryptocurrency trade data. It then
figures out your cost basis. From there, it calculates your short-term and long-term capital gains and losses.

The software then populates all of that information into Schedule D and 8949 forms. It also provides a
complete audit trail document that identifies every one of your transactions. It’s a dream come true for U.S.
cryptocurrency investors.

It couldn’t be any simpler to use. To access ZenLedger, you’ll need to go to Zenledger.io. The website has a
free demo version you can use. This free version will allow you to upload up to 10 transactions.

I strongly recommend you sign up for the free version and follow along with the rest of the report below.
To give you the basics of how ZenLedger works, I asked Pat some of the most frequently asked questions
he receives about the software. His answers are below.

(You’ll also find step-by-step instructions on how to use ZenLedger at the end of this month’s issue.)

Teeka: What do cryptocurrency investors need to know about taxes?

Pat: Even though we don’t have perfect clarity on how exactly to handle cryptocurrencies and taxes, it’s
important you don’t hide your head in the sand on the issue. The audits are coming.

As you may recall, the IRS won a lawsuit that forced Coinbase to provide user data—including third-party
information—related to bitcoin transactions conducted by U.S. Coinbase customers from 2013 to 2015.

Although the IRS did not get all the records, Coinbase did send the IRS data on approximately 13,000

The IRS is likely to begin targeting other exchanges and individual wallets as well. Cryptocurrency exchange
desk ShapeShift adopting know-your-customer (KYC) and anti-money-laundering (AML) compliance tells you
where things are going.

We also know that the IRS hired Chainalysis to scan the blockchain for potential tax cheats. Records show
Chainalysis has received nearly $2 million in funding from the IRS to date.

That’s why it’s important not to ignore cryptocurrencies when it comes to taxes. We want everyone to make
smart investments without getting in trouble.

With ZenLedger, we can keep you on the right side of the law, as well as make the process a whole lot easier
for you and your CPA.

Teeka: What is ZenLedger, and what does it do?

Pat: ZenLedger is tax software for cryptocurrency investors. It makes it easy for you to import
cryptocurrency transactions, calculate gains and income, and autofill tax forms like 8949, Schedule D, and

Further, ZenLedger prepares a number of useful documents such as capital gains reports and income
reports, and it’ll keep adding more.

We cover all the major crypto and fiat currencies. And we work with major cryptocurrency exchanges such
as Binance, Bittrex, and Poloniex.

In December 2018, ZenLedger will release a tool that shows you what coins are in the black and which are in
the red, by exchange. This will let you sell the losers and harvest a tax loss asset.

Teeka: Does ZenLedger do your taxes or replace your CPA?

Pat: ZenLedger does not do your taxes or replace your CPA. But we put all your data together, so it’s much
easier for you or your CPA to file.

Speaking of CPAs, with ZenLedger, tax filers can use the CPA Access feature to easily share their data with
their CPAs.

Plus, we also have the CPA Suite for CPAs. It enables CPAs to manage all their clients’ portfolios from a
single interface. This allows CPAs to save a lot of time and access a new group of clients.

Teeka: Does ZenLedger handle cryptocurrency transactions other than buys and sells?

Pat: Yes, ZenLedger can help with other cryptocurrency transactions, such as initial coin offerings (ICOs),
airdrops, mining, income, lost coins, and hard forks.

Teeka: How much does ZenLedger cost?

ZenLedger is free for up to 10 transactions, including all the basic and premium features. Our freemium
pricing gives you the chance to test out all the features of our tax planning software without spending a
dime upfront. You’ll see your capital gains and losses numbers, and you can decide if you want to purchase
higher levels of the software.

We have a three-tier structure:

Stingray is $99 per year, with up to 100 transactions.

Shark is $199 per year, with up to 1,000 transactions.

Whale is $299 per year, with unlimited transactions.

Remember, by using ZenLedger, you’ll stay on the right side of the law… you’ll save yourself and your CPA
tons of time… and you’ll keep yourself from paying too much in taxes.

It’s well worth the price.

(Important Note: For a limited time, ZenLedger is offering a special 99% discount on its services for Palm
Beach Confidential subscribers. See the grey box below for more details and the coupon code.)

Teeka: Is ZenLedger only for U.S. tax filers?

Pat: ZenLedger isn’t just for Americans. It can be used by anyone in the world who’s using multiple ledgers
and would like those transactions easily aggregated and cleaned up into a readable format.

By the end of the year, ZenLedger will have foreign currency support and a tax-loss-asset harvesting tool.

Teeka: If I run into problems, is there someone I can talk to?

Pat: Of course. Customer service is very important to ZenLedger. We aim to be fully transparent—with an
easy-to-use interface and friendly customer support.

You can always reach us via Intercom, which is our chat feature located right on the website. Alternatively,
you can email us at hello@zenledger.io. We’ll get back to you within 24 hours.

In the near future, we plan to add how-to videos for each screen in ZenLedger.

And we’re also working on a book that will come out soon, The CPA Guide to Crypto Taxes.
Special Deal for Palm Beach Confidential Subscribers
99% Off Coupon

Coupon Code: Palm99

Use this code to purchase your 2018 tax reports, and you’ll have access through October 15, 2019.
And you can file an extension in April 2019. You’ll also get to use ZenLedger’s tax-loss harvesting
tool when it’s released in December 2018.

You won’t be asked to supply this coupon code until you have uploaded your data and see your
capital gains and losses total for free.

Bringing It All Together

Pat Larsen’s team at ZenLedger has created the most complete, user-friendly cryptocurrency tax software I
have seen yet.

The ZenLedger platform is the only accounting program I’ve found that covers all coins, all major exchanges,
and most major wallets—and that provides actual, live customer support.

I wish I had been able to provide you with better tax suggestions last year, but the tools just didn’t exist then.
Now, with ZenLedger, crypto investors finally have an IRS-defendable process they can use to determine
their crypto capital gains.

You can access this page to find out more about ZenLedger. And continue reading after this month’s Where
to Be Invested Now to learn how to set it up.

Recommendation: You can visit the ZenLedger website here. See the bottom of this report for a step-by-step
guide on how to use the software. We’ll also be adding it to the Crypto Corner soon.

Important Note: Palm Beach Research Group and its affiliates do not provide tax, legal, or accounting
advice. Keep in mind that this is general tax information. You should consult your own tax, legal, and
accounting advisors regarding your specific financial situation.

Where to Be Invested Now

Why Bitcoin and Cryptocurrency Don’t Need an ETF to Go Mainstream

By Teeka Tiwari and Greg Wilson

“I predict the internet will soon go spectacularly supernova and [next year] catastrophically collapse.”

Those were the words of Robert Metcalfe. Though it may not seem like it, Metcalfe knows what he’s talking
about when it comes to technology. He invented Ethernet, founded computer network company 3Com, and
formulated Metcalfe’s law.
He made that prediction in December 1995. But to be fair, the internet was a mess at the time… The
Netscape browser was only a year old. There was no Google. And you could lose your connection if
someone picked up the phone in your house.

But the potential was there. More and more people were starting to use the internet. And with time, the
technology improved.

As you can see from the chart below, adoption continues to increase to this day:

It’s all part of the “digital transformation.”

Definitions vary, but it basically means using digital technology to solve traditional problems. And when done
right, digital transformation changes how you operate and deliver value to customers.

We’ve been talking to you for months about the two forces that shape digital transformation: innovation and

Sometimes innovation leads to increased adoption. And sometimes increased adoption leads to more
innovation. The order isn’t important.

What’s important is that it transforms industries.

One of the best examples is Amazon.

It started as an online bookstore in 1994. At the time, it was revolutionary—buying books on the internet was
a foreign concept. But Amazon survived, expanded, and innovated.

Among its many innovations was the key addition of Amazon Marketplace in 2002. That enabled third-party
sellers to use Amazon’s platform and sell their items online.

As you can see from the chart below, use exploded (as measured by Amazon’s sales)…

Another great example of digital transformation is Netflix.

Founded in 1997, Netflix let you rent DVDs by mail instead of having to go to the video store. Many didn’t
think the concept would survive, including rival Blockbuster. It famously turned down Netflix’s offer to buy it
for $50 million in 2000.

Netflix is now worth roughly $150 billion today. And it got there through adoption and innovation…

For Netflix, the key innovation came in 2007, when it started offering content through streaming. With
streaming, not only did you not have to go to the video store, you didn’t even have to go to your mailbox.

And as you can see in the chart below, the number of Netflix subscribers has exploded since then…
What we see with both examples are adoption and innovation at work. Both companies benefited by making
life easier for their users. Amazon made it easier to sell items online, and Netflix made it easier to consume

We draw this parallel because the same thing is happening in the cryptocurrency space today.

Missing the Forest for the Trees

It’s easy to get lost in the onslaught of news in the blockchain and cryptocurrency space.

But when you step back and focus on the key events, a clearer picture emerges…

We’re seeing many events coming together that will bolster adoption and innovation—and send future prices
much, much higher:

1. The first is Bakkt. It’s the global digital asset exchange being put together by the Intercontinental
Exchange (ICE), owner and operator of the New York Stock Exchange.

Regular readers are already well aware of this event. Teeka has been sharing all the details with his
subscribers for weeks now.

Bakkt will provide institutional money managers with custody and a regulated, secure platform.

With Bakkt, many of the pain points for institutional money managers will vanish.
2. Next up is TD Ameritrade. The company recently announced a partnership with an exchange called

ErisX is going to be like Bakkt, a regulated digital asset exchange with custodial solutions.

This news is big because it will not only help institutional investors, but retail investors as well.

TD Ameritrade boasts over 11 million funded customer accounts with $1.2 trillion in assets under

Can you imagine what will happen when average investors can buy crypto directly from their
brokerage accounts? The pain of signing up for new exchanges, figuring out public and private keys,
and having concerns about safe storage disappears.

3. And don’t forget about Fidelity Investments… It recently announced it would launch crypto products
before the year is out.

That’s big. Fidelity is even bigger than TD Ameritrade, with 27 million customer accounts and $6.9
trillion in assets under custody.

Fidelity has been coy on exactly what those products will be. One rumor is that it will start its own
digital asset exchange. Another is that it will offer crypto buying directly from brokerage accounts.

Either way, Fidelity will make it easier to use cryptocurrencies.

And those are just three examples. Goldman Sachs, Bank of America, Morgan Stanley, and others have all
come out with crypto-related news recently as well.

Notice that I haven’t even mentioned a bitcoin exchange-traded fund (ETF) yet.

The bottom line is the pace of adoption and the pace of innovation in the cryptocurrency space is

And the great part is you still have time to take advantage of it today.

Cryptocurrency Adoption Is Accelerating

The chart below shows the number of users of Blockchain.info’s cryptocurrency wallet across the last few
As you can see, even with the crypto bear market this year, adoption is continuing to grow.

And finally, here’s a quote from Ben Horowitz, co-founder of venture capital firm Andreessen Horowitz (which
has a $300 million crypto venture fund called a16z crypto):

I think that there is probably more developer activity in crypto than in anything we’ve seen since the

The pace of adoption and the pace of innovation in cryptocurrency is accelerating.

And it won’t be long before the major pain points that have kept institutions and individuals out vanish

So where are the best buys right now? Find out below.

Bitcoin (BTC)

On October 5, we got big news when Yale announced it was investing in a new venture capital fund called
Paradigm. This is important since Paradigm invests in cryptocurrencies and blockchain technology. The
$400 million fund is being led by Fred Ehrsam, the co-founder of Coinbase. Yale’s investment amount was
not disclosed.

The news is also important because Yale is a pacesetter when it comes to endowment investing. Since
1985, Yale has shifted capital from traditional asset classes to alternative asset classes such as venture
capital, leveraged buyouts, and real estate. The strategy has worked well. Yale has an impressive 11.8%
annual return over the last 20 years.

Other universities are keeping a close eye on what Yale is doing. And it wouldn’t shock us if other schools
and institutions quickly followed suit.

Action to Take: Buy bitcoin (BTC) up to $25,000.

Ether (ETH)

This month, Ethereum will implement the second half of Metropolis, which is stage three of its roadmap. The
upgrade, called Constantinople, will implement five proposals to improve network efficiency and pave the
way for scaling.

One proposal is written by founder Vitalik Buterin and will improve performance in state channels. The
upgrade is expected to launch on the mainnet by the end of October.

Action to Take: Buy ether (ETH) up to $550.

Peerplays (PPY)

Peerplays recently added National Football League (NFL) and Major League Baseball (MLB) games to
BookiePro, its decentralized sports betting app.

It also released a new update of its BookiePro.fun software. Users can update the app from the website. The
update fixes a few bugs and improves performance.

Action to Take: Hold Peerplays (PPY).

Factom (FCT)

Blockchain-as-a-service company Sphereon announced in September that it launched its first live customer
on the Factom blockchain. While the customer was not revealed, Sphereon will be using Factom for the
anchoring and signing of documents.

Since each document is given a unique, hash-based digital fingerprint, the company will have a tamper-proof
audit trail. The company is expected to record one million transactions over the course of the year.

Per Sphereon co-founder Maarten Boender, two additional customers are supposed to go live in the next
month as well.

Action to Take: Buy Factom (FCT) up to $50.

Dash (DASH)

Dash continues to see increasing adoption of its cryptocurrency for payments, especially in Venezuela.
Today, over 3,000 businesses around the world accept Dash for payments—nearly half of which are in
Venezuela. And adoption in Venezuela continues to surge as the country fights rampant inflation.

With increasing adoption, new services are popping up as well. For example, Venezuela-based company
Dash Text released its beta, an app for Dash transactions over text. The service is already available on
Movistar, one of the country’s major telecom companies.
In other news, Coinify recently integrated Dash into its point-of-sales platform. Coinify is a virtual currency
payment service provider in Europe with access to over 30,000 merchants and 70 countries.

Action to Take: Buy Dash (DASH) up to $800.

Ripple (XRP)

Ripple commercially launched its xRapid product. xRapid cuts out nostro accounts by using XRP as a source
of liquidity. This significantly reduces liquidity costs for banks and financial institutions.

MercuryFX, Cuallix, and Catalyst Corporate Federal Credit Union are the first commercial customers. CEO
Brad Garlinghouse predicts dozens of banks will be using xRapid by the end of 2019.

In other news, Ripple announced a charitable effort called Ripple for Good. It’s a social impact program with
the goal of improving financial literacy and inclusion around the world. Ripple is committing $100 million to
the initiative.

Action to Take: Buy Ripple (XRP) up to $0.30.

OmiseGo (OMG)

OmiseGo’s partnership with McDonald’s Thailand is progressing nicely. Per Hester Chew, Chief Executive of
McThai, “Integrating with Omise, we were able to solve quite a few things around customer experience.”

Chew also noted a dramatic increase in credit card usage and reduced drop-offs at checkout by switching to

Action to Take: Buy OmiseGo (OMG) up to $20.

Cindicator (CND)

Cindicator is moving towards giving out monthly rewards in CND tokens instead of ETH. It’s a major
milestone for the Cindicator ecosystem.

First, awards in CND will help expand the overall number of holders for CND. For example, had August
rewards been paid in CND, the number of token holders would have increased by 18%.

Second, by holding CND, analysts will become an even more integrated part of Hybrid Intelligence.

And third, switching to CND will increase the value of the rewards.

Action to Take: Buy Cindicator (CND) up to $0.30.

Aion (AION)

As we told you, it’s time for the Aion token swap. During the token swap, Aion will convert its ERC-20 AION
token to its native AION token on a one-for-one basis.

The swap process will run until the end of November 2018.

You have two options to complete the token swap… The first is to move your coins to an exchange that
supports the swap: Binance or KuCoin. The second is to map your tokens using the Aion Token Bridge.
We’ll send you full, detailed instructions and a video to walk you through mapping your tokens in the coming

Action to Take: Swap your AION tokens before the end of November 2018. Buy Aion (AION) up to $10.

Gifto (GTO)

Gifto recently announced a partnership with NEM (XEM). It will test the NEM blockchain to potentially use it
for some of its blockchain-based services. It also wants to improve scalability and its user experience.

Gifto is also always looking for unique ways to bring new members to its Gifto and Uplive platforms. To that
end, it recently hosted the “After the Rose” show for The Bachelor: Vietnam. Gifto saw upswings in GTO gift-
sending in Vietnam as a result.

Action to Take: Buy Gifto (GTO) up to $0.80.

FunFair (FUN)

The first FunFair-powered casino, called CasinoFair, launched at the end of September. CasinoFair features
slot games as well as casino games such as blackjack, baccarat, and European roulette. It will initially be
available in five jurisdictions: Canada, Switzerland, Finland, Norway, and Thailand. More are to follow.

Action to Take: Buy FunFair (FUN) up to $0.04.

Steem Power (STEEM)

At the end of September, Steem successfully launched Hardfork 20. The upgrade prepares the Steem
blockchain for Smart Media Tokens (SMTs).

SMTs enable anyone to launch their own custom tokens on the Steem blockchain. Steem will launch SMTs
in 2019.

Action to Take: Buy Steem Power (STEEM) up to $3.50.

Stellar Lumens (XLM)

Lightyear.io, the for-profit arm of the Stellar Development Foundation, acquired blockchain start-up Chain.
Chain is backed by Citigroup, Nasdaq, and Visa.

In other news, the Stellar Foundation is close to launching StellarX, its decentralized exchange. The platform
expects to launch next month.

Action to Take: Buy Stellar Lumens (XLM) up to $0.35.

VeChain (VET)

VeChain released its financial executive report in September.

VeChain noted it has received significant interests from enterprises, governments, institutions, and others
for partnerships. And in the arrangements they have entered, all participants have agreed to hold VET for the
long term.
Looking forward, VeChain says it has formed a new strategic partnership with an undisclosed entity that will
boost the VeChain platform. An announcement is expected soon.

Action to Take: Buy VeChain (VET) up to $0.016.

Short­Term Cryptocurrency Portfolio
Iconomi (ICN)

Iconomi is moving to a traditional legal structure, and it’s establishing a joint-stock company in
Liechtenstein. It will also be tokenizing its shares under the ticker of eICN.

All eligible holders of ICN tokens will be given the right to convert their ICN tokens into shares of the
Liechtenstein holding company.

Eligibility requires having Tier 2 verification on the Iconomi platform.

We can tell you already that U.S. investors are not Tier 2 eligible.

Those who are not eligible can sell their ICN on the open market. Alternatively, Iconomi will buy the coins
back starting in November.

The rate is 1 ICN for 0.0019 ETH. This figure is based on the average ICN price over last 180 days as of
September 27, 2018, plus 5%. It comes out to roughly $0.43.

With ICN trading around $0.36 as we go to print, the best course of action is to wait for the conversion to be

We’ll keep you posted and provide instructions later.

Action to Take: Buy Iconomi (ICN) up to $2.

Lisk (LSK)

Lisk reached an important milestone at the end of August when it successfully released Lisk Core 1.0 to the
mainnet. Lisk also released Lisk Mobile, its mobile wallet app. It’s available for both Apple’s iOS and Google’s
Android operating systems.

Action to Take: Hold Lisk (LSK).

Basic Attention Token (BAT)

This month, Brave Browser announced a collaboration with Civic, an identity-verification service. Publishers
will have the option of using Civic’s services to securely collect BAT earned through Brave and the BAT

The benefit is that users and publishers can interact in a transparent manner, with no intermediaries
harvesting user data.

Action to Take: Buy Basic Attention Token (BAT) up to $0.35.

BitShares (BTS)
As we wrote you, Bittrex will be delisting BTS on November 5, 2018.

If you hold BTS on Bittrex, you’ll want to move your coins into a BitShares wallet or onto the Binance

Action to Take: Move your BTS into a wallet or onto Binance before November 5. Buy BitShares (BTS) up to

Syscoin (SYS)

Blockchain Foundry, parent company of Syscoin, recently announced the release of Blockmarket Desktop
3.0, its decentralized web application.

Its main feature is the decentralized marketplace, where you can openly trade goods and services like you
can on eBay. Other features include an asset creation portal, identities and aliases, messaging, escrow, and
storing certificates on the blockchain.

Action to Take: Buy Syscoin (SYS) up to $0.30.

Zcoin (XZC)

Over the summer, Zcoin updated its roadmap—and it just hit its first milestone, implementing Dandelion on
its blockchain.

Developed by researchers at Carnegie Mellon, MIT, and the University of Illinois, Dandelion provides
additional privacy by concealing IP addresses from transactions broadcasted on the blockchain.

Dandelion will also be implemented on the bitcoin blockchain.

Action to Take: Buy Zcoin (XZC) up to $20.

Waves (WAVES)

Waves hit a number of important milestones in the last month:

Waves CEO Sasha Ivanov met with Joseph Muscat, the Prime Minister of Malta, and other Maltese
government officials. Waves and Malta are discussing potential scenarios for the use of the Waves
platform in the state government and corporate sectors.

Waves partnered with Rostec, a Russian manufacturing firm with $19 billion in annual sales. The
company plans to use the Waves platform to standardize its data collection and analysis processes.

And the Waves platform recently hit its one millionth wallet download.

Action to Take: Buy Waves (WAVES) up to $4.

Bitcoin Cash (BCH)

Roger Ver, CEO of Bitcoin.com, is planning on starting a crypto exchange. Right now, the team is figuring out
whether it wants to build its own exchange or find a partner. Either way, Ver plans on making Bitcoin Cash
the base currency for trading pairs—which would increase the adoption of BCH.
Action to Take: Buy Bitcoin Cash (BCH) up to $1,400.

Salt Lending (SALT)

Salt expanded its lendable areas by 200% over the last month, adding 15 U.S. states and an additional seven
territories including: Brazil, Hong Kong, Switzerland, Bermuda, Vietnam, Puerto Rico, and the United Arab

It also added Litecoin (LTC) to its platform. That means you can secure cash loans on Salt today with BTC,
ETH, or LTC.

Action to Take: Buy Salt Lending (SALT) up to $20.

Qtum (QTUM)

Qtum celebrated its one-year anniversary by releasing Qtum Core wallet v0.16.0. It’s Qtum’s biggest update

A key change in v0.16.0 is that it has SegWit technology enabled by default. Recall that this is the same
technology used by bitcoin to make transaction sizes smaller and to expand the capacity of the network.

Qtum plans on creating its own Lightning Network, similar to bitcoin, which will help Qtum scale to 50,000
transactions per second. The plan is to have a public testnet of the Qtum Lightning Network sometime in the
second quarter of 2019.

In other news, Qtum recently announced that its decentralized application (dApp) development platform is
now available on Amazon Web Services (AWS).

This means enterprise and end users now have an easy-to-use, cloud-based solution for developing and
building apps on the Qtum platform. There’s also the additional benefit of being able to run a Qtum node
without having to spend a large amount of resources on infrastructure.

Action to Take: Buy Qtum (QTUM) up to $65.

Bancor Network (BNT)

In September, Bancor announced BancorX, its cross-chain decentralized liquidity network. Bancor will be
expanding its protocol to EOS. And BancorX will enable users to perform instant EOS-based token
conversions against its automated smart contracts, also known as Relays.

Right now, BancorX is in the beta-testing phase, but it’ll soon to launch on the mainnet. It will start with 11
EOS-based tokens. You can find the list here. The EOS-based tokens listed on Bancor will soon be instantly
convertible to any Ethereum-based tokens through the Bancor Protocol.

As for ETH-based tokens available on Bancor, the number is now up to 119.

Action to Take: Buy Bancor Network (BNT) up to $5.

Litecoin (LTC)

The Gemini Exchange recently announced support for Litecoin (LTC), and trading started on October 16.
Salt Lending, where you can borrow against your cryptocurrencies, just added Litecoin as a collateral option.

And Bitnovo, a cryptocurrency debit card provider in Europe, just launched support for Litecoin.

Action to Take: Buy Litecoin (LTC) up to $175.


ICON successfully released ICON MainNet Version 3.0. It implements smart contracts on the ICON platform.
It’s also significant in that it provides the foundation for creating dApps on the ICON platform.

In other news, ICON signed a memorandum of understanding (MoU) with SK Planet, a subsidiary of South
Korea’s largest telecom company, SK Telecom. SK Planet is an internet platform development company. And
it will be incorporating ICON’s blockchain technology into its mobile services.

Action to Take: Buy ICON (ICX) up to $5.50.

Sandstorm Gold (SAND)

Sandstorm reported that it sold 14,300 attributable gold-equivalent ounces during Q3 2018. And
approximately 85% of the ounces came from operations run by major and mid-tier mining companies. The
result is unchanged from the same period last year, and the company is still on target for its 2018 forecasts.

Action to Take: Buy Sandstorm Gold (SAND) up to $8.

Crypto Corner

Be sure to visit the Palm Beach Confidential Crypto Corner. If you have questions about anything
cryptocurrencies, chances are you’ll find the answers there.

There, you can access our research and step-by-step videos on web-based wallets, hardware wallets,
and other cryptocurrency services.

You’ll also find our wallets and exchanges list. It will show you which exchanges you can buy all our
recommended coins on and which wallets we recommend holding them in.

Guide: Adding Your Trade Data to ZenLedger

There are two ways to add data. The first is by linking ZenLedger to your crypto accounts using an
application programming interface (API).

[API is the software intermediary that allows two applications to talk to each other.]

The API allows ZenLedger to link to your account directly. But don’t worry… It can’t do anything other than
read your trade data.

Here’s how it works for a popular exchange like Coinbase…

Step 1:

Below, you’ll see the “import” page. Simply click on the “Select Exchanges” drop-down menu, and a
list of all the major exchanges will come up.

When you select Coinbase, you’ll have two choices: “Import with API” or “Upload CSV.”

Step 2:

With Coinbase, use the API option because it includes everything ZenLedger needs to make its

When you click API, the following screen will come up:
Step 3:

Enter your API key and your API secret. The instructions to the right-hand side of the image above
walks you through how to do this. This was a little tricky for me, so I’m going to break it down step
by step for you.

Log into Coinbase, then click “Settings.” Click “API Access,” and then click “New API Key” (see image

This is where you’ll set the rules for what wallets and what information ZenLedger can see in your

Select all wallets and the specific permissions checked in the image below.
Here are the specific permissions again in a format that may be a little easier to read:

Once you have the correct permissions checked, scroll down to the bottom of the permissions page
and click “Create” (see highlighted portion below).
After you click “Create,” a pop-up screen will show your API Key number and API Secret number.

Once you click away, Coinbase will never show them to you again so YOU MUST MAKE A COPY OF
THEM RIGHT AWAY. You can either screenshot them, print them, or copy and paste them into
another document.
Once you have your API Key and API Secret, click back over to the import page in ZenLedger and
click “Import with API.”

Enter your API Key and API Secret. Then, click “Import Transactions” (see image below).

Step 4:

Once the import is done, click the orange button on the bottom, right-hand side of the screen called
“Finish Importing Transactions.”

You’ll be taken to a page that shows your short- and long-term capital gains and losses.

That will take you to a page that looks like this:

Step 5:

Most likely, you’ve had multiple accounts over your crypto trading history. So what you will do next is
click the “Import more transactions” button (highlighted in the previous image above).

That will take you back to the main import page. What’s important to note is that not all exchanges
offer support for APIs. Poloniex, for instance, does not.

Importing Data From Binance

Binance makes you download CSV data in 90-day chunks. We have no idea why it does this. But you
can still download and import all your trading data from the time Binance opened its doors last year.

Here’s what you’ll need to do:

First, choose Binance from the list of exchanges on ZenLedger.

Next, click “Import with API.”

As you can see, you’ll need to enter your API Key and API Secret. Instructions on how to do
so are on the right-hand side of the page.

You may need to enable APIs on Binance to proceed. To do so, go to your account settings
and click on “Enable” under the API section. Then, follow the prompts from Binance.
Once you’ve obtained your Binance API Key and API Secret, enter them in the appropriate
boxes on ZenLedger and click “Import Transactions.”

It will take a few minutes to import your transactions.

Once completed, click “Finish Importing Transactions.”

Now, all of your transactions should be imported into ZenLedger.

Next, go through your transactions to properly mark them. This way, you can identify forks
and airdrops and distinguish between sells and transfers. Simply click on the three-dot icon
at the end of the transaction if you need to mark it differently.

Once completed, ZenLedger will prompt you to import more transactions from other
exchanges if necessary.

Importing Using CSV

If your exchange does not support APIs, you will have to log into your crypto account and download your
trade history in a CSV file format. So for instance, with Poloniex, you would need to download the following

Deposit History

Withdrawal History
Trade History

Step 1:

When you log into Poloniex, click “Balances” (see below).

From the drop-down menu, select “Deposits & Withdrawals.”

Step 2:

On the page that comes up, scroll down and click:

This will take you to the “Deposit & Withdrawal History” page.

You need to download your deposit and withdrawal history. The deposit history is found in the top
half of the page (see image below):

You’ll need to scroll down for the Withdrawal history. It looks like this:

Step 3:

Once you’ve downloaded your deposit and withdrawal histories, scroll to the top of the page and
click “Looking for your Trade History?” (See below.)
That will take you to your trade history page. You need to click on “Export: Complete Trade History”
(see below).

Step 4:

Once that’s done, you simply need to go back to ZenLedger and select Poloniex from the drop-down
menu on the import page. Then, click “Upload CSV.”

Drag and drop the CSV files into the import section of ZenLedger (see below):

Just like the Coinbase example, ZenLedger will crunch the numbers and add it to your tax file.

Importing Data From Wallets

Continue doing this for all of your crypto accounts and your online and offline wallets.

Step 1:

For wallets you control (like Trezor, Nano, Blue, etc.), just click the “Wallets” tab and click “Go to
Wallets” (see below).

Step 2:

A page of supported wallets will come up. Click the wallet you want to import, and follow the simple
instructions provided by ZenLedger.

You can even do manual entries if you want by clicking “Manual Entry” on the main import page.
Back To Palm Beach Confidential

Name Symbol Buy Date Open Price Curr Price Return Yield Stop Loss Action

Sandstorm Gold Ld SAND 07/22/2016 $5.17 $4.14 -19.9% 0.0% 52.3% Trailing Buy up to $8

Orezone Gold ORE-V 10/21/2016 $0.75 $0.66 -12.0% 0.0% 50% Trailing Buy up to C$0.75

SPARK THERAPEUTICS ONCE 12/22/2016 $47.33 $50.75 7.2% 0.0% 50% Trailing Hold

Name Symbol Buy Date Open Price Curr Price Return Yield Stop Loss Action

Peerplays PPY/USD 11/23/2016 $1.29 $0.77 -40.8% 0.0% None Hold

Storj STORJ/USD 04/20/2017 $0.34 $0.35 5.1% 0.0% None Buy up to $1.00

Bitcoin BTC/USD 04/18/2016 $428.00 $6518.60 1423.0% 0.0% None Buy up to $25,000

Dash DASH/USD 05/25/2017 $132.69 $161.69 21.9% 0.0% None Buy up to $800

Ether ETH/USD 04/18/2016 $9.00 $207.54 2206.0% 0.0% None Buy up to $550

Ethereum Classic ETC/USD 05/18/2017 $11.15 $9.93 -10.9% 0.0% None Buy up to $25

Factom FCT/USD 03/16/2017 $4.20 $4.15 -1.2% 0.0% None Buy up to $50

Lykke LKK/USD 11/23/2016 $0.05 $0.03 -26.6% 0.0% None Hold









Buy up to $3.50

Buy up to $20

















Buy up to $45


Buy up to $0.35
Name Symbol Buy Date Open Price Curr Price Return Yield Stop Loss Action

Aion AION/USD 01/02/2018 $6.13 $0.43 -93.0% 0.0% None Buy up to $10

Ripple XRP/USD 05/25/2017 $0.27 $0.47 75.5% 0.0% None Buy up to $0.30

Gifto GTO/USD 02/15/2018 $0.34 $0.07 -78.5% 0.0% None Buy up to $0.80

NEO NEO/USD 02/16/2017 $0.13 $16.81 13292.0% 0.0% None Buy up to $22

Cindicator CND/USD 12/18/2017 $0.04 $0.02 -41.0% 0.0% None Buy up to $0.30

Quantstamp QSP/USD 05/04/2018 $0.20 $0.04 -79.1% 0.0% None Buy up to $0.25

FunFair FUN/USD 06/21/2018 $0.02 $0.01 -39.4% 0.0% None Buy up to $0.04

VeChain VET/USD 03/12/2018 $0.04 $0.01 -68.3% 0.0% None Buy up to $0.016

0x ZRX/USD 09/20/2018 $0.54 $0.90 67.0% 0.0% None Buy up to $0.75


Name Symbol Buy Date Open Price Curr Price Return Yield Stop Loss Action

NEM XEM/USD 05/25/2017 $0.24 $0.10 -59.8% 0.0% None Buy up to $0.30

Iconomi ICN/USD 05/22/2017 $0.94 $0.34 -63.8% 0.0% None Buy up to $2

Wings WINGS/USD 06/02/2017 $0.45 $0.16 -64.0% 0.0% None Buy up to $1

Lisk LSK/USD 06/02/2017 $1.30 $2.94 126.4% 0.0% None Hold

Basic Attention Token BAT/USD 06/07/2017 $0.27 $0.21 -20.2% 0.0% None Buy up to $0.35

Bitshares BTS/USD 06/21/2017 $0.32 $0.10 -67.8% 0.0% None Buy up to $0.40

Syscoin SYS/USD 06/21/2017 $0.20 $0.10 -52.0% 0.0% None Buy up to $0.30

Waves WAVES/USD 06/26/2017 $4.00 $2.02 -49.5% 0.0% None Buy up to $4

MaidSafeCoin MAID/USD 06/28/2017 $0.47 $0.19 -60.4% 0.0% None Buy up to $0.50

Golem Network GNT/USD 06/28/2017 $0.55 $0.16 -71.3% 0.0% None Buy up to $0.60

Aragon ANT/USD 06/28/2017 $2.63 $0.73 -72.2% 0.0% None Buy up to $8

Bitcoin Cash BCH/USD 11/13/2017 $1234.41 $451.57 -63.4% 0.0% None Buy up to $1,400

Zcoin XZC/USD 06/21/2017 $16.02 $10.05 -37.3% 0.0% None Buy up to $20

Binance BNB/USD 11/29/2017 $1.88 $10.02 433.2% 0.0% None Hold

Salt SALT/USD 12/06/2017 $5.96 $0.60 -90.0% 0.0% None Buy up to $20

Eos.io EOS/USD 11/14/2017 $1.44 $5.46 279.1% 0.0% None Hold

Qtum QTUM/USD 01/08/2018 $56.28 $3.98 -92.9% 0.0% None Buy up to $65

Dragonchain DRGN/USD 01/08/2018 $4.17 $0.19 -95.4% 0.0% None Buy up to $5

Cardano ADA/USD 01/12/2018 $0.77 $0.08 -89.9% 0.0% None Buy up to $0.90

Power Ledger POWR/USD 01/17/2018 $0.77 $0.18 -76.8% 0.0% None Buy up to $0.85

Worldwide Asset Exchange WAX/USD 01/08/2018 $1.16 $0.07 -94.0% 0.0% None Buy up to $1.40

Bancor-Network-Token BNT/USD 04/23/2018 $4.04 $1.32 -67.3% 0.0% None Buy up to $5

Litecoin LTC/USD 05/04/2018 $159.34 $54.15 -66.0% 0.0% None Buy up to $175

ICON ICX/USD 05/04/2018 $4.20 $0.73 -82.6% 0.0% None Buy up to $5.50