<p>In the U.S., FinCEN has specific rules regarding money transmitter laws for those providing money services.  Users who simply patronize a money service are almost never considered money transmitters or providers of a money service.  So, in your example, the answer is likely to be no -- no, a withdrawal from one service and a deposit to another would not likely cause you to need to report the transaction to the government. </p>

<p>As far as taxes, that too is jurisdiction-specific.  In the U.S., capital gains taxes may apply however in your example there was no gain so there would then likely be no need to report the transaction on the tax forms.</p>

<p>Disclosure: I am not a tax advisor.</p>

CC BY-SA 3.0
2013-09-09T14:20:36.743Z
Actually, in the last sentence of my question I extended the question towards earning exchange commission. So, I'd assume that one would have to pay capital gains taxes on the earned amount?
Murch
CC BY-SA 3.0
2013-09-06T08:56:28.790Z
2013-09-06T08:56:28.790Z
Stephen Gornick
<p>Let's say a ripple user were to extend trust to both Bitstamp and Snapswap to owe him 100 USD. He offers to trade USD-Bitstamp-IOU for USD-Snapswap-IOU at an exchange rate of 1:1.</p>

<p>Would he have to register this activity with a USGov institution? Would taxes on this transactions be due?</p>

<p>What if he did the same with an exchange rate of 1:1.01 and vice versa, i.e. taking an exchange commission of 1%?</p>

<ripple><legal><ripple-gateways>
Legal question regarding rippling balances between Ripple gateways
Murch
# Legal question regarding rippling balances between Ripple gateways

(Asked by: username_0 on 2013-08-27)

Let's say a ripple user were to extend trust to both Bitstamp and Snapswap to owe him 100 USD. He offers to trade USD-Bitstamp-IOU for USD-Snapswap-IOU at an exchange rate of 1:1.

Would he have to register this activity with a USGov institution? Would taxes on this transactions be due?

What if he did the same with an exchange rate of 1:1.01 and vice versa, i.e. taking an exchange commission of 1%?

**Tags:** ripple, legal, ripple-gateways


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## 1 answers

### Answer by username_1 on 2013-09-06. Score: 1

In the U.S., FinCEN has specific rules regarding money transmitter laws for those providing money services. Users who simply patronize a money service are almost never considered money transmitters or providers of a money service. So, in your example, the answer is likely to be no -- no, a withdrawal from one service and a deposit to another would not likely cause you to need to report the transaction to the government.

As far as taxes, that too is jurisdiction-specific. In the U.S., capital gains taxes may apply however in your example there was no gain so there would then likely be no need to report the transaction on the tax forms.

Disclosure: I am not a tax advisor.

> **Comments:**
> **username_0**: Actually, in the last sentence of my question I extended the question towards earning exchange commission. So, I'd assume that one would have to pay capital gains taxes on the earned amount?  

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