[uncensored-r/CryptoCurrency] An issue with RSK/sidechains, tax implications

The following post by drawingthesun is being replicated because some comments within the post(but not the post itself) have been openly removed.

The original post can be found(in censored form) at this link:

np.reddit.com/r/ CryptoCurrency/comments/9zpquo

The original post's content was as follows:

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So Bitfinex has a RSK market that trades against BTC.

https://www.bitfinex.com/posts/318

This is pretty bad as it shows that RSK tokens are not Bitcoins.

Yes there is a 1:1 peg, but now RSK/BTC trading pairs exist there will be tiny price differences. Even if there are no price differences the fact that you can now trade into RSK from Bitcoin on an exchange makes it clear that the two tokens are separate tokens, even though a 1:1 peg exists.

This means that if you want to move Bitcoin into RSK for faster transactions/smart contracts/etc... any tax office that taxes crypto to crypto transactions will also tax BTC to RSK transactions.

This tax treatment covers all USA and Australia users.

Again the tax treatment of crypto ruins yet another use case.

In my opinion, building sidechains and drivechains would have been better if the resulting token was still "BTC". Instead we have different token tickers/currency names and the tax offices (IRS/ATO) will surely see any transfer between the two as a taxable event.

Honestly I am surprised no one is considering tax implications when designing this software.

In some ways RSK seemed like a potential competitor to Ethereum, being able to run smart contracts and speed up transactions, but now it's going to be a taxable event using the peg it's utility will be reduced.

I really wish developers would discuss these implications with accountants/lawyers/etc... before shooting ourselves in the back.

I am open to anyone with a counter argument about why a tax office will let BTC -> RSK be tax free, now that an exchange has a trading pair in place.

NOTE: I am stating that the existence of a trading pair makes RSK a separate token for tax purposes. So a taxable event is triggered even if you use the peg, as the tax office will clearly state the peg is a form of acquiring RSK with BTC, as in the peg is a form of decentralized exchange.

NOTE 2: I have been unhopeful about crypto's future recently, a big reason is that almost everything that you can do with crypto triggers tax, it's going to mean that no one outside a few select people use it due to the insane tax implications of every crypto action. These pegs just make a bad problem even worse.