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“I have worked with this person for many years, and he has a tendency to try to change the terms of payment after agreeing on a certain way of operating,” the contract worker said.
A market marketing expert in the United States claims that a firm that paid them for contract work in cryptocurrencies now needs them to refund the tokens after a large increase in the asset’s price.
According to a letter sent to Quentin Fottrell of MarketWatch’s “The Moneyist,” the unnamed employee — known only as “Crypto Confused” — received payment for the contract work in cryptocurrency in August 2020, following which the price of the token surged 700%. The day the employee wrote the letter, the CEO emailed them demanding that they return the digital asset because they did not “generate any revenue for the company and are not currently doing any follow up work,” after which they can invoice the company for the hours worked in U.S. dollars — not the current value of the cryptocurrency.
“I am not really sure what to do,” said the employee. “I have worked with this person for many years, and he has a tendency to try to change the terms of payment after agreeing on a certain way of operating.”
Though Fottrell said that “paying employees in cryptocurrency is a risky practise for both the employer and the employee,” calling for money back, whether from salaried or contract employees, will almost certainly lead to a lawsuit. Given the unpredictable existence of certain tokens, employers operating in the United States are expected to record the US dollar value of every cryptocurrency used for payment on the day it is sent:
“If the value of the cryptocurrency fell 700% since August 2020, would he want to pay you in dollars? If it suddenly dipped by that amount today, would he follow up with his employees?”
Although the letter does not indicate which token was used for payment, Ether (ETH), which has risen 790 percent from $370 on Aug. 1 to more than $3,300 at the time of writing, would suit the bill. Under the new capital gains tax rate in the United States, Crypto Confused will most likely be required to pay 20% on revenue, depending on the amount of cryptocurrencies used for payment. This year, the Internal Revenue Service also extended the deadline for filing taxes to May 17.
Although several businesses are accepting cryptocurrency as payment for services offered in the United States, there are still regulatory concerns to be resolved. Twitter has hinted that it would investigate paying its more than 4,000 workers in Bitcoin (BTC), but that they would certainly be given the option to accept crypto or fiat. Miami Mayor Francis Suarez proposed a related plan for city workers in February.
Merrick Theobald, vice president of marketing at BitPay, said in March that the firm was “most definitely seeing greater demand from employees to take at least a portion of their salary in Bitcoin” as a result of the price increase and increased knowledge of cryptocurrency. However, Paul Brody, a global blockchain pioneer at Ernst & Young, believes that more businesses would not offer to pay workers in cryptocurrency, finding it a “a high risk proposition” considering the scarcity of such tokens.