Comment by ghc
1 day ago
> Transferring money across regions with the best 'normie' tools (eg Transferwise/wise.com) is multiple orders of magnitude more expensive than $0.0000015 (tranferring USDC or another GENIUS-compliant stablecoin on Solana).
I don't see how that's relevant to YC startups. Startups can't legally pay their employees in crypto through transfers, any more than they can write checks out of their bank account or pay their employees in cash. I've paid an overseas employee in BTC before, but we still had to go through a payroll provider and do everything above-board to satisfy IRS requirements.
I'm curious why you can't legally pay in crypto? I heard a few times about companies paying in crypto to their remote workers. In fact I heard that a US company was paying in BTC withing the US, though I'm not sure I trust this particular story. I also see that Deel accepts USDC, and to my understanding they convert to local currency of the remote worker. Is that all illegal? Truly want to understand.
It's not illegal, but you have to do all the paperwork the same as if you pay in USD. That means tax withholdings and all that, on a per-pay-period basis. Doing this basically means going through a payroll provider. When I had an employee we paid in BTC, we had to go through a licensed company to actually do the BTC payment to our overseas worker (Circle).
The way it worked was our payroll provider would release the paycheck in USD to Circle, who would do conversion to BTC at prevailing exchange rates same day before executing the transfer.
If we already had the money in BTC, we would have had to convert the money to USD to send to our payroll provider so they could do withholdings and all that, and then have Circle convert it back to make the transfer.
There are foreign transfer reporting requirements and rules about currency conversion at payment time so that you can't skirt paying taxes. If you try to do it yourself you're making a lot of extra work for yourself.
> Startups can't legally pay their employees in crypto
...
> It's not illegal
Why did you write that it was?
> you have to do all the paperwork the same as if you pay in USD
Yes. Obviously.
It's probably legal as long as you do all the same accounting/withholding that you would normally do. I suspect some companies are forgetting to do that, just as many people forget to report taxes on crypto.
Is it really illegal for US companies to pay their employees in cash or cheques?
It's not illegal to pay W-2 employees in US currency as long as you satisfy IRS withholding and reporting requirements. Paying employees in non-currency assets (gold, crypto, etc.) is highly regulated since it's often used as a tax-evasion scheme.