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Director investing in Cryptocurrency.

Director investing in Cryptocurrency is this legal?

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I have a director (sole director) of a small company who I have discovered has started to invest company money into cryptocurrency.  This makes me feel uneasy as I feel he is gambling with company money.  He tells me he is investing the money and as soon as it makes a profit he will return the capital and profit back in to the business, however getting paperwork from him is a difficult.  My thoughts are that these "investments" should be treated as a distribution.  Has anyone had any similar problems? Thank you in advance.

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By ms998
03rd Oct 2018 10:53

Is the company making the investments or is the company loaning the money to the director and he does it personally?

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By Accountant A
03rd Oct 2018 11:05

The activity is legal and can be carried on if the necessary authorities are in place. (Also, the tax and accounting treatment need to be dealt with correctly, obviously.)

As m2998 says, it's not clear from your question whether the company is doing this or the director personally, using company funds.

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By ireallyshouldknowthisbut
03rd Oct 2018 15:58

Id ask to see the statements from the platform dealing, ie who is the Principle.

Pretty much guarantee it will be your man and not hsi co, and he will be losing money in the longer term.

They always do. Just like the FX traders and all the others suckers. Just keep on charging 'em to add them all up!

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By TheChief
03rd Oct 2018 16:47

The director (landscape gardening business) is using a personal cryptocurrency account and withdrawing money right left and centre. He has already lost a significant amount with some online trading in stocks and shares. He has had a conversation (as they all do) with his mate down the pub and guess what his mate has made loads of money from his dealings!! My actual feeling is that he is just gambling with the company money.

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Stepurhan
By stepurhan
03rd Oct 2018 20:57

If he is trading on a personal account, then what he is doing with the money he is taking out is not your problem. What is (potentially) your problem is how the withdrawals are being treated.

It's just the same conversation you have with someone who buys expensive cars or blows all his cash on booze instead. The consequences of overdrawn loan accounts and that you cannot automatically treat random withdrawals as dividends.

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Replying to stepurhan:
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By TheChief
04th Oct 2018 09:10

I have put all of the withdrawals into the Directors loan account. The debate I am having with him is I feel the company should issue a dividend to clear the account where as he is stating that he feels it should be investments for the business.
Update - As he can not produce me any documents, he says he can't print anything off, we have agreed that he will no longer withdraw any money for investing in cryptocurrency and the company will issue a dividend to clear the overdrawn directors account.
Thank you all for taking the time to respond.

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Replying to TheChief:
ALISK
By atleastisoundknowledgable...
08th Oct 2018 08:20

TheChief wrote:

Update - As he can not produce me any documents, he says he can't print anything off, we have agreed that he will no longer withdraw any money for investing in cryptocurrency and the company will issue a dividend to clear the overdrawn directors account.
Thank you all for taking the time to respond.

Surprise surprise

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