It’s still 2014 in crypto payments, and buying a burrito is now a taxable event

Chipotle US takes cryptocurrency now! Buy your next burrito with crypto! [CoinDesk]

Well, no, of course it doesn’t.


Chipotle UK would like to assure you that this image is appetising.


Chipotle is using a platform called Flexa, which is connected in some unclear manner to the Gemini crypto exchange.

You put your cryptos into your Flexa wallet, which is called Spedn — a registered typo-mark, in the finest dot-com manner. Then you use the Spedn app on your phone to generate a “flexcode” barcode, which presents to Chipotle as a gift card. Then they hand you a burrito!

Flexa sells the crypto, and sends the dollars to Chipotle. You’re topping up a prepaid gift card with crypto.

If you put your cryptos into Flexa, you can’t ever take them out again. This is for (checks Crypto Excuse Calendar) anti-money-laundering. But Flexa is sure they’ll work out how to let you get your money out in some non-burrito form within the next (rolls dice) several months. [Flexa]

This includes payments in Gemini USD, which is apparently the most trusted form of cryptocurrency for payments — but not so trusted that they can risk giving you back what is literally your own money.

Don’t put too much into your Flexa wallet — you can only spend $750 from Spedn in any given week. That’s after you’ve provided full Know-Your-Customer details. Flexa’s reason for this is (literally) to stop terrorism. I’m sure someone will follow up with explanations of why this is absolutely what any consumer wants, and is actually good news for Bitcoin. [Flexa]

How are your deposits insured? They’re only covered by Gemini’s commercial insurance on their great big pile of cryptos. Gemini’s terms and conditions make it clear that they will absolutely claim any loss was your own fault, for not being good enough at being your own bank. [Flexa; Gemini]

Every purchase triggers a taxable event that affects your IRS tax filings — just what every ordinary person expects from using their phone to buy a burrito. Flexa won’t be filing any paperwork — but you can have fun figuring out what to do with a data dump in CSV format, or pay one of their affiliate partners to work out your burrito liability. [Flexa]

Visa is quaking in their boots! No, that’s not them giggling, they’re quaking.

Flexa did a huge press push for the initiative — though Chipotle didn’t get around to doing a press release themselves, for some reason. [Medium; Chipotle, archive of 5 June]

You’ll be pleased to hear that Flexa is “Carbon-negative: Flexa balances the carbon emissions of all of its blockchain and operating activities with high-quality, verified carbon offsets to maintain a completely carbon-negative network” — that is, they hedge a scam with another scam.

Flexa apparently sends payments around internally in its native AMP token: “AMP is an ERC-20 token used as collateral to guarantee retail payments while blockchain transactions remain unconfirmed.” [Gemini]

AMP holders stake their AMP and get interest. Good thing that doesn’t constitute an investment contract under US securities law … oh wait, of course it does. The staking reward seems to be around 2% — paid in more AMP tokens, created out of thin air. [Gemini; Reddit]

Most Flexa users seem to be AMP stakers, trying to convince themselves that crypto payments are cool and not stupid.

Flexa has signed deals with a pile of retailers, who thought they’d try out some crypto while it’s in the news. These have generated a mountain of press reports — but there are no reports yet as to actual transaction volumes. Not even Reddit /r/amptoken can work it out. [Reddit]

How widely accepted is Flexa in practice? One /r/amptoken user “tried to pay with bat using the gemini app at coffee bean & tea leaf in hawaii today and they told me since they don’t accept gift cards they can’t scan it as a gift card. it only works on the mainland right now. has anyone in Hawaii been successful paying with flexa?” The thread contains reports of denials at Chipotle in Ohio too. [Reddit]

You can also use Flexa to buy your burrito in Axie Infinity or Smooth Love Potion tokens. [Twitter]

“The legacy payment systems are complicated and costly,” says Flexa CEO Tyler Spalding. [press release, 2019]

In conclusion, cryptocurrency payment systems have not advanced one dot since 2014, and may in fact have gone backwards.

What times we live in, where this sentence exists: buying a burrito is a taxable event.

Spotted by the SomethingAwful Bitcoin grey thread. [SomethingAwful]

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28 Comments on “It’s still 2014 in crypto payments, and buying a burrito is now a taxable event”

  1. Buying a burrito has always been a taxable event. You sell labor, get taxed, than buy a burrito with your receipt of tax payment (fiat).

    1. “taxable event” is a jargon term with a particular meaning, as I literally note in the text.

      1. But, but, the global burrito market is a form of sovereign demurrage! Burritos exist to fund the international burrito cabal, which gets people addicted to burritos in order to steal people’s wealth by minting unbacked burritos which “investors” then burn by eating. BURRITOS ARE A FORM OF TAXATION IN AND OF THEMSELVES!!!!!!111!! BURRITOS ARE THEFT!

        1. So what we need now is an electronic token that is mined through PoB (Proof-of-Burrito). Better keep John Scalzi out, I hear he has previous on burrito-related shenanigans.

          1. To make sure the tokenized burritos are properly backed by burrito reserves (rather than merely commercial burrito paper, that is, IOUs for office lunches from all the big burrito exchanges), clearly we should bring in Elon Musk and the Boring Company to build and expand the transcontinental burrito tunnel network.

  2. Anyway the real reason I came over to the comment section was to remark on how extremely 2015 it is that Flexa is pushing Google AMP. 😉

  3. Merchants can receive any currency including the original cryptocurrency used to pay. Chipotle did promote Flexa the very next day. Why would they drop all news in 1 day? Most of the stuff you’re trying to bash is Flexa being fully compliant. Keep eyes on them. It’s going to be a great year.

    1. It appears not: “Your search – flexa – did not match any documents.”

      “Can” doesn’t imply “are”. If you’re implying Chipotle is taking cryptos themselves, I’d expect some definite evidence.

      Do you have any verifiable information on actual volumes of transactions? Flexa’s been around for a couple of years now. What’s their track record been like?

        1. Chipotle did tweet about the partnership, but it didn’t rate a mention in their press room.

    2. 🤣🤣🤣🤣 Wait…. you’re serious? 🤣🤣🤣🤣 Boy are you in the wrong place. 🤣🤣🤣🤣🤣

  4. Yes! Finally a simple, workable solution to all the fatal flaws of that totally unusable and overly-complicated fiat currency. NAILED IT, GUYS.

  5. Who ever thought that a burrito would be a carbon OFFSET? I guess it serves as a vicarious exhaust for all the coal that went into the blockchain.

  6. Why on earth would any rational person want to get involved with something so convoluted and unnecessary when you can simply hand someone cash or scan your credit (or debit) card and be on your way?

      1. I feel like silly shit like this is an indulgence (in the Catholic sense but also in the common sense of the word) for the bigger conmen. Throwing some money at this allows them to pretend, mostly to themselves, that there IS a use case for this and it ISN’T all a Ponzi scheme

    1. I mean you could always put denominations of cryptocurrency in individual wallets, then print out the private keys of pieces of paper and use those as currency. Of course this would have the disadvantage that if anyone actually redeemed the currency it would go back to being yet another dead tree, never mind the wild fluctuations in value and other problems.

      That said you could always have a custodial entity hold on to the assets and then securitize them while maintaining a rough peg against the cost of living. This entity could then itself print pieces of paper that people could use to buy burritos. Now, this entity should be properly regulated so that it doesn’t scam people out of the value of their money, and it would be easiest if there were just a handful of these entities, so that everyone could use the same securitized denominations, and things would be even more stable if the assets in question were largely just legally binding obligations, though admittedly they could hold onto some quantity of stable commodities just to make people feel better.

      Anyway, how does this version of currency sound? Doesn’t it sound so much more convenient than Bitcoin?!?

        1. Get this: what if… you took these piece of paper, and instead of having to go to some website, you could go to a physical building instead? There you could exchange these pieces of paper for specialized tokens, or “chips”, and then, after you exchange a bunch of pieces of paper for token chips, they would give you free booze and a free hotel room while they keep you entertained by having people in tuxedos physically perform mining algorithms in front of you with numbered cards, spinning wheels, little balls and the like to validate your transactions. Did I mention that this building also has luxurious décor with psychedelic neon lights, gourmet restaurants, and sometimes even its own branch of the Cirque du Soleil you can visit when you want to take a break? Why would you settle for using some dowdy website while sitting in your basement when instead you could be sitting in air-conditioned luxury, with 24/7 sunshine and all of these amenities? Pssshhhh… I really don’t know what this “website” business is all about. Aren’t “websites” and “computers” things that eggheads and <nerds use for work? Why would you want to work when you can have fun?!?

          1. Yeah that sounds a little better (though, honestly, the part about having to go outside and then spend time in a room with other people is kinda scary), but only if the establishment meets these conditions:

            -completely free of any kind of burdensome regulations or oversight
            -absolutely guarantees every player will for sure win big all the time
            -uses a different physical location every night, so The Man can’t track us
            -must be run by mysterious, anonymous people with names like ‘badgerfarts420.eth’, with, I presume, extensive criminal histories (so you can be confident they are professionals at this sort of thing)
            -has no age restrictions for entry, just in case, well, you know.

            Other suggestions? Did I miss anything?

          2. May I introduce you to the history of Prohibition-era “booze cruises”?

            -taking a probably dilapidated boat into international waters so you can get drunk and gamble
            -might be dodging the Coast Guard like the rum runners are
            -organized by people with inscrutable names like “Big Tuna” or “Baby Face”
            -totally just a family-friendly boat ride out to watch the sunset what are you talking about

      1. “Burrito Liability” is a baller-as-Hell turn of phrase, or username.

        Thanks for the hiccups, you nocoiner!

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