Tax rules and crypto jitters 🙄🤦♀️
Tax rules and crypto jitters 🙄🤦♀️
Biden's crypto tax proposal to further corner the crypto industry? Stephen King isn't afraid of AI. USDC market cap plummets to 2-year low. Why? Ronaldinho faces possible arrest for crypto scam.
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The US Department of the Treasury and the IRS want to make digital-asset trades more transparent, and how do they do that?
Bring in them rules.
Objective of proposed rules The new rules, introduced by the U.S. Department of the Treasury and the IRS, aim to target tax evasion within the crypto investment landscape. They seek to simplify the tax reporting process and close the existing tax gap.
Reporting requirements for platforms Cryptocurrency exchanges facilitating digital asset trading, referred to as crypto brokers, could be required to report customer information to the IRS, akin to stock and bond brokers. This move intends to enhance transparency and tax compliance.
"This is part of a broader effort at Treasury to close the tax gap, address the tax evasion risks posed by digital assets, and help ensure that everyone plays by the same set of rules."
Proposed crypto tax rules spark debate and concerns
Attempt to kill adoption in US Chairman of the House Financial Services Committee, Patrick McHenry, accuses the Biden Administration of harming the digital asset industry in the US through new crypto tax regulations. The proposal aims to improve tax compliance in the crypto sector but raises questions about its impact on decentralisation and innovation. He calls for clearer and more precise rules to avoid stifling the industry's growth.
"The Biden Administration must end its effort to kill the digital asset ecosystem in the U.S. and work with Congress to finally deliver clear rules of the road for this industry."
Impact on Decentralised Exchanges (DEXs) The proposed rules also extend to decentralised exchanges (DEXs), which function without collecting customer data. This inclusion sparks concerns about their viability and the potential erosion of decentralisation's benefits.
Kristin Smith, CEO of Blockchain Association
"Given the reporting requirements, a platform or protocol would need to centralise in order to comply, eliminating all benefits of decentralisation including security and transparency ….
… It’s important to remember that the crypto ecosystem is very different from that of traditional assets, so the rules must be tailored accordingly and not capture ecosystem participants that don’t have a pathway to compliance.”
Backlash from Industry Experts and industry figures express their concerns about the proposed rules' consequences on innovation and privacy.
General counsel for Delphi Labs, Gabriel Shapiro, notes potential harm to peer-to-peer protocols due to data collection requirements.
"The proposed rules 'could be a devastating blow to the use of P2P protocols' in the U.S. as it would ask operators of such exchanges to collect data from users."
Messari CEO Ryan Selkis was among those who responded unfavorably to the news, saying that if Biden secures reelection, the crypto industry will not flourish in the country.
Chris Perkins, president of crypto venture firm CoinFund, holds the view that other countries have surged ahead of the US, and these rules will inevitably result in reduced innovation flowing into the country. Rather than resorting to harsh crackdowns, he believes simple and detailed rules allowing safe innovation across the crypto industry are needed.
The crypto industry in the US has repeatedly voiced concerns about regulatory choices affecting innovation within the nation.
Grayscale Investments CEO Michael Sonnenshein warned that the Securities and Exchange Commission constantly resorting to enforcement action will drive crypto firms out of the country.
“If every crypto issue needs to go to a court of law, then as a country, we are squashing the innovation taking place here.”
Brad Garlinghouse, CEO of Ripple, recently indicated that the crypto industry is shifting away from the US due to its slower crypto regulation process compared with other countries like Australia, the United Kingdom and Singapore.
TTD Blockquote🎙️
Stephen King, the master of horror fiction
"Would I forbid the teaching (if that is the word) of my stories to computers? Not even if I could.”
Stephen King, the horror guru, isn't spooked by AI creativity.
He wrote an op-ed for The Atlantic, after the publication found through analysis that his works were used to train various models.
He's cool with his works training AI, but he's not sold on AI as the next great author. King thinks real creativity needs that human touch, wondering if AI can truly match us. While Hollywood's up in arms, King's like, "Easy, folks." He's curious about AI's potential, even if today's bots are more "meh" than mind-blowing. King's not banning AI; he's more "let's see where this sci-fi tale goes." In his spooky way, he hints AI might get closer to real creativity, but for now, it's more yawn than yikes.
Where’s ETF?🚨
Hashdex joins race for spot Bitcoin ETF with unique strategy👇🏻
TTD Stablecoin 🪙
The second-largest stablecoin, USDC, experiences a market cap drop to a two-year low of $26 billion, while Tether's USDT reaches an all-time high of $83 billion.
Reasons behind USDC's decline
Depegging Event Impact: USDC's decline is tied to a significant depegging incident during a US banking crisis, causing its value to plummet to $0.87.
Slower Recovery: USDC struggles to bounce back from the banking crisis, whereas USDT maintains lower volatility due to a lesser crisis impact.
Interest Rate Influence: Rising interest rates reduce USDC's appeal, as holding it means missing out on higher returns available elsewhere.
Issuance Model Variation: Differences in issuance models between USDC and USDT, along with the challenge of burning USDT on weekends, contribute to USDC's struggles.
Different usage scenarios
The distinct use cases of USDC for liquidity in DeFi and USDT as collateral for trading affect their respective market performances.
Circle's efforts and positive outlook
Circle, issuer of USDC, actively seeks to recover ground through partnerships and expanding blockchain presence. Stablecoins' adaptability in facing challenges bodes well for their future stability.
TTD Scam 🛑
Former football star Ronaldinho skipped a crucial court hearing in Brazil due to weather-related flight cancellations. He was set to testify alongside his brother and business partner about their company, 18K Ronaldinho, accused of running a cryptocurrency pyramid scheme.
18K Ronaldinho: Pyramid scheme allegations: High Returns Offer Raises Eyebrows
Authorities claim that 18K Ronaldinho enticed investors with promises of daily returns up to 2%, supposedly generated through cryptocurrency trading. These pledges triggered suspicions of a financial pyramid scheme, leveraging Ronaldinho's fame to attract unsuspecting investors.
Crypto industry's scrutiny on promised returns: Similar Cases Highlighted
The case reflects a broader concern regarding exaggerated promises in the crypto sector. Recent actions, like the arrest of Celsius CEO Alex Mashinsky, expose instances of deceptive practices related to high digital asset returns.
Legal repercussions for Ronaldinho: No Special Treatment Despite Fame
Ronaldinho's celebrity status doesn't grant immunity from legal consequences. Reports suggest he might face arrest to ensure his presence in court. The prosecutor emphasized the equality of all individuals before the law.
Ronaldinho's crypto involvement: From NFTs to Allegations
Aside from the pyramid scheme case, Ronaldinho's engagement with cryptocurrencies includes launching NFTs in partnership with INFLUXO. These NFTs were auctioned to holders with proven financial capability, some of whom received an exclusive in-person experience with Ronaldinho in Dubai.
TTD WTF 🤷♀️
The DEA, renowned for taking down Silk Road, mistakenly transferred $55,000 in cryptocurrency through an "airdropping" scam, as reported by Forbes.
Seizing $500,000 in USDT related to illegal narcotics, the DEA used a secure hardware wallet.
A scammer mimicked a test transaction meant for the US Marshals, exploiting the fact that users often check only the first and last characters of cryptocurrency addresses.
This tricked the DEA into sending funds to the scammer's address. Although the DEA tried to freeze the funds with Tether's help, the money had already been moved.
The FBI collaborated with the DEA, tracing the funds to ether and bitcoin, then a new wallet. The scammer used Binance accounts and anonymous Gmail accounts for transactions.
Law enforcement seeks Google's aid as the scammer's wallet holds $40,000, having received $425,000 since June. The DEA hasn't commented on the incident.
TTD Surfer 🏄
Hong Kong police have arrested 458 people in a crackdown on a $65 million Triad-controlled money laundering network.
Optimism Foundation is proposing to grant Base 118 million OP tokens over a span of six years. Base, in return, will contribute 2.5% of its sequencer revenue or 15% of its net profits (whichever is greater) to the Optimism Collective.
Ethereum automated market maker and decentralised finance protocol Balancer was exploited for nearly $900,000 on Aug. 27, just days after disclosing a vulnerability that affected several pools.
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