CRYPTO TAX THREAT IN SENATE INFRASTRUCTURE BILL
You’ve probably heard enough about the Senate’s bipartisan infrastructure bill at this point. Tucked deep in the 2,000-page-long $1 trillion package, which includes hundreds of billions in funding for roads, railways and broadband upgrade, is the proposal to impose tougher scrutiny on cryptocurrency transactions. Through enhanced reporting requirements for brokers trading digital currencies, the federal government apparently seeks to raise as much as $28 billion , according to an estimate by the Joint Committee on Taxation, which analyzed the plan.
The proposal immediately sparked controversy and collision among lawmakers, as the bill in its original form cast a broad and ambiguous net over the industry. So much so that an amendment narrowing the scope of who would be subject to these requirements was introduced on Wednesday by a bipartisan group of three senators—Wyden (D-OR), Lummis (R-WY) and Toomey (R-PA). The change specifically excludes certain crypto groups, including miners, software developers and transaction validators. Members of the Senate are expected to cast a vote on amendments this weekend or early next week.
GENSLER SLAMS CRYPTO AS “THE WILD WEST”
Owing to his background as a former adjunct professor at MIT who taught classes about financial technologies and blockchain, Gary Gensler, Chairman of the Securities and Exchange Commission, had been seen by many in the crypto industry as a friend or if nothing else a neutral party. This week, however, he made it clear he is anything but when it comes to policy. Speaking at the Aspen Security Forum Conference, Gensler has called on Congress to give his agency more power to protect investors in cryptocurrency markets.
“We just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West,” said Gensler. Calling the asset class “rife with fraud, scams and abuse,” the SEC chair, nevertheless, acknowledged piling applications for a bitcoin exchange-traded fund (ETF), which some took as a hint for a possible pathway for approval.
On Thursday, Ethereum implemented a highly anticipated upgrade to its protocol, dubbed the London hard fork. Principal among the five so-called Ethereum Improvement Proposals, or code changes, contained in the fork is EIP-1559, which is bound to make transaction fees on the network less volatile and more predictable, while adding an element of deflation to the second-largest crypto asset by market capitalization. But by this arrangement, miners stand to lose anywhere from 20%-50% of their revenues as the adjustment lowers the amount of ether that miners receive per block. Ahead of the revamp, ether, which was trading below $2,000 just two weeks ago, has since added more than 40%, confirming bullish predictions.
RESURGENCE OF NFTs
After a blazing start to 2021, the market for non-fungible tokens (NFTs) had started to decline. Now, it is climbing back up, raking in more than $1.2 billion in July sales–almost a half of the $2.5 billion cumulative sales in the first half of the year, according to data tracking firm DappRadar. Much of the boost is attributed to the success of play-to-earn games such as Axie Infinity, which became the most valuable NFT collection ever, surpassing perhaps the most recognizable marketplace of the sector, NBA Top Shot, with more than $830 million in trading volume ($600 million registered in July alone). Trading volumes of top NFT collections, including Axie, CryptoPunks and ArtBlocks, have increased by more than 300% over the last 30 days.
BLOCKCHAIN 50 SPOTLIGHT: Digital Currency Group
The most prolific investor in crypto-currency startups, with a portfolio of 170 companies, also owns two of the largest crypto institutions—trading platform Genesis, with 1,000 institutional clients, including payments giant Square
Crypto Coin Bitcoin SV Appears to Have Faced a ‘51% Attack’ [Bloomberg]
JPMorgan Launches In-House Bitcoin Fund for Wealthy Clients [CoinDesk]
Coinbase Acquires Crypto Connector Zabo for Undisclosed Amount [Decrypt]