Library of Congress international report / Spain's 2gether / NetWalker ransomware / Spanish tax details

The U.S. Library of Congress has released a report surveying the global tax treatment...

18,825 subscribers Inside.com February 05, 2021

Bitcoin $37,697 7 day: +9.1% Ethereum $1,709 7 day: +27.1% All crypto $1.17T 7 day: +14.6% Bitcoin dominance 60.2% 7 day: -3.6% Prices as of 4:30 p.m. EST

The U.S. Library of Congress has released a report surveying the global tax treatment of tokens obtained by mining, staking, airdrops, and hard forks across 31 countries. The report shows that, while several countries have provided guidance on bitcoin and other proof-of-work coins, only a few have addressed the taxation of tokens received from staking. Details: The report does not constitute legal advice and does not represent the official opinion of the U.S. Government. Cryptocurrencies are variously treated by the surveyed countries as investment property, a financial instrument, an intangible asset or property, a financial asset, or a commodity. Italy, for example, treats exchanges of crypto assets like exchanges of foreign fiat currencies for tax purposes. The taxation of cryptocurrencies by nation is dependent not only upon its classification, but also on other factors such as how it is acquired or used. China is conspicuously absent from the report. U.S. Library of Congress

Spanish cryptocurrency exchange 2gether said it will not be able to fully reimburse victims of a breach, despite raising €1.5M. The company will not be able to refund all of the stolen funds for 9% of users due to the recent increase in Bitcoin and Ether value. More from 2gether: The company suffered a breach in July 2020 during which cryptocurrency funds were stolen from users. 2gether was able to refund 100% of the stolen Bitcoin and Ether cryptocurrency that was not previously converted into shares or 2GT tokens. For the remaining 9% of users, the company is offering, at most, 99% of the non-converted stolen funds and, at least, the value in euros that was lost in the attack. Otherwise, those users can wait until the company can afford full refunds or an alternative solution. This story first appeared in Inside Security. Read the full issue here. Coindesk

U.S. and Bulgarian law enforcement officers have seized the website used by the NetWalker ransomware group to leak stolen data. In addition, a Canadian national was arrested and charged for allegedly extorting more than $27M using the NetWalker ransomware.  More: NetWalker is a ransomware-as-a-service product founded by Circus Spider, which rents access to attackers in exchange for a percentage of the profits. Chainalysis, which assisted in the law enforcement probe, found that NetWalker has generated more than $46M in ransoms since it first began in August 2019. NetWalker has targeted healthcare organizations during the COVID-19 pandemic, noted the U.S. Justice Department. Law enforcement seized around $454,530 in cryptocurrency as part of the NetWalker raid. This story first appeared in Inside Security. Read the full issue here. Krebs on Security

Spain's Tax Administration has released guidelines to help reduce tax evasion by crypto holders, requesting information from crypto exchanges to "strengthen international cooperation" and lawfully access crypto trading details. The Spanish Treasury also mentioned concerns about technological advances facilitating crimes through cryptocurrencies. The Treasury noted, "Digital money and the trend to reduce the use of cash, has led to an increase in the use of cryptocurrencies as means of payment, so that by the end of 2020, there are already more than 6,500 cryptocurrencies in circulation." Dozens of the world's central banks are developing digital currencies, including the digital euro projects by the European Central Bank (ECB), in which Spain participates, and are working on various anti-money laundering protocols for cryptocurrencies. Bitcoin.com

Most Coinbase customers can now find U.S. tax forms in their account for 2020 crypto gains. The IRS has sent warning mailers to delinquent U.S. tax residents and is on-schedule for its regular April 15 tax deadline. Context: San Francisco-based Coinbase crypto exchange publicly announced on Nov. 24 its decision to change its U.S. tax forms issuances from 1099-Ks to 1099-MISC for customers earning interests on crypto lending products. The reason for abandoning 1099-Ks is that the form reports only the gross proceeds of crypto transactions, excluding the base price. Several Coinbase clients received a CP2000 notice from the IRS due to misreporting tax forms. Coinbase also laid down eligibility criteria to receive a 1099-MISC from the exchange; ineligible traders will have to deal with their situation without help from Coinbase. Note that IRS Form 1099-MISC does not resolve all cost basis issues for U.S.-based crypto traders who are ultimately responsible for their own tax reporting obligations. A crypto tax agency called CryptoTrader Tax suggested that tax filing 1099-K is not suitable for some crypto exchange tax reporting. Form 1099-K is ideal for platforms such as Etsy (NASDAQ:ETSY), Uber (NYSE:UBER), and Lyft (NASDAQ:LYFT), where users are paid directly by a third party. Receivers of the IRS' CP2000 notice will have to resolve the situation with the IRS by proving their gain and loss reports. The IRS started its crackdown on misreported crypto trading taxes in 2019 and sent hundreds of warning letters to almost 10,000 U.S. cryptocurrency owners. Coindesk

QUICK HITS: Hear from finance experts as they weigh in on tech spend in 2021 & budgeting for IT at SMBs, presented by CFO Leadership Council & Electric. RSVP now!* Hackers drained over $13.8M from the Dai (DAI) vault of the decentralized finance (DeFi) protocol Yearn Finance (YFI). DeFi projects accounted for half of all crypto hacks last year. More complaints about bitcoin's carbon footprint are circulating. Google (NASDAQ:GOOGL) fixed 36 security bugs in the latest stable channel update for Chrome 88 for desktops, including a critical bug that involves insufficient policy enforcement in Cryptohome. Estonia is planning to issue new regulations that will tighten the licensing of digital currencies. Oversight of this area will be reassigned from the Financial Intelligence Unit (part of the Police and Board Guard) to the Financial Supervisory Authority. It will also require some current crypto license holders to reapply for operating permits within the country. South Africa's Financial Sector Conduct Authority issued a notice to investors, warning that if money is lost in crypto-related investments or scams packaged as crypto investments, it is "unlikely to get your money back and [you] will have no recourse against anyone" as crypto-related investments are not well-regulated. Lawmakers in the state of Wyoming have proposed a bill that would allow decentralized autonomous organizations (DAO) to incorporate in the "Equality State." China's Blockchain Service Network (BSN) announced support for Cosmos (ATOM), rolling out a permissioned version of the interoperability blockchain. Ernst & Young announced an integration with China's BSN, offering its Blockchain Analyzer and Ops Chain to users in China and across the Asian Pacific region. This will enable regulatory-compliant access to the Ethereum network within China. RIP affiliate marketing. It had a good run. What's next in 2021? leading revenue channel.* *This is sponsored content.

Curated by Associated Press fanboy, eye-strained news terminal watcher, and bitcoin follower since $1, Aaron Wise. Temporarily listening to news squawk boxes in Florida while awaiting the construction of cryptopia. Editor Charlotte Hayes-Clemens is an editor and writer based in Vancouver. She has dabbled in both the fiction and non-fiction world, having worked at HarperCollins Publishers and more recently as a writing coach for new and self-published authors. Proper semi-colon usage is her hill to die on.

767 Bryant St. #203, San Francisco, CA 94107 Copyright © 2021 Inside.com

Did someone forward this email to you? Head over to inside.com to get your very own free subscription! You received this email because you subscribed to Inside Cryptocurrency . Click here to unsubscribe from Inside Cryptocurrency list or manage your subscriptions.

                                                           

The Weird and Wonderful in Crypto This Week

Also: Ether is pumping, taking DeFi tokens with it.

February 5, 2021 The top stories in bitcoin, crypto and more – all in one place, delivered daily. Sponsored By: By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  Three stories 1. The crypto-bank connection is strengthening. Seattle-based Protego Trust Bank has received conditional approval for a trust charter from the Office of the Comptroller of the Currency (OCC) to custody digital assets. Protego is the second applicant to receive conditional approval from the OCC following Anchorage. It follows several other digital asset companies that have received bank charters, including crypto exchange Kraken and Avanti, which both received state charters in Wyoming. Meanwhile, crypto payments platform Metal Pay has filed to become a national bank in the U.S. CEO Marshal Hayner told CoinDesk's Danny Nelson the start-up seeks "full" banking licensure, including for cash deposits that would be insured by the FDIC. 2. Ethereum is pumping. The crypto surged past $1,700, notching gains of at least 30% this week. Analysts are pointing to ETH's coming futures listing on the Chicago Mercantile Exchange, due to start Feb. 8. "Ether's recent rally looks similar to bitcoin's (BTC) staggering rise from nearly $6,200 to $19,783 seen in weeks leading up to the CME futures launch on Dec. 17, 2017," CoinDesk's Omkar Godbole notes. "The bull market ended following the futures launch and prices fell as low as $3,200 by December 2018." A rally is happening across plenty of assets that rely on Ethereum's base infrastructure, including so-called DeFi tokens. In the past 24 hours, DeFi-linked coins such as COMP, AAVE, KNC and ZRX have all leapt to fresh lifetime highs, Godbole reports. In a reminder of the power regulators can wield, Nigeria's central bank has ordered banks to close any accounts found to have a history of "dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges." The Central Bank of Nigeria (CBN) has ordered banks in the country to "identify persons and/or entities" transacting with cryptocurrency or operating crypto exchanges on their platforms and "ensure that such accounts are closed immediately." India, too, is exploring a strict regulatory framework to handle digital assets, while the U.S. Treasury's own controversial rule – while not an outright ban, it would change the face of the industry – is still snaking its way through the system.  SPONSORED BY NEXO Your digital assets deserve a savings account in their BEST INTEREST. Leading crypto lender Nexo treats you, your crypto and your fiat to industry-best Crypto & Fiat services, featuring:    * Up to 12% interest on digital assets, paid out daily! * Yields available on BTC, ETH, LTC, BCH, XRP, XLM, EOS, TRX, LINK, BNB, PAXG, USDT, USDC, TUSD, PAX, DAI, HUSD, GBP and EUR. * No minimum or maximum limits on funds deposited, offering infinite opportunities to earn. * Full flexibility with no lock-in periods, so you can withdraw your funds anytime. * #ZeroFees on all transactions. * Military-grade wallet security and top-tier insurance on all custodial assets with SOC 2 Type 2 certified crypto custodian BitGo. Get started at nexo.io. At stake The weird and wonderful in crypto today Here's a roundup of all the stories from the strange world of crypto and blockchain that didn't find a home in Blockchain Bites this week.   Bitcoin billionaire and former presidential candidate Brock Pierce is looking to convert a defunct New York City church into a 21st-century rental residence. The New York Post reports Pierce is also transforming a 17th-century former Puerto Rican monastery into a private club.   "It's the oldest monastery in the Americas," Pierce reportedly said.   German authorities "seized" a wallet containing over 1,700 bitcoin (~$64.7 million), but can't access it. The funds came from a convicted hacker who refuses to share the password.    "We asked him but he didn't say," prosecutor Sebastian Murer told Reuters. "Perhaps he doesn't know."   Maybe they should call "Dave Bitcoin," a modern-day repair man who helps people access password-protected wallets when they have forgotten the password. Wallet Recovery Services, Dave's business, is booming in the bull run.   "These days, because of the price rise and just the increased interest, we get around 50 to 70 requests daily," he told CoinDesk's Ben Powers. (The decoders take 20% off the top, if resuscitation is possible.)   With all that bitcoin trapped in unmovable addresses and garbage pits, Coin Metrics finally offers a new accounting of the real circulating BTC supply. TL;DR: A good estimate for bitcoin float is 14.5 million, (meaning about 4 million BTC have been lost to the sands of time.)   All this for what Australia's central bank said is "not even really money." Speaking to a legislative committee, Reserve Bank of Australia Assistant Governor Michelle Bullock mocked the "fuss" made around bitcoin (and stablecoins) as an asset.    "[Bitcoin] is a risk to investors but it's not a financial stability risk," Reserve Bank Governor Philip Lowe echoed.   The risks are real enough for a Malaysian pair of alleged scammers, who might be canned under state law, for reportedly defrauding three women of more than 150,000 Malaysian ringgits (around $37,000). They also face fines and jail time, if convicted.   It's not just novel punishments, but the scams themselves that are evolving in this bull market. Industry publication Protos notes that were once scammers would pretend to be Elon Musk, they are now impersonating Social Capital's Chamath Palihapitiya, among other tech influencers.   One Palihapitiya scam raised approximately $60,000 in 16 transactions, when they went to press. It looks like the scam is still up.    In the worst segue in this series yet, Vanity Fair profiled BitMEX founder and outspoken bitcoin bull Arthur Hayes, who remains at large after the U.S. government levied crimes against him for… well… it's a little complicated, but it involves something that looks like fraud. The more you dig in, the odder the story appears.   "'You can look at the history of anti-money-laundering prosecutions over the last 10 years, and you just aren't going to see very many individual defendants named," attorney and crypto expert [Laurel Loomis Rimon] expounded. "Certainly not when you're talking about program violations as opposed to evidence of actual money laundering. So that is unusual.'"   Hayes is known for his expensive tastes. And now, thanks to Swiss-regulated digital asset firm Sygnum, he can be sure he's popping the right cork. Sygnum Bank teamed up with Fine Wine Capital AG to tokenize a range of "investible fine wines," issuing tokens representing the alcoholic assets on a distributed ledger.    Elsewhere in the world of tokens, Jehan Chu, a Hong Kong-based crypto investor, reportedly bought ".nft" (a top level domain, like .com or .xyz) from decentralized naming service Handshake for the low, low price of 680,000 HNS tokens (about $84,000), Decrypt covered. Handshake lets anyone auction essentially any domain, including those made out of emojis.   Memes mean money, Michael Casey once wrote. Indeed, "a demonic digital artwork on the Ethereum blockchain" sold for 420 ETH on Wednesday. The digital painting – which the buyer compared to a Basquiat – was part of the Hashmask collection of 16,384 non-fungible tokens created by about 70 artists.   "Knowing that I'm an early investor while also providing liquidity to artists and projects is incredibly rewarding," the buyer told CoinDesk's Sebastian Sinclair.    One dogecoin address apparently holds 27% of the entire coin's entire supply, Decrypt reports. With about 34.9 billion DOGE, this unknown person/persons crossed into billionaire territory in the latest pump. (Though perhaps, as Decrypt considers, perhaps the owner was already a well-known, meme-loving billionaire.) Hot dog!   One of "DeFi Summer's" first memetic fascinations, Yearn, was "exploited" yesterday, draining some $11 million worth of tokens from one of the project's "vaults." The v1 DAI vault, a smart contract that performs an investment strategy for investors, was hit with what's becoming a classic "flash loan" attack.    "That's a well-known issue (one could have it with Uniswap, too, however, Uniswap is not so popular for yield farming)," Curve CEO Michael Egorov told CoinDesk's Ethereum whisperers Brady Dale and Will Foxley. "I've expressed my thoughts to Yearn team how this could have been prevented (and similar vulnerabilities, too). But honestly, didn't expect them to have such a mistake in the code, that was a surprise to me."   Obviously it's not just crypto that's susceptible to meme-driven mania. After whatever happened with GameStop, anything seems possible. Though, a GameStop-style, Reddit-driven anti-Wall Street rally is unlikely to happen in China, any time soon, CoinDesk's David Pan reports.    "The Chinese financial regulators are closely monitoring who are trading what in the Chinese stock market. Retail investors involved in large-scale malicious shorting could be put in jail," said Jason Wu, CEO of crypto-lending firm DeFiner.    Yes, regulators have a long tail of influence. Protos reports a cannabis stablecoin pilot has been "blessed" by the U.S. state of Nevada but is unlikely to fly high. Multichain Ventures pitched a Solana-based tokenized dollars scheme, with deposits reportedly sitting in a federal bank, finally allowing the cannabis industry to transact electronically. (Banks have been unwilling to touch the industry, meaning Navadans are strictly buying weed with cash.)   Seems like a libertarian fever dream, which as CoinDesk's Brady Dale notes is the true foundation for what some see as a larger decentralization revolution. According to Dale's sources, "the state" is still the final boss in terms of achieving freedom, with crypto serving as a convenient "cheat code." A picture of the sovereign individual, according to author Robert Heinlein:   "A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects."   Finally, Jack Dorsey has set up his own node. That's right, the bearded executive of two publicly traded companies playing a hand in remaking media and finance has downloaded the open-source bitcoin codebase and hit play. Sovereignty in action.    Alright, thanks for reading. See ya next week.    Feel free to reach out with the weird and wonderful things in crypto at daniel@coindesk.com.  Introducing State of Crypto, a CoinDesk Newsletter About Policy As the U.S. presidency changes hands, CoinDesk's global macro and policy reporter Nikhilesh De launches his State of Crypto weekly newsletter to break down how the new administration could shape the cryptocurrency industry.   State of Crypto covers how policy and regulation impact the crypto world – and the other way around.   Subscribe to receive State of Crypto every Tuesday. Who won Crypto Twitter? ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. Blockchain Bites   A newsletter from CoinDesk   See Previous Editions Copyright © 2021 CoinDesk, All rights reserved.    250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.