Binance is considering buying a bank / South Korean government proposes crypto tax at 20% / Crypto Masterclass: Dan Matuszewski

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In today's newsletter: Binance is considering buying or setting up a bank. The South Korean government proposes taxing crypto profits at 20%. Crypto Masterclass featuring Dan Matuszewski, co-founder of crypto trading firm CMS Holdings, who finds it strange that leverage in Bitcoin is so high. A reminder: If you subscribe to premium, you'll receive Inside Cryptocurrency ad-free five days a week, along with features like our daily Masterclass, interviews with crypto experts, and the latest studies and reports on crypto. Sign up now for a 14-day free trial! Best, Rebecca

Market Watch There's mixed trading across the board during Wednesday trading. Bitcoin is up slightly from yesterday's price and still remains in the $9,300 range. Bitcoin $9,338 -0.42% Ethereum $243 +0.02% Tether $1.00 +0.03% XRP $0.197 -0.81% Top 100 Winner: Band Protocol $4.70 +22.40% Top 100 Loser: Velas $0.066 -6.66% Prices are as of 4:45 p.m. ET.

Binance is considering buying or setting up a bank, CEO Changpeng Zhao said. During an ask-me-anything (AMA) session, Zhao said that his company has not made specific plans. The relationship between crypto companies and traditional banks has changed in recent years, with many banks entering the crypto market, Zhao said. COINMARKETCAP/YOUTUBE

The South Korean government plans to introduce a 20% tax on income generated from crypto trading. The tax will be levied on crypto profits exceeding 2.5 million won, or around $2,000, per year. The Ministry of Economy and Finance published its revised tax code following a Tax Development Review Committee this month. The proposed taxation is a necessary requirement, the government said, citing an approach taken by countries such as the U.S. FINANCE MAGNATES

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Our Crypto Masterclass features a well-known thought leader or expert in the crypto space. Today, I focus on Dan Matuszewski, co-founder of CMS Holdings, a crypto trading firm, who finds it strange that leverage in Bitcoin is so high. To get more of Matuszewski's views and receive our Masterclass every day, sign up for Inside Crypto Premium. GET YOUR 14-DAY FREE TRIAL

The final public testnet for Ethereum 2.0 is scheduled for August 4. Danny Ryan, an Ethereum core developer, said the date was chosen following client team discussions. Phase 0 is the first stage of the network grade, which will see Ethereum moving from a proof-of-work (PoW) consensus model to a proof-of-stake (PoS) one, boosting transaction speeds. COINTELEGRAPH

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Quick Hits The U.S. Federal Reserve "better be ready" for a future that will see the issuance of digital currency, said Robert Bench, the assistant vice president in the secure payments group at the Federal Reserve Bank of Boston. SEC Commissioner Hester Peirce said that it was wrong for the agency to take legal action against Telegram, a move that forced the company to abandon its crypto project, the Telegram Open Network (TON), earlier this year. Blockchain project Avalanche has raised $42m in a public token sale. This brings the project's funding total to $60m, having previously raised $12m from a private token sale and $6m from venture companies. Most security companies send a technician to your home. SimpliSafe doesn’t. Order online. Set it up in 30 minutes. After that, you’re protected 24/7. * *This is sponsored content.

This newsletter was written and curated by Rebecca Campbell. She has been writing and reporting on various industries for the past 10 years, more specifically tech in the last three.  Editor Edited by Eduardo Garcia in New York. Eduardo is a graduate of the Columbia Journalism School M.A. Science program and writes regularly for the New York Times Climate Fwd: newsletter. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade.

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Coinsquare Settles

South Korea is mulling new crypto taxes, a major class action takes aim at Google, Facebook and more

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July 22, 2020 By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  TOP SHELF Australian blockchain startups are taking tech giants to court for banning crypto advertisements during the ICO boom, Coinsquare executives have settled over accusations of wash trading and South Korea is mulling increased taxes on crypto profits. Here's the story: 'Be Thankful I Don't Take It All' The South Korean government has proposed a 22% tax – including the 2% local income tax – on crypto trading profits. The Ministry of Economy and Finance tabled a proposal Wednesday to introduce the measure for gains above 2.5 million KRW (~$2,000). If approved by Korea's National Assembly, the tax rule will come into force in October 2021, and will also apply to non-residents and foreign companies who trade on Korean exchanges. Separately, Russian officials have updated a draft bill that would redefine crypto as a taxable property, though not as a means of payment. Previously, the country’s lawmakers introduced a version of the law that would make any business issuing or trading crypto using Russia-based infrastructure illegal.   Crypto Class Action Australian crypto startups have banded together in a class action against Google, Twitter and Facebook related to the banning of crypto advertising in 2018. The business owners claim they were harmed by the bans – meant to minimize harm to potential investors in initial coin offering (ICO) scams, but which may have overreached into legitimate businesses – and seek damages amounting to A$872 million (US$600 million). That amount could rise to A$300 billion in total as more litigants join the class action, according to the Daily Mail Australia. Strengthening Rights The Supreme People’s Court of China has said the country’s legal system should strengthen protections around digital currency ownership rights. Published Wednesday, a new guideline from the court, under the section "Strengthening judicial protection for property and equity rights," specifies that the legal system should enhance protections over new types of ownership rights such as digital currencies, online virtual assets and data. Previously there have been legal decisions made by provincial and municipal courts in China in which digital currencies like bitcoin were treated as virtual properties. Wash Trade Settlement Coinsquare will settle with the Ontario Securities Commission (OSC) over allegations executives had employees fake trades to inflate the platform’s volumes. As part of the settlement agreement reached Tuesday, Coinsquare admitted that around 840,000 illicit wash trades were conducted on the platform, amounting to a total value of around 590,000 bitcoin (BTC) (worth almost $5.5 billion at press time). Senior executives have also agreed to resign, with CEO Cole Diamond to pay a $1 million penalty and founder Virgile Rostand $900,000. Watching the Watchdog SEC Commissioner Hester Peirce on Tuesday criticized the watchdog’s decision to penalize Telegram’s $1.2 billion ICO. Speaking to the Blockchain Association Singapore, "Crypto Mom” Pierce said the SEC fundamentally erred in prosecuting and punishing Telegram's Gram token sale, saying the decision to sell Grams under a "Simple Agreement for Future Tokens" offering structure should have protected the project from securities violations. Peirce again called for a "safe harbor" that would give certain token projects three years to experiment while regulators retooled their frameworks for what is and is not an investment contract.   QUICK BITES Grayscale is closer to listing Bitcoin cash and Litecoin trusts for OTC traders BlockFi, a crypto-backed lender, is eyeing a $50 million Series C (The Block) Robinhood is abandoning plans of a U.K. launch BitMEX is supporting a Bitcoin Lightning dev THE BIG IDEA CoinDesk spoke with Gwern, the pseudonymous tech researcher, about his ongoing experiments with the most powerful AI language model to date.  OpenAI’s GPT-3 has “read” nearly every word published online, and now has the ability to complete human prompts. The tool can write media articles, business prospectuses and – as Gwern has discovered – poetry.    Human: Please write me a sonnet on the subject of the Forth Bridge. AI: Countless their wheat-stacks tall and trains which roar across it by night, All these must fall like Gabriel’s hair, Which was all gold before it withered. As others have noted, the model can’t think on its own and has clear limitations in always writing what its users want it to. To this end, Gwern found that the biggest hurdle is in coming up with the right prompt.  “I think it is partially a matter of intelligence and the technology, yes. I should be able to write out clear descriptions and provide a few examples, which would be enough for a human to infer my intent, but right now it's still quite chancy for GPT-3 to pick good completions,” he said over a direct message.  Considering this, CoinDesk asked whether the final result of running a situation feels like his own work of art.  “[W]hen I nail a prompt, what I tend to feel is more that I've created a new genre,” he said. “[I]n the way that JRR Tolkien might feel that he was the author of 'fantasy' even if he didn't feel otherwise like the author of any specific fantasy book, if you follow me. [O]ther people take the idea and run with it. [Y]ou feel proud of how your idea goes on without you.” Still, after a month of experimentation, Gwern has found the novelty has worn off. “[I]f I'm going to spend half an hour on something, it'd better be testing something interesting on GPT-3.” That’s a fine position to take while the program is still in a private beta. It might be a different story when it’s released to the world.  MARKET INTEL Users Up, Transactions Down? Despite recent price doldrums, the Bitcoin network has as many users since the cryptocurrency topped $20,000 in 2017, according to an on-chain metric. The seven-day moving average of Bitcoin's "active entities" rose to 305,355 on Tuesday to hit the highest level since Dec. 23, 2017, according to Glassnode, which defines active entities as a "cluster of addresses controlled by the same network entity." This would include both businesses like exchanges and custodians and individuals. However, the seven-day moving average of bitcoin’s transaction count has increased 23% over the past four months, but is still well below the 2020 high registered on March 5. Open Interest Open interest for bitcoin futures on BitMEX – the largest derivatives exchange by open interest – passed $1 billion Tuesday morning for the first time since the cryptocurrency market crash in March, a sign of life in a very quiet market. Before the March crash, open interest for bitcoin futures on BitMEX was about $1.2 billion. Further, open interest for bitcoin futures across all cryptocurrency exchanges broke above $4 billion for the first time since March, according to data from Skew. Broken Record Decentralized exchange volumes have already topped $1.6 billion, as of Tuesday, breaking the previous all-time high set in June, according to Dune Analytics data. Four platforms – Uniswap, Curve, Balancer and Bancor Network – have already surpassed their June volumes. “For investors racing to get exposure to the newest decentralized finance (DeFi) projects, decentralized exchanges are the earliest and often only place to make those initial investments,” said Joseph Todaro, managing partner at Blocktown Capital.  TECH POD Hype & High Fees Ethereum fees are at a two-year high as the hype around DeFi yield farming leads to a surge in network activity, according to research firm Coin Metrics. Coin Metrics' data shows median transaction fees, which increase in step with network activity, were around $0.50 yesterday – the highest since August 2018. The total value locked (TVL) in DeFi projects recently passed the $3 billion mark, according to DeFi Pulse, having only crossed the billion-dollar milestone in February. Digital Assets Data analyst Connor Abendschein attributes "massive increase" in ERC-20-standard stablecoins as a contributing factor.    ETHEREUM AT FIVE The World Computer at a Crossroads Five years ago, an unlikely project went live. It called itself “the world computer” and it promised to transform not just cryptocurrencies as we knew it, but the very idea of what could be done with cryptography and consensus. Ethereum had arrived. From its technical aspirations to unicorns and memes, Ethereum is a culture on its own. It has spawned blockchain uses — from digital cats to yield farming — previously unimagined.  Ethereum is at a crossroads. But it must complete an ambitious and fraught retooling of its foundations — the long awaited move to Ethereum 2.0 — to keep up with the market’s demands. CoinDesk is marking the milestone with Ethereum at Five: a cross-platform series comprising a series of special coverage, a pop-up newsletter and live-streamed discussions. New issues and sessions launch daily from July 27-31. Register for CoinDesk Live and our pop-up newsletter. OPINION Scaling Blockchain Businesses Lex Sokolin, a CoinDesk columnist and Global Fintech co-head at ConsenSys, is joined by Figure CEO Mike Cagney and Rebank’s Will Beeson to discuss how to successfully run a business in blockchain, why working from home is better and lessons learned from scaling multi-billion dollar corporations.  WHO WON #CRYPTOTWITTER Blockchain Bites A newsletter from CoinDesk See previous editions Copyright © 2020 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences here.

CoinDesk LIVE Presents: ETH at Five! Join us to Celebrate Five Years of Ethereum!

July 27-31, 2020 at 4PM ET, Daily

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Five years ago, an unlikely project went live. It called itself “the world computer,” and it promised to transform not just cryptocurrencies as we knew it, but the very idea of what could be done with cryptography and consensus. Ethereum had arrived.  Ethereum is at a crossroads. It has spawned blockchain uses — from digital cats to yield farming — previously unimagined. But it must complete an ambitious and fraught retooling of its foundations — the long-awaited move to Ethereum 2.0 — in order to keep up with the market’s demands.  CoinDesk is marking the moment with ETH at Five, a series of thought-provoking stories and live-streamed discussions examining the history and promise of Ethereum.  Tune in to CoinDesk Live, July 27-31 at 4 p.m. Eastern each day or call +1 (661) 4-UNICRN any time you like. P.S. Watch out for the Easter eggs.  REGISTER TODAY LIVE SESSIONS July 27 - 31, 2020 at 4 p.m. Daily Peace, Love and Unicorns: The Culture of Ethereum Monday July, 27 | 4 PM ET Presented by Andrew Keys, Tonya M Evans, Amanda Cassatt and Leigh Cuen Ethereum prides itself on its inclusive, unicorns-and-rainbows vibe, which is a far cry from the libertarian, cypherpunk, mountain-man culture of Bitcoin. Join us for a discussion about how this diverse, freewheeling and extremely social approach to software development made Ethereum what it is today. Stay for fun memories from a panel of veteran Ethereans from their nonstop global tour of conferences, meetups and festivals.   $55 Million Shockwave: How the DAO Hack Changed Ethereum Tuesday July, 28 | 4 p.m. ET Presented by Taylor Monahan, Emin Gun Sirer, Griff Green and Matt Leising The theft, the chain split, the legal aftermath — perhaps no single event impacted Ethereum's trajectory as much as the DAO hack of 2016. Bloomberg's Matt Leising sits down with the key protagonists to reflect on the events and their after-effects four years later. Ethereum's Bankless Bankers   Ethereum's Bankless Bankers Wednesday July, 29 | 4 p.m. ET Presented by Hayden Adams and Robert Leshner Smart contracts were supposed to substitute handshakes and signatures with software. These ideas have gone from science fiction to a $2.5 billion market as of mid-July, 2020, thanks to the boom in so-called decentralized finance built on Ethereum. An unlikely crew has emerged as the leading figures of this movement. We'll talk to them about how we wound up here Year Zero: From Those Who Were There   Year Zero: From Those Who Were There Thursday July, 30 | 4 p.m. ET Camila Russo, Joe Lubin, Anthony Di Iorio, Gavin Wood, Ken Seiff and Texture Getting the “world computer” operational was no easy task. Hear about the 24/7 coding, the infighting and the instant millions minted in that process. Join Camila Russo, author of the new book “The Infinite Machinem” as she digs into Ethereum's highs and lows with the programmers, entrepreneurs and investors who got in on the ground floor. Inside the Hype Machine: Behind the Scenes of the ICO Boom   Inside the Hype Machine: Behind the Scenes of the ICO Boom Friday July, 31 | 4 PM ET David Wachsman, Brad Laurie and Hartej Sawhney Smart-contract auditors, PR pros, YouTube "influencers:" Meet the service class that was caught up in 2017's ICO gold rush, selling metaphorical shovels to prospectors seeking billions in instant riches. We relive the good, the bad and the ugly of that era through their eyes.   REGISTER TODAY This email was sent by: CoinDesk   250 Park Avenue South New York, NY, 10003, US   Want to change how you receive these emails? update your preferences or unsubscribe from this list