Day: September 4, 2023

Harvard legal scholar, Christine Kim, proposes a shift in tax principles for the ‘metaverse’. Economic activities involving virtual assets could be considered taxable. She outlines models for tax collection, accounting for potential resistance and discusses possibilities for taxing unrealized gains. Managing tax evasion and accurately valuing new assets are identified as challenges.

The class-action lawsuit against the creators of HelbizCoin centers on fraudulent promises and price manipulation, adding complexity to cryptocurrency regulations as the coin is classified as a security under federal law. This case could broadly impact the relationship between national laws, international jurisdictions, and global networks, potentially leading to stricter regulations and reshaping the crypto-market.

“The digital euro, a central bank digital currency (CBDC) proposed by the European Commission, is seen as a new paradigm for preserving monetary sovereignty. It would ensure Europeans maintain access to a public payment option, countering the dominance by private payment services’ standalone solutions. However, its implementation requires a balance between fostering innovation and preserving economic stability.”

The U.S. Court of Appeals Circuit Judge has granted Grayscale Investments’ request to convert its Bitcoin Trust into a listed Bitcoin exchange-traded fund (ETF). But as the industry hails the decision as a victory, it’s worth questioning the real implications for the crypto industry and the broader acceptance of crypto ETFs in the future.

The UK’s Financial Conduct Authority now requires Virtual Asset Service Providers to gather and validate information on crypto transactions, even beyond local jurisdiction. This regulation, known as the Travel Rule, aims to counter money laundering and terrorist financing, yet raises concerns regarding privacy and curbing innovation within the growing crypto industry.

OKX, a digital asset exchange, seeks to acquire a Virtual Asset Service Provider License (VASP) amid Hong Kong’s crypto-friendly environment. With full licenses already granted to HashKey and OSL, OKX intends to onboard 100,000 to 200,000 users in its initial year of trading services. The city’s progressive stance toward crypto could position it as a “test net” for mainland China following China’s total crypto ban.

The SEC’s potential favoritism towards traditional banking applications from BlackRock and Fidelity has raised concerns. Following the recent Grayscale case, comments from legal expert Felix Shipkevich suggest the SEC’s controversial regulation methods may unduly affect smaller crypto institutions while benefiting larger firms.

Gary Gensler, Chair of the Securities and Exchange Commission (SEC), has adopted a circumspect approach towards cryptocurrencies since his appointment, voicing concerns over potential systemic risks. Amid criticism, he increased his legal actions against prominent industry players like FTX, Binance, and Coinbase. However, a recent judgement favoring Grayscale could compel SEC to reconsider its regulatory rigidity towards the crypto market.

“Harvard legal scholar, Christine Kim argues the metaverse should be taxed immediately, as significant wealth is generated by users through real economic activities. Kim proposes immediate taxation and two enforcement methods: platforms withholding taxes or a ‘residence taxation’ module for users.”

“Cryptocurrency regulation is emerging as an international focal point, highlighting distinct differences between jurisdictions. While China’s court recognizes crypto as property, South Korea targets North Korean digital assets. Meanwhile, the London Stock Exchange and OKX embark on blockchain ventures, and MoonPay adapts to UK regulations.”

“Rajagopal Menon, VP of WazirX, discusses India’s crypto regulation journey from suspicion to acceptance, stimulated by public campaigns and talks with policymakers. Despite taxing complications, WazirX is committed to user protection and education, striving for regulations reflecting India’s diverse consumer base while maintaining global standards.”

The Australian Senate has delayed Senator Andrew Bragg’s Digital Assets Bill for amendments, including the exclusion of certain tokens. While these modifications might shape a clearer regulatory framework, concerns arise about potential negative impacts on Australia’s crypto industry, including stifling innovation and deterring investors.

The digital asset landscape is witnessing intense activity regarding the approval of the first spot-traded Bitcoin ETF by the U.S. Securities and Exchange Commission. Notwithstanding setbacks and concerns around investor protection, the increasing interest among major institutions suggests the possibility of approval could be nearing. The SEC’s decision is anticipated by early 2024.

The UK government focuses on the risks and policy support for AI at the upcoming global AI safety summit. The discussions will address the risks posed by AI systems, fostering AI development for public good, and establishing international consensus on AI safety.

The US SEC, after a court victory by Grayscale, might see itself obligated to approve multiple spot Bitcoin ETF applications. This could result in a significant shift in cryptocurrency markets and mark a milestone in the evolution of cryptocurrency regulations.

Singapore’s new president, Tharman Shanmugaratnam, with past finance roles may reshape fintech policies. His views on cryptocurrency, from ‘slightly crazy’ to its potential significant role in finance, could impact Singapore’s crypto regulatory balance amidst the aftermath of local crypto establishments’ failures.