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| Here's your daily Inside Cryptocurrency briefing: - ✍️ The U.S. state of Wyoming's new act granting decentralized autonomous organizations legal status,
- 📝 Crypto implications in U.S. President Joe Biden's 2025 budget proposal,
- 📈 The rise of Bitcoin on the list of the top 10 assets by market cap, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | U.S. President Joe Biden has released his budget proposal for the 2025 fiscal year, proposing new taxes for crypto mining activities and wash sale rules for digital assets once again. Biden's administration has suggested that the proposal would generate nearly $10B in 2025 and $42B over the next decade for the government. More: - In the proposal, Biden recommended applying wash sale and mark-to-market rules to digital assets, introducing information reporting requirements for digital asset firms, implementing an excise tax on crypto mining, and establishing new foreign crypto account reporting rules.
- The administration said the budget would close tax loopholes that only benefit wealthy crypto investors.
- A crypto wash sale means that a crypto trader sells assets at a loss and repurchases them immediately for tax purposes, reducing the tax burden.
- This strategy is not allowed with stocks and bonds by law, but crypto traders can currently do that since digital assets are not classified as securities.
- Biden's budget proposal suggests eliminating this practice in the crypto market by amending the tax code's anti-abuse rules to cover crypto assets.
- The document also recommends implementing the mark-to-market accounting practice for digital assets, adjusting the value of crypto assets to reflect their value as determined by current market conditions.
- The administration expects the government to generate a total of $9B in 2025 by including crypto assets in wash sale rules and mark-to-market rules alone and anticipates this saving to even rise to $32.3B over the next 10 years.
- The document also points out that implementing an excise tax on crypto mining would similarly remove around $7B from the national deficit over the next decade.
Zoom Out: - Biden's fiscal 2024 budget proposal, released in March last year, also came with similar provisions related to crypto.
- However, the U.S. Congress did not include those suggestions in draft budget bills.
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| 2 | | 
What the numbers say: Bitcoin (BTC) has recently surpassed silver in market cap, becoming the eighth largest asset in the world. The popular cryptocurrency's market cap reached $1.42T as of Monday as silver's remained steady at $1.39T. Gold, Microsoft, Apple, NVIDIA, Saudi Aramco, Amazon, and Alphabet came ahead of Bitcoin in the top 10, respectively. Meta Platforms, formerly known as Facebook, has become the only asset class staying behind Bitcoin and Silver on the ranking, with its $1.24T market cap. Relevance: The rapid increase in Bitcoin's market cap was mainly triggered by a price jump in the token's price over the past seven days. Last week, the figure hit a new all-time high above $69,000, surpassing its record in November 2021. Then, the popular cryptocurrency further maintained the upward trend in its value, breaking consecutive price records. On Monday, Bitcoin surpassed the $72,000 level for the first time in its history. The massive investor interest in recently launched spot Bitcoin exchange-traded funds (ETFs) in the U.S. has become the primary contributor to this price jump. The enthusiasm around the upcoming Bitcoin halving event, expected to happen sometime in April or May, was also one of the main igniters of the price record of Bitcoin. The inflation-easing event will decrease miners' Bitcoin mining reward by half, reducing the number of new bitcoins entering the network by 50%. Analysts believe the event will trigger a further price increase in the leading cryptocurrency in the long term since it would ultimately reduce the total amount of tokens in circulation. Brands that should care: In January, spot Bitcoin ETFs also surpassed silver ETFs in assets under management (AUM). The slide stemmed from the rapid success the U.S.-based crypto ETFs gained within the same month they began trading. The Bitcoin ETF issuers in the U.S. include some of the largest traditional financial services firms, such as Fidelity, Franklin Templeton, Valkyrie, Ark Invest, Grayscale, BlackRock, WisdomTree, and Invesco Galaxy. | | | |
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| 3 | | Wyoming Gov. Mark Gordon has signed a new bill dubbed the Wyoming Decentralized Unincorporated Nonprofit Association (DUNA) Act into law, granting legal status to decentralized autonomous organizations (DAOs). The new law will take effect on July 1. More: - The legislation mainly establishes a legal framework for the formation and management of the DAOs founded under the act and with at least 100 members.
- The bill outlines the requirements for forming a DAO in Wyoming, the roles of the smart contracts, and the legal responsibilities of the association and its members.
- The law will allow Wyoming-based DAOs to contract with third parties, open bank accounts, appear in court, pay taxes, meet information reporting requirements, and pay compensation to its members in exchange for participation in the governance process.
- The act will also let the DAOs engage in profit-making activities and operate within the bounds of applicable laws without compromising their decentralized structure and nonprofit purposes.
- Besides, the legislation sees the DUNAs as separate entities from their members, meaning that it would allow a DAO to be held responsible for an action without implicating the individual members.
Zoom Out: - The DAOs refer to organizations where there is no central leadership, the management is maintained by a decentralized computer program, and the community is governed by a set of rules enforced by a blockchain.
- Management, decision-making, and finances are handled through blockchain in the DAOs, with token holders participating in voting.
- The DAOs' votes and activities are posted on a blockchain, ensuring that all actions of members are publicly viewable.
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| 4 | | The London Stock Exchange (LSE), a U.K.-based stock exchange, has announced that it will start accepting applications for exchange-traded notes backed by Bitcoin (BTC) and Ether (ETH), the two largest cryptocurrencies by market cap, in Q2 2024. The exchange has underlined that it would accept applications meeting the requirements in its crypto exchange-traded fund (ETF) factsheet. More: - The upcoming ETNs will allow investors to trade securities that track the performance of crypto assets listed on the exchange during trading hours in London.
- The LSE said it would disclose the exact launch date later.
- The exchange will require the proposed notes to be physically backed and non-leveraged.
- Also, the underlying crypto assets will have to be held in an offline depository wallet by 90% or kept under custody in a method that would achieve an equivalent outcome.
- The underlying assets will also have to be held by a custodian subject to anti-money laundering (AML) regulations in the U.K., European Union (EU), Jersey, Switzerland, or the U.S.
- The LSE's announcement came shortly after the Financial Conduct Authority (FCA), the U.K.'s financial market regulator, stated that it would not object to requests from recognized investment exchanges to create a market segment for crypto-backed ETNs.
- However, the FCA underlined that these investment products could be offered only to professional investors, such as credit institutions and investment firms, banning them from being offered to retail investors.
Zoom Out: - The ETNs are debt instruments that provide exposure to an underlying asset and are mostly considered an alternative to spot crypto ETFs, though they are backed by an issuer, unlike ETFs backed by a pool of assets.
- In April last year, the LSE also announced its plans to offer Bitcoin futures and options in partnership with the digital trading platform Global Futures and Options (GFO-X).
- Last September, the firm revealed that it would build a blockchain-powered trading platform for traditional financial assets, underlining that the new platform would not involve cryptocurrencies but would use blockchain technology to increase the efficiency of buying, selling, and holding traditional assets.
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| 5 | | South Korea's National Tax Service, the country's tax watchdog, has announced that it would launch a crypto-focused asset management system by 2025 to prevent digital asset-related tax evasion. The agency selected GTIC after a preliminary consultation as the lead firm in building the system. More: - The system will analyze and manage the information collected from crypto trading platforms operating in South Korea.
- The country requires crypto trading platforms to provide detailed information on their users' crypto transactions.
- South Korea's crypto gains tax will come into effect in January 2025.
- After the tax plan takes effect, the country's government will impose a 22% tax on crypto gains exceeding 2.5M Korean won (~$1,875).
Zoom Out: - South Korea has increased its regulatory efforts related to the crypto market over the past year.
- In June 2023, the country's National Assembly passed the Virtual Asset User Protection Act to better protect crypto investors.
- The legislation has authorized the Financial Services Commission (FSC), South Korea's financial market regulator, and the Bank of Korea, the country's central bank, to supervise the crypto service providers and virtual asset custodians and to enforce penalties in case of a potential violation.
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| 6 | | South Korean gaming giant Nexon Group has partnered with Ava Labs to launch its popular 2D mass multiplayer online role-playing game MapleStory on the firm's Avalanche blockchain network. The collaboration will see Nexon Group offering a new Web3-based gaming experience under the brand MapleStory Universe. More: - The first game to be launched under the new brand will become MapleStory N.
- The game will allow players to build their in-game virtual worlds and receive Web3-based rewards, such as NFTs, in return.
- In the virtual experience, there will be a fixed amount of Web3 items to obtain in various locations within the map, creating competition among users.
- Nexon Group plans to release MapleStory N by the end of the year.
- The game will be launched on a separate network inside Avalance specifically designed for Nexon Group's gaming ecosystem.
- The gaming giant initially partnered with Polygon Labs to launch the Web3 version of its MapleStory game on the Polygon network and integrate blockchain elements into it.
- However, the two firms later mutually agreed to cut ties, and Nexon Group decided to migrate MapleStory Universe to Avalanche, citing the network's assistance with server and infrastructure needs, security, and experience in onboarding and supporting various Web3 games.
Zoom Out: - MapleStory, launched in 2003, was one of the first online games to popularize the free-to-play gaming model.
- The game currently has more than 180 million users worldwide across various countries, including South Korea, the U.S., Europe, Japan, and China.
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- In a weekly memo sent to investors, the crypto-focused investment management firm Bitwise's chief information officer (CIO), Matt Hougan, forecasted that institutions with trillions of dollars of assets under management will start investing in spot Bitcoin exchange-traded funds (ETFs) in Q2 this year.
- Japanese tech giant Sony's video gaming brand, PlayStation, has filed a patent suggesting that it is exploring a system to allow players to trade in-game items using NFTs across different gaming platforms.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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