Crystal Blockchain Study Reveals $16.7 Billion in Crypto Assets Stolen Since 2011

March 21, 2023 Bitcoin.com

IRS calls for public feedback on taxing NFTs as collectibles

March 21, 2023 Coin Telegraph

Those wishing to offer feedback to the IRS on having NFTs treated as collectibles, such as coins or works of art, have until June 19 to submit comments.

The United States Internal Revenue Service said it plans to release guidance on having nonfungible tokens, or NFTs, treated as collectibles under the U.S. tax code.

In a March 21 notice, the IRS called for feedback from the U.S. public on how NFTs could be taxed as collectibles. According to the government body, collectibles under U.S. tax law “do not have as advantageous capital-gains tax treatment as other capital assets,” seemingly referring to how crypto assets are currently taxed in the country.

“Until additional guidance is issued, the IRS intends to determine when an NFT is treated as a collectible by using a ‘look-through analysis,’” said the notice. “Under the look-through analysis, an NFT is treated as a collectible if the NFT’s associated right or asset falls under the definition of collectible in the tax code.”

Under the U.S. tax code, selling collectibles such as coins or artwork is subject to a maximum capital gains tax rate of 28%. The proposed IRS guidance could apply the same standard to an NFT certifying ownership of a coin, piece of art or similar collectible.

The IRS called for comments to be submitted by June 19, so U.S. taxpayers needing to file their 2022 returns before the April 18 deadline likely won’t be affected. Forms require anyone receiving, earning, transferring or selling crypto to check a box in the affirmative to correctly report their taxes and, depending on the filer’s status, report transactions as capital gains or income.

If you owe taxes, it's important to file your #IRS tax return by the due date and pay as much as you can. Late-filing penalties are calculated based on the amount owed for each month a tax return is late. See https://t.co/tZ7Ni3lhn3 pic.twitter.com/FEnYtsBDiT
— IRSnews (@IRSnews) March 21, 2023

In October, the IRS introduced a draft bill proposing NFTs and cryptocurrencies be reported in a broad “Digital Assets” section for tax purposes. Generally, if a U.S. taxpayer hodls all digital assets for an entire year or transfers them between wallets they control, those holdings do not need to be reported.

Yellen defends government intervention to avoid another SVB

March 21, 2023 Coin Telegraph

Banking

The Treasury Secretary of the U.S. Janet Yellen said the federal government will intervene if it is necessary to protect other small lenders.

Nearly two weeks after the collapse of three United States banks - Silicon Valley Bank (SVB), Silvergate and Signature- Treasury Secretary Janet Yellen said the federal government is ready to take action if needed.

According to a Bloomberg report of excerpts from a speech Yellen will give on Tuesday at the American Bankers Association in Washington D.C., the Treasury Secretary said:

“Our intervention was necessary to protect the broader US banking system, and similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

Yellen is set to defend recent measures taken by the government to defend the banks and the greater economic impact of the situation, calling the government actions “decisive and forceful actions.”

Additionally she said the government intervention helped to maintain the "important role" of small and mid-size lenders in the U.S. economy.

“The Treasury is committed to ensuring the ongoing health and competitiveness of our vibrant community and regional banking institutions.”

U.S. regulators began swiftly working on a plan following the banking crisis, during which Yellen initially said no bailout would be necessary. Instead insured and uninsured deposits were guaranteed at both SVB and Signature by the regulators. The U.S. Federal Reserve also launched a new way to help lenders cover withdrawals.

A meeting has been announced by Congress which is scheduled for Mar. 29, which will delve into failures of SVB and Signature Bank

U.S. President Joe Biden said he is “firmly committed” to holding accountable whoever was responsible for the recent collapses. Biden also stated that shielding depositors involved with SBV and Signature will be at ‘“no cost to the taxpayer."

The Department of Justice and the Securities and Exchange Commission have both reportedly opened inquiries into the incident. Meanwhile, economists have analyzed that over 186 banks in the U.S. are well-positioned for collapse.

Florida gov and US presidential hopeful calls for CBDC ban

March 20, 2023 Coin Telegraph

CBDC

"What the central bank digital currency is all about is surveilling Americans and controlling behavior of Americans," said Ron DeSantis at a 'Big Brother’s Digital Dollar' podium.

Ron DeSantis, the Governor of Florida expected by many to throw his hat into the ring for the 2024 United States presidential race, has called for a ban on a digital dollar.

Standing in front of a podium bearing the line “Big Brother’s Digital Dollar” at a March 20 press conference, DeSantis spoke out against the Federal Reserve issuing and controlling a central bank digital currency, or CBDC, in the United States, claiming the initiative would grant “more power” to the government. He cited concerns over inflation in the country, the Fed increasing interest rates, and pressure on banks as examples of government policies directly affecting U.S. consumers.

“[A CBDC] provides the government with a direct view of all consumer activities,” claimed the Florida governor. “Any way they can get into society to exercise their agenda, they will do it. So, what the central bank digital currency is all about is surveilling Americans and controlling behavior of Americans.”

No CBDC in Florida https://t.co/p9pwSTmrlN
— Ron DeSantis (@GovRonDeSantis) March 20, 2023

DeSantis largely dismissed arguments in favor of the Fed issuing a digital dollar — environmental concerns and reaching the underbanked — without citing evidence. He pointed to China’s rollout of its digital yuan in an attempt “to monitor citizen behavior allowing for the surveillance of spending habits and to cut off access to goods and services” as well as how the governments of the Bahamas and Nigeria have handled CBDCs.

“You’re opening up a major can of worms and you’re handing a central bank huge, huge amounts of power.”

This is a developing story, and further information will be added as it becomes available.

Google Trends Data Reveals Searches for ‘Banking Crisis,’ ‘Bank Runs,’ Skyrocket

March 19, 2023 Bitcoin.com

SBF shilled FTX risk model to FDIC chairman Gruenberg prior collapse

March 19, 2023 Coin Telegraph

Coin Telegraph

The invitation was mediated by former CFTC Commissioner Mark Wetjen, who joined FTX US as the Head of Policy and Regulatory Strategy in Nov. 2021.

Before crypto exchange FTX and its founder Sam Bankman-Fried (SBF) got tied down around allegations of misappropriation of users’ funds, SBF was among the most influential crypto entrepreneurs. Long before FTX collapsed, an allegedly leaked email exchange with a top regulator shows SBF’s intent to get the exchange federally regulated.

On May 28, 2022, nearly six months before FTX filed for bankruptcy and SBF resigned as the CEO, Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg received an invitation to meet SBF on June 13, 2022, Washington Examiner reported. The email was mediated by former CFTC Commissioner Mark Wetjen, who joined FTX US as the Head of Policy and Regulatory Strategy in Nov. 2021.

*Sam Bankman-Fried's meeting invitation to FDIC Chairman Martin Gruenberg. Source: Washington Examiner*

In the latter half of the email, Wetjen told Gruenberg that FTX is in the “unusual position of begging the federal government to regulate us.” He further added:

“We have an application before the CFTC that lays out for the agency how to do so. All the CFTC has to do is approve it. Once the CFTC does, the others will follow — the other major US exchanges also have CFTC licenses.”

In response to the SBF’s request, Gruenberg agreed to meet the duo, as shown in the leaked email below.

*FDIC chairman Martin Gruenberg accepts* Sam Bankman-Fried's meeting invitation. Source: Washington Examiner

Following the collapse of FTX, SBF’s political ties were uncovered amid parallel investigations. An FDIC spokesperson confirmed that the FDIC chairman met SBF as part of “routine courtesy visits with leaders of financial firms and institutions.”

Alongside federal investigations, FTX’s new management started conducting internal investigations to track down missing funds.

Sharing the FTX Debtors’ press release just issued: https://t.co/r7PlneGSXF
— FTX (@FTX_Official) March 16, 2023

Recent court documents revealed that SBF and five other former executives of FTX and Alameda Research received $3.2 billion in payments and loans from FTX-linked entities. SBF reportedly received the lion’s share of the funds at $2.2 billion out of the lot.

Peter Schiff blames ‘too much gov’t regulation’ for worsening financial crisis

March 19, 2023 Coin Telegraph

Banks

Finding the right balance between regulations and banking institutions is important for Schiff, considering that Puerto Rico regulators closed down Schiff’s bank due to non-compliance.

The recent fall of major banks in the United States and the need for federal intervention reignited discussions to identify the most effective ways to safeguard the crumbling economies. Comparing the episode to the financial crisis of 2008, prominent economist Peter Schiff found that increasing banking regulations contribute to the worsening financial crisis.

A deeper analysis of Silicon Valley Bank (SVB) by a group of economists revealed that nearly 190 banks in the United States are at risk of a depositor-driven collapse. It was highlighted that the monetary policies penned down by central banks could hurt long-term assets such as government bonds and mortgages, creating losses for banks.

The 2008 financial crisis was driven by the collapse of the housing market. However, Schiff believed the crisis was caused by “too much government regulation.”

When the Govt. imposed lots of new #banking regulations after the 2008 #FinancialCrisis, we were assured that what is happening right now would never happen again. But one reason we had the 2008 Financial crisis was too much Govt. regulation. That's why this crisis will be worse.
— Peter Schiff (@PeterSchiff) March 17, 2023

Schiff highlighted how the US government introduced new banking regulations after the 2008 financial crash while promising that “what is happening right now would never happen again.” He added:

“But one reason we had the 2008 Financial crisis was too much Govt. regulation. That's why this crisis will be worse.”

Finding the right balance between regulations and banking institutions is important for Schiff, considering that Puerto Rico regulators closed down Schiff’s bank not too long ago, on July 04, 2022.

Despite no evidence of crimes, Puerto Rico regulators closed my bank anyway for net capital issues, rather than allow a sale to a highly qualified buyer promising to inject capital far in excess of regulatory minimums. As a result accounts are frozen and customers may lose money.
— Peter Schiff (@PeterSchiff) July 3, 2022

At the time, Schiff was reminded by Crypto Twitter as to why millions of people around the world vouch for Bitcoin (BTC) adoption in the quest for financial freedom.

On the other end of the spectrum, crypto entrepreneurs have started to double down on Bitcoin’s epic comeback. Former Coinbase chief technology officer Balaji Srinivasan predicted that Bitcoin would reach $1 million in value within 90 days.

Sir, I believe we have ourselves a deal https://t.co/9JYaLNo9Eq
— James Medlock (@jdcmedlock) March 18, 2023

As Cointelegraph reported, pseudonymous Twitter user James Medlock and Srinivasan made the wager based on their different views of the U.S. economy's future amid ongoing uncertainty regarding the country's banking system.

Srinivasan’s bet circles around an impending crisis that will lead to the deflation of the U.S. dollar and take the BTC price to $1 million.

Former Coinbase CTO makes $2M bet on Bitcoin’s performance

March 18, 2023 Coin Telegraph

<div>Former Coinbase CTO makes M bet on Bitcoin's performance</div>

Banks

Balaji Srinivasan has predicted Bitcoin will reach $1 million within 90 days as a consequence of hyperinflation in the United States.

Former Coinbase chief technology officer Balaji Srinivasan has made a millionaire bet on Bitcoin's (BTC) price over the next 90 days, predicting the cryptocurrency price will reach $1 million by June 17.

The wager was initiated on March 17, when pseudonymous Twitter user James Medlock offered to bet anyone $1 million that the United States would not experience hyperinflation. A few hours later, the former Coinbase CTO accepted the bet.

Sir, I believe we have ourselves a deal https://t.co/9JYaLNo9Eq
— James Medlock (@jdcmedlock) March 18, 2023

Under the proposed terms, if Bitcoin's price fails to reach $1 million by June 17, Medlock will win $1 million worth of the dollar-pegged stablecoin USD Coin (USDC) and the 1 BTC. The same way, if Bitcoin is worth at least $1 million by the date, then Balaji can keep the 1 BTC and the $1 million in USDC. Srinivasan explained in the thread:

“You buy 1 BTC. I will send $1M USD. This is ~40:1 odds as 1 BTC is worth ~$26k. The term is 90 days.”

As per the thread, other Twitter users helped set up a smart contract with the betting terms. Srinivasan also disclosed that he would move another $1 million in USDC for another wager on the same topic:

"I am moving $2M into USDC for the bet. I will do it with Medlock and one other person, sufficient to prove the point. See my next tweet. Everyone else should just go buy Bitcoin, as it'll be much cheaper for you than locking one up for 90 days."

Medlock and Srinivasan made the wager based on their different views of the U.S. economy's future amid ongoing uncertainty regarding the country's banking system.

Srinivasan argues that there's an impending crisis that will lead to the deflation of the U.S. dollar, and thus, to a hyperinflation scenario that would take the BTC price to $1 million. Medlock, on the other hand, is bearish about upcoming hyperinflation in the country.

Meanwhile, Bitcoin's price has reached $27,387 at the time of writing, with its market capitalization adding over $194 billion year-to-date to a 66% growth in 2023, outperforming Wall Street bank stocks amid fears of a global banking crisis.

Also, for the first time in a year, BTC's price has shifted away from United States stocks, rising about 65% compared to the S&P 500's 2.5% gains and the Nasdaq's 15% decline, Cointelegraph reported.

Binance’s response to U.S. Senators lacks financial information: Report

March 18, 2023 Coin Telegraph

Binance

Binance's Patrick Hillman answered a letter from United States Senators requesting information on Binance's operations in the country and its relationship with Binance.US.

Binance has answered a letter from United States Senators from early March requesting information about the crypto exchange operations in the country, including its balance sheet.

According to a report on March 18, Binance's response did not include the financial data requested. Bloomberg learned from an anonymous source that despite being omitted from the letter, the exchange sent the information to U.S. regulators.

In the 14-page document, Binance chief strategy officer Patrick Hillman dives into the exchange's compliance history, recognizing previous mistakes and claiming the firm has built solid Know Your Customer and Anti-Money Laundering policies in the past years. The response, however, failed to address the senator's concerns about Binance's lack of transparency.

Hillman noted in the letter:

"Binance leverages both internal tools and tools from established third-party vendors to scan user transactions and profiles in real time [...] between August 2021 and November 2022, Binance stopped over 54,000 transactions as a result of transaction monitoring alerts."

On March 2, three U.S. senators led by Elizabeth Warren sent a letter to Binance CEO Changpeng “CZ” Zhao and Binance.US CEO Brian Shroder, raising concerns about Binance's activities and requesting the companies balance sheets.

According to the Senators, there is evidence that Binance and its American arm attempted to evade U.S. regulators, evade sanctions and facilitated the laundering of at least $10 billion. “What little information about Binance’s finances is available to the public suggests that the exchange is a hotbed of illegal financial activity,” the senators wrote in the letter.

Binance has previously stated that the two companies are separate entities with independent management and operations.

Among the senator's requests were “all Binance and Binance subsidiary balance sheets from 2017 to the present,” as well as Anti-Money Laundering and similar policies, and documents about the relationship between Binance and Binance.US.

The U.S. Securities and Exchange Commission (SEC) launched in February a probe into Binance.US regarding trading firms alleged to be connected to Binance CEO Changpeng Zhao. An investigative report has suggested that Binance was behind a transfer of roughly $400 million in funds from a Binance.US account to a trading firm managed by CEO Changpeng Zhao.

Sam Bankman-Fried to propose revised bail package ‘by next week’

March 18, 2023 Coin Telegraph

Coin Telegraph

The move comes after a judge expressed displeasure about SBF’s use of encrypted-messaging apps and virtual private network services while on bail.

The lawyer representing crypto entrepreneur Sam Bankman-Fried (SBF) in the ongoing FTX case will soon present a revised bail package to Judge Lewis Kaplan of the Southern District of New York. The move comes after Kaplan expressed displeasure about SBF’s use of encrypted-messaging apps and virtual private network (VPN) services while out on bail.

Legal proceedings around FTX’s downfall led SBF to avoid possible jail time with a $250 million bail bond. However, while on bond, the entrepreneur used Signal, an end-to-end encrypted messaging service, to contact former FTX and Alameda colleagues. Kaplan forbade SBF from using such apps and threatened to revoke bail privileges if he acted out of order.

Following up on this order, Bankman-Fried’s lawyer, Christian Everdell, revealed on March 18 that SBF and federal prosecutors “have been working diligently to agree on a set of specific bail conditions that will address the concerns expressed by the government and the court,” Bloomberg reported. In the letter, Everdell stated:

“We believe we are close to a resolution and anticipate being able to present the court with a proposed order outlining these conditions by next week.”

SBF maintains his innocence in claims relating to the misappropriation of FTX users’ funds. However, the entrepreneur could face 115 years of jail time if found guilty under the eight counts against him.

During the ongoing restructuring of FTX, the current administrators revealed that FTX and Alameda Research’s former top brass received $3.2 billion in payments and loans from FTX-linked entities.

Sharing the FTX Debtors’ press release just issued: https://t.co/r7PlneGSXF
— FTX (@FTX_Official) March 16, 2023

Out of the lot, Bankman-Fried reportedly received the lion’s share of the funds at $2.2 billion.

As Cointelegraph reported, FTX’s management is investigating its rights to pursue potential action against the recipients and their subsequent transferees.

United States

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