CryptoHaven

11/08/2023

Crypto on the Campaign Trail: Assessing Presidential Candidates’ Cryptocurrency Positions

Here is what the four top presidential hopefuls have to say about cryptocurrency

08/10/2023

On Monday, PayPal launched its own stablecoin backed by the US dollar, dubbed PYUSD. Specifically, PYUSD is backed by dollar deposits and US Treasuries. The token can be redeemed for US dollars at any time and can be used to transact in other cryptocurrencies on the PayPal trading platform.

PayPal is not the first mainstream company to launch a stablecoin. In 2019, Facebook planned to launch its own stablecoin named Libra; however, financial regulators quickly quashed the project before it was up and running. That said, PYUSD is being launched against a background of clearer European and American regulatory frameworks for the legal creation of a stablecoin. On Monday, the US House Financial Services Committee chair said that PayPal’s announcement further shows that stablecoins “hold promise as a pillar of our 21st century payments system.”

Given PayPal’s history in payments and a clearer regulatory outlook, PayPal’s stablecoin might have a better fate than Facebook’s planned stablecoin. The market seemed to believe so with PayPal stock trading roughly three percent higher following the announcement.

08/05/2023

Coinbase reported earnings this week against a backdrop of regulatory uncertainty and low consumer confidence. The world’s second largest cryptocurrency exchange reported $663 million in net revenue, a 10% decrease year-over-year. Revenue still beat estimates, where experts had underestimated the boost to revenue from its institutional players, such as Blackrock, as well as its increasing market share in the United States driven by many competitors being troubled by regulatory issues. Coinbase posted a $77 million net loss, marking its sixth quarterly loss in a row; though, the loss is dramatically lower than its loss in the same quarter last year and its EBITDA was positive at $194 million.

The most important takeaway, however, took place during the earnings call. Specifically, the Chief Legal Office for Coinbase stated during the call that “[w]ith respect to the litigation with the SEC, I want to be very clear, we do think we can win. We expect to win…” The statement provides keen insight into the mindset of the executive, namely the current level of confidence the board has in its battle with the SEC.

07/28/2023

On Monday, the Worldcoin Foundation began operating its cryptocurrency project, Worldcoin, globally. The project attempts to offer cryptocurrency traceable on the blockchain that is accessible only through biometric scanning. Specifically, for an individual to access his funds, he would be required to prove his identity through a devices called the Orb, which is a football-sized silver globe that scans a person’s eye to create a unique identifier that is stored on the blockchain.

The goal of the project is to create one global identification system that provides financial services to everyone in a way that is secure. Because the project would create a global identity system, everyone across the globe would be able to access the currency, resulting in a more globalized economy filled with international trade and business. The founders claim the system is more secure than traditional cryptocurrency projects because the iris scans that are used to verify users’ identities are very difficult to counterfeit.

That said, if you are reading this and thinking that this is something out of a dystopian movie, you are not alone. Privacy advocates have raised concerns about the project, namely that it could be used to track people’s movements and activities. Also, advocates are concerned about how the biometric data will be stored and possibly shared with other third parties. Crypto enthusiasts have also blasted Worldcoin for removing anonymity and decentralization, the pillars of the modern cryptocurrency industry.

While Worldcoin continues to be a controversial project in the cryptocurrency industry, there is no dispute that the project and the technology behind the project are becoming more mainstream. According to its website, Worldcoin has had more than 2 million signups since its launch. Though it is unclear whether users signed up mere for the $50 sign-up bonus or whether users actually believe in the technology, the project and its technology are worth “keeping an eye on.”

Check out Worldcoin’s website here: https://worldcoin.org/

Building the world's largest identity and financial public utility, giving ownership to everyone.

07/21/2023

On Thursday, House Republicans introduced a new bill designed to create a clear regulatory framework for the cryptocurrency sectors. The bill will (i) provide clear guidelines for the classification of a digital assets, emphasizing that the existence of an investment contract does not automatically result in a security classification (ii) create a pathway for cryptocurrency exchanges to register with the SEC and enable the exchanges to trade digital securities, commodities and stablecoins (iii) create a disclosure regime that requires digital asset issuers to disclose certain information similar to that of traditional investment products, such as the risk factors associated with investment in a digital security and (iv) develop guidelines for the roles of the CFTC and SEC in overseeing cryptocurrencies, such as the SEC ensuring compliance with the disclosure standards.

Lawmakers have unsurprising reacted quickly to the most recent Ripple court decision, which limited the SEC’s authority over Ripple and the XRP token. Congressman Patrick McHenry (R-NC) is a supporter of the bill stating, “A regulation by enforcement-only agenda does not serve consumers or American competitiveness. Lawmakers who want to ensure the United States continues to lead the world in technology development will support these types of proposals that protect and encourage innovation here at home.” The decision to regulate does not seem to be partisan either with Senator Lummis (R-WY) saying, “This is one of those rare subjects where it’s bipartisan, it’s bicameral. There is a pretty strong recognition by the people on the committees of jurisdiction that it’s time to regulate.”

Last week, Senator Lummis (R-WY) and Senator Gillibrand (D-NY) introduced a competing regulatory framework in the Senate, which they have called “the most comprehensive” bill to address the digital currency space. The main difference between the House and Senate bills is the Senate bill gives full authority to the CFTC rather than the SEC, which the Senators have stated is “stifling innovation.”

Though the specifics of the bill will continue to be negotiated, the recent proposals make it clear that a comprehensive cryptocurrency bill is coming. Though the cryptocurrency community is quick to reject all types of regulation, the regulation being proposed will include checks on regulatory agencies, such as the SEC, which has wreaked havoc on the crypto industry as a result of its seemingly unlimited discretion and power.

Click here for the full text of the most recent House bill proposal:

https://agriculture.house.gov/uploadedfiles/fit_for_the_21st_century_act_of_2023.pdf

07/07/2023

The United States District Court for the Northern District of California has ordered Kraken to disclose account and transaction information to the IRS. As a result, Kraken will be forced to turn over user information, such as names, birthdates, taxpayer identification numbers, addresses, phone numbers, and email addresses.

Last February, the IRS petitioned the court to obtain this disclosure, claiming that it needed the information to determine if any of the exchange’s users had underreported their taxes between 2016 and 2020. That said, because the IRS only has so many resources to enforce the tax code, the IRS decided to only target larger traders by only requesting information for individuals who traded over $20,000 within a calendar year. Given Kraken has millions of users and only an estimated 1.62% of cryptocurrency holders paid taxes in 2022, the IRS will likely determine many traders failed to properly report capital gains, especially as Bitcoin skyrocketed from roughly $27 in 2011 to $30,000 by the end of 2020.

The move by the IRS comes against a broader push for increased tax enforcement. Under the Inflation Reduction Act signed by Joe Biden in 2022, the IRS received $80 billion in increased funding. The IRS claimed that the increased budget will enable it to close the nearly $600 billion annual gap between the taxes the IRS collects and the taxes the IRS is owed. Though crypto tax enforcement was not a focus of the bill, the IRS appears to be investing its resources into getting a grip on cryptocurrency, an industry known for tax avoidance.

Here is the full court order issued against Kraken:
https://storage.courtlistener.com/recap/gov.uscourts.cand.407965/gov.uscourts.cand.407965.34.0.pdf

Create alerts, search for and browse the latest court opinions, PACER documents, judges, and oral arguments. Updated automatically with the latest court documents. An initiative of Free Law Project.

06/30/2023

Coinbase has filed its first official response to the lawsuit filed by the SEC. The crypto exchanged countered that the SEC lawsuit violates due process protections and is an abuse of SEC discretion. That said, the main defense put forth by Coinbase is that the SEC does not have jurisdiction over cryptocurrency, meaning the SEC has no right to bring the lawsuit in the first place. Using these defenses, Coinbase petitioned the judge to rule in its favor before the trial begins, known as a motion for judgement on the pleadings.

Though these defense arguments were expected, Coinbase was quite creative on the timing of its filing. Coinbase filed its response nearly 40 days before the deadline of August 7th, an unusual time as most litigants use all time available before filing. By filing its defense early, the date for the next hearing will now be much earlier than expected, reducing the amount of time the SEC has to develop a response to Coinbase’s argument.

The next court appearance is scheduled for July 13th, where the Judge will determine whether Coinbase is allowed to proceed with its motion for judgement. Find Coinbase’s full response here:

https://link.coindesk.com/click/31937020.9873/aHR0cHM6Ly9zdG9yYWdlLmNvdXJ0bGlzdGVuZXIuY29tL3JlY2FwL2dvdi51c2NvdXJ0cy5ueXNkLjU5OTkwOC9nb3YudXNjb3VydHMubnlzZC41OTk5MDguMjIuMC5wZGY/5f9774fb6365176ab6625f9aB06665b98

Create alerts, search for and browse the latest court opinions, PACER documents, judges, and oral arguments. Updated automatically with the latest court documents. An initiative of Free Law Project.

06/19/2023

Blackrock filed an application for a Bitcoin ETF that would enable investors to get exposure to cryptocurrency without needing to be on the blockchain. The world’s biggest asset managers plans to use Coinbase as its custodian to hold the underlying cryptocurrency assets. Proponents of the ETF cite multiple benefits for having the ETF, including (i) accessibility, (ii) liquidity, (iii) institutional adoption, and (iv) increased ability for oversight.

The Bitcoin ETF still must be approved by the SEC in order to be offered to the public. Previously, the SEC had rejected similar proposals from other wealth management companies, including rejecting VanEck on three different occasions. That said, Blackrock – who has only ever had one ETF rejected by the SEC since its inception in 1988 – has a trick up its sleeve. In its proposal, Blackrock promised a “surveillance-sharing agreement” between exchanges to allow for the sharing of information about market trading activity, clearing activity, and customer identification. The purpose of the agreement is to reduce the likelihood of market manipulation, which makes its Bitcoin ETF application unique.

06/11/2023

On Monday, the SEC charged Binance, BinanceUS, and Changpeng Zhao with a variety of securities law violations, including (i) allowing US consumers to trade cryptocurrency-based derivatives, (ii) comingling funds between Binance and BinanceUS, and (iii) offering an unregistered security in the form of the firm’s stablecoin, known as BNB. To summarize, “[t]hrough thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” said SEC Chair Gary Gensler.

In response, Crypto.com announced it will be winding down its U.S. institutional business; Robinhood announced it will delist Cardano, Polygon, and Solana; Binance announced that it will halt trading in dollars on BinanceUS. The move by Binance is seen as a way to protect consumers, given the SEC is pushing for a federal judge to freeze Binance U.S.’s assets.

Read the SEC's announcement here: https://www.sec.gov/news/press-release/2023-101

Press Release SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao Charges include operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities...

06/02/2023

Will China finally embrace cryptocurrency? China has a long and complicated history with cryptocurrency. In 2013, the Chinese government banned initial coin offerings (ICOs), which are a way to raise money for new cryptocurrency projects. In 2017, the government banned all cryptocurrency trading and mining. However, in recent months, there have been signs that China is warming up to cryptocurrency again.

In March 2023, the People's Bank of China (PBOC) published a paper on the potential benefits of using blockchain technology, the underlying technology behind cryptocurrencies. The paper said that blockchain could be used to improve financial efficiency, reduce fraud, and improve transparency. In April 2023, a Chinese court ruled that cryptocurrency is a form of property, which could make it easier for people to sue if they lose money investing in cryptocurrency. In May 2023, the PBOC announced that it would be conducting a pilot program to test the use of its own digital currency, the digital yuan. The digital yuan is a central bank digital currency (CBDC), which is a digital version of a fiat currency that is issued and managed by a central bank.

The recent interest in cryptocurrency in China is likely due to a number of factors, including the rising value of Bitcoin and other cryptocurrencies, the increasing adoption of blockchain technology by businesses, and the government's desire to stay ahead of the curve in terms of financial innovation. It is still too early to say whether China will fully embrace cryptocurrency in the future. However, the recent signs are encouraging for those who believe that cryptocurrency has the potential to revolutionize the way we think about money.

05/19/2023

The crypto community has been quick to react to Ledger Wallet's introduction of a "Secret Recovery Phrase" service. The feature allows Ledger users to retrieve their lost or forgotten recovery phrases, which are crucial for accessing and recovering funds in the event of a wallet malfunction or loss. While some users have expressed relief and appreciation for the added convenience and security, others have raised concerns about the potential risks associated with storing sensitive information in a centralized manner. The announcement has sparked debates within the crypto community, highlighting the ongoing tension between security and convenience.

05/07/2023

Lawmakers in New York have revealed a new proposal for a bill that will further extend the state’s scope of regulatory authority over crypto firms. The new regulation – CRPTO Act – will (i) require cryptocurrency firms to refund customers who lose assets as a result of fraud (ii) require crypto companies to undergo public and independent auditing (iii) prevent crypto companies from lending and borrowing user assets and (iv) prevent crypto companies from creating cryptocurrency tokens.

Many critiques view the proposed bill as continued overregulation on the industry. A main critique of the bill is the first requirement of firms to refund customers who lose assets as a result of fraud. This is akin to Charles Schwab or TDAmeritrade refunding those duped by Enron or Bernie Madoff.

Stay up to date on all things crypto and check out our free weekly newsletter at www.cryptohaven.buzz

CryptoHaven

05/03/2023

Coinbase has announced its decision to expand its business abroad with a global platform. The move is unsurprising to crypto analysts, given the lack of regulatory clarity in the United States compared to the regulatory frameworks offered elsewhere in the world, such as Europe.

The move by Coinbase supports the claim made last week by tech investor Chamath Palihapitiya, when he stated, “United States authorities have firmly pointed their guns at crypto” and have regulated to the point where “crypto is dead in America.”

Stay up to date on all things crypto and check out our free weekly newsletter at www.cryptohaven.buzz

CryptoHaven

04/27/2023

The US Department of Commerce announced GDP rose at a mere 1.1% when adjusted for inflation, falling short of expectations. The housing sector declined for the 8th consecutive quarter and business investment in equipment fell for the 2nd consecutive quarter, which analysts found unsurprising as these sectors are sensitive to the rising interest rate environment. That said, GDP was still positive thanks to robust consumer spending, which faced its highest growth rate since the end of the COVID-19 lockdowns in 2021.

All eyes turn to the Board of the Federal Reserve, who will conduct their monthly meeting on May 3rd. The CME Group states the market is current projecting an 85.4% probability the Fed will increase interest rates by 0.25% in its May 3rd meeting.

The GDP report initially resulted in the price of Bitcoin cratering over $1,000 (3%) in just minutes. Though, the price has since rebounded.

Stay up to date on all things crypto and check out our free weekly newsletter at www.cryptohaven.buzz

CryptoHaven

04/25/2023

In July 2022, Coinbase petitioned the SEC to ask whether the SEC would allow the industry to be regulated using the existing regulatory frameworks. Specifically, Coinbase asked whether the SEC would “propose and adopt rules to govern the regulation of securities that are offered and traded via digitally native methods.” Now, roughly a year later without a response, Coinbase has filed a motion to compel the SEC to respond to the petition. Though the SEC will likely just deny the petition, Coinbase argues the answer to the question will benefit the industry by providing clarity.

Don’t miss a thing in the SEC’s war on crypto and check out our free weekly newsletter at www.cryptohaven.buzz

CryptoHaven

04/19/2023

Republican lawmakers grilled SEC Chairman – Gary Gensler – over his and the agency’s policies towards cryptocurrency and cryptocurrency firms. The hearing before the House Financial Services Committee began with Gensler by stating he has “never seen a field that is so noncompliant with laws…” After these remarks, the head of the Committee described the agency’s actions as “regulation by enforcement,” a term of art used to criticize the SEC for not making its rules clear before taking legal action against the crypto companies. Another top lawmaker called Gensler “incompetent” for failing to stop the FTX collapse, whereas another outright said the SEC rules regarding crypto “make no sense.”

For more stories like these, check out our free weekly newsletter at www.cryptohaven.buzz

CryptoHaven

04/16/2023

The SEC is investigating Bittrex - a former leading US crypto exchange - for potential violations of federal securities laws, including unregistered securities offerings and failure to register as a national securities exchange. However, given Bittrex is already shutting down its US operations due to US regulators failing to create clear regulations, the threat of a lawsuit seems pointless and a wasteful use of government resources.

For more stories like these, check out our free weekly newsletter at www.cryptohaven.buzz

CryptoHaven

04/10/2023

CryptoGPT recently raised $10 million in funding at a $250 million valuation in a round led by DWF labs. The company is best known for its protocol that combines blockchain technology, artificial intelligence and data monetization to create value within in ecosystem. The process looks something like this:

- First, users can use the various apps on the CryptoGPT network, where their activity data is tracked and turned into encrypted NFTs.
- Second, the user can take his anonymized NFT and sell it to other AIs, machine learning platforms, and other business around the world.
- Third, the user received GPT tokens for selling his data, the company’s native token.

In essence, the goal of the project is to “turn data into a valuable assets used in AI models to power value creation,” while providing benefits to the users who create the data.

For more stories like these, check out our free weekly newsletter at www.cryptohaven.buzz

CryptoHaven