Reading time 4m15s
Good morning, good reader, and welcome to Tokengraph, where we bring you Web3 news faster than Bitcoinâs 8% price drop yesterday. It has been a crazy 24 hours â letâs get right into the news.
Coming up todayâŚ
- Is KuCoin the next Gemini and Kraken?
- Bidenâs New Taxes Bad for Crypto
- Starbucks Launches $100 NFT Series
- Cathie Wood Still Buying Coinbase
- CoinTracker + H&R Block Tax Prep
Wild things have happened in crypto over the past 24 hours, one of them being that the New York Attorney General has officially filed a lawsuit against crypto exchange KuCoin for alleged securities and commodities violations.
JUST IN: đşđ¸ Kucoin #crypto exchange sued by New York's Attorney General.
— Watcher.Guru (@WatcherGuru)
Mar 9, 2023
Whatâs more, the lawsuit specifically refers to Ethereum as a security, adding fuel to the flame of discussion around financial laws in the crypto industry and whether the SEC has regulatory control over digital assets like ETH or not.
đ¨đ¨New York Attorney General claims that Ethereum is a security in Kucoin lawsuitđ¨đ¨
— Dylan LeClair đ (@DylanLeClair_)
Mar 9, 2023
The official announcement of the suit filed by Attorney General Letitia James goes like this: âThe petition argues that ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers in order to provide profit to the holders of ETH.â
The Attorney Generalâs argument is that KuCoin âfalsely representedâ itself as an exchange, when really it was a âsecurities and commodities broker-dealerâ that wasnât registered with the SEC.
The announcement of this suit was just one of many potentially (or probably) harmful events for crypto that took place just over the past 24 hours:
In the last 24 hours:
⢠Stocks + crypto shed $2T in value
⢠New York Attorney labels $ETH a security
⢠KuCoin hit with lawsuit
⢠Silicon Valley bank crash
⢠Huobi flash crash
⢠Biden proposes tax on $BTC mining
⢠Voyager liquidating assetsJust another day in crypto..
— Miles Deutscher (@milesdeutscher)
Mar 10, 2023
The Ethereum Network switched to a Proof-of-Stake consensus mechanism last year, enabling users to gain rewards from staking ETH with validators. This has led regulators to crack down on the digital currency as a security â because users can now earn profit from their holdings.
This lawsuit is much bigger than just KuCoin â it could determine the nature of all Proof-of-Stake currencies (in terms of whether theyâre securities or not), and it could also seal the fate of many similar exchanges if KuCoin goes down.
Brought to you by...
Get smarter every day with Refind
100k+ smart people start their day with Refind. To learn something new. To get inspired. To move forward. By registering you will get the 5 most relevant links from around the web, tailored to the userâs interests, curated from 10k+ sources, every day.
Adding to the regulatory rain thatâs been downpouring on the crypto industry over the past few months, US President Joe Biden has announced that his administration wants to seriously increase the amount of taxes that crypto investors (and all investors) have to pay:
- 2x capital gains taxes for certain investors
- Removing the ability to harvest tax losses through wash sales
- 30% tax on crypto mining electricity
BREAKING: Biden is proposing changing the tax treatment of cryptocurrency transactions, to tax "wash-sale" underwater crypto investments that have taken a tax-deductible loss, per WSJ.
— unusual_whales (@unusual_whales)
Mar 8, 2023
Wash-sales of this nature arenât allowed in stock trading, but theyâve been permissible in crypto because the assets arenât legally considered securities â at least yet.
JUST IN: đşđ¸ Biden admin proposes 30% tax on electricity used for #Bitcoin & crypto mining - NY Times
Itâs âhindering the transition to a low-emission energy future,â the White House says. twitter.com/i/web/status/1âŚ
— Bitcoin Magazine (@BitcoinMagazine)
Mar 9, 2023
As for the proposed tax on electricity used for crypto mining, the reasoning that the US Treasury provided was that crypto mining âhas negative environmental effects,â and that increasing taxes on it will decrease âuncertainty and risks to local utilities and communities.â
The Biden administration is joining Gensler, the NY Attorney General, and others in their crusade against crypto:
Crypto Twitter is understandably alarmed and upset over these proposed taxes. It seems that the US government wants to make it as difficult as possible for individuals to build wealth with crypto, an asset that has historically been outside of their control.
Make no mistake, the new rules Joe Biden is proposing on crypto and capital gains will only make it even more difficult for low and middle income families to create or pass down any kind of wealth at all, thatâs the point.
— Mises Caucus (@LPMisesCaucus)
Mar 9, 2023
How much money was the IRS âmissing out onâ before crypto gains were not taxable?
A. 5 million/year
B. 5 billion/year
C. 10 billion/year
B. 50 billion/year
Scroll down to the bottom to see if you're right!
Other Top Stories Today đ˘
After its very successful free NFT test launch (where some of the digital assets sold for as much as $1000), Starbucks is launching its first official non-free NFT collection: a series of 2,000 mermaid NFTs inspired by the brandâs logo. The collection will be available to mint for users of the coffee giantâs rewards app, which is still in beta.
The bear market isnât scaring Cathie Wood away â in fact, it seems to be encouraging her and ARK (her investment management firm) to buy more and more crypto-related stock. COINâs price dropped by about 8% yesterday, and in response, ARK purchased 301,437 shares of the stock, amounting to roughly $17.5M. This is only the most recent instance in a long series of COIN purchases by ARK, who seems to be building a large position in the company with serious conviction on how it will perform in the future.
The crypto tax software CoinTracker is partnering with H&R Block to make tax filing far, far simpler for crypto investors and traders. The collaboration will enable users to fill out Form 8949 automatically. This form is for reporting capital gains and losses from investments for tax filings â and it can involve thousands of individual transactions for some investors, which can be a real pain to file manually. This automation will be a massive quality of life improvement for many users.
â Trivia Answer
Answer: D.
The IRS announced in 2014 that cryptocurrency would now be considered property for income tax purposes, and it estimated that it was missing as much as $50B per year from taxes that âshould have been paidâ on crypto.
Web3 Resource of the Day
Cathie Wood on Bitcoin, Tech, Venture Capital, and Innovation | Podcast from Anthony Pompliano
Weâve got a great podcast episode to share with you today â in the wake of Cathie Wood and ARKsâ recent purchase of $17.5M in Coinbase stock, we only thought it would be appropriate to send you this episode of the Pompliano podcast. They cover a massive amount of topics, including âinvesting in innovative companies & technologies, volatility in the market, dealing with critics, investment horizon in oil & energy, bitcoin & the crypto market,â and more.
Advertising on our newsletter âď¸
Interested in advertising with Tokengraph? Fill it out this form and weâll be in touch soon.
How was today's newsletter? Help us get better:
đ Awesome - Iâll be back
đ Meh - just OK
đ Not great - do better
Thanks for voting! We can only improve with feedback from little geniuses like you.
DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice to buy or sell any assets or to make any financial decisions. Do your own research.