Community

UK’s Tax Authority Requests User Data From Crypto Exchanges: Report

The United Kingdom’s tax, payments and customs authority Her Majesty’s Revenue & Customs (HMRC) has reportedly requested that digital currency exchanges provide it with information about customers’ names and transactions aiming to identify cases of tax evasion.

Crypto exchanges come under fire

According to fintech-focused media outlet Coindesk, industry sources said that the agency has sent letters to at least three crypto exchanges in the U.K., including Coinbase, eToro, and CEX.io, requesting that they provide lists of users and transaction data.

HMRC is reportedly aiming to cooperate with crypto exchanges in a bid to identify individuals who evade taxes. According to the cited sources, the agency will probably only go back two or three years:

“If they [HMRC] do only go back two or three years, I think the interesting thing here is, that the individuals who went into crypto very early on in 2012-13 will not be affected. The ones who probably made the largest gains won’t be affected, it will be the people who came in around the time crypto peaked.”

HMRC reportedly confirmed that such requests are within the scope of its competence, specifically claiming:

“These exchanges can retain information on their clients and the transactions that they have completed. These transactions may result in potential tax charges and HMRC has the power to issue notices requiring exchanges to provide this information.”

Last December, HMRC published its first detailed tax legislation for private cryptocurrency holders following a lengthy consultation period. Specifically, it demands that individuals paid either Capital Gains Tax or Income Tax depending on the type of cryptocurrency transactions they are involved in.

Matter of international significance

HMRC’s move echoes the United States Internal Revenue Service’s, when it sent letters to 10,000 crypto investors, asking some to amend their tax filings, while compelling others to pay back taxes and/or interest and penalties. The revenue service states that the letters should be delivered by the end of August.

Cointelegraph reported that beginning Aug. 1, Brazil citizens are obligated to report on their crypto transactions with the country’s tax authority, the Department of Federal Revenue. The measure applies to individuals, companies and brokerages, and includes all kinds of crypto-related activities, including buying and selling, as well as donations, barters, deposits, and withdrawals etc.

North Korea Stole $2 Billion in Cryptocurrency From Exchanges, Says UN

North Korea has netted around $2 billion by hacking banks and cryptocurrency exchanges, according to the United Nations.

UN: Hacked crypto funds weapons of mass destruction

In a confidential report acquired by mainstream media outlets including Reuters on Aug. 5, the U.N. Security Council North Korea sanctions committee said that hackers formed an essential part of government funding. 

“Democratic People’s Republic of Korea cyber actors, many operating under the direction of the Reconnaissance General Bureau, raise money for its WMD (weapons of mass destruction) programs, with total proceeds to date estimated at up to two billion US dollars,” Reuters quoted the report as stating.

As Cointelegraph previously reported, Pyongyang regularly forms the main suspect in investigations over attacks on exchanges in nearby Asian countries.

In particular, the entity known as the Lazarus Group has become notorious for its malign activities, which have affected countries across the world.

No end to sanctions in sight

South Korea appears to be a specific target, however, the most recent event involving a phishing email scam in which hackers masqueraded as major trading platform UpBit. 

At the same time, the FBI reiterated the U.N. view that North Korea was deliberately stealing money in order to counter the effects of international sanctions, which the report now said were likely to remain due to a lack of progress in talks. 

“We call upon all responsible states to take action to counter North Korea’s ability to conduct malicious cyber activity, which generates revenue that supports its unlawful WMD and ballistic missile programs,” it added.

US Federal Reserve Launching Payment System, Crypto Bulls Nonplussed

The United States Federal Reserve Board is planning to release a real-time payments and settlements service in order to boost the payments infrastructure in the country.

A press release published on Aug. 5 reads that the Board of Governors of the Federal Reserve System has requested that Federal Reserve Banks develop a new interbank real-time settlement service to support faster payments in the U.S. The payment system is called FedNow and will purportedly launch in 2023 or 2024.

By launching FedNow, the Fed aims to modernize the country’s payment system with a real-time service that can transfer funds around the clock and on weekends and weekdays. The service will purportedly be available to both businesses and the general public.

The Fed believes that such a system will allow consumers to more flexibly manage their money and make time-sensitive payments and is requesting comment on the possible design and functionality of the new service. Commenting on the issue, Federal Reserve Board Governor Lael Brainard said:

“Everyone deserves the same ability to make and receive payments immediately and securely, and every bank deserves the same opportunity to offer that service to its community. FedNow will permit banks of every size in every community across the country to provide real-time payments to their customers.”

Reaction from the community

Some members of the cryptocurrency community are nonplussed by the Fed’s plans to launch its own real-time payment system. Anthony Pompliano — co-founder of crypto asset management firm Morgan Creek Digital Assets —  tweeted, “Bitcoin is already available.”

Others were more diplomatic with their response. Gabor Gurbacs, director of digital assets strategy at MV Index Solutions, a subsidiary of investment management firm VanEck, tweeted:

“Great that the @federalreserve is taking a forward looking and intelligent stance regarding innovation in #DigitalAssets and #payments. I recommend considering the benefits of #Bitcoin, a functioning, reliable, trust-minimized base-layer for sound money.”

Other crypto-related companies are positioned to make a contribution to the project. In June, Ripple Labs was elected to the Federal Reserve’s Faster Payments Task Force Steering Committee. The initiative intends to build “fast, safe and ubiquitous payments network in the U.S.”

The Federal Reserve cut interest rates last week, a move which some experts say could be partially responsible for Bitcoin’s (BTC) recent price rally. Fundstrat Global Advisors co-founder Tom Lee said:

“Bitcoin’s becoming increasingly a macrohedge for investors against things that could go wrong. Rate cuts are adding liquidity. Liquidity is pushing money into all these risk assets and also hedges, which is helping Bitcoin.”

Mastercard Hints at Future Crypto Wallet Product With New Job Listings

Mastercard appears to be angling to enter the crypto wallet space with new job ads for blockchain and cryptocurrency-related product development.

According to updated job listings from the payments giant as of Aug. 2, the company is seeking to hire for the following roles: 

Director, Product Management – Crypto Currency/ Wallets, Director, Product Development & Innovation – Blockchain Solutions Architect, and VP, Product Management – Blockchain/Crypto.”

A bid for the crypto wallet space?

Two of the new roles — the future director of product management for cryptocurrency/wallets and future VP of product management for blockchain/crypto — will lead a team focused on developing blockchain-based solutions that include wallets, the job listings reveal.

While neither ad discloses full details of the planned products’ scope, they do indicate that the new hires will be asked to identify solutions and concepts “that have strategic fit and value to Mastercard’s customers and partners.”

Mastercard, notably, is reported to be one of the partners in the Libra Association — a consortium established to govern Facebook’s planned stablecoin project, Libra.  

This leaves open the question of whether or not Mastercard plans to embark on a roadmap as a crypto wallet solutions provider to partner projects such as Libra, or potential other entrants into the crypto space.

Other avenues

The future hire for VP in product management for blockchain/crypto should notably have “experience with current payment systems” as well as “familiarity with relevant industry standards and regulatory requirements,” the ad indicates.

All roles will be required to closely monitor evolving trends in the cryptocurrency ecosystem and spearhead solutions for new technological developments as well as emerging risks.

As an incumbent of the previous generation of global digital payments processors, Mastercard is increasingly embracing blockchain and cryptocurrency-related development.

Just last week, instant crypto loans firm Nexo revealed it would be launching a Mastercard-branded cryptocurrency credit card. 

In fall 2018, Mastercard ranked third globally on a list ranking global entities by the number of blockchain-related patents they had filed to date.

China’s Central Bank Prioritizes Development of Digital Currency

China’s central bank, the People’s Bank of China (PBoC) announced that it accelerated the development of its cryptocurrency. 

In an Aug. 2 statement, PBoC summarized the proceedings of a video conference, in which the bank conveyed the Party Central Committee and the State Council priorities on economic and financial initiatives ranging from monetary policy to support for small businesses.

PBoC suggested that it should accelerate the research and development of its digital currency. Furthermore, the statement also indicates that much attention should be also given to other domestic and foreign cryptocurrencies.

Additionally, the bank said that it should strengthen financial risk remediation as well as its policy propaganda interpretation and respond quickly to social concerns. 

Digital renminbi as reaction to Facebook’s Libra

PBoC has seemingly prioritized the development of a digital renminbi in response to the growing adoption of cryptocurrencies globally, especially following the announcement of Facebook’s Libra stablecoin project.

In early July, PBoC director Wang Xin said that Libra could, “could create a scenario under which sovereign currencies would coexist with U.S. dollar-centric digital currencies. But there would be in essence one boss, that is the U.S. dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.”

PBoC purportedly received approval from the State Council to begin work with other market participants on a central bank digital currency.

Also in July, former PBoC governor Zhou Xiaochuan warned that the country must take precautions against Libra. Zhou served as PBoC governor from 2003–2018, a period when the government began cracking down on crypto-related business and activities, including a ban on initial coin offerings.

U.S. lawmakers recently called for the country to lead in blockchain and cryptocurrency development during the recent hearing on “Examining Regulatory Frameworks for Digital Currencies and Blockchain.”

As Cointelegraph reported at the end of July, Facebook has warned its investors that its Libra stablecoin may never be released due to the increasing regulatory concern. Meanwhile, retail giant Walmart has filed for a patent for its own digital currency similar to Libra.

Exchange OKEx Launches Data Analytics Platform for Derivatives Trading

Malta-based digital asset exchange OKEx has launched a new comprehensive data insights platform that covers trading trends for derivatives.

According to a press release shared with Cointelegraph, this platform will reportedly allow OKEx users to see real-time data on the exchange’s futures and perpetual swap markets for nine major tokens, including the top cryptocurrencies BTC, ETH, and XRP. 

The platform provides six indicators of market trends as follows: long/short positions ratio, basis, open interest and trading volume, buy/sell taker volume, top trader sentiment index, and top trader average margin used. 

As per the announcement, the goal of this platform — called Futures & Perpetual Swap Market Data — is to offer unbiased trading data for customers to better inform themselves and create trading strategies in the derivatives market.

Andy Cheung, the head of operations at OKEx, commented that derivatives trading can be particularly tricky to pick up:

“Derivatives trading requires a steeper learning curve, as it involves the use of margin and leverage. Once we realized that there isn’t really much data available in the market to help users analyze market trends, we decided to build a tool that can benefit our users. That’s why we launched this big data platform, and we are proud to say that we are the first in the industry to provide this kind of data.”

Big data analytics coming to crypto trading

As previously reported by Cointelegraph, the major cryptocurrency platform Coinbase, which includes a crypto exchange and wallet service, began providing trading signals to its users on July 17. 

Coinbase is reportedly using aggregated data to provide information on holder activity, typical hold time and popularity, and price correlation as trading signals. These analytics purport to allow users the ability to create customized and informed trading strategies, which rely on information beyond raw price and other basic market data.

Mining ASIC Giant Bitmain Lost $625 Million, Expects Profits in April

Chinese mining and mining Application Specific Integrated Circuit (ASIC) manufacturer Bitmain lost $625 million in the first two months of this year, local media QQ reports on Aug. 2.

Hundreds of millions lost

Per the report, the firm sustained losses of $625 million by March, $345 during January, and $280 million during February. Those results were reportedly driven by the sales of outdated 16 nanometer ASICs at low prices, and once the inventory is cleared of those machines, new profits are expected from the sale of new, 7 nanometer mining rigs.

The gross profit margin of the company is expected to reach 30% in April thanks to sales of the aforementioned device. At the end of March, the firm announced that its 7 nanometer Antminer S17 series miners are expected to launch on April 9.

As Cointelegraph reported in June, Bitmain is revisiting plans for an initial public offering as the cryptocurrency market started reporting gains again. While the company was hoping to raise $3 billion from its planned Hong Kong IPO, the most recent report suggested that this fundraising target will be reduced to between $300 million and $500 million if it lists in the United States.

Earlier this week, unconfirmed reports surfaced that Canaan Creative, a major competitor to Bitmain, had become the first Chinese Mining firm to file for an IPO in the U.S.

Grayscale to Conduct One of Largest Single Day Crypto Transfers

Today, digital asset management fund Grayscale Investments will transfer nearly $3 billion worth in cryptocurrency holdings to American major crypto wallet provider and exchange exchange Coinbase.

Largest single crypto transfer?

As Forbes reported on Aug. 2, Grayscale is going to move almost $3 billion worth of its digital currency holdings, including Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Litecoin (LTC), and Ripple (XRP), among some other tokens, to Coinbase, wherein Coinbase Custody will serve as custodian of the underlying assets for the company’s products.

Together with its cryptocurrency holdings, Grayscale will transfer its publicly quoted cryptocurrency trusts and its Grayscale Digital Large Cap Fund to Coinbase. The transfer will thus apparently be one of the largest single day transfers of crypto assets ever conducted.

Commenting on the deal, Sam McIngvale, Coinbase Custody chief executive, said:

“As a NY State-chartered trust company, Coinbase Custody is held to the same fiduciary standards as national banks. We also offer some of the broadest and deepest insurance coverage in the crypto industry.”

Hitting new records

In mid-July, Grayscale recorded an all-time high volume of assets under management of $2.7 billion. In such a way, the figure marked a near tripling of assets under management by the company since the preceding quarter.

As previously reported, Grayscale Investments’ Bitcoin Trust was up almost 300% on the year as of July 9. At the time, the trust was yielding a 296% year-to-date appreciation — a stratospheric increase as compared to mainstream investments reflected in the S&P 500 (18.7%) and Global Dow (12.9%) over the same time period.

Coinbase Custody revealed in June that it held $1.3 billion in assets under custody and the firm expected to hit $2 billion AUC soon.

Leicester City FC Renews Partnership With Crypto Investment Platform

On Aug. 2, English Premier League football club Leicester City FC announced the renewal of its partnership with multi-asset and cryptocurrency investment platform eToro. 

EToro’s second season with the Foxes

The Foxes’ head of partnerships Harj Hir added:

“Our relationship with eToro last season was a really positive one so we’re pleased to renew the partnership and continue our work with such an exciting, innovative industry leader. The global reach of eToro is huge and we hope to further strengthen our relations with them as we embark on our second season together in 2019/20.”

Per the press release, “a landmark sponsorship deal was signed by the Football Club and e-Toro at the start of the 2018/19 campaign, which saw the company become an Official Club Partner while the agreement was the Premier League’s first deal paid using Bitcoin (BTC)”.

Cryptocurrencies are gradually becoming more common in sports

According to eToro’s UK managing director Iqbal V. Gandham, currently the platform is “working with six clubs for the second year in a row.” On Aug. 1, Everton Football Club of the British Premier League has also signed a deal with the crypto-inclusive investment and trading platform eToro.

On July 11, American professional football team the Miami Dolphins announced that Litecoin (LTC) is now the team’s official cryptocurrency.

As previously reported by Cointelegraph, Portuguese sports club SL Benfica partnered with cryptocurrency service Utrust to facilitate payments via cryptocurrency for tickets and merchandise in June. SL Benfica now accepts Utrust’s native token (UTK) as well as BTC and Ether (ETH).

Walmart is Trying to Patent Its Own ‘Libra’ Like Digital Currency

A new patent filing suggests that United States retail giant Walmart may be developing its own U.S. dollar-backed digital currency similar to Facebook’s Libra cryptocurrency. 

Walmart filed patent for “Digital Currency via Blockchain”

Patent filing number 20190236564, “System and Method for Digital Currency via Blockchain,” was published by the U.S. Patent and Trademark Office (USPTO) on Aug. 1. The document outlines a method for:

“Generating one digital currency unit by tying the one digital currency unit to a regular currency; storing information of the one digital currency unit into a block of a blockchain; buying or paying the one digital currency unit.”

Walmart continues to outline that the proposed digital currency project can provide a zero-  or low-fee place for users to store wealth; one that can easily be redeemed and converted to store cash at selected retailers or partners. Such accounts could even be interest-bearing, the filing adds.

The digital currency could alternatively be developed so that it can be spent anywhere, the filing states, with prospective USD backing ensuring greater ease of deposits and withdrawals. It could, in another scenario, be tied to other digital currencies, rather than fiat ones.

Corporations becoming alternative banks

Early on in the filing, Walmart proposes that the launch of its digital currency could provide low-income households, for whom banking is costly, with “an alternative way to handle wealth at an institution that can supply the majority of their day-to-day financial and product needs.”

The “blockchain-protected digital currency” — as Walmart dubs it — could further challenge incumbent banks by removing the need for credit and debit cards: 

“The digital currency may act as a pre-approved biometric […] credit. A person is the ‘credit card’ to their own digital value bank.”

The retailer further imagines that the scope of its digital currency could extend to form part of wider, blockchain-powered service ecosystem, envisioning the creation of an “open-platform value exchange for purchases and for crowdsource work.” 

This would allow customers to buy products or services for themselves and for others — using the platform to hire a technician for repairs, an associate or a designated shopper for a given amount of time.  

While it currently faces a robust regulatory pushback, Facebook’s Libra stablecoin project has a similar ambition to provide low-cost, borderless value transfer and build out a digital currency-powered network.

For Walmart, its blockchain-related projects have to date focused on using the technology in areas such as supply chain management, customer marketplaces and smart appliances.

CFTC Did Not Yet Approve LedgerX Physically-Settled Bitcoin Futures: Report

The United States Commodities Futures Trading Commission (CFTC) has confirmed that LedgerX has not yet been approved by the agency to offer physically-settled Bitcoin futures, in a statement obtained by CoinDesk

Allegedly fake CFTC approval announcements

As Cointelegraph reported yesterday, LedgerX said in an announced on July 31 that its physical futures offering was live on its Omni trading platform. However, the latest confirmation from the CFTC suggests that this could not have occurred. 

Derivative specialist Thomas G. Thompson pointed out on Twitter that “the CFTC does not show any futures contracts certified by” the firm. He concludes that LedgerX may indeed have just launched their existing swaps on their new futures platform. Nevertheless, he concluded:

”Still important development because now retail can trade bitcoin options and swaps.”

“Vaporware launch”

Meanwhile, cryptocurrency news outlet The Block reported earlier today that numerous clues suggested that the launch, indeed, did not take place. The reporter quotes an anonymous industry leader commenting on the development:

“Don’t see any reported trade volume either. Vaporware launch.”

Nevertheless, the official LedgerX Twitter account announced today the launch of the LedgerX Omni, welcoming users to sign up for “early access.”

As Cointelegraph reported earlier this month, Bakkt, the long-awaited Bitcoin futures platform from the Intercontinental Exchange, has begun testing the delivery of BTC futures.

Cointelegraph reached out to the CFTC for comments but did not receive a reply at press time.

Bitcoin Price Dips Below $10K as BTC Shrugs Off Its First Fed Rate Cut

Bitcoin (BTC) price fell back below $10,000 on August 1 as markets broadly shook off the first Federal Reserve interest rate cut since 2008.

Market visualization

Market visualization. Source: Coin360

Bitcoin doesn’t care about the Fed

Data from Coin360 showed the largest cryptocurrency hovering just below the significant barrier once more Thursday, having climbed as high as $10,138 in the past 24 hours. 

A sudden uptick took BTC/USD $500 higher Wednesday, a move which itself followed a dramatic downturn over the weekend which saw the pair shed $800 in minutes.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Coin360

The temporary return to $10,000 accompanied fresh debate on crypto and blockchain regulation in the United States, while this week’s rate cut also served to fuel excitement among traders.

As various sources noted, the cut was the first from the Fed since Bitcoin’s creation over ten years ago. 

“In preparation for the halving, the Federal Reserve is cutting interest rates to further highlight Bitcoin’s economic innovation. Everybody, be sure to thank Jerome Powell for sticking to the Bitcoin as store of value thesis!” Michael Goldstein, president of the Nakamoto Institute, commented on Twitter about the event.

At press time, however, Bitcoin appeared broadly unaffected by U.S. economic policy compared to its behavior in light of regulatory noises throughout last month. 

As Cointelegraph reported, mixed messages from Congressmen and others produced significant volatility, with BTC/USD still down $4,000 versus its July highs. Compared to exactly one month ago, however, the pair has tracked neither up nor down. 

Altcoins stagnate further

A similar picture presented on altcoin markets. Sideways action has defined the top twenty cryptocurrencies by market cap in recent days, tokens moving in step with Bitcoin. 

Ether (ETH) the largest altcoin by market cap, moved up by a modest 0.7% on Friday to hit $213, having spent the past week in a corridor between $200 and $223.

Ether 7-day price chart

Ether 7-day price chart. Source: Coin360

Other major alts broadly replicated such behavior, an exception being Litecoin (LTC), which gained 4.8% to lead the market as its halving is now less than a week away.

By contrast, Bitcoin Cash (BCH) and its fork, Bitcoin SV (BSV) both lost around 2.5% in Friday trading. 

The total cryptocurrency market cap stood at $273 billion, with Bitcoin’s share at 65.1% of the total.

Keep track of top crypto markets in real time here