Lot has happened in the government and legal arenas this week in the crypto space. CFTC chairman declaring Ether to be a commodity, IRS tax guidance, EUs pledge to regulate cryptos, Trillion Dollar lawsuit against Tether, UNICEFs Crypto Fund, World’s first Gold Backed Stable coin and more. A LOT has happened this week.

Here is your dose of IMPORTANT news from the week.

You can catch ALL the important Bitcoin, Blockchain and Crypto news compilation here.

ETH ETF may soon be a reality

Heath Tarbert, Chairman of the CFTC, stated during a Yahoo Finance’s All Markets Summit, that Ether is a commodity in his view. “As a chairman of the CFTC, it is my view that Ether is a commodity,” he said. Mr. Tarbert was also confident about Ether’s futures contract as the next natural transition. “My guess is that, in the near future, you will see Ether related futures contracts and other derivatives.” Market seems to welcome this message as Ether prices moved from $183 on 9th October to $193 on 10th October when this interview became public knowledge. What is more interesting is that Mr. Tarbert is also of opinion that all hard forks coming out a commodity should be also be a commodity. Mr. Tarbert also stated that “in the next 12 months it is absolutely possible to see Ether Futures contracts.”

IRS issues guidance on Cryptocurrency taxation, industry says it’s not enough

IRS issued a ruling this week that laid out rules around taxation of hard forks and airdrops. IRS Ruling 2019-24 specifically addressed the impact of hard forks and taxation based on dominion (possession) rather than just potential of receipt. The ruling also talked about taxation of air drops, however, it is seriously lacking about the timing of determining the fair market value and what happens if a token that gets air dropped has initial value in the market but not enough volume to liquidate the assets. This ruling actually raised more concerns than to clarify a position since it was clear that this was written by individuals with no direct experience in the crypto space, according to the general opinion in the crypto market.

EU to regulate digital currencies soon

Reuters headline reads “Spooked by Libra, EU pledges to regulate digital currencies,” which openly addresses the issues that we have been screaming about all along. Facebook is too big and too corrupt in our opinion to take over the reigns of global currency. While Facebook seems to be facing backlash from all corners of the world, we are still certain that they will be launching their Libra project because of the resources they have at their disposal. They just go away with 5 billion dollar fine for breaching the fundamental tenets of trust. We will have to wait and see how many more sensational news we will have to endure to realize that ‘powerful lobbying can undermine any power’, in our opinion.









Chainlink forges forward with bold partnerships

It is not often that we cover a particular cryptocurrency in our news feed, however, exceptions are meant to be made for worthy endeavors. Chainlink is forging forward with great partnerships and bold innovations. Ever since Chainlink was mentioned in Google’s official announcement of using Chainlink’s oracle smart contract to “making internet-hosted data available inside an immutable public blockchain: placing BigQuery data available on-chain using a Chainlink oracle smart contract,” crypto space has been celebrating it. Chainlink recently announced that they will help “Drive Demand for Enterprise Smart Contracts Using the Trusted Computation Framework and Attested Oracles via Chainlink.” Apart from Google, Chainlink boasts working relationship with Intel, Hyperledger among renowned brands.

1.4 Trillion Class action lawsuit against BitFinex and Tether

Vel Freedman and Kyle Roche, same lawyers who successfully fought the case against Craig Wright, have filed a class action lawsuit against BitFinex and Tether for the damages of 1.4 Trillion dollars. The complaint reads “Part-fraud, part-pump-and-dump, and part-money laundering, the scheme was primarily accomplished through two enterprises — Bitfinex and Tether — that commingled their corporate identities and customer funds while concealing their extensive cooperation in a way that enabled them to manipulate the cryptocurrency market with unprecedented effectiveness.” Bitfinex and Tether were thought to be involved in various pump and dump schemes based on when massive amount of Tether was minted and the ensuing impact on bitcoin price action.

United Nations agency UNICEF to launch Crypto Fund

UNICEF, an agency that raised over 6.7 billion dollars in donations last year, is starting a Crypto Fund to be able to accept bitcoin, ethereum and potential government backed digital currency donations. The Crypto Fund will also “invest in early-stage, open source companies working with children,” according to the Forbes article. Christina Lomazzo, who is leading this effort with her team also is quoted in the article saying “We don’t see the Crypto Fund so much as being crypto, what we really see it as is being ready for a digital future.”







SEC rejects BitWise’s ETF proposal

SEC released its decision to reject BitWise’s ETF proposal. SEC’s disapproval letter states that while SEC “although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.” While we held the opinion that BitWise’s proposal was one of the most promising applications, the SEC said that the only reason for rejection is that the company “has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices.””

eBay, Visa, Mastercard, Stripe and others exit Facebook’s Libra association

In a welcoming news, companies are coming to their senses and leaving Facebook’s Libra in strides. This week, eBay, Mastercard, Strip, Mercado Pago were among the companies that abandoned Facebook’s Libra Association. Business Insider reported “The exits, combined with intense scrutiny from lawmakers, represent a huge blow to the initiative and leave its future uncertain.” David Marcus, Chief Executive of Libra initiative tweeted “I would caution against reading the fate of Libra into this update. Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re onto something when so much pressure builds up.”

CFTC, FinCEN and SEC issue a joint statement

Leaders from the CFTC, FinCEN and SEC issued a joint statement to remind “persons engaged in activities involving digital assets of their anti-money laundering and countering the financing of terrorism (AML/CFT) obligations under the Bank Secrecy Act (BSA).” The joint statement also clarified that “the nature of the digital asset-related activities a person engages in is a key factor in determining whether and how that person must register with the CFTC, FinCEN, or the SEC. For example, certain “commodity”-related activities may trigger registration and other obligations under the Commodity Exchange Act (CEA), while certain activities involving a “security” may trigger registration and other obligations under the federal securities laws. If a person falls under the definition of a “financial institution,” its AML/CFT activities will be overseen for BSA purposes by one or more of the Agencies (and potentially others).”









Gold backed Stable Coin: Perth Mint to launch World’s first government backed Gold Token

In a media release, Government of Western Australia backed Perth Mint has disclosed the information about launch of what is dubbed as “Perth Mint Gold Token (PMGT)”. The media release stated “The Perth Mint Gold Token (PMGT) will be the first digital gold token on a public blockchain backed by government guaranteed gold.” PMGT will be ERC-20 compatible. PMGT is expected to offer greater transparency and act as an alternative to existing stable coins which do not come with the same guarantee of gold or government backing. Richard Hayes, Chief Executive Officer of The Perth Mint, said “The digitisation of gold via a public ledger is a natural progression for the global commodity markets. It will promote gold as a mainstream asset, enhance its accessibility, and offer greater liquidity, transparency and auditability of the real assets backing this type of digital token.”

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About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry. Read more about the author here.





