There’s a growing concern about off-chain transactions in the crypto industry. These are trades that occur away from the public eye and remain unrecorded on the publicly accessible blockchain. Recognizing the potential risks involved in these shadow trades, U.S. Representative Don Beyer from Virginia has spearheaded a move towards greater accountability.
The Rise of Off-Chain Transactions
It is a well-known fact that the crypto market thrives on the promise of transparency. The essence of blockchain technology, which forms the backbone of the industry, ensures that transactions are open for public verification. Yet, as large-scale trading platforms came into play, optimizing transaction speeds and reducing costs became a priority.
This push led to a proliferation of off-chain trades, which escape public scrutiny. While many of these platforms maintain their private records, the quality and accuracy of these ledgers can be inconsistent at best. Such gaps can potentially open doors for disputes and even fraudulent activities.
Bringing Accountability to the Shadows
Representative Beyer’s newly proposed Off-Chain Digital Commodity Transaction Reporting Act seeks to cast light on these shadow transactions. The aim is clear: safeguard those engaged in the digital asset market. If passed, trading platforms would need to report all off-chain trades to a repository overseen by the Commodity Futures Trading Commission (CFTC) within a day.
By ensuring that all off-chain digital asset trades are reported promptly, the legislation hopes to mirror the kind of oversight present in securities and swap transactions. In essence, this move is less about stifling the market and more about building a secure environment for both investors and consumers, according to him.
In his words:
“Unfortunately, internal record keeping among these private entities can vary wildly, and this can leave investors and consumers vulnerable to fraud and manipulation. This bill is a common-sense measure to restore some transparency and confidence to the digital asset market.”
Founder of Bitcoin Ordinals, Casey, has proposed the RUNES protocol as a potential solution to the issues caused by BRC-20. According to Casey, BRC-20 has led to a significant increase in UTXO, 99% of which he claims are scams and memes. The RUNES protocol uses UTXOs to hold balances of runes, allowing for any amount of any number of runes to be stored. This alternative protocol aims to address the issues caused by BRC-20 and create a more secure and streamlined system for users. Only time will tell whether or not the RUNES protocol is successful, but it is worth keeping an eye on as the world of cryptocurrency continues to evolve.
ApeCoin is already ready to launch a sister DAO and NFT community treasury, with a proposal currently approved by over 70% of early voting. Animoca Brands co-founder Yat Siu co-authorizes the proposal, which seeks to position ApeCoin as a culture token to “power the broader web3 ecosystem”. It recommends acquiring influential NFTs managed by a community-governed vault, including Bored Ape Yacht Club, Mutant Ape Yacht Club, Cool Cats, World of Women, and Pudgy Penguins. The sister DAO would lease the NFT IPs to APE holders, with potential APE grants on offer, for greater adoption and utility. Voting closes on Wednesday.
Malta’s Financial Services Authority (MFSA) has launched a consultation on proposed changes to its crypto rulebook, which include requiring providers to have “an orderly wind-down plan.” The regulator is rewriting its rules for crypto exchanges, custodians, and portfolio managers to comply with the European Union’s Markets in Crypto Assets regulation (MiCA), which takes effect in 2024. MiCA is the world’s first comprehensive crypto regulation in a major jurisdiction, enabling service providers to operate across the bloc with a single license. The consultation, which began on Monday, will be open until September 29.
The post US Proposes Rules for Crypto Reporting to Close Tax Gap! appeared first on Coinpedia Fintech News
The U.S. Treasury Department has released proposed rules that would require brokers and exchanges to report certain sales on crypto, from bitcoin to NFTs, in an effort to close the tax gap. The proposed regulations are aimed at ensuring that everyone plays by the same set of rules by increasing reporting made by brokers on customers’ crypto activity. The proposed rules would treat crypto brokers similarly to brokers for more traditional investments like stocks and bonds. The new rules would make it easier for taxpayers to calculate gains and deduct losses on digital assets when they are sold. These rules are part of the Infrastructure Investment and Jobs Act.
The post Taiwan Proposes New Crypto Industry Association Category! appeared first on Coinpedia Fintech News
Taiwan’s Ministry of Economic Affairs has proposed adding a new business category to regulations, which would allow cryptocurrency-related companies to form industry associations. This move is intended to encourage the development of self-regulatory guidelines. The proposed business category outlines the cryptocurrency sector’s scope of operations and includes exchanging cryptocurrency for legal tender or other digital tokens, providing services for crypto storage or management, and facilitating coin transfers. The Ministry of Economic Affairs is soliciting public opinion and aims to finalize the amendment.
Aave Chan Initiative, a delegate platform on Aave’s governance forum, has proposed that the DeFi protocol’s treasury acquire $2 million worth of Curve Tokens (CRV) from Curve founder Michael Egorov. This would result in 5 million CRV being locked up and turned into veCRV, which enables voting rights on the Curve platform and incentivizes Curve users to provide liquidity for token pairs that involve Aave’s stablecoin. However, some governance participants have expressed concerns that the proposal could increase Aave’s exposure to the risk of CRV liquidation. The proposal will need to pass a vote to be implemented.
FTX, a cryptocurrency exchange, has proposed a plan to establish a “rebooted” offshore exchange available to non-US users, according to a draft plan submitted to the court. If approved, the reorganization plan will sort claimants into different groups, identifying FTX.com offshore exchange users as “dotcom customers” and FTX US users as “US customers”. The plan proposes that each dot com customer will receive a pro-rata share of the proceeds from a pool of assets associated with the FTX.com exchange, net of expenses. Claims from non-customers, such as regulatory penalties and taxes, would be subordinated.
The post New US Senate Bill Proposes Stringent Anti-money Laundering Rules for Defi Protocols appeared first on Coinpedia Fintech News
The US Senate is drafting the Crypto-Asset National Security Enhancement Act of 2023, requiring DeFi protocols to adopt bank-like regulations. The bill aims to curb cryptocurrency-related crimes and money laundering by imposing AML conditions on controlling entities of DeFi apps. These entities must gather and verify user information, establish anti-money laundering measures, report suspicious activity, and block sanctioned individuals. The Treasury Department’s authority would expand to oversee money laundering in unconventional financial domains, including cryptocurrency.
The post TORN Token Rises to 10% as Attacker Proposes to Refrain Hack appeared first on Coinpedia Fintech News
The TORN token increased by 10% after the recent DAO attack. The attacker proposes a solution to restore the governance state in the Tornado cash community forum, a proposal likely to be executed. Tornadosaurus-Hex attacker TORN token lost value, losing control of governance votes. The attacker’s TORN holdings indicate the proposal’s likely passage on May 26. Malicious code will be removed and Tornado Cash’s DAO governance returns to token holders. Token rose 10% before dropping due to “gigatroll” to lower the prices for increased holdings.
Kazakhstan, an oil-rich nation in Central Asia, surpassed Russia in February 2021 and has since maintained its position as the third-largest contributor to Bitcoin BTC mining. Kazakhstan made up 13.22% of the overall Bitcoin hash rate as of January 2022, trailing just the two historical leaders, the United States (37.84%) and China (21.11%).
The nation is now taking additional measures to maintain its status as one of the largest contributors to Bitcoin mining. Read on to see what these steps are.
Kazakhstan Publishes Consultation Paper Enhances its Crypto Trading Framework
Kazakhstan published a consultation paper in order to evaluate public interest in suggested changes to the cryptocurrency trading regime. A consultation paper is a document published that outlines the current law’s shortcomings, providing justifications for and against potential fixes, and seeking responses.
On January 27, the Astana Financial Services Authority (AFSA), a Kazakh regulatory body, published the policy paper. The AFSA emphasized that the revisions aim to add some enhancements to the Digital Asset Trading Facility (DATF) regulatory framework, which was established by the Astana International Financial Centre in 2018.
The investigation by AFSA brought to light issues with the continued regulation of cryptocurrency exchanges, exposing “contradictions, ineffective rules, and ambiguous terminology within the system.” It suggested implementing risk mitigation strategies on a number of fronts, including governance, illegal activity, client funds security, and settlement.
What changes will this bring?
The AFSA believes that the policy proposals will result in a number of changes, including risk mitigation for crypto operations and the industry as a whole. Furthermore, the improvements will resolve the existing framework’s ambiguities and imprecise regulations. The end goal, according to AFSA, is to establish a conducive environment for crypto exchanges while promoting innovation. According to reports, the new changes will benefit the crypto exchange industry.
The study also revealed that the development of the “Digital Assets framework: Crypto exchanges, STO, and DASP” is one of three main development targets in the “AFSA’s Strategy for 2022” initiative, which is aligned with the review of the DATF framework.
Kazakhstan’s central bank has proposed establishing an in-house central bank digital currency (CBDC) in 2023, with a progressive increase in functionality and commercialization until the end of 2025.
Initiatives like this regarding cryptocurrency are very healthy in the market. Investor confidence in the industry was shaken as a result of the FTX crash. However, Kazakhstan’s move is a step in the right direction for cryptocurrencies.
Troubled cryptocurrency firm Genesis Trading has asked the court to oversee negotiations with creditors to initiate a payout plan no later than May 19, 2023, according to a hearing on Monday. Genesis Trading owes thousands of creditors more than $3 billion, which the company was not able to meet on time due to huge losses incurred during the 3AC and FTX collapse. The company’s situation has been exacerbated by the sustained low crypto prices in the past few months.
Notably, the company has less than $150 million cash at hand to help in the restructuring process. Meanwhile, Genesis Trading intends to engage its parent company Digital Currency Group, one of its largest clients with about $1.65 billion in claims, to repay troubled creditors. Previously, DCG had announced that it has absorbed Genesis Trading’s bad debts incurred from FTX and 3AC’s collapse in a ten-year promissory note.
However, pressure from Gemini Earn Product customers and the ongoing lawsuit filed by the SEC pushed Genesis Trading to file for bankruptcy protection under chapter 11.
“In this case, there are literally hundreds of thousands of individuals whose money is at stake,” said Chris Marcus of Kirkland & Ellis, who represents a group of creditors including Gemini Trust Co.
In the deal talks, Genesis Trading through its attorney noted that it intends to sell itself and distribute the proceeds to creditors. However, if the company sale does not go through during the stipulated time frame, creditors will receive stock compensation in the restructured company. Either way, approval from US Bankruptcy Judge Sean Lane in the Southern District of New York will be required.
Meanwhile, Genesis Trading has, ostensibly, hired a former federal prosecutor to investigate an $850 million loan the company made to Digital Currency Group entities according to Genesis board member Paul Aronzon in a court filing.