Kraken, a cryptocurrency exchange headquartered in the United States, has announced its compliance with a court order to share the data of approximately 42,000 users with the U.S. Internal Revenue Service (IRS).
The exchange will transmit this information to the IRS in early November.
The court order, originating from the U.S. District Court for the Northern District of California in May 2021, compelled Kraken to provide a broad array of records and data concerning its U.S. clients to the IRS.
Initially, Kraken contested the IRS’s demands and engaged in a legal battle to reduce the scope of the summons. As a result, the number of affected clients and the volume of client data to be disclosed were substantially reduced.
Under the court’s directive, Kraken will furnish profile and transaction data for clients who engaged in transactions exceeding $20,000 in any single year from 2016 to 2020.
This also encompasses individuals who conducted deposits and withdrawals without actual transactions.
The data that Kraken will share with the IRS includes names, dates of birth, tax identification numbers, addresses, contact information, and transaction history for the affected customers.
It is estimated that around 42,000 accounts will have their information provided to the IRS.
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This development follows a similar case involving the IRS’s request for user data from Coinbase, another cryptocurrency exchange.
In 2018, Coinbase notified its 13,000 impacted customers that it would furnish the IRS with their taxpayer identification numbers, names, birthdates, addresses, and historical transaction records from 2013 to 2015.
A user named James Harper challenged the IRS’s request, seeking to prevent unrestricted access to a user’s transaction history by the U.S. government.
In October 2023, the DeFi Education Fund, a cryptocurrency advocacy group, submitted an amicus brief in support of Harper’s appeal, underscoring the broader implications of user data privacy in the context of cryptocurrency transactions.
In conclusion, Kraken’s decision to comply with the court order and share user data with the IRS reflects the ongoing scrutiny of cryptocurrency exchanges by tax authorities.
These cases raise important questions about user privacy and data protection in the rapidly evolving world of digital currencies.
Salvadoran President Nayib Bukele has taken the bold step of filing paperwork for his reelection bid in the upcoming 2024 presidential election, slated for February.
Bukele, known for his advocacy of Bitcoin, garnered strong public support when his party officially nominated him for a second term on October 26.
Addressing a large gathering of Salvadorans, he declared, “Five more [years], five more and not one step back. We need five years to continue improving our country.”
Bukele ascended to power in 2019, marking a historic shift away from the two-party dominance that had lasted for three decades between the Nationalist Republican Alliance and the Farabundo Martà National Liberation Front.
However, despite his popularity among the local populace, critics, including Salvadoran lawyer Alfonso Fajardo, argue that the country’s constitution forbids consecutive presidential terms.
Fajardo pointed out, “Nayib Bukele is running for reelection in El Salvador despite the fact that it’s prohibited in 7 articles of the constitution.
The constitution was drafted after our peace accords, after our bloody civil war. This is unconstitutional.”
Notably, in September 2021, El Salvador’s Supreme Court ruled in favor of presidential consecutive reelections, thereby clearing the way for Bukele’s candidacy. Bukele’s party, New Ideas, boasts the support of a significant 70% of the country’s voting population, dwarfing its closest competitor, which only received 4% of the total votes.
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Despite opposition, including a lawsuit from one of New Ideas’ competitors, FMNLB, alleging the unconstitutionality of Bukele’s Bitcoin adoption program, the initiative proceeded as planned.
El Salvador officially made Bitcoin legal tender three months later in September 2021.
The Bukele administration has also embraced tech-friendly policies, such as the elimination of taxes on technological innovations, aimed at bolstering the nation’s economy.
Gabor Gurbacs, a strategy advisor at VanEck, even speculated that El Salvador has the potential to become the “Singapore of the Americas.”
Bukele’s popularity has been bolstered by his resolute crackdown on MS-13, a transnational gang that had contributed to El Salvador’s status as the country with the highest homicide rates in the world six years ago.
Thanks to these efforts, El Salvador’s homicide rate has plummeted by a remarkable 92.6% since its peak of 106 per 100,000 inhabitants in 2015, now standing at just 7.8 in 2022.
The nation now boasts one of the lowest crime rates in Latin America.
However, it’s crucial to note that Bukele’s approach has not been without controversy, as the United Nations and other critics argue that El Salvador violated human rights laws by imprisoning 65,000 individuals without affording them legal rights to defend themselves.
With the presidential election scheduled for February 4, 2024, El Salvador is poised for a pivotal moment in its political landscape as Nayib Bukele seeks to continue his transformative leadership.
On October 27, Sam “SBF” Bankman-Fried, former CEO of FTX, provided crucial testimony during his trial, shedding light on his relationship with Caroline Ellison and the political donations linked to the crypto exchange. Bankman-Fried’s defense attorney, Mark Cohen, directed the proceedings.
One significant revelation from the courtroom was Bankman-Fried’s assertion that he had not discussed political contributions to U.S. politicians with former FTX engineering director Nishad Singh and former FTX Digital Markets co-CEO Ryan Salame.
Instead, he claimed that the donations made in his name were sourced from “loans from Alameda Research.”
These financial activities were part of a broader strategy to influence U.S. government policies related to cryptocurrency regulation.
Bankman-Fried emphasized the importance of shaping these policies, noting that some in Congress and the executive branch were supportive of FTX’s efforts in cryptocurrency lobbying.
Cohen took a detour from the legal allegations, delving into Bankman-Fried’s personal life. He questioned the former FTX CEO about the reasons behind his breakup with Caroline Ellison.
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Bankman-Fried explained that the relationship ended because Ellison “wanted more than I could give.” He added that this was not the first time such a situation had arisen.
During her testimony, Ellison pointed out that SBF had not been spending much time with her, which contributed to the relationship’s deterioration.
Cohen also inquired about Bankman-Fried’s unconventional style, to which SBF responded that his unkempt hair was due to his own laziness, and he preferred the comfort of shorts and T-shirts for most occasions.
In an earlier hearing on the same day, Bankman-Fried denied allegations of defrauding FTX users by allowing Alameda to use customer funds.
Former FTX Chief Technology Officer Gary Wang and others testified that SBF had given Alameda the ability to trade more funds than it had on hand.
Bankman-Fried’s testimony is expected to conclude early next week, following cross-examination by attorneys from the U.S. Department of Justice.
Assuming there are no procedural delays, the court will then instruct the jury to deliberate on the seven criminal charges brought against him.
Institutional interest in Bitcoin investment vehicles has surged amid growing anticipation of potential regulatory changes in the United States.
Data from sources such as Bloomberg reveals that Bitcoin exchange-traded funds (ETFs) and similar instruments are experiencing near-record weekly inflows.
The prospect of the United States permitting a Bitcoin spot price-based ETF has not only influenced the price of Bitcoin but has also positively impacted the broader cryptocurrency ecosystem.
Alongside cryptocurrency exchanges and mining companies, institutional investment options that have faced challenges in recent times are witnessing a resurgence in demand.
According to Eric Balchunas, a senior ETF analyst at Bloomberg, at least two well-known investment options experienced significant trading volume during the week ending October 27.
One of them was the ProShares Bitcoin Strategy ETF (BITO), the first futures-based ETF to receive regulatory approval in the U.S. in 2021.
BITO saw a trading volume of $1.7 billion during the week, marking its second-highest weekly volume since its launch.
Another noteworthy performer was the Grayscale Bitcoin Trust (GBTC), which saw a trading volume of $800 million.
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This increased activity helped narrow the discount of GBTC shares to the Bitcoin spot price, reaching its lowest level in two years.
William Clemente, co-founder of crypto research firm Reflexivity, commented that ETF trading is now “back in full steam,” highlighting the renewed interest in these investment vehicles.
GBTC has experienced a remarkable resurgence in recent months, even before Bitcoin’s 15% price increase in the previous week. Legal victories in the journey towards converting GBTC into a spot ETF provided momentum for this revival.
Currently, Grayscale’s product trades with an implied share price that is just 13.1% below the BTC spot price, according to data from CoinGlass.
Despite the optimism surrounding GBTC, investment management firm ARK Invest has reduced its holdings of GBTC in line with its share price gains.
ARK Invest is also planning to launch a Bitcoin spot ETF, and GBTC currently accounts for 10.24% of its ARK Next Generation Internet ETF—a notable change since November 2022.
In conclusion, the potential for regulatory changes in the United States regarding Bitcoin investment vehicles has sparked a surge in institutional interest and trading activity.
This trend, along with the narrowing discount of GBTC shares to the Bitcoin spot price, suggests a growing confidence in cryptocurrency investment options among institutional investors.
Stuart Alderoty, the Chief Legal Officer of Ripple Labs, and members of the XRP community have shown their support for United States Securities and Exchange Commission (SEC) Commissioner Hester Peirce’s recent stance against perceived injustices in the LBRY lawsuit.
This support was expressed on the social media platform formerly known as Twitter.
Alderoty conveyed his gratitude to Commissioner Peirce for her outspoken views and suggested that when injustices persist in non-fraud cases, especially when consumers are still awaiting resolutions for fraud cases, it may be necessary to deviate from standard protocols and raise concerns more prominently and promptly.
He even proposed the idea of submitting an amicus brief to address such issues.
Commissioner Peirce issued a dissenting statement regarding the LBRY lawsuit on October 27th.
She emphasized that the SEC had recently initiated numerous enforcement actions against various cryptocurrency exchanges, including Ripple, LBRY, Kraken, Binance, and Coinbase.
Peirce pointed out that the LBRY lawsuit was particularly troubling to her, but she refrained from discussing it further due to the ongoing litigation.
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In July, LBRY, a blockchain-based file-sharing and payment network, was found to have violated Section 5 of the Securities Act of 1933.
As a result, LBRY was permanently prohibited from engaging in unregistered cryptocurrency securities offerings involving its native token, both directly and indirectly.
LBRY initially sought to appeal the judgment by the SEC, with strong support from the XRP community.
However, as the legal battle concluded in favor of the SEC, LBRY made the difficult decision to shut down. The company cited financial burdens and regulatory pressure as the primary reasons for its closure.
Pro-XRP lawyer John Deaton, in response to Commissioner Peirce’s statement, suggested that it might be the right time to submit an amicus brief.
Deaton believes that, just as 75,000 individual holders expressed their views in court during the legal proceedings, it is equally important for someone with insider knowledge to speak out in a court of law.
Deaton had previously expressed his disapproval of the SEC’s actions against the company, attributing them to causing financial distress.
The support from Ripple Labs, the XRP community, and legal experts like Deaton highlights the growing concern over regulatory actions in the cryptocurrency space and the need for a fair and transparent legal process.
Solana, the Layer-1 blockchain platform often seen as a competitor to Ethereum, has been making significant waves in the crypto market recently.
Its native cryptocurrency, SOL, has experienced a remarkable surge, surpassing the $32 mark.
This surge has captured the attention of asset management firm VanEck, which has not only expressed optimism about Solana’s future but has also shared its price predictions.
In a comprehensive report, VanEck has presented various valuation scenarios for Solana, offering a wide spectrum of possibilities.
Their projections range from a conservative estimate of $9.81 to an ambitious target of $3,211.28 by the year 2030.
To put this in perspective, this would signify an astounding 10,600% price increase for Solana over the next few years, making it a formidable contender in the blockchain arena. In comparison, Ethereum’s price target stands at $11,800.
One particularly intriguing aspect outlined in the report is the potential for Solana to become the first blockchain capable of accommodating applications with over 100 million users.
This not only highlights its technical prowess but also its ability to challenge Ethereum’s dominance in the space.
Currently, SOL ranks among the top 10 cryptocurrencies, having exhibited impressive growth, exceeding 200% since the beginning of 2023.
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The Solana ecosystem boasts a total value locked (TVL) of $378 million, further emphasizing its growing influence in the crypto world.
Nevertheless, there is a hint of caution in the air as the daily directional movement index (DMI) suggests an increasing bearish sentiment on the daily chart.
This situation places the onus on the bulls to defend the gains made, especially since Solana’s recent ascent aligned with Bitcoin’s surge to $35,000.
If the bullish momentum falters, there is a possibility of SOL’s price slipping below the $30 mark.
Traders contemplating short positions for SOL might find this situation compelling, as technical indicators show the blue line (+DI) decreasing while the red line (-DI) is on the rise, signaling a potential price decline.
This pattern suggests an elevated bearish influence and the potential for a market downturn, potentially resulting in a 15% drop in Solana’s price from its current valuation of $32.
This decline corresponds with a nearby support level reinforced by the 21-day exponential moving average.
In the dynamic world of cryptocurrencies, vigilance and strategic decision-making remain paramount as Solana’s journey unfolds.
Google has reaffirmed its commitment to advancing artificial intelligence (AI) by injecting an additional $2 billion into Anthropic, an AI startup, according to a recent report.
Google’s initial investment of $500 million in Anthropic, a competitor to OpenAI, has now been followed by a commitment to pay the remaining $1.5 billion over time.
This substantial investment builds upon Google’s earlier $550 million injection into Anthropic earlier in 2023.
Additionally, Google Cloud has entered into a multiyear agreement with Anthropic, valued at over $3 billion, further solidifying their partnership.
This news comes on the heels of Amazon’s substantial $4 billion investment in Anthropic in September.
Anthropic is channeling these substantial funds into the training of its AI systems, notably AI assistant Claude, with the aim of achieving groundbreaking developments in the AI industry.
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In contrast, OpenAI, which has received more than $13 billion in funding from Microsoft since 2019,
ChatGPT gained rapid popularity, amassing over 100 million users within its first two months after launching in November 2022, drawing the attention of venture capital firms worldwide.
Notably, Anthropic’s co-founders, siblings Dario and Daniela Amodei, were formerly associated with OpenAI but departed in 2021 due to disputes with OpenAI’s CEO Sam Altman regarding the safety implications of AI system development.
Prior to the investments from tech giants Google and Amazon, Anthropic relied heavily on funding from Sam Bankman-Fried, the former CEO of FTX, who contributed approximately $530 million to Anthropic in April 2022.
This investment came roughly seven months before FTX’s financial downturn.
Anthropic’s substantial increase in valuation is seen as a positive sign for creditors of FTX, as they hope to be fully compensated through the bankruptcy proceedings stemming from FTX’s financial difficulties.
The infusion of funds into Anthropic not only underscores the importance of AI in today’s tech landscape but also highlights the fierce competition and investments made by major players like Google and Amazon in the race to advance AI technology.
Phishing scammers have devised a cunning scheme to deceive unsuspecting readers by cloning the websites of two prominent crypto platforms, Blockworks and Etherscan.
Their nefarious plot aims to trick individuals into connecting their crypto wallets to a fraudulent source, ultimately resulting in the theft of their digital assets.
The counterfeit Blockworks website took a deceptive approach by displaying a fabricated “BREAKING” news report regarding a supposed multimillion-dollar “approvals exploit” on the decentralized exchange Uniswap.
Users were lured into visiting a counterfeit Etherscan website under the pretense of rescinding approvals related to this purported incident.
This fake news article was disseminated on Reddit through compromised accounts within various crypto-related subreddits, amplifying its reach and potential victims.
The imposter Etherscan website, masked as a token and smart contract approval checker, concealed a treacherous trap: a wallet-draining mechanism.
Beosin, a reputable blockchain security firm, conducted an examination of the drainer’s smart contract.
They discovered that the attacker’s objective was to siphon off wallets holding a minimum of 0.1 Ether, equivalent to $180.
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However, the drainer had a critical flaw; it failed to initiate any phishing transaction after a wallet was connected, undermining its malicious intent.
A closer examination of the fraudulent domains revealed that the sham Etherscan site, approvalscan.io, was registered on October 25th, while the counterfeit Blockworks site, blockworks.media, was registered just a day later.
This quick domain registration turnaround showcased the scammers’ urgency in launching their deceitful campaign.
In an October 25th tweet, Web3’s anti-scam platform, Scam Sniffer, exposed another instance of scammers deploying a wallet-draining mechanism on a cloned website imitating the crypto news outlet Decrypt.
Intriguingly, Scam Sniffer clarified that the phony Blockworks and Decrypt sites were operated by distinct groups of scammers, adding a layer of complexity to their fraudulent operations.
As phishing scams continue to evolve in sophistication, it is essential for users in the crypto space to exercise utmost caution and verify the authenticity of websites and information sources before connecting their wallets or engaging in any transactions.
Vigilance remains the best defense against these cunning cybercriminals seeking to exploit the crypto community’s trust.
On October 25th, Taiwanese lawmakers unveiled the Virtual Asset Management Bill in the country’s unicameral parliament, the Legislative Yuan.
This legislation is designed to enhance customer protection and establish proper oversight within the virtual asset industry.
Spanning 30 pages, the bill puts forth a set of reasonable requirements for virtual asset service providers (VASPs).
These include the segregation of customer funds from the company’s reserve funds, the implementation of an internal control and audit system, and membership in the local trade association.
Notably, the bill currently does not mandate stablecoin issuers to maintain a 1:1 ratio of reserve funds, and it does not address algorithmic stablecoins.
The specific rules governing advertising and marketing activities will be determined by the “competent authority.”
For VASPs operating without a license, the bill proposes fines ranging from a minimum of 2 million Taiwanese dollars (approximately $60,000) to a maximum of 20 million TWD ($600,000).
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Existing companies in the Taiwanese market will have a grace period of six months from the bill’s enactment to secure the necessary licenses.
In September 2023, Taiwan’s Financial Supervisory Commission (FSC) also issued industry guidelines tailored to VASPs.
Foreign virtual asset service providers are prohibited from offering their services in Taiwan without obtaining regulatory approvals from the FSC.
These regulatory measures have emerged as prominent cryptocurrency exchanges in Taiwan have taken proactive steps toward self-regulation.
On September 26th, several local exchanges, including MaiCoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, united to establish the Taiwan Virtual Asset Platform and Transaction Business Association.
Their primary objectives are to support the cryptocurrency industry and collaborate closely with regulators to ensure responsible growth.
United Nations Secretary-General António Guterres made a significant announcement on October 26, revealing the creation of a 39-member advisory committee dedicated to addressing global issues surrounding the regulation of artificial intelligence (AI).
The committee’s composition is remarkably diverse, encompassing a wide array of experts from various sectors.
It includes leaders from the tech industry, government officials representing countries like Spain and Saudi Arabia, and scholars hailing from nations such as the United States, Russia, and Japan. Some notable figures among them are Hiroaki Kitano, Sony’s Chief Technology Officer; Mira Murati, the Chief Technology Officer of OpenAI; and Natasha Crampton, Microsoft’s Chief Responsible AI Officer.
Moreover, the committee members come from six different continents, representing a rich tapestry of backgrounds and perspectives, ranging from AI expert Vilas Dhar in the United States to Professor Yi Zeng from China and Egyptian lawyer Mohamed Farahat.
In his official statement, Secretary-General Guterres acknowledged the profound positive impact of AI, but also highlighted the potential for malicious use that could erode trust in institutions, weaken social cohesion, and even threaten democracy.
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This recognition of AI’s dual nature underscores the urgency of addressing its governance on a global scale.
The surge in interest and concern surrounding AI’s societal implications, especially following the introduction of technologies like ChatGPT by OpenAI, has prompted researchers and policymakers worldwide to advocate for enhanced international cooperation.
Many governments are actively working on legislation to regulate AI, further emphasizing the need for global collaboration in this realm.
The United Nations is taking proactive steps in this direction. It plans to release preliminary recommendations by the end of the year, with comprehensive guidelines scheduled for the summer of 2024.
Immediate priorities include fostering a global scientific consensus on potential AI-related risks and challenges while bolstering international cooperation in AI governance.
The inaugural meeting of the advisory committee is scheduled for October 27, signifying the organization’s commitment to addressing the complex issues surrounding AI regulation on a global scale.