Author: Chris Lion

Senator Lummis believes implementing a 30% tax would jeopardize crypto’s growth and presence in the U.S. 

United States President Joe Biden has put forward a proposal to revive a 30% tax on crypto mining operations as part of his latest budget. The proposal shows the government’s commitment to regulate crypto space more critically.     

In a document from the U.S. Department of the Treasury titled “General Explanation of the Administration’s Fiscal Year 2025 Revenue Proposals,” the Administration pointed out that the existing laws do not address digital assets, which primarily focus on broker and cash transaction reporting.

To address the gap, the Biden Administration seeks to impose an excise tax, similar to a tax on goods like fuel, particularly digital asset mining activities. 

The Treasury noted that “any firm using computing resources, whether owned by the firm or leased from others, to mine digital assets would be subject to an excise tax equal to 30 percent of the costs of electricity used in digital asset mining.”

A Theee-Phase Tax Proposal

If approved, the proposal would significantly impact crypto miners. Crypto miners play an essential role in providing security in blockchain networks and verifying transactions by solving complex mathematical puzzles, which requires large computational power and energy.

The tax revival of a 30% tax on crypto mining cancels initial policies and indicates the Administration’s growing concern surrounding crypto activities’ environmental and regulatory implications. Critics have long complained about the ecological effect of crypto mining, which regularly depends on energy-intensive processes powered by fossil fuels.

According to the Biden Administration, the proposal will take effect for taxable years after December 31, 2024. The government plans to introduce the tax in three phases: 10% rate in the first year, 20% increase in the second year, and 30% in the third year   

The Administration also added that tax would extend to crypto mining firms that generate electricity internally. Additionally, companies that produce power independently, commonly known as “off-grid: entities, must pay a 30% tax based on estimated electricity usage expenses.

Speaking on the development, Pierre Rochard, the Vice President of Research at Bitcoin-driven infrastructure solution Riot Platforms emphasized that even individuals using solar or wind energy would feel the impact of the proposed tax. Rochard is confident that this move appears to be a strategy to suppress Bitcoin and introduce a central bank digital currency (CBDC).

Congress Deliberates on the Biden’s Proposed Plan 

President Biden’s budget plan will pass through deliberations in Congress, where lawmakers will carefully examine the proposal and negotiate potential amendments.

U.S. Senator Cynthia Lummis already expressed her concerns regarding the tax proposal on X. Lummis argued that while the Administration’s acknowledgment of cryptocurrency in the budget shows an optimism towards crypto, implementing a 30% tax would “destroy any foothold the industry has in America.”

Meanwhile, this is the second attempt the Biden administration has made to implement a 30% tax on electricity used by crypto miners. On March 9, 2023, Biden attempted to tax miners in the budget proposal 2024. 

The new law will allow DAOs to create new contracts with third parties that enable them to open bank accounts among other things. 

Mark Gordon, governor of Wyoming, has passed legislation granting legal status to Decentralized Autonomous Organizations (DAOs). The move makes Wyoming the first state in the United States to officially recognize DAOs as distinct entities. 

Under the new law, DAOs will be provided legal standing, allowing them to enter into contracts, own properties, and get involved with legal proceedings, much like traditional corporations. 

The new regulation was championed by the legislature’s Select Committee on Blockchain, Financial Technology, and Digital Innovation. The bill has now established a legal framework for decentralized unincorporated nonprofit associations (DUNAs) operating in the state.  

The bill, which came into effect on March 7, highlighted the requirements for establishing a DUNA, which handles the functions of smart contracts. It also provides guidelines regarding the obligations of the association and its members. 

According to the document, DUNA stands as a separate legal entity from its members, which signifies that the DAO can be held accountable without involving its members in liability issues. Since a DAO is an entity without central leadership, such organizations make decisions using a bottom-up management approach. Memebers of a DAO must hold a stake in the organization. In a blockchain network, each DAO is backed with a specific cryptocurrency.  

“A person is not liable for a breach of a decentralized unincorporated nonprofit association’s contract merely because the person is a member, administrator, authorized to participate in the management of the affairs of the nonprofit association, or considered a member by the nonprofit association,” the new law states. 

On March 8, after a concluded analysis, venture capital firm a16z crypto mentioned a “fundamental misunderstanding of the nonprofit designation provided by the new law.

More so, the legislation creates a regulatory guideline tailored to DAOs’ special characteristics, which addresses concerns surrounding governance, liability, and accountability.  

Wyoming seeks to promote innovation and ensure the stability and transparency of its financial ecosystem by providing legal certainty and consumer protection measures.  

According to Miles Jennings, a16z’s general counsel, and David Kerr, principal at Cowrie law firm, a Wyoming-based DAO is not restrained from participating in for-profit activities. 

“Under Wyoming law, the UNA and the DUNA can engage in for-profit activities. This would include operating a decentralized exchange protocol, a decentralized social media protocol; you name it,” Jennings said.

DAOs are also permitted to offer compensation to their members, which may include rewards for participating in the governance process.

Optimism (OP), a leading layer two scaling solution for Ethereum, has announced the completion of a private token sale worth $90 million. OP aims to increase Ethereum’s transaction throughput while decreasing the network’s cost.  

The Price of Optimism OP Today 

The live price of OP is $4.62, and the 24-hour trading volume is $400,769 at the time of writing. The token has been +15.07% in the last 24 hours, and its total circulating Supply is 1.01B. 

Also, while the foundation is selling a substantial quantity of tokens, they specified in the announcement that the sale included a two-year vesting period, restricting the buyer from trading the token before then. 

Optimism stated that the buyer can still use the tokens for governance participation within the vesting period. 

Optimism wrote, “During the lock-up, the purchaser will be able to delegate the tokens to unaffiliated third parties for participation in governance.”  

30% of the Initial OP Token Supply 

The organization told the community that the tokens originate from the “Unallocated portion” of the OP Token treasury and constitute a part of the foundation’s initial working budget of 30% of the original OP token supply.  

“Over the next few days, there will be several transactions to send the OP. These are all planned transactions, and we’re sharing a heads-up to keep the community informed,” Optimism stated.    

Several Users Triggered at Buyer’s Hidden Identity 

The foundation explained to the community that the transaction was conducted as a private sale, and the terms and identity of the buyer could not be disclosed. The post triggered discussions on X, with some followers perceiving the sale negatively, while others defended the foundation. 

Ethereum advocate Anthony Sassano expressed his love for OP and acknowledged his investment in the project. However, he highlighted that private sales lack transparency, leaving “a bad taste” in his mouth. Meanwhile, other members argued that the team behind OP also needs to sustain themselves financially.  

According to records, this is not the first time the foundation has sold its tokens privately. In September 2023, it sold 116 million OP tokens, valued at approximately $160 million.   

In May 2023, Optimism unlocked 9% of its native token’s total supply, which raised concerns amongst token holders at the time. 

On-chain data has revealed that companies owned by tech billionaire Elon Musk hold a whopping $1.34 billion worth of bitcoin (BTC).

Tesla and SpaceX Hold $1.3B in Bitcoin

According to Arkham, a blockchain intelligence platform, Tesla currently holds 11.5k BTC ($780M) across 68 addresses, and SpaceX holds approximately 8.29k BTC ($560M) across 28 addresses. 

Electric car company Tesla  is the largest holder of BTC among Musk’s firms. Tesla announced its decision to invest in bitcoin in January 2021 and the company purchased $1.5B worth of the asset at the time.

The firm also announced that it would accept bitcoin payments for its products.

However, Tesla later suspended the bitcoin payment option and sold $272M and $936M worth of BTC in Q1 2021 and in Q2 2022 respectively due to environmental concerns.

Elon Musk Loves Dogecoin

Musk believes Bitcoin is not friendly to the climate as the network still largely depends on fossil energy to run. Nonetheless, the billionaire promised that his companies would resume their bitcoin activities when the protocol starts using 50% renewable energy for its operations.

Meanwhile, Elon Musk’s  tweets and public statements have often influenced the prices of digital assets, and he particularly favors popular memecoin Dogecoin (DOGE), thus earning him the title “Doge Father.”

In 2021, Musk announced that Tesla would accept Dogecoin as payment for branded products. Shortly after the announcement, the price of the memecoin soared tremedounrly.  

“Tesla will make some merch buyable with Doge & see how it goes,” Musk tweeted.    

Do Kwon, the co-founder and CEO of blockchain platform Terra, has won his appeal against extradition to the United States. 

According to an official statement released on March 5, the Appellate Court of Montenegro has annulled the decision made by the High Court of Podgorica to authorize the extradition of Kwon to the United States. The ruling represents a significant turn of events in the legal proceedings regarding the Terra founder’s extradition.   

The Appellate Court panel contended that the earlier ruling by the High Court in Podgorica was affected by “significant violations of the provisions of criminal procedure” under local laws. 

“There are no clear and valid reasons for decisive facts regarding the order of arrival request letter,” the panel said.

The recent verdict by the Appellate Court of Montenegro adds another event to the prolonged saga of Kwon’s extradition process since his arrest in Montenegro in March 2023. Following his arrest, both the United States and South Korea submitted extradition requests, sparking primary debate over whether the Terra founder should return to his home country. 

In December 2023, the Appellate Court of Montenegro revoked Kwon’s extradition authorization to the United States or South Korea. The court argued that the case should be remanded to the Podgorica Basic Court for a retrial. However, in November 2023, the High Court of Podgorica previously determined the requirements for Kwon’s extradition, leaving the ultimate decision regarding Kwon’s extradition to Mr Andrej Milović, Montenegro’s Minister of Justice.   

Terra Labs, the firm responsible for the Terra blockchain, renowned for its Terra stablecoin, suffered a significant collapse in May 2022 amidst allegations of fraud. According to the U.S. Securities and Exchange Commission (SEC), Terra Labs and its co-founder Kwon organized a fraudulent scheme that resulted in the market’s disappearance of at least $40 billion.  

Meanwhile, the latest legal verdict is a win for Kwon but the case will be reviewed further by the same court that initially ruled on the matter. As such, Kwon’s extradition is not entirely annulled, pending further judicial proceedings. 

Leading cryptocurrency exchange Binance has announced its decision to discontinue all transactions involving the Nigerian Naira (NGN) on March 8. 

The firm expects users to withdraw, trade or convert NGN into cryptocurrencies before the service is discontinued by the weekend.

Binance noted that after the deadline, any remaining NGN in any user’s account will be converted to Tether (USDT). 

The exchange further assured its Nigerian customers of a seamless transition process and has outlined steps to help facilitate the withdrawal of funds tied to the NGN from the platform.

“Please note that the conversion rate is calculated based on the average closing price of the USDT/NGN trading pair on Binance Spot in the last seven days,” the firm said. 

Furthermore, Binance Pay, the exchange’s payment service, will exclude NGN from the list of supported payment options on the 6th of March.

Recall that the company already delisted the NGN from its peer-to-peer service  in late February.

In response to the news, some Nigerian users have expressed their frustration, calling on the exchange to reconsider its decision and seek alternative means to resolve the challenges in its Nigerian operations.   

The news on the total removal of the NGN from Binance comes as the firm faces substantial regulatory scrutiny in Nigeria.  

Reportedly, Nigeria’s National Security Adviser in Abuja, the nation’s capital, seized the passports of two Binance executives, citizens of the United States and the United Kingdom.  

On February 27, the governor of the Central Bank of Nigeria (CBN) contended that cryptocurrency exchanges in Nigeria were under suspicion for processing and handling illicit transactions.  

Amid suspicions of alleged illicit activities by Binance in the country, the Nigeria House of Representative Committee on Financial Crimes has called for the exchange’s CEO, Richard Teng, to be present before the committee for questioning.  The committee chair has also issued an ultimatum to Binance’s management to appear on or before March 4.  

Meanwhile, Nigeria is one of the fastest-growing global crypto economies as the country’s economy and local currency continue to fall.  

In September 2023, leading crypto intelligence firm Chainalysis ranked Nigeria as the second-highest country globally regarding crypto adoption.

In August 2022, Nigeria topped the list as the most crypto-obsessed country globally regarding the volume of Google searches for “cryptocurrency” or “buy crypto.”