Category: Crypto News

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.

The dramatic rise in the price of WIF has valued the 350M tokens sold by the developer at more than $693 million.

A blockchain developer who participated in the creation of the Dogwifhat (WIF) memecoin missed out on a massive profit after selling millions of the token before it gained traction.

According to a tweet by Lookonchain, the developer offloaded 350 million WIF for 511 Solana (SOL) worth $29,000 within two days after the memecoin began trading in November 2023.

$29K Sale Before 10,000x rally

Within four months after its launch, WIF has skyrocketed over 10,000x to become one of the biggest memecoins on the Solana network and the fifth-largest memecoin in the crypto space after Dogecoin, Shiba Inu, Pepe, and Floki.

The market capitalization of WIF has surged to $2.07 billion alongside the token’s value. When the memecoin started trading on November 20, it was worth around $0.00017; however, at writing time, the token’s value had risen to $2.09, representing a 1,229,362% rise. 

The dramatic rise in the price of WIF has placed the 350M tokens sold by the developer at a valuation of more than $693 million. Apparently, the developer missed a chance to create generational wealth, according to some members of the crypto community.

Although Lookonchain tagged the developer’s experience “the saddest thing,” the blockchain intelligence platform revealed that the WIF creator did not lose out entirely as they had a separate wallet that did not offload another portion of the tokens immediately after trading began.

WIF Surpasses Bonk

The developer spent 2 SOL to purchase an additional 489,674 WIF for the separate wallet. Recently, they sold 12.4 million WIF for 890,000 USDC. At the time of writing, the wallet held 589,199 WIF worth approximately $1.2 million at current prices.

Dogwifhat has remained relentless in its rally, recording an 831% gain in the past month and 66% in the past week. The token recently surpassed Bonk, another Solana-based memecoin that gained over 10,000% last year, to take fifth place. Dogwifhat’s meteoric rise can be attributed to several factors, including the crypto community’s attention to the Solana ecosystem and the memecoin’s listing on major exchanges like Binance.

Meanwhile, SOL has also pumped over 693% in the past year and was trading at $147 at the time of writing, reaching levels not seen since January 2022.

Osama Hussain, a former Leicestershire police officer trading thousands of Euros on cryptocurrency has been banned for providing false information about his crypto holdings. 

To examine the risk of vulnerability to financial inducement, the Leicestershire police force carries out a series of checks on potential staff. The check ensures complete honesty among officers. An important part of the pre-employment assessment involves a thorough investigation of a person’s financial life. 

Hussain’s Financial Vetting

Osama Hussain was assessed when he wanted to join the UK police force in November 2022. But, he lied concerning his knowledge of cryptocurrency saying that he had invested only £150 into digital assets and was an amateur in crypto. He passed the vetting with an agreement to inform the force about any significant changes in his financial life. 

During his vetting, Mr Hussain reported that has not been close with an unrevealed Person A. Later on, a transaction of about £4000 between Hussain and Person A was discovered. So, Hussain’s claim of not being in contact with Person A was a lie. 

Further, in January 2023, Santander bank blocked Hussain’s account and he didn’t tell the police force about it. Instead, some months later after he got married, he filed for a change in circumstances. When asked about any changes in his financial circumstances, he said there were none. However, he was trading thousands of Euros in cryptocurrency. 

Leicestershire Police Statements and Decision

Before the force discovered Mr Hussain’s lies, he resigned from the police. Upon the investigation result, Chief Constable Rob Nixon concluded that Hussain knew that his crypto transaction with Person A would threaten his application to work with the police force. He said, “ he has maintained the lie to cover up his previous activity and his relationship with Person A.” 

Although he resigned from police work earlier and pleaded guilty to not revealing the information during vetting, Nixon barred him from the police force leaving him with no chance of returning to join the force. He also indicated that he would have dismissed Mr Hussain, if these things were revealed when he was still serving with the police. 

In conclusion, Nixon said, “His conduct was fundamentally dishonest, demonstrated a serious lack of integrity, was continued, and would seriously undermine public confidence in policing.” 

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.