Crypto Exchanges Announce Market Developments, US Report Addresses Crypto Tax, New DOJ and SEC Enforcement, Reports Detail Crypto Crimes


In this matter:

• Cryptocurrency exchanges and financial companies announce market developments

• US report covers crypto tax issues, Israeli decision says tokens are securities

• DOJ, SEC and Europol are taking various measures to enforce the cryptocurrency

• Reports provide insights into cryptocurrency crimes and darknet activity

Cryptocurrency exchanges and financial companies announce market developments

Last week, Coinbase announced its intention to become a publicly traded company by announcing a proposed direct listing of its Class A common shares on Form S-1. Coinbase had previously filed its Form S-1 with the Securities and Exchange Commission (SEC) in confidence on December 17, 2020. According to reports, Nasdaq will be the place for direct listing.

Gemini recently released its report on the State of Cryptocurrency in the UK, which summarizes a survey of 2,000 respondents and tracks demographic trends related to cryptocurrency in the region. For example, nearly 42 percent of respondents who are current or past cryptocurrency investors are women. The report also notes that respondents who are cryptocurrency investors are less likely to own a home than those who are not interested in cryptocurrency, are more likely to be in a relationship and have children at home, and most likely to be between the ages of 18 and 44.

Another major cryptocurrency exchange this week announced the acquisition of a leading debit and credit card issuer in the UK and Europe. According to a blog post, the exchange’s acquisition provides the exchange with a sophisticated payment platform accompanied by a full EMI license that enables the exchange to “issue crypto-enabled multi-asset debit cards across the UK and Europe”.

In overseas markets, a Canadian investment firm recently completed an IPO of its cryptocurrency fund on the Toronto Stock Exchange. In Switzerland, according to a recently published press release, Sygnum Bank and Fine Wine Capital AG have “successfully marked a number of first-class investable wines and thus created the first asset tokens to be issued under the new Swiss DLT law”.

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US report covers crypto tax issues, Israeli ruling says tokens are securities

The Law Library of Congress published a report on the taxation of cryptocurrency block rewards in January 2021. The report includes the results of foreign legal specialists on the tax treatment of new tokens in 31 countries obtained through cryptocurrency mining or staking, known as “block rewards”. The report also looks at the tax implications of cryptocurrency tokens acquired through airdrops and hard forks (“chain splits”). The report shows that while various tax authorities have published guidelines on taxing mined tokens, few specifically address the taxation of tokens obtained through staking. For countries where no explicit block bonus tax rules are available, the report includes information such as general tax rules, legislative proposals, official statements, and comments from legal scholars and tax professionals that may be helpful in determining the tax treatment of these assets. The report complements a broader comparative study of regulatory approaches to cryptoassets that the Law Library published in April 2019.

This week the Israel Securities Service issued a preliminary ruling stating that cryptocurrency is a security subject to Israel’s Securities Act. The paper comes in response to a request from a blockchain company to determine that its token is a utility token and is intended to be used only in conjunction with the company’s services that allow users to cancel cryptocurrency transactions. The agency dismissed the company’s arguments, stating that (1) the company’s tokens may have a secondary market for investment purposes, (2) the tokens are a material asset of the company, and (3) the company has the right to value to change the tokens independently and enable their use for future developments.

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DOJ, SEC and Europol are implementing various measures to enforce the cryptocurrency

According to a recent DOJ press release, a California man was charged with money laundering and running an unlicensed money transfer company that exchanged tens of millions of dollars in bitcoin and cash. If the defendant pleads guilty, he faces a maximum statutory sentence of 25 years in federal prison.

According to another recently released report, a California couple allegedly used their status with the U.S. Navy to access the personal information of more than 9,000 people who sold them for identity theft for Bitcoin payments of at least $ 160,000. To use dollars. The couple have been charged with conspiracy on wire fraud, wire fraud and aggravated identity theft and face a maximum sentence of 20 years in prison.

The Securities and Exchange Commission (SEC) recently accused three people of defrauding hundreds of retail investors of more than $ 11 million through two fraudulent and unregistered digital asset securities offerings. The SEC alleges that several people wrote fraudulent promotional materials that were distributed to the investing public and that these materials contained false statements, including the fact that the digital tokens could be delivered on the Ethereum blockchain and that the funds invested were intended to be used Development of a coin was “degradable” and that the tokens could be traded on a proprietary digital asset trading platform when the platform was “launched”. In parallel, the DOJ filed a criminal complaint against one of the defendants.

According to a recent press release, the Spanish Civil Guard, Catalan Police, Andorra and Europol have jointly dismantled an investment fraud in the currency and binary options markets and arrested six suspected fraudsters between the ages of 20 and 34. In two house searches, the police are said to have confiscated eight vehicles; multiple electronic devices; an estimated $ 84,000 in fiat money and cryptocurrencies, including Bitcoin, Ether, XRP, and OmiseGo; and multiple company-related bank accounts.

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Reports provide insights into cryptocurrency crimes and darknet activity

A recent CipherTrace report on cryptocurrency crime and anti-money laundering showed a massive surge in cryptocurrency crime over the past year. The report showed that major crypto thefts, hacks, and fraud cases totaled $ 1.9 billion in 2020. This is the second highest annual value ever recorded. Another recent report on cryptocurrency-related crime showed some significant geographic differences in the activity of the darknet market. According to Chainalysis, Eastern Europe and China are the source of the vast majority of money laundering activity related to cryptocurrencies, while the United States and Western Europe have most of the darknet providers. Meanwhile, darknet providers continue to benefit even during the pandemic, as scammers are now promoting COVID-19 vaccines on the darknet for bitcoin worth up to $ 1,000. Recent analysis found over 340 fraudulent advertisements on 34 pages, while fake vaccine advertisements were displayed on just 8 pages last month.

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