2021-04-13 23:21:31

Maven-Operated The Street is Dipping its Toes Into Cryptocurrency

Photo by Aleksi Räisä on Unsplash

Finance media company The Street announced on April 5, 2021, that it would be launching a new brand focusing exclusively on cryptocurrency. The Street also intends to devote more media coverage on its website to cryptocurrency news.

Rob Barrett, who recently became president of The Street’s parent company Maven Media, stated that the decision reflects growing interest in alternative currency across the world. Additions to The Street’s website include:

  • A channel dedicated only to news about cryptocurrency

  • Newsletter titled Crypto Investor covering stories about the growing acceptance of Bitcoin on Wall Street

The Street will offer the cryptocurrency newsletter on a subscription basis while access to its dedicated channel remains free.

How The Street is Ramping Up to Offer Expansive Coverage of Cryptocurrency

Rob Barrett has led the development of bringing on a new team of journalists, all of whom have extensive experience covering the alternative currency market. Barrett intends to position The Street as a leader in finance media by providing extensive cryptocurrency resources on the company’s website. The Street also hopes to capitalize on the mistakes other finance media companies have made in ignoring the growing acceptance of cryptocurrency.

The Street’s new president stated that his intention is for the new dedicated channel to cover events and information in the finance world as they happen. The newsletter will offer more in-depth articles for people interested in learning more about the cryptocurrency market.

About Rob Barrett

Rob Barrett began his new position as president with Maven Media in late February. All media brands and editorial teams at The Street and Sports Illustrated, another Maven Media publication, will report to him directly. Rob Barrett will report to Ross Levinsohn, the CEO of Maven Media.

Prior to coming on board with Maven Media, Rob Barrett held the position of president with the digital media group Hearst. He previously worked with Ross Levinsohn in the news and finance division of Yahoo where Levinsohn was head of media and interim CEO.

Other positions Barrett has held in the finance media industry include executive vice president at Tribune, Co., lead of the digital group at the Los Angeles Times, and managing producer at ABC News. Barrett was responsible for launching the first website for Time.com in the late 1990s.

Levinsohn expressed his enthusiasm regarding Barrett joining Maven Media as president of The Street and Sports Illustrated. Having worked with Barrett in the past and knowing his long history in media, Levinsohn feels confident that he can grow both companies.

The main challenge for Sports Illustrated is that subscriptions to its print media have fallen by over one million people in a 19-month period from May 2019 to December 2020. The popular sports magazine has recently added a digital subscription that is performing even better than expected. Rob Barrett expected this when he became president and will work with his teams to determine how Sports Illustrated can continue to serve both customer groups well.

The Street grew its revenue by 30 percent in 2020 with predictions for an even better 2021. Barrett states that he intends to grow the number of advertisers and subscribers for both companies.

About Ross Levinsohn

https://finance.yahoo.com/

Ross Levinsohn has spent more than 30 years working in finance, media, and technology. He assumed the position of Maven Media CEO in August 2020. Levinsohn took over the position from James Heckman, the outgoing CEO and founder of Maven Media. Heckman will continue to consult with Levinsohn regarding business development and strategic initiatives. Just as Ross Levinsohn express his enthusiasm for Rob Barrett coming on as president, Maven Media’s executive chairman did the same with him.

Noteworthy prior roles that Levinsohn has held include president of Fox Interactive Media and head of global media and Americas division with Yahoo. Other media companies Levinsohn has worked for include Alta Vista, CBS Sportsline, HBO, Guggenheim Digital Media, and Tribune.

At the time that Levinsohn took over as the head of Maven Media, the company raised more than $24 million dollars from finance backers. These included:

About Maven Media

Maven Media is the parent company of more than 275 brands besides The Street and Sports Illustrated. Some top brands the company represents include History, Bio, and MTO News. Maven Media works with journalists and publishers to give them the platform to tell their story. The Street and Sports Illustrated reach a combined monthly audience of 150 million people. Based in Seattle, Maven Media sells stock under the name MVEN.

Contact:

Exec Edge

Twitter: @Exec_Edge


2021-04-13 17:15:00

Kent Swig Launches New Cryptocurrency, DIGau

Terra Holdings’ Kent Swig (Swig Equities, iStock)

Real estate investor and Terra Holdings owner Kent Swig has secured $6 billion in gold reserves to back his new cryptocurrency.

DIGau, his digital token, will be pegged to the market price of the gold, Bloomberg News reported. The gold is guaranteed by liens that Swig and partner Stephen Braverman secured against mining claims in Nevada and Arizona through their company, Dignity Gold.

“Gold was one of the original rock-solid backings of all currencies,” Swig told the publication. “We’re not reinventing the wheel here. What we’re doing is applying the world’s stable backing of a lot of things to a very advanced technology.”

While cryptocurrencies like Bitcoin have seen massive swings, pegging the new coin to a physical asset could stabilize it.

Swig’s new coin isn’t the first attempt to combine gold and crypto; other attempts haven’t had much success, according to Bloomberg. But an interest in both has increased in recent years, as investors seek to protect themselves against inflation.

Billionaire Rick Caruso’s real estate firm recently became the largest real estate firm to accept rent in cryptocurrency.

[Bloomberg] — Sasha Jones


2021-04-13 22:07:35

E11EVEN MIAMI Becomes First U.S. Nightclub to Accept Cryptocurrency – NBC 6 South Florida

Ultraclub E11EVEN MIAMI announced Tuesday that it will now be accepting cryptocurrency as a form of payment – making them the first major nightclub in the U.S. to do so.

Now, when paying for tables, drinks, or merchandise, guests have the option of seamlessly paying with cryptocurrency.

“With the tremendous growth and relevancy of cryptocurrency coupled with Mayor Francis Suarez leading the charge for Miami’s tech boom, we felt it made sense to introduce cryptocurrency as an option to our guests to pay for their night out,” said Dennis DeGori, creator and CEO of E11EVEN MIAMI. “E11EVEN is dedicated to always staying ahead of the curve, and we believe Cryptocurrency is here to stay.”

E11EVEN MIAMI has partnered with one of the largest cryptocurrency processing companies to implement a system to process cryptocurrency purchases using Bitcoin, Bitcoin Cash, Ripple, Dogecoin, among others. The system in place enables businesses to accept cryptocurrency as a form of payment without having to buy, own or manage crypto.

“Bringing services and amenities that cater to our cutting edge clientele is of uber importance (to us), and we’re seeing an increasing trend of clients wanting to use their Cryptocurrency as a form of payment,” said Gino LoPinto, operating partner of E11EVEN MIAMI. “We believe nightclubs allowing Bitcoin as payment will soon become a nightlife industry norm, and we’re excited to be the ones paving the way.”

Located in Downtown Miami, E11EVEN MIAMI is the world’s first and only 24/7 ultraclub. Since opening it’s doors in 2014, the nightclub has catapulted South Florida nightlife to incredible new heights establishing itself as the highest-grossing nightclub per square foot in 2019.


2021-04-13 20:42:22

ESG and Cryptocurrency: Considerations for Market Participants | Latham & Watkins LLP

For market participants pivoting toward ESG and digital assets, weighing the issues at the crossroads of these two megatrends is critical.

The huge rise in popularity of Bitcoin — and the growing interest by mainstream financial institutions in virtual assets as an investable and tradable asset class — has shone a light on the cryptocurrency industry’s environmental, social, and governance (ESG) performance.

The vast majority of the world’s financial institutions manage climate risk and other ESG risks in their own portfolios. As a result, many financial institutions perform related diligence on corporates they look to service, whether by traditional lending, capital markets underwriting, or direct investment. While the focus has primarily been on the ESG performance of cryptocurrency miners (given their role in the creation of cryptocurrencies and the energy requirements associated with that process), the ESG performance of the broader cryptocurrency industry will increasingly need to be considered, particularly as institutional investment in this space is accelerating. Accordingly, investors in cryptocurrency miners, in cryptoasset service providers, and even in companies that put cryptoassets on their balance sheets must now weigh the potential for increased returns against the possible negative impact on their ESG credentials.

While much has been written about the sustainability challenges related to cryptocurrency mining, ESG represents a broad range of considerations. This post explores the ESG-related challenges that cryptocurrency market participants are facing and practical steps to meet them.

Environmental

Environmental concerns have circulated in popular media relating to the amount of energy expended in mining cryptocurrencies, particularly those that rely on a proof of work consensus model (such as Bitcoin and Ether) rather than proof of stake or proof of authority consensus models.[1] Such emissions, it has been argued, have the potential to significantly contribute to the acceleration of global warming.

According to research by the University of Cambridge, the majority of Bitcoin miners are based in China,[2] a country heavily reliant on coal for energy. Until recently, a large amount of cryptocurrency mining was conducted in Inner Mongolia, an autonomous province in northern China, where coal-burning power plants provided the electricity for mining operations. However, in March 2021 the provincial government of Inner Mongolia announced that it would ban all cryptocurrency mining operations in a bid to achieve carbon-reduction targets set by the central government. In addition, a significant portion of cryptocurrency mining occurs in Sichuan province, the most hydroelectric-rich region in the country. With China publicly stating that it is targeting carbon neutrality by 2060, further policy decisions and initiatives to shift from fossil fuels to clean energy sources may reduce the cryptocurrency mining carbon footprint.

Furthermore, a growing range of blockchain protocols supporting the issuance of cryptoassets that do not rely on energy-intensive consensus models are coming into the market, including permissioned networks, which the financial industry is increasingly adopting. Even so, the continued success of Bitcoin as an asset and its broader importance to the cryptocurrency market means that environmental questions continue to be extremely relevant.

Where and how cryptocurrency is mined is a growing area of focus for investors who do not want to buy cryptocurrency that is created in a way that causes excessive energy waste or environmental damage. Anecdotes have circulated about investors seeking sustainably mined “virgin” bitcoins at a premium, as these bitcoins are less likely to be associated with problematic activities, and therefore less likely to raise ESG or reputational risks. Some institutions even want to mine their own supply to be able to prove their coins’ provenance to clients.

Today nearly 40% of cryptocurrency mining relies on renewable energy sources, as an increasing number of miners aim to reduce carbon emissions and meet investors’ demands. Miners can differentiate their ESG credentials by switching to or emphasizing their use of sustainable energy sources, and other cryptocurrency market participants can consider taking steps to encourage the use of renewable energy in bitcoin mining.

Climate Focus: The Impact of the Paris Agreement

The Paris Agreement is a legally binding international treaty on climate change, adopted by 196 countries at the United Nations Climate Change Conference in Paris on 12 December 2015.[3] Its goal is to limit global warming to below 2°C, compared to pre-industrial levels. Those 196 countries are now looking to build their own legislative frameworks to ensure that they can achieve the carbon reduction goal set out in the Paris Agreement. They will achieve these goals by imposing carbon reduction requirements on companies operating in those jurisdictions. In practice, for the vast majority of companies, this requirement will likely involve aligning with the Task Force on Climate-related Financial Disclosures (TCFD), a private sector task force whose recommendations are widely recognised as authoritative guidance on the reporting of financially material, climate-related information. A number of governments and financial regulators around the world have expressed support for the TCFD recommendations and are integrating them into their guidance and policy frameworks. Examples include the UK, Australia, New Zealand, Canada, Hong Kong, Japan, Singapore, and South Africa, as well as some EU Member States.

The TCFD recommendations and supporting disclosures include the following:

  • Governance: Disclose the organisation’s governance around climate-related risks and opportunities.
  • Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material.
  • Risk management: Disclose how the organisation identifies, assesses, and manages climate-related risks.
  • Metrics and targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

For the reasons highlighted above, many cryptocurrency miners and firms may find having to disclose their GHG emissions publicly as a highly sensitive exercise. And careful consideration should be given both to the data integrity to support the accuracy of those disclosures and to the plans to transition to more sustainable business models over time.

Cryptocurrency firms may also be interested in exploring carbon offset and energy efficiency/sustainability programmes. For example, the Energy Web Chain is an Ethereum-like base layer network protocol for the purpose of building renewable energy applications on the blockchain. Unlike the Ethereum or Bitcoin protocols, Energy Web Chain uses a proof of authority consensus model, which Energy Web Chain argues is more energy efficient due to its permissioned, proof-of-authority consensus. These types of blockchain consensus models have been gaining prominence as a result of energy efficiency concerns, and may become an increasingly important factor in the success of these platforms. Energy Web has also recently partnered in the launch of the Crypto Climate Accord (CCA), a private sector-led initiative inspired by the Paris Agreement. The CCA focus its efforts on decarbonizing the cryptocurrency industry, aiming for all blockchains to be powered by 100% renewable energy sources by 2025, as well as net-zero emissions for the entire crypto industry by 2040.[4] Separately, the power industry is being pushed to innovate and find ways to create micro grids and other energy-saving programmes that empower the consumer to participate in the supply and demand of energy.

Treasury Focus: Putting Bitcoin on the Balance Sheet

Aside from volatility and accounting issues, corporate treasuries are also acutely impacted by the tension between the ESG agenda and the environmental concerns of digital assets noted above. Most listed corporates now have an ESG policy in place and, at one level or another, are looking to finance themselves by relying on ESG-linked products (sustainability-linked bonds or loans, ESG swaps, etc.). Concurrently, many corporate treasuries (especially in the US, but trending in Europe as well) are looking to invest a portion of their balance sheet assets in digital assets (Bitcoin in particular). This is because, in the face of impending inflationary concerns, corporate treasuries are increasingly looking for uncorrelated hedges in the form of cryptocurrencies to invest some of their liquid assets. For public companies looking to issue ESG products and also allocate a portion of their balance sheet to digital assets, the contradiction is acute. The decision to move forward may require a reckoning with this specific contradiction.

Social

Social impacts have moved to the forefront of our collective attention during the COVID-19 pandemic. Bitcoin and other cryptocurrencies have notable stories to tell on the subject of social benefits. Namely, the opportunity for greater financial inclusion and the protections afforded to society as a result of censorship-resistant transactions. Cryptocurrencies aim to allow users to seamlessly transfer value in all parts of the world via a monetary network that is robust, free of censorship, and resistant to intervention by state actors and geopolitical conflicts. The only barrier to entry for aspiring market participants is an internet connection.

Many cryptoasset service providers have taken significant steps to implement compliance safeguards such as anti-money laundering (AML) and combating the financing of terrorism (CFT) frameworks even in advance of formal regulatory requirements being imposed on them, though this is not universally the case. For example, the increasing use of decentralised finance (DeFi) platforms in order to trade cryptoassets or provide/take liquidity through lending or market-making platforms raises concerns as to whether these unregulated platforms may be used to sidestep the compliance safeguards of regulated platforms. DeFi platforms do not tend to impose AML “know your customer” (KYC) standards on their users, and governments and regulators have raised concerns as to whether the anonymity associated with these platforms could lead to undetected market manipulation or financial crime.

On the other hand, a benefit of cryptocurrency transactions is that they are largely transparent and traceable (with the exception of privacy coins[5]). The blockchain analytics firm Chainalysis estimates that criminal activity represented only 0.34% of cryptocurrency transactions in 2020, down from 2.1% in 2019.[6] Blockchain analysis has been recognised as an important tool for cryptoasset service providers to consider when dealing with assets that have originated from anonymous or private sources.[7] Still, important questions remain as to how AML/KYC requirements should be adjusted to take into account the traceable nature of the blockchain (e.g., how many “hops” should a cryptoasset service provider analyse to be comfortable with the source of the asset?). However, as the industry matures, and as regulators and international bodies such as the Financial Action Task Force continue to work with the sector, market standards in this space should continue to emerge.

In light of the above concerns, market participants in the cryptocurrency industry can use their social impacts as a method of competitive advantage, particularly by contrasting their activities with any perception that cryptocurrency is an avoidance mechanism for taxation and other regulatory regimes, or a driver for criminal activity. But to do this, they must also be able to demonstrate meaningful social contribution by understanding the metrics customarily used to measure social impacts. Opting in to transparent regulatory regimes that are built with social protection measures in mind will become a distinguishing feature of cryptocurrency miners and other market participants in the future.

Another important area is how firms deal with the inherent cross-border nature of cryptoassets and the significant fragmentation of regulatory standards globally that has emerged in this space. Due to the extraterritorial approach taken by many regulators with respect to cryptoassets, firms must fully consider the regulatory requirements that apply both in the jurisdiction in which they are incorporated as well as the jurisdiction in which their customers are based. However, different regulatory standards can lead to firms being subject to inconsistent regulatory requirements that are designed to deal with the same regulatory risk, and regulators need to be mindful of the significant burden that these requirements can place on firms.

Governance

Governance, and in particular the transparency of a cryptocurrency market participant’s governance framework, forms a key driver of opportunity or exposure. Considerations include:

  • Does the management body take into account sustainability issues in the course of business?
  • Is the operation structured to align with the long-term ideal of being sustainable by maintaining a diverse management team?
  • Does the firm operate with tax transparency?
  • Is financial crime, bribery, and corruption risk adequately managed?
  • Does the operation have systems in place to protect against cyberattacks that could result in losses for investors and breaches of privacy?
  • Is executive pay linked to sustainability targets?

Some of these questions may challenge high-growth companies that often operate under regimes that have not adapted to their model, particularly in the case of financial crime legislation. Over time, governance will organically improve as digital asset businesses become more mainstream and list on public exchanges (whether through IPOs, direct listings, SPACs, or otherwise), as they will be forced to adhere to formalised governance and disclosure models as would any other publicly traded company.

Final Thoughts

The ESG agenda includes both investment risks and opportunities. Some jurisdictions, such as the EU, require financial institutions to look beyond climate risk to other environmental factors, in addition to social and governance concerns. And because many financial institutions view ESG performance as directly linked to financial performance, they elect to diligence such matters regardless of the regulatory frameworks they are subject to. For these reasons, it is advisable for any cryptocurrency firm looking to access finance from financial institutions to holistically review its ESG credentials and narrative and consider how it would like to publicly present its performance against traditional ESG metrics. For ESG-conscious financial institutions looking to trade, invest, or custody digital assets, it will be critical to review the cryptocurrency firms’ ESG credentials and narratives to ensure that they are in line with their own ESG objectives, as well as client expectations. And for corporate treasuries exploring the possibility of adding cryptocurrency hedges to their balance sheet, a well-devised strategy and execution is imperative to ensure consistency with internal ESG policies.

Endnotes

[1] “Proof of work” is a method of deciding who is allowed to publish blocks to a blockchain by requiring a certain amount of resources to be expended. It is the mechanism used by Bitcoin to validate transactions and determine which miners are rewarded. “Proof of stake” is a method that allows users to mine blocks according to the stake they hold (i.e., the more coins a user holds, the more mining power a user has). “Proof of authority” is a consensus model, similar to proof of stake, that leverages identity (in the form of set, pre-approved authorities, called validators) as the form of stake rather than actually staking tokens. Each network implements a system to authorize and identify validators, who will then validate transactions and Blocks within the respective network. This allows proof of authority networks to use less computational power and does not require communication between nodes to reach consensus. See the Latham and Watkins Book of Jargon – Cryptocurrency & Blockchain Technology at https://www.lw.com/bookofjargon-apps/boj-CryptocurrencyandBlockchain?documentid=13328

[2] https://cbeci.org/mining_map/.

[3] The US withdrew from the Paris Agreement on November 4, 2020, but officially rejoined on February 19, 2021, by Executive Order of US President Biden.

[4] https://cryptoclimate.org/.

[5] Privacy coins are coins that provides its user community with a higher level of anonymity than is typical for cryptocurrency. Privacy-related features may include encryption, the bundling of transactions (so that individual users cannot be linked to individual transactions), and stealth addresses. See the Latham and Watkins Book of Jargon – Cryptocurrency & Blockchain Technology at https://www.lw.com/bookofjargon-apps/boj-CryptocurrencyandBlockchain?documentid=13328

[6] See the Chainalysis 2021 Crypto Crime Report, available at https://blog.chainalysis.com/reports/2021-crypto-crime-report-intro-ransomware-scams-darknet-markets.

[7] See the Joint Money Laundering Steering Group’s Sectoral Guidance on Cryptoasset Exchange Providers and custodian wallet providers.


2021-04-13 18:06:26

Spanish Tax Agency Issues Warning To Cryptocurrency Holders

In brief

  • Spain’s tax agency has issued a warning to cryptocurrency holders.
  • If crypto holders in Spain don’t declare their holdings, they could be in line for a penalty.

Spain’s Ministry of Finance (Ministerio de Hacienda) has issued a warning that crypto holdings are taxable income, and if a crypto holder fails to declare these holdings, they would be in line for a hefty penalty, per Telemadrid.

With the start of the new financial year, the Spanish tax offices are warning Spanish crypto holders of their tax obligations. According to the report in Telemadrid, the Spanish Ministry of Finance estimates that approximately 15,000 Spaniards will have to include ownership of cryptocurrencies in their tax returns.

Per Spanish tax legislation, crypto holders will be required to pay tax not on their purchase of cryptocurrencies, but on any sales of cryptocurrencies. 

Tax experts Jesús Gascón, Marta Rayaces and Enrique García, reportedly told Telemadrid that crypto holders have to declare what sales they made from cryptocurrencies during 2020. “Either because we have changed them to euros, to another cryptocurrency, or because we have used them to buy goods, a flat, or a car,” they said. 

Spain’s Bitcoin boom

As in other parts of the world, the crypto industry is experiencing a surge in Spain—specifically in Madrid, the capital city. Telemadrid notes that it is possible to pay with cryptocurrencies in over 100 establishments in the Spanish capital already.

But there’s been a backlash to the Bitcoin boom from the authorities. In the wake of a large-scale advertising campaign by crypto exchange Bit2me on the streets of Madrid, Spain’s National Securities Market Commission (CNMV) has proposed stricter rules to regulate “risky” Bitcoin street ads in the country. The CNMV and the Bank of Spain have also issued a joint statement regarding the investment risks inherent in cryptocurrencies, describing them as volatile, complex, and lacking in transparency.


2021-04-13 19:57:00

Tax cheats cost the U.S. far more than previously thought — and cryptocurrency is part of the problem, IRS commissioner says

The Internal Revenue Service could be missing out on collecting approximately $1 trillion every year from taxpayers who are not paying their full tab, Charles Rettig, the tax collector agency’s commissioner, said Tuesday.

“It would not be outlandish to believe that the actual tax gap could approach and possibly exceed $1 trillion dollars,” Rettig told members of the Senate Finance Committee.

“We do get out-gunned. There’s no other way to say it,” he later added.

The $1 trillion number was “shocking,” said Sen. Ben Cardin, a Democrat from Maryland.

The figure is massive by itself, but Rettig’s own estimation during Tuesday’s hearing of the federal tax gap — which is the difference between taxes legally owed and taxes actually paid — was a drastic upward revision of the IRS’s own projections.

Rettig said the agency’s existing estimates of the tax gap read like they’re “from the dark ages.” The most recent official IRS estimates said that every year from 2011 and 2013, taxpayers failed to pay $441 billion in tax money. IRS compliance efforts and late payments narrowed that annual divide to $381 billion.

A lot’s changed since then, Rettig explained, starting with rise of cryptocurrency.

The IRS counts virtual currency like Bitcoin
BTCUSD,
+4.69%

and Ether
ETHUSD,
+6.13%

as property. When an owner profits off the currency, the IRS says that’s subject to capital gains rules — but the IRS has to know about the transactions before it can assess taxes.

In recent years, the IRS has been stepping up enforcement on cryptocurrency tax compliance, most recently by obtaining a court order for account information for users at one digital exchange.

Foreign income, such as offshore accounts, and illegal source income also contribute to the tax gap, Rettig said.

Less than a month ago, IRS researchers were some of the authors on a new study that looked into tax evasion and pointed a finger at the wealthiest taxpayers.

Under-reporting for taxpayers on the bottom half of the income ladder rose 7% when researchers re-examined returns using more stringent methods. It jumped 21% for the top 1% of earners. The researchers considered offshore accounts and pass-through entities as tactics to mask wealth.

“We are up against more sophisticated elements in the community, practitioners and others, and the tools that they are using,” Rettig said Tuesday.

The IRS is also up against a shrinking staff and budget, which means the agency is performing fewer and fewer complex audits to recoup cash. In the last 10 years, the IRS is down 17,000 members in its enforcement wing alone, Rettig said. “That has to have an effect, and it does,” he told lawmakers.

That’s where the federal budget comes in. President Joe Biden’s is pushing for massive infrastructure spending, which would be powered by corporate tax hikes.

His administration recently released a budget proposal that would set aside $13.2 billion for the IRS. If enacted, that would be a 10.4% increase from this year’s level, according to the Tax Policy Center.

The point of the IRS budget bump is to beef up oversight of rich taxpayers and corporations, the White House said last week. The money is meant “to increase oversight of high-income and corporate tax returns, ensuring that the wealthy and well-connected pay what they owe and play by the same rules as everybody else.”

If it goes through, the agency’s budget increase would be about $1 billion dollars.

With that cash, Rettig said Tuesday he could do things like hire 4,875 more employees in the enforcement side of the agency.

It’s not like IRS staffers are resigned to tax cheats, Rettig said Tuesday. “Our people are equally offended by people who don’t comply.”


2021-04-13 19:12:30

Coinbase, 9-Year-Old Cryptocurrency Co., is More Valuable Than Citigroup, Morgan Stanley, BlackRock

The largest U.S. cryptocurrency exchange platform is set to make its public debut this week, sending Bitcoin to near-record levels while its own expected value surpasses the value of major central banks, according to the latest estimates.

Coinbase, which has its IPO set for Wednesday, is valued at $100 billion, dominating institutions like Citigroup, Morgan Stanley and BlackRock, which are dwarfed by Coinbase in both revenue and predicted listing.

Founded in 2012, Coinbase collected about 0.57% of every transaction in fees, which added up to $1.1 billion in trading revenue on $193 billion in trading volume, in 2020, according to Market Watch. The trading fees made up 86% of 2020 revenue. Assuming a similar breakdown of its reported $1.8 billion in total revenue in the first quarter of this year, trading fees would equal about $1.5 billion on $335 billion in trading volume, or about 0.46% of every transaction.

Citigroup’s fourth-quarter 2020 earnings were reported at $4.06 billion, or $2.08 per share, while Morgan Stanley reported $48.2 billion, or $6.46 per share. BlackRock saw earnings of $8,676,680 in the fourth quarter of 2020, putting its earnings per share at above $10. None have published their earnings for the first quarter of 2021.

Coinbase’s 115 million shares were priced at $200 each just two days ago, according to Money & Markets, but that number has since increased with the company’s sudden jump from an $85 billion to $100 billion price tag. Some analysts, however, think the estimates are inflated and destined to fall short of their expectations.

Coinbase, America’s leading cryptocurrency exchange, arrives on Wall Street on Wednesday, April 14, as part of a “direct introduction.” An IPO, eagerly awaited by crypto enthusiasts, could value the California company at more than $100 billion. In the photo, the homepage of the Coinbase cryptocurrency exchange application is seen next to a visual representation of the digital Cryptocurrency Bitcoin and a dollar bill on April 12, 2021, in Paris, France.
Chesnot

Sarah Kunst, managing director for Cleo Capital, told Bloomberg on Monday that the company’s assets under management are not especially high for a company with a $100 billion predicted value.

“That is a lot of money, and to put it in perspective, JPMC is worth $475 billion,” she said. “So they have, you know, 43 million accounts but they only have about 2,000 customers on average compared to Schwab, which has 9 trillion under management with 31.5 million accounts and over 200 percent more when it comes to assets under management per customer. This is a very very big bet on a very nascent player, still.”

Market Watch analysts also said they don’t expect the live debut to reach the $100 billion mark and instead estimate something closer to $18.9 billion. Cryptocurrency is still far from mainstream interest, and a mature market could decrease profitability by as much as 98%, Market Watch said. Their calculations also show that its current profits are small compared to expectations.

Coinbase may be a stable, profitable company, but COIN is far from being a basket that investors should rush to drop their eggs into, Market Watch analysts said.

Newsweek contacted Coinbase for comment on its IPO but did not hear back in time for publication.


2021-04-13 18:51:15

Acker to Accept Cryptocurrency Effective Immediately

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America’s Oldest Wine Shop Will Transact in the World’s Newest Currencies

https://wineindustryadvisor.com/NEW YORK, NY – April 13, 2021 Acker, America’s oldest wine shop and the world’s largest fine wine auction house, will begin accepting the world’s newest, digital currencies as payment at auction and retail effective immediately.  Acker will accept Bitcoin, Bitcoin Cash, Ethereum, Dogecoin, PAX, Gemini Dollar, and BUSD.  Using the bitcoin payment processor, BitPay, clients can pay for auction purchases as easily as transacting via credit card.  Acker has also added two of the top digital currencies, Bitcoin and Ethereum, to its Acker Markets platform, which provides an insider’s look at the top producers, vintages, and regions in the wine auction market relative to other significant financial markets. 

“Cryptocurrencies are no longer a passing fad, and, as one of the oldest licensed businesses in America, Acker is proud to accept this novel form of payment as we continue to evolve in our third century as a company,” remarked Acker Chairman, John Kapon.  “Cryptocurrency is here to stay, and we are excited to offer these additional options for payment in this ever-changing and shifting world.  We look forward to growing our already robust network of wine lovers and making more exciting announcements in the digital space soon.”

The auction season continues for Acker with another “live online” auction in Hong Kong on April 23rd and 24th and returns to Delaware on May 12th and 13th.   Acker is currently accepting wines for its Spring “live online” auctions, with weekly web auctions closing every week.  For more information, email [email protected].

About Acker

Established in 1820, Acker is the oldest wine shop in America and the world’s largest fine and rare wine auction house.  Since third generation wine merchant John Kapon, Chairman of Acker, started the auction business in 1998, the house has gained worldwide recognition.  Acker offers a vast array of services, including cellar consultations, a deep retail inventory of fine and rare wine for immediate sale, first class wine education amenities, and fine and rare wine auctions.

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https://wineindustryadvisor.com/


2021-04-13 17:42:15

Front Page Story And Back Page Correction: IRS Clarifies Its Public Cryptocurrency Position In Internal Guidance – Technology


United States:

Front Page Story And Back Page Correction: IRS Clarifies Its Public Cryptocurrency Position In Internal Guidance


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In Revenue Ruling 2019-24, the US Internal Revenue Service
(“IRS”) ruled that a holder of cryptocurrency who
experienced a hard fork followed by an airdrop (in which the new
currency emerging from the hard fork was distributed) had taxable
income equal to the value of the currency received. My
bitcoin-savvy friends thought the rule was gibberish because hard
forks and airdrops have nothing to do with one another. In
you-know-what-I-meant IRS Chief Counsel
Memorandum, dated March 22, 2021, the IRS corrected the
nomenclature that it used in Revenue Ruling 2019-24. ILM 202114020
also provides further guidance on airdrops.

I.  Once Again, a Tax Lawyer Attempts to Explain Aspects
of the Cryptocurrency Market

An airdrop occurs when a person delivers free cryptocurrency to
a custodial account. Frequently, these giveaways are conditioned on
the performance of an act, such as promoting the use of the
distributed currency or some other social media highlighting. On
August 1, 2017, Bitcoin Cash was distributed on a 1:1 basis for all
Bitcoins held in an eligible account. The giveaway was prompted by
the fact that all digital mining for Bitcoin itself had been
completed and Bitcoin Cash mining could replace this activity. On
April 1, 2021, each Bitcoin Cash coin was worth approximately
$558.20.

ILM 202114020 concludes that recipients of the August 1, 2017
airdrop recognize taxable ordinary income as a result of receiving
the airdrop regardless of “the specific means by which the new
cryptocurrency is distributed or otherwise made available to a
taxpayer.” This conclusion is consistent with the position
taken in Revenue Ruling 2019-24 (without consideration of whether
the airdrop is accompanied by a hard fork).

Given the volatility of cryptocurrencies, the question as to
when the income is recognized and how the cryptocurrency is valued
are important. The answer to the timing question is that the
receipt of the airdrop is taxable as soon as the recipient can
exercise dominion and control over the cryptocurrency. As a result,
if the airdrop is made to a wallet that the recipient cannot
“open,” no income is recognized until the cryptocurrency
is released to the recipient. If the cryptocurrency has
appreciated, the recipient would expect to recognize a greater
amount of income at this later date. The situation would be
exacerbated in a rising rate environment. As for valuation, ILM
202114020 states that the fair market value of the Bitcoin Cash can
be determined “using any reasonable method.”

II.  And as Though He Didn’t Already Learn His
Lesson

In contrast to airdrops, hard forks occur when an existing unit
of cryptocurrency (often, a “Coin”) is split in two. This
occurs when the predecessor unit of cryptocurrency becomes
obsolete, invalidating prior history. A fork is simply a change in
the blockchain’s protocol that the software uses to decide
whether a transaction is valid or not. If enough people continue to
desire to trade the predecessor units, there will be two separate
currencies. On the other hand, if use of the predecessor currency
becomes obsolete, each holder will be required to update the
protocols for storage and transfer to the successor units. This is
exactly what happened with Bitcoin Cash. So while it is easy to see
how airdrops are taxable, it is less clear that hard forks in and
of themselves should be considered to result in ordinary income.
But the IRS confused the two events.

Specifically, airdrops are akin to income paid on property or
compensation for services. Hard forks, on the other hand, are more
akin to recapitalizations or the splitting up of property that is
already owned. Hard forks could be treated as sales or exchanges,
but it’s unlikely that the new blockchain would differ
materially in kind and extent so as to be treated as a taxable sale
or exchange. In each of Revenue Ruling 2019-24 and ILM 202114020,
the IRS has held, however, that hard forks should be taxed in the
same manner as airdrops. Hopefully, this same treatment of
extremely different transactions will be fixed over time, even if
it is by means of another back page correction.

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2021-04-13 17:29:00

BlockchainK2 Corp. Announces Participation at the H.C. Wainwright Cryptocurrency, Blockchain & Fintech Conference On April 27, 2021 (Virtual Conference)

Vancouver, British Columbia–(Newsfile Corp. – April 13, 2021) – BlockchainK2 Corp. (TSXV: BITK) (OTCQB: BIDCF) (FSE: KRL2), today announced it will be featured as a presenting company at the H.C. Wainwright Cryptocurrency, Blockchain & FinTech Conference. The conference is being held on April 27, 2021 virtually.

Tony Caputo, CEO of Amplify Games, wholly owned subsidiary of BlockchainK2 Corp will provide an overview of the Company’s business during the presentation. If you are an institutional or retail investor, and would like to listen to the Company’s presentation, please click on the following link (www.hcwevents.com/crypto) to register for the conference. You may also listen to the company presentation online starting on April 27 at 7:00 A.M. (ET) and archived for 90 days. Over 30 corporate presentations and panels are available live and on-demand on April 27, 2021, starting at 7:00 A.M. (ET).

Event: H.C. Wainwright Cryptocurrency, Blockchain & FinTech Conference (Virtual Conference)

Date: April 27, 2021

Time: 8:30AM-9AM (Eastern Time)

For further information, please contact:

Sergei Stetsenko, CEO
604-630-8746

About BlockchainK2 Corp.

BlockchainK2 Corp. is a holding company investing in blockchain technology solutions for capital markets and other sectors that can be made more efficient through tokenization. The Company owns a gaming platform Amplify Games Inc changing the way video games are distributed and promoted. BlockchainK2 is also invested in RealBlocks, a technology platform for private equity, private credit and real estate that provides tokenized secondary trading of LP interests. The company’s wholly owned subsidiary iRecover Inc is working to implement the findings and principles of behaviorism, social neurodevelopment, and behavioral economics in a blockchain based application to support individuals recovering from addiction. The Company also has executed a joint venture agreement with Standard Power, an industrial scale crypto currency mining facility with very low power costs in the United States. For information on BlockchainK2 Corp., please visit www.blockchaink2.com.

Forward-Looking Statements

This press release contains statements which constitute “forward-looking statements”, including information concerning the intentions, plans and future action of the Company described herein. The words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the general risks of a public company, currently with limited business and financial resources, as well as those risk factors discussed or referred to in the Company’s continuous disclosure record available at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as otherwise required by applicable law.

About H.C. Wainwright & Co.

H.C. Wainwright is a full‐service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions. H.C. Wainwright & Co. also provides research and sales and trading services to institutional investors. According to Sagient Research Systems, H.C. Wainwright’s team is ranked as the #1 Placement Agent in terms of aggregate CMPO (confidentially marketed public offering), RD (registered direct offering) and PIPE (private investment in public equity) executed cumulatively since 1998.

For more information visit H.C. Wainwright & Co. on the web at www.hcwco.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/80296

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