Category Archives: Cryptocurrency
Cryptocurrency is akin to Ponzi scheme and banning it is perhaps the most advisable choice, says Indias Central Bank – TechCrunch
A top official of Indias central bank has compared cryptocurrency to a Ponzi scheme and suggested an outright ban in its sharpest criticism just weeks after the government proposed taxation of the virtual digital asset and paved way to recognize it as legal tender in the worlds second-largest internet market.
T. Rabi Sankar, deputy governor of Reserve Bank of India (RBI), told an audience at a banking conference that cryptocurrencies have been specifically developed to bypass the regulated financial system, and are not backed by any underlying cash flow.
We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may even be worse, he said.
Sankars remarks come at a time the Indian government has sent signals that its moving in the direction of recognizing the digital virtual asset as legal tender. The nations Finance Minister Nirmala Sitharaman proposed taxing income accrued from transfer of cryptocurrencies and NFTs in the federal budget early this month.
The sale of cryptocurrencies and NFTs have made quick inroads in India in the past year despite regulatory uncertainty. The worlds second-largest internet market has seen the second-highest adoption rate for cryptocurrency investments, according to an analysis by research firm Chainalysis.
The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime, she said in her budget speech.
Indias central bank has so far been very cautious about cryptocurrencies. In 2018, it banned financial firms from dealing with cryptocurrency. The ban was overturned by Indias Supreme Court two years later, but most banks have continued to follow the RBIs direction.
Sitharaman said on Monday that New Delhi and the RBI were holding discussions to formulate rules and that the two were onboard.
Sankars speech has made it clear that the RBI has not changed its long-held stance. As a store of value, cryptocurrencies like bitcoin have given impressive returns so far, but so did tulips in 17th century Netherlands. Cryptocurrencies are very much like a speculative or gambling contract working like a Ponzi scheme. In fact, it has been argued that the original scheme devised by Charles Ponzi in 1920 is better than cryptocurrencies from a social perspective, he said.
Cryptocurrencies can wreck the currency system, the monetary authority, the banking system and in general the governments ability to control the economy, he warned.
They threaten the financial sovereignty of a country and make it susceptible to strategic manipulation by private corporates creating these currencies or governments that control them. All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India, he said. We have examined the arguments proffered by those advocating that cryptocurrencies should be regulated and found that none of them stand up to basic scrutiny.
Newly Published, From Cryptocurrency to the Kennedys – The New York Times
AVIVA VS. THE DYBBUK, by Mari Lowe. (Levine Querido, ages 8 to 12, $17.99.) Lowes mystical debut novel about the psychic tussle between a grief-stricken 11-year-old girl and a mischievous boy ghost who stirs up repressed memories of the accident that caused her fathers death offers a rare, sensitive portrayal of a contemporary Orthodox Jewish community.
OLU & GRETA, by Diana Ejaita. (Rise x Penguin Workshop, ages 3 to 5, $17.99.) Though theyve never met, two cousins a boy in Lagos and a girl in Milan celebrate the many things they have in common in this ebullient picture book by the Nigerian Italian illustrator, textile designer and New Yorker cover artist.
BLUE: A History of the Color as Deep as the Sea and as Wide as the Sky, by Nana Ekua Brew-Hammond. Illustrated by Daniel Minter. (Knopf, ages 4 to 8, $18.99.) This poetically written, gorgeously painted picture book, about our quest to replicate the color of the ocean and the heavens, encompasses joy and sorrow.
THE LEGEND OF GRAVITY: A Tall Basketball Tale, by Charly Palmer. (Farrar, Straus & Giroux, ages 4 to 8, $18.99.) An acclaimed artist slam-dunks his solo picture book debut, in which fast-dribbling vernacular wordplay and thick, perspective-bending brushstrokes tell a whopper of a hoop-dreams tale.
WHEN IM GONE, LOOK FOR ME IN THE EAST, by Quan Barry. (Pantheon, $27.) The relationship between a young Buddhist monk and his identical twin, who renounced monastic life, is tested when the two are tasked to roam Mongolia in search of a reincarnated spiritual teacher.
THE CRYPTONIANS: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, by Laura Shin. (PublicAffairs, $18.99.) A former senior editor at Forbes tells the story of the founding of Ethereum, a novel cryptocurrency network that allowed users to launch their own coins, and how it fundamentally altered the crypto landscape.
WHY ARGUMENT MATTERS, by Lee Siegel. (Yale University, $26.) This account examines the role that argument has played throughout history and how it has shaped human existence.
THE FIRST KENNEDYS: The Humble Roots of an American Dynasty, by Neal Thompson. (Mariner, $28.) A journalist traces the Kennedy dynasty back to two struggling Irish immigrants who arrived in America during the great famine and tells the story of Bridget Murphy, who, after her husbands untimely death, single-handedly raised the first Kennedy to be elected to public office.
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Newly Published, From Cryptocurrency to the Kennedys - The New York Times
Why the hell is comedy genius Larry David flogging Cryptocurrency? – The Independent
There are few people who have had such an outsize influence on TV comedy as Larry David. Its only fitting then that one of the mediums true geniuses is now getting the full HBO documentary treatment. The Larry David Story, set to air Stateside this March, will see David sit down with longtime friend and collaborator Larry Charles to talk about the early lows and many subsequent highs of his career. As an avowed fan of everything David has ever worked on, Ill be tuning in quicker than you can say Beloved Aunt.
Or rather, a fan of almost everything hes ever done. Last weekend, during one of the Super Bowls many lavishly produced advertising breaks, my ears pricked up at the sound of David in ancient finery dismissing the inventor of the wheel with a pithy: Eh, I dont think so. The ad continued to race through great moments in history, with David as the eternal cynic trying to push back progress. He doesnt rate the indoor toilet, has no taste for coffee and even pooh-poohs the humble fork, waggling his fingers and admitting; Ive got 10 forks right here, baby!
Its a lark watching David hop through eras, but the final punchline isnt so funny. At the end of the ad, modern-day David is pitched the Bahamas-based cryptocurrency exchange FTX. Its a safe and easy way to get into crypto, its claimed. David isnt convinced: Eh, I dont think so, he says. And Im never wrong about this stuff. Never! I wasnt the only one taken aback when it was revealed what David, appearing in his first ever television advert, was actually selling. Among the many tweets calling him out, one Twitter user put it succinctly: Not Larry doing a crypto adLARRY NO.
Of course, while the conceit of the clip is that David isnt endorsing investing in cryptocurrency sparing us the image of him grinning like a used car salesman and telling us to Sign up now we all know that isnt how adverts work. His presence and celebrity lend an air of respectability to a less than three-year-old company that desperately wants to be taken seriously.
Larry Davids credibility not to mention his immense fortune runs deep. After starting out as a stand-up comedian and then briefly, thanklessly, writing for Saturday Night Live in the mid Eighties, he teamed up with Jerry Seinfeld in 1989 to create Seinfeld. Widely considered to be one of the greatest sitcoms ever made, it was also one of the most lucrative. In 1998, when Seinfeld was syndicated, David reportedly enjoyed a $250m (183.6m) pay day. He has continued to earn money from the rights ever since, and the deal stipulates he will do so until a full $1.7bn (1.24bn) has been paid out. In 2019, Netflix picked up the Seinfeld streaming rights and David again pocketed somewhere north of $100m. Its hard to read those figures without also hearing Davids deathless catchphrase: Prett-ay, prett-ay, prett-ay good.
While Seinfeld may have made David the sort of money that would entice many to buy a private island somewhere hot and disappear from public life altogether, he was made of more ambitious stuff. A decade after creating Seinfeld, he returned as the creator and star of Curb Your Enthusiasm, another all-time great sitcom. It has now run for 11 seasons, two more than Seinfeld managed, and seen David crowned as Americas favourite misanthrope.
Davids brutal pessimism is key to the FTX advert. What is less clear is this; If David is willing to lend his name to a cryptocurrency exchange, is he also happy to be paid in the stuff? Turning to an in-depth making of feature about the advert in the The New York Times, we learn from the headline alone that: Larry David Doesnt Get Crypto. I dont know about you, but if a salesman wasnt prepared to use their own product Id certainly think twice about using it myself. David isnt interviewed, but director Jeff Schaffer a veteran of both Seinfeld and Curb Your Enthusiasm - was happy to talk. Im excited to have someone try to explain it to me at some point, Schaffer said, laughing, when asked to explain exactly what it is theyre selling. Times writer Tiffany Hsu notes: Needless to say, he was not paid in virtual currency. Schaffer adds: Thats what I should have done then I would understand it. Maybe. Or I would simply lose it all. Yikes. It seems safe to assume that David was similarly recompensed in old-fashioned, real-world currency.
Larry David, as seen in the Super Bowl advert for cryptocurrency FTX
(FTX)
David is far from the only A-list star to have taken a pay day from the burgeoning crypto industry, with both Matt Damon and LeBron James appearing in similarly themed adverts. Something all three have in common is enough cold hard cash in the bank not to be too concerned if any cryptocurrency investments end up going sour. Thats probably not true when it comes to the majority of the 112.3 million people who watched the Super Bowl. For most of us, putting our money into an unregulated currency thats hard to use and so vulnerable to scams that an occasional magician recently stole $4.5bn worth of the stuff represents a prett-ay, prett-ay, prett-ay big risk.
Thats before you get into how utterly disastrous it is for the environment, with cryptocurrency now using up nearly as much electricity as Argentina. It all adds up to a bad look for a man already a multi-millionaire many times over, but David is once again laughing all the way to the bank not to a Bahamian cryptocurrency exchange.
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Why the hell is comedy genius Larry David flogging Cryptocurrency? - The Independent
Crypto Donations to Charity Rose More Than 1000% Last Year – Money
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Donations of cryptocurrency have soared along with the price of Bitcoin and other digital assets. In 2021, Fidelity Charitable investors donated more than $330 million in cryptocurrency, more than 12 times the amount given in 2020, according to a recent report.
In 2021, Bitcoin, the largest cryptocurrency by market capitalization, saw its price reach an all-time high of $67,000 (it's now trading around $40,000). Not surprisingly, Bitcoin accounted for most (80%) of crypto donations to Fidelity Charitable, followed by Ethereum (11%) and Litecoin (1%). A non-profit organization independent of Fidelity Investments, Fidelity Charitable distributed a total of $10.3 billion last year.
There are many ways you can give cryptocurrency to your favorite charities. One way is to work with an organization like Fidelity Charitable, which administers donor-advised funds.
Heres how it works: You set up a Giving Account through Fidelity Charitable online with no minimum investment. Then you transfer the Bitcoin or other currency from your crypto wallet to your Fidelity Charitable account. The crypto you donate to Fidelity Charitable will be converted into cash. (Keep in mind that some investing apps don't currently let you transfer crypto from their platform to another, while others, like Coinbase, will charge you to do so.)
You can then choose when Fidelity Charitable will send the money to a non-profit of your choice. If you don't want to donate right away, you can invest the money in various securities, including ESG funds, mutual funds that own stocks of companies with favorable track records on environmental and social factors. Earnings grow tax-free in your account until they're donated.
Another option for donating cryptocurrency is to work with companies like The Giving Block. This organization helps nonprofits accept cryptocurrency donations. It also links crypto donors to different charities. According to its latest report, The Giving Block took in a total donation volume of more than $70 million in 2021, or an increase of 1,558% from 2020. Moreover, NFT projects donated $12.3 million to charities via The Giving Block.
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Donating crypto to charity can also save you on taxes. When you sell an asset such as a stock or crypto coin for more than you bought it for, you typically owe a capital gains tax on the difference. The rate ranges from 0% to 37%, depending on your income and how long youve held the investment. (Short-term capital gains, levied on assets held for a year or less, are generally taxed at the same rates as ordinary income.)
So if you bought $10,000 worth of Bitcoin and sold it for $25,000, youd owe a capital gains tax on $15,000. But if you donated it to an eligible nonprofit, youd avoid a capital gains tax on your donation.
Plus, you may be able to deduct the donation from your federal income tax bill. Daniel Rodriguez, an accredited investment fiduciary and chief operating officer at Hill Wealth Strategies, a wealth management firm in Richmond, Virginia, says that if youre taking the standard deduction, then you won't also get a charitable deduction by selling cryptocurrency. Only people who itemize their deductions are allowed to deduct charitable contributions on their federal income tax return.
If you owe more than $10k in taxes, Tax Relief can allow you to break down your debt into payments.
Community tax Relief provides a full menu of tax relief services to help clients get out from under the yoke of tax debt.
Before you decide to donate cryptocurrency to charity, make sure the recipient accepts crypto. And if it does, make sure the organization has a means to convert it to cash quickly and easily. Cryptocurrency is a highly volatile asset, and wild price swings can mean the charity benefits from less than you initially donated.
Organizations like Fidelity Charitable and The Giving Block convert your crypto donations into cash as soon as possible and transfer it to charities. Fidelity Charitable currently accepts only Bitcoin, Ethereum and Litecoin. The Giving Block accepts these three, as well as Dogecoin and any cryptocurrency supported by the Gemini exchange.
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Cryptocurrency Investors Are Surprisingly Big on Giving Money to Charity
TurboTax Now Lets You Get Your Tax Refund in Crypto
5 Best Crypto Wallets of 2022
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Crypto Donations to Charity Rose More Than 1000% Last Year - Money
U.S. Treasury Signals that Cryptocurrency Miners & Stakers Will Not Be Subject to Broker Information Reporting Tax Requirements – JD Supra
[co-author: Benjamin Cantor]*
On February 11, 2022, in a letter addressed to certain U.S. Senators, the U.S. Department of the Treasury indicated that cryptocurrency miners, cryptocurrency stakers or related hardware or software providers would not be considered to be brokers, as defined, for purposes of the information reporting tax rules included in the Infrastructure Investment and Jobs Act (the Act), enacted on November 5, 2021.
The Act amended the definition of broker for tax information reporting purposes to include any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person. The Act defined digital asset as any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary. As a result of these changes, a broker of digital assets must file IRS Form 1099-B reporting the name and address of each customer and for a digital asset acquired after January 1, 2023, the customer's adjusted basis in the digital asset and whether gain or loss if any with respect to such digital asset is long-term or short-term, and a failure to file may result in civil penalties.
In its letter, the Treasury stated that certain statements previously made in the U.S. Senate were consistent with the Treasurys view that ancillary parties who cannot get access to information that is useful to the Internal Revenue Service are not intended to be captured by the reporting requirements for brokers. The statements that the Treasury referred to were made by U.S. Senators Rob Portman (R-Ohio) and Mark Warner (D-Virginia) on August 9, 2021, with reference to the proposed draft of the Act (find link here). Specifically, Senators Portman and Warner indicated that the following categories of persons would be excluded from the definition of broker in the legislation: (i) persons solely involved with validating distributed ledger transactions through proof of work (commonly known as miners), (ii) persons solely staking digital assets for the purpose of validating distributed ledgers transactions (commonly known as stakers), or solely involved with validating distributed ledger transactions through other validation methods, now or in the future, associated with other consensus mechanisms that are developed and might come into the market as the technology evolves, and (iii) persons solely engaged in the business of selling hardware or software for which the only function is to permit persons to control private keys which are used for accessing digital assets on a distributed ledger. Senators Portman and Warner reiterated their views in a letter addressed to the Treasury, dated December 14, 2021, which was signed by four other senators (find link here).
In its letter, the Treasury also stated that it will consider the extent to which other parties in the digital asset market, such as centralized exchanges and certain exchanges described as decentralized exchanges and peer-to-peer exchanges, should be treated as brokers in light of the clarification provided by the Act. The Treasury also stated that it intends to propose regulations that reflect its view of the appropriate scope of the definition of broker.
*Law Clerk
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U.S. Treasury Signals that Cryptocurrency Miners & Stakers Will Not Be Subject to Broker Information Reporting Tax Requirements - JD Supra
Cryptocurrency prices today: Bitcoin, Ether down as crypto …
Cryptocurrency prices fell over the past 24 hours due to higher uncertainty. (Photo: Reuters)
Cryptocurrency prices fell on Tuesday as the overall market declined by over 2 per cent over the past 24 hours.
Bitcoin, the worlds most popular cryptocurrency, was trading at $42,290 or 1.20 per cent lower than its price 24 hours ago at 12:10 pm. The market capitalisation of Bitcoin fell to $800 billion and the 24-hour trade volume was $624 million.
Ehter, the native token on the Ethereum platform, declined to $3,196 or 2.55 per cent lower than its price 24 hours ago. Ethers market capitalisation dipped to $376 billion while the 24-hour trade volume was $672.67 million.
All other smaller cryptocurrencies fell due to higher volatility in the virtual coin market. There has been a jump in trading volume as investors continue to sell their holdings.
Commenting on the crypto market momentum, Edul Patel, CEO and Co-founder of Mudrex, a global algorithm-based crypto investment platform, said, The global cryptocurrency market cap has dipped by 2 per cent over the past 24 hours, while the trading volume rose by nearly 20 per cent.
Bitcoin and Ethereum traded below $43,000 and $3,500. Meanwhile, Cardano has surged to almost 30 per cent in the past seven days, outperforming its rivals BTC and ETH. The recent developments in ADA contribute to the optimism around blockchain driving growth, he added.
The inflation rates in the US may push the demand for the crypto market in the coming days.
Cryptocurrency
Price (US Dollar)
24-hour change
Market cap
Volume (24 Hours)
Bitcoin
42,316.10
-1.22%
$801.15 billion
$624.01 million
Ether
3,206.23
-2.21%
$377.25 billion
$672.67 million
Dogecoin
0.170539
0.06%
$22.65 billion
$1.01 billion
Litecoin
148.27
-0.06%
$10.30 billion
$82.06 million
XRP
0.762060
-0.36%
$76.20 billion
$2.00 billion
Cardano
1.56
2.37%
$51.58 billion
$487.73 million
DISCLAIMER: The cryptocurrency prices have been updated as of 12:20 pm and will change as the day progresses. The list is intended to give a rough idea regarding popular cryptocurrency trends and will be updated daily.
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Cryptocurrency prices today: Bitcoin, Ether down as crypto ...
Cryptocurrency trading higher across the board, Bitcoin above $44,000 – Fox Business
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Cryptocurrency was edging higher overnight and into Tuesday morning as Bitcoin broke through the $44,000 plateau despite investor concern over Russia and Ukraine.
Early Tuesday, Bitcoin was trading at nearly $44,220, up 4.87%, while Ether and Dogecoin were trading at $3,110 (+8.55%) and 15 cents (+4.39%), respectively, Coindesk reported.
BlockFi Lending LLC has reached a $100 million settlement with the Securities and Exchange Commission and 32 states after being charged with failing to register offers and sales of its retail crypto lending product and violating registration provisions of the Investment Company Act of 1940.
THIS IS WHY WE NEED BITCOIN
According to the SEC, the company, which is backed by investor Peter Thiel, began offering and selling BlockFi Interest Accounts (BIAs) to the public in March 2019, in which investors lend crypto assets to the company in exchange for its promise to provide a variable monthly interest payment.
Cryptocurrency was edging higher overnight and into Tuesday morning as Bitcoin broke through the $44,000 plateau despite investor concern over Russia and Ukraine.
In other cryptocurrency news, a federal judge ruled Monday that Heather Morgan will be released pending trial, while her husband, Ilya Lichtenstein, will remain behind bars as they both face trial for allegedly laundering billions in stolen bitcoin.
Judge Beryl Howell said the evidence suggests that Morgan was an integral player in the scheme but that Lichtenstein seemed more involved in the planning and execution of the alleged crimes.
Howell also said Morgans health conditions were a factor, as she recently had breast surgery and has follow-up appointments scheduled. She will be on home detention with an ankle bracelet GPS monitor.
The defense pointed out that both defendants had their families in court who were willing to put up their homes in exchange for a guarantee that the defendants would appear for all court dates.
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However, Howell ultimately ruled that there was a significant flight risk, and agreed with government prosecutors who argued that several hundred million in cryptocurrency could buy a new house or "buy each of their parents a private island."
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Cryptocurrency trading higher across the board, Bitcoin above $44,000 - Fox Business
‘To the moon’: You probably saw the crypto Super Bowl adshere’s what to know before buying in on the hype – CNBC
While watching the Super Bowl, you probably saw some interesting advertisements by cryptocurrency companies like FTX, eToro and Crypto.com, among others, touting crypto to the masses.
Coinbase, for example, aired a 60-second commercial featuring a bouncing QR code. Once scanned, it led to a promotion offering $15 worth of free bitcoin to new users who sign up for its platform. This generated so much buzz that the Coinbase app and site briefly crashed.
FTX titled its commercial "Don't Miss Out with Larry David," where David jokingly mocked important inventions, from the wheel to the light bulb. At the end, David also dismisses FTX, and the screen said, "Don't be like Larry. Don't miss out on crypto, NFTs, the next big thing."
Others had similar takes, including eToro. Throughout its commercial, the song "Fly Me to the Moon" played, which was a nod to the crypto community's belief that crypto prices will soar "to the moon."
It can be exciting, and for some, there's a real fear of missing out. But, it's important to understand the risks of cryptocurrency before buying in.
It may be difficult to take a step back amid the hype, but experts recommend being careful, understanding the risks andtaking time to research. They deem cryptocurrency to be a volatile and speculative bet, and in turn, warn to only buy as much as you can afford to lose.
Here's what to know before investing in cryptocurrency.
It's important to truly understand bitcoin, cryptocurrency or any asset prior to investing.
'Educate before allocate' is a phrase that me and my friends are using," Douglas Boneparth, certified financial planner and president of Bone Fide Wealth, previously told CNBC Make It. Boneparth has invested in bitcoin since 2014.
Cryptocurrencies like bitcoin are decentralized, which means they aren't controlled by one entity or government, and aren't backed by a reserve asset.
Bitcoin, the largest cryptocurrency by market value, launched in 2009 with the intent to work as a peer-to-peer financial system. Its blockchain wascarefully created with a well-thought-out ecosystem. Bitcoin also has a limited supply, which allows for built-in scarcity by design. Because of that, it's seen as a store of value by its holders.
But this also contributes to why financial experts see it as more risky than other investments. And altcoins, or other cryptocurrencies aside from bitcoin, may require additional cautiondue to their differences from something like bitcoin, including their structure, supply and utility. To learn more about altcoins, you can read here.
"Before investing in any cryptocurrency, it's important to understand what you're investing in and the associated risks, not just hype around it," Boneparth said.
There are many different risks when it comes to investing in cryptocurrency.
Tech risk, for example, is important to consider. Smart contracts, or collections of code that carry out a set of instructions on the blockchain, are essential for most crypto-based projects to run. But if there's a weakness in the code behind a coin or project, there's a possibility for hacks or other fraud.
It's also extremely important that yourprivate keys, the string of letters and numbers similar to a password used to unlock access to cryptocurrency, remain undisclosed to the public. Security should be prioritized if buying cryptocurrency, and there aremany wallet options availableto secure your investments. There isn't much regulation or insurance available for cryptocurrency holdings, which makes security measures even more imperative.
Additionally, investors should be aware of bad actors in the space.
Popular scams includesim swapping, where hackers call your phone company and convince them to transfer your phone number to theirs in order to pass the two-factor authentication on your account. Experts also say you should also avoid scanning QR codes or clicking on random links, especially when redeeming seemingly free rewards, and remain skeptical of outside messages.
These risks, along with crypocurrency's decentralized nature, make it subject to volatility. As quickly as prices rise, they can tumble back down.
Downturns are normal in crypto, said Tyrone Ross, CEO of Onramp Invest, which provides crypto asset management technology for financial advisors. "Folks should know that going in, and if you have the means, you should work with an advisor to guide you through these markets."
Again, experts warn to only invest in cryptocurrency what you can afford to lose.
"Bitcoin and other cryptocurrencies are highly volatile so the swings that occur are pretty typical of this asset class," Anjali Jariwala, certified financial planner, certified public accountant and founder ofFit Advisors, previously said.
There's even a possibility of losing your entire investment, she said. So, investors should first allocate funds to their "required buckets," like an emergency or retirement fund, before buying into a riskier asset class like cryptocurrency.
Boneparth agreed: "Be very careful about how much you allocate and understanding what you can tolerate, because if 80% of your net worth is tied to bitcoin, and it goes down 30%, that's rough."
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Don't miss: NFT-based money laundering 'jumped significantly' at end of 2021, firm says
Want to Lure Young Workers With Cryptocurrency? 3 Things to Know – GoLocalProv
Monday, February 14, 2022
Sam Slade, Business Contributor
In todays tight labor market, Bitcoin could give you an edge. But before you forego paychecks, here are 3 things to consider.
Comply with federal and state law: Some states require wages to be paid in US currency. However, others allow an employee to agree in writing to receive part or all of their wages in another form. No matter where you operate, youll want to make any program optional and have employees authorize their participation in writing.Decide how youll pay: You can either pay employees in their normal currency, with a portion of the wages then converted to the digital asset of their choice, or you could pay in the cryptocurrency itself. With the latter, keep in mind youll need to withhold and report payroll taxes, which could be a little more challenging administratively since youll need to determine the fair market value of the cryptocurrency.Disclose the risks: Bitcoin and other cryptocurrencies can be volatile and drop steeply in value. (In December, Bitcoin fell as much as 21% in a matter of hours.) Plus, theres the potential capital gains taxes theyll need to understand since cryptocurrencies are currently considered property by the IRS. Be sure to make employees aware of the risks and agree to them in their written acknowledgment.
These are just a few of the topics youll need to think about when considering digital currencies as a payment method. With many potential legal issues, its a good idea to consult your attorney first before making any decision to pay wages or bonuses in cryptocurrency.
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Want to Lure Young Workers With Cryptocurrency? 3 Things to Know - GoLocalProv
Triple digit rewards of staking offer respite to cryptocurrency investors – Business Standard
The recent guidance provided by the US Treasury Department on transaction reporting by crypto companies is shining some light on staking one of the least understood but hottest corners of the digital-asset world.
Treasury indicated on Friday that stakers would be spared from forthcoming rules that are more targeted for brokers rather than investors using their tokens to help order transactions that create new blocks on various blockchain networks. Thats especially good news for crypto investors seeking a refuge amid the recent downturn in coin prices.
Staking has been booming in part because of the incentive-based aspect of crypto where various new coins and blockchains are competing for validators by promising stratospheric annual returns in the form of new coins. The rewards have been so lucrative that more than 70 per cent of all tokens issued on many chains Solana, Binance Smart Chain and Cardano, among them were staked late last year, according to crypto researcher Messari and tracker Staking Rewards.
As staking options multiply and promised returns reach into the triple digits, the trend has only strengthened. In the fourth quarter, 7.7 per cent of all the coins that make up the roughly $2 trillion crypto universe were staked, up from 1.8 per cent in the year-ago period, according to staking provider Staked, a unit of the crypto exchange Kraken. And thats even as Bitcoin, most of Ethereum, XRP and various stablecoins that make up more than 70 per cent of the crypto markets total estimated value, dont allow for staking.
Thats likely changing fast, with all Ether expected to migrate to proof of stake this summer. The Ethereum network, the worlds most used blockchain, is running a smaller proof-of-stake network called Beacon in parallel with its main one to work out potential bugs.
I think it goes from 8 per cent (of Ether being staked) to 80 per cent very quickly, said Tim Ogilvie, chief executive of Staked. It will happen over a year or two. Ethereum staking may be one of the biggest changes in crypto weve seen in a long time.
Of the different ways to earn yield on crypto holdings, staking is generally seen as less risky than some other DeFi strategies such as yield farming. That said, new blockchains offering eye-popping rewards are often at risk of failing to attract enough transaction volume and making the coins rewarded worthless.
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Triple digit rewards of staking offer respite to cryptocurrency investors - Business Standard