Crypto Tax Crackdown, Grayscale’s Competition, TRON’s Vision, Algorand’s Partnership, and Solana’s Challenges

Our first story takes us into the realm of finance and taxes. For over a year and a half, the crypto community has been eagerly anticipating a tax crackdown from the Treasury Department. However, despite Congress approving new rules to empower the IRS in tracking crypto transactions, complete silence surrounds the release of these regulations.

The IRS’s delay has left many perplexed, given their consistent view of crypto as a significant avenue for tax avoidance. Even cryptocurrency tax expert Lisa Zarlenga expressed her confusion, highlighting that implementing these regulations should be the “single easiest thing” the IRS could do to enhance compliance.

Interestingly, while the IRS has been sluggish in its response, the Securities and Exchange Commission, or SEC, has taken a more assertive approach to regulate the crypto industry. Notably, the SEC has filed lawsuits against industry giants Coinbase and Binance, demanding compliance with its regulations. This contrasting stance between the IRS and the SEC raises intriguing questions about the state of crypto regulation in the United States.

The delay in releasing tax regulations becomes even more surprising considering the administration’s ongoing efforts to tackle uncollected taxes, estimated at a staggering $500 billion annually. The IRS has long sought additional powers to combat tax avoidance in the crypto space, but progress seems to have hit a roadblock.

The yet-to-be-released regulations are expected to spark controversy, much like the heated debates that took place in Congress when the rules were initially approved. With the Treasury tasked with ironing out the details, uncertainty looms over which aspects of the crypto industry will fall under the purview of these regulations. Will it target obvious entities like Coinbase, or will it extend its reach to decentralized exchanges, cold wallets, and even miners?

The primary objective of these regulations is to enhance tax collection by mandating brokers to report transactions to the IRS, thereby providing independent data on crypto transactions and reducing the chances of tax omissions. This approach, known as “third-party reporting,” has been successfully implemented in various areas of taxation for decades.

While we eagerly await the release of these regulations, experts predict that the implementation date could be further down the road. Critics argue that this delay grants an unfair advantage to the crypto world, allowing them to operate without clear guidelines and potentially evade taxes.

Shifting our focus to crypto market developments, we have some intriguing news. Grayscale, the largest Bitcoin asset management product with its staggering $19 billion BTC trust, could soon face some formidable competition. Investment giant Blackrock has filed for a spot Bitcoin exchange-traded fund, or ETF, in the United States. This development poses a potential threat to Grayscale’s dominant position in the market.

Despite the inefficiencies and liquidity concerns associated with Grayscale’s product, it has managed to generate approximately $380 million in annualized fees. However, if Blackrock and other asset managers succeed in launching spot Bitcoin ETFs, it could provide a more convenient and compliant option for retail and institutional investors to gain exposure to Bitcoin.

Recently, the iShares unit of Blackrock filed the necessary paperwork with the Securities and Exchange Commission for the establishment of a spot Bitcoin ETF. This move has prompted other asset managers, such as Invesco and Wisdom Tree, to either apply or reapply for their own Bitcoin ETF products.

It’s important to note that the Grayscale Bitcoin Trust currently represents only around 3% of the  total Bitcoin market cap, leaving ample room for a compliant ETF to gain its share of the market.

Now, let’s shift our attention to the latest news in the world of Tron. During a TRON DAO community seminar, founder Justin Sun discussed the newly defined mission, vision, and values of TRON. The mission centers around building a metaverse free port, a digital space that embodies freedom and opportunity. TRON’s vision aims to create a truly decentralized global ecosystem that dismantles financial barriers and empowers individual financial independence.

TRON’s core values, including community obsession, a champion’s mindset, embracing change, and long-termism, drive the TRON DAO toward its mission and vision. The guiding principles, such as simplicity, being genuine, providing 24/7 professional support, and celebrating the potential of ordinary people, are discussed to embody these values within the TRON team.

Trust serves as the cornerstone of TRON, with Sun emphasizing the importance of user and community trust for the platform’s success. TRON is committed to cultivating user trust, fostering a resilient community, and establishing a solid foundation for future growth.

The TRON ecosystem aims to be responsive to user needs and conducive to industry growth. Beyond its current achievements, TRON envisions creating a metaverse marketplace and community hub built on blockchain technology and decentralized applications. TRON’s mission is to democratize the web, empowering decentralized commerce and communities on a global scale.

In other news, DWF Labs, a global multi-stage Web3 investment firm, has announced a strategic partnership with the Algorand Foundation. The partnership includes a $50 million ALGO token purchase agreement to provide liquidity within the Algorand ecosystem. Furthermore, an MOU has been signed to allocate funds for projects in areas such as DeFi, Art and Music, Gaming, Oracles and Bridges, and Infrastructure, all built on the Algorand blockchain. DWF Labs chose Algorand due to its advanced technology, security, environmental sustainability, and social impact. The Algorand Foundation’s focus is on empowering a borderless global ecosystem based on Algorand’s blockchain technology, which offers high transaction speeds, immediate finality, near-zero transaction costs, and operates on a carbon-neutral platform. Through this partnership, DWF Labs actively participates in the growth and development of the Algorand ecosystem.

Moving on to Solana, the ecosystem has faced challenges and a decline in activity and interest following the SEC lawsuit against Coinbase and Binance. The network experienced a significant 48% drop in activity, as well as a decline in DEX volumes and NFT interest. However, there are glimmers of recovery, with DEXes like Saber showing increased transaction numbers and active wallets. Conversely, Raydium did not experience notable growth. In the NFT sector, while blue-chip NFTs saw a surge in recent weeks, overall interest in the Solana NFT ecosystem declined, as reflected in the trading volume and the decline in NFT floor prices. SOL’s price and trading volume also experienced a significant decline, and development activity on the Solana network has decreased in recent days.

Lastly, in the XRP community, a debate has emerged over the timing of the summary judgment in the Ripple lawsuit. Discussions were sparked by a member sharing information suggesting that a court usually takes one to three months to review legal briefs and decide on summary judgment requests. However, former SEC lawyer Marc Fagel countered that, based on his research, summary judgment motions in a particular federal district court take about six months on average, and Ripple’s case has been pending for nearly seven months. This comparison was made in relation to the LBRY lawsuit, highlighting the volume of material and contested factors in each case. The timing of the summary judgment in the Ripple lawsuit remains a topic of discussion among the XRP community and legal experts.

In a concerning development, scammers have been exploiting fake wrapped Ethereum coins to deceive investors into purchasing fraudulent meme cryptocurrencies. These scammers create counterfeit WETH and make it appear as if prominent blockchain companies are acquiring meme coins, tricking unsuspecting investors into following suit. It serves as a reminder to exercise caution and verify the authenticity of transactions and investments in the crypto space.

Lastly, a significant event occurred when a dormant Ethereum whale transferred 7,998 ETH, worth $15.18 million, after six years of inactivity. This unexpected movement of funds raises questions about its potential impact on the Ethereum price rally, as previous instances of large holders moving substantial volumes have triggered market volatility.

That concludes our discussion for today. We’ve delved into the realm of crypto taxation, the potential competition facing Grayscale, the vision and values of TRON, the partnership between DWF Labs and the Algorand Foundation, the challenges faced by the Solana ecosystem, the ongoing Ripple lawsuit, and the prevalence of scams in the crypto world. Stay informed and vigilant as the crypto landscape continues to evolve.

Thank you for joining us on another episode of “We Will Crypto.” Remember to subscribe, leave a review, and share this podcast with fellow crypto enthusiasts. Until next time, keep exploring the fascinating world of cryptocurrencies, and may your investments be profitable and secure.