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Dogecoin HODLERs Are Beating Shiba Inu With 57% Landing In Profits



In the US, the IRS, the government agency responsible for collecting citizens’ taxes, is about to launch new software that will offer support to all those who need to track their crypto transactions in the DeFi world and need to calculate potential capital gains/losses.

This is a true tax reporting tool created specifically to allow Americans to file their taxes directly with the IRS without DeFi protocols having to file 1099 forms in connection with their clients’ activities.

In fact, a new bill proposed by the US Treasury Department would have required all decentralized exchanges to provide personal user data, just as they do with centralized brokers such as Coinbase.

The new software could save DeFi application developers from facing a law that has some absurdity given that there is no human counterpart but simply technology managing operations in this field.

The IRS And The New Software For Taxing Crypto In DeFi

The Internal Revenue Service (IRS), a US tax agency, is preparing to offer its citizens free software to support the reporting of taxes payable within the crypto DeFi world.

The move follows a “Direct File” pilot program that is expected to be rolled out in 13 states starting in 2024, and potentially holds all the cards to upend previous tax reporting rules.

Users of decentralized finance applications can simply take advantage of blockchain technology to track all transactions made with an overall recap of gains and losses that occurred within the calendar year.

This new software, similar to other existing services in the crypto tax context such as Token Tax, Koinly, and Zen Ledger, leverages public crypto databases to provide a comprehensive record of all transactions that have occurred in DeFi.

Users need only enter their address in a dedicated box, and the tool will return a reliable, complete, and detailed history of taxable transactions that occurred on protocols not managed by a central entity such as decentralized exchanges

This approach greatly simplifies a recent bill proposed by the IRS itself and the US Treasury Department that would require decentralized exchanges to provide a list of their customers’ personal information on so-called 1099 forms.

The main problem with this bill is that DeFi protocols are not operated by intermediaries and hence would have to totally change their approach to start recording personal customer data.

Read Also: Australia Updates its Capital Gains Tax Guidance to Include Wrapped Tokens and DeFi

The IRS has also proven in the past that it is not an expert in keeping taxpayers’ private information secure: in 2016 the government agency was the victim of a hack in which it lost more than 700,000 Social Security numbers and other sensitive data.

In fact, security is not the workhorse of the IRS. which has been admonished several times by the Treasury’s Inspector General for Tax Administration precisely for its dastardly handling of data provided by taxpayers,

The tax reporting software in the DeFi niche, will eliminate this risk at the outset, as well as reduce the US Internal Revenue Service’s workload with the millions of 1099 forms that were expected to arrive under the new rule.

Once again, technology simplifies the difficulties caused by technology itself.

The “broker rule” and reporting requirements for DeFi platforms

The IRS’s decision to introduce the new tax-management software in DeFi to U.S. citizens comes only after a bill proposed in August that would have officially defined all decentralized services offering crypto exchange instruments as ” brokers.”

In a nutshell, all AMMs, self-custodial digital wallets with swap connections and decentralized trading protocols are considered the same as centralized services such as Coinbase, Binance, Kraken, Bitget, etc.

This framing would force DeFi services themselves to provide the IRS with a long list of information about their clients, as is the case with regulated brokers in the country who must report all on-boarding and off-boarding between crypto and US dollars conducted on their platforms.

This approach, although it can be agreed upon on a theoretical level given that it would greatly reduce the “tax gap” and tax evasion in the crypto field, cannot be applied from a practical point of view.

DeFi protocols are not businesses and do not have central intermediaries with a power to control what happens on these applications.

To think of forcing software to return detailed data of all clients conducting crypto transactions is totally insane, as it would set a precedent for the mandatory introduction of KYC verification.

Cryptocurrency exchange Coinbase had spoken out against this rule stating that no DeFi entity transacts digital assets within the authority granted by Congress, and hence should not be required to face such violence from authorities.

Furthermore, why should an imaginary intermediary be required to report tax information as if it were a broker?

This mess, created by the IRS itself with its recent bill, could be solved by the software mentioned in the previous paragraph.

On the one hand, it would eliminate the duty of decentralized counterparties to adjust to track their clients’ data and provide it secondarily to the IRS, with all the attendant risks of computer data theft.

On the other hand, this system would help the US IRS collect a decidedly non-underestimated amount of taxes in crypto given the growth the decentralized finance sector is experiencing.

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Cryptocurrency Market Update: Bitcoin Slips Below $70,000 Amidst High Liquidation




In a swift turn of events, Bitcoin (BTC), the pioneering cryptocurrency, dropped below the $70,000 threshold early on Wednesday following a wave of investor sell-offs. Just a day prior, Bitcoin had crossed the $71,000 mark, but market sentiment swiftly shifted, dragging other major altcoins—including Ethereum (ETH), Dogecoin (DOGE), Ripple (XRP), Solana (SOL), and Litecoin (LTC)—into the red zone.

According to CoinMarketCap data, the overall Market Fear & Greed Index stood at 75 (Greed) out of 100, indicating a mix of optimism and apprehension among traders. Notably, the Bittensor (TAO) token emerged as the top gainer with a remarkable 24-hour surge of over 7 percent, while dogwifhat (WIF) experienced the largest loss, plummeting nearly 16 percent.

Bitcoin (BTC) Price Update Bitcoin’s price tumbled to $69,089.01, marking a 24-hour dip of 3.05 percent, as reported by CoinMarketCap. On the Indian exchange WazirX, BTC was priced at Rs 60.93 lakh.

Other Major Cryptocurrencies Ethereum (ETH) saw a 24-hour loss of 4.81 percent, trading at $3,508.86, while Dogecoin (DOGE) registered a dip of 5.59 percent, currently priced at $0.1879. Litecoin (LTC) and Ripple (XRP) also experienced losses, with Solana (SOL) marking a 24-hour loss of 3.44 percent.

Top Gainers and Losers Bittensor (TAO) led the pack of gainers with a 7.30 percent surge, while dogwifhat (WIF) suffered the most significant loss, dropping by 15.58 percent.

Market Analysis and Expert Insights Experts weighed in on the market scenario, attributing Bitcoin’s downturn to heightened liquidations and cautious sentiment ahead of the upcoming US CPI data release. While Bitcoin’s immediate support rests at $67,700, resistance is expected at $70,400. Ethereum proponents face challenges amid hopes for an ETF approval, with the SEC providing limited updates on the matter.

Final Thoughts The cryptocurrency market remains highly dynamic, with prices fluctuating rapidly and investor sentiment playing a pivotal role. As the market navigates through volatility, it’s essential for investors to stay informed, exercise caution, and seek expert advice before making any investment decisions.

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Cryptocurrency: A Scapegoat for Foreign Policy Failures?




Cryptocurrency has once again found itself at the center of a heated debate, this time regarding its alleged role in facilitating illicit activities and circumventing sanctions imposed by the United States. The Biden administration, in particular, has come under scrutiny for its handling of the issue, with some accusing it of using digital assets as a convenient scapegoat for broader foreign policy shortcomings.

In a recent hearing before the Senate Banking Committee, Deputy Treasury Secretary Wally Adeyemo raised concerns about the misuse of cryptocurrencies by foreign adversaries such as Iran, Russia, North Korea, and militant groups like Hamas. Adeyemo’s remarks underscored a growing unease within the U.S. government regarding the potential national security implications of unregulated digital currencies.

However, voices from within the cryptocurrency industry and Congress have pushed back against the administration’s narrative. Faryar Shirzad, Chief Policy Officer at Coinbase, one of the leading cryptocurrency exchanges, pointed out that the prevalence of illicit activity in the crypto space is relatively low compared to traditional finance. Instead of demonizing cryptocurrencies, Shirzad argued, the focus should be on targeting bad actors operating offshore.

Senator Tim Scott, the ranking Republican on the Senate Banking Committee, echoed these sentiments, accusing the Biden administration of using digital assets as a distraction from its failure to effectively combat financial flows to sanctioned entities. Scott’s criticism reflects broader skepticism among some lawmakers about the government’s approach to regulating cryptocurrencies.

One area of potential agreement between the Biden administration and the cryptocurrency industry is the need for clearer regulations governing stablecoins, a type of digital asset pegged to a fiat currency like the U.S. dollar. Both sides recognize the importance of addressing the potential risks associated with stablecoin issuance and usage, particularly in the context of national security and financial stability.

The debate over stablecoins has intensified following reports of their alleged role in facilitating illicit transactions, including those linked to Russia’s war effort in Ukraine. The Treasury Department has called for increased oversight of stablecoin issuers and transactions, while also advocating for legislation that would subject them to stricter regulatory standards.

Despite the contentious nature of the discussion, there are signs of bipartisan cooperation on certain aspects of cryptocurrency regulation. A bipartisan bill addressing stablecoin regulation passed the House Financial Services Committee last year, signaling a potential path forward for legislative action in this area.

As the debate over cryptocurrency regulation continues to unfold, it is clear that finding the right balance between innovation and security will be paramount. While concerns about illicit activity and national security must be addressed, policymakers must also recognize the potential benefits of cryptocurrencies in fostering financial inclusion and technological advancement.

Ultimately, the resolution of these issues will require thoughtful collaboration between government officials, industry stakeholders, and lawmakers to develop a regulatory framework that promotes innovation while safeguarding against misuse. Only through constructive dialogue and cooperation can we ensure that cryptocurrencies fulfill their potential as a force for positive change in the global economy.

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Bitcoin Resurgence: Why Wall Street Is Embracing the Crypto Revolution




Andrew Pratt of Wiser Wealth Management in Marietta, Ga., finds little resistance as he proposes Bitcoin investments to his firm’s committee. With Bitcoin surging 140% in the past year and backed by giants like BlackRock, skepticism has waned. Pratt sees the potential to allocate a modest 1% of client portfolios to Bitcoin, acknowledging the limited downside risk compared to potential gains.

The debate over Bitcoin’s intrinsic value seems to have lost its relevance amidst its soaring market performance. Once dismissed, Bitcoin now boasts a market value of $1.3 trillion, driving the total crypto market to $2.5 trillion. Wall Street, once wary, now views cryptocurrency as an opportunity for profit rather than a speculative venture.

Despite lingering doubts about Bitcoin’s utility beyond speculation, Wall Street executives are increasingly supportive. BlackRock’s CEO, Larry Fink, notably reversed his stance, endorsing Bitcoin’s long-term prospects and championing the iShares Bitcoin Trust, now one of the largest Bitcoin ETFs with nearly $18 billion in assets.

While skepticism persists about Bitcoin’s status as a real asset or currency, its growing acceptance on Wall Street underscores the evolving landscape of finance. As institutions embrace cryptocurrencies, Bitcoin’s journey from pariah to portfolio asset highlights the transformative power of digital assets in reshaping traditional investment strategies.

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