Japanese Cryptocurrency Groups Request Tax Reform for 2023

Alexander Salazar
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Japanese Cryptocurrency Groups Request Tax Reform for 2023

Those associations call for the separate taxation of cryptocurrencies at 20%, allowing the transfer of the loss for three years. Fearing a talent exodus, those groups request the government to relax corporate tax regulations, taking the tax rate from 55% to 30%.

Two Japanese crypto asset associations jointly published a request for tax reform, including the separate taxation of cryptocurrencies at 20%. The groups are the Japan Crypto Asset Business Association (JCBA) and the Japan Crypto Asset Exchange Association (JVCEA).

In their request, the JCBA and the JVCEA mention several issues they consider an obstacle to growth in the sector.

Those problems include the need to facilitate tax returns and the lack of consistency within the system. The groups also discuss the confrontation with foreign cryptocurrency tax systems and the relevance of those assets in the Web 3.0 strategy.

The Japanese Ministry of Economy Trusts the Use of Web 3.0

In July, the Japanese Ministry of Economy, Trade, and Industry (METI) established a Web 3.0 office. They seek to collaborate on developing the business environment and understand the sector better.

Gaku Saito, the chairperson of the Tax System Study Group, considers Web 3.0 a crucial point in the tax reform request. He said the possession of cryptocurrencies by citizens would increase dramatically if the Japanese government made it a national strategy.

The request for tax reform calls for the separate taxation of cryptocurrencies at a 20% rate. People may transfer the loss from the amount of cryptocurrency-related income for three years from the following year.

Japanese Crypto Asset Associations Want the Industry to Thrive

Japanese cryptocurrency advocacy groups have worked hard to ensure the success of the cryptocurrency industry. Fearing an exodus of talent, those associations requested the government to relax corporate tax regulations. They also want the current tax rate on individual investors to go from 55% to 30%.

Financial institutions are also aware of the relevance of cryptocurrencies in the economic system. In July, the FSA revealed they might allow Japanese fiat banks to custody crypto assets, arguing investor protection.

The Regulators from Many Countries Work on Cryptocurrency Taxes

The governments of many countries do not know how to deal with the taxes on cryptocurrency. For example, South Korea postponed its crypto tax plans again until 2025. In the case of India, they have imposed strict tax rules, causing the trading volumes to plummet in this market.

Since the crypto asset class adoption is increasing, investors will have to face taxes on cryptocurrencies. Along with general regulation, this will cause some difficulties in the short term despite the legitimization of the market.

The relevance of cryptocurrencies in the economy has led many regulators worldwide to regulate them. The payment of taxes on the crypto asset class causes fear among advocacy groups seeking advantages for their users.  

Meanwhile, Bitcoin (BTC) is trading at around USD 23,046 and has accumulated a 0.5% gain over the last week. While its daily trading volume is above USD 23.13 billion, its market capitalization is about USD 440.46 billion, according to CoinGecko.

By Alexander Salazar

Ethereum “Merger” May Accelerate Institutional-Grade Investing

Audy Castañeda
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Ethereum “Merger” May Accelerate Institutional-Grade Investing

A new report from Bloomberg Intelligence finds that Ethereum could become worthy of an institutional investment after the Merger.

According to a report by Bloomberg Intelligence (BI), the upcoming Ethereum merger to change the consensus layer from Proof-of-Work to Proof-of-Stake is likely to be a critical factor in accelerating institutional-grade investment.

The report further suggests that Ethereum’s growth will depend on its strength as a social and economic tool.

There seem to be promising signs, as the total ETH locked in smart contracts has increased by 1.4% in three years. While NFTs have experienced a temporary hiatus, BI believes they have the potential to displace stablecoins and decentralized finance activity.

Broadening of use cases has strengthened Ethereum’s activity on the Blockchain, compared to the previous bear market. Both stablecoins and DeFi have been challenged by the liquidity crisis at some major cryptocurrency firms that have filed for bankruptcy or halted withdrawals.

In mid-July, fund manager CoinShares published a report saying that ETH inflows were on a three-week streak, with $7.6 million going to institutional investors.

Grayscale Ethereum Trust offers institutional investors exposure to Ethereum. The main institutional holders of the Trust are Rothschild Investment Corp, Weatherbie Capital LLC, and Rye Brook Capital LLC.

Last month, Ethereum co-founder Vitalik Buterin responded to critics who falsely claimed that Ethereum code changes are decided by a governance vote.

Ethereum outperforms Bitcoin on key metrics

The report suggests that Ethereum could be mispriced, considering the recovery from a peak on May 21, 2022.

Ethereum has also outperformed Bitcoin in three vital on-chain metrics: active users, non-zero balance addresses, and transactions.

Bitcoin has been hit by rate hikes by the Federal Reserve and is likely to continue to follow stocks lower if these announcements continue. However, it is still five times above the March 2020 low in early August 2022.

Active Ethereum addresses with non-zero balances are at an all-time high. These have mostly remained flat compared to a year ago, but are up 113% compared to three years ago, outperforming Bitcoin.

The number of active Bitcoin addresses decreased by 30% in the same period. On July 26, 2022, the 7-day moving average of active users increased by 46%, or 180,000 in a month. Ethereum transfer volumes are down 7% despite a 29% price drop.

Tokenization: Clear Possibility

According to the report, crypto assets appear to be going the way of futures and exchange-traded funds (ETFs), having put an end to the heady days of 2020 and 2021.

Similar to how futures contracts provide exposure to assets without requiring the investor to own the asset, there is little stopping the tokenization of all types of assets, except perhaps technical and regulatory hurdles.

The report highlights the fact that Tether and USDC are made possible by Ethereum attests to the value of Blockchain technology.

By the end of 2022, Ethereum could offer staking returns of 6% to 9%, with a deflationary issuance pattern, the report adds, as long as the Merger occurs within that time period.

By Audy Castaneda

Exchange Zipmex Claims that Babel Made Believe Its Lack of Liquidity Was “Momentary”

Audy Castañeda
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Exchange Zipmex Claims that Babel Made Believe Its Lack of Liquidity Was “Momentary”

Zipmex and Babel are not the only exchanges battling it out this crypto winter.

Cryptocurrency exchange Zipmex, which froze withdrawals on July 20, has shed new light on its battle with Babel as the company desperately sought to recover $48 million from the lender.

The announcement by Zipmex indicates that Babel’s BGM had previously assured the exchange that all liquidity issues could be resolved quickly and in a timely manner. This further led Zipmex to believe there was no cause for concern.

A meeting of the two sides on July 20 changed everything, revealing that, “the road to resolution would be a long one and may not be guaranteed.”

Zipmex Reports to Thai SEC

After the meeting with Babel, Zipmex immediately reported the situation to the Thai Securities and Exchange Commission (SEC).

According to Zipmex, the Babel revelations on July 20 brought “a significant change from previous talks.” This left them with little other recourse to refer themselves and their creditors, Babel and Celsius, to the regulator.

Previous disclosures have revealed that Zipmex lent Babel Finance $48 million and Celsius $5 million. Zipmex went on to explain that prior to the recent events of the crypto winter, the financial history of these companies suggested that they would have little trouble paying off their respective debts.

Zipmex said, “These parties were backed by highly reputable investors.” Before moving on, Celsius Network raised over $750 million in funding at the end of their Series B round in late 2021. They started the round with an investment of $400 million. In total, Celsius Network raised $864 million in funding, valuing the company at $3.5 billion.”

Regarding Babel, they added that it, “raised over $80 million in a Series B funding round in May 2022, bringing its total value to $2 billion.”

In both cases, however, this reasoning proved to be wrong. While Celsius and Babel seem to have been very successful in raising money, neither was as adept at managing it.

A Very Hot Crypto Winter

Crypto winter may be here, but there is still plenty of heat in the atmosphere thanks to tempers blazing around the cryptosphere. Zipmex and Babel are far from the only companies facing each other.

Bancor and Celsius are among the corporations that suddenly fell from grace during the market downturn, with the former accusing the latter of being a “hostile antagonist against the Bancor protocol.”

Bancor went as far as to claim that Celsius was “creating short positions” and trying to destabilize the project.

In more general terms, the biggest sources of anger remain the highly unstable Terra stablecoins and the disaster at venture capital firm Three Arrows Capital (3AC). Both teams have a long list of angry parts to deal with; after they were seemingly mishandled on the ground.

In the case of 3AC founders Kyle Davies and Su Zhun, the anger was so acute that the two men were forced to flee Singapore and go into hiding. Certainly, for some, crypto winter is actually the hottest time of the year.

By Audy Castaneda

Hackers Attack the Clones of the Github Cryptocurrency Repositories

Alexander Salazar
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Hackers Attack the Clones of the Github Cryptocurrency Repositories

The widespread malware attack did not target cryptocurrency repositories but also affected them. Stephen Lacy noticed a malicious URL in the code while examining an open-source code, finding more than 35,000 results.

Development platform Github has been the victim of malware attacks on tens of thousands of its repositories.

A security researcher said they had cloned up to 35,000 Github repositories with malware.

Although the widespread malware attack did not target cryptocurrency repositories, it also affected them.

Stephen Lacy, a software engineer, recently warned the crypto community on Twitter about the raid.

Developers Clone Github Repositories to Infect them with Malware

Tech portal Bleeping Computer reported that malware had not attacked the repositories but their modified clones. The practice of cloning open-source code is a standard among developers, but hackers have infected legitimate projects, targeting unsuspecting developers.

Lacy noted that the attack had affected cryptocurrency projects like Golang, Python, JavaScript, Bash, Docker, and Kubernetes.

While examining an open-source code, the software engineer noticed a malicious URL in the code. After scanning the Github repositories for this URL, they found more than 35,000 results.

According to Bleeping Computer, over 13,000 search results came from a repository called redhat-operator-ecosystem. They added that the malicious URL extracted the environment variables of a user while containing a one-line backdoor.

They warned that those environment variables could contain sensitive data like API keys, tokens, and cryptographic keys. The malware also allows the remote execution of arbitrary code on the systems of everyone installing and running the clones.

The report indicated that most cloned repositories appeared in the past month. However, Github confirmed that the malware did not compromise the original repositories and that they had cleaned the clones.

In July, Luca Stealer, a new strain of malware written in Rust, was making the rounds. It targets Windows operating systems and steals sensitive information like crypto wallet information distributed on Github.

The Cryptocurrency Industry Has Had a Miserable Week

Miles Deutscher, a DeFi researcher, pointed out that the cryptocurrency industry has not had a good week. Hackers stole USD 190 million from the Nomad Bridge and breached around 8,000 Solana wallets, equivalent to about USD 8 million.

However, the total capitalization of the crypto market has gained 1.7%, reaching USD 1.12 trillion.

The Victoria Police Now Can Seize Cryptocurrency Wallets in Australia

While hackers attack cryptocurrency repositories, Australian police can seize wallets and cryptocurrencies from cyber criminals. New laws introduced in parliament as part of the Community Crime and Safety Legislation Amendment Bill 2022 aim to combat organized crime.

The growing use of cryptocurrencies has led to a new bill to allow the police to identify and seize cryptocurrencies. The laws will require exchanges to reveal user information to help investigators, the same as banks.

Anthony Carbine, the Police Minister, said the modifications to the law involved updating police powers. Criminals have changed how they operate rapidly, forcing them to respond to new forms of crime.

By Alexander Salazar

The LINK Price Might Keep Dropping If the Bulls Lose the Current Support

Alexander Salazar
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The LINK Price Might Keep Dropping If the Bulls Lose the Current Support

The LINK bulls are defending a support zone at USD 7.29 to push the price higher, maybe toward USD 9. The lack of purchases may cause a collapse due to the need for liquidity as high as USD 6.38 per token.

The Chainlink (LINK) bulls have defended the current support zone amid a mixed trend in the crypto market. If the volume of sales of the cryptocurrency increases, the price will likely suffer a new crash. It is trading at around USD 7.73 but would drop to at least USD 6.38.

LINK is trading at around USD 7.73 and has accumulated a 7.8% gain over the last week. While its daily trading volume is above USD 431.73 million, its market capitalization is about USD 3.44 billion, according to CoinGecko.

Although LINK has lost 2.2% over the last 24 hours, that pullback may be profit-taking. The price has reached a significant order block level, which is common in the crypto market.

Some Facts Might Help Stop the Drop in the Price

Chainlink is among the top 50 projects in the crypto market and is constantly growing. They plan to include a Proof of Reserve (PoR) procedure allowing holders to verify which assets they possess.

Since the crypto market has been to the downside, LINK has also given up part of its recent profits. However, watching price action in these situations might help, as the value of LINK might decline further.

The Daily Technical Analysis of the Price of LINK

The daily chart indicates that investors need to watch some small ranges in the price of LINK. The bulls are defending a support zone at USD 7.29 to prevent a drop toward USD 6.38. If the bulls manage to drive the value of LINK higher, it may reach USD 9.

The RSI indicates that the trend might continue the downside as its exponential moving averages (EMAs) have crossed below 55 points. The moving average convergence divergence (MACD) shows weakness, while its EMAs reveal a bearish bias.

However, the Japanese candlesticks have not crossed below the central ENV ranges, which indicates profit-taking might precede further increase.

The Bulls Must Defend the ENV Level to Search for Liquidity

There is an optimistic scenario for a bullish trend to develop, but anything may happen. Therefore, if the bulls cannot defend the ENV level due to the lack of purchases, there will be a collapse. That may occur due to the need to search for liquidity as high as USD 6.38 per token.

The price of LINK has to retest this support, but a daily close below USD 6.38 would be critical. The bears might take the opportunity to look for increasingly low levels in liquidity zone 1, close to USD 5.50.

Meanwhile, Bitcoin (BTC) is trading at around USD 22,860 and has accumulated a 0.2% loss over the last week. Its daily trading volume is above USD 24.71 billion, while its market capitalization is about USD 437.90 billion, according to CoinGecko.

By Alexander Salazar

Chainlink Price Feeds Now Available on Metis

Audy Castañeda
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Chainlink Price Feeds Now Available on Metis

The Chainlink Price Feeds integration supports the expansion and security of the Metis DeFi ecosystem. Elena Sinelnikova, co-founder and CEO of Metis, comments that with this integration, the Blockchain “is poised to help accelerate DeFi adoption and enable innovative new use cases.”

Metis Andromeda is a layer 2 Blockchain built on top of Ethereum, with smart contracts fully compatible with the Ethereum Virtual Machine (EVM).

Since August 2022, the Metis Blockchain has been integrated with Chainlink, with the purpose of supporting the expansion and security of its DeFi ecosystem.

In their press release, they highlight that the implementation will deliver the decentralized infrastructure necessary to create increasingly sophisticated and profitable applications.

Positive Vibes from Chainlink

Since each Price Feed is secured by a decentralized network of independent and peer-reviewed nodes, Chainlink is considered the most important decentralized oracle in the crypto ecosystem.

It is important to note that oracles —especially decentralized ones— that operate as a bridge between the Blockchain and real-world information.

Santiago Ríos Maderna, Chainlink Community Advocate in Argentina for Latin America, has an analogy to imaginatively describe oracles. According to him, “Just as in Ancient Greece oracles were the connection between gods and mortals, in Web3 they are the bridge between the Blockchain and the real world.”

Niki Ariyasinghe, Head of Blockchain Partnerships at Chainlink Labs, celebrates the news:

“We are pleased to support the Metis ecosystem with native Chainlink Price Feeds integration, allowing developers to build scalable DeFi platforms on top of Ethereum. With high-quality, hyper-trusted and decentralized market data accessible, developers can build more advanced dApps that offer users a superior experience.”

The Metis Ecosystem

As of mid-2022, the Metis DeFi ecosystem has already seen some interesting growth. In its network there are already operating protocols such as Beefy Finance, Pickle Finance and Synapse Network

Now, with the integration of Chainlink Price Feeds, they will be able to boost it even more, as both developers and Decentralized Autonomous Companies (DAC) – a concept managed fromy Metis – will be able to create feature-rich, profitable DeFi applications with high transaction speeds and low costs.

Elena Sinelnikova, co-founder and CEO of Metis, elaborates on this by stating that, “Chainlink Price Feeds will accelerate innovation in the Metis ecosystem, allowing DeFi applications to support advanced functionalities that improve the user experience. Given the demand for more affordable and faster Web3 applications, our scalable Layer 2 solution, in combination with Chainlink Price Feeds, is poised to help accelerate DeFi adoption and enable innovative new use cases.”

Led by the Metis DAO, the Metis Andromeda Blockchain has a number of unique capabilities, such as a Peer-to-Peer (P2P) sequencer layer. With this, the projects and sub-communities in Andromeda take advantage of this layer two to bring their vision of Web3 to life.

It is worth remembering that the oracles helped bring to life many of the fundamental philosophies underlying Web 3.0, such as transparency, decentralization, among others. Despite this, the oracles are not free of being hacked or corrupted, so the best course of action is to do your own research before venturing.

By Audy Castaneda

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