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Is Coinbase Selling User Data To Government Agencies? 

A new report has surfaced claiming that one of the biggest cryptocurrency exchanges in the industry is planning on selling user data to government agencies for $250,000. According to documents available to the public, the Drug Enforcement Agency (DEA) and the Internal Revenue Service (IRS) are looking to purchase licenses from the exchange’s analytic tool […]

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A new report has surfaced claiming that one of the biggest cryptocurrency exchanges in the industry is planning on selling user data to government agencies for $250,000. According to documents available to the public, the Drug Enforcement Agency (DEA) and the Internal Revenue Service (IRS) are looking to purchase licenses from the exchange’s analytic tool called Coinbase analytics. 

The analytics tool appears to provide law enforcement agencies with analysis and tracking of cryptocurrency flows across multiple blockchains that criminals are using. Additionally, it can provide enhanced law enforcement sensitive capabilities that are not found in other tools on the market, showing a period of performance adaptable to a 12-months period. It can also provide investigators with the identity attribution, and de-anonymities of virtual currency addresses both domestically and internationally.

Coinbase denies the allegations claiming that the data provided by the analytics tool solely include public information and does not include private information. The company continues to explain that any other company could obtain the same information through a specialized tool. 

Unfortunately, not many community members seem to believe in the story. Many have expressed their willingness to leave the crypto exchange if they were to find out that Coinbase was secretly selling their data. The crypto exchange also faces other issues, with people complaining about the high fees, the outages during bitcoin’s price peaks, and privacy concerns. It’s a known fact that Coinbase shared information with the IRS about clients who traded over $20,000 in crypto during the last fiscal year.

Regardless of this tool, there’s one thing that remains unchanged; government agencies are paying close attention to crypto holders, monitoring users and transactions to ensure compliance with regulations. Known your customer and anti-money laundering laws prevent crypto exchange users from going completely dark. Companies are forced to cooperate with government agencies despite their desire to ensure their customers’ information. Agencies worldwide request crypto exchanges to inform them about citizens and their crypto investments, the recurrence of their trades, the source of the funds, the profit they take, transactions they make, and so on. 

The reality is that if you’ve ever held cryptocurrencies in a centralized exchange, or completed a KYC or AML process, then it’s highly probably that government agencies already know about your crypto assets.

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Injective launches gold synthetic commodities on Solistice Testnet

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Injective Protocol announced the launch of their first synthetic commodity market on the Solistice Testnet. According to the announcement, users can now trade gold perpetual markets with up to 20x leverage. The price oracles utilized will enable real-time feeds which further allows traders to trade gold 24/7 on Injective.

“We have chosen to begin with the introduction of gold as it is currently one of the most highly traded assets worldwide.”, stated the protocol, further adding that user interest derived from a survey from their community also aided this decision.

The layer two DEX is reportedly exploring the addition of both new synthetic assets and new markets not available anywhere else, a few days after the introduction of initial markets on the testnet.

The initial markets will include the following: Injective, Bitcoin, Ethereum, Binance Coin, Polkadot, Elrond, ChainLink, Uniswap, and Yearn Finance.

These markets were also supposedly chosen based on an analysis of user sentiment and traction across channels – an indication that this selection of coins was the most popular amongst the larger crypto community.

Injective Protocol is backed by a prominent group of stakeholders including Pantera Capital, and the leading cryptocurrency exchange, Binance.

The diversification of its product offering into synthetic assets sees it joining a list of protocols that have recently ventured into the same space, the newest example being the newly launched Mirror Protocol, which tracks the price of stocks, futures, exchange-traded funds, and other traditional financial assets.

As the DeFi industry continues to evolve, the emergence of new asset classes such as synthetic commodities will soon be a part of this ecosystem of alternative finance.

Source: https://eng.ambcrypto.com/injective-launches-gold-synthetic-commodities-on-solistice-testnet

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Ethereum community explodes over proposed stablecoin act from U.S. representatives

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The crypto community was slammed with news earlier this week that U.S. House representatives are looking to crack down on stablecoins.

The Office of Congresswoman Rashida Tlaib, who is heading this new proposed legislation, wrote in a press release announcing this move:

“The COVID-19 Pandemic has exposed numerous barriers to accessing and utilizing mainstream financial institutions, leaving many to look to the financial technology sector to meet the financial servicing needs of low- and moderate-income (LMI) consumers for everything from faster direct payments, access to loans, and even access to bank accounts. LMI consumer vulnerabilities could be exploited and obscured by bad actors looking to issue stablecoins.”

This “STABLE Act” would require that any issuer of a stablecoin must comply directly with banking regulations. This would basically harm the DeFi space by only allowing KYC-ed individuals to transact with decentralized applications.

Further, supporters of the act on Twitter, including one professor/digital currency specialist at Stanford, Rohan Grey, has basically said that nodes should be disallowed from processing illegal stsablecoin transactions:

“You’re taking the Ethereum network as a fixed variable and saying that it’s impossible for node validators on it to know what transactions they are verifying. I’m saying running Ethereum itself is a *choice* and if that’s an issue then change the code or run a diff network.”

The crypto space, especially the Ethereum community, is not taking this lying down.

Ethereum & crypto community fires back over STABLE Act

Scott Lewis, the founder of projects like DeFi Pulse, wrote that a key advocate of this STABLE Act is making some dangerous and incorrect assumptions about Ethereum and cryptocurrencies as a whole.

The advocate, Nathan Tankus, said that Ethereum users are subject to “mediation conducted by the Ethereum Foundation when they use the Ethereum Network” because no Ethereum users actually run their own nodes.

Many in the space have fired back against these assertions, pointing to their own nodes and evidence showing that cracking down on stablecoins would actually harm the disenfranchised.

CoinCenter, a key advocate for positive and logical crypto regulation in Washington, has received tens of thousands of dollars of donations since the STABLE Act was released.

Stablecoins still gain traction

While stablecoins are coming under fire, they are seeing support from institutions.

The U.S. government itself was revealed to be working directly with Circle, the issuer of USDC, to distribute relief payments to Venezuelans in need.

Further, it was more recently revealed that Visa is teaming up with Circle to allow businesses to accept payments in USDC.

Posted In: Regulation

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Source: https://cryptoslate.com/ethereum-community-explodes-over-proposed-stablecoin-act-from-u-s-representatives/

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India Reportedly Plans to Tax Crypto Investors As Bitcoin Price and Trading Activities Soar

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Barely ten months after the Indian Supreme Court lifted the RBI’s ban on cryptocurrency transactions, fresh reports from yesterday revealed that the country’s tax authority is now keeping a close watch on crypto traders as Bitcoin’s price continues its bullish trend.

Taxing Crypto Gains

According to local media, the Indian Tax Department is already in possession of data belonging to investors who invested in Bitcoin or cryptocurrencies through banking channels before the RBI’s ban in 2018. 

This development is coming after data shows a tremendous increase in crypto trading activities in India. Since the crypto ban was lifted earlier this year, retail investors between the ages of 25 and 40 have been spending millions of dollars on crypto trading every day. 

Over $25 Million Daily

Two of India’s largest crypto trading platforms, Binance-acquired WazirX and CoinDCX, saw a significant increase in activities over the last six months. According to an earlier report, WazirX recorded a massive 125% increase in user signups in the last two quarters. The exchange also has a daily trading volume of $19-26 million, with more than 85% of the transaction coming from Indian traders. 

Some experts believe it will be difficult for the country to tax crypto because there’s no regulation in place for crypto dealings. They feel a regulatory framework will provide the needed clarity to make taxation easier. While India is yet to release its crypto regulation, an earlier report suggests that the country may regulate crypto as commodities.

Declaring Bitcoin Profits As Capital Gains

Although it is unclear how India plans to implement the tax law, sources familiar with the matter claimed that the country’s taxman is already preparing to collect tax on the gains made from Bitcoin. And notice may be sent out to investors if “something goes out of this.”

Experts believe that the tax authorities may classify crypto gains as business income, and investors may have to pay up to 30% tax on profits made from selling cryptocurrencies. 

However, some tax experts are advising their clients to declare their Bitcoin earnings as capital gains, which is similar to profits generated from shares.

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Source: https://cryptopotato.com/india-reportedly-plans-to-tax-crypto-investors-as-bitcoin-price-and-trading-activities-soar/

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