2023-11-09 11:28

The government lost $420 million in potential revenue and failed to improve transparency because the tax regime prompted as many as 5 million crypto users to shift transactions offshore, a new study found. India's controversial 1% tax deducted at source (TDS) crypto tax policy needs to be lowered to 0.01%, a technology think tank has proposed based on a new study. India introduced a 30% tax on crypto profits and the 1% TDS on all transactions in July, 2022, resulting in traffic taking a nosedive and exchanges going into survival mode. India's most controversial crypto policy, a 1% transaction tax deducted at source, needs to be lowered to 0.01% to help the government achieve its aims of boosting revenue and improving transparency, a New Delhi-based technology policy think tank said in a new study. The tax, a form of income tax known as TDS, has prompted as many as 5 million crypto traders to move their transactions offshore, and has cost the government a potential $420 million in revenue since it was introduced in July, 2022, according to the study by the Esya Centre. The findings in the "Impact Assessment of Tax Deducted at Source on the Indian Virtual Digital Asset Market" go one step further than the group's previous report, which revealed Indians moved more than $3.8 billion in trading volume from local to international crypto exchanges after the controversial crypto rules were announced. They show that, at least in part, the tax failed to achieve one of its stated aims: taxing people who are earning profits. "While the VDA market in India is burgeoning, the benefits of the same are being reaped by offshore exchanges," said Vikash Gautam, the report's author, referring to virtual digital assets. "Data shows that two likely policy objectives of the tax – to curb speculation and create transparency around transactions – have not been achieved." Prime Minister Narendra Modi’s government announced a 30% tax on crypto profits and the 1% TDS on all transactions in February, 2022. At the time, Finance Minister Nirmala Sitharaman said the intention behind the TDS, the more controversial of the levies, was to increase traceability in India’s crypto ecosystem. Domestic and international participants warned it could kill the industry, and Indian crypto traffic nosedived in the months following its implementation, forcing almost all major exchanges into survival mode. Representatives of the domestic industry have pleaded with the authorities on numerous occasions to lower the taxes. In addition to tracing transactions, the intention behind TDS was to discourage "speculative activity," according to the study, which analyzed transaction volumes from 13,000 peer-to-peer (P2P) traders and surveyed crypto exchange executives. The Finance Ministry had not responded to a CoinDesk request for comment on the study by publication time. The study also urged the government to clarify the applicability of TDS to offshore platforms. "It just isn't enforceable, as per stakeholders," Gautam said in an interview. "It is possible to be done with international cooperation, but we do understand it is a long process. Some of the other countries have some arrangements with international exchanges to track that." Read More: Indians Moved Over $3.8B to Foreign Exchanges Since Crypto Tax Rules https://www.coindesk.com/policy/2023/11/09/indias-controversial-crypto-tax-should-be-cut-after-failing-to-achieve-aims-think-tank-urges/

2023-11-09 11:14

COIN, MSTR, HOOD and mining stocks all showed upward movement in pre-market trading after bitcoin rose to its highest level in 18 months. Shares of U.S. crypto-centric companies were ticking upwards in pre-market trading after bitcoin's (BTC) price rose to the highest level since May 2022. BTC climbed above $36,000 for the first time in around 18 months during Asian trading hours on Thursday, and the bullish momentum fed through to U.S. publicly-traded firms with crypto exposure, such as the Coinbase (COIN) exchange, software developer MicroStrategy (MSTR) – which owns a large number of bitcoin, trading platform Robinhood (HOOD) and mining firms Marathon Digital (MARA) and Riot Blockchain (RIOT). Most of the companies fell Wednesday, and bitcoin's latest rally appears to be turning their price movement upward. COIN had added about 4% as of 11:03 UTC (6:03 ET). MicroStrategy, which held 158,400 BTC on its balance sheet as of the end of last month, rose almost 5%, while mining firms Marathon and Riot are up 9.8% and 6% respectively. Robinhood is showing more restrained gains of 2.5%, having closed on Wednesday down over 14% after reporting big drops in its revenue and trading activity earlier this week. These gains may also reflect fresh optimism of a spot bitcoin exchange-traded fund (ETF) finally being approved in the U.S., following reports that the Securities and Exchange Commission (SEC) has opened talks with Grayscale Investments about converting its bitcoin trust product into an ETF. Read More: Sizing the Massive Spot Bitcoin ETF Opportunity https://www.coindesk.com/markets/2023/11/09/us-crypto-stocks-ride-btc-momentum-in-pre-market-trading/

2023-11-09 10:18

Rumors are persistent that the next Grand Theft Auto will have a GameFi element. Lawyers aren't so sure, but there's a catch. Gamers are eagerly awaiting the next chapter of the massively successful Grand Theft Auto (GTA), and its developer, Rockstar Games, recently confirmed that a trailer for GTA VI will be arriving in December. But a question on some people’s minds is: will it have an in-game cryptocurrency? GTA VI and crypto In the decade since the last GTA game, crypto gaming, or GameFi, has launched, and major game studios have tried to incorporate it into their titles with mixed success. While video game marketplace Steam has banned crypto from its game store, its rival Epic Games doubled down on the effort. Epic Games has welcomed crypto with open arms. However, the games store isn’t profitable, and gamers have been skeptical about Epic’s pivot-to-crypto in its store. Business interest in crypto has also spread to the GTA franchise, with rumors that GTA VI will include some crypto element. This comes as Ubisoft and Immutable announce that they are building “a new gaming experience that will further unlock the potential of Web3.” Details are scant at this time, but this would mark the second foray for Ubisoft into the world of crypto gaming — the first being an NFT companion experiment to 2021's free-to-play Ghost Recon: Breakpoint. Setting aside the issue of if gamers are interested in crypto, some serious legal questions arise from this. Rockstar is a multibillion dollar game developer with a massive presence in the U.S., and it would be a high-profile target for the Securities and Exchange Commission (SEC). “My preliminary view aligns with the notion that there’s a legal grey area, substantial enough for a powerhouse like Rockstar Games to hesitate before integrating any sort of virtual currency within their games or issuing one of their own,” Florida-based digital assets attorney John Montague, told CoinDesk. “Their hesitation, I believe, likely stems from a fear of possible issuer liability, especially given the aggressive stance the SEC has taken in recent times—underscored by the ongoing situation with Coinbase,” he continued. “I understand their desire to be conservative, and the risk/reward for their shareholders may just not be there.” But Montague says there might be a catch. The SEC has already addressed many of the questions surrounding GameFi in a no-action letter directed towards the crypto gaming project Pocket Full of Quarters – the only no-action letter available on the subject. In the no-action letter, the SEC indicates that fixed-priced in-game tokens are not securities because they are used for game utility rather than investment; Montague explained a view that, while not definitive, is a key factor in current regulatory considerations. However, the relevance of price fixing in the evolving decentralized finance (DeFi) and cryptocurrency space may be questionable and potentially burdensome for developers. DeFi is a term for financial activities carried out on the blockchain without financial intermediaries. “Given the evolution of DeFi and the free-floating nature of cryptocurrency, I do not think the price fixing is a particularly relevant factor and really just results in additional development costs, API, and oracle costs for game developers integrating tokeneconomic structures,” he said. Montague argues that there’s no actual investment happening, which fails to meet the first requirement of the Howey test. “Nevertheless, there still remains much regulatory ambiguity that is preventing game developers from entering into the space, which I think is a very sensible approach until regulatory clarity is achieved,” he said. Rockstar Games did not immediately respond to CoinDesk’s request for comment. The rules around GameFi are clearer in Asia While Rockstar is a U.S. company, its Grand Theft Auto franchise is a worldwide sensation, and it needs to be cognizant of rules worldwide. Rockstar is no stranger to this, as it has had to censor parts of GTA V for release in certain countries to comply with their laws around entertainment and extreme content. GameFi isn’t a new concept in some parts of Asia; variations of it, minus the blockchain component, have been tried decades ago. South Korea’s Gaming Industry Promotion Act, specifically Article 32, prohibits game currencies from being cashed out, a law that has been used to block the distribution of play-to-earn games like Axie Infinity, as they are equated to gambling by the government, CoinDesk previously reported, while in Japan, certain in-game actions of such games might be deemed illegal gambling. China has the most stringent restrictions, banning any gaming elements exchangeable for yuan and crypto trading, thereby eliminating the possibility of GameFi in the country. However, it’s unclear if GTA VI will even be allowed to be released there. Regardless of the regulatory uncertainty around the world surrounding GameFi, Montague hopes it will one day be center stage in AAA games. “I think GameFi is awesome and will eventually integrated into many titles in the future,” he said. https://www.coindesk.com/web3/2023/11/09/heres-why-gta-vi-probably-wont-have-a-crypto-component/

2023-11-09 07:13

Over $62 million in bitcoin shorts were liquidated in the past 24 hours, contributing to higher prices. Bitcoin (BTC) prices crossed the $37,000 level for the first time since May 2022 on Thursday, extending the largest digital asset's massive recent rally. Short sellers – traders who made bets prices will fall – might be exiting positions in a rush known as a short squeeze, fueling the move higher. Data shows just under $50 million in liquidations occurred in a four-hour period during early Asian trading hours, creating a short squeeze that drove prices up. BTC surpassed $36,000 a few hours earlier for the first time in 18 months. Bitcoin has surged recently amid optimism U.S. regulators will approve ETFs that hold BTC, something some experts believe will lure a flood of investment money into the original cryptocurrency. Those hopes increased Wednesday following a CoinDesk report that the Securities and Exchange Commission has opened talks with Grayscale Investments on the details of the company's application to convert its bitcoin trust, known as GBTC, into a bitcoin ETF. Bitcoin short squeeze A short squeeze is an unusual condition that triggers a rapid price rise in any asset – typically beginning when the price jumps higher unexpectedly and short sellers exit their positions, leading to a buying flywheel. Over $21 million of those shorts were wiped on futures exchange BitMEX, followed by OKX and Binance. This suggests the move could have been driven by market trades based in Asia, where these exchanges enjoy a relatively large user base. Liquidation refers to when an exchange forcefully closes a trader's leveraged position due to a partial or total loss of the trader's initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open). Bitcoin ETFs Elsewhere, analysts at Bloomberg Intelligence doubled down on expectations of a spot bitcoin ETF approval in the U.S., reiterating a "90% chance" of a launch by January. "Delay orders were issued by the SEC for BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity & Valkyrie at the same time," analyst James Seyffart said in an X post. "If the agency wants to allow all 12 filers to launch – as we believe – this is the first available window since Grayscale's court victory was affirmed." https://www.coindesk.com/markets/2023/11/09/bitcoin-short-squeeze-bumps-prices-to-nearly-37k-as-spot-etf-hopes-strengthen/

2023-11-09 05:41

The fund continues to sell GBTC as shares have rallied 235% this year, outperforming bitcoin and traditional risk assets. Cathie Wood's ARK Invest purchased a large chunk of shares in U.S.-based financial services company Robinhood (HOOD), a day after the popular trading platform laid out plans to expand in Europe. ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Fintech Innovation ETF (ARKF) bought a combined 1,141,046 shares of Robinhood. The total purchase had a value of $9.54 million based on Wednesday's close of $8.36. "With an experienced team in place, we will soon launch brokerage operations in the U.K.," Robinhood said in its third-quarter earnings statement on Tuesday. "As another step in global expansion, we are also planning to launch crypto trading in the EU following our U.K. launch," the firm added. Bitcoin's 110% year-to-date gain has failed to boost demand for shares in Robinhood, which, as of Wednesday, traded just 2.7% higher on a year-to-date basis. Also, the ARK Next Generation Internet ETF (ARKW) sold 48,477 units of GBTC worth $1.34 million. Late last month, the fund sold 72,509 units of GBTC. Still, GBTC has the highest weight of 9.88% in the ETF. Shares in GBTC have rallied 235% this year, outperforming bitcoin (BTC) and major U.S. stock market indices by a big margin, data from charting platform TradingView shows. GBTC's discount relative to the trust's net asset value has narrowed to 12.26% from the record 48% in December last year in hopes the U.S. Securities and Exchange Commission (SEC) would greenlight the conversion of the trust into a spot-based ETF. https://www.coindesk.com/markets/2023/11/09/ark-snaps-up-95m-hood-shares-day-after-robinhood-announces-european-expansion/

2023-11-09 05:27

Numerous participants exhibited signs of photokeratitis, an ailment resulting from ultraviolet (UV) light exposure, after last weekend's event. Yuga Labs confirmed that UV-A emitting lights installed in one corner of the event was "likely the cause" of a series of eye-related medical emergencies that took place at the company's Ape Fest event in Hong Kong over the weekend. Attendees of ApeFest reported blurred vision and burning eyes after attending the event last weekend. One attendee claimed they had eye issues for more than 30 hours following the event. in an X post on Thursday, the company said it initiated a detailed investigation after reports came out, which comprised of an exhaustive examination of inventory records, material logs, and specification sheets, surrounding the instillation of its exhibits at ApeFest. "This comprehensive investigation, undertaken in collaboration with Jack Morton Worldwide, the global brand experience agency that produced ApeFest 2023, has determined that UV-A emitting lights installed in one corner of the event was likely the cause of the reported issues related to attendees’ eyes and skin," the post read. Yuga Labs says it encourages anyone that is experiencing symptoms to seek medical attention, and reach out to the company. “Community is the heart of Yuga and the purpose of ApeFest is to bring the community together IRL,” Yuga Labs said in its post on X. “We are saddened that this incident has detracted from the experience of ApeFest attendees." Prices of the popular Bored Apes Yacht Club slumped from 30 ether (ETH) to 28 ETH following the event and have since reversed declines. https://www.coindesk.com/web3/2023/11/09/yuga-labs-confirms-uva-a-emitting-lights-cause-of-apefest-eye-issues/