🇺🇸 Uncle Sam Wants Your Crypto

Helium Carrier Rewards | Binance Labs Lead Deals

Marco Manoppo & Karon Pangestu
August 28, 2023

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Good Morning,

Crypto markets continue to trend down as Powell adopted hawkish tone. He said that inflation remains too high, which means that we’ll need to wait a bit longer for that bull market.

Also, 6 Bitcoin ETF filing decisions are due this week, although the SEC will probably delay its decision until the final deadline.

In Today's Email:

What Matters: Treasury-IRS crypto tax rules 💼
Products: Helium mobile 📱
Charts: Binance investments, Bitcoin NFT 📈

Narratives: Nothing — wait for the Bitcoin ETF decisions and adjust your strategy accordingly.

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WHAT MATTERS

Treasury- IRS Introduce Crypto Tax Rules

VOI

State of play: The US Treasury and the Internal Revenue Service (IRS) have proposed a new crypto tax reporting rules.

The proposed rules mandate brokers and exchanges to report crypto sales, spanning from Bitcoin to NFTs.
According to the proposed rules, crypto brokers including DEX, CEX, wallets, and payment processors will be required to report details about digital asset sales and exchanges starting in 2025.
The proposal extended reporting requirements for certain cash transactions of more than $10,000 to digital assets.
According to the Treasury, the regulations are anticipated to generate approximately $28B over a decade.
As per the proposed regulations, brokers must offer a new Form 1099-DA to assist taxpayers in assessing potential tax obligations.

What’s next: Comments on the proposal are due October 30 and the Treasury will hold hearings on the proposal in November.

Proposed treasury regs for crypto asset 'brokers' just dropped and do indeed explicitly characterize various persons involved in DeFi (including operators of websites that communicate with wallets) as brokers . I'll need to dig in more but it looks pretty bad.
— _gabrielShapir0 (@lex_node)
1:12 PM • Aug 25, 2023

Our take: This regulation will make it even harder for crypto founders to operate or focus on the US markets.

For builders and investors: Always have a global-first strategy and don’t rely on one particular market whereby one piece of legislation can destroy your business.

Without a clear rules around which decentralized protocols fall under the categorization of “broker”, this rule will further diminish the upside for founders and investors that are focusing on the US consumer crypto markets.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

PRODUCTS OF THE WEEK

Helium Mobile, a Decentralized Wireless Carrier

Helium Mobile

A unique wireless carrier merging the decentralized Helium 5G network with T-Mobile’s nationwide 5G network, Helium Mobile, is now available to the public in Miami with a monthly price of only $5/month.

The $5 monthly plan unlocks unlimited talk, text, and data.
Node operators are offered MOBILE crypto tokens as a reward for hosting dedicated 5G (or 4G) hotspots.
Helium Mobile users can earn MOBILE by using their phones on the network by opting in to share their location data.
T-Mobile's nationwide 5G acts as a backup for Helium Mobile users when they're out of range from a Helium 5G node.
Helium Network boasts nearly 950K total activated nodes to date, with about 400K nodes live.

Other cool products:

Scamfari, a crowdsourced Web3 scam reporting.
Banatica, a dashboard that analyzes Binance market transactions.
Homerun, a co-investment club with blockchain solutions.
Courtyard.io, a marketplace & tokenization app.
InkTradr, an NFT x tattoo marketplace.

CHARTS OF THE WEEK

Binance Labs Leads Fundraising Activity

Messari

State of play: Over the last half-year, Binance Labs has taken the lead as the most engaged venture investor with 17 deals done. Followed closely by Coinbase Venture with 14 deals done.

Last week, Binance Labs announced a private investment in Pendle Finance. Binance Labs also engaged in follow-on rounds for Maverick Protocol and Radiant Capital.
These three protocols have established a reputation on Arbitrum (Radiant and Pendle) and zkSync (Maverick).
Other investment themes under Binance Labs' radar include zero-knowledge technology, privacy technology, and gaming.

Our take: Other than having a really large AUM, this move from Binance might be its way to diversity its business from a “centralized-exchange first” business.

Bitcoin NFT Sales Growth

Messari

State of Play: Throughout May and June, Bitcoin exceeded both Polygon and Solana in NFT sales volume.

In May and June, Bitcoin's combined NFT sales volume was $314M, whereas Polygon and Solana recorded sales volumes of $54M and $125M, respectively.
The swift ascent of Bitcoin's prominence in the NFT realm is driven by the Ordinals Protocol.
Bitcoin Ordinals sales volume has plummeted by over 97% from its peak in May 2023, but it still dominates 80%+ of on-chain Bitcoin transactions.

Our take: Bitcoin economic security model deserves an entire article on its own, but we’re seeing that developers exploring new ways to build on top of Bitcoin network to increase its functionality.

QUICK BITES

Treasury-IRS proposes crypto tax rules.
Base set to receive 118M OP tokens over six years.
JPMorgan sees limited downside for crypto markets.
OnlyFans reports ETH holdings.
Pepe confirms former team members stole $15M.
US Judge skirts on classifying CEL as a security, citing Ripple.
PYUSD facing sluggish demand.
Binance delists five Russian lenders.
ARK Invest & 21Shares applied for Ether and Bitcoin futures ETFs.
HashKey to start crypto retail trading service in HK.

MEME & NOTEWORTHY READS

Arthur Hayes’ read on macro market update.
Ben Basche’s read on noncustodial finance.
Max Shannon’s read on cross-chain vs multi-chain paradigms.

using crypto to gamble on humans might be our future
“intern wtf are you talking about”
mini thread 1/9 🐧
— @intern (@intern)
2:53 PM • Aug 17, 2023

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.