JPMorgan: Crypto Is a Nonexistent Asset Class for Most Large Institutional Investors

JPMorgan: Crypto Effectively Nonexistent for Most Large Institutional InvestorsA strategist at global investment bank JPMorgan says crypto is effectively nonexistent as an asset class for most large institutional investors. “The volatility is too high, the lack of an intrinsic return that you can point to makes it very challenging,” he added. JPMorgan on Institutional Crypto Investing JPMorgan Asset Management’s head of institutional portfolio […]
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New House Financial Services Committee chair wants to delay crypto tax changes

U.S. Republican Representative Patrick McHenry called for clarification on a “poorly” written digital asset tax provision in a letter to the Treasury.

The incoming United States House Financial Services Committee chair, Patrick McHenry, wants the Treasury to delay implementing a section of the Infrastructure Investment and Jobs Act that deals with digital assets and tax collection.

McHenry sent a letter on Dec. 14 to U.S. Treasury Secretary Janet Yellen with questions and concerns about the scope of Section 80603 of the act. In the letter, he requested clarification over the “poorly drafted” and potentially privacy-compromising section that deals with the taxation of digital assets, scheduled to go into effect next yea.

He said the section requires the government to treat digital assets as the equivalent of cash for tax purposes, which could “jeopardize” the privacy of Americans and hamp innovation.

The section, called “Information Reporting for Brokers and Digital Assets,” requires brokers to report certain information relating to dealing with digital assets to the Internal Revenue Service (IRS).

McHenry argues the section has been drafted badly and that the term “brokers” could be “wrongly interpreted” as applying to a wider range of people and companies than intended.

The Act contains a provision requiring individuals or entities engaging in a trade or business to report to the IRS any digital asset transactions that exceed $10,000.

The requirement was challenged earlier this year by Coin Center, a nonprofit advocacy group focused on blockchain technology, which filed a lawsuit against the Treasury arguing that the rule will impose a “mass surveillance” regime on U.S. citizens.

Related: Sens. Warren and Marshall introduce new money-laundering legislation for crypto

According to Fordham International Law Journal, the section is likely to impose reporting requirements on the major cryptocurrency exchanges that already have user information, including customers’ names, addresses and social security numbers.

McHenry acknowledged it was a positive step forward to see the Treasury Department state that “ancillary parties” should not be subject to the same reporting requirements as brokers.

In February, U.S. Senator Rob Portman tweeted a letter from U.S. Assistant Secretary for Legislative Affairs Jonathan Davies that clarified that parties such as crypto miners and stakers are not subject to the new legislation.

McHenry’s letter concluded by requesting the Treasury “immediately” publish the rules under the section and delay its effective date to give market participants time to comply with any new requirements.

It’s the second letter McHenry has sent to Yellen this year, having sent her a letter on Jan. 26 urging the Treasury secretary to clarify the definition of a broker.

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Bitso Partners With Felix Pago to Offer Whatsapp-Based Remittance Services Between Mexico and US

bitso felix pagos remittances whatsappBitso, a Latam-focused cryptocurrency exchange, has partnered with chat-based payments provider Felix Pagos in order to offer Whatsapp-integrated remittances. The objective of this partnership is to put nearly instant chat-based remittances in the hands of Mexican and US users that might be intimidated by crypto tech otherwise. Bitso to Power Felix Pagos Whatsapp-Integrated Remittances Remittances […]
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Crypto blame game back on US Senators’ menu following SBF arrest

While Congressman Brad Sherman saw SBF as the poster child of the crypto ecosystem, congressman Tom Emmer highlighted the crypto community’s contribution to uncovering the supposed FTX fraud.

The arrest of the former FTX CEO Sam Bankman-Fried (SBF) by the Bahamian authorities served as a cue for anti-crypto proponents to reignite discussions around the dangers of cryptocurrencies. While some political leaders blame the crypto ecosystem for SBF’s frauds, others find no point in blaming an entire industry for one man’s action.

During an FTX hearing in front of the House Financial Services Committee, Congressman Brad Sherman did not see a difference between SBF and an industry that once boasted a $2 trillion market cap, as he stated:

“My fear is that we’ll view Sam Bankman-Fried as just one big snake in a crypto Garden of Eden. The fact is crypto is a garden of snakes.”

He supported this statement by explaining how cryptocurrencies, just like nonfungible tokens (NFTs), are being purchased in hopes of selling them for a higher price.

Rep. Brad Sherman during the FTX hearing in front of the U.S. House Committee on Financial Services. Source: YouTube

He also highlighted how entrepreneurs such as “Sam Bankman-Fried would tell you there’s a hell of a market for bankruptcy court evasion” and pointed out how crypto aids tax evasion efforts of bad actors.

On the other hand, Congressman Tom Emmer distanced the FTX fallout from the institution of cryptocurrencies while speaking at the U.S. House Committee on Financial Services. Instead, Emmer disclosed how the immutable nature of blockchain technology helped the crypto community uncover the FXT Token (FTT) discrepancies, which ultimately led to SBF’s arrest.

Information stored over the public blockchain will further assist law enforcement in digging into the nuances of the possible crimes. He added:

“I encourage my colleagues to understand Sam Bankman-Fried’s con for what it is — a failure of centralization, a failure of business ethics and a crime. It is not a failure of technology.”

While naysayers try to link SBF’s actions with the idea of crypto and blockchain, the case for decentralization grows stronger. Public blockchain-based crypto ecosystems not only allow for traceability but can also help authorities with anti-money laundering initiatives.

Related: US senator: There’s ‘no reason why’ crypto should exist

Despite the decade-long federal resistance toward crypto, the support for crypto US Senators has grown evidently stronger. Pro-crypto Senator Cynthia Lummis believes in Bitcoin’s (BTC) position as a viable inclusion to 401(k) retirement plans, revealing her disregard for the prolonged, but temporary, bear market:

“I’m very comfortable with making sure that people can include Bitcoin in their retirement funds because it’s just different than other cryptocurrencies.”

Lummis places her bet on Bitcoin’s scarcity, which according to “a personal belief,” will help increase the asset’s value over time.

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White House silent on whether it will return $5.2M in donations from SBF

A White House spokesperson dodged point-blank questioning on whether President Joe Biden is planning to return the political donations from SBF.

White House press secretary, Karine Jean-Pierre, declined to answer questions from a reporter on whether United States president Joe Biden will return the $5.2 million in campaign donations previously given by FTX founder Sam Bankman-Fried.

“Will the president return that donation?” Associated Press reporter Zeke Miller asked in a Dec. 13 press briefing, “does he call on all politicians who got campaign donations that may have come from customer money to return those funds?”

“I’m covered here by the Hatch Act,” Jean-Pierre responded, adding she was “limited on what I can say.”

”Anything that’s connected to political contributions, from here I would have to refer you to the DNC,” she said in reference to the Democratic National Committee — the governing body of the U.S. Democratic Party of which Biden is a member.

The Hatch Act is a federal law prohibiting those employed in the executive branch of government from being involved in political campaign activities.

“I’m asking the president’s opinion though,” Miller pressed. Jean-Pierre repeated that she was “covered by the Hatch Act,” adding:

“I just can’t talk to political contributions or anything related to that I cannot speak about it from here.”

Miller again pushed for Jean-Pierre’s response on Biden’s opinion which she said she couldn’t speak about “even his opinion, even his thoughts about the contributions, donations — I cannot speak […] about that from here.”

Bankman-Fried was charged with violations of campaign finance laws on Dec. 13 including violations of contributions laws and obstructing the Federal Election Commission’s functions, along with making contributions in the name of others.

He was the second-largest “CEO-contributor” to Biden’s 2020 presidential campaign with his $5.2 million worth of donations behind only the $56 million of contributions from media mogul Micheal Bloomberg.

Related: ‘You can commit fraud in shorts and T-shirts in the sun,’ says SDNY attorney on SBF indictment

The FTX founder was also a top individual donor in the 2022 mid-term elections, again the second-largest Democratic party contributor in the cycle with $36.8 million funneled to its candidates.

Public records show Bankman-Fried sent just over $240,000 to Republicans during the mid-terms but he admitted to so-called dark money donations in a Nov. 16 interview with cryptocurrency vlogger Tiffany Fong saying he “donated about the same to both parties.”

Politicians on the receiving end of Sam Bankman-Fried’s and other FTX executives political donations may be forced to return the contributions to the bankruptcy trustee in any case, due to bankruptcy proceedings.

As per a previous report from Cointelegraph, as much as $73 million worth of political donations from those at FTX may be recalled to repay the failed exchange’s creditors.

Some politicians have already resorted to giving away their cash to charity in an attempt to distance themselves from the company and its donations.

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Binance US finally rolls out mobile payments service to US customers

Binance’s US arm has rolled out a feature for US customers called “Pay” which was launched by its global parent to users outside the US in 2021.

United States crypto exchange Binance US has finally rolled out its Binance Pay service — some 22 months after the feature was launched by the global exchange to its customers outside the U.S. in 2021.

The service, which was rolled out a beta version globally in Feb. 2021 for peer-to-peer payments before expanding to include merchant transactions on Mar. 12, allows mobile users of the Binance app to instantly transact nearly 150 supported cryptocurrencies without fees.

A Dec.13 blog post from Binance US clarifies that Pay transactions will feature zero gas or transaction fees, and notes that the app is currently only available on mobile as it prepares to introduce a web version “which will arrive in the near future.”

Meanwhile, amid the recent FUD against Binance global, Binance CEO Changpeng Zhao (CZ) applauded the Binance American unit, saying to “Keep building!”

To access the new features, Binance.US users would need to update to the latest version of the app, and go through identity verification as well as loading their Pay wallet.

However, the service only facilitates transactions between users on the Binance US mobile app. Users can receive up to $1 million in crypto every 24 hours.

Related: Crypto community members discuss bank run on Binance

The latest announcement has come amid a turbulent period for the global crypto exchange.

At the time of writing Binance’s Bitcoin (BTC) balance has fallen by over 42,000 in the last 24 hours, equating to over $754 million, but despite the withdrawals the exchange still has a Bitcoin balance in excess of 527,304 BTC according to on-chain monitoring resource Coinglass.

The withdrawals are understood to have followed a Dec. 13 Reuters report which suggested the United States Department of Justice is nearing the end of an investigation into Binance which commenced in 2018, with U.S. prosecutors reportedly split over whether there is enough evidence to press criminal charges against the exchange and its executives.

Additionally, there have also been fresh concerns within the crypto community relating to Binance’s finances, with accounting and financial specialists consulted by the Wall Street Journal in a Dec. 10 report suggesting Binance’s proof of reserves raise a number of red flags while community members fear the worst.

In a Dec. 14 update on Twitter, CZ noted that “Things seem to have stabilized,” adding that the withdrawals yesterday weren’t even within the top five withdrawals they’ve processed in its history.

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PayPal has become an episode of Black Mirror: Elon Musk

The “PayPal Mafia” including co-founders Peter Thiel and Elon Musk have slammed the payments platform over its “totalitarian” debanking policies.

PayPal’s former leadership, also known as the “PayPal Mafia,” have slammed the payments giant for its debanking policies of late, with one co-founder calling the freezing of funds “totalitarian,” while another compared it to an episode of Black Mirror.

Despite becoming crypto-friendly in recent years, the payments tech giant has caught a lot of headlines and pushback over its de-platforming practices, which reportedly involve a rather abrupt process of freezing funds, fines, and frosty negotiations to unlock the accounts of its users for varying reasons.

Peter Thiel, who co-founded PayPal in 1998 and served as its CEO until 2002 suggested to The Free Press (TFP) on Dec. 14 that the company’s vision has significantly shifted away from its initial goal of giving global citizens greater control over their money.

“If the online forms of your money are frozen, that’s like destroying people economically, limiting their ability to exercise their political voice,” Thiel noted, adding that:

“There’s something about destroying people economically that seems like a far more totalitarian thing.”

Thiel is colloquially referred to as the “Don” of the famous “PayPal Mafia,” which is a group of founders and former employees — such as Elon Musk — that have since gone on to found or work at other major tech companies.

Fellow PayPal Mafia member and the firm’s first COO David Sacks has also spoken out against PayPal’s deplatorming practices over recent years as well.

In talking with TFP, Sacks argued that PayPal, under the leadership of current CEO Dan Schulman, is trying to cash in on the woke culture movement by banning people with opposing views.

“The CEO [Schulman] has got like every woke award you can win,” Sacks said, adding:

“It’s a symbiotic relationship—he implements their agenda, and, in exchange, they give him awards, and that furthers advancement up the corporate totem pole of woke capitalism.”

To list just some of PayPal’s notable deplatformings, it has shut down the accounts tied to the censorship-free focused Freedom Phone startup, news website Consortium News, the Free Speech Union and lockdown sceptic blog The Daily Sceptic. All of which could be deemed as leaning right politically, or at least as holding alternative views.

Responding to the article from The Free Press, Elon Musk, the now-CEO of Twitter and CEO of SpaceX and Tesla said that the platform has become an episode of Black Mirror — a British television series that usually presents some form of dystopian future where people are controlled by technology.

With the threat of deplatforming being in place for some, crypto proponents have of course pushed the “Bitcoin fixes this” narrative due to the network’s decentralization and censorship resistance.

Related: What are crypto payment gateways and how do they work?

In October, the firm also controversially introduced $2,500 fines for users that “promote misinformation” or material that presents risks to “user safety and wellbeing,” both of which were defined under ambiguous terms.

The move was met with intense backlash from the community and big figures alike, including PayPal Mafia members such as former PayPal president David Marcus and former CEO Musk. On Oct. 11, PayPal then promptly walked back that policy and attributed it to an internal error.

However, some skeptics believe the policy has been quietly snuck back into the company’s user agreement and acceptable use policy.

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