This tax plan from House Democrats follows the infrastructure bill recently passed in the Senate, suggesting implementing stricter rules on businesses handling cryptocurrencies and expanding reporting requirements for brokers.
Democrats in the United States lower chamber have proposed ‘wash sale,’ tax initiatives to fund the $3.5 trillion spending expenses which could also potentially affect crypto users within the country.
In a document released by House Committee Ways and Means on Monday, the tax initiative would help increase the tax rate on long-term capital gains to 25 percent from 20 percent for specific high-income earners. This would also apply to the Surtax on net investment income, increasing the United States capital gains and dividends tax rate from 25 percent to 28.8 percent for only wealthy crypto users.
Similarly, the tax initiative would include cryptocurrencies or digital assets to the “wash sale.” Before now, the rule used to be for stock and other securities alone but now intends to include virtual assets. This is an effort to fight avoidance of capital gains, the loopholes created by the existing tax laws under the IRS that consider crypto assets as property.
What Is the ‘Wash Sale’ Rule?
The Wash sale rule has been clearly explained by the IRS code. It occurs when a person sells a stock or security at a loss and within a month before or after this sale, purchases a significant similar product, or acquires a contract or option to do so. Wash sale does not allow individuals to claim any loss that occurs in this process.
However, at this moment, cryptocurrency is not subject to the wash sale rule, but the House Committee on Means and Ways have suggested the inclusion of crypto into it.
According to Sec. 138153 of the Ways & Means report subjecting digital assets to wash sale rule, “This section (Sec. 138153) includes commodities, currencies, and digital assets in the wash sale rule, an anti-abuse rule previously applicable to stock and other securities. The wash sale rule in section 1091 prevents taxpayers from claiming tax losses while retaining an interest in the loss asset.”
Peradventure, the house approves it; it would mandate crypto users to report taxes, starting from Dec. 31, according to the new wash sales rule. The capital gains tax rate would take effect on post-September 13 transactions.
This tax plan from House Democrats follows the infrastructure bill recently passed in the Senate, suggesting implementing stricter rules on businesses handling cryptocurrencies and expanding reporting requirements for brokers. However, several Democratic and Republican lawmakers proposed amendments to the language in the bill to clarify the role of cryptocurrencies.
Binance’s Trading Volume Hits $100 Billion in Just One Day
Binance continues to see unprecedent trading activity while attempting to sail through regulatory hurdles
Binance’s daily volume hit an eye-popping $100 billion on Oct. 20, according to a tweet by CEO Changpeng Zhao.
The leading crypto exchange recorded this crucial milestone on the day Bitcoin, the largest cryptocurrency, reached a new all-time high of $67,276.
Despite introducing stricter measures for users due to severe regulatory scrutiny, Binance enjoys a comfortable lead over other crypto exchanges in both spot and derivatives trading, according to data provided by CoinMarketCap.
Eerier this month, the trading platform also announced a $1 billion ecosystem fund.
Meanwhile, the decentralized finance sector is catching up with centralized behemoths. The total value locked in DeFi protocols has hit $100 billion for the first time.
Binance Smart Chain DeFi protocol PancakeHunny suffers flash loan attack
As the users argue “what’s better,” Ethereum or Binance Smart Chain, the latter saw another decentralized protocol being exploited. PancakeHunny on BSC was attacked by a flashloan and no, this wasn’t a first for the protocol.
Blockchain security and data analytics company Peckshield Inc. announced the attack on Twitter.
The last time that this protocol was exploited, was in June, wherein the team had noted the creation of a smart contract to exploit the Hunny Minter Smart Contract. The contract was subsequently executed 91 times, as per the team.
The team took a long time to respond to the hack this time but assured the users that their funds were safe. The team added in a preliminary report,
“On 20 October 2021, at 0920 UTC. A smart contract was created to exploit the Hunny TUSD vault. The Contract was subsequently executed 26 times.”
PeckShield provided some details about the same noting,
According to the agency, this hack was possible due to a profit inflation bug, which converts the relatively small amount of harvested ALPACA, to a large amount of TUSD for staking. PeckShield added,
“These converted TUSDs are then counted as profit, now inflated to mint large amount of $HUNNY!”
Actions taken by the team
The PancakeHunny team has stopped the minting process for the TUSD vault while assuring that funds in Hives were all SAFE. The exploit did not affect other Hives and Vaults but the price of HUNNY.
They added that the issue has been identified and the team will change its rooting to higher liquidity pools to prevent the aftereffects of price manipulation of LP pools.
NBA Makes Coinbase Its Exclusive Crypto Partner
Coinbase has joined FTX in scoring major partnerships in the sports industry
The National Basketball Association has announced a multi-year deal with Coinbase, America’s biggest crypto trading platform in an Oct. 19 press release.
Coinbase will act as the exclusive partner of the NBA, NBA G League, Women’s National Basketball Association (WNBA), and other leagues.
As part of the deal, the exchange will have a brand presence during televised games as well as unique content and activations that are meant to boost crypto awareness.
Kate Rouch, Coinbase’s chief marketing officer, says that the company is proud of joining forces with the NBA:
The freedom to participate and benefit from the things you believe in is at the heart of Coinbase’s mission. Nobody believes this more than NBA and WNBA fans. We’re proud to become the Leagues’ official cryptocurrency partner.
The shares of Coinbase are up roughly 3% at press time.