Crypto Guides, Knowledge & Insights

Singapore to Tax Income Generated From NFT Transactions

Singapores income tax treatment will be determined based on the nature and use of the NFT.　　Taxing NFTs　　According to the latest report by The Business Times, Singapore Finance Minister Lawrence Wong while addressing the parliament revealed that the prevailing income tax rules will apply to the income derived from non-fungible token (NFT) transactions or trading in it. Due to the absence of a capital tax regime in Singapore, individuals deriving capital gains from the NFT transactions will not be taxable, Wong clarified.　　The news comes amid the recent tax changes that many analysts believe will help in reducing inequality, strengthening the social compact, aiding longer-term spending.　　Singapores “Tech-neutral Stance” On NFTs　　Earlier in January this year, Singapore officials had cautioned the citizens in terms of decisions related to digital investment vehicles, especially in the nascent sectors of NFTs and metaverse. Despite being often touted as the next crypto hub in Asia, Singapore had urged global regulators to exercise greater control over digital investments. It had revealed closely exploring the risks associated with technologies such as blockchain, decentralized finance, NFTs, and the metaverse.　　Last month, Singapores central bank said it will not regulate the NFT market. Responding to a parliamentary question on regulating NFT activities, Tharman

2022-03-14Deep Dive

The Future of Sports Lies at Cross-Section of Crypto and NFTs, says PwC Report

A new report by PwC has placed NFTs and other digital assets among the top ten major trends within the sports industry.　　The report, which details the Sports Outlook for North America, reveals that the future of the sporting industry lies at an intersection with non-fungible tokens.　　Citing various factors ranging from altering sports technology infrastructure to driving fan engagement, the report pointed out three main use cases for NFTs in the sporting industry.　　Collectibles　　The first of these uses is collectible NFTs, which refers to platforms that sell collectible, authenticated, and limited-edition digital content, which we have already started to see adopted in mainstream sports.　　Specifically, the report mentions the digitization, minting, and trading of player trading cards, match tickets, and other objects or materials that can be placed on the blockchain. These collectibles, inadvertently, could be displayed or even shared across the metaverse.　　We have witnessed the success and longevity of this, as Dapper Labs has continued to popularize this application with NBA Top Shot. This NFT tokenizes nostalgia and some of the NBAs greatest memories and highlights over the course of history. In 2021, Dapper Labs accounted for nearly $827 million worth of transactions, showing that other games in addition to Axie Infinity

2022-03-14Deep Dive

Analyzing the Bitcoin mining industry panorama following BTC’s price drop

Crypto markets have experienced highly volatile months, even by crypto‘s standards. The year began with rising inflation shortly followed by the Russian and Ukraine war, causing Bitcoin’s price to retrace significantly from the $50k level at which it stood by the end of 2021. This recent series of events have impacted the mining industry in a negative way.　　The industry has grown tremendously boosting competition and elevating hash rate to sustained levels not seen before. These low prices has affected the mining industry profitability and as a consequence miner reserves have decreased, likely to cover companies day to day costs. Furthermore, we will explore Chinas crackdown on mining long term effects by analyzing the current Hash Rate Distribution.　　Quick refresher — the hash rate is the aggregate power contributed by miners to secure a proof of work blockchain. This computing power is used to solve cryptographic algorithms (SHA-256 in Bitcoin‘s case) to process transactions and reach consensus in proof of work blockchains. This indicator serves to measure how strong a network’s security is, since the greater the hash rate the more difficult it becomes for an attacker to try to overtake 51% of the mining control.　　As can be seen above, Bitcoins hash

2022-03-13Deep Dive

Analyzing the Bitcoin mining industry panorama following BTC’s price drop

2022-03-13Deep Dive

Limiting Proof-of-Work Crypto Back on the Table as EU Parliament Prepares Virtual Currencies Vote

The latest draft of the European Unions (EU) proposed legislative framework for governing virtual currencies, Markets in Crypto Assets (MiCA), still contains a provision that could limit the use of proof-of-work cryptocurrencies.　　Proof-of-work is the energy-intensive consensus mechanism that underlies popular cryptocurrencies like bitcoin and ether. The computing process has come under heavy scrutiny from lawmakers in the EU over energy concerns.　　A previous draft of the MiCA framework contained a strongly worded provision that proposed a prohibition of crypto services that rely on environmentally unsustainable consensus mechanisms starting in January 2025. But the provision was later scrapped following industry backlash.　　The EU parliamentarian in charge of the MiCA legislative framework, Dr. Stefan Berger, said at the time that the paragraph in question had been removed, but that a final decision had not yet been made.　　One version of the new draft, reviewed by CoinDesk, has a similar provision though significantly toned down from the original. It says that crypto assets “shall be subject to minimum environmental sustainability standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the Union.”　　If a proof-of-work consensus mechanism is operating on a small scale, it is exempt from

2022-03-13Deep Dive

All Bitcoin ATMs in UK to shut down as FCA deems them “illegal”

Bitcoin ATMs first appeared in 2014 and their popularity increased greatly throughout 2020 and 2021. Their popularity attracted swindlers as well as the UK governments negative attention.　　The UK hasnt been particularly welcoming towards crypto or its ATMs. Even before crypto ATMs became popular, the UK released a notice in 2019 including ATMs under the Anti Money Laundering (AML) requirements, as well as all crypto exchanges.　　AML requirements held its subjects responsible for conveying a KYC process by collecting users names, official IDs, dates of birth and residential addresses.　　According to FCA, there are no cryptoasset firms operating in the UK, offering ATM services, that are compliant with the AML. A recent post from FCA states:　　“None of the cryptoasset firms registered with us have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally and consumers should not be using them.”　　The post continues with FCAs warning about shutting all illegal ATM machines down:　　“We are concerned about crypto ATM machines operating in the UK and will therefore be contacting the operators instructing that the machines be shut down or face further action.”　　The FCA also published a list of unregistered crypto firms, to inform their

2022-03-13Deep Dive

Yuga Labs Obtains Cryptopunks and Meebits Brands, Gives Commercial Rights to NFT Holders

Bored Ape Creators Yuga Labs Acquires Cryptopunks and Meebits Collections From Larva Labs　　Last year and during the course of 2022, non-fungible tokens (NFTs) have seemingly become a mainstay within the crypto industry. One of the teams behind the fifth-largest NFT collection, in terms of all-time sales volume, Bored Ape Yacht Club, announced the acquisition of the IP tied to two other popular NFT collections. The two collections happen to be the Larva Labs issued Cryptopunks and Meebits collections.　　From the official Yuga Labs Twitter account the team tweeted:　　Some big news to share today: Yuga has acquired the CryptoPunks and Meebits collections from Larva Labs, and the first thing were doing is giving full commercial rights to the NFT holders. Just like we did for BAYC and MAYC owners.‘What’s Good for Punks Is Good for Apes‘　　While BAYC is the fifth-largest NFT project by all-time sales volume (ATSV), dappradar.com NFT collection stats indicate Meebits holds the top ATSV record today with $7.54 billion in ATSV. Meebits’ sister project Cryptopunks is below the collection with $2.65 billion in ATSV, in comparison to BAYC‘s ATSV which is $1.41 billion. Yuga’s Mutant Ape Yacht Club (MAYC) is the ninth-largest in terms of ATSV with $895.53 million

2022-03-13Deep Dive

Upcoming AML Regulations in Estonia to Affect Cryptocurrency Industry

Government of Estonia Creates Stricter Regulatory Environment for Crypto Businesses　　Estonia, whose banking sector has in the past been implicated in the processing of billions for suspicious Russian clients, is now taking steps to close the loopholes that could allow Russia, its elites, and allied Belarus to evade sanctions imposed over the invasion of Ukraine.　　Next Tuesday, the country‘s amended Money Laundering and Terrorist Financing Prevention Act will enter into force, introducing stringent standards. Crypto companies are going to bear the brunt of Estonia’s war against dirty money, Politico notes in a report.　　The update will make the Estonian regulatory regime for platforms operating with digital assets even stricter than the upcoming EU rules. The framework adopted in 2017 was considered too loose as it allowed hundreds of businesses, many based elsewhere, to obtain licensing from Estonia.　　Speaking to the publication, Minister of Finance Keit Pentus-Rosimannus insisted that Estonia welcomes innovation but emphasized that it will not tolerate financial crime and will uphold the prevention of money laundering as a priority. He further commented:　　Supervision was simply not possible. But the risk was ours because they operated with an Estonian license. That was one thing that was changed with the law.　　Authorities in Estonia intend to

2022-03-13Deep Dive

Real-World Use Cases for Smart Contracts and dApps

Introduction: What Are Smart Contracts？　　Smart contracts are one of the key components of many blockchain-based ecosystems, and an especially important element of many application-focused blockchains like Ethereum. These digital contracts are trustless, autonomous, decentralized, and transparent — and are usually irreversible and unmodifiable once deployed. Smart contract advantages include reducing — or even removing — the need for intermediaries and contract enforcement in an agreement or transaction. Thats because with a smart contract, the code defines the mechanisms of the transaction and is the final arbiter of the terms. For this reason, smart contracts have become the building blocks of an entire ecosystem of decentralized applications (dApps) and represent a major focal point of blockchain development in general.　　A solitary smart contract can only be used for one transaction type: If something happens, then something else happens. However, most dApps work by bundling smart contracts together to enable a sophisticated, synergistic set of functionalities. There are thousands of dApps across various blockchain networks, including finance, gaming, exchanges, and media — and they can all utilize smart contracts in different ways and to different ends. Examples of smart contract applications include financial purposes like trading, investing, lending, and borrowing. They can be

2022-03-11Deep Dive

Can crypto help Russia avoid sanctions?

According to an analysis by Robert A. Schwinger, in the case of North Korea and Venezuela, the entities involved in using cryptocurrencies to avoid sanctions were seriously charged for their actions. The paper also finds specific laws and rules directed against methods that help countries avoid sanctions. In some of the cases where an entity has been seen violating sanction programs, regulators have imposed civil liability against such crimes.　　For example, BitPay was fined US$507,000 in February 2021, and BitMEX founders recently pleaded guilty to violating the U.S. Bank Secrecy Act and agreed to pay a fine of US$10 million.　　In addition to keeping an eye on the crypto transactions, U.S. lawmakers have guidelines in place that require crypto service providers to take necessary security measures to ensure they dont help facilitate deals with prohibited entities. Any violation could lead to both civil and criminal penalties.　　Laws are in place if Russia tries to circumvent sanctions via cryptocurrencies. But more importantly, tools are available for companies to put in alert for any transactions “intersecting with sanctioned entities,” said Caroline Malcolm, head of international policy at Chainalysis, a blockchain analytics firm.　　But, we still left the part where the government and citizens could use privacy

2022-03-11Deep Dive

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