🔔 MARKET MOVING NEWS! (28/12/24)
1️⃣ IRS Issues Rules On Digital Asset Reporting, Says Front-Ends Are Brokers ‼️
The United States Internal Revenue Service (IRS) has reportedly issued final regulations that require brokers to disclose gross proceeds from sales of cryptocurrencies and other digital assets, including information regarding taxpayers involved in the transactions. Notably, this also expands existing reporting requirements to include front-end platforms of decentralised exchanges (DEX). If implemented, front-end interfaces of popular DEXs like Uniswap may soon be mandated to conduct Know Your Customer (KYC) processes on its users. The new rules will begin to apply to digital asset sales starting in 2027. According to the IRS, there are between 650 and 875 estimated DeFi brokers that will be affected by these final regulations. It also estimates that the new regulations will affect up to 2.6 million taxpayers.
2️⃣ Crypto Industry Calls On Congress To Block New DeFi Broker Rules ▶️
The new IRS rules classifying front-end interfaces of DeFi protocols as brokers has reportedly triggered immediate backlash within the crypto industry, with calls for the incoming Congress to overturn the new rules. Notably, many legal experts have taken to social media to suggest that the IRS may be overstepping its authority and infringing constitutional rights.
Jake Chervinsky, chief legal officer at venture capital firm Variant stated,
This unlawful rule is the dying gasp of the anti-crypto army on its way out of power. It must be struck down, either by the courts or the incoming administration.
3️⃣ US-listed Bitcoin, Ether ETFs Tally $38.3B Net Inflows In Launch Year 📊
According to Farside Investors, United States spot Bitcoin exchange-traded funds (ETFs) and spot Ether ETFs recorded a staggering $35.66 billion and $2.68 billion in net inflows in 2024. Notably, spot BTC ETF inflows far exceeded early industry estimates. The top contributors to the net inflows are as follows; BlackRock’s iShares Bitcoin Trust ETF (IBIT) with $37.31 billion in net inflows, Fidelity Wise Origin Bitcoin Fund (FBTC) with $11.84 billion, ARK 21Shares Bitcoin ETF (ARKB) with $2.49 billion, and Bitwise Bitcoin ETF (BITB) with $2.19 billion. These net inflows smashed an earlier $14 billion first-year estimate from Galaxy Digital’s research head Alex Thorn.
4️⃣ Bitget To Burn 40% of Total Supply of BGB And Introduce Quarterly Burns 🔥
Crypto exchange Bitget has announced plans to burn 40% of the supply of its native token ‘BGB.’ It also stated that it will introduce quarterly burns of the BGB token by allocating 20% of profits from its exchange operations and its separate crypto wallet for this purpose. The token buy back and burn program is expected to start in 2025. Notably, the latest announcement follows a previous announcement that revealed it was going to merge the Bitget Wallet Token (BWB) with BGB. The company clarified that the merger will not affect the total supply of BGB.
