Global Crypto Tax is Coming - Get Ready! 😱
The government giveth, the government taketh away.
That’s exactly what seems to be happening around the world as nations are trying to recoup some of the stimulus spending they dolled out during the pandemic. And, they plan to do this with some pretty extensive tax overhaul.
Us crypto users are not immune to this. In fact, given the misconceptions that are usually created around crypto’s use, regulations around the taxing of it are likely to be even more stringent.
This was made pretty clear in a recent report released by the Organisation for Economic Co-operation and Development (OECD) - another large, unelected and unaccountable global organisation.
What’s particularly interesting here is that the OECD has been working on these global crypto tax standards ever since 2020 and the recommendations in this report are likely to get rolled out in the next two years.
In my video today, I break down the report and dive into some of the most important sections. I also let you know exactly what this could mean for your crypto taxes and the broader crypto markets as a whole.
You can watch that here.
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📈 Guy’s Forward Guidance 📈
Like most crypto holders, I’ve been thinking about which domino will be the next to fall in the aftermath of FTX and Alameda Research. So far, it’s been mostly crypto companies and platforms going down with the SBF ship. A few crypto projects have been affected too, but nothing major… yet. Now, call me crazy, but this leads me to believe that a big crypto project is about to get rekt. XRP is at the top of the list, given the SEC’s ongoing lawsuit against Ripple. I’ve had XRP in the back of my mind since I saw the crypto industry rallying behind Ripple. Was it a sign that Ripple was in trouble, not that it was winning?
If you watched our recent Cardano update, you’ll know that Cardano founder Charles Hoskinson said he heard that the outcome of the SEC’s case against Ripple would be announced on the 15th December. Well, it’s been four days, and there’s been no news yet. It’s possible that Charles was just rambling, but I think it’s more likely that he was just given a range of dates (like the outcome could be announced as soon as the 15th December, but not necessarily on that day). I’m starting to believe this is the case because of cryptic tweets that have been made by Messari CEO Ryan Selkis over the last week.
On the 13th December, Ryan tweeted one of my favourite memes of the past two years, warning that bad news for ‘daisy chains’ was on the way, but saying that he couldn’t share what exactly for legal reasons. According to Investopedia, a daisy chain is when a group of investors artificially inflate the price of an asset. Obviously this kind of stuff is common in cryptocurrency, especially altcoins. This suggests that the ‘daisy chains’ Ryan is referring to are altcoins. If this is the case, then his crypto tweets could be in relation to the outcome of the SEC’s case against Ripple, and this seems to be more likely than not.
Consider that Ryan tweeted that the next week would be bad for daisy chains on the 15th December. This seems to be the earliest day the outcome of the case could have been announced, assuming Charles’ source of information was accurate (which is likely). All Ryan has been saying since then is that ‘no news is good news’, which could of course apply to anything. Full disclosure, we heard through the grapevine that Digital Currency Group may also be in trouble. I must stress that we heard this through someone who heard through someone, etc. This means it may not be accurate, but Ryan has also been tweeting about Grayscale. If you want more information about what’s going on at Grayscale then you can watch my previous video on it.
Speculation aside, Ryan’s tweets lead me to believe that something big is coming up, and the sell-off we’ve seen over the last couple of days could be the smart money getting out. To be fair, the stock market has also been collapsing since the Fed confirmed it would be continuing on its hawkish path. There was also a massive options expiry in stocks that happened on Friday, and a chap on the Real Vision podcast predicted it would result in a lot of selling. He also noted that there was next to no support between 3800 and 3600 on the S&P 500. This could take stocks back down to multi-year lows, and do the same to crypto.
However, this doesn't change the fact that all the conditions are present for a crypto crackdown of some kind. Recall that the SEC served Ripple on the 22nd December 2020, just three days before Christmas. To my mind, the only reason you’d do something like that is to demoralise your enemy. I would argue that regulators are especially interested in demoralising the crypto industry today. That’s because this time they have the support of the people who were hurt by Terra, Celsius, FTX, etc. After all, we are in the ‘then they fight you’ phase. Demoralising the entire crypto industry before Christmas could be their next move.
Ho, ho… oh.
🇺🇸 Central Banks vs. Inflation 🇺🇸
As almost all of you will know, central banks around the world have been raising interest rates to fight inflation. This is because raising interest rates makes it more expensive to borrow, and also makes existing debt more expensive. The result is a decrease in consumption, which lowers inflation (in theory). Central banks call this ‘demand destruction’, and it’s something they’ve done many times before. But, what about the supply side?
If you’ve been keeping up with the channel, you might recall that viral video we did about Blackrock predicting the fiscal and monetary response to the pandemic before it happened. The main takeaway for me is something that I heard many times before but never took seriously: the elites need inflation. This is because most governments, corporations and even ‘the rich’ are massively in debt, and inflation erodes the actual value of that debt.
As it so happens, many financial analysts and institutions have been predicting that inflation will not come back down to the 2% target set by central banks. Although none have yet budged on that 2% target, the European Central Bank seemed to step in that direction last week when it noted that inflation in the Eurozone would stay above 2% until at least 2025. Even Jerome Powell is slowly beginning to admit that a 3% target isn’t the end of the world.
It's stuff like this that makes me wonder: are the central banks truly serious about fighting inflation? Because it’s starting to look like they are trying to keep inflation high enough for the elites to devalue their debts, but not so high that the resulting interest rates cause their friends on Wall Street and in Washington to default on their debts. Luckily for the elites, they received most of the trillions of pandemic stimulus. Over 10 trillion dollars went out in the first two months alone!
Meanwhile, the average person was led to believe that low interest rates would stay, and were encouraged to take massive amounts of debt. Most of this debt came in the form of mortgages, and now the housing bubble is starting to burst. Moreover, much of the stimulus people received went into stocks. Millionaires and billionaires subsequently cashed out shortly before the Fed announced its inflation fight, including Tesla CEO Elon Musk.
If you were to explain this series of events to someone from another planet, they would tell you that the elites set the whole thing up. They knew their debts were getting too large and needed an excuse to cause inflation. They knew they needed lots of money to endure the high interest rates that would inevitably come. They knew that inflation would have to stay high for a long time to devalue that debt. Greenflation suddenly starts to make sense!
📲 The Case That Could Kill Social Media 📲
In 2015, a young American law student, Nohemi Gonzalez, was killed in an ISIS attack in Paris. Her tragic death saw her family suing tech giant Google (Gonzalez v. Google), claiming that it was liable for her death.
Well, her family believes that Google and its subsidiary YouTube must be held accountable for their algorithms that recommend videos to users. While these algorithms help drive better user experience, they also tend to make harmful content more accessible to those that might be looking for it.
Specifically, Nohemi’s family believes that the “ISIS videos” recommended by YouTube helped drive the terrorist organisation’s recruitment and ultimately facilitated the Paris attack. This has triggered a series of questions that could fundamentally change the way social media platforms handle user content.
To give you more context, social media and internet platforms in the U.S. have firmly relied on Section 230 of the Communications Decency Act (CDA) to escape liability when it comes to content posted by users of their platforms.
Section 230, also known as the 26 words that created the internet, was introduced back in 1995 when Congress rewrote the telecommunications law for the first time in 60 years. Essentially, it allowed “interactive” online platforms such as forums and read-write webpages to gain immunity from any content posted by users of the platform.
This has kept organisations like YouTube, Twitter and Instagram well protected when it comes to lawsuits regarding content on their platforms. If you’re wondering why this protection is important, the story behind that can be traced all the way back to a bookstore owner in 1959. But that’s a story for another day.
What’s important now is that in October this year, the Supreme Court of the United States (SCOTUS) agreed to hear Gonzalez v. Google. Now, this is quite significant, as this is the first time SCOTUS will look into and decide on the scope of Section 230 of the CDA.
The court will analyse and decide if algorithmic suggestions do, in fact, come under the protections afforded to online platforms. The outcome of the case could potentially have significant implications for YouTube and other social media platforms.
Without the protection afforded under Section 230, YouTube and others could potentially be held liable for any illegal or harmful content that is posted by their users. This could trigger a number of changes, including increased moderation and censorship of user-generated content in order to avoid legal liability.
Above all, I reckon it will make online platforms more hesitant than ever when it comes to hosting certain types of content. In such a scenario, it is reasonable to assume that the overall user experience on YouTube and other platforms will be severely impacted.
This would also have implications for the creators who depend on these platforms as a means of distribution and income. Not to mention the potential implementation of more advanced moderation and surveillance technologies. Privacy? What’s that?
That doesn’t sound like such a nice world for anyone. Does it?
Well, my deep dive into this case was prompted by a recent Cointelegraph article that made a case for decentralised social media platforms being the natural progression in the face of a potentially negative outcome for the case.
As you’re aware, I’m a firm believer in the future of decentralised everything, including social media. However, recent regulatory crackdowns on such “decentralised” entities have me questioning if this really is possible.
And, realistically speaking, it is unlikely that a single Supreme Court case could completely dismantle major social media platforms such as Facebook. While it certainly has significant implications for these companies, it is also important to consider the many other factors that contribute to the success or failure of a business.
In summary, I’ll be anxiously watching how all this turns out, and I reckon you should too.
🔥 Deal of The Week 🔥
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🔮 Video Pipeline 🔮
- Digital Dollar Project: What does it mean?
- BlackRock’ 2023 Predictions: What’s Coming?
- FTX Hearing Summary: What you need to know?
- SBF’s Leaked Testimony: Shocking revelations!
- FED Press Conference Analysis: My take!
🏆 What's New At CoinBureau.com This Week? 🏆
✅ OKX vs. Coinbase Review 2023: Which Crypto Exchange is Best?
That’s all for this week.
The team at Coin Bureau hopes you all have a delightful festive season. We would also like to thank you for all your support during these very testing times for crypto markets. This too shall pass.
Guy your crypto guy
Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.
Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.