Last week [In] Crypto: Ethereum Merger, Crypto Sanctions, Illegal Crypto Mining
Over the past five months, authorities in Iran have arrested more than 9,000 illegal crypto mining rigs in Tehran. Be[In]Crypto has rounded up some of the most important stories from the past week in the crypto industry, in case you missed them.
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Ethereum is merging
Ethereum’s (ETH) developers have expressed concern about the network’s upcoming “Merge,” a transition from proof-of-work (PoW) to proof-of-stake (PoS) consensus. The merger is set to take place on or around September 15 and will see the ETH network shift from its current decentralized proof-of-work algorithm to a new proof-of-stake algorithm.
The co-founder of Ethereum, Vitalik Buterin, has always been an advocate of the PoS protocol. In his blog post from November 2020, he explained the reasons why he believes that PoS is a better system than PoW. These include security that is more secure “for the same cost,” decentralization, and attacks that make it easier to “recover from.”
Chainlink has taken to heart the announcement that they will be supporting the PoS chain after the merger. Ethereum is moving from being a network that needs miners to validate transactions, which is an energy-draining procedure, to one where so-called validators “stake” Ethereum tokens with the ability to approve transactions instead.
Crypto Sanctions
After a series of attacks on digital currency, governments around the world have come up with rules that crypto firms must follow. Reports describe that the $620 million stolen from the Ronin sidechain of Axie Infinity was transferred through illegal crypto mixers.
Private keys were used to withdraw ETH and USD Coin (USDC) from the Ronin sidechain, a crypto bridge created to help Axie Infinity players exchange tokens between blockchains.
On May 6, 2022, the US Treasury Department sanctioned Blender.io after it was revealed that the Bitcoin (BTC) mixing service had been used by North Korean hackers to launder funds for cybercrime. The Treasury Department said the mixer was processing $500 million in bitcoin transactions on Axie Infinity when the hack occurred.
In a letter to Treasury Secretary Janet Yellen, Minnesota’s 6th District Congressman Tom Emmer asked for an explanation for what he calls the unprecedented ban on a similar crypto mixer called Tornado Cash.
Growth of NFTs
Non-fungible token (NFT) platforms have recently seen rapid growth in recent months as users have shown great interest in buying, selling and trading these digital assets.
Recently, Nike, one of America’s most famous sports brands, has been discovered to be the world’s highest paying brand from the purchase of NFTs so far this year. The gaming company has topped the list of the highest earning brands of digital tokens. The company is the leader with a turnover of 185 million dollars, according to data from Dune Analytics.
Illegal Crypto Mining
Iran’s government has seized over 9,000 illegal crypto mining rigs in Tehran in the past five months, and many more are expected to be confiscated in other parts of the country.
This development comes after the Iranian government cracked down on crypto mining farms that used subsidized electricity to run their operations. In some cases, these farms stole electricity from state utilities. According to the Central Bank of Iran (CBI), cryptocurrencies are illegal to buy or sell in Iran, although it is legal to mine and use them to pay for imports.
The Islamic Republic of Iran recently placed its first import order, worth $10 million, using cryptocurrency, raising concerns about avoiding sanctions. According to the bank manager, those with official authorizations are allowed to mine digital currencies for this type of import.
Cryptocurrency scams
Crypto fraud has been a huge problem in the crypto space, with billions of dollars lost to fraudsters every year. This has become the main challenge for the investor within the crypto space and also for the authorities trying to control it.
In a report on August 22, the owner of a Bored Ape, purchased for $116,000, fell victim to a scam just two hours after the purchase. The latest Bored Ape instance is just one of several thefts that have taken place throughout August as ownership of one of the simian NFTs dwindles.
Fraudsters have stolen more than $100 million between July 2021 and July 2022. Last summer, NFT sales surged, leading to an influx of new investors and crypto enthusiasts unfamiliar with the space. Many of these individuals were swindled out of their investments.
Crypto innovations
Samsung is considering launching its own cryptocurrency platform next year, with the tech giant’s investment company planning to launch its own cryptocurrency. The South Korean giant has developed a wallet feature for its Galaxy line of smartphones, and a TV that supports NFTs and Cardano (ADA).
By 2023, six more prominent firms will have a crypto trading platform on the exchange, including Mirae Asset Securities. This can attract investors to the cryptocurrency company because investors will feel safer investing in a company with a good reputation. The news of Samsung’s cryptocurrency exchange has been welcomed by the crypto community as it will help legitimize the industry.
Japan to review corporate tax rules
The Japanese government’s Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) will examine corporate tax rates for crypto companies from 2023. The review will mainly focus on the crypto companies that provide cryptocurrency to raise funds used to build businesses.
The new system assesses whether companies that own digital tokens should only be taxed if a profit is generated when they are sold. The agencies claim that they do not want to hamper the growth of startups and hinder their work in Japan by having a double taxation system. In July 2022, crypto advocates in Japan called for tax cuts.
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