February 17, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

• Police in Canada appear to be prohibiting companies registered with the country’s anti-money laundering authority from transacting with crypto addresses funding the “Freedom Convoy” protests.

• Taiwan plans to complete its CBDC simulations by September.

• $25 billion in crypto from illicit sources is held by a group of 4,000 criminal whales, says Chainalysis.

• The Financial Stability Board said that crypto could have a destabilizing effect on finance.

• A group of US Senators introduced legislation that would attempt to mitigate risk associated with El Salvador’s purchase of BTC.

• Audius is now allowing users to wrap its token, AUDIO, from Ethereum to Solana.

• Crypto VC firm Paradigm hired a high-school student as a research engineer.

Today in Crypto Adoption…

• Twitter added Ethereum addresses for tipping.

• Snoop Dogg wants to turn Death Row records into the first NFT music label.

• Warner Music Group will build a concert theme park in The Sandbox.

• Cosmetic giant L’Oréal filed 17 digital asset and NFT related trademarks.

The $$$ Corner…

• Castle Island Ventures, a crypto VC firm led by Nic Carter, launched a $250 million web3 fund.

• Red Bull signed a $150 million sponsorship agreement with Bybit.

What Do You Meme?

What’s Poppin’?

AML → Crypto Exchanges

Some of the largest companies in crypto have banded together to bring anti-money laundering technology to digital assets.

Eighteen companies formed the initial membership of the group, called Travel Rule Universal Solution Technology (TRUST), and include some of the biggest names in the industry. Anchorage, Avanti, Bitgo, bitFlyer, Bittrex, BlockFi, Circle, Coinbase, Fidelity Digital Assets, Gemini, Kraken, Paxos, Robinhood, Standard Custody & Trust, Symbridge, Tradestation, Zero Hash, and Zodia Custody make up the coalition.

The group was formed in order to implement the “travel rule” recommended by the Financial Action Task Force, which requires financial institutions to share information about customers with their transaction partners. In essence, the travel rule was not built for crypto – it is a holdover from the traditional financial world. It has been quite divisive among the crypto community for some time, as data security and anonymity are baked into the ethos of blockchain.

Coinbase, who is leading the coalition, explains that TRUST is built in such a way to “protect the security and privacy of our customers’ personal information.” To do so, the 18 members, each of whom is a centralized entity, have created a system that will…

1. send information directly from exchange – exchange via encrypted channels (and the receiver is expected to safeguard it)

2. make exchanges prove their identity before receiving customer information

3. where coalition members must meet core anti-money laundering, security, and privacy requirements through a partnership with compliance and risk management firm Exiger

And the group does not plan to stay at eighteen – or in the US. “The next step is adding new members, so that TRUST can provide comprehensive compliance across the crypto industry. The Travel Rule’s reach is expanding internationally, and so must the TRUST solution. TRUST is focused on expanding to many other jurisdictions this year,” concluded Coinbase in its launch statement.

Recommended Reads

1. Girl Gone Crypto on why hardware wallets are so important in light of Canada’s decision to halt BTC and ETH trades to trucker blockades:

2. Not Boring’s Packy McCormick on tokenomics resources:

3. @zachxbt on @ashwsbreal’s alleged pump and dump scheme:

On The Pod…

Your 2021 Crypto Taxes: How to Handle NFTs, DAOs, Airdrops and More

Two crypto tax experts, Shehan Chandrasekera, certified public accountant and head of strategy, Tax, at Cointracker, and John Cardone, senior director of Washington National Tax at RSM US LLP, explain everything crypto traders need to understand when filing taxes for 2021. Show topics:

• the five types of transactions that constitute a taxable crypto event

• how NFT taxes should be reported

• why the sale of collectibles (NFTs) is taxed differently than the sale of crypto property (tokens)

• what type of forms you might receive from crypto exchanges and why this information is usually incomplete

• why the crypto provision in the infrastructure bill most likely won’t affect retail traders

• why John wants a digital asset-specific 1099 form

• how staking income will be taxed this year (and why this might change soon)

• how to report taxes for…

  • airdrops like ENS and SOS

  • income earned via a play-to-earn game like Axie Infinity

  • the sale of virtual land

  • wrapping Bitcoin onto Ethereum

  • rewards received via a crypto credit card

• how to save money on taxes going forward

• how Shehan and John think crypto taxes will evolve

• why the IRS listed a job posting for someone who could exploit crypto wallets

Book Update

You can purchase it here: http://bit.ly/cryptopians