Regulation
Rep. Wiley Nickel Urges SEC to Withdraw SAB 121
Congressman Wiley Nickel has called on SEC Chairman Gary Gensler to withdraw Staff Accounting Bulletin (SAB) 121. This request comes as a bipartisan Senate vote on nullification looms, highlighting significant concerns over the SEC’s approach to digital assets.
Rep. Wiley Nickel Calls for SAB 121 Reversal
Nickel’s request to withdraw SAB 121 marks a crucial point in the regulatory landscape. The bulletin has drawn criticism for its stringent guidelines on the accounting of digital assets. Bipartisan support for nullification in the Senate indicates substantial opposition to these guidelines, which many view as hindering innovation and growth within the digital assets sector.
Nickel’s critique focuses on the broader economic implications of the SEC’s policies. He believes the current regulatory environment is perceived as hostile by the digital assets industry, potentially undermining broader economic interests. Nickel stated that the SEC’s stance is not aligned with President Biden’s best interests, emphasizing the need for regulatory bodies to foster, rather than stifle, emerging technologies.
Tom Emmer, the House of Representatives majority whip, has also criticized Gary Gensler’s approach. Emmer argues that Gensler’s methodology conflicts with the SEC’s primary mission to protect investors, promote capital formation, and sustain fair, orderly, and efficient markets. Emmer expressed concerns that SAB 121 could lead to regulatory overreach.
Emmer emphasized that the SEC appears to be deviating from its statutory duties. He warned that the regulation restricting banks from effectively holding crypto assets might undermine market efficiency and investor confidence. This reflects a broader Republican concern about the potential negative impact of regulatory expansion on capital markets.
SAB 121 Faces Backlash from Crypto Sector
The crypto industry has also voiced opposition to SAB 121. Cardano (ADA) founder Charles Hoskinson criticized the Biden administration for what he sees as an attempt to “kill” the crypto industry. He called on industry stakeholders to stand up for their rights against what he perceives as unjust regulatory measures.
Hoskinson’s comments highlight a growing sentiment within the crypto community that the SEC’s actions are overly restrictive. Industry enthusiasts argue that such regulations could stifle innovation and hinder the growth of digital assets. The backlash against SAB 121 suggests that many within the industry believe that a more balanced approach is needed to support both regulation and innovation.
Also Read: Turn $1,000 Into $100,000 Buying 6 XRP Rivals As Ripple vs SEC Battle Escalates
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
This week is all set for some important events for the crypto industry as investors eagerly await the approval of the spot Ethereum ETFs. However, there are some key developments on the regulatory front as well with the US House voting to overturn Biden’s veto on SAB 121.
Will US House Overturn Biden’s SAB 121?
Ahead of this week either on Tuesday or Wednesday, the US House is likely to vote in order to overturn the SAB 121 veto. The SAB 121 has raised major concerns over the past week, especially within the crypto industry.
Many in the crypto market fear that the bulletin could prevent banks from offering crypto custodial services. According to the bulletin, crypto custodial firms must record their customers’ crypto holdings as liabilities on their balance sheets. However, the SEC has defended SAB 121, describing it as “non-binding staff guidance” that enhances disclosures to customers.
In May, the Biden administration decided to veto the decision by lawmakers to repeal the SAB 121 laws. However, the US House could decide to overturn this.
Also Read: Kamala Harris Overtakes Biden In Prediction Markets
All Eyes on CPI and PPI Data
Ahead this week, the US will release the CPI and PPI numbers for the months of June with the Fed chair Jerome Powell likely to deliver his semi-annual monetary policy testimony to the House Financial Services Committee. As of now, there are 50% chances of a 25 basis points rate cut by November this year.
Furthermore, on Wednesday, the Senate Agriculture Committee’s Oversight of Digital Commodities will have a hearing with CFTC Chairman Rostin Behnam. Furthermore, Representative Ro Khanna will have a crypto roundtable with key Democrats and billionaire Mark Cuban to stop Donald Trump’s crusade in crypto.
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Ro Khanna is currently engaging with top figures from the crypto industry, alongside White House officials and Democratic lawmakers.
Later on Thursday, there’s a Senate hearing for the renomination of SEC Commissioner Caroline Crenshaw and the nomination of Christy Goldsmith Romero, currently a CFTC commissioner, as the new FDIC Chair.
Ahead of the release of the US CPI, the broader crypto market has come under pressure with Bitcoin tanking by 5% on Sunday, and altcoins seeing an even steeper correction.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
The newly elected Indian government under Prime Minister Narendra Modi will present the Union Budget later this month on July 23. India’s crypto industry is looking forward to this budget with high hopes expecting some tax reliefs along the way. Furthermore, the crypto industry is also looking for clear guidelines from the Indian government.
India Budget: Will Govt. Reduce Crypto Tax Burden?
For the upcoming union budget, the crypto industry has a few hopes such as the reduction in crypto taxes, allowing the off-setting of crypto losses against the gains in a given financial year, as well as treating capital gains in crypto at par with other asset classes. Lastly, the industry expects India to build a conducive environment for crypto firms, in order to compete with other global economies.
Back in 2022, the Indian government had imposed a hefty 30% tax flat on crypto gains. This was irrespective of one’s income tax slab. Additionally, the government imposes a 1% tax deducted at source (TDS) on every transfer of crypto assets.
Ashish Singhal, co-founder of cryptocurrency app CoinSwitch, stated that to make the most out of India’s Web3 opportunity, the Indian government must reconsider the cryptocurrency tax treatment in the upcoming budget. He said:
“The flat rate of 30 percent applicable on income from the transfer of VDAs needs to be re-examined to ensure parity with other tech-enabled sectors. Additionally, the threshold of Rs 10,000 or Rs 50,000 can also be looked at. Most crypto sellers (mainly individuals) are in the low-income bracket. Increasing the threshold will reduce the administrative burden on the tax department in processing refunds”.
A key advantage of investing in traditional assets like stocks, gold, and bonds is the ability to offset losses in one asset against gains in another within the same year and to carry forward unadjusted losses for future adjustments. In contrast, losses from one crypto asset cannot be offset against gains from another, nor can they be carried forward. As a result, the industry is seeking a major revision to this rule.
Also read: CoinDCX Acquires BitOasis To Foray Into MENA Region
Furthermore, during the pre-budget consultations, the Bharat Web3 Association requested the government in order to reduce the TDS from 1 percent to 0.01 percent.
“The Indian VDA market has seen a sharp decline in business over the past two years since the 1 percent TDS and capital gains tax were implemented. The 1 percent TDS has significantly impacted our business. We expect the upcoming budget to address our grievances and reduce the TDS and capital gains taxes on VDA transactions to reasonable levels, allowing us a level playing field to function and prosper,” said Shivam Thakral, chief executive officer, BuyUcoin, a cryptocurrency exchange.
Learning Lessons from US Regulations
The US SEC’s approach to regulation through enforcement has faced a strong backlash from the crypto industry players in recent years. Such regulatory measures have forced several token innovators and crypto developers to set up their base outside the US.
One of the primary criticisms of US crypto regulation is the lack of clear, consistent guidelines. This uncertainty has placed startups and established companies in a challenging position, unsure of compliance requirements and wary of abrupt legal repercussions.
As India advances in shaping its crypto regulatory framework, it can draw lessons from the US to sidestep potential pitfalls and cultivate a more favorable environment for digital assets. India should aim for a balanced approach, akin to the Goldilocks zone, promoting innovation while safeguarding investors through regulations that are neither overly stringent nor lax.
Emphasizing the practical utility of blockchain technology beyond speculation can spur the creation of impactful solutions in sectors such as finance, supply chain management, and public administration.
Also Read: Voice of Web3 by Coingape : Showcasing India’s Cryptocurrency Potential
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
A wave of controversy has erupted in the crypto community as Celsius Network faces backlash for suing users who withdrew funds prior to the company’s bankruptcy. David Schwartz, the Chief Technology Officer of Ripple, has weighed in on the matter. Moreover, he offered insights into why Celsius might have taken such drastic action.
Ripple CTO On Celsius’ Latest Move
According to a user on X, Celsius Network has initiated lawsuits against numerous users in New York courts. The user expressed frustration, stating, “Celsius Network has officially sued me and thousands of innocent users… because we happened to take our money off the platform 90 days before they declared bankruptcy.”
The crux of the issue lies in the concept of “clawback.” Clawback provisions allow bankrupt companies to recover funds withdrawn by users within a certain period before the bankruptcy filing. In this case, the period is 90 days. Hence, Ripple CTO Schwartz emphasized the legitimacy of these actions in specific contexts, particularly regarding “non-existent ‘profits.’”
He stated, “If you withdrew fake ‘profits’ that were never actually earned or generated, then you didn’t withdraw your own money.” A user responded to the Ripple CTO, highlighting the perceived injustice. They wrote, “Clawback attempt for people who had withdrawn within 90 days of filing for BK. Absolutely disgraceful behavior.”
Schwartz tried clarifying the nuances by asking, “Are they just trying to clawback non-existent ‘profits’? Or are they trying to clawback returns of principal?” Further discourse revealed that Celsius is allegedly pursuing the return of both profits and principal amounts withdrawn within the 90-day period. The original poster detailed, “They started off asking for 27% of all principal as a settlement, which came across as a giant scam.”
Schwartz’s stance on such actions is clear: “Usually, in schemes like this, they don’t go after people who withdrew their own principal unless there’s evidence that they had inside information or connections.” Moreover, the lawsuit’s impact on users has been severe.
Also Read: XRP Price Decline To $0.40; Can The Ripple’s New Try It Feature Change That?
The Other Perspective
The original poster mentioned, “They are asking for outrageous sums of money, basically my entire net worth.” This sentiment is echoed by many in the crypto community, who fear the broader implications of such legal actions. Another user questioned, “Why would they let you keep profits off assets they are saying you didn’t have the right to have?”
Replying to the user, the Ripple CTO provided a different perspective this time. He argued that the losses suffered by users are a result of Celsius’ fraudulent activities. He stated, “Why should an innocent party bear the costs of Celsius’ fraud? Why should the victim have to suffer the additional loss of bearing the costs of a free option they never agreed to give anyone?”
The lawsuits have not only financial repercussions but also emotional ones. The original poster described the emotional turmoil caused by the lawsuits and the substantial legal fees incurred. “I have to spend thousands to retain an attorney,” they lamented.
As the crypto community watches closely, prominent figures like Coinbase CEO Brian Armstrong and TRON founder Justin Sun have been called upon to support the affected users. In addition, they also asked for aid from ZachXBT, a renowned crypto sleuth. The outcome of these lawsuits could set a significant precedent for the industry.
Also Read: Ripple CLO Slams US Authority Over Crypto Regulation Approach
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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