Argo Blockchain Installs 4,500 Crypto Mining Machines From Celsius Network

Argo Blockchain Installs 4,500 Crypto Mining Machines From Celsius Network

Bloomberg

(Bloomberg) – Bitcoin’s rally hit a speed bump as the world’s largest cryptocurrency witnessed its worst weekly decline in almost a year amid wider losses in risk assets.The digital token slumped 20% this week, the most since the pandemic-fueled selloff last March. The wider Bloomberg Galaxy Crypto Index, tracking Bitcoin, Ether and three other cryptocurrencies, was down 23% for the same period. Bitcoin fell 5% to trade at $45,672 as of 5:00 p.m. in New York, according to consolidated pricing compiled by Bloomberg.“It is a market that was ridiculously overbought and will probably be so once again in the not-too-distant future,” Craig Erlam, a senior market analyst at OANDA Europe, said in a note Friday.The rough patch for Bitcoin comes amid increased volatility in global markets, as a surge in bond yields heralds growing expectations that growth and inflation are moving higher and forcing traders to reevaluate their positions across multiple asset classes. The tech-heavy Nasdaq 100 dropped the most since October this week as stocks like Tesla Inc. and Peloton Interactive Inc. slumped.“Risk-on assets are taking a hit at the moment – we’re seeing stocks slide and crypto is following,” said Vijay Ayyar, head of Asia Pacific for cryptocurrency exchange Luno in Singapore. “The dollar is strengthening, which is a good indication to expect a slide in Bitcoin and crypto.”Bitcoin’s weakness in the face of market gyrations raises questions about its efficacy as a store of value and hedge against inflation, a key argument among proponents of its stunning rally over the past year. Detractors have maintained the digital asset’s surge is a speculative bubble and it’s destined for a repeat of the 2017 boom and bust.In a Flash, U.S. Yields Hit 1.6%, Wreaking Havoc Across MarketsWhile Bitcoin is often touted as the new “digital gold,” the yellow metal is winning out at the moment with spot gold trading at $1,734 per ounce, down about 3% for the week. The Bloomberg Dollar Spot Index is up 0.9% in the same period, its strongest gain since October.Heavy selling in the Grayscale Bitcoin Trust, the world’s largest such fund, as well as the expiry of Bitcoin options are also contributing to the volatility, Ayyar said. The trust has slumped 24% this week, with losses racing past its underlying asset, as a once-massive price premium over Bitcoin turned negative as investors cashed in on those gains, he said.Prominent figures across the financial world have also recently weighed in on Bitcoin.Tesla chief executive Elon Musk said the prices “seem high” on the weekend, seen by some as an initial catalyst for the week’s selloff. Ark Investment Management’s Cathie Wood later said in a Bloomberg interview she was “very positive on Bitcoin” but didn’t disclose whether Ark had made a purchase.Earlier this week, Microsoft Corp. co-founder Bill Gates said in a Bloomberg Television interview he wasn’t a fan of Bitcoin, while Treasury Secretary Janet Yellen said the token was an “extremely inefficient way of conducting transactions.”(Updates prices, chart)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

SEC Inspectors Outline Crypto Examinations Playbook in Compliance Notice

Examiners at the U.S. government’s top securities watchdog outlined their framework for vetting digital asset investments in a compliance notice Friday.

Naming custody, record keeping, registration requirements and conflicts of interest protocols on their exhaustive list of focus areas, officials from the Securities and Exchange Commission’s (SEC) Division of Examinations reminded mainstream financial players like broker-dealers and investment advisors to tread carefully when bringing digital asset products into the traditional financial world.

The release, which did not appear to be targeted at any one event, nonetheless comes as ever more U.S. corporates grapple with how to handle their digital asset endeavors without stoking regulatory ire.

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On one end of this spectrum is MicroStrategy’s ban on employees trading bitcoin ahead of potentially market-moving corporate buys. And on the other is Tesla CEO Elon Musk, who yesterday expressed hope that rumors are true the SEC is investigating his DOGE tweets, which tend to precede with price jumps.

SEC examiners framed the notice as a reminder of the novel risks associated with distributed ledger technologies and digital assets, and of the responsibilities market participants have to hedge those risks with thorough compliance frameworks.

Crypto Tax 2021: A Complete US Guide

Crypto tax season is fast approaching. With so many investors entering the crypto market the past year, that means dealing with a new asset class on their taxes. And even for seasoned investors, the regulatory landscape changes all the time. Here’s what you need to know about filing crypto taxes for 2020.

The U.S. Internal Revenue Service (IRS) in 2014 decided bitcoin and other cryptocurrencies should be treated as “property”, meaning they qualify for capital gains treatment similar to traditional assets like stocks and bonds. There are, however, some instances where certain activities involving digital assets are treated as income and therefore subject to income tax.

What crypto actions are taxable events in the United States?

Capital gains tax events involving cryptocurrencies include:

Selling cryptocurrency for fiat (U.S. dollar, British pound sterling, Japanese yen, etc.)

Using cryptocurrency to purchase goods and services.

Trading or swapping one crypto asset for another, either on an exchange or directly peer-to-peer.

Income tax events include:

Receiving cryptocurrency from an airdrop

Any crypto interest earnings from decentralized finance (DeFi) lending

Crypto mining income from block rewards and transaction fees

Crypto earned from liquidity pools and staking

Receiving cryptocurrency as a means of payment for carrying out work, including bug bounties

It’s worth noting that any losses incurred from trading can be used to offset your capital gains as well as deduct up to $3,000 off your normal income tax depending on how long you’ve held the assets for (see below). Any additional losses can be carried forward to the next tax year. You do, however, have to show a loss across all assets in a particular class to qualify for a capital gains reduction.

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Example:

Bob owns a selection of crypto assets and company stocks. His company stocks performed well over the year and Bob made a $10,000 profit, which he cashed out and is subject to capital gains tax. Bob’s crypto assets, however, performed badly, and he lost $14,000. So he decided to cash out.

Because Bob had a net loss across all of his capital assets (crypto and stocks) he’s able to completely offset the capital gains owed for his $10,000 profit to zero, plus use the remaining $4,000 to reduce his ordinary income tax by the maximum amount of $3,000 and carry the remaining $1,000 over to the following year.

How much tax will you pay?

In the United States, how much capital gains tax you owe for your crypto activity depends on how long you’ve held your assets and in which income tax bracket you are.

This is divided into two parts:

Short-term capital gains : Any gains or losses made from a crypto asset held less than a year are taxed at the same rate as whatever income tax bracket you’re in. A full list of tax brackets for 2020-21 can be found here. Any losses can be used to offset income tax by a maximum of $3,000. Any further losses can be carried forward as mentioned above.

Any gains or losses made from a crypto asset held less than a year are taxed at the same rate as whatever income tax bracket you’re in. A full list of tax brackets for 2020-21 can be found here. Any losses can be used to offset income tax by a maximum of $3,000. Any further losses can be carried forward as mentioned above. Long-term capital gains: Any gains or losses made from a crypto asset held for longer than a year incurs a much lower 0%, 15% or 20% tax depending on individual or combined marital income.

U.S. long-term capital gains tax brackets (Internal Revenue Service) Source: Internal Revenue Service

Losses from exchange hacks or theft

The significant changes to tax law from December 2017 confused many crypto investors who had been subject to scams, hacks or other ways to lose crypto investments.

The amended law limits personal casualty losses to a “federally declared disaster.”

Many crypto investors and accountants mistakenly thought this limitation would apply to their crypto investments. However, this is not the case, according to the legal team at CryptoTaxAudit.

Crypto investment losses are not “personal casualty losses.” Instead, they are classified as investment losses under tax code 165(c)(ii) because they are “transactions entered into for profit, though not connected with a trade or business.”

As a result, all crypto losses in scams, thefts, or accidents are complete tax losses. These losses can be claimed on form 8949 as $0 proceeds transactions. This means that if you bought one bitcoin for $15,000 and it was stolen through an exchange hack, you would be able to report a loss of $15,000.

Deducting Ponzi scam losses

Ponzi scam losses can be treated as itemized deductions and are not subject to the $3,000 capital loss limitation. The amount invested in the scam can be deducted from your taxable income. This treatment is also known as the “Bernie Madoff deduction,” named after the former chairman of the Nasdaq stock market, Bernard Madoff, who was convicted for running one of the biggest financial fraud operations in history. The key requirement is that someone must have been indicted for the loss to qualify as a Ponzi deduction.

How to prepare for crypto tax season

Now that you know how your crypto assets are taxed, here’s what you need to do in order to prepare, file and pay your taxes:

Keep a record of all your cryptocurrency activity : The IRS requires all crypto users to keep an accurate record of all cryptocurrency purchases and sales, including airdrops, lending interest and all other activities mentioned above under capital gains and income tax events. Most leading crypto exchanges and platforms have built-in tax reporting features that automatically generate reports for you. However, there are also third-party services that offer to do all the leg work for you (see below).

The IRS requires all crypto users to keep an accurate record of all cryptocurrency purchases and sales, including airdrops, lending interest and all other activities mentioned above under capital gains and income tax events. Most leading crypto exchanges and platforms have built-in tax reporting features that automatically generate reports for you. However, there are also third-party services that offer to do all the leg work for you (see below). Calculate your gains and losses: Once you have your full transaction report, you can use a number of services or tax calculators to work out what you owe or do it manually depending on how many trades you’ve made in the year. The amount is found by finding the difference between the price at which you sold and the cost basis (the original price you paid).

Once you have your full transaction report, you can use a number of services or tax calculators to work out what you owe or do it manually depending on how many trades you’ve made in the year. The amount is found by finding the difference between the price at which you sold and the cost basis (the original price you paid). Fill in Form 8949 and add it to Form Schedule D: Form 8949 is the specific tax form for reporting crypto capital gains and losses. The Schedule D form is the main tax form for reporting overall capital gains and losses. Any cryptocurrency earned as an income needs to be added to Schedule 1 Form 1040, and self-employed earnings from crypto need to be added to Schedule C.

Form 8949 is the specific tax form for reporting crypto capital gains and losses. The Schedule D form is the main tax form for reporting overall capital gains and losses. Any cryptocurrency earned as an income needs to be added to Schedule 1 Form 1040, and self-employed earnings from crypto need to be added to Schedule C. Submit forms and pay any tax owed.

Crypto tax services for U.S. citizens

The following platforms offer a range of crypto tax services and can take care of the entire process for you: