BITCOIN LAW

US Treasury and IRS Introduce Stricter Reporting Standards for Crypto Brokers

The Scoop: The U.S. Department of the Treasury and the IRS introduce regulations requiring brokers of digital assets, like Bitcoin, to adhere to strict tax reporting standards.

Central Objective: This move aims "to close the tax gap, address the tax evasion risks posed by digital assets, and ensure everyone plays by the same rules" as part of the Biden-Harris Administration's Infrastructure Investment and Jobs Act (IIJA).

Brokers' Obligations: Brokers, including digital asset platforms and payment processors, are now mandated to file returns and provide payee statements on certain digital asset transactions. A new Form 1099-DA will also be introduced for clarity on tax obligations.

Timeline and Feedback: Reporting will commence in 2026 for 2025's transactions. The expected revenue from these provisions could be $28 billion over a decade. Feedback is open till October 30, 2023, with a public hearing scheduled for November 7, 2023.

WHAT WE'RE WATCHING

🪨 BlackRock, the world's largest asset manager, is bolstering its Bitcoin strategy by investing in leading Bitcoin miners. Seizing the recent price dip, BlackRock expanded its stakes to 6.14% in Riot, 6.44% in Marathon Digital, 0.88% in Cipher Mining, and 2.88% in TeraWulf, totaling investments around $411.54 million. BlackRock is now a major shareholder in 4 of the 5 largest public mining companies.

📚 Bitcoin developer, Jimmy Song, releases new book: Fiat Ruins Everything. "Fiat Ruins Everything" discusses the debasement of modern life, from finance to culture, attributing societal decline to fiat systems. It analyzes how institutions deteriorate, leading to personal hardships, and promotes Bitcoin as a potential solution.

📊 JPMorgan predicts limited near-term downside for Bitcoin & crypto markets. attributing August's crypto correction to factors like tech positioning, U.S. yields, China's growth concerns, and SpaceX's Bitcoin write-off. The ongoing SEC vs. Ripple appeal could introduce future market uncertainty.

💾 Dropbox is ending its unlimited cloud storage offer on its Advanced plan, citing misuse by cryptocurrency miners and resellers. New customers will now receive a 15TB limit. Dropbox's decision comes in response to users leveraging the platform for cryptocurrency mining purposes and pooling vast amounts of storage for personal use or resale. The company mentions that customers misusing the offer consume storage vastly disproportionate to typical business users.

🇷🇺 Russian Foreign Minister Sergey Lavrov emphasized BRICS' intent to lessen reliance on the U.S.-controlled economic system. He mentioned possible alternatives, including a currency pool among member nations. The goal is to promote national currencies and an alternate payment system.

👛 Robinhood may hold a third-largest Bitcoin position with 118,000 BTC. The identity remains unconfirmed but aligns with Robinhood's reported $4.24 billion in Bitcoin.

👴 Chairman Patrick McHenry criticizes the Treasury and IRS's proposed rulemaking on digital asset reporting. He alleges it disregards bipartisan demands for clarity and alignment with Congressional intent. He advocates for his bill, the Keep Innovation in America Act, to rectify these issues.

FEDERAL RESERVE

Powell Stresses Concern Over Persistent Inflation, Reaffirms 2% Goal

The Scoop: Federal Reserve Chair Jerome Powell expressed concerns over the current state of inflation, emphasizing the need to achieve the 2% target. His recent speech at Jackson Hole reflected a firm commitment to bring inflation down to the desired levels.

In his Words: “It is the Fed’s job to bring inflation down to our 2% goal, and we will do so... Two percent is and will remain our inflation target.”

Stance: Powell mentioned the significant tightening of policy over the past year and indicated the possibility of more "restrictive monetary policy" to address inflation, hinting that rate cuts aren't on the horizon.

Forward-Looking: As the Federal Open Market Committee meetings approach in the coming months, Powell highlighted the challenges in determining the right monetary stance in real time. He emphasized that the Fed will depend on comprehensive economic data to guide their decisions but remained committed: “We will keep at it until the job is done.”

POLL

IN THE LOOP

📊 Our chart site, Bitbo, released three new charts: Bitcoin Price Year-Over-Year, Bitcoin Days Since All-Time High and Bitcoin price draw-down from high.

🛢️ India bought 1 million barrels of oil from the UAE using rupees, marking its first-ever transaction bypassing the US dollar. This follows a BRICS trend, with China also using its currency for energy purchases, emphasizing a shift from the dollar.

✉️ Binance experienced a swift withdrawal of $150 million in Bitcoin across five transactions within a minute. Amid challenges, including halting card services in several regions and ending a partnership with Mastercard, speculations arise about whales losing faith and possible market shifts.

Today’s newsletter was written by Jordan and edited by Colin.