1) The war between governments vs cryptos is here.
So the war between governments vs cryptos have officially begun. The list of how many platforms & people are affected just this week is as below:
(i) Coinbase
Coinbase has received a Wells notice from the SEC, meaning that the SEC are ready to take enforcement action for possible violations of securities laws, targeting their Coinbase earn & wallet services that enables customers to earn a yield by staking. If you don’t know what does a Well’s Notice mean, it’s basically:
A letter that the US SEC sends to people or firms at the conclusion of an SEC investigation that states the SEC is planning to bring an enforcement action against them, while also concluded the people or firms are to be charged with violation of the securities laws.
(ii) Sushiswap
Mr Gary Gensler here has amplified his stands that “all staking services or tokens are securities because it falls under the Howey test”, not just by going after Coinbase, but also Sushiswap, one of the largest decentralized exchanges in the Ethereum-compatible blockchain ecosystem, where their platform & founder had recently served with an SEC Subpoena.
(iii) Tron & Justin Sun
Next in line, Justin Sun, the founder of the Tron network, is also being sued by the SEC for allegations of selling and airdropping unregistered securities, fraud and market manipulation. Tron’s token TRX & BitTorrent’s token BTT are deemed as unregistered securities by the SEC.
For those whom are unaware, yes BitTorrent, to which you used it to download your free pirated movies & games since your childhood, is actually a platform that is sold to Tron back in 2018 for $ 140 million and has a token called BTT, whereby downloaders can pay to seeders in exchange for higher Torrent download speeds, and the token is registered as a TRC-20 (Tron’s token standard).
Tron has faced many controversies and has been unloved by many crypto communities. I found a list of news that you can refer to:
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Tron’s Jusin Sun Accused of Governance Attack on DeFi Lender Compound
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Tron Project Accused of Misleading Developers in $1 Million Dapp Contest
To put the icing on the cake, back in 2020, I have also written an extensive article talking about my TRON experience and why their DeFi platforms are basically like casinos and eventually I quit using them a long time ago.
(iv) Popular celebrities linked to Tron
Similarly with Justin Sun, the SEC is also suing popular celebrities such as Lindsay Lohan, Jake Paul, Soulja Boy, Austin Mahone, Ne-Yo and Akon for being paid to promote TRX & BTT tokens on social media.
(v) Do Kwon, Terra Luna Founder
Do Kwon, the founder of Terra Luna, was finally arrested in Montenegro for fraud cases including commodities, securities, wire frauds, conspiracy to defraud investors and engage in market manipulation, including the fall of Terra Luna that caused a huge wave of financial losses & bankruptcies. You can re-read a summary here if you’re under the rock and needed a refresher.
We’re bound to see more of these coming from the SEC in the coming months as they have a strong intention to bring crypto down for good. However, for the good of the financial sovereignty for everyone & upholding the permissionless nature of the blockchain & cryptocurrency technology to give everyone equal access to financial services, we need to keep on pushing to build great crypto products & services that are able to help these people, while educating the people of holding fiat vs holding other financial assets so that they will make better decisions in the management of their own wealth. The more people realizing the systematic failures of the banking system, the more people will appreciate the importance of total control of their wealth.
2) Indonesia Transitioning Away from Visa and Mastercard, Introducing New Payment System
Indonesia’s President, Joko Widodo, has reportedly asked local agencies to begin transitioning away from international payment processors such as Visa and Mastercard, while they have plans to introduce a domestic credit card system allowing for greater independence and lower fees.
The reason reported was that the country wants to become less reliant on external financial platforms like Visa & Mastercard, while taking lessons from Russian sanctions by the US to increase the country’s independence in financial transactions, while also shielding transactions from geopolitical fallout. This move will allow transactions to be settled locally rather than by foreign providers.
It would be interesting to see if they are also integrating blockchain technology to settle transactions more efficiently, while the absence of middlemen is also an advantage for Indonesia to achieve financial independence. Furthermore, they can also build a better, more transparent & auditable financial system that everyone, including the government, can verify.
So far, I found an association called the Asosiasi Blockchain Indonesia, to which they are a non-profit organization that aims to mobilize blockchain technology actors in creating a quality business environment that spurs the understanding, utilization, progress and competitiveness of blockchain technology. Let’s hope Indonesia will be able to set a standard for others to follow.
3) El Salvador president readies bill to eliminate taxes on tech
El-Salvador, one of the pioneers that adopts Bitcoin as legal tender in 2021, is planning to become a tech-tax-free nation with President Nayib Bukele saying that he’ll be sending a bill to congress to eliminate all taxes, including income, property, capital gains & import tariffs on technology innovations.
This move may lower the barriers of entry for more tech startups to build products & services, while also attracting developers to earn a living in El Salvador. While Bitcoin is already a legal tender in El Salvador, we may also see salaries being paid to developers in Bitcoin which is also a global currency that can be accepted all around the world. Anyone, no matter where they are from, are able to send money back to their homes as long as they have Bitcoin wallets.
According to Deloitte, their standard corporate income tax is 30%, capital gains tax rate is 10%, while individual income tax rate ranges from 0% to 30% depending on income level. With the proposal of turning El Salvador into a “Bitcoin City”, most taxes will be eliminated except Value Added Tax (VAT), meaning the prices may become more expensive due to VAT but residents will also have more buying power for paying significantly lesser taxes.
While I’m glad to see a country adopting cryptocurrencies as legal tender, El Salvador is also being touted as a popular spot to experience great outdoors & cheaper prices, which further enhances the attractiveness for tech developers & startups to migrate to El Salvador. Let’s hope El Salvador may set a good example to other countries on implementing a financial system with cryptos as legal tender.
4) PM Malaysia to “decentralize” business monopolies
To roundup this week’s Pizza bits with a local news, Malaysia Prime Minister, Anwar Ibrahim, has said the government is reviewing all monopolies, to ensure better and fairer services for the public. In crypto terms, our government is planning to “decentralize” business competition so that no single entity will be monopolizing one sector of the business, which is reflecting the principles of what blockchain technology brings. This will be a great step towards building a fairer competition among businesses which may spur better innovation and growth of a nation.
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