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ECP NetHappenings
Final Broker Rule, Prometheum, Tether
Final “Broker” Rule from IRS
Final “Broker” Rule from IRS delivered this past friday 12/27/24 on a Christmas / New Year holiday as the democrats are thrown out and the Trump people take over. This is the last salvo from Warren’s Choke point hold over the Crypto industry, meant to kill the industry and starts in 2027. However it is lousy law written by obviously ignorant staff people who don’t know what they are doing, and will get over turned in court.
Treasury Department, IRS Issue Final Regulations and Transitional Guidance for Digital Asset Brokers
https://www.cooley.com/news/insight/2024/2024-07-11-treasury-department-irs-issue-final-regulations-and-transitional-guidance-for-digital-asset-brokers
On June 28, 2024, the US Department of the Treasury and IRS issued final regulations providing guidance on tax reporting requirements applicable to certain “brokers” of digital assets.
IRS uploads finalized ‘broker rule’ for digital assets to the Federal Register for publishing on Dec. 30, 2024 as part of a friday dump this rule is extremely burdensome and i’d guess this will be put to a Congressional Review Act (CRA) process in the next Congress
The abrupt emergence of a previously-unknown broker dealer that happened to specifically agree with the totality of S.E.C. Chair Gensler’s views on the securities status of digital assets raised eyebrows in 2023, particularly when the unknown firm was granted the first of a new class of broker dealer licenses. The CEO was berated before Congress by Republican members of the House Financial Services Committee, and according to FINRA records, Prometheum’s alternative trading system (ATS) has yet to conduct any trades. Republicans have called on the DOJ and SEC to investigate Prometheum for “ties to China,” while others have noted irregularities in their fundraising and reporting. Whether or not Prometheum is investigated, it’s likely that the special-purpose broker-dealer license is abolished in 2025. – @intangiblecoins
INDUSTRY GROUPS SUE
Industry groups sue to stop IRS from collecting user info from DeFi front-ends
https://www.theblock.co/post/332523/industry-groups-sue-to-stop-irs-from-collecting-user-info-from-defi-front-ends
The controversial rule’s finalization was met with widespread criticism from crypto industry experts, who argue that the rule would create an undue burden on certain DeFi protocols to collect, protect, and report sensitive personal information on users, even when it’s unclear which entity would perform those functions.
Industry Fights Back on Final “Broker” Rule from IRS
In order to protect DeFi and the digital asset industry more broadly, we sued Treasury and IRS today challenging their doomed rulemaking, which would essentially serve as a DeFi ban.
Along with @BlockchainAssn & @TXblockchain_, we asserted claims that the rulemaking is in excess of the agencies’ statutory authority, is a violation of the Administrative Procedure Act (APA) and is unconstitutional. https://www.defieducationfund.org/_files/ugd/84ba66_b6af3a8d9414462d8a34897cfec39c5e.pdf
The IRS’ midnight broker rule still targets software providers with unfit and unconstitutional KYC requirements
What it means and what happens next. The whole rule is ill considered and should be overturned by Congress
REVENGE: THE INDUSTRY FINALLY INVESTIGATES PROETHEUM
“Republicans have called on the DOJ and SEC to investigate Prometheum for “ties to China,” while others have noted irregularities in their fundraising and reporting. Whether or not Prometheum is investigated, it’s likely that the special-purpose broker-dealer license is abolished in 2025.”
22 – The S.E.C. will open an investigation into Prometheum, the first so-called “special purpose broker dealer.”
MORE ABOUT PROMETHEUM
and it’s known ties to China
Prometheum Inc regulatory status
ECP NetHappenings @BoringSleuth vs. Prometheum Inc.
ECP NetHappenings BoringSleuth comments on Prometheum EthGate
ECP NetHappenings Historic Moments, Security, and Liars
ANOTHER PLAYER
Tether’s USDT Stablecoin
@martypartymusic
https://x.com/martypartymusic/status/1873078398429360264
The facts.
The non-compliance of Tether with the Markets in Crypto-Assets (MiCA) regulation by December 30, 2024, has implications for Tether’s USDT stablecoin in the European Union:
Regulatory Compliance: MiCA introduces a comprehensive regulatory framework for crypto assets in the EU, specifically addressing stablecoins like USDT. By December 30, 2024, issuers of stablecoins are required to comply with MiCA’s rules, which include obtaining necessary licenses like an Electronic Money Institution (EMI) license, maintaining transparent reserves, and adhering to strict governance and risk management protocols. Tether has not obtained these licenses, thus facing potential exclusion from the EU market.
Delisting from Exchanges: Several crypto exchanges within the EU have already taken or are considering actions to delist USDT to comply with MiCA.
@coinbase, for instance, has preemptively delisted USDT from its platform for EU users, citing compliance with MiCA. This trend suggests that other exchanges might follow suit, potentially leading to a significant reduction in USDT’s liquidity and availability within the EU.
Market Impact: The potential delisting of USDT from EU exchanges could lead to a shift towards MiCA-compliant stablecoins like @circle’s $USDC and $EURC, which have already secured the necessary licenses. This shift might disrupt market dynamics, affecting trading pairs, liquidity, and overall market efficiency for EU traders.
Tether’s Response:
@Tether_to has been investing in and supporting initiatives that align with MiCA, such as through @Quantoz and @StablREuro, to introduce MiCA-compliant stablecoins like EURQ and USDQ. This indicates a strategic pivot towards compliance through partnerships rather than direct confrontation with the EU regulations. However, the immediate future of USDT in the EU remains uncertain as these new ventures are not yet fully operational or widely adopted.
Uncertainty and Speculation: There’s considerable speculation and uncertainty about how this will unfold. While some sources claim that all EU exchanges must delist USDT by December 30, official guidance from EU regulators on this matter has been somewhat ambiguous, contributing to a “wait-and-see” approach by some exchanges.
In summary, Tether’s non-compliance with MiCA by the December 30 deadline could lead to a temporary or permanent exclusion of USDT from the EU market, affecting its trading volume, liquidity, and the overall market structure for stablecoins in the region. However, Tether’s moves to support MiCA-compliant alternatives suggest an attempt to navigate these regulatory challenges.
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