Kenya Plans Crypto Tax to Raise Cash
As part of plans to widen its taxation base, with other sources of funding proving expensive or inaccessible, Kenya's government last week disclosed it will introduce a 3% tax on digital assets in the upcoming budget year.
The tax legislation will likely affect the 8.5% of Kenya's total population—or more than 4.25 million people—which own cryptocurrency, according to the United Nations Conference on Trade and Development (UNCTAD) estimate as of 2022.
The move, which will also see a 15% levy on monetized digital content as done by influencers among others, aims to help Kenya expand its tax revenues as the government faces a cash crunch and seeks to nearly double collections to KES5 trillion ($36.7 billion) in five years.
US OFAC Settles With Poloniex, Avoids Civil Liability
Poloniex, a digital asset trading platform, has agreed to pay $7.6 million to settle its potential civil liability for apparent violations of US sanctions against Crimea, Cuba, Iran, Sudan, and Syria. According to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the violations occurred between January 2014 and November 2019, when the exchange allowed customers located in the sanctioned jurisdictions to engage in online digital asset-related transactions valued at up to of $15.3 million. The settlement amount reflects the U.S. Treasury's determination that Poloniex's apparent violations were not voluntarily self-disclosed and were not egregious. Justin Sun, who now owns Huobi Global, acquired Poloniex from Circle in 2019.
US Taps DLTs Among Critical Technologies for Future Standards
The U.S. government last week identified distributed ledger technologies (DLTs) as one of the eight subsets of critical and emerging technology (CET) that will receive prioritized efforts for standards development. The eight technologies proposed to receive key support in the National Standards Strategy for Key and Emerging Technologies include communication and networking technologies, semiconductors and microelectronics, and Artificial Intelligence and Machine Learning. Others are biotechnologies, positioning, navigation, and timing services, digital identity infrastructure and DLTs, clean energy generation and storage, and quantum information technologies.
Developing standards for these technologies that are increasingly affecting a range of key economic sectors, the White House states, will strengthen U.S. competitiveness and national security.
Meanwhile, the same week saw the U.S. President, Joe Biden, seek a 30% punitive tax on crypto mining operations because "they are a danger to society".
Former OpenSea Employee Convicted of Fraud
A former product manager at the largest marketplace for non-fungible tokens (NFTs), OpenSea, was last week convicted of fraud and money laundering for insider trading. Nathaniel Chastain reportedly used his insider knowledge to buy NFTs that were going to be featured on OpenSea's home page, selling them shortly afterward for more than $50,000 in illegal profit. He was accused of abusing his status at OpenSea.
While Chastain's conviction was described as the first insider trading case involving digital assets, he pleaded not guilty. His lawyers argued that knowledge of what NFTs would be featured on OpenSea's home page was confidential information when Chastain worked at the company.
Deloitte Leverages Polkadot’s KILT for Digital IDs
BOTLabs GmbH and the world’s biggest accounting firm, Deloitte Consulting AG, have announced the integration of Polkadot's KILT blockchain technology for issuing reusable digital credentials.
The KILT parachain will enhance Deloitte's identity protocols to improve Know Your Customer (KYC) and Know Your Business (KYB) processes. The credentials can be used for multiple purposes. They include regulatory compliance for banking and DeFi services, age verification for e-commerce platforms, private logins, and fundraising. The KYC/KYB certificates are often paper-based and repetitive for the individual customer, putting their data privacy at risk. The integration will enable Deloitte to offer its customers a wallet in the form of a browser extension for managing and sharing their credentials which are digitally signed and stored on their devices, remaining under their control at all times.
Court Summons Craig Wright for Non-compliance With $143m Debt Judgment
In a $143-million judgment held by W&K against Dr. Craig Wright, the self-proclaimed creator of Bitcoin, a U.S. judge last week ordered an in-person evidentiary hearing to determine whether Wright’s alleged non-compliance with a standing Compulsion Order warranted contempt of proceedings.
The current dispute stems from Wright’s alleged failure to properly complete the Debtor Fact Information Form from a previous judgment to enable the creditor to collect the debt. Wright also designated the Form as “Attorney’s Eyes Only” and insisted that it be filed under seal as it will reveal sensitive personal financial information, a claim the plaintiff says is factually false.
The judge gave Wright and his counsel up to May 18, 2023, to show cause why they should not be sanctioned for not unsealing the form, which has rendered the document useless for its intended purpose.
Bhutan Partners Bitdeer to Take Advantage of Hydroelectric Reserves for Bitcoin Mining
Bloomberg reported last week that the investment department of Bhutan and mining company, Bitdeer, have been seeking investors for $500 million to capitalize on the country’s hydroelectric power to establish carbon-free Bitcoin mining. Forbes had earlier reported that the Bhutanese government has been quietly using its hydroelectricity reserves to power the mining of the top cryptocurrency. Bitdeer, founded by Jihan Wu, is looking to generate 100 MW of power from Bhutan and plans to start building a mining data center in Q2 2023.
In Kazakhstan, it was reported last week that the government has made over $7 million in taxes from crypto mining in the country as of April 27 since respective companies began paying taxes and other fees on January 1, 2022.
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