TaxBit, a Salt Lake City, Utah-based provider of crypto tax and accounting software, announced on Tuesday that it has received a new investment from Haun Ventures – a new venture fund designed to help founders build the next generation of the internet.
The strategic investment will allow TaxBit to further accelerate its leading tax and accounting platform and bring additional solutions to the crypto market, helping clients and businesses report and pay crypto taxes.
This is one of the first investments by Haun Ventures, a venture capital fund recently founded by Katie Haun.
Ms. Haun co-led Andreessen Horowitz’s crypto arm in the past, but announced her departure in December last year. In March, Haun launched her venture capital firm, Haun Ventures, which is dedicated to backing crypto startups. The venture capital company was launched with $1.5 billion in capital across two funds — a $500 million early-stage fund and a $1 billion “acceleration” fund.
Besides providing investments to TaxBit, Haun Ventures stated that it has selected a world-class team of crypto-native experts and veteran policy and strategy operators who will collaborate with TaxBit to tell key audiences about how the tax and accounting infrastructure facilitates the growth of the crypto economy.
Katie Haun, the founder of Haun Ventures, talked about the partnership and said: “The web3 ecosystem has grown dramatically since I entered the space and yet we are still in early days. While the crypto economy will continue to unfold in cycles, there is now broad acceptance that this industry is here to stay. TaxBit provides the core infrastructure that is required for the crypto economy to grow and reach its full potential. In addition to the vital role the product plays in the broader ecosystem, the team at TaxBit is best-in-class which is why we’re proud to formally back the company and partner with them over the long term.”
Austin Woodward, TaxBit Founder and CEO, also commented on the development and stated: “The Haun Ventures team shares TaxBit’s vision of working with regulators to propel responsible regulation that enables digital asset adoption at scale. TaxBit’s compliance infrastructure is a critical component to the Web3 ecosystem. We have a deep respect for the Haun Ventures team and look forward to working together in carrying out our shared vision.”
Navigating Crypto Tax Reporting
In August last year, TaxBit raised $130 million in a Series B funding round co-led by IVP and Insight Partners. Other investors, including Tiger Global, Paradigm, 9Yards Capital, Sapphire Ventures, Madrona Venture Group and Anthony Pompliano, also participated in the funding round.
The funding came a few months after TaxBit raised a $100 million Series A in March last year. The latest financing officially made TaxBit a unicorn, with a valuation of $1.33 billion.
The digital economy’s need for tax and accounting software is rising in the industry as regulators require more formal reporting practices. As a result, TaxBit has witnessed impressive growth. In 2020, the firm issued over two million tax forms.
Since the last funding raise, TaxBit has tripled its number of employees to about 100 people. The company has also established an office in Seattle, deployed services with the IRS, and created partnerships with a number of digital asset platforms including Coinbase, BlockFi and Gemini.
DLT Finance Group, a financial services company, based in Frankfurt, Germany, announced on Tuesday that it has received nine BaFin licenses that gave its approval to launch a digital asset platform targeting global financial institutions.
With the regulatory approval, the digital asset platform now offers a wide variety of regulated digital asset services, including brokerage, trading, custody, staking, and DeFi protocols.
DLT Finance disclosed that its new suite of digital asset solutions includes the following: prime brokerage, direct market access to a dozen liquidity venues, OTC Trading, deposits and withdrawals of crypto for instant trading, crypto custody, facilitation of relevant compliance processes, staking, and access to DeFi and liquidity mining, as well as borrowing and lending.
DLT Finance stated that it designed the digital asset platform to cater to institutional clients’ needs, such as banks, brokers, asset managers, and crypto exchanges, among others.
DLT Finance revealed that it has already partnered with major firms within the digital asset space, including Kraken, Bitstamp, B2C2, and Bittrex.
DLT Finance empowers its customers with one API to seamlessly integrate crypto products into their platforms through its platform.
The unique BaFin licensing arrangement offers an innovative regulatory solution for digital asset markets. DLT Finance said that its customers no longer need their own license, as they can trade legally and securely with the company.
The digital asset platform acts as an institutional counterparty where clients can trade on leading liquidity venues and choose from financial commission brokerage, OTC and direct market access. Customers can also stake assets directly from their custody and access to liquidity mining pools and the world of DeFi.
Furthermore, DLT Finance mentioned its digital asset platform facilitates regulatory compliance of digital asset custody for its clients, offers custom solutions for crypto derivatives, and issuance and placement for tokenized or traditional securities. The platform is streamlined with API access and direct online banking integration.
While existing solutions only facilitate closed-end systems, DLT Finance empowers its customers to create an open system in which assets can be directly deposited and withdrawn. Such developments are set to improve access and regulatory cover for digital assets significantly, thus attracting new participants into the crypto landscape.
DLT Finance Group, a financial services company, based in Frankfurt, Germany, announced on Tuesday that it has received nine BaFin licenses that gave its approval to launch a digital asset platform targeting global financial institutions.
With the regulatory approval, the digital asset platform now offers a wide variety of regulated digital asset services, including brokerage, trading, custody, staking, and DeFi protocols.
DLT Finance disclosed that its new suite of digital asset solutions includes the following: prime brokerage, direct market access to a dozen liquidity venues, OTC Trading, deposits and withdrawals of crypto for instant trading, crypto custody, facilitation of relevant compliance processes, staking, and access to DeFi and liquidity mining, as well as borrowing and lending.
DLT Finance stated that it designed the digital asset platform to cater to institutional clients’ needs, such as banks, brokers, asset managers, and crypto exchanges, among others.
DLT Finance revealed that it has already partnered with major firms within the digital asset space, including Kraken, Bitstamp, B2C2, and Bittrex.
DLT Finance empowers its customers with one API to seamlessly integrate crypto products into their platforms through its platform.
The unique BaFin licensing arrangement offers an innovative regulatory solution for digital asset markets. DLT Finance said that its customers no longer need their own license, as they can trade legally and securely with the company.
The digital asset platform acts as an institutional counterparty where clients can trade on leading liquidity venues and choose from financial commission brokerage, OTC and direct market access. Customers can also stake assets directly from their custody and access to liquidity mining pools and the world of DeFi.
Furthermore, DLT Finance mentioned its digital asset platform facilitates regulatory compliance of digital asset custody for its clients, offers custom solutions for crypto derivatives, and issuance and placement for tokenized or traditional securities. The platform is streamlined with API access and direct online banking integration.
While existing solutions only facilitate closed-end systems, DLT Finance empowers its customers to create an open system in which assets can be directly deposited and withdrawn. Such developments are set to improve access and regulatory cover for digital assets significantly, thus attracting new participants into the crypto landscape.
Wirex, a cryptocurrency platform based in London, announced on Tuesday that it has expanded some features and functionalities of its non-custodial wallet, allowing users to add NFTs, purchase crypto coins, and make payments using Google Pay and Apple Pay.
The announcement comes after Wirex formed a strategic partnership with the metaverse NFT project, Tori Zero. The collaboration enabled Tori Zero to become the first NFT project integrated into the Wirex Wallet.
Wirex further disclosed that the expansion also has provided new alternative payment methods to customers in India, Malaysia, Indonesia, and Portugal.
The firm said that Wirex wallet holders can now store and hold NFTs on multiple blockchains bought on major marketplaces like OpenSea. The new feature allows users to store all blockchain-based assets in one platform, including over 100 cryptocurrencies.
Wirex also revealed a partnership with fintech firm uTorg. This collaboration has enabled the launch of many new features that are set to make crypto purchasing on the wallet easier than before. Users can now directly buy cryptocurrencies on multiple blockchains in-app, thus saving them huge amounts of gas fees. Wirex said that the features would provide an unparalleled user experience by offering a direct on-ramp for buying digital currencies on the Ethereum, Fantom, Avalanche, Polygon, and Binance Smart Chain blockchains.
Pavel Matveev, the CEO and Co-Founder of Wirex, commented on the development and said: “With NFT ownership growing at an unprecedented rate, the addition of NFTs to the wallet will connect NFTs to the real world and give added layers of security and trust like never before to them. Flexibility and choice will be a key component, by expanding the payment methods for multiple blockchains, further widening access and appeal.”
Increase Accessibility to the Benefits of Crypto and DeFi
Wirex added the Polygon blockchain to its recently launched non-custodial wallet and the Wirex app in February. The addition enabled users to access the benefits of the Polygon blockchain, which joined the wallet alongside the Ethereum, Fantom, Binance Smart Chain, Avalanche, and Bitcoin blockchains on the app.
Diversifying the blockchains available on the app has allowed hundreds more assets to be supported, thus giving users the ability to receive, send, store, and exchange them on their mobile devices and be spent at over 61 million locations worldwide.
Towards the end of last year, Wirex launched its mass-market non-custodial wallet, which has complemented the Wirex app and a crypto-enabled card with more than 4.5 million customers.
Launched in 2014, Wirex has remained an active digital payment platform working to make crypto and traditional currencies equal and accessible to all.
Renowned Venture Capital (VC) firm Andreessen Horowitz (a16z) has shared data showing creators have many benefits when they pitch their tents with Web3.0 rather than Web2.0.
The argument was made in the first issue of the firm’s state of the crypto report, which shows Web3.0 currently has 22,400 creators.
It should be understood that the Web3.0 space is filled with predominantly Non-Fungible Token (NFT) creators that are notably using blockchain to revolutionize the art, music, and general creative world. Web2.0 was innovative enough to usher in the ability for users to create content that all can enjoy. However, the big social media platforms have little or non-existent incentivization models for these creators. Web3.0 is set to change all of this.
The Andreessen Horowitz report compared creators’ earnings from Web3.0 with those hosted on YouTube, Spotify, and Meta Platform’s Facebook.
The data shared showed YouTube generated content ad revenue of $15 billion from 37 million channels, and the average pay per channel was pegged at $2.47. The payout worsens with Facebook, which plays hosts to 2.91 billion, with a generated ad revenue of $300 million. Creators here earned an average of 10 cents. Spotify came out better as the 11 million artists hosted on the platform received an average of $636 from an ad revenue of $7 billion.
Herein lies the Web3.0 advantage, creators here earned as high as $174,000 on average from a revenue of $3.91 billion across secondary sales on OpenSea alone. The creator economy is bigger than OpenSea as thousands of creators are now taking advantage of cheaper fees across BNB Chain, Solana, Polygon, and Avalanche, among other blockchain networks.
With the massive returns Web3.0 presents to creators, a16z noted that “Web3.0 is tiny but might” and may soon be the go-to place for creators despite the fact that Spotify, Instagram, and other social media outfits are exploring crypto integrations.
Hong Kong-based Animoca Brands and Blowfish Studios announced the closure of one of the most anticipated AAA blockchain games.
The Planet Private Sale for Phantom Galaxies sold 7,734 Planets and Asteroids (“Planets”) for a total of US$19.3 million.
Holders of the Planets – which are non-fungible tokens (NFTs) – will gain in-game real estate and utility along with a regular emission of the native cryptocurrency of Phantom Galaxies.
Strategic supporters who invested in Phantom Galaxies during the Planet Private Sale included Sequoia China, Liberty City Ventures, GameFi Ventures, Everest Ventures Group, Terrace Tower Group, MDDN Co (Joel and Benji Madden), C Ventures, SMO Capital, Polygon Ventures, Dapper Labs, NFT Live + Cagyjan, Kingsway, 3Commas Capital, Double Peak, Mind Fund, Defi Cap, and others.
Phantom Galaxies is an open-world mech combat game, currently in Alpha, developed by Blowfish Studios.
According to Animoca Brands, the game’s blockchain-based AAA game titles will appeal to both traditional gaming enthusiasts and Web3 natives.
Currently, only three of the four episodes of the Alpha version are available. The access to the Beta launch is expected to occur in Q3 2022.
Animoca Brands said, “there are currently over 125,000 users actively playing the Alpha version of Phantom Galaxies and over 500,000 owners of the NFTs granting access to the Alpha game.” Over 1,700 ETH have been generated by these NFTs in OpenSea.
Planets represent Phantom Galaxies’ user-ownable real estate.
Each Planet will have designated coordinates within the game universe and will have uniquely designed random traits, according to Animoca Brands. Furthermore, owners will be able to monetize Planets by building structures, such as marketplaces and hangars, as well as choosing their Planet’s governance system.
Blowfish Studios is a subsidiary of Animoca Brands. The Sydney-based developer and publisher of high-quality multi-platform games, including Qbism, Siegecraft, Morphite, Projection: First Light, and Storm Boy.
The company’s current projects under development include Phantom Galaxies, MotoGP™ Ignition, and Aradena Battlegrounds.
Nasdaq-listed cryptocurrency exchange Coinbase Global Inc is tapering down its plans to hire more staff this year as current market realities do not permit it.
According to a blog post from Emilie Choi, the company’s President and Chief Financial Officer, the move is necessary in order to let the company prioritize what truly matters so that the exchange, dubbed America’s largest, can exit the current harsh market realities better and stronger.
“To ensure we’re best positioned to succeed during and after the current market downturn, we’re announcing we’re slowing hiring so we can reprioritize our hiring needs against our highest-priority business goals,” she said, adding that the firm is being rigorous with its “resource prioritization so we can emerge from this down cycle even stronger than we are today.”
Despite the fact that Coinbase considers growing its workforce as a yardstick for growth, it said the current market realities have pushed it to reassess its hiring needs. Emilie pointed out a green light in the decision as it will afford the company to let those already hired to be properly integrated into the firm’s corporate culture.
Coinbase made history when it became the first mainstream centralized cryptocurrency exchange to go public via the direct IPO route back in April 2021. A year down the line, the company has lost a massive chunk of the valuation of its shares and is down by 74% in the year-to-date period.
Per a Reuters report, the company has seen an exodus of some of its top investors, including Azora Capital, Jupiter Capital, and Yarbrough Capital, all of which dumped the company’s shares before the massive selloff the firm experienced in May.
Despite this harsh reality, Emilie Choi reassured that the company is in a good place with a solid balance sheet. She is optimistic that the firm will survive this current onslaught as it has weathered the storm through past market downturns.
New data from the Cambridge Centre for Alternative Finance (CCAF), which publishes the Cambridge Bitcoin Electricity Consumption Index (CBECI), shows that China now ranked second in terms of the total hashrate emanating from the region from September 2021 to January this year.
The uptick in China’s mining activities is reportedly fueled by a complex ring of underground mining activities, which is fueled by the adoption of proxy mining pool services providers.
The data “strongly suggests that significant underground mining activity has formed in the country,” the CCAF said in a statement. “Access to off-grid electricity and geographically scattered small-scale operations are among the major means used by underground miners to hide their operations from authorities and circumvent the ban.”
While China recorded a Zero hashrate last year from June to July following the enactment of the Bitcoin mining ban in May, the CCAF said logistics challenges took the underground miners a few months to re-organize to continue their activities in a covert manner.
“It takes time to find existing or build new non-traceable hosting facilities at that scale,” CCAF said. “It is probable that a non-trivial share of Chinese miners quickly adapted to the new circumstances and continued operating covertly while hiding their tracks using foreign proxy services to deflect attention and scrutiny.”
While the United States is still in the lead with respect to the total hashrate recorded, China held up to 22.3% of the combined hashrate within the period under review.
According to insiders who spoke to the South China Morning Post (SCMP), underground miners make use of Virtual Private Network (VPN) to shield their exact locations. Additionally, they tend to use different energy service providers so that the energy consumption from a particular location is not made obvious.
The Chinese government is still very strict with its ban, and while sanctions await violators of the ban rules, there is no evidence that the covert miners are ready to stop their activities for now.
A study shows that 90% of surveyed central banks worldwide are exploring the future issuance of central bank digital currencies (CBDCs). Blockchain.News interviewed industry experts to find out the outlook of Hong Kong’s digital currency and its potential adoption.
The outlook of e-HKD
In a recent discussion paper published by The Hong Kong Monetary Authority (HKMA), the local regulator reached out to the public to consult the development of retail central bank digital currency (rCBDC) or the digital Hong Kong Dollar (e-HKD). The discussion paper lists a wide range of issues and a dozen of key questions covering a wide range of issues:
The potential benefits and challenges of e-HKD
The balance between privacy and illicit activities prevention
Interoperability with the existing payment system
Considerations in terms of legal, design and policy perspectives respectively
The level of participation by the private sectors.
The role of e-HKD
The rCBDCs can be divided into two-tier distribution models: the wholesale interbank system and the retail user wallet system, according to the e-HKD technical whitepaper.
The wholesale CDBC is used for transfers between the central bank and commercial banks or other institutions, while the retail CDBC is used for transfers between commercial banks and the general public for retail transactions, Professor Chew Seen-Meng, Associate Professor of Practice in Finance and Associate Dean (External Engagement) of the Chinese University of Hong Kong (CUHK) explained.
Regarding retail CBDCs, a doubt that could arise among the public could be why does the market still need another digital payment tool among other diverse options in HK?
Chew, the former economist for the Singapore office of the International Monetary Fund (IMF) and Morgan Stanley, acknowledged that “it is true that there is no urgent need for a digital HKD.”
However, “having an e-HKD could make our lives even more convenient by eliminating the need to carry physical notes and coins around and enables virtually all payments to be made by just tapping the mobile phone” in the long term, Chew said.
Moreover, “the transmission mechanism of monetary policies from the HKMA can become more efficient through the e-HKD,” Chew added.
Furthermore, the scholar believes digital currency could provide a faster and more convenient way to transfer value by supporting more economic activities potentially if the digital currency is accepted as a medium of exchange by the public in the long term.
Currently, a plethora of payment platforms has already captured the market.
E-wallets with Peer-to-Peer (P2P) payment functions are becoming mainstream in Hong Kong.
In e-commerce alone, digital wallets are expected to account for 40 % of the city’s online transaction value by 2025, overtaking credit cards, according to the 2022 Global Payments Report by the US financial technology company FIS.
In an exclusive interview with Blockchain.News, Etelka Bogardi- Partner of Asia lead of Global Payments and Fintech Practice, Norton Rose Fulbright Hong Kong, told Blockchain.News that “one of the primary design considerations should be interoperability with existing systems.”
Bogardi, a Hong Kong-based financial services regulatory lawyer and the former Senior Counsel to the Hong Kong Monetary Authority, suggests the regulator should aware of the effect of the e-HKD on banks and any potential disintermediation effects, given Hong Kong’s status as an international financial centre and the large presence of the financial sector.
Meanwhile, Chew also shared a similar view and added that “the administration needs to fully ensure and secure before e-HKD is launched.”
“Unless e-HKD can address some pain points of the current e-Payment services or is much more convenient than the existing e-Payment options, it would be hard for e-HKD to be embraced by the public among the plethora of retail payment options in Hong Kong,” Etelka added.
Through the paper, the HKMA reiterates that “the purpose of developing e-HKD is not to replace existing payment methods” but to “avoid creating a closed-loop payment system, which impedes payments made between e-HKD users and users of other payment systems.”
The rCBDC is expected to provide connectivity among other payment service providers, for instance, cross-platform payments to be conducted efficiently.
Token-based or Account-based?
The balance between privacy protection and data access is another crucial consideration among systematic issues. The discussion paper mentioned that the key design feature of e-HKD to consider is whether it is issued token-based or account-based.
According to the paper, the token-based would allow more anonymity in payments between various parties, protecting against abuse of individual data by commercial entities. Still, it could be risky to facilitate illicit activities.
The account-based approach, on the other hand, would “require the recording of balances and transactions of rCBDC holders. This approach would rely on the ability to verify the identity of the account holder and could help comply with AML/CFT requirements.”
Both approaches require a ledger to complete transactions with distributed ledger technology (DLT) and tokenization, which could be structured to trace users depending on the degree of anonymity and access of information to parties.
However, Prof. Chew said that the traceability of digital currency from the regulator indicates that small retailers such as taxi drivers might be reluctant or not interested in changing their behaviours or habits of transactions due to taxation concerns.
“Since the e-HKD’s value will be controlled by the HKMA, it is already a kind of stablecoin. To the extent that the HKMA is able to maintain the stability of e-HKD’s value through algorithms or its forex reserves, the risk of the e-HKD plummeting in value should be quite small.”
The regulator said the “full anonymity is not plausible,” e-HKD should comply with existing law and ordinances. Its legal mandate and legal tender status would logically align with the currency system.
“Overall, whilst there would need to be some work done to accommodate an e-HKD in the existing legislative framework of currency issuance and related issues, these are not insurmountable obstacles. Some of the more technical legal issues raised relate to the application of effective AML controls and data privacy laws. In that sense, the discussion around having a two-tier issuance and distribution structure is very beneficial,” Etelka explained.
Global adoption of CDBCs
Over the past two years, the global market was trapped by uncertainties amid the COVID-19 pandemic.
Amid the turmoil, the increasing demand for raising cross-border payments efficiency and the emergence of cryptocurrencies, such as stablecoins and other tokens, also gave rise to regulatory challenges, pushing global governments to update their currency policy in response.
According to the latest report published by the Bank of International Settlement (BIS), 90% of surveyed central banks worldwide are exploring the issuance of central bank digital currencies. The financial institution added that around two-thirds of central banks surveyed would take issuing retail CBDC into account in the near future.
The Bahamas became the first sovereign nation to issue CBDC since 2020, called the “Sand Dollar”, as the pioneer in adopting a new form of currency, driven by its geographical and the cost of delivering currency on its land.
“In countries with a weak currency or underdeveloped financial system, and a large unbanked population, the CBDC is more useful and can be more easily adopted by its citizens,” Chew explained.
Yet, the SAND Dollar’s potential benefits did not live up to its expectation.
A report from the IMF indicates that the island nation’s adoption of the SAND Dollar is merely less than 0.1% of the currency in circulation.
The issue of financial inclusion continuously troubles this Caribbean nation. World Bank defines financial inclusion as the access of individuals and businesses to valuable and affordable financial products and services for their financial that need to be delivered responsibly and sustainably. The Bahamas is also desperately to improve its cybersecurity for its digital currency.
Bogardi believes Hong Kong’s market enjoys a unique position with a well-developed retail payment landscape:
“Issues of financial inclusion are perhaps not as relevant as other jurisdictions who have chosen to press ahead with CBDCs (e.g. Bahamian Sand dollar). As a result, it is correct that the focus of the HKMA’s exploration of the e-HKD is as a conduit to fuel digital innovation in Hong Kong, and to help position it for potential challenges from new forms of payment means such as stablecoins.”
Regionally, China has been conducting a wide range of digital Yuan (e-CNY) pilot tests since 2020, developed by the People’s Bank of China (PBoC).
The administration rolled out a massive pilot test during its Beijing Winter Olympic Games and currently, the e-CNY app is one of the most downloaded apps in the country. The app has recorded over 83 million downloads through iOS and Android systems so far.
“In China, electronic payments have been dominated by Alipay and WeChat Pay for several years now. The central government is keen to introduce the e-CNY to maintain control of the monetary system before private firms like Alibaba and Tencent become too influential in the country’s payment system. Since it is a large country, it has to do many pilot tests in numerous cities so that citizens can familiarize themselves with the e-CNY before it is officially launched, and this of course will take some time, “Chew said.
On the other hand, experts suggest geopolitical factors, such as war, might also accelerate the progress of CBDC issuance.
While the objective of introducing the CBDC among other countries or regions could be different, the HKMA has disclosed that “it is inclined towards the Coins-approach under which e-HKD would be solely issued by one single authority” in the long term.
By adding that, looking for tasking agent banks to handle all customer-facing activities relating to the distribution of e-HKD.
“If the technology is ready, the HKMA can consider doing some pilot tests in several stages to let Hong Kongers try out the e-HKD on their mobile phones so that they can familiarize themselves with it and learn about its usefulness,” said Prof. Chew.
The HKMA has reiterated that it has not yet decided on introducing the e-HKD.
