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MicroStrategy may owe taxes on $19B unrealized Bitcoin gains: Report

MicroStrategy may owe taxes on $19B unrealized Bitcoin gains: Report

Despite never selling any Bitcoin, MicroStrategy may have to pay taxes on its unrealized gains.

Michael Saylor’s MicroStrategy, the largest corporate Bitcoin BTCUSD holder, may have to pay federal income taxes on its unrealized gains, according to the Inflation Reduction Act of 2022.

The act established a “corporate alternative minimum tax” under which MicroStrategy would qualify for a 15% tax rate based on the adjusted version of the company’s earnings, according to Jan. 24 report in The Wall Street Journal.

Still, the US Internal Revenue Service (IRS) may create an exemption for BTC under President Donald Trump’s more crypto-friendly administration.

MicroStrategy’s holdings have surpassed 450,000 BTC, worth more than $48 billion, after the company bought $243 million of BTC on Jan. 13.

According to MicroStrategy’s portfolio tracker, the company’s Bitcoin holdings have an unrealized gain of over $19.3 billion.

The report comes six months after MicroStrategy agreed on June 3, 2024, to pay $40 million to settle a tax fraud lawsuit that had accused it and Saylor of tax evasion.

The attorney general of the District of Columbia sued Saylor and MicroStrategy in August 2022, alleging the executive had paid no income taxes in the district for at least 10 years while he lived there.

MicroStrategy and Coinbase push against corporate alternative minimum tax

MicroStrategy and cryptocurrency exchange Coinbase have pushed back against the corporate alternative minimum tax (CAMT) regulation.

The two firms have requested that the US Treasury and IRS adjust the final rule to exclude unrealized crypto gains from the adjusted financial statement income (AFSI) to “avoid serious unintended consequences to US corporations holding substantial cryptocurrency.”

The two firms wrote in a joint letter to lawmakers on Jan. 3:

“The unforeseen combination of CAMT and a newly promulgated accounting standard are creating unjust and unintended tax consequences… CAMT imposes a 15% minimum tax on the AFSI of any corporation whose AFSI averages at least $1 billion in the prior three-year period.”

“Because the standard affects a corporation’s AFSI, corporations that own enough appreciated crypto (or have enough other book income) to be subject to CAMT must now pay tax on unrealized gains in the value of that cryptocurrency,” the letter stated.

US crypto tax laws gain prominence after IRS issued crypto tax guidelines in 2024

Crypto tax laws gained increased investor interest in June 2024 after the IRS issued a new crypto regulation, which will make US crypto transactions subject to third-party tax reporting requirements for the first time.

Starting in 2025, centralized crypto exchanges (CEXs) and other brokers will start reporting the sales and exchanges of digital assets, including cryptocurrencies.

According to the IRS, the decision aims to help investors “file accurate tax returns with respect to digital asset transactions” and to address potential noncompliance in digital currency.

This decision could push crypto investors to decentralized platforms in a “paradoxical situation” that could make tax revenue harder to track, Anndy Lian, author and intergovernmental blockchain expert, told Cointelegraph.

Showcasing the crypto industry’s backlash, the Blockchain Association filed a lawsuit against the IRS in December 2024, arguing that the rules are unconstitutional because they include decentralized exchanges under the “broker” term, extending data collection requirements to them.

 

Source: https://www.tradingview.com/news/cointelegraph:83010f015094b:0-microstrategy-may-owe-taxes-on-19b-unrealized-bitcoin-gains-report/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
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Trump family may build ‘giant businesses’ on Ethereum — Lubin

Trump family may build ‘giant businesses’ on Ethereum — Lubin

The Trump family may expand its involvement in the cryptocurrency industry by launching an Ethereum-based business.

This speculation follows the release of several Trump-branded memecoins and Donald Trump’s inauguration as the 47th president of the United States on Jan. 20.

Joseph Lubin, co-founder of Ethereum and founder of Consensys, hinted at the development in a Jan. 21 post on X.

“Based on what I am aware of, the Trump family will build one or more giant businesses on Ethereum,” Lubin wrote. “The Trump administration will do what is good for the USA, and that will involve ETH.”

Lubin suggested that the Trump administration might eventually integrate Ethereum technology into government activities, similar to its current use of internet protocols.

While no official announcement has been made, Lubin pointed to some tell-tale signs, including recent Ether purchases by Trump’s World Liberty Financial (WLFI) decentralized finance platform.

The WLFI-labelled wallet has amassed 55,341 ETH, worth over $183 million, making Ether the wallet’s largest holding after the Circle’s USD Coin stablecoin, Arkham Intelligence data shows.

Trump to bring crypto, TradFi convergence

The Trump administration may also bring more regulatory clarity, enabling greater integration between traditional finance and the cryptocurrency industry, according to Franklin Templeton CEO Jenny Johnson.

More regulatory clarity could act as a catalyst for market growth, especially developments around crypto-based exchange-traded funds (ETFs), according to Ryan Lee, chief analyst at Bitget Research.

Lee told Cointelegraph:

“This convergence may enhance the legitimacy of cryptocurrencies, paving the way for the development of financial products such as ETFs and tokenized assets. However, it also introduces challenges, including higher compliance costs, heightened security concerns, and the persistent issue of managing market volatility.”

However, regulatory clarity is needed first to offer a “stable framework for crypto businesses,” which will ultimately attract more market participants, Lee added.

Trump family memecoins may present new challenges for crypto legislation

Meanwhile, the Trump family’s memecoins may present a new legal gray area for the US securities regulator.

The memecoin launches could bring more regulatory enforcement from the Securities and Exchange Commission, as they set a “precedent that could blur the lines between celebrity, politics and finance,” according to Anndy Lian, an author and intergovernmental blockchain adviser.

Lian told Cointelegraph:

“The question now is whether the SEC will tighten regulations to curb potential market manipulations or if they will adapt to this new reality by establishing clearer guidelines for such tokens.”

“The risk here is that without stringent oversight, the market could be flooded with similar tokens, potentially leading to volatility, scams or even undermining the credibility of cryptocurrencies,” Lian said.

The Official Trump (TRUMP) token has staged a 24-hour recovery of over 10.5% at the time of writing, but remains 44% down from its all-time high of $75.35 recorded on Jan. 19, CoinMarketCap data shows.

 

Source: https://cointelegraph.com/news/trump-family-ethereum-giant-businesses-lubin

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

Trump family memecoins may trigger increased SEC scrutiny on crypto

Trump family memecoins may trigger increased SEC scrutiny on crypto

The Trump family’s recently launched memecoins may invite more regulatory scrutiny from the US Securities and Exchange Commission, presenting new challenges for the cryptocurrency space.

President Donald Trump launched the Official Trump (TRUMP) memecoin on Jan. 18 and the Official Melania (MELANIA) token on Jan. 19 on the Solana network, ahead of his presidential inauguration on Jan. 20.

While the memecoins attracted significant retail interest, they may pose regulatory challenges for the wider cryptocurrency industry and draw further scrutiny from the SEC.

The presidential memecoin launch sets a “precedent that could blur the lines between celebrity, politics and finance,” according to Anndy Lian, author and intergovernmental blockchain expert.

This may challenge the SEC’s approach to crypto regulation in 2025, Lian told Cointelegraph:

“The question now is whether the SEC will tighten regulations to curb potential market manipulations or if they will adapt to this new reality by establishing clearer guidelines for such tokens.”

“The risk here is that without stringent oversight, the market could be flooded with similar tokens, potentially leading to volatility, scams or even undermining the credibility of cryptocurrencies,” Lian said.

While some crypto industry insiders see this as a new era for memecoins, their token allocations have raised red flags among investors, considering that nearly 90% of the Melania token supply was in a single wallet, Bubblemaps said in a Jan. 19 X post.

This is in contrast with the official website shared by Mrs. Trump, which claimed that 35% of the tokens had been distributed to the token’s team, while 20% were allocated to both the treasury and the community, with 15% offered to the public and 10% set aside for liquidity.

Political memecoins: A legal gray area for the crypto industry

The Trump family’s newly launched memecoins present a unique gray area for US regulators.

While the Trump administration has signaled a more crypto-friendly regulatory stance, similar memecoins present additional challenges, according to Steve Milton, CEO of the Fintopio CeDeFi wallet app and former global vice president of marketing and communication at Binance.

The Trump family memecoins are a “step forward and backward” for the industry, Milton told Cointelegraph.

“The US needs understanding and cooperative regulators to push innovation and competition, and that’s what the new Trump era will usher in,” he said. “But the same person launching a memecoin for expressing support for ideals leads to a growing gray area.”

Memecoin-fueled retail speculation is “precisely the king of activity the SEC is tasked with mitigating,” meaning that this memecoin launch could “exacerbate regulatory uncertainty” in the short term, Milton added.

On the bright side, both of the presidential family’s memecoins have attracted new retail investors to the crypto space, according to Ryan Lee, chief analyst at Bitget Research.

The memecoins have invited new “speculative demand and market liquidity,” the analyst told Cointelegraph.

“The launch has also drawn new investors into the space, with many entering via the Moonshot platform, indicating its broad appeal,” he said. “The broader impact suggests that celebrity-backed tokens could reshape market trends, drawing in fresh capital and further integrating blockchain with mainstream audiences.”

Meanwhile, the TRUMP token is down more than 49% from its peak of $75.35, reached on Jan. 19. The token fell over 24% in the past 24 hours, CoinMarketCap data shows.

 

Source: https://cointelegraph.com/news/trump-memecoins-sec-regulatory-challenges

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j