Daily Digest - 28th April 2023

Headlines

▌SEC Chairman: Cryptocurrency exchanges should be registered in accordance with the law and operate in compliance

Gensler, chairman of the US Securities and Exchange Commission (SEC), said that cryptocurrency exchanges should be registered with the US SEC and abide by its regulations, while properly handling the conflict of interest that exists. He also said that the SEC is working hard to make regulations related to the cryptocurrency market more transparent, so as to eliminate the room for ambiguity. Previously, cryptocurrency exchange Coinbase had asked the SEC to give clearer "regulatory guidance."

Policies

▌UK HM Revenue and Customs Proposes Legislative Amendments to DeFi Lending and Pledge Taxation

The UK HM Revenue and Customs (HMRC) is seeking public opinion on proposed changes to the tax treatment of DeFi lending and betting. Under existing rules, a DeFi transaction can be considered a sale, written off as a gift or sale by a lending institution or liquidity provider, even in the absence of a change in ownership of the asset. The proposed changes will ensure that DeFi transactions are not considered dispositions of assets for tax purposes. This can only happen when crypto assets are “economically disposed of in non-DeFi transactions.” While the proposed framework is aimed at DeFi lending and staking, it is also intended to apply to centralised finance (CeFi), where cryptocurrency lending or staking through intermediaries, the filing said. HMRC has previously extended existing tax rules to cryptocurrencies, including tax breaks for foreign investors who buy cryptocurrencies through local agents. The consultation will last for eight weeks and end on June 22.

Cryptocurrency

▌Coinbase: SEC is charging violations "on the fly"

Cryptocurrency exchange Coinbase said that the US Securities and Exchange Commission (SEC) is "immediately" making a decision on alleged violations. The San Francisco-based platform hit back at the SEC this month in a filing, made public for the first time on Thursday, in response to Wells' notice that the SEC formally warned law enforcement that it found enough evidence of violations that it may file a lawsuit against the exchange. Much of Coinbase's argument rests on the notion that exchange-listed cryptocurrencies are not securities, in stark contrast to statements made by SEC Chairman Gary Gensler, who has repeatedly said that, in his view, most digital assets do meet the standards of a stock exchange.

▌Informed sources: The US FBI raided the residence of former FTX executive Ryan Salame

The FBI raided the Potomac, Maryland home of Ryan Salame, a former FTX executive and former Republican political candidate who has made large campaign contributions, according to two people familiar with the matter.

▌CoinDesk Indices and CoinFund jointly launched the Ethereum pledge benchmark interest rate

CoinDesk Indices and cryptocurrency investment firm CoinFund have jointly launched a benchmark that tracks Ethereum collateralisation rates and brings institutional investors' expectations into digital assets. The Composite Ether Staking Rate (CESR) will be calculated and published seven days a week. It takes into account block rewards, new emissions, transaction fees, maximum extractable value (MEV), protocol slash, and withdrawals.