Crypto Weekly: Do Kwon Arrested, IRS considers taxing NFTs, and the SEC crypto crackdown continues

2 min read  ·  24 Mar 2023

A still from Quantumn, Kevin McCoy, 2014. Image courtesy of Sotheby's

A still from Quantumn, Kevin McCoy, 2014. Image courtesy of Sotheby's

⚖️ Regulation

Terra founder Do Kwon arrested at Montenegro airport with falsified documents, charged with fraud by the US. In a 12-page indictment revealed on Thursday, US prosecutors accused Kwon of defrauding crypto customers by “deceiving those individuals about aspects of the Terra blockchain, including its technology and the extent to which it had been adopted by users”. (FT)

IRS Considers Taxing NFTs like Physical Art, collectibles. The guidance could classify NFTs as collectibles, similar to art and gems, and impact IRAs and capital gains taxes. (Decrypt)

White House blasts digital assets in new report, sees little value in crypto. A White House report paints a dim picture of digital assets, arguing their use cases have not been fulfilled while suggesting they present risks to consumers and the broader financial system. The report may signal a shift in approach by the Biden administration, from ostensibly agnostic about the sector to openly adversarial. (The Block)

Coinbase receives SEC warning about potential legal action. The regulator has issued Coinbase a Wells notice, which warns companies they may face enforcement action in the future. The notice says the SEC has made a “preliminary determination” to recommend action against Coinbase (Reuters)

SEC sues Tron network founder and celebrities, including Lindsay Lohan, Jake Paul, and Solja Boy for allegedly selling securities. Justin Sun is accused of mismanaging billions of dollars of TRX and BTT tokens on public markets — while creating secondary sales from which he profited. (Blockworks)

👾 NFTs

A US Court Has Handed a Legal Victory to Digital Artist Kevin McCoy in an Ownership Challenge Over the First-Ever NFT. Kevin McCoy, the artist who is widely credited with creating the first NFT, and auction house Sotheby’s have won a legal victory in a lawsuit that challenged the terms and propriety of a 2021 sale at which the token sold for $1.47 million. (Artnet)

Sony Files Patent for NFTs to Allow Transfers between games and consoles. The move by the gaming giant aims to make assets more interoperable, not only between different games but also hardware like VR headsets, computers and different consoles. (CoinDesk)

Magic Eden Ambraces Ordinals, Releases Bitcoin NFT Marketplace. Traders on Magic Eden will be able to purchase inscriptions, or non-fungible tokens minted on satoshis within the Bitcoin network. To help collectors do so, the company is integrating support for Bitcoin wallets Hiro and Xverse to allow traders to list, purchase and sell Ordinal NFTs. (CoinDesk)

🔗 DeFi

Digital Currency Usage Soars in Nigeria on Cash Shortages. Nigerians have increasingly turned to a once-spurned digital currency to transact, after a chaotic demonetization policy gave rise to a shortage of banknotes and bolstered demand for alternative payment methods. The value of eNaira transactions has surged 63% to 22 billion naira ($47.7 million) this year, while about 13 million so-called e-wallets have been opened, a more than 12-fold increase from October. (Bloomberg)

Telegram Users can now transfer USDT through chats. USDT has been added to the @wallet bot on Telegram, expanding the messaging app's facility for buying and selling crypto. (CoinDesk)