Seychelles-based cryptocurrency trading platform KuCoin has been hit with a lawsuit filed by New York Attorney General Letitia James, which alleges the exchange violated securities laws.

President Joe Biden's latest budget proposal includes a measure that could see US crypto miners taxed at a rate of 30% on their electricity costs. The tax is meant to reduce mining activity, and would apply to any firm using resources, whether they’re owned or rented.

The US Federal Reserve is reportedly forming a team of experts to monitor developments in the cryptocurrency industry, particularly in relation to unregulated stablecoins. The move is part of the central bank’s effort to maintain oversight of the sector and establish necessary regulations.

 Top stories in the Crypto Roundup today:

• New York Regulator Labels Ether a Security in KuCoin Lawsuit
• Biden Admin Budget Proposes 30% Tax on Crypto Mining Energy
• Federal Reserve to Create Crypto-Focused Team
• Crypto Market Movers – LQTY, STX, ACH

New York Regulator Labels Ether a Security in KuCoin Lawsuit

Seychelles-based cryptocurrency trading platform KuCoin has been hit with a lawsuit filed by New York Attorney General Letitia James, which alleges the exchange violated securities laws.

The lawsuit specifically targets tokens, including the second-largest cryptocurrency by market capitalization Ether, alleging these meet the definition of a security, without registering with the attorney general’s office.

The lawsuit marks the first time a regulator has claimed in court that Ether is a security, despite Securities and Exchange Commission Chairman Gary Gensler hinting that the agency might consider it as such.

While the Commodity Futures Trading Commission has previously maintained that both Bitcoin and Ether are commodity assets, James argues that Ether falls under the Martin Act, a 102-year-old anti-fraud law that gives her office the power to investigate securities fraud and take legal action against violators.

Biden Admin Budget Proposes 30% Tax on Crypto Mining Energy

President Joe Biden's latest budget proposal includes a measure that could see US crypto miners taxed at a rate of 30% on their electricity costs. The tax is meant to reduce mining activity, and would apply to any firm using resources, whether they’re owned or rented.

The tax would be phased in over three years, starting after December 31, 2021, at a rate of 10% per year, before reaching the full 30% rate in the third year. The Treasury has argued that the energy consumption of crypto mining operations has negative environmental effects and creates uncertainty and risks for local utilities and communities.

The proposal would give cryptocurrency miners reporting requirements on the amount and type of electricity used and the value of that electricity, and would also apply to those who acquire their energy off-grid.

Federal Reserve to Create Crypto-Focused Team

The US Federal Reserve is reportedly forming a team of experts to monitor developments in the cryptocurrency industry, particularly in relation to unregulated stablecoins. The move is part of the central bank’s effort to maintain oversight of the sector and establish necessary regulations.

Speaking at an event in Washington, Vice Chair for Supervision Michael Barr acknowledged that digital currencies have the potential to revolutionize finance but emphasized the importance of creating appropriate safeguards.

The team, according to Barr, will keep the Federal Reserve informed of innovation and new developments. One area of concern for the Fed is stablecoins, with Barr warning that their widespread adoption could lead to bank runs, potentially putting households and businesses at risk.

Crypto Market Movers – LQTY, STX, ACH

Several tokens are leading the charge in the last 7-day period. Some of these are well-known cryptocurrencies with more liquid trading pairs, so we’ll be focusing on these over low-cap cryptos that may have higher percentage changes.

Stacks (STX) - Stacks is an open-source network of decentralized apps and smart contracts built on Bitcoin. The Stacks blockchain is a flexible layer on top of Bitcoin that enables decentralized apps, smart contracts, and digital assets.

Liquity (LQTY) - Liquity is a decentralized borrowing protocol that allows users to obtain loans against Ether tokens used as collateral, with the interest rate determined by the borrower. In essence, Liquity provides loans to individuals in exchange for Ether tokens present with them.

Alchemy Pay (ACH) – Alchemy is a cryptocurrency payment solution and technology provider in Asia Pacific that powers online and offline merchants. It's designed to be a fast, secure, and convenient hybrid crypto-fiat payment systems and solutions.

 

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