IRS Gets Approval to Receive Financial Records of Circle’s US Customers

The court has authorized the US Internal Revenue Service of Joe Doe summons to Circle and its predecessors and affiliates, including Poloniex, for those engaged in crypto transactions worth at least $20,000 between 2016 and 2020.

US District Judge Richard Stearns of Boston has issued an ex parte order allowing the US Internal Revenue Service (IRS) to serve a John Doe summons on Circle, including its affiliates, division, and subsidiaries cryptocurrency exchange Poloniex.

Poloniex was sold by Circle in 2019 to Tron founder Justin Sun after less than two years of acquiring it for $400 million.

The IRS believes thousands of taxpayers are not telling the government about their income from crypto transactions. As such, the agency filed a petition for an order approving the service of an IRS John Doe summons on Circle.

Now, the court has ordered and adjudged the IRS to serve a summons upon the Boston-based digital currency platform Circle Internet Financial for the financial records of its US customers who had an account at the platform or any of its predecessors and engaged in cryptocurrency transactions worth at least $20,000 between 2016 and 2020.

The financial records include account registration records, Know-Your-Customer due diligence, money laundering reports, account funding, and activity records.

The IRS told the judge that it has good reason to believe Circle customers are not reporting their tax liability from crypto income.

At this time, it hasn’t been mentioned just how many Circle customers might be subject to the John Doe summons. As per the accompanying memo, Circle is regulated as a “money services business” (MSB) with the Financial Crimes Enforcement Network (FinCEN).

As an MSB, Circle is required to maintain certain records, including transactions worth more than $3,000, the name and address of both the sender and recipient, the amount of the transaction, the date of the transaction, and other identifying information.

The memo further mentions that as of July 2019, Circle had served over 8 million customers with over $200 billion in trading volume of more than 60 types of digital assets.

The IRS had also won a similar 2017 decision on Coinbase, under which the agency sent a notification letter to over 10,000 taxpayers and asked them to file amended returns and pay back taxes.

The IRS said Coinbase notifications resulted in about $25 million in revised assessment.

Coinbase had put up a fight against the John Doe summons, but it only resulted in the IRS narrowing the scope of its demand slightly as the court sided with the government. In the Justice Department announcement of Stearns’ order, IRS Commissioner Chuck Rettig said this summons is

“a step to enable the IRS to uncover those who are failing to report their virtual currency transactions properly.”

The DoJ said the US petition does not allege that Circle is engaged in any wrongdoing.

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Author: AnTy

Auditing Giant, KPMG & CoinMetrics Launch Service to Monitor Risk for BitGo Institutional Clients

Auditing Giant, KPMG & CoinMetrics Launch Service to Monitor Risk for BitGo Institutional Clients

  • Big four auditing giant KPMG and crypto intelligence firm CoinMetrics partnership offers institutional crypto custodian, BitGo, clients a channel to monitor and mitigate risk on public blockchains.

Announced on Thursday, the partnership among the three firms aims to enhance institutional investment in crypto via a “deeply integrated combined offering.” The offering consists of BitGo’s custodial service, Chainalysis data, and intelligence on blockchains and KPMG’s Chain Fusion, which offers crypto asset management tools to institutional investors.

The alliance started in October 2020 when KPMG announced a strategic partnership with CoinMetrics to expand its blockchain product suite. The alliance aims at ensuring the delivery of reliable and accurate data and proprietary analytics to institutional investors.

In the report, CoinMetrics also announced its FARUM business product suite’s commercial launch allowing BitGo clients to efficiently mitigate and monitor risks on public blockchains such as Bitcoin. FARUM provides risk management tools that allow identifying and monitoring network attacks, fee volatility risks, and any unusual events on the blockchain.

According to BitGo Chief Revenue Officer Pete Najarian, the alliance is designed to increase institutional adoption of crypto while boosting the safety of funds. He said,

“Through this collaboration, we will be delivering the products and services that our institutional clients have needed to allow broad adoption of digital assets.”

KPMG will integrate its Chain Fusion system, which provides users with a suite of products to manage crypto assets. The data infrastructure also provides institutional investors a simpler way to keep up with reporting, regulations, and compliance.

The new product “marks a significant step forward in uniting the core capabilities” of the firms, Arun Ghosh, Principal and KPMG Head of Blockchain for One Americas, said in a statement. Institutions and banks can now leverage the experience in custody, system integration security, risk, and compliance in a one-stop-shop.

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Author: Lujan Odera

Cosmos (ATOM) Joins Forces with China’s Blockchain Service Network (BSN)

Cosmos (ATOM) Joins Forces with China’s Blockchain Service Network (BSN)

  • China-only Blockchain-based service network (BSN), China’s blockchain infrastructure project, announced the addition of Cosmos (ATOM) blockchain to its network.

In a tweet sent out this Monday, Chinese permissioned blockchains, BSN open permissioned blockchains (OPBs) announced they’ve adapted the first batch of networks, “Wechang chain” based on the Cosmos blockchain and Tai’an chain based on FISCO BCOS.

The Chinese only blockchain service network only permits permissioned enterprise blockchains, which differs from the global version which supports any blockchain.

China’s BSN is aiming to promote permissioned blockchains interoperability and improve the efficiency of transacting across them hence the move to add Cosmos. The integration might of Cosmos, a multi-chain system focused on completing cross-chain value transfer, could be a major step in transacting digital assets and data across permissioned enterprise blockchains.

Moreover, Cosmos is also well regulated under China’s laws and will help keep China’s BSN and the BSN international community in check.

The BSN international community has been growing in the past few years adding Ethereum, Tezos, Nervos, Neo, EOSIO, and IrisNet (developed by Chinese blockchain startup Bianjie, also the creator of Wenchang Chain) in September 2020. More blockchain was added later in the month including Solana, Algorand, and ShareRing with a plan to add over 40 blockchains by summer.

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Author: Lujan Odera

Ripple’s RippleNet Cloud Service Receives SOC 2 Certification from American Institute of CPAs

Ripple’s RippleNet Cloud Service Receives SOC 2 Certification from American Institute of CPAs

RippelNet has received significant security and privacy compliance milestone for its RippleNet Cloud service. This comes amid the company’s battle with the SEC.

  • While Ripple Labs continues to face significant pressure from a legal battle with the Securities and Exchange Commission (SEC), the company continues to mark wins in other areas.
  • The Silicon Valley firm announced that it had received a significant auditing compliance certification for one of its other tools.

RippleNet Cloud Works Well So Far

According to an announcement, Ripple Labs confirmed that it had gotten a System and Organization Controls 2 (SOC 2) certification from the American Institute of Certified Public Accountants (AICPA) for RippleNet Cloud, its cloud-based institutional payment network.

Ripple’s statement explained that the certification was in recognition of its work in facilitating payments for its ever-expanding network of clients.

As Ripple explained, the rise of the coronavirus brought a significant demand for effective cloud-based, digital payment services. RippleNet Cloud, which launched in June 2020, has so far been able to onboard 40 banking institutions worldwide, providing quick and reliable cross-border payment solutions to them.

As the blockchain company explained, financial institutions have been steadily demanding RippleNet Cloud. The service allows them to deploy modern payment infrastructures in less than five weeks, much faster than what it would take with in-person deployment. Ripple added:

“In fact, RippleNet Cloud transaction volumes doubled every eight weeks in 2020 and reached an annualized run-rate of 1.8 million transactions, per Q4 volumes. More than half of all RippleNet transactions today flow through Cloud and now, customers can put further trust in RippleNet’s security capabilities.”

Plans In Case the SEC Shuts XRP Down

The SOC2 certification confers a service with high standards in terms of data security and privacy. As Ripple explained, the certification means that institutions looking to deploy the service into their infrastructure can now feel more confident about doing so. The Gemini Trust Foundation, a crypto holding company owned by the Winklevoss twins, also has the certification.

With a new compliance certification in the bag, RippleNet Cloud can now become another cornerstone of Ripple’s business, akin to that of the company’s on-demand liquidity (ODL) tool, which helped it to reach unicorn status back in 2019.

It also provides another avenue for Ripple to focus on, especially now that the fate of the XRP is in the balance. In December, the SEC sued Ripple Labs over the firm’s XRP token, which the agency calls a security. The financial watchdog also slammed Ripple for engaging in an unregistered securities offering in the asset’s 2013 Initial Coin Offering (ICO).

While Ripple is committed to fighting this suit in court, the prevalent opinion is that the SEC will emerge victorious in the case. If that happens, Ripple might be forced to leave the country and move the use of its token elsewhere.

For now, Japan might be the frontrunner for the company’s new base. Ripple already has a significant presence in the country, thanks in large part to its partnership with local financial services giant SBI Holdings. Earlier this week, the latter announced that it would add support for XRP to its crypto lending platform, SBI VC Trade.

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Author: Jimmy Aki

Brave Pushes Towards A Decentralized Web; First Browser to Add Native IPFS Support

Brave rapidly built a reputation for itself as the challenger to conventional, centralized internet service providers. More recently Brave took its latest ambitious step to the support of an entirely decentralized web. How it intends to do this is through offering full native integration with a peer-to-peer networking protocol.

Known more commonly as the Interplanetary File System (or IPFS for short), this protocol sets its sights on fundamentally improving the dominant application layer protocol – HTTP. Along with processing content faster, IPFS also aims to make it easier to access, and more resistant to failure.

The prospect of any protocol dethroning HTTP is an impressive one, but how does it work? TechCrunch offers a concise view of how IPFS works and how it could accomplish all that it claims. To summarize – HTTP was originally designed for browsers to gain access to information stored on central servers. IPFS, however, accesses these same browsers with the use of a network of distributed nodes. While this is similar to obtaining or validating information on the blockchain, you can also liken it to downloading content from a solution like BitTorrent. This is a fundamental difference in how browsers can access information, with little to no difference from the end-user’s perspective.

IPFS offers a range of benefits over HTTP, such as faster speeds, better security, and more resilience to failure; being based upon a distributed network of nodes. One of the more pivotal attributes of IPFS is that web content could be made far more resistant to censorship.

“IPFS gives users a solution to the problem of centralized servers creating a central point of failure for content access,” Brave’s CTO Brian Bondy commented, regarding IPFS, adding that “the power to seamlessly serve content to millions of new users across the globe via a new and secure protocol.”

Brave has been a long-standing supporter of the IPFS protocol, having worked on it since 2018. At the moment, with the launch of version 1.19 of the Brave Browser, it’s 24 million monthly active users will be able to directly access IPFS content by resolving URIs that start with ‘IPFS://’.

Brave users can also choose to install a full IPFS node, making their Browser a contributing node to the P2P network.

Molly Mackinlay, the Project Lead for IPFS, shared the motivation behind the creation and launch of the IPFS protocol, citing that a decentralized web can help users fight back against ‘systemic data censorship’ from government entities and monopolistic Big Tech. Mackinlay said,

“Today, Web users across the world are unable to access restricted content, including, for example, parts of Wikipedia in Thailand, over 100,000 blocked websites in Turkey, and critical access to COVID-19 information in China.”

“Now anyone with an internet connection can access this critical information through IPFS on the Brave browser.”

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Author: James Fox

Crypto Mining Service, Titan, Receives Investment Funds From Coinbase Ventures

Crypto Mining Service, Titan, Receives Investment Funds From Coinbase Ventures

The developer of Bitcoin mining software and services Titan has announced a strategic investment fund from Coinbase Ventures. The investment fund was made during Titan’s seed fundraising round.

The investment will allow Titan to expand its offerings, which enable Bitcoin mining firms to achieve growth, profitability, efficiency, and sustenance.

Titan’s Expansion Goals Continue

Titan has been very active in the market lately. Last month, the company announced a partnership with North American mining leaders CoreScientific and CoinMint. The partnership is part of the agreement to become members of the Titan Pool. It is designed to help miners in the cryptocurrency industry meet opportunities and deal with challenges that may come in the future.

The Titan Pool is currently undergoing a high-volume test, as the firm is planning to launch its closed beta this month. Co-founder and chief executive officer of Titan Ryan Condron have commented on the development.

“The investment from Coinbase Ventures serves as a powerful endorsement of the Titan team, roadmap and vision,”

He added that the mining industry had advanced a lot, as it started from being a hobby to becoming an industry. Now, it’s a critical global computing infrastructure. Condron also reiterated that Titan is now equipped to help top miners in the world to overcome their challenges.

Titan says it makes mining less complicated, scalable, and profitable using its advanced mining management software. The company was launched in September 2018 by Matthew Roszak, Jeff Garzik, and Ryan Condron.

Coinbase Prepares for IPO

In another development, Coinbase is certainly one of the most popular cryptocurrency exchanges in the U.S, as the cryptocurrency exchange is highly profitable. However, despite its popularity, the company isn’t a publicly listed exchange and doesn’t make its financial figures available to the public.

This may come as a surprise to many, considering the popularity of the exchange. This may change as the company is preparing for an IPO.

Most of the company’s profits are from trading fees from Bitcoin and other crypto assets. The company filed an S-1 form intending to launch an IPO with the U.S. Securities and Exchange Commission (SEC) on December 22.

The firm has been involved in several projects and partnerships. It has also invested in a lot of startups to expand its portfolio and encourage more cryptocurrency adoption.

The investment with crypto mining pool Titan is another strong indication of where the exchange’s goals lie. While it has invested in several projects, the firm also received funds from top investment firms like Andreessen Horowitz and Tiger Global Management.

With the firm’s massive growth, many investors would want to participate in its upcoming IPO, which may likely be the biggest in 2021 as Bakkt and Gemini prepare for IPO’s as well.

This is not the first mining investment of Coinbase. In 2018, the exchange also invested in mining hardware startup Coinmine.

The Titan investment will help the crypto mining pool complete its beta testing phase, which is expected to end in February. Mining giant Core Scientific is among the clients currently testing the pool.

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Author: Ali Raza

PayPal & Revolut’s Crypto Brokerage, Paxos, Raises $142M to Facilitate Digital Asset Adoption

Thanks to a new funding round, the blockchain startup is powering PayPal’s new cryptocurrency service is gearing up for a big year in 2021.

Gearing Up for 2021

The company confirmed that it had raised $142 million in new funds and is looking forward to significant growth in the new year.

Per a press release, Paxos confirmed that its Series C funding round was led by Declaration Partners, a New York-based investment management firm backed by billionaire David Rubenstein. The round also included Mithril Capital and PayPal, which is already a major Paxos partner.

The funding round brings Paxos’ overall haul to $240 million. Company chief executive Charles Cascarilla explained that the funds would go a long way in bolstering its expansion plans as it looks to build the “market infrastructure of the future.” He added that the company would double its workforce, expand its product solutions, and create new products to target enterprises.

The CEO also reiterated his company’s commitment to regulation and security.

Plans Ahead

While Paxos appeared to have started the year quietly, the past few months have been monumental for the firm. The company was instrumental in PayPal’s smooth entrance into the crypto space, partnering with the payment processor to launch PayPal’s crypto service.

PayPal announced its crypto offering in October, confirming that it would allow users to spend cryptocurrencies at merchants that accept its service. The crypto service will support Bitcoin, Litecoin, Ether, and Bitcoin Cash. Explaining its role, Cascarilla said in a blog post that Paxos built the underlying platform that will power PayPal’s crypto service.

As the blog post explained, Paxos fits into PayPal’s service on two fronts. Its crypto brokerage service will provide PayPal with easy crypto trading and custody. The company is lending its API to the payment processor to promote an easy and seamless user experience.

BitLicense was also instrumental in helping PayPal secure a conditional Virtual Currency License (BitLicense), allowing it to provide its crypto services to New Yorkers.

Along with its PayPal integration, Paxos is also working towards becoming a fully-registered crypto bank. The stablecoin issuer filed its application last week, looking to incorporate its Paxos General Trust in New York.

blog post to that effect explained that the company would hope to broaden its service range and coverage through the bank charter. The bank pointed out,

“Our mission is to modernize financial market infrastructure and enable the movement of any asset, any time, in a trustworthy way. A national Trust Bank charter would help us realize our goal by enabling us to serve customers across the country in the most efficient way.”

With two business opportunities laying ahead, Paxos seems poised to become more of a force in the industry come 2021.

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Author: Jimmy Aki

Australian Crypto Payments Service Provider, Banxa, Set to Go Public in Canada

Banxa, an Australian based fiat-crypto payments service provider, is set to list on the Canadian Stock Exchange this December. The shares of this crypto startup will begin trading on the Canadian VC marketplace dubbed ‘TSX Venture Exchange,’ an ecosystem run by TMX Group, which is also in charge of the Toronto Stock Exchange.

According to the initial reporting by a local Financial Review Street talk section, Banxa will be listed on TSX Venture Exchange with an estimated market cap of $50 million. Notably, the firm had already received a green light from Canadian authorities to debut within this jurisdiction. Banxa touted the listing as the first of its kind for a crypto payments provider. Domenic Carosa, the founder and Chairman of Banxa, informed the publication that,

“Our TSX listing will make Banxa the first crypto Payment Service Provider (PSP) to be listed in the world, bringing well-needed transparency and governance to the crypto sector.”

The Aussie crypto startup has been operational for around six years and now enjoys the backing of heavyweights, including OKGroup, Alium Capital, and Alex Waislitz’s Thorney. Some of its clients include prominent exchanges and digital wallet providers like Shapeshift, Abra, Kucoin, OKEx, and Binance. Banxa has raised around $5 million pre-IPO, holding its series A funding earlier in the year.

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Author: Edwin Munyui

BlockFi Eyes European Market in Q1 2021; Excludes the UK Due to Regulatory Uncertainty

BlockFi, a crypto lending service, is eyeing the European retail market with an expected product launch in Switzerland, Italy, and the Netherlands by the first quarter of 2021. The crypto lending firm has already begun the trials for the launch in Italy. However, to many people’s surprise, BlockFi has excluded the United Kingdom from the list despite having several London offices.

David Olsson, Blockfi’s vice president for Europe and Asia, shed some light on the launch of their retail products in the European market and said,

“They’re large enough markets that it’s worth our while to go in and put the resources to work to get traction there, and there is also the regulatory certainty that they’re more pro-crypto and it’s a stable regulatory environment.”

The crypto lending firm said that they are only focusing on institutional clients in the UK for now. The reason for excluding the UK could also be attributed to the latest crypto regulation update in October made by the Financial Conduct Authority (FCA). The October update prohibited offerings of derivative crypto products to retail investors.

While the October update does not impact BlockFi, the firm is currently observing the country’s retail market and regulatory policies surrounding it. The crypto lending firm believes it’s too complicated at present to roll out an elaborate business model in the country.

Olsson said that the October ban on derivatives offering for retail investors would hamper the future of crypto services in the country. He said that the ban looks like “it’s putting crypto on a different footing to equities,”

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Author: Silvia A

Crypto Finance Firm, Amber Group, Partners With BitGo As The Custodian For Institutional Investors

Global crypto finance service provider Amber Group announced BitGo Trust as its qualified custodian for its institutional investors and traders.

Amber Group is a renowned name when it comes to high-frequency trading and crypto financing for institutional investors. The firm is trying to use its industry experience in partnership with the BitGo to expand its offerings. The firm wants to expand its market reach to next-generation cryptocurrency traders as well as high net-worth investors.

Amber says BitGo is the right custodian partner

Amber Group says it chose BitGo for its collaboration because of the company’s user policy controls, compliance tools, and battle-tested institutional-ready custody used in securing customers’ assets.

Another major factor that swayed Amber Group towards BitGo is the benefit of issuance. Last year, BitGo launched the most expansive and comprehensive insurance policy for digital assets, including the $100 million as protection against assets held in custody. It provided a certain level of assurance of digital assets protection that isn’t common in the industry. The assurance of funds protection is one reason why Amber Group choose BitGo as a partner in this new project.

BitGo is offering protection for funds held in its custody via the European marketplace and a syndicate of insurers in the Lloyd’s of London.

The clients who buy Excess Specie Insurance, as it is called, will stand as Dedicated Customer Loss Payee in the insurance policy, which offers an extra level of insurance protection.

The partnership will transform future finance

Chief executive officer of BitGo, Mike Belshe, has commented on the partnership. He said the partnership with Amber couldn’t have come at a better time, as Amber group has a leading edge in crypto innovations. Belshe further stated that the team at Amber was carefully selected, and they are all seasoned professionals, which is why the partnership with the firm is great.

He further reiterated that BitGo would be providing the custody infrastructure, liquidity, and security necessary for the transformation of future finance via the collaboration.

The Chief executive officer of Amber Group, Michael Wu, has also commented on the development. He pointed out,

“As we scale our operations into more jurisdictions, we prioritize partnering with reliable and well-reputable infrastructure providers like BitGo.”

He further said that the Amber group’s daily operations require the successful implementation of rigorous security measures. The company must choose the right partner committed to asset protection more than anything else in the industry.

Amber was founded in 2017 and has grown to become a top crypto-finance service provider, with more than 200 institutional clients worldwide. It has received funds from institutional partners like Coinbase Ventures, Fenbushi Capital, Blockchain.com, Dragonfly Capital, and Polychain Capital.

Amber says it’s committed to bringing professionalism and more transparency to the cryptocurrency market.

Rumor: PayPal Exploring Acquiring Crypto Companies, In Talks with Bitcoin Custodian BitGo

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Author: Ali Raza