digital assets

Wyoming lawmakers pass bill to prevent forced disclosure of private keys

If Wyoming Governor Mark Gordon signs the bill, from July 1 individuals in Wyoming will be protected from being forced to divulge their private keys, with one limited exception.

Wyoming lawmakers have passed a bill that will prohibit courts in the state from forcing someone to disclose their digital asset private keys, with one minor exception.

The bill was passed by a vote of 41-13 in the Wyoming House of Representatives on Feb. 15, a day after passing 31-0 in the Wyoming Senate.

If the bill is approved by Wyoming Governor Mark Gordon, the law will come into effect on July 1.

*The new law — W.S. 34-29-107 — titled “Production of private keys; prohibition.” Source: The State of Wyoming Legislature*

“No person shall be compelled to produce a private key or make a private key known to any other person in any civil, criminal, administrative, legislative or other proceeding[s]” in the state of Wyoming, the incoming law reads.

The law includes any private keys associated with digital assets, one’s digital identity or any other interests or rights to which the private key provides.

BIG STUFF–today the #Wyoming legislature passed a bill prohibiting compelled disclosure of private keys (w/ some exceptions), by a veto-proof majority! CONGRATS to @rothfuss @JaredSOlsen @itsmikeyin & special thx @ChristopherA. Next stop @governorgordon https://t.co/qu0OoWMzKO

— Caitlin Long ⚡️ (@CaitlinLong_) February 16, 2023

The minor exception involves when a public key is unavailable or is unable to disclose details of the digital asset, digital identity or other interest or right.

However, the act also states that the new law will not bar one from being compelled “to produce, sell, transfer, convey or disclose a digital asset, digital identity or other interest or right” that a private key could provide access to.

It also doesn’t prevent one from being compelled to “disclose information about the digital asset, digital identity or other interest or right.”

The new law — W.S. 34-29-107 — will be titled “Production of private keys; prohibition.”

The private keys legislation comes under Chapter 29 — Digital Assets which is a subset of Title 34 — Property, Conveyances and Security Transactions.

The passing of the bill comes as the private key law has been in the works since as early as September 2019.

Wyoming has long been touted as one of the most crypto-friendly states in the U.S.

It was the first state in the U.S. to declare a decentralized autonomous organization (DAO) as a limited liability company (LLC) in July 2021, and has previously considered a state-issued stablecoin in February 2022 — however, it appears that those endeavors haven’t progressed too much since then.

Israeli court rules authorities can seize crypto in 150 blacklisted wallets

Over 150 crypto wallets blacklisted for alleged links to the funding of terror groups can now be drained of all funds following a ruling by an Israeli court.

Tel Aviv’s Magistrate Court has reportedly issued a ruling allowing Israel’s government to seize all the crypto in more than 150 digital wallets that it has blacklisted for allegedly funding terrorist groups.

According to a Dec. 18 local Israeli media report, Israeli Defense Minister Benny Gantz says the court’s Dec. 15 ruling has already allowed authorities to seize a further $33,500 from digital wallets linked to the Islamist militant group Hamas.

Prior to the court ruling, Israeli authorities had only been legally allowed to seize digital assets with direct links to terrorist activity but not additional funds in the same wallets. In December 2021, authorities seized $750,000 from the wallets.

The de facto ruling authority of Palestine’s Gaza Strip since 2007, Hamas is classified as a terrorist organization in whole or in part by several countries and international blocs including the United States, European Union, Israel and the United Kingdom.

Starting in January 2019, Hamas began appealing to its supporters to send funds using Bitcoin (BTC) as a means to combat sanctions and financial isolation.

Gantz signed an order on July 9, 2021, authorizing security forces to seize crypto accounts with alleged ties to the militant wing of Hamas.

Authorities disclosed at the time the accounts contained Tether (USDT), Ether (ETH), Dogecoin (DOGE), XRP (XRP), Binance Coin (BNB), Zcash (ZEC), Litecoin (LTC) and other altcoins.

In Februa, 30 crypto wallets from 12 exchange accounts linked to Hamas were seized by Israeli authorities as well.

The exact value of the crypto assets seized was not publicly revealed.

Crypto has been shown to have a relatively minor role in fundraising for terrorist groups. Early in 2022, blockchain analytics firm Chainalysis determined only a small portion of crypto funds are used in criminal activity.

US consumer watchdog probes crypto firms over deceptive ads

The Federal Trade Commission is investigating several unnamed crypto firms over possible misconduct in the advertisement of digital assets.

Several crypto firms are facing a probe from the United States Federal Trade Commission (FTC) over possible deceptive or misleading advertisements relating to cryptocurrencies.

According to a Dec. 6 report from Bloomberg, FTC spokeswoman Juliana Gruenwald said the watchdog is investigating “several firms for possible misconduct concerning digital assets.”

Gruenwald did not provide further details about which firms were the subject of the investigation or what had triggered the probe.

However, deceptive advertising and promotion have been a trending topic in the United States this year.

In October, reality TV star Kim Kardashian was fined by the United States Securities and Exchange Commission (SEC) for “touting on social media” about the EthereumMax (EMAX) crypto token without disclosing she was paid $250,000 to promote it.

In November, NFL quarterback Tom Brady and NBA point guard Stephen Curry were reportedly among a group of celebrities facing a probe from the Texas financial regulator over their promotion of the now-bankrupt crypto exchange, FTX.

The FTC is an independent agency of the United States which was created to protect the public from deceptive or unfair business practices through law enforcement, research and education.

Earlier this year, they sent out an alert about a crypto scam with three key components, an impersonator, a QR code and a crypto ATM where the victims will be directed to send money.

They also revealed in a June 6 report nearly half of all crypto-related scams originated from social media platforms in 2021, and as much as $1 billion in crypto has been lost to scammers throughout the year.

Cointelegraph reached out to the FTC for comment but did not receive a reply by the time of publication.

Globally, several financial watchdogs and enforcement agencies have also been actively trying to curb deceptive crypto advertisements.

In March, the United Kingdom-based Advertising Standards Authority (ASA) issued an enforcement notice to over 50 companies advertising crypto, instructing them to review their ads to ensure they comply with the rules.

In August, the U.S.-based consumer watchdog group Truth in Advertising called out 19 celebrities for allegedly promoting nonfungible tokens (NFTs) without disclosing their connection to the projects.

Australia’s financial regulator has also fired warning shots across the crypto industry about deceptive advertising tactics.

In October, the Australian Securities and Investments Commission (ASIC) launched civil proceedings against Australian firm BPS Financial Pty Ltd (BPS) over alleged “misleading” representations concerning its Qoin token.

INX submits bid for Voyager Digital’s assets

FTX US won a $1.4-billion bid to purchase Voyager’s assets in September, but with the firm filing for bankruptcy, the funds were once again up for grabs.

Trading platform INX has submitted a bid for an undisclosed amount to purchase the assets of crypto brokerage firm Voyager Digital.

In a Nov. 30 announcement, INX said it had sent a non-binding letter of intent for Voyager’s assets following the platform filing for bankruptcy in July. According to INX CEO Shy Datika, the bid was aimed at providing “credibility, technology, and unique regulatory positioning” for Voyager users seeking stability in a volatile market.

Voyager’s original bankruptcy filing from the Southern District Court of New York suggested the firm could owe between $1 billion to $10 billion to more than 100,000 creditors amid a bear market and exposure to Three Arrows Capital. In September, FTX US won a $1.4-billion bid to purchase Voyager’s assets, but with FTX Group itself filing for bankruptcy in November, the funds were once again up for grabs.

Binance has reportedly been considering a bid for Voyager’s assets, while crypto exchange CrossTower was one of the firms that made an offer prior to FTX’s downfall. Cointelegraph reported on Nov. 13 that CrossTower had been working on a revised bid following FTX Group’s bankruptcy filing. INX was not part of the bidding process in September.

Cointelegraph reached out to INX for comment, but did not receive a response at the time of publication.

FTX bankruptcy freezes millions worth of crypto company funds

Galois Capital, New Huo Technology and Nestcoin are just some of the crypto firms with funds stuck on FTX as the exchange undertakes bankruptcy filings in the United States.

The collapse of the cryptocurrency exchange FTX continues to have knock-on effects throughout the crypto industry, with multiple crypto-focused companies reporting significant amounts of their capital stuck on FTX.

Between Nov. 11 to 14, three crypto companies announced large losses, with one of them having to lay off workers to deal with the crisis.

On Nov. 11, crypto hedge fund Galois Capital announced it had “significant funds” stuck on FTX, with a Nov. 12 Financial Times report that said a possible $50 million worth of Galois’ assets were stuck on the exchange.

Other crypto-focused companies have reported their funds arestuck on the now-bankrupt exchange.

New Huo Technology, the owner of the Hong Kong-based crypto platform Hbit Limited announced on Nov. 14 it failed to withdraw $18.1 million worth of cryptocurrency before FTX stopped processing withdrawals.

$13.2 million of this loss are digital assets owned by Hbit users with the company saying it would continue to take steps to “withdraw the cryptocurrency as soon as possible,” bit admitted due to FTX’s bankruptcy filings the crypto “may not [be] able to be withdrawn from FTX.”

According to the announcement, Li Lin, the controlling shareholder of the company and founder of the Huobi crypto exchange, agreed to loan up to $14 million to the company for it to use in processing withdrawals. However, the company does not yet know what the financial impact of FTX’s bankruptcy will be if it is never able to withdraw the funds.

Nigerian Web3 startup Nestcoin also announced it failed to withdraw funds from FTX with the company’s CEO, Yele Bademosi, posting to Twitter on Nov. 14 a letter previously shared with investors.

The letter detailed that Nestcoin will lay off workers “as we held our assets (cash and stablecoins) at FTX to manage our operational expenses” and it no longer has the funds to pay some staff.

An update shared with our investors earlier today on the FTX incident and its impact on @Nestcoin. pic.twitter.com/0Mjo4SYF7R

— YB (25,25) ⏳ (@YeleBademosi) November 14, 2022

Previously crypto data aggregator platform CoinGecko warned on Nov. 13 that layoffs across the crypto sector could increase in the coming months when the “full impact” of FTX’s sudden collapse takes effect.

On November 11, FTX said roughly 130 companies in its FTX Group including its United States entity FTX.US and sister trading firm Alameda Research declared they would file for bankruptcy in the U.S. after FTX suffered a liquidity crisis and was unable to process user withdrawals, leaving its customers without access to their funds held on the exchange.

Its Bahamas-based subsidiary, FTX Digital Markets had its assets frozen by the local securities regulator on Nov. 10 and liquidators appointed to safeguard its funds while the bankruptcy proceedings are undertaken.

IRS introduces broader ‘Digital Assets’ category ahead of 2022 tax year

An early draft of the 2022 IRS tax form sees cryptocurrencies, stablecoins and nonfungible tokens grouped under a new “Digital Asset” category.

American taxpayers will find a broader, more defined category encompassing cryptocurrencies and nonfungible tokens (NFTs) in their 2022 IRS tax forms. The draft bill released by the Internal Revenue Service features a well-defined Digital Assets section that outlines if and how taxpayers will account for the use of cryptocurrencies, stablecoins and NFTs.

Page 16 of the draft defines Digital Assets as any digital representations of the value recorded on a “cryptographically secured distributed ledger or any similar technology.” 2021’s tax form required taxpayers to indicate whether they had received, sold or exchanged in “virtual currency” — with this term changing in the yet-to-issued 1040 tax form for 2022.

Taxpayers are required to answer the Digital Assets section of their income tax return whether or not they have engaged in digital asset transactions during the tax year.

A number of situations will require American taxpayers to indicate yes to the question on Digital Assets of Form 1040 or 1040-SR. This includes receiving as a reward, award or payment for property or services or sold, exchanged, gifted or disposed of a digital asset in 2022.

This would include instances where an individual received digital assets as payment for property or services provided or as a result of a reward or award. Receiving new digital assets through mining or staking also falls under this category, as does transacting digital assets in exchange for goods or services as well as exchanging or trading digital assets.

Holding cryptocurrencies, stablecoins or NFTs as well as staking tokens is also clearly addressed in the draft tax form:

“You have a financial interest in a digital asset if you are the owner of record of a digital asset, or have an ownership stake in an account that holds one or more digital assets, including the rights and obligations to acquire a financial interest, or you own a wallet that holds digital assets.”

The Digital Assets explainer also outlined conditions that do not require taxpayers to check Yes on their tax forms. If an individual holds a digital asset in a wallet or account, transfers digital assets from a wallet or account to another wallet or account owned by themselves or acquires digital assets using United States dollars or other fiat currencies through electronic platforms like PayPal.

Digital asset transactions can be clearly classed in either capital gains or income sections of the 2022 tax return.

If an individual disposed of any digital asset during the year which was held as a capital asset, they are expected to calculate their capital gain or loss and report on Schedule D of the tax return.

If individuals received digital assets as payment for services or sold digital assets to customers in a trade or business, this would need to be reported as income in its specific category.

UK Law Commission to review international laws on crypto to consider legal reforms

The legal review authority will work to compile law reform proposals for public consultation in the second half of 2023.

The Law Commission of England and Wales will set about reviewing private international legal challenges involving cryptocurrencies through a government-commissioned project.

The review, launched on Oct. 18, will provide clarity on how international law approaches emerging technologies like cryptocurrencies, digital assets and electronic documentation.

The law reform project, dubbed “Digital Assets: Which Law, Which Court?” will outline current international legal rules and their application to digital contexts with the purview of making recommendations for legal reforms to keep United Kingdom laws relevant.

The project is sponsored by the Ministry of Justice and intends to develop reform proposals to be published for public consultation by the second half of 2023.

The announcement highlighted that the proliferation of blockchain technology has generated a number of conflict of law issues, which, in turn, has created legal uncertainty for users, organizations and governments.

A major hurdle is considering which courts have the power or jurisdiction to hear disputes and which laws should be applied. This is also due to the digital nature of cryptocurrencies and digital assets like nonfungible tokens (NFTs), which are intangible in nature, distributed and geographically difficult to define, which further exacerbates legal considerations.

Sarah Green, law commissioner for commercial and common law, highlighted the difficulty in dealing with legal disputes involving the burgeoning space in a statement shared with Cointelegraph:

“With digital assets and other emerging technologies developing rapidly in recent years, the laws that support and govern them have struggled to keep pace. This has led to inconsistencies across jurisdictions, with uncertainty over which laws should be applied and which courts should rule on them.”

The announcement also stressed its aim of supporting innovative digital technologies like cryptocurrencies in the U.K. as the country looks to establish itself as a hub for cryptocurrency adoption.

The Law Commission has been involved in a number of law reform projects involving smart contracts, digital assets and decentralized autonomous organization electronic trade documents. Cointelegraph has reached out to the Law Commission to ascertain further details of the project

Japanese banking giant Nomura launches digital ecosystem VC arm

“Staying at the forefront of digital innovation is a key priority for Nomura,” said president and group CEO of Nomura Holdings Kentaro Okuda.

Nomura, one of the largest investment banks in Japan, has established a venture capital arm aimed at investing in companies focusing on crypto and blockchain.

In a Wednesday announcement, Nomura said the business, named Laser Digital, will “provide new value in the area of digital assets” for clients under the Switzerland-based holding company Laser Digital Holdings AG. The investment bank said it chose Switzerland based on its “robust regulatory regime for digital assets and blockchain projects” in addition to potentially recruiting talent.

“Staying at the forefront of digital innovation is a key priority for Nomura,” said president and group CEO of Nomura Holdings Kentaro Okuda.

Laser Digital’s venture capital product, Laser Venture Capital, will focus on investments including centralized finance, decentralized finance, Web3 and blockchain infrastructure. Laser Digital said it planned to announce additional products and services “over the coming months” aimed at secondary trading and investor products.

As one of the largest banks in Japan, Nomura Holdings had a reported $454.8 billion in gross assets under management as of June 2022 at the current exchange rate with a historically weak yen. Cointelegraph reported in May that Nomura planned to launch a crypto subsidiary aimed at investments in crypto and nonfungible tokens that would be based outside of Japan with a board of directors staffed by Japanese transplants until it could acquire local talent.

Canadia’s new opposition leader is a Bitcoiner

The new Conservative Party of Canada leader has previously advocated for financial freedom through crypto tokens, smart contracts and decentralized finance.

Canadian politician and noted crypto advocate Pierre Poilievre has taken the helm of Canada’s Conservative Party, which looks set to give the current administration a run for its money in the next federal election.

The pro-crypto politician reportedly won the leadership of the Conservative Party of Canada in a landslide victory on Sept. 10, securing 68.15% of the electoral points up for grabs, an far outpacing his nearest opponent Jean Charest who received just 16.07% of the vote.

Poilievre has been a member of the Conservative Party since 2003, first winning office in the 2004 election. He has since served as a Member of Parliament for seven terms and held various roles including Shadow Minister for Finance and Minister of Employment and Social Development.

Poilievre has been known as a supporter of crypto and Bitcoin (BTC), advocating for more financial freedom through tokens, smart contracts, and decentralized finance.

His latest appointment means that Canadians may be able to eventually vote for a pro-crypto Prime Minister in the 2025 federal election, which is set to take place on or before Oct. 20, 2025, to determine who will be the 45th Canadian Prime Minister.

Earlier this year, Poilievre urged the Canadian public to vote for him as leader to “make Canada the blockchain capital of the world,” adding:

“Let people take back control of their money from bankers & politicians.”

Let people take back control of their money from bankers & politicians.

Expand choice, lower costs of financial products, create thousands of jobs.

Get your membership. So you can vote for me as leader. To make Canada the blockchain capital of the world: https://t.co/d9I1ky9w2t pic.twitter.com/qQrJct9gKK

— Pierre Poilievre (@PierrePoilievre) March 28, 2022

In March, YouTube channel BITCOIN posted a video of Poilievre at a Tahinis Restaurant during his leadership election campaign talking about his support for crypto, saying: “We must keep cryptocurrencies legal.”

“People should have the freedom to choose other money. If the government is going to abuse our cash, we should have the freedom to use other, higher quality cash.”

He also briefly spoke about ideas to simplify crypto taxes, rules and regulations so there was a consistent law across Canada.

In the same video, he bought chicken shawarma using the Lightning Network.

However, Poilievre has offered very few specifics on how his party would implement the regulation and adoption of crypto if they unseat current Prime Minister Justin Trudeau’s Liberal party.

The Conservative Party of Canada currently holds 16 out of 105 seats in the Senate and 119 out of 338 in the house of commons, while Trudeau’s Liberal government has a minority government with 160 seats in the house of commons.

To form a majority government requires at least 170 seats in the house of commons.

Canada made its foray into the global digital asset space when its Parliament passed a national law on digital currencies in 2014.

The Canadian regulatory council also created a new preregistration filing for crypto platforms in August of this year.

Only a relatively small number of Canadians currently hold BTC, according to the Bank of Canada Financial System Review released in June 2022 — with about 13% of Canadians owning some in 2021, up from 5% in 2020.

Canada’s new opposition leader is a Bitcoiner

The new Conservative Party of Canada leader has previously advocated for financial freedom through crypto tokens, smart contracts and decentralized finance.

The pro-crypto politician reportedly won the leadership of the Conservative Party of Canada in a landslide victory on Saturday, securing 68.15% of the electoral points up for grabs, and far outpacing his nearest opponent Jean Charest who received just 16.07% of the vote.

Poilievre has been known as a supporter of crypto and Bitcoin (BTC), advocating for more financial freedom through tokens, smart contracts and decentralized finance.

His latest appointment means that Canadians may be able to eventually vote for a pro-crypto leader in the next federal election — set to take place on or before Oct. 20, 2025, to determine the 45th Canadian Prime Minister.

Earlier this year, Poilievre urged the Canadian public to vote for him as their leader to “make Canada the blockchain capital of the world.”