原文标题：Top Stories of the Week - 4/26
原文作者:Charles Yu,Gabe Parker,Christine Kim
原文来源：Galaxy Digital
Compilation: MK, Mars Finance
This week, our newsletter covers the Consensys standoff with the SEC, new edits added to the Bitcoin BIP repository, and the IRS's new draft 1099 for digital assets.
Consensys 加入与 SEC 的对抗
Consensys filed a lawsuit with the SEC, accusing it of "illegally usurping Ethereum's powers." In a lawsuit filed Thursday in the U.S. District Court for the Northern District of Texas, Consensys challenged the SEC's practice of regulating Ether as a security. According to the lawsuit, Consensys received a Wells notice from the SEC on April 10 indicating that the SEC is preparing charges against its MetaMask wallet, alleging that the wallet acted as an unlicensed broker to facilitate securities trading by swapping and staking products.
In a blog post, Consensys founder Joe Lubin explains two main reasons for filing a lawsuit against the SEC: first, the SEC "should not be allowed to arbitrarily expand its jurisdiction to cover the future of the regulated Internet," and second, "the SEC's reckless behavior has created confusion for developers, market participants, institutions, and countries who are building or already managing critical systems on the Ethereum platform." Lubin also emphasized that Consensys' position is clear: (i) Ether is not and should not be considered a security, and (ii) wallet software that allows people to buy, sell, and transfer Ether, such as MetaMask, is not a broker-broker.
Consensys has joined the fight against the SEC's over-regulation of cryptocurrencies, and the Ethereum-centric company works to protect the broader Ethereum ecosystem. In addition to supporting MetaMask, the most popular cryptocurrency wallet, Consensys also offers products such as Infura and Truffle (API and development tool suite), Besu and Teku (Ethereum clients), and Linea (the emerging ZK rollup protocol). However, according to the filing of the lawsuit, it appears that at this time the SEC is only targeting MetaMask Swaps and MetaMask Stake products. If the SEC's projected charges were based on these MetaMask products, those charges could have been dismissed, at least in part—on March 27, a federal judge dismissed the SEC's allegations against Coinbase that the exchange acted as an unregistered broker through its Coinbase wallet, although the judge did allow the SEC to continue litigation against Coinbase's staking program (see our previous newsletter for more details). Assuming that the MetaMask and Coinbase wallets operate similarly and the respective staking programs of the two companies, we believe it is reasonable for any potential litigation against Consensys to be handled in a similar manner to Coinbase.
Regardless, Consensys is an important part of the Ethereum ecosystem, so any legal developments are likely to have an impact on the broader crypto industry. As a result of Consensys' latest lawsuit, or any active related litigation between the cryptocurrency firm and the SEC, a federal judge may soon declare whether Ethereum is a security or not. - Charles Yu
Five new BIP editors have been added to the Bitcoin community
The Bitcoin developer community recently appointed five new contributors as editors of the Bitcoin Improvement Proposal (BIP). For background, the BIP is a formal proposal for an upgrade to the Bitcoin protocol. These new members, including Bryan "Kanzure" Bishop, Jon Atack, Mark "Murch" Erhardt, Olaoluwa "Roasbeef" and Ruben Somsen, now play a vital role in the BIP process. Their responsibilities include reviewing the proposed draft BIP, providing feedback to BIP authors, and deciding whether or not to assign a formal number to the BIP. Once the BIP has sufficient technical documentation, BIP editors will merge the corresponding pull requests into Bitcoin's Github BIP repository. The expansion of the BIP editorial team marks a significant change from the past, where the model was that Luke-Jr, the well-known but controversial developer of Bitcoin Core, had the sole authority to merge the BIP into the repository. Bitcoin's Github BIP repository serves as the primary database for tracking all pending Bitcoin upgrades.
The addition of five new BIP editors marks the first time in Bitcoin's history that more than one core contributor has served as a BIP editor. Veteran Bitcoin Core developer Ava Chow led the nomination process, selecting the five new BIP editors.
Our take:
Due to the meticulous due diligence process conducted by the developer community, the pace of Bitcoin protocol upgrades is slower than that of other blockchains. For example, the most recent Taproot upgrade, which was activated in November 2021, underwent three years of rigorous developer vetting before activation. This long-term due diligence is partly due to the limited number of BIP edits authorizing merge pull requests to Bitcoin's Github BIP repository. Prior to the recent addition of new BIP edits, designating one person as the sole BIP editor created a bottleneck in the BIP process for years. As a result, assigning numbers to promising BIPs has been a major hurdle for BIP authors.
Improving the efficiency of the BIP due diligence process while maintaining quality control is an important step forward for the Bitcoin developer ecosystem. Recently, one of the five new BIP editors assigned BIP numbers to two high-profile opcodes, OP_CAT and OP_TXHASH, BIP-347 and BIP-346. Although assigning a number to a BIP and including it in a GitHub BIP repository doesn't guarantee an activation path, this step can help increase the visibility and attention of the BIP. In addition, the assignment of a BIP number sends a signal to the developer community that the BIP has passed the initial due diligence stage. Overall, the addition of these five talented Bitcoin Core contributors with a rich history of GitHub commits will inevitably bring greater efficiency and clarity to the overall BIP process.
The IRS releases a draft tax return for cryptocurrency brokers
On Friday, April 19, the Internal Revenue Service (IRS) published a preliminary draft of Form 1099-DA (Digital Asset Gains from Broker Trading). The form, as the name suggests, is primarily used to allow brokers to report the earnings from the sale and trading of digital assets and their basic information. Last August, the IRS, together with the Treasury Department, released a detailed 282-page document that laid out an understanding of the expanded duties and responsibilities under President Biden's Infrastructure Act, detailing the form. Under these proposed rules, a broker is defined as a person or entity that can identify a client and provide services that help clients sell digital assets. The August guidelines made it clear that this would affect centralized crypto exchanges, custodians, and wallets. However, it is unclear how these guidelines will apply to non-custodial versions as well as other types of decentralized applications, such as non-fungible token (NFT) trading platforms and blockchain explorers. For more information on the IRS's new broker rules, see our August report. The IRS states that digital asset brokers need to collect "know your customer" information from all U.S. users and include Form 1099-DA in their annual tax filings.
Form 1099-DA collects basic information about the filer, including name, address, Social Security number, and pays special attention to the nature of the brokerage business. The form provides filers with five options to declare their brokerage type, including:
- Kiosk Operator
- Digital asset payment processors
- Custodial wallet providers
- Non-custodial wallet providers
- other
At the bottom of the form, the file manager must also include the transaction ID or hash of all digital asset transactions facilitated by the broker and the on-chain account address. In addition, the filer must also report the "number of units" transferred in the transaction and details of any "accrued market discounts" or "impermissible wash losses" that affect transaction costs and earnings. The draft version is marked at the top with the 2025 tax year, which could indicate that the IRS is looking to finalize broker reporting rules by the end of the year. The IRS is currently accepting comments and feedback on the draft Form 1099-DA. Some crypto industry advocates have publicly opposed the draft, pointing out that it could adversely affect the privacy and accessibility of crypto users. Earlier this year, a bipartisan group of nine members of Congress also voiced opposition to the IRS's proposed rule on tax reporting requirements for digital asset brokers.
Our take:
The good news is that the proposed broker reporting rules have not yet been finalized and are still subject to change. The bad news is that the IRS doesn't seem to have adequately listened to the concerns of cryptocurrency industry advocates and legal experts. Between August 2023 and November 2023, the IRS's proposed ruling received more than 40,000 comments during a public comment period. Many institutions, such as Galaxy Research, Coin Center, and A16z, oppose an overly broad definition of brokers, arguing that it would cause significant setbacks for brokers and users and developers of blockchain-based services, and could trigger a mass migration of certain decentralized finance (DeFi) services outside the United States.
Despite the headwinds, the IRS appears to be moving forward with its proposed rules for digital asset brokers. The release of a draft Form 1099-DA confirms industry concerns that the definition of a broker could include non-custodial digital asset wallets and most DeFi applications. Listing a "non-custodial wallet provider" as an IRS-approved type of digital asset broker indicates that those "other" types of digital asset services that facilitate the sale or exchange of digital assets, regardless of whether they are operated by a centralized entity or function primarily through self-executing (smart contract) code, will be subject to the same rules.
If the Form 1099-DA and the proposed broker reporting rules are finalized in their current form, then DeFi developers, as well as other types of open-source software developers in the crypto industry, will need to consider the implementation of these rules and consider one of three options:
- Comply with and implement KYC measures and conduct annual reports through Form 1099-DA;
- Blocking U.S. users, prohibiting the use of U.S. IP addresses on the frontend of the website, which may not be feasible at the smart contract level;
- Full decentralization, abandoning application upgradeability, front-end, and fee decisions, makes it impossible for a service or its creator to know (let alone report) the identity of its users.
Again, the good news is that the IRS's proposed rules for digital asset brokers have not yet been finalized, and the early release draft of Form 1099-DA opens a new comment period, and industry stakeholders can use this opportunity to voice their concerns once again. Considering the wide-ranging impact these rules can have on the crypto industry, no opportunity, no matter how small it may seem, should not be overlooked.
Chart of the week
Last week, we noticed a record high percentage of addresses using multiple Layer 2 (L2) per day, suggesting an exaggeration of the observed data for unfiltered daily active addresses in L2. The chart below further identifies the number of daily active addresses that have been active for the last five days or more. This address pool is less mercenary and more representative of the core set of active L2 addresses.
Calculated using the 30-day moving average (MA), there are 814,320 daily active addresses that have traded for more than five days during their lifetime. In comparison, of the seven L2s observed, there were 11,900 deduplicated DAAs and 15,300 unfiltered DAUs (as of April 25, 2024). This highlights that 68% of the deduplicated DAAs and 53% of the frequently cited unfiltered DAAs are more active.
In addition, the founder of Samourai, a bitcoin mixing service, was charged this week on charges including money laundering and unauthorized transfer of funds. During its operation, the service received a total of 44,900 BTC worth of deposits, totaling $2.87 billion based on the Bitcoin market value of $64,000, involving 79,700 individual transactions. The service accepted its first deposit in April 2019. (Source: Clark Moody).
Other news
- Stripe has been enabling USDC payments since this summer
- The ViaBTC "epic satellite" from the fourth Bitcoin halving sold for 33.3 BTC (about $2.13 million).
- The Worldcoin development team is looking forward to partnering with PayPal and OpenAI
- Franklin Templeton launched a peer-to-peer transfer feature for its on-chain U.S. government monetary fund
- CryptoPunk traded for 4,000 ETH (about $12.41 million), making it the sixth highest price in history
- During the rune fee spike, Bitcoin mining difficulty rose for the first time after the halving
- The EU Anti-Money Laundering Act was voted to pass
- Renzo's ezETH Drops 18.3% After Binance Announces REZ Tokenomics
- Samourai Wallet 创始人因联邦洗钱指控被司法部逮捕