Crypto vs government agencies, October 2019

October was full of authoritative statements from Government agencies that crypto holders probably wish didn’t exist. Most of this months news was “bad” for crypto but let’s be real. The more people talk about things, the closer we (might hopefully) get to a consensus. 

SEC says no to Bitcoin ETFs

Bitwise might as well be Steve Urcle. Their ETF proposals have been rejected by the SEC so many times that you kind of want to just want them to stop. 

Thankfully, this time the SEC gave Bitwise some feedback on what needs to happen in order for it to be approved. 

“After digesting it a little bit, we’re pleased with the detail the staff provided and the clarity of what we have to do,” Bitwise’s global head of research told Coindesk.

An ETF, or exchange-traded fund would allow investors to purchase Bitcoin without the hassle of owning and managing the asset. Bitwise getting permission to create an ETF would mean that it could be traded on major stock exchanges. 

SEC vs Telegram’s TON blockchain

On October 11th, the SEC obtained a restraining order against Telegram and TON for “conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas that has raised more than $1.7 billion of investor funds.”

Cointelegraph learned through a court order that says Telegram’s hearing will take place in February 2020.

Details of TON are few and far between, other than it being a proof-of-stake network. The only real promise is that it would bring a fast and scalable blockchain network to 300 million Telegram users. 

Central bank talking about digital dollar

Coindesk reported that a Federal Official at the Federal Reserve Bank of Dallas recently spoke about the possibility of a digital dollar. 

“We have not at the Fed decided to pursue or drive to develop a digital currency, but it’s something we’re actively looking at and debating.”

The comment came after a former CFTC chairman wrote about how a digital dollar could help the USD maintain its status as the world’s reserve currency.

Ethereum is a commodity 

At a Yahoo Finance Summit, CTFC Chairman Heath Tarbert clarified that they view Ethereum as a commodity. 

About a year ago, specifically Bitcoin was ruled to be a commodity in federal court. This resulted in CTFC being able to prosecute fraud involving virtual currency. Later in the year, they admitted not not understanding Ethereum very well and announced they were looking into it. 

Basically everyone tells crypto industry to follow banking laws

The CFTC, FinCEN, and SEC issued the formally reminded the crypto industry of their anti-money laundering and countering the financing of terrorism (AML/CFT) obligations under the Bank Secrecy Act.

“The nature of the digital asset-related activities a person engages in is a key factor in determining whether and how that person must register with the CFTC, FinCEN, or the SEC.”

The statement didn’t mention any immediate consequences, but obviously, the agencies aren’t happy about unorganization in the crypto community. 

IRS drafts virtual currency section on tax form

A draft of the main form U.S. tax payers fill out released with a new “virtual currencies” question. 

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

This is the first time the IRS has not had any guidance on cryptocurrencies for five years. They released a new FAQ page about crypto where it was clarified that a crypto asset you hold that went through a hard fork won’t be tax unless you received any new tokens.