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Uniswap found that many respondents are put off by the complexity and cost of on-chain trading.

There are few phrases that strike fear into the heart of a crypto punter as much as “capital gains tax.”

So when the UK House of Commons Treasury Committee released a report today arguing that trading in assets like bitcoin and ether should be regulated like gambling, traders in the space were quick to point out, gleefully, that such a designation would see them protected from capital gains levies. 

“So zero taxes on gains? Yasss,” responded one Crypto Twitter lurker to the news. 

“Good thing gambling winnings not taxed in the UK,” commented another named Mellow Yellow. 

Those were just two of dozens of responses to the report, and they’re not wrong. In the UK, gambling income is not taxed, according to tax expert Nimesh Shah, chief executive of tax and accounting advisory Blick Rothenberg. “From a tax perspective: happy days for anyone invested in crypto because it is completely exempt from a tax perspective,” he said.

The regulation of cryptocurrencies as gambling instruments, in the committee’s view, would protect retail investors from its volatility and the risks associated with scams and illegal activity. The report echoes the view of financial services lobbying groups in the country that have come out against a potential plan by the UK government that would bring crypto-assets within the regulatory framework of traditional finance. 

Unwanted tax bills

But such a move could also protect crypto fans from unwanted tax bills — at least on paper. To be clear, the committee doesn’t make policy — it simply scrutinizes legislation and makes suggestions.

“Profits are not taxed and losses are not deductible,” Shah said. “If the Select Committee pushes this as gambling then the Treasury should kiss goodbye any tax benefits from people investing in cryptocurrency.”

Industry lobby group CryptoUK raised a similar point in a statement following the release of the committee report, asking “Does the Government really wish to exclude tens of millions of pounds in tax income from gains made by the buying and selling of unbacked crypto assets?”

CryptoUK stands with a long list of crypto market participants that have spoken out against the select committee’s recommendation. While the potential tax benefits appeal to mom-and-pop traders, the impact on the industry’s reputation could set it back years. 

“We fundamentally disagree with the Treasury Select Committee’s conclusion that crypto-assets have no intrinsic value,” commented Blair Halliday, Kraken’s UK managing director. “It’s regrettable the committee does not support the opportunity the UK has to be a true global leader in our rapidly developing industry.”

Gambling designation could hurt the UK

Daniel Howitt, CEO of crypto tax calculation service, Recap, noted in an email to The Block that regulated retail crypto trading as gambling could set back the UK as a digital asset and blockchain epicenter.

Whilst serving as finance minister, current prime minister Rishi Sunak proposed a number of measures to turn the UK in a hub for crypto, earning him a spot on CoinDesk’s most influential list for 2022. 

“This is not a signal to the world that we understand the potential of the asset class,” Howitt said. “We now look disjointed with the potential for divergent regulatory approaches between government departments, including a crypto-advocating Prime Minister — it could derail these ambitions.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A U.S. debt default would be bad for absolutely everything.

Axie Infinity is coming to Apple’s App Store, but not in the country that did the most to propel the play-to-earn game to become the biggest web3 game and NFT collection of all time, the Philippines.

“Right now Sky Mavis is testing in smaller markets as it prepares for a global launch,” said a Sky Mavis spokesperson by email. The global launch will include the Philippines and Brazil, they said. Sky Mavis is the creator of Axie Infinity.

While those two countries are among Axie Infinity’s hottest markets, ranking among the top five nations which had the highest number of players in 2022, the game has been by far most popular in the Philippines, according to Statista. More than 40% of the millions of people playing Axie were from there, said Statista.

When asked about when Axie Infinity: Origins — the title for the latest version of the game — will be available on the App Store in the rest of the world Sky Mavis’ spokesperson said: “There are still a lot of variables to consider before we can provide a concrete global launch timeline, including how Sky Mavis continues to collaborate with app stores and mobile platforms,” they said by email, adding that the company will be “analyzing user data and retention rates from the select test markets.”

Thanks largely to the Philippines, where players sometimes could earn crypto that either supplemented their existing income, or became their principal mode of making a living during the pandemic, Axie Infinity has generated more than $4 billion in NFT trading, according to CryptoSlam! data.

Test first, expand later

“Ultimately, the goal of our test markets is to refine the app and make necessary adjustments based on community feedback and data analysis before launching it to a broader audience,” another spokesperson said. “The Philippines is the largest market for Axie so our goal is to expand our testing and make any changes needed, prior to launching in our largest market.”

Countries where Apple users will be able to download Axie Infinity: Origins, the latest iteration of the game, include Argentina, Colombia, Peru, Mexico, Venezuela, Indonesia, Malaysia and Vietnam, the company said in a statement. There are more than 1.5 billion iPhone users in the world, according to DemandSage. Apple’s iOS operating system has less than 10% market share in The Philippines, according to Statista.

Indonesia and Mexico are both larger markets than the Philippines with populations of about 274 million and 127 million respectively, according to World Bank data from 2021. The Philippines has a population of nearly 114 million.

‘Axie Infinity: Origins’ being offered for download on Apple’s App Store, thus enabling iPhone users to play the game, is a big win, according to Sky Mavis co-founder Jeffrey Zirlin.

Historically Apple has been hostile to applications which want its users to be able to buy, sell and trade digital assets. 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto investors are attempting to capitalize on the latest wave of meme coin mania by tracking the movements of early pepecoin (PEPE) buyers.

An ETF with a stated purpose of betting against Meta’s view of the Metaverse is shutting down after a little more than 15 months and a nearly 30% loss. 

Subversive Capital Advisor will close and liquidate the Subversive Metaverse ETF, ticker PUNK, as the firm pivots to artificial intelligence.

PUNK launched in January 2022 to invest in “companies that provide services and products that support the infrastructure and applications of the Metaverse.” Mark Zuckerberg’s company, despite the name, was decidedly not one of those companies. 

Subversive Capital said the ETF would focus on “emerging technological and human advancement requires responsible companies dedicated to the principles of egalitarianism, democracy, sustainability, and facts,” in its online description of the fund. “Therefore, we believe that Meta Platforms Inc., the parent company to Facebook, is antithetical to those principals and any market cap above zero is a direct assault on liberal democracy and the survival of our planet.”

Souring on the metaverse

The investment firm is just the latest company to seemingly sour on the metaverse. Zuckerberg himself spoke more about artificial intelligence and Meta’s core products rather than the company’s metaverse efforts in its most recent earnings report and analyst call. 

The ETF shorted Meta, which was trading at around $300 the day the fund started trading. Meta tumbled to under $90 in November, and is currently back up around $240.

Companies the fund did invest in included Alphabet, Apple, Nvidia and Microsoft, among others. Subversive says it “is dedicated to investing in radical companies whose core missions subvert the status quo and require sophisticated regulatory strategies for success.”

“We continue to believe Meta’s focus is misguided and we’ve decided to pivot given the rapid advances in more promising technology such as artificial intelligence,” Subversive’s portfolio manager, Christian Cooper, said.

The fund will close after the close of business on May 31.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The state-level campaign against a U.S. digital dollar made its first foray into established law with Governor Ron DeSantis’ signature on Florida’s effort to block the use of virtual government-backed money in business transactions.

The pre-seed funding extension was led by Superscrypt, and Polygon was a prior investor.

The latest price moves in bitcoin (BTC) and crypto markets in context for May 17, 2023. First Mover is CoinDesk’s daily newsletter that contextualizes the latest actions in the crypto markets.

San Francisco-based crypto company Ripple today announced an audacious swoop for Swiss custody firm Metaco in a deal worth $250 million.

For Ripple, an enterprise blockchain and payments specialist, the move signals an expansion into providing crypto custody services for institutional investors. The company plans to start offering customers tools to custody, issue and settle tokenized assets, according to today’s announcement.

The transaction — which was financed through a mix of cash and Ripple equity — will see Ripple become the sole shareholder of Metaco, but the firm will still operate as a standalone brand. Its founder and CEO Adrien Treccani will continue to lead the business.

“Metaco is a proven leader in institutional digital asset custody with an exceptional executive bench and a truly unmatched customer track record,” said Brad Garlinghouse, Ripple’s CEO, in a statement. “Bringing on Metaco is monumental for our growing product suite and expanding global footprint.”

Founded in Switzerland in 2015, Metaco serves a range of clients including global custodians, large banks, financial institutions and other corporates. Its core crypto custody product, Harmonize, helps investors manage custody, trading, tokenization, staking and smart contract management across the DeFi ecosystem.

Hunting for deals

Metaco is already live across a number of markets, including Switzerland, Germany, Turkey, France, the United Kingdom, the United States, Singapore, Australia, Hong Kong and the Philippines. Ripple, meanwhile, boasts customers in over 55 countries and can offer its payment services in over 70 markets globally.

News of the acquisition comes with Ripple still locked in a years-long feud with the U.S. Securities and Exchange Commission. In 2020, the SEC accused Ripple of raising $1.3 billion through the sale of XRP, a token, and also sued CEO Garlinghouse and co-founder Christian Larsen. A decision from a federal judge settling the dispute could come as soon as the first half of this year.

CEO Garlinghouse had signalled as far back as May 2022, however, that the company had a “a very strong balance sheet” and may seek out M&A opportunities, in an interview with CNBC.

Monica Long, Ripple’s president, said in a statement today that Ripple “is uniquely positioned to address the growing institutional crypto custody market, expected to reach nearly $10 trillion by 2030.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.