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HAPI Labs has launched a platform for reporting of scam- and crime-related addresses in partnership with Ukraine’s cyber police.

Coinbase faced a grilling from U.S. Supreme Court justices today as it made the crypto industry’s high court debut, arguing a case about the handling of arbitrations.

Somehow we accept that financial transactions get turned over to the government by default without a warrant, says civil liberties lawyer Marta Belcher, a speaker at this year’s Consensus festival.

The popular NFT marketplace is integrating support for Bitcoin wallets Hiro and Xverse to help traders list, purchase and sell Ordinal NFTs.

Sony Interactive Entertainment, the company that produces the wildly popular Playstation gaming console and has released a host of popular video games, filed a patent request for NFTs in an effort to provide more flexibility with in-game assets.

In Sony’s filing, dated last week, the company outlined how it wants gamers to be able to use NFTs across different games and platforms, including those produced by rival console makers like Microsoft and Nintendo. “[T]he NFT is provided to the [user] … so that the digital asset may be used, via the NFT, across plural different computer simulations and/or across plural different computer simulation platforms,” the filing said. “Ownership of the NFT may also be subsequently transferred to other [users] … for their own use across different simulations and/or platforms.”

The Japanese conglomerate’s desire to use NFTs comes at a time blockchain-enabled games and the companies making them are struggling to attract mainstream gamers used to playing on the consoles and platforms provided by Playstation and Xbox, which is made by Microsoft. Sony embracing both in-game digital assets, or NFTs, and potentially inoperability that extends to other companies could prove to be a seminal moment in the evolution of gaming.

If Sony becomes a strong supporter of digital asset ownership in gaming, coupled with its experience delivering popular titles like “The Last of Us” to market, the company could help introduce millions of gamers to blockchain-powered gaming.

Virtual reality

Besides pointing to the potential interoperability between Playstation and gaming consoles “made by Microsoft or Nintendo,” or other manufacturers, Sony’s filing expressed aims to have the NFTs also work across “virtual reality (VR) headsets, augmented reality (AR) headsets,” smartphones, tablets, computers and televisions.

The next era of the internet and gaming, many blockchain advocates believe, will include increased interoperability — the ability to use digital artifacts across different games, platforms and devices — and widespread ownership of digital assets that can be used on different devices and platforms. This next phase, dubbed web3, is currently being built with help from many executives and gaming developers who made a name for themselves during the period known as web2, which has been traditionally dominated by closed ecosystems.

Sony also filed an NFT patent last November; however, the patent appeared to be rejected for failing to “integrate the abstract idea into a practical application.” The company has also explored using blockchain technology for music copyright management and education.

© 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 Securities and Exchange Commission recently served Sushi and “head chef” Jared Grey with a subpoena, the decentralized finance company said on Tuesday. 

Grey asked Sushi DAO to fund a $3 million USDT legal defense fund to cover costs related to the SEC’s inquiry. Sushi sought to establish a legal entity to reduce liability for contributors and the DAO last year. 

“We’re cooperating with the SEC,” Grey said in a blog post. “It has become evident funds must be available to handle legal needs for operational continuity and to protect core contributors.” 

The SEC did not immediately respond to a request for comment, and Grey said Sushi does not “intend to comment publicly on ongoing investigations or other legal matters.”

The Sushi DAO Legal Defense Fund would cover “reasonable” attorney fees and costs for core contributors who have been active since the ratification of Sushi 2.0 last year. The funds will come from a combination of Kanpai fees, grants and Sushi. If the money runs out before the legal issues conclude, the DAO will make $1 million USDT available as needed.

© 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 would-be thief is laying the groundwork to intercept 3 million ARB tokens from the upcoming Arbitrum airdrop.

The crypto criminal sent ether to around 2,400 wallets in order to approve a contract that allows recipients to claim the airdrop, which is set for Thursday. Normally this wouldn’t be a problem, but this person also appears to have access to the wallets’ private keys.

The approved contract will automatically claim the airdrop on behalf of the thief, bypassing any bots that might be set up to sweep funds that land in the wallets. 

Word of the scheme was first brought to light by Arkham Intelligence and a post on GitHub. The ARB token will control the governance of the Arbitrum One and Nova networks through a DAO.

Since the bad actor knows the private keys for the wallets, wallet owners can’t necessarily block them. What they can do is revoke the contract that has been set up — but even then they would still need to manually claim the airdrop before the hacker does.

In a world often rife with exploits, this attempt to hijack an airdrop is unique.  If successful, it means the thief would end up claiming 0.26% of the user airdrop by siphoning them from wallets that aren’t their own. Such a move would undermine the goal of handing over governance to the most dedicated Arbitrum community members while at the same time depriving these wallets of their rightful claim.

Not possible on Arbitrum 

The fact that the drop is happening on Arbitrum, a layer2 scaling project, complicates matters for the wallets in question. If the airdrop was on the Ethereum blockchain, then it might be possible to use Flashbots to gain an edge in claiming the airdrop first — but that’s not possible on Arbitrum.

Some in the community have called on Offchain Labs to blacklist these wallets so that the bad actor doesn’t end up with all of the tokens. Yet this could stop legitimate users from having a chance to claim them.

At the time of the airdrop announcement, Offchain Labs CEO Steven Goldfeder told The Block there will be no changes to the airdrop allocation. The company has not addressed this specific issue.

© 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.

Sushi DAO and Head Chef Jared Grey were served with a subpoena by the U.S. Securities and Exchange Commission, the DAO revealed Tuesday.

Although it would be an “attractive option” to let the crypto industry collapse onto itself, the crypto industry is here to stay despite the market downturn, or “crypto winter,” said Steven Maijoor, executive director of supervision of the Dutch central bank and chair of the Financial Stability Boards’s crypto working group.

“Crypto is here to stay and regulators need to set a path for supervising the sector,” Maijoor said, speaking at the Bank for International Settlements Summit on Tuesday.

The past year has been tumultuous for the crypto sector, seeing major crashes, including Terra’s stablecoin collapse, the FTX debacle, and most recently the unravelling of crypto-friendly banks such as Silicon Valley Bank, Signature and Silvergate. Despite this series of events, there is growing interest in both digital assets and their underlying technology. 

Traditional finance players as well as consumers are interested in getting involved in the sector, making regulation — and therefore legitimization — necessary, Maijoor said. Despite jurisdictions taking measures to regulate the sector around the world, crypto will remain a high risk for the next few years, he added.

“There is detriment for consumers, but it’s not for us as regulators to judge if this will be a successful new technological development, but to only control the negatives,” he said.

The FSB’s recommendations on global crypto regulation standards will be published in the summer, following the call for industry and expert input on policy recommendations from October, the crypto working group chair noted.

The policy recommendations stem from a principle of “same risk, same regulation.” Maijoor noted that jurisdictions will need to be incentivized to implement the rules proposed by the FSB.

© 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 Internal Revenue Service and the Treasury Department want feedback on the treatment of NFTs as collectibles for tax purposes.

The IRS said it plans to treat NFTs like collectibles, akin to gems, stamps, alcoholic beverages and art, in a notice released on Tuesday. The IRS also plans to define NFTs as a collectible until the “further guidance is issued.” 

Accountants have recommended treating NFTs as collectibles for tax purposes since they substantially grew in popularity two years ago, the IRS guidance would formalize that tax treatment, placing NFTs in the same tax category as physical art, like paintings and sculptures. 

The U.S. tax agency notes in its release seeking comment that, “Generally, collectibles also do not have as advantageous capital-gains tax treatment as other capital assets.”

NFTs that certify ownership of a physical property would be scrutinized with a ‘look-through’ analysis, the agency added, meaning the IRS will view the NFT as an analogue for the underlying asset it certifies. If that asset is a collectible, like a gem, the NFT will be taxed that way.

NFT creators are subject to other taxes, like capital gains and personal income. Cryptocurrencies themselves are currently taxed as property in the U.S., meaning they fall under the capital gains tax rate when sold or transferred. 

The Treasury and IRS asked for comments on questions such as whether there are concerns with applying the “look-through analysis” and what other NFT-related guidance would be helpful, among other questions.  

Comments are due June 19.  

© 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.