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IRS Stepping Up Cryptocurrency Enforcement Efforts

The IRS has confirmed that it has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly. In the announcement, IRS Commissioner Chuck Rettig says that “The IRS is expanding our efforts involving virtual… Continue Reading

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The IRS has confirmed that it has begun sending letters to taxpayers with virtual currency transactions that potentially failed to report income and pay the resulting tax from virtual currency transactions or did not report their transactions properly. In the announcement, IRS Commissioner Chuck Rettig says that “The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”

The IRS identified the taxpayers receiving these letters through various ongoing IRS compliance efforts, likely including customer information that the IRS received last year after successfully enforcing a John Doe summons against Coinbase. The IRS has said that it expects more than 10,000 taxpayers will receive these letters by the end of August.

Taxpayers will receive one of three variations of the letter: Letter 6174, Letter 6174-A, or Letter 6173. Letter 6174 is a “soft notice” that notifies the taxpayer that the IRS is aware that they have or had one or more accounts containing virtual currency, and says that taxpayers should file amended or delinquent returns if they believe they have not accurately reported virtual currency transactions on their tax returns. Letter 6174-A is similar to Letter 6174 but also states that the IRS has information that the taxpayer “may not have properly reported your transactions involving virtual currencies.” Letter 6173 goes another step further, directing taxpayers to respond to the letter either by filing amended or delinquent returns or by providing a written explanation of the actions they have taken to become compliant with their US tax obligations. All three letter variations provide general educational information about taxpayers’ obligations to report virtual currency transactions.

At the same time, the IRS also appears to be stepping up criminal enforcement efforts. On July 19, Don Fort, Chief of the IRS’s Criminal Investigation Division, spoke about the IRS’s criminal enforcement efforts regarding cryptocurrencies, at the RJS Law Tax Controversy Institute in San Diego. Mr. Fort reportedly told the audience that the division is building a number of cryptocurrency-related criminal tax cases, and that details about those cases may soon become public. Earlier this month, Tax Notes published a detailed presentation prepared by the Criminal Investigation Division regarding the use of cryptocurrencies in cyber crimes.

Taxpayers who have received a letter from the IRS may wish to consult a tax advisor to ensure that they have complied with their tax obligations or to determine the best way to respond to the letter or come into compliance.

Source: https://www.steptoeblockchainblog.com/2019/07/irs-stepping-up-cryptocurrency-enforcement-efforts/

Blockchain

Ethereum 2.0 on Track as Staked ETH Tops $3.6 Billion

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In a lengthy blog post titled ‘The State of Eth2’ lead developer Danny Ryan has published an update on progress made on Beacon Chain and what is in store for 2021.

Ryan added that the separate designations of Ethereum imply a ‘false sequentiality’ in that one is being left behind for the other. Instead, the terms actually represent different layers of the stack he added.

“The terms “eth1” and “eth2” are misnomers. If I had my way, I’d toss them out forever, but the terms are pretty ubiquitous at this point so let’s at least discuss what they mean.”

Ethereum 2.0 Stats Strengthening

The numbers are what most people are really interested in, however, and they are continually improving. At the time of press, there was 2.78 million ETH deposited in the Beacon Chain smart contract according to the ETH 2 Launchpad. At current prices of $1,300, this equates to $3.6 billion and at its recent all-time high price was just over $4 billion.

The dashboard reports an annual percentage yield of 9.4% for those that have staked ETH and locked up their assets for at least another year.

According to Etherscan, the top known depositor is Kraken with 14.4% of the total followed by Binance with 10.7%. Centralized exchanges make it easy for the average person who doesn’t want to run their own hardware to have a stake in Ethereum’s future. Data from Dune Analytics suggests that more ETH is now being staked by individuals rather than single whale addresses or institutions.

Additionally, over 66,500 active validators are participating in the network with 19,000 pending according to beaconcha.in. In his latest update, developer Ben Edgington stated that only four validators were slashed (kicked off the network for harmful behavior or misconfiguration) in the past two weeks.

When Will ETH 2.0 Scale?

Phase 1, which will introduce scaling with sidechains or ‘shards’, is expected towards the end of 2021 or early next year. Ryan acknowledged that in its current state, the network cannot cope;

“It is abundantly clear that Ethereum L1 today will not, alone, provide the throughput needed to support the global demand for decentralized applications.”

He also stated that the first set of upgrades to the Beacon Chain is actively being discussed. Some of the changes proposed are improvements to validator incentives, while others bring new features to the network such as native light client support.

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Source: https://cryptopotato.com/ethereum-2-0-on-track-as-staked-eth-tops-3-6-billion/

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Bitcoin Manages to Hold On Above $34,000 Support

In the short-term, as long as Bitcoin doesn’t reach a daily close below $34,000, it’s expected to move towards the resistance line of the triangle.   Bitcoin Bounces At Support Bitcoin is still trading above the $34,000 support area, a level which has held since BTC initially broke out on Jan. 6. While BTC has … Continued

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The Bitcoin (BTC) price is consolidating inside a symmetrical triangle that has been in place since Jan. 4. BTC is expected to continue consolidating and eventually break down.

In the short-term, as long as Bitcoin doesn’t reach a daily close below $34,000, it’s expected to move towards the resistance line of the triangle.

 

Bitcoin Bounces At Support

Bitcoin is still trading above the $34,000 support area, a level which has held since BTC initially broke out on Jan. 6.

While BTC has briefly fallen below this level, it has created long lower wicks and hasn’t reached a close below it. BTC did the same yesterday, initially dropping but creating a long lower wick and reclaiming the level.

Technical indicators provide mixed signals. The MACD is falling steadily and has nearly reached the negative territory. The daily RSI has generated a hidden bullish divergence, a strong sign of trend continuation.

As long as BTC is trading above and does not reach a daily close below this support level, it’s likely that the price will bounce again.

BTC Divergence
BTC Chart By TradingView

The six-hour chart supports this scenario since it shows that BTC is trading inside a symmetrical triangle and bounced on its support line yesterday. The resistance line of the triangle is currently at $37,700.

However, similar to the daily time-frame, technical indicators on the six-hour chart are neutral.

Therefore, a breakdown from the triangle would also mean a breakdown from the $34,000 support area, confirming that the trend is bearish.

BTC Triangle
BTC Chart By TradingView

BTC Wave Count

The long-term count suggests that BTC has completed a bullish impulse and is now correcting inside a complex, W-X-Y structure.

A breakdown from the $34,000 support area and the symmetrical triangle would likely confirm that BTC is heading lower, possibly toward $29,000.

BC Long-Term Count
BTC Chart By TradingView

The wave count suggests that BTC is likely in the C wave of an A-B-C-D-E structure, which creates the entire symmetrical triangle.

Similarly, a decrease below the B wave low at $33,400 would confirm that BTC has broken down.

Nevertheless, if that occurs prior to the creation of the C, D, and E waves, it would indicate that BTC is trading inside a different corrective structure instead — though the end result would likely be the same.

BTC Wave Count
BTC Chart By TradingView

Alternate Movement

The alternate count would be that BTC is in a bullish fourth wave triangle, and is currently in the D wave. This would not fit with the long-term count at all, since it would suggest that another upward move is in the cards.

Nevertheless, if BTC were to break out from the triangle instead and move above the B wave high at $40,500, it would confirm that BTC is bullish.

At the current time, this seems unlikely.

BTC Alternate Count
BTC Chart By TradingView

Conclusion

Bitcoin is expected to continue consolidating inside the current symmetrical triangle before eventually breaking down. An increase above $40,000 would invalidate this scenario.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo.
In 2019, he decided to focus full-time on cryptocurrencies and trading.

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Source: https://beincrypto.com/bitcoin-manages-hold-above-34000-support/

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IG Group Posts 129% Jump in H1 FY21 Income

Revenue for the period took a leap of 67 percent.

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London-listed IG Group Holdings plc (LON:IGG) has published its interim results for the first half of FY2021, showing a massive jump across all key metrics. The trading platform operator 129 percent year-over-year jump in the pre-tax profits with £231.3 million from last year’s £101.2 million.

After paying the taxes, the profits remained £187.1 million, 127 percent higher than the previous year. However, the dividend per share remained the same at 12.96 pence.

IG already revealed its impressive trading revenue for the first two quarters in the financial year, which was consolidated in the half-yearly results. The net trading volume for the period came in at £416.9 million, compared to £249.9 million in the previous year. That translates to a jump of 67 percent.

It further detailed that £340.6 million in revenue was generated from the core markets, a year-on-year increase of 62 percent. Turnover from ‘significant opportunities’ also jumped by £36.3 million to £76.3 million.

Client Retention Rates Remained Comparable

The record revenue levels were achieved due to increasing client activities in the trading markets. The broker on-boarded 64,000 new clients in the period and the number of active traders also spiked 55 percent to 238,600.

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Despite the jump in the client activities, IG detailed that new client retention rates remained ‘comparable to historical averages.’

The major increase in the trading activities and demand pushed the total operating costs at 22 percent higher to £188.2.

“We delivered record revenue and profit, made excellent progress against our strategic growth objectives, and continued to build a more sustainable and diversified global business,” IG chief June Felix said in a statement.”

“Demand for our products remained high, benefitting from favourable trading conditions, although it is the quality of our technology and the dedication of our people, throughout the global pandemic, that has enabled us to convert this demand into a step change in the size of our active client base.”

The broker was also well-prepared for Brexit and migrated the accounts of its EEA clients last month to IG Europe from the London-based entity.

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