The Internal Revenue Service (IRS) has agreed to offer a refund to a Nashville couple who sued the IRS over taxes they paid on unclaimed and resold Tezos staking rewards.

The ruling might establish a precedent for future guidance on how to tax cryptocurrency earnings generated via staking. At the moment, Proof-of-Stake (PoS) staking incentives are regarded as income and must be taxed as soon as they are obtained. According to the latest developments, they should only be taxed when sold for USD.

Context and details

In May 2021, the Jarretts filed a complaint against the U.S government, claiming that the 8,876 Tezos (XTZ) tokens they produced in 2019 were not income and shouldn't have been taxed as such. The case also alleged that the government was doing something unique, namely tax creative activity rather than revenue.

"Taxing freshly made cakes, books, or tokens as income would therefore have far-reaching and damaging impacts on taxpayers and the United States economy," the couple argued. They further stated that this is not supported by the Internal Revenue Code, regulations, caselaw, or even the constitution itself. The IRS responded by declaring that it will honour the Jarretts request to repay the $3,793 they paid for their unclaimed rewards plus "statutory interest as required by law".

What's next?

Even today, there is currently no clear information or guidelines pertaining to taxing unclaimed staking rewards. The IRS asks taxpayers if they have "received, sold, traded, or otherwise disposed of any financial interest regarding digital currencies", but none of those characteristics appear to apply directly to the Jarretts unclaimed and resold awards.

Moreover, the couple reportedly intends to push the issue further in court in order to get longer-term protection and create a national precedent. American taxpayers are probably hoping that no legislative reaction to this court decision mirrors the United Kingdom regulators recent cryptocurrency staking instructions. There, crypto staking is frequently treated as a token sale, resulting in capital gains tax. Only time will tell what shall happen within the U.S as staking has become an exceedingly popular common method of earning crypto and extra income.

Solana (SOL) has suffered a major setback as a result of a recent $322 million breach on its Wormhole bridge. SOL fell during the uncertainty surrounding wETH's support for the bridge, although it has since recovered slightly.

Nonetheless, a sizable portion of investors and traders are growing increasingly wary about backing Solana due to an apparent lack of sufficient security safeguards, especially since this is not the first time that it has been hacked.

What happened?

As aforementioned, an attacker obtained $322 million in ETH by exploiting the bridge protocol Wormhole. Wormhole has estimated the worth of the assault at a whopping 120,000 ETH. According to various early reports, the funds stolen during the attack were initially worth 80,000 ETH. Later, it was revealed that the amount taken was a lot more than what was previously thought. The reason for the lower estimations was that they did not appear to account for stolen funds which were held on Solana as wrapped ETH (wETH).

Regardless, the sheer quantity stolen via the incident makes this one of the most significant DeFi attacks in recent memory. Other high-profile hacks include a $611 million attack on Poly Network in August of last year. Other notable attacks in 2021 also involved BadgerDAO and Cream Finance.

Next steps

As of now, Wormhole has not yet provided a full explanation of the hack as instead they have stated that the network is "offline for maintenance as it investigates a potential vulnerability". Additionally, Wormhole developers sought to get in touch with the attacker through a blockchain message. The team reportedly reached a "white hat deal", offering the culprit $10 million in exchange for revealing their exploit method and returning the stolen assets.

Meanwhile, Jump Crypto decided to replace the stolen funds, which is why they donated 120,000 ETH as their team believes that Wormhole is an integral part of a multichain future. Some investors were not impressed however as they primarily viewed this as little more than a bailout attempt which doesn't address the main issue at hand.

In early January, Ethereum co-founder Vitalik Buterin issued a warning about the inadequacies of cross-chain bridges, citing the security dangers inherent in such protocols. On a lighter note, Solana recently launched their new P2P (Peer To Peer) feature which enables their users to pay merchants directly and seamlessly.

Vitalik Buterin has revealed that he is helping with the Proof-of-Stake (PoS) transition of Dogecoin (DOGE). The PoS network is becoming increasingly popular among major cryptocurrencies, with a rising number actively switching to it.

According to the Ethereum founder, nearly every single major cryptocurrency today has a strategy to move to PoS. He recently stated that Dogecoin therefore intends to shift to a Proof-of-Stake network with community staking.

To that end, Buterin referred to a proposal made on Christmas Eve last year that described a method for implementing the DOGE strategy for a 'Community Staking' form of PoS. This would potentially allow more people to participate in administering the Dogecoin network.

President Vladimir Putin has indicated that he will support a Russian government proposal to tax and regulate cryptocurrency mining, thereby rejecting the central bank's recommendation to completely ban it.

The Russian leader welcomes the new approach, which would enable mining to continue, primarily because Russia has several locations with excess power, such as Karelia, Irkutsk, Krasnoyarsk.

Meanwhile, the Russian central bank remains opposed to crypto mining due to environmental reasons and also because it generates incentives to circumvent rules and bypass various regulations.

In related news, Russian Finance Minister Anton Siluanov maintained the ministry's stance on regulating rather than prohibiting cryptocurrencies, which led to him suggesting that cryptocurrency trading should be allowed to occur via local banks.

India has just revealed plans to develop a central bank digital currency (CBDC) by next year and tax cryptocurrencies as well as NFTs, as the government inches closer to officially recognizing cryptocurrency assets.

To that end, income from the transfer of any and all digital assets would be taxed at 30%, according to Nirmala Sitharaman, the country's finance minister. She also recommended a 1% tax deduction at source on payments made relating to the acquisition of virtual assets in order to collect data on all such crypto-based transactions.

The Indian proposal has arrived at a time when the buying of cryptocurrencies and NFTs has been rapidly gaining traction within the country, despite various regulatory uncertainties.

Meanwhile, neighboring country Pakistan has made no announcements regarding potential changes to its intentions of banning crypto entirely, much to the discontent of Pakistani cryptocurrency enthusiasts and traders.

The cryptocurrency market is highly volatile, and it is no surprise to anybody these days. While Bitcoin remains the most popular cryptocurrency, the rise of NFTs brought Ethereum to the big scene.

News and prices go hand-by-hand

Nobody is getting shocked nowadays by the recent news. The cryptocurrency industry has been quite shaky over the past few months and the most recent blow was made by Russian President Vladimir Putin, who might ban cryptocurrencies in The Russian Federation, following China in their attempts to cease any crypto activity.

While the leading coins immediately dropped in price, Tether/USDT remained stable. Surely, thats thanks to the fact that you can buy USDT and sleep well, since the project founders have backed the digital asset with real-world assets.

But what will Putins speech about crypto affect the coins?

Blockchain always stood up

The crypto market is among the most resilient in the market, with a string of successful projects and ventures that have sustained their operation even in the face of a long bearish trend. This makes perfect sense as cryptocurrencies are backed by large businesses and blockchain believers alike.

Crypto predictions for 2022

Bitcoin is expected to reach $100,000 towards the end of April for a number of reasons. It tends to increase in value during springtime, just as it did last year, and the latest reports from CNN confirm that this season will be no different.

Ethereum 2.0 is also expected within the next few months. This update will reduce transaction fees by a significant margin, and it could allow Ethereum to break the $10,000 price point. Still, even in the most conservative scenarios, it might hit $6,000 by the end of 2022

Altcoins finally making the cut

Altcoins have been a major topic of discussion. They seem to have been left in the shadows. Not anymore. BNB has spiked in 2021 and is about to do the same this year. Solana is finally predicted to reach $300 this year.

If Ethereum is the foundation for decentralized finance (DeFi), then Tether is the base asset of this ecosystem. While Tether is a stablecoin, it has been popular for over four years for its ability to function as an alternative to volatile cryptocurrencies such as Bitcoin and Ethereum. Because of its fame, Tether will definitely rise strong in 2022.

Cardano doesnt share the same good faith, though. While it might surprise some with good results, it is expected to remain relatively consistent. That isnt bad but in particular - its just a missed chance to invest in something more profitable.

Summary

Everyone is expecting Bitcoin to finally reach $100,000 in 2022. And while this topic might be the main one for many investors, we shall not forget the importance of Ethereum and altcoins which could shape the blockchain world in the next couple of months, and why not years?

El Salvador has been encouraged by the International Monetary Fund (IMF) to rescind its plan of making Bitcoin (BTC) legal tender. El Salvador became the inaugural nation back in September of last year to successfully enable its citizens to use cryptocurrencies in all purchases alongside the United States dollar (USD).

Mixed reactions

Large-scale demonstrations erupted in response to the decision, which many feared would bring widespread inflation and instability to the already struggling Latin American country. While it is true that many commended President Nayib Bukele for his progressive approach and eagerness to be different, BTC has since lost about half of its value since November 2021. Nonetheless, Bitcoin is currently accepted everywhere in El Salvador for numerous products and services.

When El Salvador made Bitcoin legal tender, the local government developed a new digital wallet application, offering each citizen $30 in BTC. Over 200 additional cash machines have also been placed across the nation.

Furthermore, the El Salvador government touted the policy as a tool to stimulate economic development and job creation, but the decision has nonetheless split El Salvador's citizens in terms of overall acceptance since it requires companies and businesses to accept the flagship crypto as payment whenever feasible with little to no choice. The discontent is largely because Bitcoin is a contentious virtual currency in part because its value has often changed dramatically, causing it to increase and decrease substantially over the last decade.

IMF doesn't want BTC as legal tender

The IMF has cautioned President Nayib Bukele of the hazards that crypto poses to the country, emphasising that obtaining a loan from the agency would be difficult if BTC was made legal tender within the country .

To that end, the directors of the board have now 'urged local authorities to reduce the scope of the BTC law by withdrawing its legal currency status'. They emphasised the significant dangers connected with the usage of Bitcoin regarding financial stability and integrity along with consumer protection. Lastly, they also mentioned the great risks involved with the issuance of Bitcoin-backed bonds.

Ultimately though, President Bukele appears unfazed by the warnings of the IMF and has even announced the construction of a &lsquoBitcoin City', which shall reportedly utilise the geothermal energy generated by the country's volcanoes to power the initiative. The leader also recently admitted to &lsquobuying the dip' pertaining to the current state of the crypto market.

Cardano (ADA) is a project by Charles Hoskinson that had a lot of promise when it was first introduced as an alternative to Ethereum (ETH). Over the past few years, Charles Hoskinsons initiative skyrocketed in terms of popularity and usage, even reaching the top 3 global cryptocurrencies by market capitalization once upon a time.

However, therein lies the problem, as Cardano has been unable to replicate that kind of success as of late which has since led many to believe that perhaps its best days are truly behind it. As to whether that is indeed the case or not remains to be seen.

Successes

Its not all bad for Cardano though, as the amount of addresses that are holding ADA recently increased to a new all-time high of 4 million back in December. Despite overall activity on Cardanos network being down that month, the number of holders nevertheless increased. Also, Cardano transaction costs, which averaged $0.38 in November, continued to fall to $0.33 in December. Transaction costs on the network averaged $0.69 in September of the previous year.

Whats more is that Cardano transaction traffic even momentarily eclipsed that of the Ethereum blockchain ahead of the debut of SundaeSwap, a much-anticipated decentralized exchange (DEX) on Cardano, earlier this month. Furthermore, its first DeFi programme, MuesliSwap, was released with minimal fanfare but nonetheless saw its total value locked increase dramatically.

Moreover, the average blockchain load recently managed to remain over 90%. This is the very first time the system had ever reached this degree of blockchain load, and its maintenance of the metrics is even more remarkable.

Struggles

Unfortunately, Cardano has also been facing a lot of problems lately despite its recent success. The ongoing drama between SundaeSwap and CardStarter has since left a sour taste in the mouths of the ADA community, to the point where Hoskinson himself had to get involved. To make matters worse, the launch of SundaeSwap was filled with all sorts of technical problems wherein numerous users repeatedly reported failed transactions.

As if that werent bad enough, the overall sentiment regarding Cardano has also slightly worsened as an increasing number of crypto investors and enthusiasts believe that the project is failing to deliver on its various promises.

Still, there may be some light at the end of the tunnel as we draw closer to the Basho stage of Cardano which is based around scaling, interoperability and optimization. Ultimately, time will tell what shall become of the 6th largest cryptocurrency by market cap.

Hackers have recently targeted Qubit Finance, a DeFi (Decentralised Finance) network. The culprits gained access to the network, which is based on BSC (Binance Smart Chain), and stole roughly around $80 million. So far, this is the biggest crypto heist to occur this year.

In a tweet, Qubit Finance acknowledged the robbery and stated that their team is actively discussing what actions to take with their security and network partners, before adding that they shall provide further updates as soon as they become available.

The Qubit team also released a public message to clients informing them that the hacker as well as their stolen assets were being tracked, and that the hacker has since been contacted in order to provide a 'maximum bounty offer' and hopefully have the funds be returned to their rightful owners.

Fidelity Investments has submitted an application for a new Metaverse ETF (Exchange Traded Fund) which will track publicly traded firms with exposure to the blockchain-oriented network of three-dimensional digital worlds.

As per the filing, the Fidelity Metaverse ETF shall hence follow the Fidelity Metaverse Index, which measures 'the performance of a worldwide universe of firms that create, produce, distribute, or otherwise sell various services or products linked to building and enabling the Metaverse'.

Fidelity's application is the most recent among corporations attempting to capitalise on the growing interest regarding the metaverse concept. ProShares submitted a similar ETF application with the SEC in December 2021 whereas Roundhill Investments debuted a metaverse ETF on the New York Stock Exchange in June of last year.

Nevertheless, the SEC often remains reluctant to approve ETFs however, as was highlighted when it declined the approval of a Fidelity Spot BTC ETF earlier this week, adding to the ever-growing list of rejected applications.

[LOS ANGELES] Jennifer Espositos directorial debut reinvents the film fundraising model, offering an exclusive NFT sale in collaboration with award-winning Barcelona-based female NFT artist, Gala Mirissa, and platinum award-winning musician and producer Mike Gonek. The sale will go live on OpenSea on February 3 and run until February 5.

The FRESH KILLS NFT collection, namesaked after Espositos upcoming film, combines kinetic visual art with original music tracks based on the films powerful screenplay. Espositos vision of empowering female-led film projects is echoed by OpenSea, the worlds largest NFT marketplace and crypto startup Unicorn. 

NFTs are at the forefront of a cultural and artistic revolution. Projects like Espositos are just the tip of the spear at disrupting the traditional film industry by democratizing access to production funds, and offering new ways for filmmakers to interact and connect with fans, explained Alexander Bercow, arts partnership manager at OpenSea.

The FRESH KILLS NFT sale will begin on February 3rd on the periphery of Sundance's virtual events week. Additionally, the FRESH KILLS team will be headlined on OpenSea, the worlds leading NFT marketplace and the industrys foremost unicorn startups. To mint, a FRESH KILLS NFT, visit their website and learn more about the sale: https://www.arebelliousact.com/fresh-nfts

The collection came together to support the importance of supporting female-driven content created by female directors. 

The collection incorporates early rewards for fans and supporters. FRESH KILLS NFTs, will include perks like executive producer credits, red carpet premiere invites, visits to set and even a cameo on the film. 

The NFT space to me is freedom. Freedom for the artist and freedom for the people who take part in the journey of that NFT. Having these incredible artists step forward and give their support not only to my film but also to female-driven content made by female directors is magical. This kind of collaboration through NFTs is the future, said Jennifer Esposito.

Esposito and producers Alexis Varouxakis and Christine Crokos have already adopted a novel funding model. FRESH KILLS became the first feature film owned and traded by a global fan base. 

FRESH KILLS seeks to support underrepresented voices, empower artists to be heard and people to participate in the success of the film. A percentage of profits from the film will support films made by women. 

In full support of that spirit, acclaimed artist Ali Sabet will be donating a curated collection of his works to the teams sale.

There are moments in your life that you know you have to step up and serve. Helping Jennifer to bring her vision to life of a female narrative is one of those moments for me, explained NFT artist Ali Sabet.

ABOUT THE PROJECT

FRESH KILLS is a gripping drama that tells the story of the loyal women of an organized crime family that dominated some of the boroughs of NYC in the late 20th century. Unlike the typical mob movie formula, FRESH KILLS is written from the perspective of women within organized crime, the fear, violence and the rage that dictates who they are and who they become.

Espositos team has already hinted at a future partnership with other NFT leaders to launch what they described as a ground-shaking NFT project to revolutionize the Film Industrys move into Web 3.0.

The FRESH KILLS NFT sale will begin on February 3rd on the periphery of Sundances virtual events week. Additionally, the FRESH KILLS team will be headlined on OpenSea as part of partnership between the two. To learn more about the FRESH KILLS NFT collection, visit their website: https://www.arebelliousact.com/fresh-nfts

ABOUT THE ARTISTS

Gala Mirissa ranks amongst the top sales in the rank list of NFT by CryptoArt.io. She was named by BeInCrypto on International Womens Day 2021 as one of the three most influential hispanic women in the cryptocurrency industry using NFT (non-fungible token) technology.Creator of the first NFT of ELLE magazine, specifically the cover of February (Spain) with the top model Barbara Palvin.

Mike Gonek is a platinum producer and composer known for his innovative sound design and unique soundscapes. His records have been cut by artists like Chris Brown, Usher, PartyNextDoor, and others. As a global DJ and the other half of Torro Torro, Mike has toured the world with artists like Diplo, Skrillex, Zedd, and Dillon Francis.

OpenSea is actively being exploited nowadays owing to a weakness on the platforms front end. As per various reports, a user had successfully stolen 347 ETH from the NFT marketplace not too long ago.

Moreover, several users discovered that it was possible to acquire certain NFTs from OpenSea at rates previously advertised on the Rarible marketplace.

Also, while no backend or blockchain hacking process was required for the attack, the user merely leveraged the imbalance between the two orders on the different platforms to obtain value by purchasing an NFT for a substantially cheaper price than indicated on OpenSea.

Ultimately, its been a rough week for the NFT sector as not only have there been many functionality-related issues, but the NFT community previously also discovered that practically anybody can obtain a verified Twitter profile image by right-clicking and saving nearly any NFT and then subsequently mint it as a distinct collection on OpenSea without purchasing the real piece.