8 February

An Ethererum test network (testnet) successfully simulated withdrawals of staked ether (ETH) for the first time, bringing the second-biggest blockchain yet another step closer to its historic transition to a fully featured proof-of-stake network. The testnet, known as Zhejiang, facilitated the withdrawal simulations early Tuesday after going live last week.

On the Zhejiang testnet, partial and full withdrawals as well as BLS changes are included in the execution payload. We have a successful fork.

Zhejiang is the first of three testnets to run through a simulation of Shanghai. The next testnet upgrade will happen sometime in the next few weeks to Sepolia, followed by Goerli.

See Also: Crypto Protocol Lido Proposes ‘Turbo,’ ‘Bunker’ Modes for Post-Shanghai Ether Withdrawals
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“In 2021, Joshua and Jessica Jarrett sued the IRS to recover federal income taxes levied on the Tennessee couple’s stake-generated Tezos, arguing that self-generated staking rewards could not be considered taxable income under federal law.

Mid-way through the lawsuit, the IRS offered to issue the Jarretts their requested refund, but the plaintiffs refused, eager to get assurances from a court that the issue wouldn’t arise in the future. No such assurances came to pass, however: a federal judge dismissed the case in October, deeming the Jarretts’ grievances moot after a tax refund was issued.

The Jarretts are currently in the process of appealing their case’s dismissal, and ConsenSys will now provide financial support for that effort.

Core to the appellants’ argument is the position that staking rewards should not be considered taxable income, as no employer is doling them out. They should instead be considered effectively self-generated, or “created property,” under the federal tax code.

Similar to a farmer who grows crops, staking rewards are created by the protocol to incentivize participating in providing security for the protocol. Created property is not taxed until sale.”

Digital Currency Group (DCG) has started selling holdings in several investment vehicles run by its subsidiary and digital assets manager Grayscale at a steep discount, according to a Financial Times report citing U.S. securities filings. A Bernstein report had earlier said saving Grayscale would come at a cost for DCG.

According to the FT report citing filings, DCG’s recent share sales have focused on the Ethereum fund, where the group has moved to sell about a quarter of its stock to raise as much as $22 million in several trades since Jan. 24. The company is selling at about $8 per share, despite each share’s claim to $16 of ether.

This is simply part of our ongoing portfolio rebalancing.”

See Also: US Prosecutors Ask for Postponement of SEC, CFTC Cases Against Sam Bankman-Fried

“The Bank for International Settlements (BIS), the association of the world’s central banks, is spearheading the development of a monitoring system for stablecoins to ensure issuers maintain adequate reserves. The program will also investigate tech tools to help regulators form data-based policy frameworks, BIS said on Tuesday as it unveiled its work program for 2023.

The 2023 program focuses heavily on how central bank digital currencies could improve payments systems. The BIS is also working on monitoring systems for crypto and DeFi. Other standard setters such as the Basel Committee on Banking Supervision and the Committee on Payments and Market Infrastructures are also looking into crypto and stablecoin supervision.”

See Also: Digital Pound Holdings Could Be Limited to 10K, Central Bank Says

All activities and firms fall under the supervision of the Virtual Assets Regulatory Authority (VARA), set up last year to oversee the sector as Dubai aims to attract crypto and blockchain companies. The extensive rules published Tuesday detail requirements for companies from cybersecurity norms to compliance and risk-management standards. A separate set of rulebooks address specific activities like issuance, advisory, custody and exchange services.

With bespoke rules and guidelines designed to provide clarity, assure certainty, and mitigate market risks, VARA seeks to develop a model framework for global economic sustainability within an innovation-centric environment that is truly borderless, technology agnostic, and future-focused.”

See Also: Argentina’s National Securities Commission to Set Requirements and Rules for Crypto Companies

Organizations are using cryptocurrencies – borderless by nature – to get international aid into Turkey. The effort is the latest example of crypto being used to crowdfund cross-border responses. Ukraine’s government raised millions of dollars for its war effort after Russia invaded in February last year.

Turkish singer Haluk Levent’s charity Ahbap is leading the response with roughly $2 million in crypto donations raised on the Avalanche, BSC and Ethereum blockchains in less than a day. Local exchange Paribu is also fundraising for two nonprofits assisting in the response. Levent claimed the addresses had been approved by Turkey’s Financial Crimes Investigation Board (MASAK) in spite of the ban of crypto payments by the nation’s central bank in April 2021.

Binance, the world’s largest crypto exchange by trading volume, also pledged to airdrop $100 per Turkish user in BNB, Binance’s native token, a sum worth roughly $5 million.”

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