Rise in Crypto Regulatory Activities

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The Federal Trade Commission has opposed Microsoft’s $68.7 billion acquisition of Activision Blizzard in court. According to the FTC, the agreement would give Microsoft an unfair advantage over its rivals. If successful, it would restrict Microsoft’s efforts to enter the still-developing metaverse. To establish an “Open Metaverse,” Microsoft has teamed up with Meta, Sony, and other companies. Non-fungible tokens, or NFTs, are no longer permitted on the company’s Minecraft servers. The FTC is also suing Microsoft for buying Bethesda Games Studios and making Xbox the only platform for Starfield and Redfall.

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All the companies processing crypto transactions for users in the European Union (EU) will have to report this information for tax motives under the legislation put forward. The policy further says that even non-European crypto asset managers will need to provide transaction reports if they have users who are EU citizens. Companies will provide information like where the user lives, and where and when they were born to the tax control. In addition, information like how much the user spent buying or receiving in crypto is to be reported. The execution of the rules would cost an initial amount of $300 million and an additional $25 million every year. Policymakers claim that the program will have a “minimal” impact on small- and medium-sized businesses because they already have access to the information that has to be disclosed.

People from different firms seem to have concerns regarding the policy and, state that it will put an “undue burden” on the companies working in the region. A vote on the legislation, which would create a framework for crypto services among its participants, is anticipated in February. This is similar to the Indian TDS system. It mentions levying a 1% TDS and 30% tax on any consideration paid for the transfer of Virtual Digital Assets.

The U.S. legislators have written a letter asking Jerome Powell, Federal Reserve Chairman for information on the banking sector’s ties to FTX. Martin Gruenberg, the acting chair of the Federal Deposit Insurance Corporation, and Michael Hsu, the currency controller, received letters from Elizabeth Warren and Tina Smith. The collapse of digital asset exchange FTX, which was formed by former FTX CEO Sam Bankman-Fried, has recently prompted the senators to speak out about it. In their letter, the senators mentioned Alameda Research’s $11.5 million investment in Washington bank Moonstone as well as other U.S. banks’ “heightened volatility” as a result of cryptocurrency holdings. Both the lawmakes have been vocal about the collapse of FTX and crypto in general. Fidelity was asked to scrap its 401k Bitcoin plan last month, Warren, Smith and Richard Durbin of Illinois in the wake of the FTX collapse.

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