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🚫SEC cancels SAB 121, Warren targets wealthy with tax hike, & more


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Your weekly roundup of the 🔥hottest news in crypto:

🚫SEC cancels SAB 121, Warren proposes increased tax on wealthy, & other news

Written by Ciaran Lyons

Jan. 19 - 25

#1

SEC cancels controversial crypto accounting rule SAB 121

The US Securities and Exchange Commission has canceled a controversial rule that asked financial firms holding crypto to record them as liabilities on their balance sheets.

A new Staff Accounting Bulletin (SAB) from the commission on Jan. 23 said it "rescinds the interpretive guidance" of SAB 121, an agency rule published in March 2022 that the crypto industry has long sought to cancel.

"Bye, bye SAB 121!" SEC Commissioner Hester Peirce, the agency's crypto task force lead, wrote in a Jan. 23 X post. "It's not been fun."

The SEC published SAB 121 in March 2022, which asked financial firms holding crypto on behalf of customers to report the assets as a liability on their balance sheet. The crypto industry pushed back on the measure, saying it would make holding crypto administratively more difficult.

House Financial Services Committee Chair French Hill said in a statement on X he was "pleased" to see the "misguided SAB 121 rule has been rescinded."

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#2

Elizabeth Warren proposes Elon Musk pay more taxes for gov't efficiency

US Senator Elizabeth Warren has penned an open letter to Department of Government Efficiency (DOGE) Chair Elon Musk, proposing ways the federal government could cut wasteful spending.

According to the Jan. 23 letter, Warren proposed fully funding the Internal Revenue Service (IRS), closing the carried interest loophole, and adding a capital gains tax on estates.

The wealthy appear to be the targets of Warren's IRS proposal, as the socioeconomic group is mentioned four times in the brief, four-paragraph section titled "Cutting Waste and Abuse in the Federal Tax Code." With an estimated net worth of $426 billion, Musk certainly falls into that category.

Senator Warren voiced strong concerns about the DOGE process and its policies, particularly regarding potential conflicts of interest among its leadership:

"The year 2024 marked the beginning of a shift toward broader cryptocurrency acceptance, and the launch of new coins by President Donald Trump and First Lady Melania sets a powerful precedence for what is to come."

#3

Nasdaq seeks amendment to BlackRock's Bitcoin ETF for in-kind redemptions

Nasdaq has submitted a filing on behalf of asset manager BlackRock, seeking a rule change to permit in-kind creation and redemption for its spot Bitcoin exchange-traded fund (ETF).

Bloomberg ETF analyst James Seyffart said in a Jan. 24 X post that BlackRock "should have been allowed to do this from the get-go" when the BlackRock iShares Bitcoin Trust launched alongside the other ten US spot Bitcoin ETFs in January 2024.

On the same day as the filing, six more crypto ETF applications were filed in the US.

Nasdaq proposed "to allow for in-kind transfers of the Trust's Bitcoin," as per a Jan. 24 filing with the US Securities and Exchange Commission.

The filing stated that "Authorized Participants" — institutions that facilitate the creation and redemption of fund shares — would be able to use either cash or Bitcoin to create shares or receive cash or Bitcoin when redeeming shares.

#4 Prediction of the week

Bitcoin could top $150K before retrace in repeat of 2017 cycle, says analyst

Bitcoin's price action is mimicking the 2016 to 2017 cycle and could hit a top of $150,000, says Glassnode lead analyst James Check.

Check said in a Jan. 23 episode of the Theya podcast that $120,000 to $150,000 is what he would call the "topping cloud" for Bitcoin, and any level above that likely won't hold for long.

"We can absolutely bust out the top end of that, with a very, very low probability of staying at the top end," Check said.

Bitcoin is currently trading at $103,019, and Check added that the "average guy" is "quite profitable" if it reaches $120,000 — significantly more so if it reaches $150,000.

"Above that is speculative fever, and I probably would think if we go above it, we will go back down through it," he said.

Bitbo data shows Bitcoin's short-term holders have paid an average of $90,349 per BTC, while long-term holders have paid an average of $24,627.

#5 FUD of the week

Ledger co-founder released after days in captivity in France: Report

David Balland, co-founder of the French cryptocurrency hardware wallet manufacturer Ledger, was released following a harrowing kidnapping incident, according to a statement from the Paris prosecutor's office cited by Bloomberg.

Balland was abducted from his home in central France during the early hours of Jan. 21. He was held captive until a police operation on the night of Jan. 22 secured his release. The kidnappers had demanded a ransom in cryptocurrency.

Ledger was established in 2014 by Balland and others. The devices are designed to keep users' private keys offline, thereby safeguarding digital assets from online vulnerabilities.

The company, which raised 100 million euros ( $109 million) in 2023, now boasts a valuation of 1.3 billion euros ($1.42 billion) and employs about 700 people.