Last week, the Indian government announced that it plans to begin taxing cryptocurrency income at 30%, a major move which would lurch the country towards legalization and regulation. It also plans to roll out the digital rupee, a CBDC, by April 2023. This is a major move away from statements by Narendra Modi, which leaned towards outright bans.
“India is already a large market. WazirX, the country’s largest exchange, announced that they have over ten million traders signed up, trading over $40 billion of cryptocurrency. That’s reason enough for the government to begin taxing profits. Prohibition is rarely the answer in such a case. As time goes on, government officials begin to see the long-term value of blockchain-based technologies. They begin to understand that they simply can’t wish it away. They understand that, if they ignore it and ban it, they will be left behind,” opined Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.
Finance Minister Nirmala Sitharaman alluded to that in her statement, saying that the “magnitude and frequency of these transactions have made it imperative” for the government to begin taxing. “There has been a phenomenal increase in transactions in virtual digital assets,” she continued.
“So far, Prime Minister Modi has taken the tack opposite of El Salvador’s Bukele,” Gardner said. In past speeches, Modi has attributed cryptocurrencies as a method of money laundering to enhance illicit activities and noted that rampant trading could “spoil our kids.” In November, a bill emerged to ban cryptocurrencies, which was later clarified to be a consideration.
“This is the right move for India. Digital assets are simply not going away. A personal distaste — or failure to understand them — does not mean that it is good policy to ban them. The digital assets industry is moving forward. The time to react is now. It is time for government to encourage innovation in the arena,” said Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“Because of the size of the country, as well as its tech footprint, this is a major move for the industry. And it couldn’t come at a better time. Despite the naysayers, cryptocurrency isn’t going through a winter. It is following the same path as other traditional assets and responding to external factors. India’s movement toward digital assets is proof of just that,” said Gardner.
Mixin Network Halts Services After $200 Million Security Breach; Recovery Plan in Progress
Mixin Network, a prominent decentralized wallet service provider, has been rocked by a massive security breach resulting in a loss of $200 million.
The breach, attributed to vulnerabilities in its cloud service provider’s database, has raised questions about the platform’s dependence on centralized infrastructure.
Mixin Network, known for its support of 48 public blockchains and an impressive total network asset value exceeding $1 billion, halted deposit and withdrawal services following the breach.
This incident has prompted discussions within the crypto community regarding the risks associated with centralization in decentralized platforms.
In response to the breach, Mixin Network has taken swift action, enlisting the expertise of blockchain security specialists from SlowMist.
The company has pledged to resume services only after thoroughly addressing identified vulnerabilities, a decision reached through consensus among all network nodes.
The plan for asset recovery will be announced in due course, and Mixin founder Feng Xiaodong will provide a detailed explanation in a public livestream.
The Mixin incident follows closely on the heels of the JPEX cryptocurrency exchange scandal in Hong Kong, which has left countless individuals reeling from financial losses totaling $178 million.
Experts now speculate that these recent setbacks may lead the Hong Kong government to reconsider its enthusiastic promotion of Web3 technologies, as concerns over security and public sentiment cast a shadow on the region’s cryptocurrency ambitions.
Carlton Lai, head of blockchain and cryptocurrency research at Daiwa Capital Markets, said, “I think this scandal will have a pretty sizeable negative impact on retail sentiment, given its significant local presence and the various celebrities involved.”
As Hong Kong grapples with the fallout from these high-profile incidents, the future of cryptocurrency in the region remains uncertain, with questions of regulation and security taking center stage.
Dallas Mavericks Owner and Billionaire Tech Investor, Mark Cuban, Falls Victim to Phishing Attack, Losing $870,000 in Crypto Assets
Mark Cuban, owner of the Dallas Mavericks and a prominent billionaire technology investor, recently fell prey to a phishing attack, resulting in a loss of approximately $870,000 worth of tokens.
The incident occurred over the weekend after months of inactivity on Cuban’s crypto wallet.
Phishing attacks, a prevalent threat in the crypto industry, deceive users into revealing sensitive information, downloading malicious software, and exposing their private data.
These attacks exploit users’ trust, often causing them to overlook the authenticity of incoming requests on their crypto wallets or unwittingly download counterfeit applications designed solely to pilfer their assets.
Cuban’s crypto wallet was emptied of various assets, including U.S.-pegged stablecoins, staked ETH (stETH), SuperRare (RARE) tokens, and some Ethereum Name Service (ENS) domains, according to blockchain data.
The initial discovery of these suspicious transactions was made by the vigilant on-chain investigator @wazzcrypto.
Fortunately, Cuban was alerted to these transactions, and he managed to safeguard over $2.5 million worth of Polygon’s MATIC tokens.
He accomplished this by promptly logging into his wallet and transferring the tokens to a secure Coinbase exchange address.
Cuban revealed that the phishing attack was apparently initiated through a fraudulent MetaMask wallet application that he had unwittingly downloaded.
This incident marks the second high-profile phishing attack in as many weeks, following Ethereum co-founder Vitalik Buterin’s experience in early September. Buterin’s X account was compromised in a phishing attack, although he did not appear to lose any of his own funds.
Nevertheless, unsuspecting users collectively suffered losses of up to $700,000 by sending tokens to a malicious link that falsely appeared to have Buterin’s endorsement.
As the crypto industry continues to thrive, it is crucial for users to exercise caution and remain vigilant to safeguard their digital assets from the ever-present threat of phishing attacks.
RxR Analysis Reveals: Ether’s True Worth 27% Higher than Market Price
RxR, a research-driven partnership between Republic Crypto and Re7 Capital, has revealed that Ether (ETH), the native token of the Ethereum blockchain, is currently trading at a 27% discount to its actual fair value.
This revelation comes as a result of RxR’s innovative approach to evaluating the worth of cryptocurrencies. Instead of relying solely on traditional metrics, RxR’s methodology incorporates a blended version of the Metcalfe law that takes into account both the active user base on the continuously expanding Ethereum scaling networks and the users on the Ethereum mainnet.
Ether, as a fundamental component of the Ethereum ecosystem, facilitates a wide range of activities, from simple transactions to participating in network security through staking, earning interest, and even storing non-fungible tokens. As such, the value of Ether has long been intertwined with Ethereum’s network usage.
Lewis Harland, an analyst at RxR, explained the significance of this approach, stating, “Ethereum’s network valuation exhibits a closer alignment with the updated Metcalfe law index when the active user base of Ethereum’s scaling networks is included in the model, in contrast to when it is omitted.”
Harland continued, “The updated model, which factors in these networks, places ETH’s valuation at $275 billion, indicating that the current market capitalization is trading at a substantial 27% discount.”
Ether’s market capitalization consistently tracks the blended Metcalfe law model more accurately than the traditional model, which fails to consider the growing activity on layer 2 networks or offchain solutions built atop the Ethereum mainnet.
In essence, this analysis challenges the perception that Ether might be overvalued, as suggested by the traditional Metcalfe law Model.
The emergence of Layer 2 technology has undoubtedly become one of the most dynamic and exciting developments in the crypto market. Key protocols, such as Coinbase’s BASE, Arbitrum, and Optimism, have found their unique niches within this landscape.
According to data from L2Beat, the total value locked in layer 2 protocols has surged more than threefold in just two years, reaching an impressive milestone of over $9 billion.
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