Crypto Startups Flee Japan's Tax Policy

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Dec. 27, 2021

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PROHIBITIVE TAX? Crypto companies in Japan have implored authorities to change tax policies that some say are driving them out of the country. On Dec. 10, Japan’s ruling coalition approved a tax plan for the 2022 fiscal year that continues to treat token listings, airdrops and treasuries as taxable. Crypto startups, faced with a tax rate as high as 35% or potential taxes even if assets aren’t sold, are leaving the country, CoinDesk Lavender Au and Eliza Gkritsi report.

METAVERSE MENTIONS: Kraken is developing a marketplace for non-fungible tokens (NFTs) where users can arrange loans using the tokens as collateral, CEO Jesse Powell told Bloomberg. Although competing exchanges Coinbase and FTX have also moved into NFTs, NFT-backed loans are somewhat more novel. Elsewhere in the metaverse, PwC Hong Kong bought LAND in The Sandbox. The virtual real estate platform welcomed just 4,500 unique addresses in the past 30 days, according to DappRadar.

PROPOSED BANS: Amid ongoing economic experimentation, soaring inflation and growing bitcoin use, Turkey President Recep Tayyip Erdoğan will send a crypto law to the country’s parliament, two publications reported Friday. In April, Turkey’s central bank said it was banning the use of cryptocurrency for payments, although it remains legal to hold crypto in the country. Separately, an influential economic group tied to India’s ruling party has called for a ban on “private” digital currencies and the development of a central bank digital currency (CBDC). In the U.S., Sen. Cynthia Lummis (R-Wyo.) will pitch Congress next year on creating a self-regulatory body for crypto as part of her sweeping digital asset policy bill.

MINING BUMP: Marathon Digital is purchasing a record number of bitcoin miners from Bitmain. The publicly traded firm did not disclose a total but claimed that in terms of exahashes per second (EX/s) the new machines will generate, the deal was the largest single order of Antminer S19 XP bitcoin miners, part of its plan to have 199,000 operational miners by 2023 (reportedly to bump its hashrate by 600%).

BLOCKCHAIN DEVELOPMENT: Cardano founder Charles Hoskinson said “a formal open-source project structure” similar to Hyperledger to Linux to help steer blockchain development is in the cards for 2022. He is also pursuing “end-to-end microfinance” capabilities and a native web wallet for the $50 billion blockchain, in a year-end video shot from Boulder, Colo. Separately, ERC-20 tokens have come to Dfinity’s Internet Computer with its new cross-chain bridge to Ethereum. Finally, in a reversal, Telegram CEO Pavel Durov has put its weight behind Toncoin, one of two blockchains that came out of the demise of the $1.7 billion TON blockchain targeted by the U.S. Securities and Exchange Commission in 2020.

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