cryptocurrencies

Legendary venture capital firm Andreessen Horowitz is preparing to launch a new fund that will invest exclusively in cryptocurrencies and other related endeavors.

Tech news outlet Recode reports that the prominent Silicon Valley firm is hiring staff for a “separately managed fund focusing on crypto assets,” which will be the VC’s first dedicated solely to this nascent industry.

That said, Andreessen is no stranger to cryptoasset investing. The firm has invested in cryptocurrency unicorns Coinbase and Ripple, as well as smaller ventures such as CryptoKitties, one of the most popular Ethereum-based decentralized applications (DApps). Andreessen has also provided backing to Polychain Capital, one of the larger cryptocurrency hedge funds.

Little else is known about the new fund, including how large it will be and whether “crypto assets” refers to cryptocurrencies and tokens exclusively or also includes cryptocurrency companies.

Notably, one of the positions for which Andreessen is hiring is a lawyer, who will be responsible for navigating the murky regulatory environment around cryptoassets. In particular, he or she will determine whether prospective investments are compliant with Securities and Exchange Commission (SEC) regulations.

In March, representatives from Andreessen Horowitz attended a meeting with SEC officials along with fellow members of an industry working group. Sources familiar with the meeting — which was also attended by representatives from Union Square Ventures — said that the working group pressed the SEC to provide formal guidance that ethereum and a number of initial coin offering (ICO) tokens are not securities under federal law, but the agency was hesitant to grant this broad exemption.

The other new hire, a finance manager, will assist the firm in collecting investments from its limited partners. He or she will also face the difficult challenge of assigning valuations to prospective cryptoasset investments — a tall order given the novelty of the space.

Andreessen has not yet announced the new fund publicly.

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iran

Iran’s central bank has ordered regulated financial institutions to cease dealing in cryptocurrencies or offering services to company’s that facilitate or promote cryptocurrency trading.

According to Reuters, the Central Bank of Iran (CBI) levied the new ban on anti-money laundering (AML) grounds, citing a circular published by government regulator last December.

“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them,” Iranian state media reported the circular as saying.

“All cryptocurrencies have the capacity to be turned into a means for money-laundering and financing terrorism and in general can be turned into a means for transferring criminals’ money,” the government added in another section of the circular, which was cited by Radio Free Euorpe/Radio Libertry.

The move comes as Iran is struggling to mitigate a full-blown currency crisis, which was partially spurred by possible forthcoming US economic sanctions.

Regulators had already prohibited money changing outside of banking platforms, and the cryptocurrency ban appears to be another effort to prevent Iranians from siphoning money out of the country.

High-ranking Iranian officials have also called for the government to ban encrypted messaging app Telegram, in part because the firm is launching its own cryptocurrency, called “Gram,” which they claim could lead to as much as $50 billion being funnelled out of Iran annually.

The CBI is not the only central bank to take a hostile stance on cryptocurrencies. The Reserve Bank of India (RBI) recently banned Indian banks from serving cryptocurrency exchanges, though industry groups are currently challenging this ban in the country’s supreme court.

Meanwhile, Iran has also reportedly mulled launching its own state-backed digital currency, which it believes could enable it to evade international economic sanctions, much as Venezuela intends to do with its “petro” cryptocurrency.

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The price of bitcoin has surpassed the $8,800 mark, rising 6 percent within the last 24 hours. Trading volumes across the major cryptocurrency exchanges have also increased beyond $26 billion for the first time in a while.

Upward trend.

Last month, bitcoin tested the $9,200 mark, but it didn’t take long before it fell to $6,500 after failing to sustain the momentum to bounce off $8,200.

Based on the fluctuations in the price the market has witnessed in recent weeks, it is quite likely that bitcoin will test the $9,200 mark again as it did last month, and it could even surpass it. A movement above the $9,200 level it reached late March could see bitcoin price entering the $10,000 region before April ends.

Psychological threshold.

Investors highlighted the $10,000 mark for bitcoin in November last year was both a psychological threshold and a key milestone. They predicted it would surge substantially, way before it got to $10,000. Bitcoin was relentless towards the ending of last year.  After breaking the $10,000 ceiling – it rose to $14,000 and eventually to $20,000, where the decline started.

Since the corrections of February this year, and the series of regulations in recent weeks, the market has struggled to hold forth any form of stability. As always, the price of most altcoins and tokens have taken a cue from bitcoin which has been battered since the turn of the year. Regional exchanges in Japan and South Korea have not been spared either as both have witnessed a decrease in trading volumes.

The new trend in the price of BTC is an ideal position for the currency to rally round for both the short and mid-term, given that more people are getting aware of cryptocurrency as adoption has increased.

finland

Tax authorities in Finland have begun matching bank records to cryptocurrency transactions in an effort to track down suspected Bitcoin tax cheats.

English-language Finnish news outlet Metropolitan.fi reports that Timo Puiro — the tax office’s inspector general — has identified at least 3,300 citizens who owe taxes related to gains accrued while trading cryptocurrencies. Collectively, they owe about 30 million euros in capital gains taxes — a tenfold increase from 2016.

According to the report, the tax office has taken advantage of “generous access” to bank transfers and other financial data, which officials have been able to successfully link to Bitcoin transactions from cryptocurrency exchanges and other trading platforms.

Using this data, the tax office has been able to identify Finns who taxes on their cryptocurrency gains, and it will scrutinize their annual tax returns to determine whether they pay them.

The latest date that taxes can be filed in Finland is May 15, so it is unclear whether residents are paying their cryptocurrency-related taxes.

However, the fact that many cryptocurrency investors do not report cryptocurrency trading on their tax returns is well-documented. US financial services company Credit Karma has said that among users of its tax preparation software cryptocurrency reporting is at “negligible levels,” and the Internal Revenue Service (IRS) has contracted with a blockchain forensics firm in the past to help the agency track down Bitcoin tax cheats.

Cryptocurrency exchange Coinbase was also recently forced by a court order to provide the IRS with access to customer records for high-volume users.

As BlockExplorer reported, tech conglomerate Amazon recently won a patent for a data streaming marketplace that would transmit information in real-time. The company identified catching Bitcoin tax cheats as one potential use case for the marketplace. Under the system, law enforcement agencies could subscribe to data streams for Bitcoin transactions and shipping information or bank records and then use in-app analytics tools to identify correlations in the data.

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Kraken’s CEO, Jesse Powell, had nothing but strong words for New York regulators who tried to compel the San Francisco based exchange to take part in it’s Virtual Market Integrity Initiative. Kraken and 13 other exchanges were instructed to participate in the Virtual Market Integrity Initiative, with the goal of seeking greater transparency regarding how trading platforms operate.

The New York Attorney General offices Investor Protection Bureau sent letters to the platforms requesting they completed a questionnaire by May 1. The forms included detailed questions on ownership, fees, money laundering and more.

According to the Attorney General, Eric Schneiderman:

“Too often, consumers don’t have the basic facts they need to assess the fairness, integrity and security of these trading platforms.”

Most exchanges were willing to cooperate with the inquiry and are interested in increasing transparency in the space. Tyler Winklevoss, CEO of Gemini whose statement was published on CNBC applauded the Attorney General and  said:

“We look forward to cooperating with and submitting our responses to the questionnaire that has been circulated.”

Powell (Kraken), however, was more critical of the regulators. In an update shared on Twitter, he said:

“Kraken’s BitLicense-prompted exit from New York in 2015 pays another dividend today. When I saw this 34-point demand, with a deadline 2 weeks out, I immediately thought ‘The audacity of these guys — the entitlement, the disrespect for our business, our time! The resource diversion for this production is massive. This is going to completely blow up our roadmap!’ Then I realized that we made the right decision to get the hell out of New York three years ago and that we can dodge this bullet.”

Kraken had ceased operations in New York in 2015 as part of the “Great Bitcoin Exodus” that resulted after the controversial BitLicense was introduced. Powell said that Kraken was open to help New York’s regulators understand their business operations as well as how the crypto space works but he believes the AG’s inquiry is misplaced and blames other crypto exchanges for “kowtowing” to the probe and others before it. Kraken also recently ceased operations in Japan due to regulatory pressure, but still ranks in America’s top 15 by volume list for cryptocurrency trading platforms.