IRS Talks Reporting Requirements 💰

GM. This is Degen Scoop. It’s Tuesday, here’s the scoop:

• IRS Talks Reporting Requirements 💰

• SEC Charges Podcaster 👨‍⚖️

• Friend.tech Usage Drops 90%+ 🥶

• Whale Moves 🐋

• Threads You CAN’T Miss 🧵

Proposition by IRS on Regulations and Reporting of Digital Assets

Last Friday, the IRS released a proposal to mandate reporting of digital assets which aim to close the taxing gap from those who have not reported their earnings. While Americans are already required to declare any cryptocurrency earnings, the new proposal seeks to offer clearer guidance to digital asset transactions with a hearing set for November.

A major part of the proposal is that exchanges will be required to report all the transactions that take place on their platform. Any centralized exchange worth its salt that is operating in the US is probably already doing this to cover themselves from potential litigation. Monitoring of transactions is key to know how much taxpayers will owe when push comes to shove.

SEC Charges Podcaster For Selling Securities

The SEC strikes again: this time it’s the first time an NFT sale is being charged as an unregistered securities sale. The company Impact Theory raised $30M in late 2021 through an NFT sale which was marketed as investing into a business. This is a no no if you wish to be SEC compliant. In this case, the NFTs were effectively an investment contract so the SEC issued a cease and desist which has been honored.

The company has been ordered to pay $6M in fines and will be required to create a fund to make all investors whole. For those considering an NFT sale to fund a business investment: maybe don’t do that if you like not dealing with the SEC. The Howey test was used to determine the fact that the NFTs were marketed as securities and certainly will not be the last time.

Friend.tech Frenzy Ends as Hype Dies Down

Friend.tech dominated the TL for a week since it launched and even brought OnlyFans creators. Having had some time to use the app, when it wants to comply, the usage has calmed down as the shiny new toy quality has been lost. That’s not to say this desire of SocialFi uses is dead, but rather that even degens get bored of something new after a week’s time which is the attention span of CT.

The revenues compared to peak usage have dropped over 95% (DeFiLlama) but this is likely just a growing pain for Base’s novel app. The economic model isn’t perfect and could use some tuning if the founders are willing to listen in the downtime. Many top accounts have seen a hit in key price, but we’d be shocked if the app were to completely die so quickly.

Notable NFT Sales in the Last 24 Hours:

Notable Threads You May Have Missed:

Meme of the Day

Conclusion

Touch grass, hit the gym, and don’t forget about what’s really important outside of magical internet coins.

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DISCLAIMER: This newsletter does not constitute financial advice. This is strictly educational and should not be used to make any financial decisions. Be responsible and do proper due diligence before aping.