🌋📊 IRS Erupts Crypto Volcano, GameStop Retreats, Binance Conquers Japan - Proof of Intel

Good morning, tech pioneers! Your faithful guides Mochi & Kimchi have clocked back in for another vibrant edition of Proof of Intel (PoI). Ready to dive headfirst into a spicy bowl of tech and crypto news, simmered to perfection with our unique blend of insights and analysis? Let's swap that coffee for our tech-tonic mix, and let the enlightenment commence!

SUMMARY 📓🖋️

🟧 The IRS ruled staking rewards in blockchain are now immediately taxable, sparking widespread "staker" uproar!

🟧 GameStop pulls the plug on its cryptocurrency wallet citing "regulatory uncertainty" just a year after adoption.

🟧 Kenya suspends Worldcoin's local operations due to potential public safety concerns.

🟧 Binance Japan commences operations, offering access to 34 virtual currencies.

🟧 HashKey and OSL secure licenses to offer retail crypto trading in Hong Kong.

TL;DR at the bottom.

🍯💸 IRS Sweetens the Deal for Itself, Staking Rewards Now Taxable!

Well, well, well. If it isn't our old friend the IRS, back with another party trick. In their latest magic act, the IRS has made your staking rewards disappear...into their coffers. 😅 That's right, folks! The IRS has decreed that staking rewards from blockchain should be reported as income in the year they are received. Now, isn't that just the cherry on top of our crypto sundae?

With the power of Revenue Ruling 2023-14 in their pocket, they mandate stakers to report the "fair market value" of rewards as gross income, leaning heavily on Section 61 of the Internal Revenue Code. Remember the Jarretts, our brave couple who tried to fight the IRS in 2021? They insisted that staking rewards should be taxed based on the price at which the assets are sold. The IRS, while tipping their hat to the Jarretts by honoring their requested refund, dismissed the case with a sly grin. Now there's some food for thought.

In the world of regulators, staking is starting to feel like the star of a shooting game. In between the IRS and the U.S. Securities and Exchange Commission, who have previously sued exchanges like Kraken and Coinbase, it seems like the spotlight is blinding. Even third-party staking through centralized exchanges are under the IRS's microscope, and the crypto community is not having it. The Proof of Stake Alliance, for one, firmly believes this ruling overlooks the economic and practical reality of cryptocurrency.

🎮🏳️ Game Over for GameStop’s Crypto Wallet

GameStop, the video game retail titan, has decided to hit the "Eject" button on their crypto wallet. Apparently, the "boss level" of regulatory uncertainty was too much for them to handle. Now, don't get upset. You can still retrieve your account in a compatible wallet as long as you know your "Secret Passphrase". Can't say the same for the Princess in another castle though. 🎮

Just over a year ago, GameStop got adventurous, dipping its toes into the crypto space with a self-custodial crypto wallet system. They even launched an NFT marketplace in collaboration with the Australian blockchain startup, Immutable X. Unfortunately, the marketplace was as well received as a badly timed jump in a platformer game, with criticisms about the lackluster selection of NFTs and a somewhat shadowy practice of selling NFT games without their creators' permission. Now that's a plot twist!

Even though the NFT storefront is still running, its journey feels like a gaming character stuck on a ledge. Why, you ask? In an earnings call last December, GameStop hinted at scaling back these ventures after another quarter of massive net losses. Adding to the drama, CFO Diana Saadeh-Jajeh, who has been one of the main players behind the NFT and crypto initiatives at GameStop, resigned last week. And a month before that, CEO Matt Furlong, also a major driver of these initiatives, was shown the "Exit" door. Their new player? Chewy founder Ryan Cohen. Will he be the hero who saves the day or yet another character lost in this labyrinth of a game? Only time will tell! 🎲

👁️‍🗨️💱 Kenya Halts Worldcoin's Project: Eyeing Safety or Just Not Seeing Eye to Eye?

Pop quiz: If you're offered cryptocurrency in exchange for a scan of your iris, would you do it? Apparently, over 350,000 Kenyans said "Game on!" But alas, the Kenyan interior ministry hit the pause button on the "play". Why, you ask? It seems the ministry wasn't too thrilled about the idea of Worldcoin's project, which exchanges iris scans for a digital ID (and some shiny cryptocurrency tokens in certain countries).

Worldcoin, the brainchild of OpenAI's CEO, Sam Altman, aims to create a novel "identity and financial network". But as cool as that sounds, Kenya's got some reservations. They're worried that promising money for consent could be seen as, well... inducement. Worldcoin Foundation, a Cayman Islands-based entity, says it's using this pause to educate the authorities about the privacy measures they have in place. Well, let's hope they do a better job explaining it than I did with my parents about why I needed the latest gaming console.

The Kenyan government isn't the only one eyeing Worldcoin with suspicion. Reports say that the UK, Germany, and France are also squinting their eyes at this shiny orb of an idea. A 'Big Brother' or a revolutionary step towards a global digital economy? We'll have to wait and see. In the meantime, just remember - it's all fun and games until someone loses an eye... or their privacy

🌸🎌 Binance Blooms in Japan: 34 Cryptocurrencies Now on Offer

Enter Binance, the heavyweight champ of cryptocurrency trading platforms, donning a new avatar as Binance Japan. "Why the rebranding?", I hear you ask. Well, let's just say it's their way of playing nice with the regulators.

Binance has swiped right on Japan, officially changing its name after purchasing Sakura Exchange BitCoin last year. They're taking a different approach to romance, though, by not letting new users in Japan create accounts on Binance's global platform and instead pushing them towards Binance Japan. Existing users, fear not! You'll just need to migrate your accounts to the new platform starting August 14th. The migration might be a bit of a hassle, but hey, it's all for the sake of compliance with Japanese standards.

And if you thought that was the end of the surprises, hold on to your hats! Binance Japan is throwing a party, with a guest list of 34 virtual currencies, a number that outdoes its rivals in Japan. Customers might not be able to trade with each other initially due to low liquidity, but hey, you can always buy and sell tokens from Binance Japan's own stash.

🚀💱 Hong Kong Leaps Into Retail Crypto Trading With HashKey and OSL

Ready to dive into the vibrant world of Hong Kong's crypto scene? The city is extending a warm welcome to individual investors with digital asset firms like HashKey and OSL getting the green light from regulators. HashKey is hopping onto the retail bandwagon, having procured the necessary licenses to expand its services from professional investors to retail users.

The firm has upgraded two major licenses issued by the Hong Kong Securities and Futures Commission (SFC). License Type 1 will see HashKey operating a virtual asset trading platform under the city's securities laws. License Type 7, on the other hand, gives them the ability to provide automated trading services to both institutional and retail users. HashKey is painting the town red, not only by becoming one of the first licensed exchanges to offer retail crypto trading in Hong Kong, but also by launching its crypto over-the-counter trading service, HashKey Brokerage.

Meanwhile, OSL, another local crypto firm, has also joined the party, obtaining an upgrade to its existing license to offer Bitcoin and Ether trading to retail investors. OSL's co-founder Dave Chapman gushes: the latest licensing uplift allows OSL to facilitate access to digital assets for retail investors.

TL;DR: 🔻💯

🟧 The IRS, in an eyebrow-raising move, declares that blockchain staking rewards are now immediately taxable. This sparks a flurry of dissent in the crypto community, and with regulators zoning in on staking, the temperature is certainly heating up.

🟧 GameStop, facing "regulatory uncertainty", has decided to discontinue its crypto wallet just a year after its adoption. Despite launching an NFT marketplace, the company hinted at scaling back such ventures after major net losses. Adding to the saga, key personnel behind these initiatives have left the company, leaving the future of GameStop’s crypto adventure hanging in the balance.

🟧 Kenya has put a halt to Worldcoin's local operations over safety concerns. The project, initiated by OpenAI's CEO Sam Altman, gives users a digital ID and cryptocurrency in exchange for an iris scan. With this suspension, Worldcoin aims to boost understanding of its privacy measures. However, the project also faces scrutiny in the UK, Germany, and France.

🟧 Binance, the world-leading crypto trading platform, is now offering services in Japan as Binance Japan, in an effort to comply with regulators. New and existing Japanese users will need to move to Binance Japan, which will provide access to 34 virtual currencies, more than any other crypto exchange in the country.

🟧 HashKey and OSL have made a bold entry into retail crypto trading in Hong Kong, after securing the necessary regulatory licenses. They're all set to offer a variety of services, including a virtual asset trading platform and automated trading services to both institutional and retail users. Both local firms are now ready to trade with retail users, making the Hong Kong crypto scene all the more exciting!