Hey there, PoI readers! 💫

It's your favorite crypto connoisseur, Mochi, back with another serving of tantalizing tech and web3 news. From the UK's tax surveillance expansion and rate-cut fever sparking a crypto rally, to Arthur Hayes throwing major shade at Monad and Washington's epic AI regulation showdown, we've got a lot to unpack. So, buckle up and get ready for a wild ride through the wonderland of digital assets and tech policy!

INTEL BRIEF

🟧 The UK is expanding its crypto reporting rules to include all domestic transactions starting in 2026, giving tax authorities full visibility into both local and cross-border digital asset activity.

🟧 Crypto stocks surged on Friday as Polymarket odds for a December Federal Reserve rate cut jumped to 87%, driven by dovish comments from Fed officials and broader enthusiasm around prediction markets.

🟧 Arthur Hayes warns that Monad could crash 99% due to its "high FDV, low-float VC coin" structure, while remaining bullish on broader crypto markets driven by upcoming monetary expansion.

🟧 A federal vs. state showdown over AI regulation is heating up as tech giants push for national standards (or none at all) while states rush to protect consumers, with efforts underway to preempt state laws through the NDAA and a leaked White House executive order.

The UK Taxman Is Coming for Every Single One of Your Crypto Transactions

The UK taxman is coming for your crypto receipts, and he's bringing receipts of his own.

Starting in 2026, His Majesty's Revenue and Customs (HMRC) will require domestic crypto platforms to report every single transaction from UK-resident users. That's right, whether you're sending Bitcoin to your mate Dave across the street or trading NFTs at 3 AM in your pajamas, the government wants to know about it.

This expansion of the Cryptoasset Reporting Framework (CARF)—a fancy OECD-designed system for global tax snitching—means HMRC will get automatic access to both domestic and cross-border crypto data for the first time. Previously, the framework only focused on international transactions, leaving purely domestic activity in a cozy little blind spot. Well, that blind spot just got floodlit.

The UK government is essentially trying to prevent crypto from becoming what they call an "off-CRS" asset class—finance speak for "something rich people can hide money in without us noticing." Can't have that now, can we?

But wait, there's a silver lining! On the same day, UK officials proposed a "no gain, no loss" tax framework for DeFi users, which would defer capital gains taxes until you actually cash out your tokens. The crypto industry is reportedly pretty stoked about this one, so it's not all doom and gloom.

Meanwhile, across the globe, governments are getting increasingly nosy about digital assets. South Korea's threatening to raid homes for hardware wallets (talk about aggressive), Spain wants to jack up crypto taxes to 47% (ouch), and Switzerland's playing it cool by delaying their reporting until 2027 while they figure out who to share data with.

The only country seemingly going the other direction? The United States, where Representative Warren Davidson wants Americans to be able to pay federal taxes in Bitcoin—which would go straight into a national BTC reserve. Now that's what I call bullish.

UK expanding CARF rules to cover all domestic crypto transactions starting 2026—no more hiding your trades

HMRC gets automatic access to comprehensive crypto data to close tax compliance gaps

Global trend intensifying: South Korea seizing cold wallets, Spain hiking taxes to 47%, while the US proposes paying taxes in Bitcoin

Polymarket Bettors Go All In on Rate Cuts While Crypto Stocks Absolutely Rip

Polymarket showed 87% odds of a December rate cut, the highest level we've seen all month. And let me tell you, the mining stocks were feeling themselves. Cleanspark, Riot Platforms, and Cipher Mining all climbed higher, with double-digit gains over the past five days. That's what we in the business call "absolutely cooking."

Circle, the company behind the USDC stablecoin, jumped nearly 10% in early trading (because apparently even stablecoins want to party), while Michael Saylor's Strategy and Coinbase posted more modest—but still respectable—gains. Bitcoin itself bounced back around 7% for the week after face-planting to roughly $82,000 on November 21st.

So what's driving this rollercoaster of emotions? Two words: Fed officials. When Fed Chair Jerome Powell said in October that a December cut was "not a foregone conclusion," markets got spooked and Polymarket odds nosedived from 89% to a measly 22% by November 20th. Yikes.

But then Fed Governor Christopher Waller came in clutch on November 17th, suggesting the central bank should "consider cutting rates" because the labor market is looking weak and inflation is getting close to that magical 2% target. Suddenly everyone's optimistic again, and here we are.

Meanwhile, prediction markets themselves are having a moment. Polymarket just scored partnerships with the UFC and fantasy sports operator PrizePicks, while competitor Kalshi raised a mind-boggling $1 billion from Sequoia and CapitalG, hitting an $11 billion valuation. (That's a lot of billions, folks.)

Rumors are also swirling that Coinbase is building its own prediction market platform backed by Kalshi, and Robinhood revealed that prediction markets have become one of their fastest-growing revenue streams with over one million users trading since March.

Looks like everyone wants a piece of that sweet, sweet speculation pie.

Polymarket odds for December rate cut hit 87%, fueling a rally in crypto stocks and Bitcoin

Mining stocks crushing it with double-digit weekly gains; Circle jumped nearly 10%

Prediction markets booming: Kalshi raised $1B, Coinbase allegedly building competing platform, Robinhood sees explosive growth

Arthur Hayes Just Called Monad a Dumpster Fire Waiting to Crash 99%

Former BitMEX boss Arthur Hayes just dropped a spicy take that's got the crypto Twitter timeline absolutely buzzing—and it's not good news for Monad holders.

Hayes pulled no punches while speaking on Altcoin Daily, calling the recently launched layer-1 blockchain "another high FDV, low-float VC coin" and warning it could potentially crash as much as 99%. Ouch. That's not just bearish, that's nuclear winter bearish.

So what's his beef? It all comes down to token structure. Hayes argues that projects with a massive gap between their Fully Diluted Value (FDV) and actual circulating supply are basically ticking time bombs for retail traders. The pattern is predictable: early price pump, insider excitement, then boom—token unlocks hit and the price gets absolutely demolished. "It's going to be another bear chain," Hayes said, suggesting that while every new token gets its moment in the spotlight, that doesn't mean it'll stick around long-term.

According to Hayes, most new layer-1 networks are destined to fail. He believes only a handful will survive the next cycle, naming Bitcoin, Ether, Solana, and Zcash as his picks for protocols with actual staying power. Monad, which raised $225 million from venture firm Paradigm last year and just went live this Monday with a MON token airdrop, apparently didn't make the cut.

But it's not all doom and gloom in Hayes-land. Despite his Monad pessimism, he's wildly bullish on crypto overall, predicting that "massive amounts of crazy bull market money printing" are headed our way. He believes governments—especially the United States—are gearing up for another liquidity injection to juice the economy ahead of political campaigns and slowing growth.

Hayes also dismissed the famous four-year Bitcoin cycle, arguing that past bull runs were driven by global credit expansion from the US and China, not Bitcoin halvings. He calls Bitcoin the "last free-market smoke alarm" for the global financial system—basically, when BTC sneezes, the economy catches a cold.

Looking forward, Hayes is betting big on privacy tech, predicting that zero-knowledge systems and privacy coins will dominate the next narrative. He's putting his money where his mouth is too—Zcash is now the second-largest holding in his family office Maelstrom, right behind Bitcoin.

Arthur Hayes warns Monad could crash 99% due to high FDV, low-float tokenomics favoring VCs over retail

Only BTC, ETH, SOL, and ZEC believed to survive long-term; most layer-1s expected to fail

Hayes bullish on broader crypto driven by government money printing; predicts privacy coins will dominate next cycle

Silicon Valley and State Governments Are Fighting Over Who Gets to Control AI

Washington is finally getting serious about AI regulation, but not in the way you might think. Instead of debating how to regulate artificial intelligence, everyone's fighting over who gets to do it—and it's getting messy.

Here's the setup: With no meaningful federal AI standard focused on consumer safety, states have been doing what states do best—taking matters into their own hands. California passed SB-53 for AI safety, Texas introduced the Responsible AI Governance Act, and dozens of other bills have popped up nationwide. Sounds reasonable, right?

Not so fast, says Silicon Valley. Tech giants and buzzy startups are absolutely freaking out over what they call an "unworkable patchwork" that threatens innovation. Josh Vlasto, co-founder of pro-AI PAC Leading the Future, warned TechCrunch that state regulations will "slow us in the race against China." (Ah yes, the classic China argument—works every time.)

The industry and its friends in the White House are pushing hard for either a national standard or no regulation at all. And they're not messing around. House lawmakers are reportedly trying to sneak language into the National Defense Authorization Act (NDAA) that would block state AI laws entirely. Meanwhile, a leaked draft of a White House executive order shows the administration wants to create an "AI Litigation Task Force" specifically to challenge state laws in court. Yikes.

Here's where it gets spicy: The leaked EO would give David Sacks—Trump's AI and Crypto Czar and VC founder—co-lead authority on creating a uniform legal framework. Sacks has been vocal about blocking state regulation and keeping federal oversight "menial," favoring industry self-regulation to "maximize growth." (Translation: let us do whatever we want.)

Pro-AI super PACs are throwing absurd amounts of money at this fight. Leading the Future—backed by Andreessen Horowitz, OpenAI's Greg Brockman, and Palantir's Joe Lonsdale—has raised over $100 million and just launched a $10 million campaign pushing Congress to override state laws.

But not everyone's buying it. More than 200 lawmakers signed an open letter opposing preemption, arguing that "states serve as laboratories of democracy" and must retain flexibility to address new challenges. Nearly 40 state attorneys general also sent a letter opposing a state regulation ban.

New York Assembly member Alex Bores, who's being targeted by Leading the Future for sponsoring the RAISE Act (which requires AI labs to have safety plans), isn't backing down. "The AI that's going to win in the marketplace is going to be trustworthy AI," he told TechCrunch.

Meanwhile, Rep. Ted Lieu is drafting a 200+ page megabill covering fraud penalties, deepfake protections, whistleblower protections, and mandatory testing for large language models. He hopes to introduce it in December, though he admits it won't be as strict as he'd like—he's trying to write something that can actually pass a Republican-controlled government.

As cybersecurity expert Bruce Schneier and data scientist Nathan Sanders point out, AI companies already comply with tougher EU regulations, so the "patchwork" complaint might just be cover for avoiding accountability altogether.

Grab your popcorn, folks. This fight's just getting started.

Federal vs. state AI regulation battle intensifying: Industry pushing to preempt state laws through NDAA and leaked White House EO

Pro-AI PACs spending $100M+ to oppose state regulation; David Sacks positioned to lead federal framework favoring self-regulation

200+ lawmakers and 40 state AGs oppose preemption; Rep. Ted Lieu drafting 200+ page federal AI bill for December introduction

And that's a wrap, my lovely PoI readers! I hope this edition left you feeling informed, entertained, and maybe even a little bit savvier about where the crypto and tech world is headed. Remember to stay curious, stay informed, and keep your wallets (both digital and physical) close. Until next time, this is Mochi, signing off with a virtual high-five!

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