Daily Digest - 11th October 2022

Headlines

▌SBF: FTX Did Not Participate in the Global Acquisition of Huobi

Huobi announced that the controlling shareholder company has transferred all the shares of Huobi Global held by the fund of About Capital Management. But WuBlockchain learned from multiple sources that Justin Sun is actually the core investor of this M&A fund. Bloomberg reported that Huobi Lilin was seeking to sell its majority stake in the exchange at a valuation of $3 billion. FTX and Justin Sun have made initial contact with him. Justin Sun tweeted to explain: "We are not currently involved in any matters related to Bloomberg's reporting." SBF said it has no plans to acquire Huobi. But it is rumored that FTX has invested to help Justin Sun. SBF retweeted the report which claimed "the real buyer of Huobi is Tron Founder Justin Sun, possibly with the help of SBF", saying he's "still not involved".

Policies

▌Portugal's New Draft Budget Proposes a 28% Income Tax on Cryptocurrencies Held for Less Than a Year

The Portuguese government proposed a 28% income tax on cryptocurrencies held for less than a year in a draft budget for 2023 released on Monday. Free crypto transactions will also be taxed, and a 4% rate will apply to commissions charged by intermediaries. According to reports, in the next few weeks, the draft budget still needs to be discussed and approved within parliament. Earlier this month, Portugal’s Finance Minister Fernando Medina announced a commitment to begin taxing cryptocurrencies, saying the government would work on creating a framework that “promotes the crypto-economy” to provide “a sense of security and legal certainty,” as previously reported.

▌EU Lawmakers Voted 28:1 to Support the Crypto Asset Market Regulation (MiCA) Act

According to an official tweet, EU lawmakers voted 28-1 on Monday in favor of the Market Regulation for Crypto Assets (MiCA) bill, securing the passage of legislation signed by EU governments last week that is expected to be released in early next year. Markets in Crypto Assets (MiCA) allows wallets and other crypto service providers to operate across the EU, provided they are registered with national authorities and meet minimum guarantees aimed at protecting investors and maintaining financial stability, another regulation on the transfer of funds. The law requires wallet providers to check the identities of their customers to reduce money laundering. In a tweet welcoming the vote, lawmaker Stefan Berger, who chaired parliamentary negotiations, called the move "good news."

Cryptocurrency

▌Formula 1 Plans to Get Involved in NFTs and Crypto

Racing giant Formula 1 filed for a new trademark related to NFTs and cryptocurrencies. According to one of the filings, it plans to offer software for cryptocurrencies, digital collectibles, and NFTs. The software will also support cryptocurrency payments and exchange transactions. Another filing pertains to retail store services in the metaverse. Formula 1 intends to create an online marketplace for buyers and sellers of cryptocurrencies. It also plans to facilitate financial transactions with the help of blockchain and even venture into cryptocurrency mining. On top of that, Formula 1 may use virtual goods such as NFTs in online virtual worlds and mixed-reality environments to provide entertainment services.

▌Cardano Co-Founder: Most Layer 1 Protocols Including Ripple (XRP) Aren’t Securities

Cardano co-founder Charles Hoskinson gave his opinion on the legal status of XRP. Hoskinson believes that Ripple-affiliated tokens should be regulated as commodities rather than securities. To support his argument, Hoskinson notes that most layer 1 protocols are not securities, including XRP, as they provide utility and have a sufficient degree of decentralization.

Key Economic Events

▌Cathie Wood Wrote an Open Letter to the Fed to Stop Raising Interest Rates

Ark Invest founder and CEO Cathie Wood sent an open letter to the Federal Reserve on Monday urging them to stop raising interest rates. Cathie Wood's letter focused on two variables - employment and headline inflation – upon which the Fed appears to be making its decisions. “Commodity prices are leading indicators, upstream in the stages of processing,” Wood’s letter says. Consumers have noticed that various products, such as food, have increased their prices over the past few months. Wood agrees that this is a big issue, however, raising rates by 75 points as the Fed did last month, is not the answer.