U.S. banks reported an alarming increase in unrealized losses and a growing list of institutions at risk of failure in the first quarter of 2024, according to the latest U.S. Federal Deposit Insurance Corporation (FDIC) data. The FDIC report highlights 7 billion in unrealized losses and identifies 63 banks as vulnerable, marking a concerning uptick […]
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Mining Rig Producer Canaan’s Q1 Unrealized Gains Narrow Net Loss to $39.4 Million
In the first quarter of 2024, Canaan Inc. generated .1 in revenues versus the .4 million in costs incurred in the same period which resulted in the company recording a gross loss of .3 million. Nangeng Zhang claimed that Canaan’s revenues in the last quarter exceeded expectations due to the company’s persistent sales efforts and […]
Bitcoin News
Mining Rig Producer Canaan’s Q1 Unrealized Gains Narrow Net Loss to $39.4 Million
In the first quarter of 2024, Canaan Inc. generated .1 in revenues versus the .4 million in costs incurred in the same period which resulted in the company recording a gross loss of .3 million. Nangeng Zhang claimed that Canaan’s revenues in the last quarter exceeded expectations due to the company’s persistent sales efforts and […]
Bitcoin News
Glassnode Insights Into Long-Term Bitcoin Holders Reveal 228% Average Unrealized Gain
An in-depth examination conducted by the onchain analytics firm Glassnode, alongside the researcher Cryptovizart, has shed light on bitcoin’s unexpected rise to record-breaking highs just before the halving occurrence, unveiling key aspects of market behavior. Glassnode Report Sheds Light on ETF Net Inflows and Long-Term Bitcoin Holder Gains In its analysis, Glassnode emphasizes the notable […]
Bitcoin News
Japanese Cabinet Approves Tax Reform Eliminating Unrealized Crypto Gains Tax for Companies
The Japanese government has approved a tax reform that removes some crypto taxes for corporations and conglomerates. The reform, discussed since early December, removes the unrealized gains taxes on crypto holdings for companies, paving the way for them to hold crypto assets more consistently.
Japanese Government Approves Tax Reform to Eliminate Unrealized Gains Tax
The Japanese cabinet convened to approve the FY2018 tax reform, which includes a series of modifications to rules affecting companies in the cryptocurrency area. The reform included a change that removed the “unrealized gains” crypto tax that mandated companies to pay tribute based on the price change of crypto assets each fiscal year.
A change that eliminated this tax for companies’ self-issued cryptocurrencies had already been approved earlier this year, but with this modification, crypto companies can now hold crypto issued by third parties without paying the unrealized gains taxes.
However, cryptocurrency sales and purchases will continue to be taxed. This opposes the petition of the Japan Crypto Asset Business Association, which asked for eliminating the tax on crypto exchanges. According to local media, the measure will contribute to a general reduction in tax-derived income for June 2024, expected to be the largest since 1989.
The reform, which had been in discussion since early December, is directed to make it easier for corporations to add crypto to their treasury without paying for simply holding it. Japan is one of the few countries that applies this unrealized crypto gains tax, prompting companies to hold these assets in other countries.
Nonetheless, even after this approval, the tax reform will have to be presented to the Diet next year and will have to be passed by both houses.
What do you think about the unrealized gains crypto tax exemption for companies in Japan? Tell us in the comments section below.
Japan Mulls Exempting Companies From Paying Taxes on Unrealized Cryptocurrency Gains
Japan is considering exempting corporations from paying unrealized gains income taxes related to cryptocurrency holdings. The measure, proposed as part of a reform in Japan’s tax code, would allow companies to avoid paying taxes for cryptocurrencies even if their market value changes during each fiscal year.
Japan to Stop Taxing Corporations for Unrealized Cryptocurrency Gains
The Japanese government is about to overhaul its tax code, improving the regime for companies holding crypto long-term. A new consideration in the tax code discussed by policymakers and slated to be part of the 2024 tax reform establishes that cryptocurrency holdings of corporations would not be taxed for unrealized gains.
Currently, Japan taxes the cryptocurrency holdings of corporations by taking market prices at the start and the end of each fiscal year as a reference, something that has been widely criticized as detrimental for companies holding these assets. The approval of this proposal would mean that companies holding these assets in foreign countries — like Singapore, Dubai, and Switzerland — could bring their crypto holdings to Japan. However, this would mean that the Japanese government would also lose part of the tax collected from companies, taking an undetermined hit.
Nikkei Japan clarifies this would only apply to cryptocurrencies being held as part of companies’ property and not used for short-term trading purposes.
The Japan Blockchain Association called for these changes in June, stating that the tax regime was hindering the growth of Web3 in the country and causing market instability due to the need for companies to sell part of their currencies to pay the corresponding taxes.
Japan has been progressing in the cryptocurrency taxation field, having lifted another tax on cryptocurrencies self-issued by companies in June. Before, companies had to pay taxes on unrealized gains for cryptocurrencies they themselves issued. However, this measure was lifted, opening Japan for companies that want to issue, or have issued, such currencies.
What do you think about the possible change in Japan’s cryptocurrency tax regime? Tell us in the comments section below.
Ethereum Whale With Over $60 Million In Unrealized Profits Moves Coins To Exchange
A dormant Ethereum whale has resurfaced, moving their 39,260 ETH worth approximately .5 million. According to data from Lookonchain, this Ethereum whale with almost million in ETH recently woke up and decided to move its mountain of digital assets to an exchange.
Although it is unclear the motive behind this transfer, it appears to be to take profit on a 670% gain over the past five years.
Ethereum Whale Moves 39,260 ETH To Crypto Exchange
The crypto market has had another flurry of price increases in the past few days, with Coinmarketcap’s Fear & Greed Index now pointing to an extreme greed of 81. Ethereum hasn’t been left out of the price gains, and the crypto is currently up by 11% in a 7-day timeframe.
Amidst the price gain, a social media post by on-chain analysis tracker Lookonchain shows that a whale recently deposited 39,260 ETH worth .5 million to the crypto exchange Kraken. Further details from on-chain data show that the coins were acquired around June to August 2017.
During this period, the whale address received 47,260 ETH acquired at an average price of 0 and worth .34 million in total at the time. However, the account has remained largely inactive since then, sitting on unrealized profit as Ethereum continued to grow in price. But now, the coins have made their way into Kraken.
The massive transfer of funds from a whale’s wallet to an exchange typically signals them cashing out some or all of their holdings. In this particular case, the whale would make a profit of approximately million if they decided to sell all their holdings on the exchange.
An early $ETH whale appears to be selling ETH again after being dormant for 5 years.
The whale deposited all 39,260 $ETH(.5M) to #Kraken 30 mins ago.
The whale received 47,260 $ETH(.34M) at ~0 from June to August 2017.
If sold the whale would make a profit of ~M. pic.twitter.com/v0PI4LNTKO
— Lookonchain (@lookonchain) December 5, 2023
Trend Of ETH Profit Taking Increasing?
A massive transfer of funds naturally leads to speculation within the crypto community, and there seems to be an increasing trend of large ETH holders taking profits. Other social media posts from Lookonchain over the past few days have shown similar cases of large wallets sending their ETH to exchanges.
For instance, a recent post showed the movement of ETH in wallet addresses belonging to defunct exchanges FTX and Celsius. FTX deposited 3,143 ETH worth .2 million on Coinbase, while Celsius sent 7,500 ETH worth .2 million to address “0xc450.”
Galaxy Digital followed suit, depositing 9,179 ETH worth .9 million to Binance. According to Whale Alerts, 16,944 ETH worth .14 million also made its way to Coinbase from a private wallet.
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16,944 #ETH (38,148,363 USD) transferred from unknown wallet to #Coinbasehttps://t.co/XJYadmioyi
— Whale Alert (@whale_alert) December 6, 2023
Even though Ethereum briefly touched ,300 yesterday, it would seem the recent transfer to exchanges has had an effect on the price of ETH, as the crypto is trading at ,269 at the time of writing, down by 1.5%.
The crypto market remains largely unpredictable, but it would be prudent to wait to see if the crypto approaches and rebounds at the ,200 resistance level. At the same time, a strong blast above ,300 could signal bulls are still in control.
Fed Reveals 722 Banks Reported Unrealized Losses Over 50% of Capital as Concerns Over US Banking Crisis Grow
The U.S. Federal Reserve has revealed that 722 banks reported unrealized losses exceeding 50% of their capital at the end of the third quarter of 2022. “Rising interest rates are creating significant unrealized losses in investment securities and in some cases depressing tangible equity,” according to the Fed’s Division of Supervision and Regulation.
722 Banks Reported Unrealized Losses of More Than 50% of Capital
The U.S. Federal Reserve has revealed in a board presentation by the Division of Supervision and Regulation that 722 banks reported unrealized losses exceeding 50% of their capital at the end of the third quarter of 2022. The presentation, released to the public in April, is dated Feb. 14. It highlights the impact of raising interest rates on certain banks and the Fed’s supervisory approach to address issues at these banks.
“Rising interest rates are creating significant unrealized losses in investment securities and in some cases depressing tangible equity,” the Fed presentation states. “As interest rates increase, banks with large market value losses could experience increased financial and risk management challenges.”
The Fed presentation further details:
At third quarter end, 722 banks reported unrealized losses exceeding 50% of capital.
Moreover, “31 of these banks report negative tangible equity levels,” which means they are currently “not able to borrow new money from Federal Home Loan Banks and may lose the ability to sell loans to Government Sponsored Enterprises,” the Fed presentation adds.
Many people took to social media Saturday to voice concerns about the U.S. banking crisis. Some stressed that this is a clear indication that the banking crisis is far from being resolved while others warned that the banking crisis in the U.S. is just getting started.
Gabor Gurbacs, director of Digital Assets Strategy at investment management firm Vaneck, opined:
The Fed had the data, knew what could be coming after their reckless interest rate policies yet they didn’t meaningfully warn either the government or the public.
Despite multiple bank failures, Fed Chair Jerome Powell has insisted that the U.S. banking system is “sound and resilient.” Regarding the collapses of Silicon Valley Bank, Signature Bank, and First Republic Bank, the Fed chairman claimed: “Those have all been resolved, and all the depositors have been protected.”
Multiple people have cautioned that the U.S. banking crisis is not over, including JPMorgan Chase CEO Jamie Dimon, who said last month that there will be “repercussions for years to come.” Economist Peter Schiff also recently warned that the banking crisis is not over and a much worse financial crisis is incoming.
What do you think about the state of the U.S. banking system? Let us know in the comments section below.
Confusing U.S. Tax Laws Lead to $5 Billion In Unrealized Crypto Losses
Last year, the crypto community pointed fingers at tax payers liquidating assets in order to cover inflated tax bills due to the substantial gains realized during the 2017 Bitcoin bull run as among the chief reasons the bear market had begun.
In 2018, however, the inverse happened, and most cryptocurrency investors suffered massive losses as the price of Bitcoin and other cryptocurrencies fell by as much as 80-90% in most cases. With tax season rolling around again, investors should be liquidating assets in order to lock in realized losses that can be claimed on an individual’s taxes, offsetting other aspects of the individual’s tax bill, or possibly leading to a return.
However, new data reveals that only 34% of losses American cryptocurrency investors saw in 2018 have been realized, suggesting that most Americans don’t understand crypto-related tax laws, and don’t realize they can claim the losses on their taxes.
Nearly Two-Thirds of American Crypto Losses Could Go Unrealized
According to credit monitoring services company Credit Karma, United States citizens have suffered losses related to their cryptocurrency investments to the tune of billion. However, only about a third of those billion in losses will be realized losses, or roughly .7 billion.
When an individual American tax payer invests in a cryptocurrency, a cost basis is established for tax purposes. Selling an asset also triggers a taxable event. How much that asset has appreciated – or in the case of the 2018 bear market that is still currently ongoing, how much that asset has depreciated – at the time it is sold, determines what the individual is responsible for tax-wise. If an asset is never sold, the gains or losses are only paper gains and losses, meaning they cannot be claimed on an individual’s taxes, but may still be reflected in one’s portfolio.
Related Reading | U.S. Lawmakers Ask IRS for Clarity on Crypto Tax Laws
The data suggests that either Americans don’t understand that assets must be sold to trigger the taxable event and lock in unrealized losses that can be claimed on their taxes, or the HODL mentality has made it so they simply won’t sell their assets for any reason – not even to lock in unrealized losses for tax reasons.
Credit Karma general manager Jagjit Chawla says it’s the former.
“Even though those who sold their bitcoin at a loss can typically claim a tax deduction we found that before taking our survey, 61% of respondents who lost money on bitcoin didn’t actually realize they could get a tax deduction for bitcoin losses,” he explained.
The survey revealed that respondents were confused in general, with more than half believing their losses were too small to make an impact, while others didn’t even know they were required to file their cryptocurrency losses on their taxes. Not doing so could lead to severe penalties. Some claimed they didn’t even know how to file their crypto losses.
U.S. Crypto Tax Law Is Complicated, Varies By Duration of HODL
Complicating things further, in the United States, cryptocurrencies are treated as property and are subject to capital gains tax the same way real estate is. Capital gains tax rates vary by income levels, and are classified as “short-term” and “long-term” depending on how long the asset has been held by the owner. Each classification also has different rates.
Related Reading | Former U.S. Representative Ron Paul Pushes for Crypto Tax Exemption
Locking in realized cryptocurrency losses could allow war-torn investors to claim up to ,000 in losses on their tax bills. Losses exceeding ,000 can be carried over into the following tax year. Investors can also use carried over losses to offset potential tax gains on next year’s tax bill, if the cryptocurrency market eventually turns around and a new bull run begins this year.
When investing in cryptocurrencies, be sure to also speak to a certified public accountant that is well-versed in capital gains tax law, and at least has a familiarity of cryptocurrencies. Given how new the technology and asset class, this may be like finding a needle in a haystack, but considering how important taxes are to any individual, knowing your cryptocurrency taxes are handled properly is worth the extra effort.
The post Confusing U.S. Tax Laws Lead to Billion In Unrealized Crypto Losses appeared first on NewsBTC.
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