Powell's Speech Gutted the Market
In today's newsletter:
Price Action: A 4.3% decline brings Bitcoin to its lowest level since July 16 after Fed Chair Jerome Powell doubles down on interest rate hikes.
Wife of Arrested Tornado Cash Developer Denies Russia Secret Service Links
Report: Japan Considers Corporate Crypto Tax Breaks to Attract Startups
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After U.S. Federal Reserve Chair Jerome Powell reaffirmed the country's restrictive monetary policy early on Friday at the central bank's Economic Symposium.
The largest cryptocurrency by market capitalization hit a low of $20,549 but is now trading around $20,666 after the news.
Following Powell's speech, the majority of cryptocurrencies likewise decreased in value, with FLOW posting the largest 24-hour loss at 11%. The market cap of Ether (ETH), the second-largest cryptocurrency after bitcoin, decreased by 8.5%.
Wife of Arrested Tornado Cash Developer Denies Russia Secret Service Links:
The wife of Alexey Pertsev, the web developer arrested in Amsterdam over ties to the Tornado Cash crypto mixing protocol, dismissed speculation her husband had links to the Russian secret service after allegations surfaced of his connection to a cybersecurity company blacklisted by the U.S. Treasury Department.
The Dutch public prosecutor, who still has not charged the developer, claims Pertsev may have been involved in laundering over $1 billion worth of criminally obtained cryptocurrencies through Tornado Cash. However, his wife has denied those claims.
Sources appear to confirm that Pertsev previously worked for a company called Digital Security, which offers services such as penetration testing, a kind of security audit for checking how robust are a system's cyber defenses. The firm, also known as DSec, is said by Crime financial analyst Kharon to have been sanctioned in November 2018 by OFAC, which cited links between the company and Russian spies.
Japan Considers Corporate Crypto Tax Breaks to Attract Startups: Reports
Two crypto lobby groups recently urged the government to change the nation's tax regulations governing the industry, where investors are subject to a capital gains tax of up to 55%.
Under the current system, startups that issue their own tokens must pay taxes on unrealized gains for the tokens they might be holding on to because the company's holdings are taxed based on the market value at the end of the taxation period, according to local news outlet Yomiuri.
Currently, investors in Japan are taxed up to 55% on capital gains.
The potential tax reduction is aimed at encouraging startups to remain in Japan. CoinDesk reported in December 2021 that heavy tax burdens may be causing crypto firms to quit the country altogether. Japanese lawmaker Taira Masaaki appeared to confirm the tax review on Twitter.