Crypto's New Bonnie & Clyde, MLB Goes Crypto, & No More Block Reward Tax?

[CoinSnacks] February 9, 2022 | Issue #207 Sponsored By: [Coin Snacks]( MUST READS --------------------------------------------------------------- Big 4 Accounting Firm Adds Crypto To Its Corporate Treasury Think the institutionalization of crypto is old news? Think again. KPMG in Canada made a splash [announcement]( this week stating that it added BTC and ETH to its corporate treasury. "Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to cryptoassets, and traditional financial services such as banks, financial advisors and brokerages are exploring offering products and services involving cryptoassets. This investment reflects our belief that institutional adoption of cryptoassets and blockchain technology will continue to grow and become a regular part of the asset mix." Regardless of the size of their allocation, which has not been made public, this should be looked at as much bigger news than, say, Tesla (TSLA) or Block (SQ) buying BTC in 2021. KPMG is one of the "Big 4" accounting firms. Millions of people go to them for advice on exactly this kind of stuff (i.e. wealth management, taxes, accounting, consulting, etc.) A couple of years ago, getting a Big 4 firm to even talk to a crypto company was like pulling teeth. Today, they are part of the community. Moneyball This week crypto went to Washington... but not in the way you'd typically think. Major League Baseball's Washington Nationals just [inked]( a major 5-year, $38.15M contract with an up-and-coming crypto stablecoin slugger – Terra (UST). Similar to FTX becoming the primary sponsor inside Miami Heat's arena, Terra will become a major sponsor inside the Nationals' ballpark (see design concepts [here]( bringing enhanced brand awareness and exposure to thousands of baseball fans. Furthermore, both parties will make efforts to implement UST as an accepted currency for in-venue transactions – a watershed moment for "America's pastime" that's, ironically, all happening right under the noses of the SEC and all of D.C. The announcement also marks the first-ever sports partnership with a decentralized autonomous organization (DAO) and was the end result of one of the fastest governance proposals in Terra’s history. SPONSORED --------------------------------------------------------------- Airbnb Created A $1.2 Trillion Market & reAlpha Wants To Unlock It For You [Coin Snacks]( 10 million vacation rentals worldwide make up this growing $1.2 trillion market. That’s why [reAlpha]( is democratizing the short-term rental market with advanced technology and fractional ownership. In fact, their [AI-chosen Airbnb properties]( have the potential to beat long-term rental property revenue by 70%+ per property. [Get in for as little as $1000 and own a piece of reAlpha as a shareholder today](. DEEP DIVES --------------------------------------------------------------- Wormhole Hacked For $325 Million, Jump Crypto Replenishes As CoinSnacks was going to press last week, Wormhole, a cross-chain protocol that lets users easily transfer tokens between blockchains, lost hundreds of millions of dollars of ETH in the [second largest]( hack of all time. What Happened? Last Wednesday, Twitter came alive when prominent pseudonymous Paradigm security researcher [@samczsun]( pointed out that Wormhole was being exploited. Minutes later, the Wormhole team [tweeted]( that the network was “down for maintenance” while investigating a “potential exploit.” How Did This Happen? The Wormhole, Solana’s bridge, was tricked into crediting 120,000 ETH as having been deposited on Ethereum, allowing for the hacker to mint the equivalent in wrapped whETH (Wormhole ETH) on Solana. Learn more [here]( and [here](. Why Does It Matter? Without getting too technical, due to the hack, it meant that any ETH that had been bridged to Solana was potentially unbacked. In other words, hundreds of millions of dollars worth of ETH on Solana was effectively worth zero, yet people could still trade it around. Not good. The Result: Within 24 hours, the Wormhole team tweeted that all funds had been restored by Jump Crypto who [acquired]( Certus One, a core developer of Wormhole, in August, 2021. The president of Jump Crypto, Kanav Kariya, said that “Jump put up 120k of its own ETH because we believe in Wormhole and want to support it in this stage of its development. And we're going to come out stronger than ever.” Overall, It’s not been a good start to the year for Solana as it has been dealing with outages, disruptions, liquidations, and now a major hack. That being said, Ethereum also had some rough early days, but came out stronger each and every time. America’s Bitcoin Miners See Georgia As The New U.S. Hot Spot Following the ban on crypto mining in China and Russian considerations of doing the same, the U.S. has suddenly [become]( the world's top destination for mining crypto. Dozens of companies, with hundreds of thousands of miners, worth billions of dollars, are looking to find miner-friendly states to plug into their electrical grid. In doing so, these companies are investing hundreds of millions of dollars into the states and providing the local governments with new tax revenues. The only problem? As some states are acting to attract miners, others are taking a more hostile approach. Enter Georgia, which has emerged as a go-to state for miners. While other states are worried about power usage and environmental impacts, Georgia is attracting miners with low power prices and large amount of nuclear and solar power (re: renewables). State regulators have also built a reputation for being friendly to miners with programs for renewable energy credits and information about future power price spikes so they can throttle back operations if necessary. All of this helps explain why miners such as Bitmain, Core Scientific, and CleanSpark are clamoring to enter the state. Shout out to our friend Rolf at [Block Operations]( who has been early on mining and mining in Georgia, in particular. Origin Of The Scam Here's [another entertaining piece]( from @cobie on investor tokenomics, "evil VCs," and how to avoid the bag. "If you are making decisions without understanding the financial incentives of those playing on the same field as you then I hope you’re not betting more than you can afford to lose." SPONSORED --------------------------------------------------------------- [Coin Snacks]( Your portfolio has probably been getting hammered lately. Especially if you're all-in on tech stocks and crypto. It might seem like this is a temporary blip. But if you're wise, you know it's time to diversify. For example, did you know that comic books are way up? Or that tickets are mooning? Or that farmland is completely unaffected? To understand more, read [Alts](. It's a newsletter that analyzes alternative investment markets. Stefan and Wyatt provide original research that help you become a better investor. Oh, and they don't just track these markets, they are actually crushing them. While everything else in the world was down last week, their own recommendations were up 1.4%. [Join 28,000 others and see what you've been missing](. REGULATORY FRONT --------------------------------------------------------------- Bitfinex Bonnie and Clyde Yesterday, the United States Department of Justice [seized]( an estimated $3.6 billion worth of Bitcoin linked to the [2016]( hack of crypto exchange Bitfinex – the largest financial seizure in the department’s history. Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, both of New York, were arrested in Manhattan for alleged conspiracy to launder the proceeds of 119,754 BTC stolen from Bitfinex’s platform in 2016. Even on the surface, it’s almost too incredible to be true – a couple holed up in downtown Manhattan with billions of dollars in Bitcoin, shuffling the funds around to various crypto wallets. The pair allegedly even purchased gold bars and Walmart gift cards to wash the money. Morgan had a popular TikTok account, [posting videos of herself rapping]( about finance and money making techniques. Lichtenstein was an investor, “NFT influencer” and ex-Y Combinator alum with some degree of notoriety in the financial world. Lighthearted on the surface for neutral observers, this case could have significant implications on crypto regulation... Although regulators may point to this case as an example of the use of Bitcoin in money laundering, it’s actually a bright day for crypto. The public nature of the blockchain resulted in the bad guys losing their coins. But what happens next? With this seizure, the US government is now one of the largest holders of BTC. Will the BTC be returned to Bitfinex customers? We don't know yet, nobody does. At the time of the hack in 2016, the Bitcoin was worth $70m, paltry compared to the now $3.6 billion value. Adding to the complexity, Bitfinex and the U.S. government are not exactly on friendly terms. While both parties are relieved to have some degree of resolution, Bitfinex is seen by some federal officials as a force weakening the dollar’s reserve status abroad in [El Salvador]( and Malaysia. Regardless, Bitfinex Bonnie and Clyde have etched their names into crypto history books – with more to be seen in coming weeks as new revelations are made. Who knows, this story may run much deeper as billions of dollars can make buttoned up people do nefarious things. [It wouldn’t be the first time](. IRS Signals Retreat In Court Battle That Could Reshape Crypto Taxation Last year, Joshua Jarret sued the IRS for a refund. He claimed that taxes he paid on block rewards received from proof-of-stake networks should be treated as newly created property (e.g. like ears of corn grown in a field) and therefore shouldn’t be taxed until he sells them. The IRS denied that refund, and so he sued saying they were misinterpreting the law. Although the lawsuit is still ongoing, the IRS may be trying to get out of the lawsuit before they lose by offering Josh his refund without admitting fault. Rather than taking the money and running, Josh is [denying the refund]( in order to receive a clear and official ruling on the matter. An official ruling would set precedent for subsequent tax years and for other taxpayers. So he hasn’t won yet, and you can't just go out and not claim staking rewards on your taxes this year, but it does look like the IRS is [realizing]( that their current policy may not be adequately justified by law, and may not survive a judgement from the court. That’s great news. TWEET OF THE WEEK --------------------------------------------------------------- [Coin Snacks]( SPONSORED --------------------------------------------------------------- TLDR Crypto Newsletter - Keep up with crypto in just 5 minutes a day Cut through the noise with links and summaries of the newest innovations, tools, and launches in the crypto ecosystem. 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