Taxes, AI, and the Inverse Jim Cramer strategy make for a weird week in crypto

In Token Issue this week, we look at the US’ latest anti-crypto tactic, the AI-driven smear campaign against Binance, and the state of Web3 games. [Read from your browser]( Token Issue Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues [here]( or [sign up here]( to receive future newsletters. Written by Scott Shuey Crypto journalist Hi {NAME} [Good news]( Jim Cramer still has it. The host of CNBC’s Mad Money and the progenitor of the [Inverse Jim Cramer Strategy]( said the collapse of First Republic Bank would probably end the [US banking crisis](. Since then, the stock prices of PacWest Bancorp and Western Alliance Bank have [both tanked]( and as of Thursday, PacWest Bancorp appear to be [heading for receivership](. What does this mean for crypto? It depends who you ask. Some analysts think the plummeting confidence in banks will [drive depositors to crypto](. But the US government is likely to bail out failed banks to prevent the panic from escalating, so deposits may just stay where they are. Then again, any bailout could hurt confidence in the US dollar, which may again drive money into crypto. There’s also a final consideration - the US government is going full-scale anti-crypto, which is casting doubt on the continued viability of the industry if it doesn’t have the support of the world’s largest economy. That is volatility in a nutshell and is why you should be very cautious about what the financial experts tell you - unless, of course, it’s Jim Cramer. Then do the opposite. So while we wait for the analysts to get their stories straight, let’s take a look at the biggest stories this week. -- Scott --------------------------------------------------------------- 👀 ALL EYES ON... What everyone’s talking about. 1️⃣ [White House pushes for tax on crypto mining]( The Biden administration is looking to impose a new tax on crypto mining operations for the “harms they impose on society,” the White House posted on Tuesday. According to the post, crypto mining firms aren’t paying for the full costs that they incur. These include “local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate.” The Digital Asset Mining Energy tax could eventually force firms to pay an amount equal to 30% of the cost of the electricity the companies use for crypto mining. 2️⃣ [Binance claims to be target of ChatGPT-based smear campaign in Washington DC]( Binance said there’s been an AI-based disinformation campaign against CEO and co-founder Changpeng Zhao, Fortune reported. The fabricated accusations include allegations that Zhao is a Chinese Communist Party official and that he had developed a social media platform for the China National Petroleum Corp. The Twitter thread posted by Binance chief strategy officer Patrick Hillmann showed how the firm tried to replicate the conversation on ChatGPT - only for the chatbot to answer with “a fake LinkedIn page and a non-existent Forbes article.” 3️⃣ [Web3 games hit new active user lows]( There are currently only 800,000 daily active users of Web3 games, according to data released by blockchain data platform [Footprint Analytics](. The stats also show that [Axie Infinity's]( daily active users have dropped from “millions” at its peak to only 9,000. “Axie Infinity users are primarily focused on earning profits,” the post said. [Stepn]( a move-to-earn app that [made headlines]( last year, saw its daily users drop from 110,000 to around 4,000.  --------------------------------------------------------------- ⭐ TO THE STARS Impactful developments and projects in Web3. 1️⃣ [Liquidity staking surpasses DEXs in TVL]( Total Volume Locked [(TVL)]( in liquidity staking protocols surpassed decentralized exchanges (DEXs) for the first time in April, according to DefiLlama. This makes liquidity staking, which has US$17.93 billion in TVL, the most valuable sector in decentralized finance (DeFi). Top liquidity staking protocols like Lido, Rocket Pool, and Frax Ether saw more than 10% of TVL growth over the past month, [Wu Blockchain said](. 2️⃣ [Crypto.com launches AI-powered chatbot for crypto info]( [Crypto.com]( has rolled out [Amy]( an AI-powered chatbot designed to help users learn about digital assets. It’s currently in beta testing. Developed on OpenAI’s ChatGPT, the tool acts as an expert that provides near real-time information about tokens, projects, price listings, and historical events. However, it doesn’t offer financial advice. 3️⃣ [Mastercard expanding crypto card tie-ups]( Mastercard plans to partner with more crypto firms to expand its crypto-linked payment card offering, Reuters reported. The payments giant has already teamed up with crypto exchanges including Binance, Nexo, and Gemini to provide such cards in some countries. --------------------------------------------------------------- MORE TO CHEW ON Stuff that’s good to know. 1️⃣ [Hong Kong VC firm launches $100m blockchain fund with Asia focus]( [CMCC Global]( a Hong Kong-based VC firm, has established a new US$100 million fund focused solely on blockchain projects. The announcement comes as Hong Kong is pushing to become a leading virtual-asset trading hub. Its government has [set aside]( HK$50 million (about US$6.4 million) to expand the local Web3 ecosystem. 2️⃣ [Dubai issues warning to former 3AC founders]( Dubai's Virtual Assets Regulatory Authority (VARA) issued a formal warning to Kyle Davies and Su Zhu, the co-founders of defunct crypto hedge fund Three Arrows Capital, for launching and promoting their new digital asset exchange, OPNX, without obtaining the necessary license. The notice can be found under the “Regulations” section on the VARA homepage. 3️⃣ [Auditor CertiK exploring compensation plan for Merlin hack]( CertiK tweeted that it’s exploring a community compensation plan to cover the approximately US$2 million lost in a hack of [Merlin DEX]( on April 26. The exploit was conducted during Merlin’s public sale of its Mage tokens. CertiK, which audited Merlin prior to the exploit, also said, “Initial investigations indicate that the rogue developers are based in Europe.” The blockchain security firm is working with law enforcement to track them down. 4️⃣ [Binance lists Sui token]( Binance listed the new [Sui]( token and [began trading]( Sui/Bitcoin, Sui/Tether, Sui/TrueUSD, Sui/Binance Coin, Sui/Euro Token, and Sui/Try Finance pairs on Wednesday. Sui launched at US$2.16, but it promptly fell to US$1.15 before settling between US$1.30 and US$1.44. The Sui mainnet, which went live on Thursday along with the native token’s release, has been a highly anticipated Layer 1 blockchain built by developers formerly working at Meta’s failed Diem project. 5️⃣ Coinbase unveils international crypto derivatives exchange On Tuesday, Coinbase debuted an international exchange for derivatives including on Tuesday, which includes perpetual futures contracts. All transactions are settled in USD Coin. The exchange isn’t available to users in the US.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894