November 9, 2021
Photo: Anna Moneymaker/Getty Images
Hello and welcome to Protocol | Fintech! This Tuesday: The crypto industry loses a tax battle in the infrastructure bill, Robinhood reveals a breach, and why you'll soon be able to Venmo Amazon.
The long, winding road to an $1 trillion infrastructure bill also had many twists and turns for the crypto industry — and it's not over.
The bill, which was passed by the House on Friday and is expected to be signed by Biden this week, includes two provisions that crypto advocates had railed against. While the crypto industry has seen its lobbying power grow, it still isn't able to easily push changes through the vast machinery of Congress.
I'm a broker, you're a broker. The term "broker" has a clear enough definition in traditional finance. Who's a broker in crypto? Fire up your shruggy emoji.
Felony crypto? The infrastructure bill would amend section 6050I of the tax code in a way that could apply to the crypto industry.
The battle isn't over yet. Crypto industry lobbyists are still working on several ways to turn back these changes.
Ultimately, the Treasury Department will have latitude to decide how to apply these new rules. There were some reports in August that the Treasury was inclined to use a narrower definition of "broker," but that hasn't been clarified. Watch for emerging IRS rulings as the next flashpoint.
— Tomio Geron
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Robinhood said attackers stole information of millions. The online brokerage said the data breach was part of an extortion attempt.
NFT games are fun. Filing taxes afterward is a nightmare. Millions of gamers are in for an unpleasant surprise next tax season.
You'll be able to Venmo Amazon next year. Consumers in the U.S. will be able to pay with Venmo on Amazon.com and the Amazon mobile app starting in 2022. Jeff Bezos needs the money, right?
Mining for New York City crypto token will begin Wednesday. CityCoins, the nonprofit that created MiamiCoin, said it will be launching a similar initiative for New York City.
"It's not an investment, it's a religion." —Mark Mobius, founder of Mobius Capital Partners, on cryptocurrencies.
"Roses are red, violets are blue, this is a sign to get some crypto and burgers too." —Burger King's Twitter account not trying particularly hard in promoting a crypto perk in partnership with Robinhood.
"Crypto is our love language." —Robinhood replying to Burger King's tweet.
What fintech trend are you most excited about?
I find DeFi, or decentralized finance, really exciting. There are two reasons for that. First, it's a shift in the traditional power dynamic. The ability to dictate what happens with money in what way and when is moving away from large, traditional financial infrastructure, and more toward individual players.
The second reason is that DeFi creates efficiencies that are almost incapable of existing within the current legacy system. DeFi removes traditional intermediaries and creates broad peer-to-peer networks that can operate much faster and with less friction — and that are inherently more secure.
What problem would you like to see a fintech company solve?
ACH is a complete mess here in the U.S. It would be great to see a fintech solve that problem. DeFi is solving some of that, and allowing for real-time settlements between two different parties. But most of the world already has this in their mainstream banking ecosystems. For example, in the U.K., they have open banking laws that allow everything to be digital. India, Japan and the whole of the Asia-Pacific region also have it. The U.S. is behind. It did recently introduce something called real-time ACH, which is ACH in four-hour batch windows, but that's nowhere close to what other countries are offering. I believe solving it is critical: It's hurting America's competitiveness and ability to innovate in the banking sector.
What's your favorite pastime that doesn't involve a screen?
I'm a self-taught piano player. I started playing the drums in high school but soon realized I liked composing music too, and you can't do that too easily on drums. So I switched to piano in college and now I use both composing and playing as a way to relieve stress. My daughter will often ask me to play her favorite song, which is usually whatever the latest Taylor Swift song is, and that's nice for me because those songs are relatively straightforward and it allows my daughter and me to have fun and spend time together.
Tipalti is expanding the reach of its prepaid debit cards. The payments automation company has formed a partnership with Intercash to offer the cards in 192 countries.
New York's new mayor wants crypto taught in schools. Eric Adams said city schools should add blockchain technology to the curriculum.
The SEC named four new members to an audit watchdog. The Public Company Accounting Oversight Board regulates audits of public companies. The four new members include three of the first people of color to serve on the board; new chair Erica Williams is among them.
Deep Nishar is joining General Catalyst. The investor and entrepreneur will serve as a managing director at the venture capital firm.Matt Wolf has joined Zynga. The marketing veteran will lead the gaming company's blockchain initiatives.
Drata raised $100 million. The compliance automation software company's Series B round was led by ICONIQ Growth.
SMBX raised $11.5 million. The FINRA-regulated crowdfunding service's seed funding was led by Dovi Frances' Group 11.
That's the projected cost savings from blockchain-based cross-border payments by 2030, compared to $301 million in 2021, according to Juniper Research.
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