Continues Washington, D.C. Push; IoT Startup Attracts Big-Name Crypto Investors

The top daily news from the cryptocurrency and blockchain space:

  • continues push into Washington, D.C. with lobbying involvement.
  • Helium attracts big-name cryptoasset investors as it launches peer-to-peer IoT device.
  • Angel investor, former Google director marks first hire for Square Crypto.

At the time of writing, bitcoin (BTC) and ether (ETH) are trading at $8,130.8 (+2.0%) and $260.3 (+4.9%), respectively. As for the MVIS CryptoCompare Digital Assets 10 Index, it is currently tracking at 4,043.3 (+0.5%).

Bitcoin Ethereum CryptoCompare Continues Washington, D.C. Push as Lobbying Details Shared – the publisher of the EOSIO blockchain protocol tied to the popular EOS (EOS) cryptocurrency – appears to be looking to influence blockchain policy conversation in the U.S. As initially reported on by The Block, the blockchain technology startup is cited as the client of lobbying firm Holland & Knight, LLP in a disclosure document filed in May.

The news follows efforts by the Hong Kong-headquartered over recent months to set up a new office in northern Virginia; a region that is adjacent to Washington, D.C. and home to various government institutions including The Pentagon (i.e., the United States Department of Defense headquarters) and the George Bush Center for Intelligence (i.e., the Central Intelligence Agency (CIA)).

Helium Launches Blockchain-Enabled IoT Device, Raises $15 Million

Helium, a San Francisco-headquartered startup using blockchain technology to facilitate wireless connections, announced the launch of its Helium Hotspot product along with the closure of a $15 million Series C fundraising round.

Some big-name venture capital firms partook in the $15 million raise. This included Kyle Samani and Tushar Jain’s Multicoin Capital and Union Square Ventures (USV), who each co-led the Series C round. In a blog post appearing on Multicoin’s website, Jain noted the fact Helium marked “the largest private investment [Multicoin has] made.”

Although initially launching in the U.S., Helium intends to expand network coverage internationally, chief operating officer Frank Mong mentioned in a Medium blog post published Wednesday evening (CET).

Ex-Google Director Marks Square Crypto’s First Hire

Square Crypto, the crypto-focussed entity of the Jack Dorsey-led payments company, Square, announced angel investor and former Google director, Steve Lee, as its first hire.

Most recently, Lee served as a product manager for Bitcoin Operations Technology Group (Bitcoin Optech), a group dedicated to bringing open-source technologies and techniques to Bitcoin-using businesses. Notably, Square hosted Bitcoin Optech’s inaugural workshop in San Francisco in July 2018.

While at Google, Lee led product management for mobile applications, Google Maps, as well as Google’s location platform. He was also a co-founder of Google Glass.

Latest Crypto Tax Guidance Shows IRS Still Confused

Written by Robin Singh, a cryptocurrency tax consultant based in the UK. He is the founder of - a cryptocurrency tax solution that automates capital gains reporting. He is a former Fintech engineer with a knack for numbers. Besides being a crypto enthusiast, he is also a passionate gamer and can be found in Orgrimmar when not at his desk.

After years of silence, the IRS finally released an update to their 2014 cryptocurrency tax guidelines in October. The update was welcomed by accountants and taxpayers alike, who had been left in the dark when it came to declaring their crypto taxes for far too long. While the IRS makes certain aspects of cryptocurrency taxes clearer, some of the new additions have only contributed to the overall confusion and left many unanswered questions.

If you have read the new crypto tax laws but still find yourself struggling to comprehend what these changes mean for you, this analysis will break down the major additions so that you can file your crypto taxes more confidently.

More Control Over Your Capital Gains and Taxes

Until now First In First Out (FIFO) was the only confirmed method for calculating capital gains on crypto but in the new guidance the IRS has also clarified that you are allowed to use Specific Identification (SI). For those unacquainted with FIFO, it’s basically a way to figure out the cost of an asset when you are buying and selling in multiple transactions.

For example, let’s imagine that you purchased 4 BTC for $400 in January and another 2 BTC for $400 in August. You then sell 5 BTC for $1,000 in November. The cost of the first 4 BTC will come from the first 4 BTC you purchased, while the remaining 1 BTC will get its cost from the second transaction. So, your final capital gain becomes $400.

Using SI, on the other hand, you can choose to calculate gains and losses using specific transactions - as long as you can prove that you are actually selling the assets from those transactions (for ex. by keeping the received assets in separate wallet addresses).

In this scenario, let’s imagine that you bought 1 BTC for $100 and another BTC for $500 and both are held in two different addresses. Now if you were to sell 1 BTC for $500, you can simply sell the one that you bought for the same price to avoid any capital gains. With FIFO you would have sold the one you bought first for $100 and realized a $400 capital gain. This extra control gives you the ability to make more tax-savvy trades.

Picking the Right Accounting Method

Which method you choose to use will ultimately depend on how much time you are willing to devote to your tax planning efforts. If you want to reduce your taxes - and have the time to do so - you may want to look into SI. If, on the other hand, you are filing crypto taxes just before the deadline you are unlikely to benefit much from SI and would do well to just use FIFO.

There is also another calculation method available called Last In First Out (LIFO) which is actually the opposite of FIFO. It is used by some for calculating capital gains on shares but the IRS has not explicitly confirmed that you can use it for cryptocurrencies too.

In the end you should pick a method and stick to it. You are not allowed to switch between accounting methods without prior approval from the IRS.

On Hard Forks

The IRS also released a number of Q and A’s that specifically addressed some questions related to hard forks and how they should be treated from a tax perspective.

To summarize the new information regarding forks, the IRS has stated that any cryptocurrency obtained as a result of a hard fork is considered to be taxable income. Regardless of whether or not you asked for the digital assets or you refuse to use them, you still must report these earnings to the IRS and pay the required taxes for the new crypto.

If you are disappointed with this, you are not the only one. Many crypto influencers took to Twitter to express their feelings, some saying they will owe taxes on the BitcoinSV fork even though the coin is practically worthless. While the IRS’s guidance does make sense for forks such as the Bitcoin Cash fork which was widely accepted, they still have a long way to go in defining fair laws that can be applied universally to all kinds of crypto transactions.

Keep in mind, however, that you will not always receive crypto when a hard fork occurs. If your wallet provider or exchange doesn’t support the new coin, you will not see any crypto available, which means that you won’t have to worry about reporting it either.

The Bottom Line

Tax agencies all over the world are grappling with cryptocurrencies and amending existing laws to also apply to virtual currency. In August the IRS even sent out thousands of letters to suspected crypto tax evaders to remind them of their obligations.

Next year you will also find a new question at the top of your tax return that specifically asks whether or not you traded with cryptocurrencies. Almost 150 million taxpayers are expected to answer this, so interest in cryptocurrencies is likely to skyrocket.

As awareness and adoption of Bitcoins and other cryptocurrencies continues to grow, we will see more and more regulations and laws being enacted to combat the threat of tax evasion and money laundering. It is important to keep an eye on new regulations concerning crypto taxes so you are not caught off guard come April.