Crypto staking rewards are taxable once received: IRS

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United States crypto investors must report crypto staking rewards as gross income in the year it was received, according to a new ruling from the country’s top tax authority.

On July 31, the Internal Revenue Service (IRS) issued Revenue Ruling 2023-14, giving clarification about how income earned from staking digital assets should be treated for taxation purposes.

Crypto staking rewards are taxable once received: IRS

Decentralized exchange LeetSwap, which operates on Coinbase’s Base network has announced a pause on trading, citing concerns of a potential exploit.

LeetSwap tweeted on Aug. 1 that it noticed some of its liquidity pools may have been compromised and temporarily stopped trading to investigate. In a subsequent update, the exchange said it is working with on-chain security experts to try to recover locked liquidity.

Crypto staking rewards are taxable once received: IRS

While the exchange did not share many details, a number of blockchain sleuths have since provided some commentary about how the exploit is likely to have taken place.

Algorithmic market maker Wintermute’s research head Igor Igamberdiev believes the attacker used an exposed smart contract function, allowing them to increase the price of a token which would then allow them to drain wrapped Ether 

 from LeetSwap’s liquidity pools.

Crypto staking rewards are taxable once received: IRS

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“The likelihood of a long-lasting chain split of Ethereum following the Merge remains slim,” said Alex Thorn, head of firmwide research at Galaxy Digital.

Binance CEO Changpeng ‘CZ’ Zhao is looking to bring smaller algorithmic stablecoins to the market, in a bid to offer investors options other than the current global stablecoin giants.

Speaking in a July 31, ask me anything (AMA) session on Twitter, CZ cited risks associated with large stablecoins such as Tether (USDT) and Binance USD (BUSD), saying that while Tether is by far the largest stablecoin by market cap, he remains cautious of the asset due to its lack of transparency:

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Nonetheless, at least some investors are preparing for a hard fork, or a parallel PoW chain, positioning in the derivatives market indicates.

Ether futures were also trading at premium at $1,905 on the CME exchange, “reflecting expectations around a proof of work fork,” said Matthew Sigel, head of digital assets research at fund manager VanEck.

Cryptoverse: Electric ether leaps on verge of Merge