Check out the biggest breaking crypto market updates for today:
ETH Linked To Vitalik Buterin Is On The Move
According to data from Ethereum block explorer Etherscan, Ethereum co-founder Vitalik Buterin moved 600 ETH to the US crypto exchange Coinbase yesterday.
On-chain analytics firm Arkham data shows that Vitalik has moved around $3.6 million in ETH to exchanges including Kraken, Gemini, and Coinbase since the start of the year.
Another dominant Ethereum address, which had bought ETH during Ethereum’s initial coin offering (ICO) in 2014, moved 191 ETH worth around $320,000 on August 20 to another address, according to Etherscan data.
Analysts have also confirmed that it is unlikely that this second address belongs to Vitalik.
That address the ICO participant sent their ETH to later bought Unitbot (UNITBOT) and ApeCoin (APE) tokens.
On-chain analytics firm Nansen confirmed the 600 ETH transfer from Vitalik’s wallet to Coinbase, adding that Vitalik sent “a test transaction of 0.1 ETH two days ago.”
His transfer only accounts for around 0.01% of Ethereum’s daily average trading volumes over 30 days of $6.3 billion, per CoinGecko data.
Nansen analysts said that the previous transfers have “typically been to Kraken.”
Tuesday’s transfer to coinbase takes Vitalik’s total amount transferred to the exchange at $4.6 million.
The last time Vitalik transferred ETH to exchanges was between June 5 and 7, following which ETH witnessed a 14% drop, according to Coingecko data.
However, in March, Vitalik’s transfer on exchanges coincided with the local bottom of around $1,400, suggesting that the effect on price after these movements is merely coincidental.
A month ago, an ICO whale address transferred $116 million worth of ETH to Kraken. In May, another Ethereum whale moved 4,032 ETH worth $7.4 million to the proof-of-stake contract.
Coin Center Responds to US Lawmakers’ Request For Crypto Tax Guidance
In an Aug. 21 letter to Sens. Ron Wyden and Mike Crapo, crypto-focused policy nonprofit group Coin Center provided suggestions for potential legislation related to the taxation of digital assets.
The letter outlined several suggestions, including having the IRS establish a de minimis exemption for crypto transactions, not applying US tax law reporting requirements for second parties to digital assets, revising the IRS definition of a broker to explicitly exclude crypto miners and Lightning node operators, as well as limit the agency’s authority to issue legal summons for alleged tax evaders.
“[F]orcing ordinary people to collect highly intrusive information about other ordinary people, and report it to the government without a warrant, is unconstitutional under the Fourth Amendment,” said Coin Center. “[D]emanding that politically active organizations create and report lists of their donors’ names and identifying information to the government is unconstitutional under the First Amendment.”
With regards to limiting the IRS’s authority to issue legal summons for alleged tax evaders, the advocacy group cited a 2016 case in which the IRS issued a subpoena to Coinbase with a “John Doe” summons, allowing the agency to gain a large amount of user data from individuals who may not have been involved in any potential tax reporting violations.
Coin Center added on the matter:
“If we set a precedent that merely dealing in bitcoin could result in a firm’s customers easily losing their financial privacy, it would have severe consequences for bitcoin and the related blockchain ecosystem.”
According to Coin Center, the IRS also needed to consider providing guidance on block rewards, airdrops and hard forks for tax purposes and not require a qualified appraiser for certain donations made in cryptocurrency.
The suggestions followed a July request from the U.S. Senate Financial Services Committee, which will be accepting responses on crypto tax guidance through Sept. 8.
Addressing the tax gap – the amount of taxes owed versus those actually paid to the government – has been an ongoing issue in the U.S. as the crypto space expands.
Though some legislation, including the infrastructure bill passed in November 2021, has attempted to address some of the issues surrounding taxes on cryptocurrency, critics of the legislation have pointed to seemingly impossible reporting requirements for retail investors.
Friend.Tech Denies Report That Database Of Over 100K Users Was Leaked
The team behind the viral SocialFi platform Friend.tech has denied the claims made in a recent The Block report that stated that the personal information of more than 100,000 Friend.Tech users were “leaked.”
The Friend.tech team stated,
“This is just someone scraping our public API that shows the association between public wallet addresses and public Twitter usernames. It’s like saying someone hacked you by looking at your public Twitter feed.”
The post also received input from X’s (formerly known as Twitter) Community Notes contributors.
“The underlying data is public and anybody can work it out reading a block explorer: if you buy a share, 5% goes to the creator’s wallet and he will have needed to fund his wallet. The database only scraps that public info,” the community note reads.
A pseudonymous developer for Yearn Finance named Banteg originally published a repository of the publicly available scraped data, containing details of users on the Friend.tech platform on GitHub.
This data included wallet addresses on Base, linked to the corresponding Twitter usernames for more than 101,000 users.
“101,183 people have given friend.tech access to post as them, leaked db (database) indicates,” Banteg wrote.
Banteg also gave criticism to the inaccurate interpretation of their initial post.
Banteg’s release of the data followed a post from blockchain analytics service Spot On Chain which found that Friend.tech’s API revealed specific sets of information not immediately available to everyday users of the app.
The most prominent example was that wallets created by certain users can be viewed through the API.
When asked how this information could be used, Spot On Chain said it could be used to game the system by allowing bots to near-immediately purchase shares of big accounts as soon as they signed up to Friend.tech.
“A lot of bots have already taken advantage of this, it monitors the contract, finds the big KOL, and buys shares before others,” wrote Spot On Chain.
Since its beta launch on August 11, Friend.tech has seen its users engage in over 934,000 unique transactions and trade a staggering volume of 34,320 Ether – $57,101,116 at current prices.
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