Market Update & Industry News - Week ending 1 December 2023

🔷 The United Kingdom’s HM Revenue & Customs launched a voluntary disclosure mechanism to encourage the public to disclose any unpaid tax on income or gains from digital assets including NFTs, utility tokens, and exchange tokens. To curb unpaid capital gains tax on digital assets, those who do not comply may face interest and penalty fines. From initial disclosure, the full tax payment is due within 30 days. 

Appold View: Such a disclosure tool has previously existed but this is the first time a targeted approach with a marketing spend has been undertaken. It is also consistent with the UK’s recent announcement that it will be implementing the OCED-led program by 2027, where digital asset platforms will be sharing client information with tax authorities. 

🔷 Football star, Christiano Ronaldo, had a class-action lawsuit filed against him due to his alleged role in promoting NFTs issued by global crypto exchange Binance. In November 2022 Ronaldo launched his NFT “CR7” collection with each NFT having a price range of $77 to $10,000. The lawsuit is seeking £1b in damages.

Appold View: Last year a host of celebrities faced litigation in a class-action suit against FTX but this is one of the early Binance-focused lawsuits, with others expected to come. The Southern District of Florida filed a lawsuit alleging that Ronaldo promoted Binance, which contributed to the sale and offer of unregistered securities. 

🔷 A US Federal Judge issued a “show cause order” to the US Securities and Exchange Commission over an alleged false statement concerning an ongoing criminal case against crypto firm Debt Box. Earlier in the case the SEC argued that Debt Box was closing its accounts and moving to the UAE, this led to the courts freezing Debt Box’s bank accounts with a restraining order.

Appold View: It is not good for the SEC's credibility when a judge issues such an order. Discrepancies were discovered in the SEC’s claims, which means that under this order the SEC now has to provide reasons and explain why they should not face penalties for their actions. 

🔷 London-based crypto custody and trading firm, Copper, announced plans to start a digital securities brokerage in the UAE. Based out of Abu Dhabi, Copper Securities will offer execution and custody services to institutions, hedge and sovereign wealth funds.

Appold View: A good move from Copper as it expands its regional footprint, with other service providers looking to do similar. 

🔷 Global technology network IOTA also announced a $100m foundation in Abu Dhabi to create a digital network. The IOTA Ecosystem DLT Foundation is an apparent effort to accelerate the growth of its distributed ledger technology in the Middle East.

Appold View: It's good to see the IOTA Foundation expanding into the MENA region. The funds are understood to be distributed over 4 years.