A critical point

GM, and welcome to RollCall by Rollfi!

Get caught up from the past week in 10 minutes or less:

• SECs decision & a new crypto bill

• Employees want to be paid in crypto

• Weekly Highlight 🌟

• Other stories from the week 📰

GOVERNMENTS & CRYPTO

In the last few months, regulatory scrutiny has increased as the crypto industry matures.

Many in the industry are calling for responsible and sensible regulations however, the government's actions toward the industry have not been consistent. This week was a perfect example of the dichotomy of the government's treatment toward the crypto industry:

SEC's Probe into Coinbase

After one of the first insider trading busts in crypto history last week, the Securities and Exchange Commission (SEC) filed securities fraud charges against the former Coinbase employee at the center of the insider trading scandal.

While the Department of Justice thanked Coinbase for their cooperation in the investigation and decided not to charge the defendant with securities fraud, the SEC is taking a different approach. The SEC is now calling 9 of the tokens involved "securities", 7 which are on Coinbase's platform. Coinbase's Chief Legal Officer quickly took to the company's blog to assert that Coinbase does not list securities and called for collaborative rule-making rather than one-off enforcement actions to bring digital assets under the SEC's jurisdiction.

Classifying certain tokens as securities could cause a massive shake-up in the crypto world. Exchanges would have to either de-list certain tokens or quickly become compliant. Tokens classified as securities would have to register with the SEC.

The Commodity Futures Trading Commission (CFTC) and the SEC have seemingly been wrestling over how to classify certain cryptocurrencies for quite a while now. CFTC Commissioner Caroline Pham issued a statement late last week calling the SEC's decision to categorize the tokens as securities a “striking example of regulation by enforcement.”

FTX CEO Sam Bankman-Fried seems to be ok with the SEC's actions, noting that some tokens are securities:

New Crypto Tax Bill

Senators Toomey (R-Pa) and Sinema (D-Ariz) introduced new bipartisan legislation to "simplify use of digital assets for everyday purchases" earlier this week.

The legislation proposes a tax exemption on crypto transactions worth less than $50. The Virtual Currency Tax Fairness act, as its being called, would allow people to trade and transact virtual currencies easily without the need to track their tax liabilities on small transactions.

To date, paying for anything in crypto would need to be recognized as a "sale" of your assets that is then taxed as either a capital gain or loss (for more on this topic, we covered tax implications of crypto in depth in a previous newsletter.)

Many see accounting for capital gains and losses while transacting small amounts as a negative attribute of crypto. A bill like this could see adoption rise and allow users and businesses alike to freely transact without the additional accounting burden.

EMPLOYEES WANT TO BE PAID IN CRYPTO

Despite the recent downturn in markets, employers are finding employees still want to be paid in crypto.

In a recent article from Blockworks, they found that there is still strong interest in crypto payroll for employees both domestic and abroad.

The most prominent locations for employees seeking crypto for payroll are places with historically unstable currencies and slow or outdated banking systems. Not coincidentally, employees are opting for either bitcoin or stablecoins like USDC for something they can rely on.

Our take: Employees in the US and abroad are going to demand more flexible options for payment in the future. If you are one of the employers that wants to stay ahead of the curve, we've got the perfect product for you.

WEEKLY HIGHLIGHT

This week, Aptos, a new Layer 1 blockchain raised $150M Series A from notable investors FTX, a16z and more.

The team behind Aptos consists of many of the engineers behind Meta's Diem blockchain project.

Aptos differs from current L1’s in that they are optimizing for the best user experience through security, scalability, and upgradability. With a reported 130k transactions per second, it would be the fastest L1. And as opposed to existing L1's, they are committing to continuous upgrades as use cases evolve.

The mainnet is expected to launch in Q3 of this year. You can read more about the Aptos vision here.

MORE STUFF FROM THE WEEK

• The Federal Reserve's Federal Open Market Committee announced a rate hike of 75 basis points on Wednesday. Markets have responded positively to the news after many expected a rate hike of 100bps.

• Voyager Digital rejected FTX's offer to buy Voyager's assets. The company called it a "low-ball" offer but Sam Bankman-Fried disagrees.

• Crypto exchange Kraken is under investigation by the US Treasury Department for violating sanctions against Iran that have been in effect since 1979.

• Brazil’s Largest Digital Bank Nubank Reaches 1M Crypto Users After Just a Month

GLOSSARY

We're confused too. We're here to help decrypt the crazy world of crypto.

• Layer 1 - Layer-1 blockchains can validate and finalize transactions without the need for another network (Binance)

Not much else this week. Instead, check out this thread that explains common terms and things you need to know when interacting with Ethereum.

At Rollfi, we're building the payroll & HR platform for the modern workforce.

Our platform can enable your business to seamlessly pay your teams in both cash & crypto. And your company doesn't need to have any crypto to make it happen.

Want to see the platform in action? Click the link below to book a live demo with our founding team. We're super excited to share what we've built and get feedback on how we can improve the customer experience.