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Canaan reports record revenues; Korea says no to crypto tax delay

Canaan reports record revenues meanwhile Korea says no to crypto tax delay

Cryptocurrency mining hardware manufacturer Canaan reports record revenues.

South Korea’s finance minister says no to crypto tax delay.

NFT platform OpenSea admits insider trading.

We’ll have more on those stories — and other news shaping the cryptocurrency and blockchain world — in this episode of The Daily Forkast, September 16.

Transcript

Welcome to The Daily Forkast, September 16, 2021. I'm Angie Lau, Editor-in-Chief of Forkast.News covering all things blockchain.

Well, it's not been the easiest of year so far for some in the cryptocurrency mining industry, with China's clampdown causing a mass exodus of miners from the country. But that hasn't stopped one player from prospering. Find out who, how much and how they did it.

We'll take a look at what's driven those numbers and a whole lot more coming up.

All right. First up, let's get straight down to it.

Despite China's clampdown on cryptocurrency mining, hardware manufacturer Canaan has seen its revenues go through the roof. The company reported its strongest ever quarterly sales, up over 500% from the same period last year. That's 500 percent. That's a lot.

Now, Canaan says strong market demand for its bitcoin mining machines and the proceeds from its registered direct offering in May both helped fill its coffers.

So how exactly did they do it? Forkast.News Timmy Shen has more.

The increase in bitcoin mining machines Canaan delivered saw the total computing power sold hit 5.9 Terahashes per second last quarter.

And that meant net revenue for the quarter soared to US$167.5 million, a leap of almost 170% from that achieved in the first quarter.

The company says its strategy going forward is to increase its market share in the bitcoin mining machine business and that it is confident, despite industry wide challenges, including wafer supply instability and regulatory uncertainties in various countries.

Chairman and CEO Nangeng Zhang says the company has also been making strides into the AI business with the launch of its "Kendryte K510" chip.

Canaan says the outlook remains healthy, predicting a 10% to 30% sequential increase in revenues for the third quarter.

For Forkast.News, I'm Timmy Shen, Taipei, Taiwan.

Meanwhile, crypto investors in Korea get ready to pay up. South Korea's finance minister says taxing crypto can be delayed no longer.

Taxes on capital gains from crypto transactions are set to begin January 1, 2022. That's just in a few months time.

But critics think that is way too soon, saying crypto assets need to be actually properly defined before taxes are introduced. And investors say the disparity between tax on crypto in Korea and stock trading gains is actually unfair as the threshold is set way lower for crypto.

Forkast.News Danny Park has more on what it means for investors and the crypto industry in Korea.

South Korea's tax law was amended last year to include cryptocurrency, stipulating that annual crypto capital gains of over 2.5 million Korean won would be taxed 20% from January 1st, 2022.

A backlash from investors and experts followed immediately, pointing out how the regulatory environment is not yet fully structured, especially protection measures for crypto investors and several lawmakers proposed bills delaying it by one to two years.

On top of that, crypto traders argued it was unfair, as while crypto income over 2.5 million won or approximately US$2,100 is taxed, the threshold for stock gains is much higher, starting at 50 million won or around US$42,000.

A blind spot to taxing crypto, leaving authorities unable to track peer to peer transactions, which could be used later on to avoid taxes, was also not tackled.

However, the Finance Minister, Hong Nam Ki, spoke on Wednesday at the National Assembly that delaying the tax law will only cause market confusion.

One expert told Forkast.News that crypto taxes should be no different from taxing stock gains.

The National Tax Service claims that [crypto] is not a financial asset, that it’s part of “other assets” or “intangible assets”. Regardless of category, if the characteristics [of the investments] are similar,I think it’s right to tax it the same as stock capital gains tax."

However, Professor Lee agrees the tax should take place as scheduled, saying where there is income, there should be tax.

For Forkast.News I'm Danny Park.

And finally, today we've seen criticism from China in the past few days over NFT sales, but now U.S. based platform OpenSea is under fire.

The platform has issued a statement admitting an employee made purchases of items before they actually appeared publicly on the site.

While the statement does not identify the employee, a member of the NFT community took to Twitter to accuse the company's Head of Product of allegedly using secret wallets to buy items ahead of listing, only to sell them on for a profit.

The platform says it has introduced new internal policies to prevent it happening again. But it is about a wider industry issue here.

Speaking to Forkast.News on Word On The Block this week, Cardano founder Charles Hoskinson suggested that's not the only issue the industry should be wary of, saying money laundering is also a concern.

"There's a lot of evidence the Treasury Department's been tracking. That's where people are are basically using NFTs as a mechanism to legitimize unlawful funds. Just create an NFT. You buy it from yourself. You say it came from someone else. Oh, look, this picture of a stone sold for $5 million and I just made it out of nowhere. I have no idea who the counter-party is."

And buyer beware on NFTs as well. Unauthorized artworks are also something to watch out for.Hong Kong based studio, All Rights Reserved has confirmed with Forkast.News that a series of NFTs by the artist KAWS announced by Tron Foundation founder Justin Sun via Instagram have not actually been authorized.

Sounds like the NFT industry could be in for tough times if it doesn't work harder on self-regulation.

And that's The Daily Forkast from our vantage point right here in Asia. For more visit Forkast.News. I'm Editor-in-Chief Angie Lau. Until the next time.

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