Investment Learning

September 4, 2024

U.S. July Trade Deficit Reaches Largest Since June 2022

According to Odaily, market reports indicate that the United States recorded a trade deficit of $78.8 billion in July. This figure slightly exceeded the expected deficit of $79.0 billion. The previous value was revised from $73.1 billion to $73.0 billion.The July trade deficit marks the largest since June 2022, highlighting ongoing economic challenges. The data reflects the balance between the country's imports and exports, with a higher deficit indicating that the value of imports continues to surpass that of exports. This trend can have significant implications for the overall economic health and policy decisions.The trade deficit is a critical economic indicator, often influencing currency values, trade policies, and international relations. Analysts and policymakers closely monitor these figures to assess economic performance and make informed decisions. The latest data underscores the importance of addressing trade imbalances to foster a more stable economic environment.

September 4, 2024

Ripple CEO Predicts SEC Chair Departure Regardless of 2024 Election Outcome

According to BlockBeats, Ripple Labs CEO Brad Garlinghouse has made a bold prediction that regardless of the outcome of the 2024 U.S. presidential election, SEC Chairman Gary Gensler will step down. Garlinghouse expressed his willingness to make a 'gentleman's bet' that Gensler's term will not continue, no matter who takes office in the White House.Since 2020, Ripple has been embroiled in a legal battle with the SEC. In the context of the upcoming November election, Garlinghouse discussed U.S. cryptocurrency policy, emphasizing that technology should bridge political divides. He anticipates that as the election progresses, technology will foster bipartisan cooperation. He noted that while Republicans have taken a more proactive stance on cryptocurrency, several key Democrats also view these technologies as crucial for maintaining America's leadership in the tech sector.

September 4, 2024

Japan's Financial Regulator Proposes Crypto Tax Overhaul

According to Cointelegraph, Japan’s Financial Services Agency (FSA) has unveiled plans for a comprehensive overhaul of the tax code for the fiscal year 2025, which includes provisions for crypto assets that could potentially lower their tax rates. In an August 30 request for tax reform, the FSA emphasized the need to treat crypto assets similarly to traditional financial assets that can be invested in by the public.Source: MartyPartyThe FSA stated, “Regarding the tax treatment of cryptocurrency transactions, cryptocurrency should be treated as a financial asset that should be an investment target for the public. It is necessary to consider this issue from the perspective of whether it should be treated as such.” Currently, crypto profits in Japan are taxed as miscellaneous income at rates ranging from 15% to 55%, with the highest rate applying to earnings over $1,377 (200,000 Japanese yen), depending on the individual’s income tax bracket. In contrast, profits from stock trading are taxed at a maximum rate of 20%. Corporate crypto holders face a flat 30% tax rate on their holdings at the end of the financial year, regardless of whether they have made a profit through a sale.Government ministries submit tax reform requests to the ruling party, which then forwards them to a tax system research committee and the national legislature for consideration. The reform must be approved by both houses of the Japanese government — the House of Representatives and the House of Councilors — to be enacted into law. Advocates of the crypto industry in Japan have been lobbying for a revision of the national tax regime for digital assets for several years. The Japan Blockchain Association (JBA), a pro-crypto lobbying group, formally requested the government in 2023 to lower the tax rate on crypto assets. On July 19, the group also submitted a request for tax reform on crypto assets for the 2025 financial year to foster further growth in the nation’s crypto sector. Among its proposals was a flat 20% tax rate for crypto and a three-year loss carryover deduction. Despite these efforts, the requests have so far failed to result in any policy changes for the industry in Japan.

September 3, 2024

CFTC Recovers $18 Million in Digital Assets from Alleged Ponzi Scheme

According to Foresight News, the U.S. Commodity Futures Trading Commission (CFTC) has recovered $18 million in digital assets linked to an alleged commodity pool Ponzi scheme. Oregon resident Sam Ikkurty has been accused of defrauding investors through a purported 'crypto hedge fund.' Ikkurty promised to return 'net profits' to investors but failed to do so, and did not inform investors that the fund's performance had plummeted by 98.99% within a few months.U.S. District Court Judge Mary Rowland for the Northern District of Illinois has ordered Ikkurty and several related entities to pay a total of $209 million in penalties. This includes nearly $84 million in customer restitution, approximately $37 million in disgorgement of ill-gotten gains, and about $110 million in civil monetary penalties. Additionally, Ikkurty has been ordered to pay over $14 million in contempt of court fines.

September 3, 2024

Nvidia Faces Major Market Cap Loss Amid DOJ Antitrust Probe

According to Cointelegraph, Nvidia experienced its largest one-day market capitalization loss, shedding over $280 billion in value following a reported antitrust subpoena from the United States Department of Justice (DOJ). On September 3, Nvidia's shares dropped by 9.5%, closing at $108, which resulted in a $278 billion reduction in its market cap. This event marks the most significant single-day value loss for any stock in the history of the US share market, based on Google Finance data. The decline continued in after-hours trading, with shares falling more than 2% to a low of $105.The sharp drop in Nvidia's stock price occurred as the DOJ issued a subpoena to Nvidia and several other companies, seeking evidence of potential violations of US antitrust laws. Bloomberg reported on September 3, citing sources familiar with the investigation, that the DOJ had previously sent non-binding questionnaires to Nvidia for additional information. The subpoena represents an escalation in the investigation, legally obligating recipients to provide information and potentially leading to a formal complaint against the chipmaker.US antitrust officials are concerned that Nvidia may be making it difficult for businesses to switch to other artificial intelligence and computer chip providers and penalizing buyers who do not exclusively use its AI chips. As part of the investigation, DOJ officials have contacted other tech firms, including Nvidia's largest investor, Microsoft, for further information. In response, Nvidia stated in an emailed statement to Bloomberg, "Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them." Nvidia CEO Jensen Huang emphasized that priority is given to customers who use Nvidia products in ready-to-go data centers to prevent stockpiling and expedite the installation of the company's technology.Founded in 1993, Nvidia has quickly risen to become the world's largest manufacturer of computer chips, particularly those used in AI processes. Nvidia's success in developing AI-specific infrastructure has allowed it to significantly outperform its rival chipmakers. As of the time of publication, Nvidia's market cap stands at $2.65 trillion, making it 30 times larger than former market leader Intel and 12 times larger than competitor Advanced Micro Devices (AMD).

September 3, 2024

CFTC Orders $209 Million Compensation in Fraud Case

According to Odaily, the U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Mary Rowland of the U.S. District Court for the Northern District of Illinois has issued a final judgment against Sam Ikkurty of Oregon and entities Jafia, LLC, and Ikkurty Capital, LLC, operating under the names Rose City Income Fund I LP, Rose City Income Fund II, and Seneca Ventures, LLC. The federal court has ordered Ikkurty and several associated entities to pay $209 million in compensation.This judgment follows a previous ruling by Judge Rowland in favour of all CFTC charges, which included allegations of fraud and misappropriation of funds. The CFTC's lawsuit highlighted significant fraudulent activities and the misuse of investor funds. Additionally, the CFTC has successfully recovered over $18 million in digital assets stolen from a court-appointed receiver.The case underscores the CFTC's commitment to enforcing regulations and protecting investors from fraudulent schemes. The recovery of digital assets further demonstrates the agency's efforts to reclaim misappropriated funds and ensure justice for affected parties.

September 3, 2024

SEC Charges Galois Capital Over FTX Crypto Custody Failures

On September 3, the U.S. Securities and Exchange Commission (SEC) announced charges against Galois Capital Management for failing to properly custody client assets, particularly involving funds held with the now-defunct cryptocurrency exchange FTX.Digital asset custodians often seek a New York trust charter. Source: NYDFSViolations of the SEC Custody RuleThe SEC alleges that Galois Capital violated the agency's custody rule, which mandates that investment advisers must hold client funds with a "qualified custodian," such as a registered bank or broker-dealer. Instead, Galois reportedly held crypto assets on multiple cryptocurrency exchanges, including FTX Trading Ltd., which collapsed in November 2022.The collapse of FTX led to Galois losing approximately half of its assets, exposing investors to substantial risks. According to Corey Schuster, co-chief of the SEC enforcement division’s asset management unit, the firm's actions failed to protect investor funds. He stated, “We will continue to hold accountable advisers who violate their core investor protection obligations.”Custody of Digital AssetsSince 2021, several firms, including Anchorage Digital Bank, Fireblocks Trust Company, Coinbase Custody Trust, and Fidelity Digital Asset Services, have emerged as qualified digital asset custodians. However, FTX was never among them. Its collapse resulted in billions of dollars in customer funds becoming inaccessible due to mismanagement and alleged fraud.Misleading Redemption PracticesThe SEC further alleged that Galois Capital misled its investors regarding the notice period required for redemptions. The firm reportedly told some investors that redemptions required at least five business days’ notice while allowing other investors to redeem with fewer days’ notice.Penalties and Investor CompensationIn response to the charges, Galois Capital has agreed to pay a civil penalty of $225,000, which will be distributed to investors harmed by the fund's mismanagement.This case serves as a reminder of the importance of proper custody of assets and investor protections, particularly in the rapidly evolving cryptocurrency market.

September 2, 2024

Qatar Financial Centre Introduces Digital Assets Framework

According to Cointelegraph, the Qatar Financial Centre (QFC) in Doha has unveiled a comprehensive regulatory regime for digital assets. This initiative aligns with the Qatar Central Bank’s strategy and involves the Qatar Financial Centre Authority (QFCA) and Qatar Financial Centre Regulatory Authority (QFCRA). The framework establishes a foundation for digital assets within the QFC, including tokenization processes, legal recognition of property rights in tokens and underlying assets, custody arrangements, and transfer and exchange mechanisms. Additionally, it includes provisions for the legal recognition of smart contracts.The QFC operates independently from the mainland, similar to free economic zones in the United Arab Emirates, with its own legal, regulatory, tax, and business framework. It allows up to 100% foreign ownership and repatriation of profits and charges a competitive 10% corporate tax on locally sourced profits. The new framework aims to ensure that the digital asset ecosystem within the QFC is secure, transparent, and adheres to international standards. It sets standards for asset tokenization and aims to build trust and confidence among consumers, service providers, and stakeholders.Qatar Central Bank Governor His Excellency Sheikh Bandar bin Mohammed bin Saoud Al Thani stated that the new regulations are a milestone in realizing the country’s Third Financial Sector Strategy, which was launched in November 2023. This strategy aims to create a capital market to unlock Qatar’s economic potential and includes embracing emerging technologies to accelerate digital transformation. The digital assets framework is the result of collaboration and consultation with industry stakeholders, developed with input from an advisory group of 37 domestic and international organizations in the finance, technology, and legal sectors.Since the launch of its Digital Assets Lab in October 2023, the QFC has accepted more than 20 startups to develop, test, and commercialize their products and services. This initiative supports Qatar’s broader digital transformation goals and positions the country as a significant player in the global digital assets market.

August 29, 2024

U.S. Pending Home Sales Hit Record Low in July Due to High Prices and Borrowing Costs

According to BlockBeats, the measure of pending home sales in the United States fell to a historic low in July due to high prices and borrowing costs. Data released showed that the index of signed contracts dropped by 5.5% last month to 70.2, marking the lowest level since 2001. This decline exceeded economists' general expectations, reflecting a decrease in sales across all four major regions.Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), stated in a release, 'The positive impact of job growth and increased inventory cannot overcome the challenges of affordability and a certain degree of wait-and-see attitude related to the upcoming US presidential election.' For nearly two years, the second-hand housing market has been sluggish due to high borrowing costs and insufficient inventory. Although mortgage rates have fallen to their lowest level in over a year this month, high home prices and limited inventory continue to deter potential buyers, who may still be waiting for even lower rates. Yun noted that a decrease in mortgage rates would undoubtedly attract buyers back into the market.

August 28, 2024

Telegram Founder Pavel Durov Faces Allegations of Child Abuse in Switzerland

According to Foresight News, Telegram founder Pavel Durov has been accused by his former partner, Irina Bolgar, of harming their youngest son on five occasions between 2021 and 2022. The child was born in September 2017. These allegations were made a few months after Bolgar accused Durov of ceasing to pay her approximately $167,500 per month in child support.Bolgar's lawyer confirmed that she and her three children are involved in this civil case. However, he declined to comment on any criminal proceedings related to the matter.