The IRS’s war on alternative currencies is heating up, R3 is falling apart, and EY is embracing Bitcoin. Here are the cryptocurrency highlights of week 48:
- The Justice Department says a federal district court has ordered that Coinbase, a San Francisco exchange for digital currency, should turn over its customer account information to the government. This would reveal the identities of all of its active United States-based users to the IRS. The IRS is concerned that some of Coinbase’s customers may have used its service to circumvent or mitigate tax liability. Federal investigators say they need Coinbase’s records to be able to identify some Bitcoin wallets and to check against tax records to make sure Coinbase’s users are paying any and all proper taxes on their Bitcoin-related income.
- On 30 November, the R3 blockchain consortium, a collective of roughly 70 banks and financial institutions dedicated to the development of distributed ledger technology, released the open-source Corda platform. According to the website Corda is: “a distributed ledger platform designed to record, manage and automate legal agreements between business partners. Designed by (and for) the world’s largest financial institutions, it offers a unique response to the privacy and scalability challenges facing decentralised applications.” The platform received mixed responses, and Bitcoin Core developer Peter Todd even said the platform looked like “Bitcoin without blockchain”.
- The R3 consortium also happened to be shrinking recently, as several members have decided to depart R3. Goldman Sachs, one of the founders of the consortium, was one of the first to leave. Spanish banking group Banco Santander soon followed, and Morgan Stanley has too quitted the group. According to Nick Weisfeld, Data Practice Head and Blockchain Specialist at GFT: “These departures show that there is a real question over the value being generated by R3, and an even bigger question over their ability to commercialize.” R3 has responded to the situation by lowering the goal for its first large round of equity funding by 25% down from $200 million to $150 million.
- Big Four accounting firm EY is embracing Bitcoin. EY Switzerland has announced that beginning January 2017 all of their customers may settle their bills using Bitcoin. Simultaneously, EY announced that employees will be receiving a digital wallet and a Bitcoin ATM has been placed into operation and is publicly accessible to the office building next to the Hardbrücke train station in Zurich.
- Due to last week’s introduction of the Bitcoin Energy Consumption Index, there were no weekly highlights and price updates. Changes are therefore considered over a two-week period. In this period the price of Bitcoin gained more than two percent, taking the price to a current rate of about $770 per BTC. The price of Ethereum crashed by almost 20 percent, taking Ether down to a rate of $7.92 per ETH. Ethereum Classic also decreased, with the price decreasing more than ten percent to $0.77 per ETC. Zcash is finally stabilizing, losing “just” seven percent of its value. One ZEC is now trading at $60 per coin.