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The U.S. Congress discusses the Federal Reserve's "streamlining of the master account" and evaluates whether cryptocurrency and fintech companies can directly connect to the central bank's payment system

On Wednesday, the U.S. House Financial Services Committee held a hearing to discuss the changing roles of banks and fintech companies, with one focus being the "streamlined master account" proposal that the Federal Reserve is considering, which would allow certain crypto banks and fintech companies limited direct access to the Federal Reserve's payment system. A Federal Reserve master account allows financial institutions to directly use the Federal Reserve payment network and gain the most direct access to the U.S. dollar monetary system. Institutions without this account typically need to rely on partner banks that have master accounts to provide services.The so-called "streamlined account" is a limited-function version intended to provide limited access for new financial institutions. Republican Congressman Dan Meuser stated at the hearing that access to the Federal Reserve payment system is no small matter, and the core issue is which institutions should be allowed to directly use these critical payment channels. Traditional institutions like community banks are concerned that crypto and fintech companies are not subject to equally stringent regulation, and direct access could pose risks to security and stability. The crypto industry generally supports the proposal, arguing that direct access to the Federal Reserve payment system should have been opened long ago, as it would help reduce reliance on intermediary banks and promote innovation.In May of this year, Trump also signed an executive order requiring the Federal Reserve to assess policies for opening central bank payment channels to fintech companies, including crypto companies. Previously, the Kansas City Federal Reserve had approved Kraken's parent company Payward for a "limited purpose account" in March, sparking discussions in the market about the extent to which crypto and fintech companies should have direct access to Federal Reserve services. A representative from Anchorage Digital stated at the hearing that if the U.S. wants to continue as a global financial center, it needs to allow for innovative federal and state regulatory frameworks.

Korean Tax Tribunal: The gift tax on Bitcoin transferred through a spouse's account must be re-investigated

The Korean Tax Tribunal recently made a re-investigation ruling on a dispute regarding the gift tax on Bitcoin. The case involves whether transferring Bitcoin through a spouse's overseas exchange account constitutes a gift, which has attracted widespread attention in the cryptocurrency tax community. The case shows that taxpayer A transferred 67 Bitcoins stored in a personal hardware cold wallet (Ledger) to avoid direct transfer to a domestic exchange due to the Travel Rule regulatory restrictions in South Korea, using spouse B's overseas exchange account for the transfer. The entire process took only 2 to 8 minutes, after which the Bitcoins were sold to purchase real estate.The tax authorities determined that this action constituted a gift between spouses and imposed a gift tax on A. A appealed, claiming that the Bitcoins were personal assets held since before 2014 and submitted a memorandum of understanding signed with the spouse—where it was agreed that if the Bitcoins appreciated, real estate would be purchased, and 13 Bitcoins would be gifted to the spouse as compensation. A argued that determining it as a gift solely based on the brief passage of funds through the spouse's account was a qualitative error.After review, the Tax Tribunal found that A failed to adequately submit key evidence such as the memorandum of understanding, gift contract, and photos of the hardware wallet during the tax investigation, leading to flaws in the investigation process. At the same time, the distribution method of 67 Bitcoins transferred to A's account and 13 Bitcoins retained under the spouse's name was consistent with A's statements. Based on this, the Tribunal ruled that a new investigation must be conducted regarding the actual ownership of the hardware wallet and the substantive ownership of the digital assets. This case is seen as a landmark case in South Korea's cryptocurrency tax practice, directly addressing the challenges of determining ownership of cold wallet assets and the tax classification of cross-account transfers.

The U.S. Department of Justice has seized cloud computing accounts used by Huibang Group for laundering billions of dollars in cryptocurrency fraud proceeds

According to The Block, the U.S. Department of Justice has seized a cloud computing account used by Huione Group, which is accused of laundering billions of dollars in cryptocurrency scam proceeds. Assistant Attorney General A. Tysen Duva stated that the account constituted technical support, enabling the transfer and concealment of scam funds through Southeast Asian scam centers. This action is part of "Operation Choke Point," under which the U.S. Financial Crimes Enforcement Network had previously identified Huione Group as a primary money laundering concern.The statement claims that Huione's subsidiaries are suspected of assisting criminals in transferring funds from investment scams, cyber theft, and other illegal blockchain activities, ultimately injecting them into the legitimate banking system, with a significant amount of theft reportedly linked to North Korea. Huione's "Huione Guarantee" had previously posted advertisements for stolen credit cards, identity information, malware profits, and human trafficking services on Telegram channels. Blockchain analytics firm Elliptic pointed out that Huione launched the stablecoin USDH under financial pressure last year and developed a proprietary product line that includes a decentralized exchange, wallets, and "Huione Chain" (Xone).
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