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You are here: Home / Archives for mining firms

mining firms

Ethereum User Loses $5.2M After Two Grave Mistakes

June 12, 2020 by Arnold Kirimi

Over the last day, the Ethereum user has fortuitously spent about $5.2 million on transaction fees to make just two ETH transactions. On June 10, the user-initiated a transfer of only $130 to ETH, accidentally incurring a cost of $2.6 million.

A few hours later, the same Ethereum user started another transaction. This time round, however, the transaction involves a much higher amount of Ethereum worth $86,000. The problem is that users still spend the same amount of transaction fees, another $2.6 million error. Oh, Ouch!

Mining pools’ reaction to the $5.2 million Ethereum user mistake

In the two cases, the mining companies have frozen the funds and are exploring the option to give them back to their original owner. Spark Pool, which mined the first transaction, issued a public statement instantly after block number 10237208 was extracted, noting that it has launched investigations on the matter.

Moreover, Spark Pool noted that the mining firm has the experience of handling similar issues. Notably, the firm saw a similar incident more than a year ago when block number 7238290 was mined more than a year ago. The transaction involved a transfer of 0.1 ETH, at the cost of 2,100 ETH in transaction fees.

On the other hand, the second transaction involving block number 10241999 was mined by a different mining firm by the name Ethermine. Similarly, the firm reacted instantly to the incident and tweeted that the original owner to contact their customer support to settle the matter.

 

Today our Ethermine ETH pool mined a transaction with a ~10.000 ETH fee (https://t.co/B5gRWOrcPf). We believe that this was an accident and in order to resolve this issue the tx sender should contact us at via DM or our support portal at https://t.co/JgwX4tGYr4 immediately! pic.twitter.com/sWxVRx5muv

— Bitfly (@etherchain_org) June 11, 2020

 

A bad mistake or a money laundry strategy?

Some people are contemplating that the two transactions could have been a money-laundering tactic. Theoretically, an Ethereum miner could turn illegally earmarked ETH into legitimate by miner’s reward by including a vast transaction fee and mining the block themselves. This is practically possible since ETH miners decide which transactions to include in their blocks.

Nevertheless, this does not seem to be the case in the two incidents. The strongest point of view against the argument is that two different transactions ended up in two separate mining pools, which uses thousands of ETH miners scattered globally, to find new blocks. This means that the funds were not being sent to one receiving entity; since they would be eventually divided among the thousands of miners that make up the pool.

Filed Under: Altcoin News Tagged With: Crypto Transactions, Ethereum (ETH), ethereum miner, Ethereum user, fee, mining firms, mining pools, Money laundering, transaction fee

South Korean Officials Proposes Taxing Cryptocurrency Profits

June 3, 2020 by Arnold Kirimi

South Koreans may soon see their cryptocurrency proceeds slashed by the tax man.Earlier this week, South Korean officials in the Ministry of Strategy and Finance proposed taxing profits made through crypto-fiat transactions, including tokens sold by mining firms through ICO offerings. 

The regulator anticipates to submit the complete proposal in July and hand in the tax amendment to the South Korean regular assembly in September, according to a report by a local media outlet by the name Edaily. South Korea has long attempted to settle on a regulatory framework for cryptocurrencies. The proposed amendments could bring much needed clarity in the country’s cryptocurrency industry.

Currently, the South Korean law does not tax the revenue generated from cryptocurrency transactions, unlike the likes of the US, Japan, Germany, and many others who tax profits obtained from cryptocurrency dealings. Moreover, Singapore also exercises a Value added tax (VAT) on digital currency transactions, however, the South Korean officials made it clear they do not intend to go that far.

South Korean officials to tax revenue generated from crypto transactions

The South Korean lawmakers are now looking to invoke the usual ‘taxation where income is located’ rule to cryptocurrency transactions that make a profit. Furthermore, the tax will not apply if the transaction results in a net loss, but will equally tax both South Korean citizens and foreign residents.

Following G20’s recommendations, digital currencies are expected to be classified as assets as opposed to currencies. Nevertheless, not everyone is not okay with the proposed changes and the ability to effectively enforce taxation. According to a researcher at the Korea Local Tax Institute, Young Jeong:

“If you do a P2P transaction without going through an exchange, there is a possibility of avoiding taxation. Even with IP tracking, if there are a large number of targets, administrative costs will increase and it will be difficult to track each day.”

Furthermore, South Korean lawmakers are also suggesting to ban the country’s residents from using decentralized finance (DeFi) products, labeling digital currencies as high-risk assets.

Filed Under: Industry Tagged With: bitcoin income, Crypto Regulations, Crypto Transactions, cryptocurrency profits, cryptocurrency taxation, DeFi, digital currencies, mining firms, south korea

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