Author: Phil Stafford

Phil is a long-standing Australian journalist with specialised experience in business, finance, travel and popular culture.

Categories
Australia Crypto Art Crypto News NFTs Regulation

NFTs ‘Inadvertently’ Taxed, Says Australian Senator During Sydney Art Exhibition

Australia is preparing policy ahead of the federal election in May focusing on clearer rules for digital assets and artists. Policy specifically relating to NFTs needed to be implemented quickly to stave off a potential “brain drain” on Australia’s economy, according to NSW Liberal Senator Andrew Bragg.

Tax Restructuring Sorely Needed

Senator Bragg, speaking this week at Sydney’s inaugural 3D art NFT exhibition, Satellite, said the country needed to hear from artists on the best way forward for digital asset regulation. Tax restructuring was sorely needed to counter local firms looking to establish themselves in more favourable jurisdictions overseas, including in Singapore and the UK, he added.

At the moment, I think there are cases where NFTs are being taxed inadvertently. There’s no real transfer of value. We want to make sure that we’re not doing that – we need to make sure we’re tax-competitive. Otherwise, why would you do business here?

NSW Liberal Senator Andrew Bragg

What Does the ATO Say?

The Australian Tax Office (ATO) has provided broad guidelines on the tax treatment of NFTs. You pay tax according to the method that applies to your particular use case:

  • under the capital gains tax (CGT) regime;
  • on revenue account as trading stock;
  • as part of a business or profit-making scheme; or
  • depending on the terms of the NFT smart contract and the rights it grants, a combination of the above.

For most users who are buying or selling NFTs, crypto art assets are treated in the same manner as normal cryptocurrency as they fall under the same rules for capital gains. The following actions involving NFTs are considered disposals and will accordingly attract CGT:

  • selling NFTs in exchange for cryptocurrency;
  • exchanging one NFT for another NFT or fungible cryptocurrency; or
  • giving an NFT as a gift (unless it is to a tax-deductible entity such as an Australian charity).

Minting an NFT is generally not subject to tax. Only the disposal of an NFT (through sale, trade or bridging) constitutes a CGT event.  The exception is when the value of the asset the NFT was minted for has increased since the original purchase, which would constitute a CGT event in itself.

Last month, the ATO signalled its intention to apply more pressure on Australian crypto traders and investors this year, as cryptocurrencies become more popular among the general Aussie population.

Categories
Bitcoin Bored Ape Yacht Club Charity Crypto News Kraken NFTs

Crypto Donations to Ukraine Exceed $100 Million as Kraken and BAYC Join In

Two weeks into the Russia-Ukraine War, total crypto donations across Ukrainian government wallet addresses, charities and relief efforts have passed US$108 million.

Ukrainian Clients of Kraken to Receive $1,000 in BTC

On March 9, Kraken announced it would distribute over US$10 million for relief efforts to clients who created an account from Ukraine prior to that date. Those clients will each receive US$1,000 in bitcoin during the first tranche of funds disbursement, which can be withdrawn immediately. The exchange also waived currency exchange fees for withdrawals of up to US$1,000.

BAYC Developers Match Contribution

Bored Ape Yacht Club (BAYC) has also pitched in on the fundraising effort. After collecting nearly US$1 million in ETH from wallets containing a BAYC non-fungible token (NFT), the developers behind BAYC said it would match the contribution with a US$1 million ETH donation of their own.

Good News Follows Bad

Both these pieces of good news come after the cancellation of a planned airdrop from the Ukrainian government earlier this week, accompanied by a spate of scams looking to capitalise on the crypto community’s generosity.

Last week, an NFT of the Ukrainian flag was sold for 2,258 ether – about US$6.75 million – with the proceeds directed to ‘Come Back Alive’, an organisation that donates supplies to Ukrainian civilians and members of the military.

In other donations news, Binance’s Ukraine Emergency Relief Fund has received over US$11.3 million in various cryptocurrencies since its inception. Kuna’s Crypto Fund of Ukraine has also accepted over US$14 million in major altcoins such as Polkadot, Tether, Candle, USD Coin and Dai.

Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation, says that cryptocurrencies have been “essential in this conflict, in terms of helping our army”. 

In a situation like this where the national bank is not really operating, crypto is helping to perform fast transfers, to make it very quick and get results almost immediately.

Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation
Categories
Crypto News DeFi NFTs Solana

Adobe’s Creative Platform ‘Behance’ Adds Support for Solana NFTs

Behance users can now connect their Phantom wallets to their accounts to showcase Solana (SOL) non-fungible tokens (NFTs) on their profiles.

Phantom is a Solana wallet built for decentralised finance (DeFi) applications as well as for NFTs. QuickNode, a Miami-based Web3 infrastructure platform, helped build out this feature with Adobe on Solana. 

A More Viable Alternative to Ethereum

Although Behance creators can already display their NFTs minted on the Ethereum blockchain within their profiles, high energy usage and prohibitive gas costs are driving them away.

As Adobe vice-president William Allen pointed out on Twitter this week, Solana is a proof-of-stake chain that addresses these concerns. He added that a single transaction on Solana “uses as much energy as a Google search and costs a fraction of a penny”.

For its part, Phantom tweeted that this integration is “huge” for the Solana creator economy because it allows artists “an eco-friendly and low-cost way to experiment with NFTs”.

In October last year, Adobe announced it would launch a “prepare as NFT” option to its Photoshop software. Adobe’s Content Credential system would prove that the person selling an NFT is the one who made it and allow NFT sellers to link the Adobe ID with their crypto wallets. This would allow compatible NFT marketplaces to show a verification certificate to prove the art is authentic.

Categories
Crypto Art Crypto News NFTs

A Look at Hollywood’s Hottest NFT Movie Projects

Could non-fungible tokens (NFTs) be the saviour of a Hollywood movie industry that appears increasingly bankrupt of original ideas? From endless Marvel remakes to the umpteenth reiteration of the Batman franchise, Tinseltown is way down on originality and NFTs may be the solution.

There have already been movies funded by NFTs and more than one documentary film in the works examining the NFT craze – worth a staggering US$25 billion in trading volume generated in 2021 alone – but movies based on NFT collections could well be the industry’s next hot ticket.

What follows are just a few of the major NFT projects announced to receive the film treatment, as well as those that have signed representation to explore potential movie deals and more:

Aku

Aku dreams of becoming an astronaut. Source: hypebeast.com

Artist and former professional athlete Micah Johnson’s Aku – an African American boy who dreams of being an astronaut – was the first original NFT character optioned in April 2021, just two months after the first Aku NFT dropped. Anonymous Content and Permanent Content, the latter company formed by musician Shawn Mendes and manager Andrew Gertler, will exercise the option.

Aku’s star has grown significantly across subsequent NFT drops, also spurred by the Aku World experiential show held at Art Basel Miami last December. According to Johnson, a former Major League Baseball player, NFT holders may be able to influence the direction of the IP as it expands into the world of film and beyond.

Huxley

Last week, longtime Marvel film producer Ari (Iron Man) Arad and his eponymous studio announced plans to co-produce a cinematic adaptation of Huxley, an NFT comic book project by artist Ben Mauro (Elysium, The Hobbit). Arad will develop Huxley alongside Web3 production studio Feature and Oscar-nominated VFX supervisor Jerome Chen. Mauro’s sci-fi credentials are evident in the trailer below:

World of Women

Last month, actor/producer Reese Witherspoon announced plans to create movies and TV series based on Yam Karkai’s World of Women (WoW) NFT project through her Hello Sunshine production house. In January, World of Women signed with music industry identity Guy Oseary to represent it in such media and product deals. Witherspoon vows that WoW NFT holders will have a say in the creation of projects based on the profile picture collection.

World of Women. Source: theindependent.com

On the ‘Maybe’ List

In October 2021, Yuga Labs announced it had signed with Oseary to explore media opportunities across various potential formats, including film, television, music, and video games.

The deal followed news last August that Larva Labs, creators of the influential CryptoPunks NFTs, had signed with United Talent Agency (UTA) for similar aims. Creative Artists Agency (CAA) has also signed pseudonymous NFT collector 0xb1 – who owns Bored Ape NFTs, among others – to licensing and partnership deals.

In the same month last year, Roman Coppola – scion of the famous Italian-American Hollywood family – co-founded a decentralised film financing platform based on blockchain technology, in partnership with his equally illustrious sisters, Gia and Sofia.

Categories
Crypto News Hackers NFTs

‘Smol Brains’ NFTs Worth $1.4 Million Stolen and Then Returned?

TreasureDAO, an NFT trading market built on Arbitrum, has confirmed an exploit in which hackers purchased NFTs listed on the market at zero fees.

Soon after, TreasureDAO advised users to “delist everything” through messages posted on its Discord server, then later informed the community it had identified the issue.

Smol Brains are the most popular NFTs traded on Arbitrum, and 17 were stolen. Based on their listed prices on the TreasureDAO platform, their dollar value was around US$1.4 million.

Many More NFTs Stolen in the Same Exploit, Though Some Were Returned

However, according to analysis by blockchain security and data firm PeckShield, more than 100 NFTs from several collections were stolen from the marketplace.

In a surprise twist, the hackers started to return stolen Smol Brains and other NFTs just hours after the exploit:

The incident echoed the recent experience of NFT marketplace Mintable, which was able to recover three NFTs stolen in a phishing attack on the OpenSea platform last month.

Categories
Crypto News Gaming NFTs Solana

Aussie NFT Project ‘SolChicks’ Has Raised $77 Million in 6 Months

Since September 2021, Australian play-to-earn blockchain gaming company SolChicks has raised A$77 million from venture capital and institutional investment funds, as well as hiring more than 100 staff.

Powered by the high-speed Solana blockchain, SolChicks is scheduled for an “alpha” mini-game release next month and an official release exactly a year after its founding.

SolChicks Joins Seoul Stars and Angrymals in the Catheon Gaming Stable

A pair of Australian finance graduates, chief executive William Wu – based in Shanghai – and CEO Lewis Grafton of Sydney have in six months grown SolChicks into a game studio with two other titles. The duo’s Catheon Gaming team (and parent company) is based in Australia, Hong Kong and Singapore.

Catheon’s other games are the Korean-themed Seoul Stars, a “sing-to-earn” game endorsed by K-pop stars, and Angrymals, a player-versus-player fortress defence strategy mobile game inspired by Angry Birds and Worms. But SolChicks is the flagship, said to be similar to traditional RPG titles such as Darkest Dungeon or Diablo, except that the players are “cute chicken characters” that can be bought and sold as NFTs on Solana.

How the Game Works

NFT characters are stored in a digital wallet (the developers recommend Phantom or SolFlare). There are only 10,000 unique origin SolChicks, but players who own two will be allowed to breed them to produce SolEggs. Breeding SolChicks creates unique NFTs that can be sold in the marketplace for profit.

The original SolChicks fall into one of five categories based on the rarity of their attributes. Players can progress their SolChicks through 60 levels, from Tutorial, through Fledgling and Progression, and finally Endgame.

SolChicks are highly customisable based on their primary and secondary stats, which can be improved through buying and adding NFT attributes. Players are urged to “bond” with their SolChick – they need to regularly “feed” it and participate in PvP (player versus player) battles with it to gain experience.

What Players Can Earn

Players are ranked on a weekly basis according to their level and achievements, and rewarded with CHICKS tokens. Users can earn the in-game currency SolCoins, and may also sell and trade their in-game assets and rewards as NFTs.

SolChicks has over 350,000 followers on Twitter and says its community consists of 700,000 across 20 countries. The demo version of the game is currently available to all aspiring players through the SolChicks website.

Crypto News Australia reported on five new NFT projects that launched on the Solana blockchain in December 2021. Add SolChicks to that list.

Categories
Coinbase Crypto Exchange Crypto News Russia

Coinbase Refuses to Block All Russian Crypto Transactions

Coinbase has joined Coinberry, Kucoin, Binance and Kraken in refusing to “sabotage ordinary Russian users” by freezing their accounts at the request of Ukraine’s vice prime minister.

A Coinbase spokesperson said the digital currency platform would not “institute a blanket ban” against Russian users, adding that such a measure would “harm economic freedom”.

A unilateral and total ban would punish ordinary Russian citizens who are enduring historic currency destabilisation as a result of their government’s aggression against a democratic neighbour. We remain vigilant as this invasion evolves and are deeply committed to playing our part.

Coinbase spokesperson

“Instead, we will continue to implement all sanctions that have been imposed, including blocking accounts and transactions that may involve sanctioned individuals or entities,” the Coinbase representative added.

Majority Approves Exchanges’ Decision

Coinbase’s decision, along with those of the four other crypto exchanges that have declined to block all Russian crypto transactions, has been met with almost universal approval:

Of course, there’s always the exception that proves the rule:

The good news is that in the week since Russia’s military invasion of Ukraine began on February 24, as of March 1 over US$37 million in Bitcoin and other cryptocurrencies had been donated to the Ukrainian government and Ukraine-based non-governmental organisations (NGOs) to aid its resistance.

Categories
Canada Crypto Art Crypto News NFTs

KPMG Canada Buys World of Women NFT

Less than a month after adding Bitcoin and Ethereum to its balance sheet, the Canadian branch of accounting multinational KPMG has followed up by purchasing a non-fungible token (NFT) from the World of Women (WoW) collection.

KPMG Also Buys ENS Domain Name

The NFT, Woman #2681 (see below), was purchased on February 13 for 25 ETH (about US$73,000) before being transferred to a separate wallet. The company also revealed it owns kpmgca.eth, the Ethereum Name Service (ENS) domain name designed to make wallet addresses easier to use.

WoW #268. Source: OpenSea

WoW is a community that celebrates representation, inclusivity and equal opportunities for all, though its promotional focus is on female artists, who currently account for a tiny minority of NFT art sales. WoW also supports women-focused and, more recently, global ecological causes.

The signature WoW collection features 10,000 first-edition NFT artworks of diverse, inspiring, and powerful women living on the blockchain. Many of their female avatar art pieces have become prized collector’s items.

‘On the Cusp of Change’

“Women are underrepresented in the [crypto] world, which makes us proud to make our first NFT acquisition [from] a collection that supports women,” says KPMG partner Nancy Chase. “We hope that our purchase draws more women into a sector that’s on the cusp of changing how we interact with one another in the future.”

Actor/producer Reese Witherspoon, whose media company Hello Sunshine partnered with WoW last month. Source: variety.com

WoW has surged to the top of the NFT charts since launching in November, and now commands an 8.5 ETH (roughly US$24,000) floor price on secondary marketplace OpenSea. The project has benefited from promotion by A-list actor/producer Reese Witherspoon, whose media company Hello Sunshine partnered with WoW in February.

Categories
Blockchain Crypto News NFTs Solana

Weekly NFT Sales Continue to Slide, Interest Down 45% in Past 30 Days

In a sure sign that the non-fungible token bubble has burst, if only temporarily, interest in NFTs has almost halved in the past month.

Worldwide Google Trends (GT) data shows that interest in NFTs plunged by 45 percent in terms of internet searches. During the second week of January, the search query “NFT” sat comfortably at 100, the highest trend score a query can register on GT. This week, however, the data shows an overall score of just 55.

Sales Down Almost 30%, Solana the Only Gainer

Overall sales slipped by 29.35 percent last week, translating to losses of more than 7 percent. Out of 12 different NFT-supporting blockchains, Solana was the only gainer in terms of sales during that period. Rounding out the top five were Ethereum, Ronin, Flow and Avalanche.

The biggest seven-day sales losers included Binance Smart Chain (down 76.68 percent) and Avalanche (-54.56 percent). Topping the sales list, according to cryptoslam.io, was 3Landers with US$40.8 million, followed by Tubby Cats ($35.9m), Invisible Friends ($32m), Mfer ($23.7m) and Bored Ape Yacht Club ($23.68m).

OpenSea Tops Marketplace Sales

Dappradar.com statistics indicate that OpenSea was the top NFT marketplace in terms of sales last week, followed by LooksRare, BloctoBay, Ronin’s Axie Infinity, and Solana’s Magic Eden.

Many continue to question the value of NFTs, with the tokens serving no purpose besides being able to be bought or sold. Thus owners tend to hold onto NFTs in the hope their value increases. In October last year, Singapore-based decentralised derivatives exchange SynFutures launched NFTures, a product that allows users to short, or bet against, the future prices of NFTs. Hopefully a few got on board ahead of this latest slump.

Categories
Crypto News NFTs

Seller ‘Rugs’ Sotheby’s, Cancels $30 Million Auction At Last Minute

This week’s much-anticipated Sotheby’s auction of 104 CryptoPunks NFTs, dubbed Punk It!, was cancelled after the seller reneged on the sale and turned the non-event into a sick joke on Twitter:

Seller Only Succeeds in Rugging Bidders

Pseudonymous collector 0x650d facetiously tweeted “nvm, decided to hodl”, later posting a meme implying he was “taking punks mainstream” by “rugging” Sotheby’s. While no actual funds were lost, the collector did pull the proverbial rug from under bidders’ feet.

This stunt comes just over two weeks after the famous auction house announced the sale, which it estimated could have generated US$20 million to US$30 million.

Robert Leshner, creator of DeFi protocol Compound, tweeted that it was a “sad day for digital art collectors”:

In an apparent attack of conscience and a vain attempt to save face, 0x650d later tweeted that he had pulled out of the auction because of Sotheby’s exorbitant commission fees.

Stunt Blows Up in Seller’s Face

That drew an almost instantaneous withering response from @RugRadio founder Farokh.eth: “Bro you suck stop acting like you rugged Sotheby’s lmao you made everyone look stupid. Even the press here is laughing at us because of you stop hiding the guilt behind dumb ass memes.”

There was no shortage of support for Farokh’s comment. One tweet summed up the reaction of the NFT community:

The entire episode was also a bad look for Sotheby’s, which launched its own NFT marketplace – Sotheby’s Metaverse – in October 2021.