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Aside from liquidity, what do institutions bring to crypto? What precisely is their value added? This is an instructive question to ponder, because there is little consensus on what deeper institutional participation means for an industry that is riven with contradictions.

The long-running wait for Bitcoin ETF approval, giving pensions and funds exposure to BTC, may well prove to be a positive catalyst for industry growth. But in focusing on price action, observers are missing out on the real benefit of broadscale institutional adoption. The greatest benefit of deepening institutional adoption may be the regulatory certainty it ushers in.

Tax and Compliance

There are a number of areas where institutional involvement is forcing regulators to give straight answers. Chief among these are taxation and compliance. What trades can a business legally make, how should they be disclosed on its balance sheet, and what steps must it take to report these activities?

Related: Bitcoin ETFs: A $600B tipping point for crypto

Determining what constitutes a taxable event in crypto depends on your dominion. While U.S. traders are required to calculate profit and loss (PnL) on every trade on a decentralized exchange (DEX), perps position, and on-chain event, other countries take a less rigorous approach, while a few don’t bother to tax it at all.

Regardless of where you reside, determining your obligations when buying, selling, and storing digital assets can be a headache. But it could be worse: imagine how much more is at stake for businesses, whose public accounts must be scrutinized, and which typically require permission to even list Bitcoin (BTC) on their balance sheet.

There are good reasons why a higher bar is set for enterprises in terms of compliance, disclosure, reporting, and taxation compared to consumers. It’s a primary reason why it’s taken so long for serious institutional adoption to manifest. But as the trickle of financial firms gaining a foothold in the space turns into a flow, the retinue of lawyers and lobbyists in tow has begun to yield dividends. When BlackRock starts beating the drum for a Bitcoin ETF, even the Securities and Exchange Commission (SEC) has to sit up and take notice.

Grayscale’s favorable court ruling against the SEC on Aug. 29 has shown the power institutions can muster in forcing regulators to renegotiate. The precedent this appeals decision sets will further increase the confidence of institutions in their ability to reframe legislation in their favor.

Seeking regulatory clarity

For those who already have skin in the game — sole traders, trading firms, family funds, venture capitalists — greater institutional involvement can only be a good thing. When the largest institutions decide they want in, it forces regulators to play ball. Not every provision that’s consequently pushed through the statute books will aid the industry — some will be asinine — but collectively they provide something that’s been missing for years: clarity.

Is Bitcoin a security? What about Ether (ETH) or Solana (SOL)? The answer, at present, depends on who you ask. Some agencies seem intent on declaring everything bar Bitcoin a security; others take a more measured approach, focusing their enforcement efforts on the most egregious token sales and shills.

Related: 10 years later, still no Bitcoin ETF — but who cares?

Institutions can’t trade assets that lie in regulatory no man’s land: they need black and white, not shades of gray. Their increasing participation in the market is bound to provide clearer answers in terms of crypto classification, which will benefit the entire industry.

In addition, greater institutional involvement is legitimizing digital assets by making them less exotic to those tasked with regulating them. Crypto opponents can’t justifiably claim the industry to be a hotbed of money laundering and wash trading when its most active participants include the world’s leading trading firms.

Signs of institutional adoption

Today, businesses and governments are pressing ahead with blockchain-based initiatives such as CBDC pilots. In Asia alone, Hong Kong and the Bank of Japan are exploring programs involving digital currencies. 

Meanwhile, banks from the U.S. to Europe are introducing crypto custody and trading services for their clients. And in August, Europe’s first spot Bitcoin ETF listed in Amsterdam, proving that institutional willpower eventually gets things done.

Regulators and institutional players are still catching up in terms of expertise to those who helped build the industry from the ground up in its early days through hands-on participation. No one has complete mastery. But as a rising tide lifts all ships, greater institutional involvement will bring benefit to all players, from the humblest yield farmer to the richest whale. Rather than assume any one group has it all figured out, an open and collaborative dialogue is most likely to lead to positive outcomes. Regulators, institutions and early adopters each offer unique insights.

You don’t have to thank them, but big institutions are a net positive for the industry. Bigger players produce better rules — and better outcomes for everyone.

Gracy Chen is the managing director of the crypto derivatives exchange Bitget, where she oversees market expansion, business strategy, and corporate development. Before joining Bitget, she held executive positions at the Fortune 500 unicorn company Accumulus and venture-backed VR startups XRSPACE and ReigVR. She was also an early investor in BitKeep, Asia’s leading decentralized wallet. She was honored in 2015 as a Global Shaper by the World Economic Forum. She graduated from the National University of Singapore and is currently pursuing an MBA degree at the Massachusetts Institute of Technology.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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South Korea ramps up crypto seizures, will target cold wallets

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South Korea ramps up crypto seizures, will target cold wallets

South Korea ramps up crypto seizures, will target cold wallets

South Korea’s National Tax Service warned that cold wallets are not beyond its reach, as it will conduct home searches to combat tax evasion.

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‘Bring it on’: Left-wing activists gather for fight back against the right – and Labour

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'Bring it on': Left-wing activists gather for fight back against the right - and Labour

The World Transformed, a left-wing political festival, has historically ran alongside the Labour Party Conference as an unofficial fringe event.

But a lot has changed since it began in 2016, organised then by the Corbyn-backed group Momentum. And like the former Labour leader himself, TWT has gone independent.

From Thursday to Sunday, a programme of politics, arts and cultural events will be held in Manchester, a week after Labour’s annual party gathering ended.

“It no longer made any sense to be a fringe festival of the Labour conference,” Hope Worsdale, an organiser since 2018, tells Sky News. “We need a space for the independent left to come together.”

This decision was made before the formation of Your Party in July and the surge of support behind the Greens and its new leader Zack Polanski, but both these factors have given TWT some extra momentum. Organisers say it is not just a festival, but a “statement of intent from the British left” – and a left that looks different from how it used to.

Previous headline speakers were Labour MPs in the left-wing Socialist Campaign Group, and in 2021, the showstopper was American democrat Bernie Sanders calling in live for an event alongside John McDonnell.

The World Transformed, previously headlined left-wing Labour MPs
Image:
The World Transformed, previously headlined left-wing Labour MPs

Bernie Sanders and John McDonnell in conversation at TWT in 2021
Image:
Bernie Sanders and John McDonnell in conversation at TWT in 2021

This year, Mr Polanski, Jeremy Corbyn and Zarah Sultana are the only British politicians due to speak at events – though Brian Leishman, who lost the Labour whip in the summer, is also scheduled on a panel.

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TWT was put on pause last year for organisers to reflect upon its role going forward, after Sir Keir Starmer’s election victory.

In 2021, 2022 and 2023, while he was leader of the opposition, the festival was able to “co-exist” with Labour as a space for activists on the left to discuss ideas.

But the prime minister’s “shift to the right” has alienated so many of those grassroots members that it was felt TWT’s core audience would no longer be at Labour Party conferences, says Hope, who joined Labour in the Corbyn years and has since left.

TWT in 2016. Pic: TWT
Image:
TWT in 2016. Pic: TWT

Event at TWT in 2023
Image:
Event at TWT in 2023

“Our official position isn’t that Labour is dead and no one should engage with it,” she says.

“But they have shifted the values of Labour so radically since the last election, broken promise after promise, attacked civil liberties… there’s been such a suite of terrible decisions that mean people who are generally progressive and generally left wing feel like they have to take their organising elsewhere.”

So what’s on the cards?

There will be 120 events held in Hulme, Manchester, from Thursday to Sunday evening.

At the heart of the programme is daily assemblies, which organisers say are “designed to hold genuinely constructive debates about what we should do and how we should do it”.

But there’s just as much partying as there is politics – Dele Sosimi and his Afrobeat Orchestra are headlining the Saturday night slot while a “mystery guest” will host what TWT calls its “infamous” pub quiz on Friday night.

Back in 2018 that was Ed Miliband’s job, when 10,000 activists were expected to attend TWT. This year, organisers anticipate around 3,000 people will gather, but those involved insist this is a real chance for the left to strategise and co-ordinate, given the involvement of over 75 grassroots groups, trade unions, and activist networks.

Collaboration ‘vital’

A key question the left will need to address is how it can avoid splitting the vote given the rise of the Greens, socialist independents and the formation of Your Party,

One activist from the We Deserve Better organisation, which is campaigning for a left-wing electoral alliance and will be at TWT this weekend, acknowledged collaboration is “vital” if the left is to make gains under Britain’s first-past-the-post system.

Jeremy Corbyn at TWT. Pic: Reuters
Image:
Jeremy Corbyn at TWT. Pic: Reuters

But it remains to be seen whether Your Party co-leaders Mr Corbyn and Ms Sultana can even work together following their public spat last month, let alone with other parties. The pair put on a united front at a rally in Liverpool on the eve of TWT, when Sultana said she was “truly sorry” and promised “no more of that”. But will the truce last?

“It’s not ideal”, says the activist. “Hopefully they are back on track…a lot of collaboration is happening at the grassroots and we need to make sure it’s formalised so we can beat Labour and the right, we need to put on united front.”

They point to seats like Ilford North, where Health Secretary Wes Streeting clung on by a margin of just 528 votes in the general election, after a challenge from British-Palestinian candidate Leanne Mohamad, who ran in protest against Labour’s stance on Gaza.

Meanwhile, in Hackney, the Greens are hoping to gain their first directly elected mayor next May, with the Hackney Independent Socialist Group of councillors throwing their weight behind the party’s candidate, Zoe Garbett.

The We Deserve Better activist says Labour’s “hostile war on the left” has made these areas ripe for the taking, and what is more important than party affiliation is galvanising momentum behind one candidate who shares socialist values on issues like public ownership and immigration – be they the Greens, independents, or Your Party.

“The World Transformed reflects a general reorientation of the left outside of Labour. If they are taking these places for granted, we are going to win. If we unite as the left then we can win even bigger. Bring it on.”

Is Labour in danger?

There is some cause for Labour to be worried. It is haemorrhaging votes to both the right and the left after a tumultuous first year in office (13% to Reform UK, 10% to the Greens and 10% to the Lib Dems, according to an Ipsos poll in September).

Many Labour MPs feel the prime minister has spent too much energy trying to “out Reform Reform” with a focus on immigration, and he needs to do more to win back moderate and progressive voters that will be gathering at TWT this weekend.

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Starmer’s ‘anti-Reform party’ gamble

One fed-up MP told Sky News it was a shame TWT had decided to branch away from Labour, but not a surprise.

“This was something that was on the cards for a while, a parting of the ways, it’s another thing to show what’s happening with the direction of the party.”

He said in previous years the festival “was full of people for the first time in their life who were excited about politics and had a leadership looking at how it could challenge the biggest issues in our country”.

“Debates could be heated but it was always a place for intellectual discussion and that inside the Labour Party is now dead.”

But he said the party ultimately had bigger things to worry about than TWT, with a budget round the corner and potentially catastrophic local elections in May.

“I don’t think it will keep Keir Starmer or Morgan McSweeney up at night.”

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Privacy group urges Ireland to drop work on encryption ‘backdoor law’

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Privacy group urges Ireland to drop work on encryption ‘backdoor law’

Privacy group urges Ireland to drop work on encryption ‘backdoor law’

The Irish Communications Interception and Lawful Access Bill is still in development, with drafting yet to occur, but the Global Encryption Coalition wants it scrapped now.

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