THE LEDGER: Biden goes after crypto mining, while Coinbase has a loan moan

The energy and environmental costs of cryptocurrencies – for years a bone of contention – came to attention of Joe Biden this week, while Coinbase decided that loans were not its bag.

This week has seen the Biden administration turn its attention to crypto mining, with the proposal of the Digital Asset Mining Energy Excise Tax (DAME), encompassing a 30% tax on the power used for crypto mining.

The Council of Economic Advisers, an agency within the executive office of the president, providing objective economic advice, said: “Currently, crypto mining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate.”

However, given the level of resistance within sections of the US establishment to such a move, and the difficulty of implementation (tracing who is using their energy, and for what purpose), it could be a while before anything substantial appears.

But just a few days earlier, Bhutan was seeking to identify investors to raise $500m to fund digital mining in the Himalayas, with the goal of setting up carbon-free digital mining, taking advantage of Bhutan’s hydroelectric power, which accounts for 30% of Bhutan’s gross domestic product. One door opens as another one closes.

And in what appears to be some nefarious goings on, Canadian cryptocurrency trading platform ezBtc has been accused of fraud by British Columbia's securities regulator, after allegedly lying to its customers and diverting their money to gambling websites. The British Columbia Securities Commission (BCSC) alleges that ezBtc deceived customers for three years by stating that their funds were being securely stored.

And across the pond, the UK is set to ban cold calls associated with financial products in a bid to curb fraudsters, including those running cryptocurrency scams. Working alongside the telecoms regulator, Ofcom, it will use innovative technology to counter phone number “spoofing”, which would prevent fraudsters from impersonating legitimate UK phone numbers.

And finally, in what looks to have been a more business-based decision, Coinbase announced it is to stop issuing new loans through its Coinbase Borrow service. According to the exchange: “We regularly evaluate our products to ensure we’re prioritizing the offerings that our customers care about most.”

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Written by Edward Pearcey

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