Japan’s FSA Proposes Tax Exemption for Unrealized Crypto Gains

Japan mulls unrealized crypto gains tax exemptionJapanese lawmakers are currently in discussions about a proposal that could exempt companies from paying taxes on unrealized cryptocurrency gains.Photo by Joshua Tan on UnsplashReforming aggressive crypto tax policyThe plan is anticipated to be incorporated into the fiscal 2024 tax reform agenda, according to a report published by Nikkei Asia on Wednesday.Up until now, Japan has had some of the most aggressive tax rates where cryptocurrencies are concerned when compared internationally. At the moment, corporations have to pay a 30% tax on crypto holdings regardless of whether they’ve sold those digital assets or not. The policy has been criticized broadly by crypto sector participants in Japan. It is seen as inequitable, considering that Japan taxes profits from stocks at a flat 20%.Corporate tax exemptionThe proposal, currently under deliberation by Japan’s ruling coalition, specifically targets Japanese companies holding digital assets for purposes other than short-term trading. If approved, these firms may be granted an exemption from corporate tax, contingent on mark-to-market valuations at the close of the fiscal year.Mark-to-market valuations involve assessing the fair values of assets with periodic fluctuations, such as cryptocurrencies. This exemption is expected to benefit various entities, including venture capital (VC) firms, non-fungible token (NFT) businesses and other blockchain companies holding cryptocurrencies for payment purposes. Additionally, crypto issuers, who are also crypto holders, would not be subjected to these taxes.Policymakers from the Liberal Democratic Party and the ruling coalition partner Komeito engaged in discussions on Tuesday regarding these potential tax exemptions.Bringing clarity to crypto taxationThis move is part of Japan’s ongoing efforts to bring clarity to crypto taxation. In June, the National Tax Agency clarified that crypto issuers in the country would not be liable to pay capital gains taxes on unrealized gains, fostering a more conducive environment for crypto-related businesses.Japan has been actively reviewing its crypto tax policies since last year, aiming to incentivize companies to stay in the country. This initiative follows the departure of several startups due to heavy tax burdens.Industry reactionWith news of this potential Japanese crypto tax reform breaking, crypto community members haven’t wasted any time in providing their thoughts. Taking to the X social media platform, Sota Watanabe, the founder of the Astar Network multichain dApp hub, wrote:”Good move. This is what I requested multiple times to the government over years. Once this issue is solved this year, all companies, especially big enterprises, can hodl crypto like ASTR much easier. Japan weighs ending tax on some corporate crypto holdings.”Former Goldman Sachs Portfolio Manager and Web3 investor, Steve Lee, said that this is “another big move in Japan that would help enterprises push their crypto business.”The Financial Services Agency (FSA), Japan’s top financial regulator, recently submitted legislation-change requests to the government, seeking alterations to the taxation of domestic crypto firms. Critics argue that the existing rule has impeded innovation in the crypto-asset and blockchain sectors, placing an undue burden on companies.On Oct. 16, major businesses in Japan, through the Japan Association of New Economy (JANE), urged the government to implement crypto tax reforms in 2024. Their appeal emphasizes the potential for reduced tax rates to stimulate growth and increase tax revenue.

Titi Financial Announces $TITI AirdropTiti Financial, the team behind Titi Protocol, a project that aims to further its $TiUSD algorithmic stablecoin, announced that it is currently distributing the first round of airdrops of its $TITI governance token.Taking to social media, the Singapore-based project encouraged interested parties to check their eligibility for the airdrop on the project’s website. In a Medium blog post, the project stated: “In order to give back to the users who have supported us all the way, TiTi protocol has decided to conduct the first round of airdrops to community users.”An algorithmic stablecoinTiTi Protocol is a decentralized, 100% collateral-backed, ‘use-to-earn’ algorithmic stablecoin. It aims to provide diversified and decentralized financial services based on the crypto-native stablecoin system, with an autonomous monetary policy.Alongside $TITI as the project’s governance token, $TiUSD is the accompanying stablecoin issued by TiTi Protocol.Initial DEX offering (IDO)The airdrop runs until May 9. Once that process has been completed, the project intends to launch on mainnet through an initial DEX offering (IDO). IDO volume will be 10 million $TITI, 1% of total issuance, with an initial price per token of $0.06.Launching on the Ethereum blockchain, the IDO commences on May 10, with the sale running until 8:00 UTC on May 13. Buyers have until 08:00 UTC on May 14 to claim their tokens. Total token supply has been set at 1,000,000,000 $TITI. Purchase amount parameters have been set, with a minimum to maximum range extending from $100 to $3,000. The $TITI token can be purchased using USDC, USDT or DAI stablecoin. The project has advised participants to prepare by having an Ethereum compatible wallet available, such as MetaMask, Gnosis Safe or WalletConnect.$3.5 million fund raiseLast month, the project disclosed that it had been successful in raising $3.5 million in funding. The funding round was led by California-based Spartan Group, a blockchain advisory and asset management firm. Other venture investors included SevenX Ventures, Incuba Alpha, DeFi Alliance, Agnostic Fund, Fourth Revolution Capital and Solidity Venture. A number of individual investors associated with Alpha Venture DAO and 0x1b from Fold Finance also participated.Overcoming algorithmic design shortcomingsIt’s interesting to see a renewed interest in algorithmic stablecoins after the epic collapse of Terra Luna in 2022. Additionally, it’s noteworthy that an institutional investment appetite exists given that backdrop. Lead investor Spartan Group cited the depegging risk alongside poor liquidity as being a known problem where algorithmic stablecoins are concerned. However, the investor believes that the Titi Protocol has the necessary design elements incorporated to counteract these issues.One of the key features of the protocol is that liquidity providers only need to provide single sided liquidity to Titi automated market makers (AMMs). The protocol itself covers the other side of that process, doing the math to mint the equivalent value of TiUSD.In April, the project also announced a partnership with Alpha Venture DAO. The decentralized venture capital fund is financed by its own community. Furthermore, Titi Finance can call on the expertise and skills of the DAOs members.Photo by CoinWire Japan on Unsplash

Lotte World Unveils Theme Park Maps in Metaverse Platform The SandboxLotte World, one of South Korea’s major theme parks, announced Wednesday (local time) that it is making its debut on the global metaverse platform The Sandbox, on which it will unveil a virtual map that mirrors the offline theme park experience with quests and missions.Photo by Shuto Araki on UnsplashImmersive virtual adventuresThe map portrays a fantastical concept with two realms — Lotte World Station and Fairy Tale World. Lotte World Station is a map of a train station modeled after the theme park that serves as both the starting point for all journeys through the metaverse and as a gateway to other maps. Users can explore the map and learn about the various virtual adventures awaiting them. The map also offers information about Lotte World’s five businesses, including Lotte World Adventure, Lotte Water Park, Seoul Sky, and more.Users can even enjoy attractions such as Lotte World Adventure’s Balloon Ride and World Monorail, as well as Seoul Sky’s Sky Bridge and the Water Park’s Tornado Water Slide.On the other hand, Fairy Tale World is a kingdom-themed map where Lorry and Lotty — Lotte World’s famous mascots — reside as queen and knight. Users can access this map by riding the World Monorail from Lotte World Station. They can then embark on quests to save the cursed Fairy Tale World and enjoy rides such as Gyro Drop, Fantasy Dream, Bumper Cars, and Merry-Go-Round.Furthermore, the virtual map features Lotte World Adventure’s iconic landmark, Magic Castle, and Lotte World Adventure Busan’s Talking Tree, where parades will also be held.Special eventThe theme park is also holding an opening event in celebration of the map’s launch. Users who complete quests within Lotte World Station and Fairy Tale World by November 8 will receive rewards. Furthermore, those who possess items that they collected from the Lotte World Adventure game that was released in July will receive additional rewards.“We plan to release three more maps in the future to further diversify our metaverse content. We are committed to showcasing unique content that Lotte World alone can provide, transcending the boundaries of online and offline experiences,” the theme park said.