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The collapse of crypto lending firms and exchanges in 2022 was in many ways worse, faster and dumber and more complete, than the global financial crisis of 2008. But it did much less harm, because the damage was confined mostly to crypto. Crypto speculators, people playing in the toy financial system, lost a lot of crypto. But banks and savers mostly did not lose money, because banks and savers mostly steered clear of crypto, because it was so obviously unregulated and full of scams. More and better regulation would be good for crypto, in that it might give more regular people the confidence to invest in crypto. But that might be bad for the regular people!
How Not to Play the Game
bloomberg.com
The result is that you get a tax deduction worth $2 million, the charity gets $130,000, and the lawyers get the rest of the value of the yacht. This shouldn’t work, and it doesn’t work, but it’s funny to think about. A good pressure point in the tax code is the charitable deduction for non-cash assets: If you have some unique non-traded asset (art, yacht, etc.), you can donate it to charity and deduct the market value of the asset, and if there is no market value then you and the charity have some leeway to make it up. You want the value to be high (so you get a bigger deduction), and the charity doesn’t care (it isn’t paying the made-up price), so there are incentives to make up a big number. The IRS knows this and tries to crack down by requiring appraisals, etc., but if you can generate what looks like a market transaction at the made-up price, I guess that helps. But if you generate what looks like a fake transaction, it doesn’t.
The SEC Cracks Down on Crypto
bloomberg.com
Much of US equity market structure is driven by this basic fact, that it is better to trade with retail customers than it is to trade with professional investors.
The SEC Wants More Stock Auctions
bloomberg.com
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