Today in Crypto: The Netherlands plans to tax unrealized capital gains on a range of investments, including stocks, bonds and cryptocurrencies, the SEC has dismissed its civil action against Gemini with prejudice. Meanwhile, French authorities are investigating a data breach at a crypto tax platform, Waltio.
Netherlands risks capital flight with unrealized gains tax on stocks, crypto
The Netherlands plans to tax unrealized capital gains on a range of investments, including stocks, bonds and cryptocurrencies, sparking warnings of capital flight.
A majority of lawmakers in the Dutch parliament appear ready to back changes to the country’s Box 3 asset tax regime, which would require investors to pay annual tax on both realized and unrealized gains, even if assets have not been sold, NL Times reported on Tuesday.
The plan follows court rulings that struck down the existing system for relying on assumed, rather than actual, returns. The Tweede Kamer (House of Representatives) debated the proposal again this week, with more than 130 questions put to caretaker State Secretary for Taxation Eugène Heijnen.
While many lawmakers acknowledged flaws in the plan, most signaled they would support it, citing an estimated 2.3 billion euros ($2.7 billion) per year in lost revenue if implementation is delayed further.
SEC drops civil action against Gemini with prejudice
The US Securities and Exchange Commission’s civil lawsuit against Gemini Trust Company and Genesis Global Capital in the Earn-related unregistered securities case has been dismissed with prejudice.
Court filings show the parties submitted a joint stipulation to dismiss the action on Friday in the US District Court in the Southern District of New York, effectively ending the SEC’s claim over Gemini’s crypto lending program with Genesis.
A federal judge still needs to sign off on the joint stipulation to dismiss.
The dismissal comes about nine months after the SEC paused the civil action in April 2024 when then-acting chairman Mark Uyeda was leading the agency.
The SEC was content with the dismissal based on a 100% in-kind return of Gemini Earn investors’ crypto assets through the Genesis bankruptcy case in mid-2024 and Gemini agreeing to contribute up to $40 million to help fund the full return of those crypto assets.
It also noted that Genesis already settled with the SEC by agreeing to pay a $21 million fine.
The SEC brought the case against the Winklevoss-led Gemini and Genesis in January 2023, during the Biden administration, when crypto-related lawsuits and investigations surged as part of a broader regulatory crackdown on the industry.
French authorities investigate data breach of crypto tax platform
Authorities in France have started a preliminary investigation into a breach of cryptocurrency tax platform Waltio that could have compromised users’ personal data.
According to a Thursday notice by French cybersecurity authorities, the Paris Public Prosecutor's Office and the country’s National Cyber Unit were investigating the nature of the stolen data and identities of Waltio users. The notice warned that users affected by the breach could be targeted in an attempt to move their digital assets under the guise of legitimate security concerns.
According to a Friday report from Le Parisien, a group of hackers called the Shiny Hunters sent a ransom demand to Waltio following the attack. The hackers obtained personal data from about 50,000 Waltio users, the majority of whom were based in France.
Many criminals have targeted crypto users globally in person after obtaining personal data regarding their holdings, names and addresses. The notice warned that such users in France could be the victims of “kidnappings and unlawful detentions,” or have close relatives put at risk to extort them out of their crypto holdings.
The targeting of crypto users or their relatives has become known colloquially as a “wrench attack,” in which a criminal kidnaps or holds someone hostage, sometimes using violence to force them to transfer their digital assets. Some users in France have been the victims of such attacks, and there are similar reports from several countries.
