Here’s what happened in crypto today

Today in crypto, the European Anti-Money Laundering watchdog warned that the end of the Markets in Crypto-Assets Regulation (MiCA) transition period could strain compliance at crypto companies, Coinbase has revealed that nearly 100% of its code is now written with the help of AI and the UK will defer capital gains tax on certain cryptocurrency lending and liquidity pool transactions from 2027.

Crypto firms face AML risks during post-MiCA migration, says AMLA chair

Mass user migration following the end of the MiCA transitional period could strain compliance at virtual asset service providers (VASPs) in the European Union, according to Bruna Szego, chair of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). 

“Because we know customers will rush to withdraw, this will put additional pressure on these VASPs,” Szego said during a Wednesday briefing with the European Parliament’s Committee on Economic and Monetary Affairs.

Szego said firms winding down their EU operations could come under pressure as customers rush to withdraw, while licensed crypto companies could face onboarding challenges as they absorb new users. She urged service providers to maintain efficient compliance procedures throughout the transition.

MiCA’s 18-month transitional period ended on July 1, requiring crypto asset service providers (CASPs) to hold a license to continue serving EU customers. The European Securities and Markets Authority said crypto service providers that remain unauthorized by the deadline must take “immediate” steps to wind down their EU activities.

Over 95% of Coinbase’s code is now written with help of AI

Artificial intelligence now helps write more than 95% of Coinbase’s code, offering new insight into the crypto exchange’s AI strategy following its decision to cut 14% of its workforce earlier this year. 

Coinbase cut 700 staff in May. In an email to employees, Coinbase CEO Brian Armstrong said AI has “dramatically” changed the pace of work and there was a need to “return to the speed and focus of our startup founding, with AI at our core.” 

Rob Witoff talks about Coinbase’s adoption of AI. Source: Cointelegraph

“Effectively, 100% of our employees are using AI on a daily basis here,” Coinbase’s head of platform, Rob Witoff, told Cointelegraph. “And close to 100% of our code, probably somewhere between 95% and 100%, is written by or with LLMs today.”

The figure is more than double Coinbase’s February estimate, when the company said 40% of its code was written with AI, reflecting the accelerating pace of AI adoption across tech and crypto companies.  

UK to defer capital gains tax on crypto lending and liquidity pools from 2027

The United Kingdom will defer capital gains tax on certain cryptocurrency lending and liquidity pool transactions from April 6, 2027, under new rules that treat qualifying disposals on a “no gain, no loss” basis until the assets are ultimately sold.

HM Revenue and Customs (HMRC) announced that qualifying crypto lending arrangements and liquidity pool transactions will no longer trigger immediate capital gains tax liabilities. Instead, gains or losses will generally be recognized only when an “economic disposal” of the digital assets occurs, aligning tax treatment with the underlying economics of these activities.

The revised framework replaces HMRC’s 2022 guidance following industry consultation and is expected to affect roughly 700,000 individuals and trustees. The tax authority said the change is intended to simplify compliance and improve fairness by deferring tax until investors realize an actual economic gain or loss.

Aave founder Stani Kulechov welcomed the move, arguing it reduces administrative burdens for taxpayers.

“This is the right direction, mainly driven by the industry feedback demonstrating that any other approach would cause significant admin burden for the tax payer,” Kulechov said in a Monday X post.