Arkham transfers $487 million of ARKM to Coinbase Prime to comply with tax requirements
July 21, 2024 17:47 •
To comply with regulatory and tax requirements, Arkham withdrew 304.5 million ARKMs, valued at approximately $487.24 million, from its vesting contracts and transferred them to Coinbase Prime custody.
The sale included 115.8 million ARKM tokens, valued at $185.28 million, owned by Arkham CEO Miguel Morel, according to data on its platform.
Transferring Tokens to Coinbase Prime
Arkham previously communicated via the X social platform on July 17 and clarified that the team’s tokens must be transferred to Coinbase Prime to ensure proper tax payment and regulatory compliance starting July 18.
This transfer means that the specific unlocking and transfer status of these tokens will no longer be visible on the blockchain, enhancing the security and regulatory oversight of the assets.
The transfer marks the beginning of a linear unlocking cycle for the team, investors, and advisors, which began on July 17. These groups are currently unlocking approximately 324,200 ARKM per day, worth $518,000. This process is part of a pre-set three-year unlocking schedule, which remains unchanged despite recent developments.
The move to Coinbase Prime is a strategic step for Arkham, in line with the company's commitment to regulatory compliance and strong security measures. Using Coinbase Prime's custody service, Arkham ensures that the tokens are managed under strict security protocols, providing peace of mind for investors and stakeholders.
Related: How to Track and Report Crypto Transactions for Tax Purposes
Regulatory compliance for encryption
In the same year that Satoshi Nakamoto introduced the Bitcoin white paper, the U.S. Congress enacted legislation that strengthened the tax reporting obligations of financial intermediaries. This new law requires financial institutions to provide detailed information about their tax returns to taxpayers and the IRS.
Under the ruling, companies must calculate taxes based on their “cost basis,” the difference between an asset’s original purchase price and the proceeds from a sale, similar to current cryptocurrency capital gains tax rules.
Law enforcement agencies also use the services of U.S.-based crypto exchange Coinbase to securely store or dispose of cryptocurrency confiscated as part of criminal investigations.
According to official documents, the U.S. Marshals Service has entrusted Coinbase Prime with the task of handling assets associated with the defunct FTX cryptocurrency exchange and the infamous Silk Road platform. The company received a contract worth more than $32 million.
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