1️⃣ Sky Faces Scrutiny Over Potential $756M Exploit Flaw ❓

An X user reportedly criticised DeFi protocol Sky (formerly MakerDAO) for its reliance on an externally owned account (EOA) to manage $756 million in USDC reserves within its lite peg stability module (PSM). The lite PSM is a mechanism designed to assist Sky in maintaining the peg of its stablecoin to the United States dollar by allowing users to swap the stablecoin for USDC at a fixed rate. The user argued that this custodianship model could leave funds vulnerable to potential exploits or insider misuse. Sky co-founder Rune Christensen has reportedly responded by stating that “the private keys needed to reconstitute the MPC [multiparty computation] account were destroyed as a part of the setup process with Coinbase Custody.” If true, this eliminates the risk of a compromised private key.

2️⃣ France Wants $BTC HODLers to Pay Taxes on 'Unproductive Wealth' 🤔

Earlier this week, French Senator Sylvie Vermeillet proposed taxing Bitcoin and other digital assets similar to luxury items and vacant properties, claiming the assets needed to be classified as “unproductive” assets for the 2025 budget. This means that taxes will be imposed on unrealised gains if they exceed €800,000. So far, the proposal has passed the Senate in a preliminary vote and been endorsed by the country’s Finance Minister, Laurent Saint-Martin. If passed, French crypto investors would need to report foreign cryptocurrency holdings annually in the Cerfa 3916-bis form. Fines for failing to report crypto holdings abroad range from €750 to €1,500.

3️⃣ FDIC Asked Financial Institutions to Pause Crypto-Related Activity According to Letters Obtained Through Coinbase Lawsuit 🔍

Redacted letters recently obtained in a lawsuit brought by Coinbase have reportedly revealed that the Federal Deposit Insurance Corporation (FDIC) asked financial institutions to pause cryptocurrency-related activity. The FDIC began issuing these "pause letters" between March 2022 and May 2023. According to the documents released on Friday, the FDIC also asked financial institutions for crypto-related documents, specifically "cost-benefit analysis," disclosures and marketing materials. Coinbase Chief Legal Officer Paul Grewal tweeted that the letters show that "Operation Chokepoint 2.0 wasn't just some crypto conspiracy theory,"

One letter from March 2022 reads,

At this time the FDIC has not yet determined what, if any, regulatory filings will be necessary for a bank to engage in this type of activity. As a result, we respectfully ask that you pause all crypto asset-related activity.

4️⃣ FCA Issues Warning, Bans Pump.Fun in the UK ❌

Solana meme coin launchpad Pump.fun has announced that it will no longer be available for use in the United Kingdom after the country’s Financial Conduct Authority (FCA) issued a warning about the memecoin generator platform not being authorised to operate in the country. The FCA’s notice adds that customers dealing with Pump.fun won’t have access to consumer protections, such as the Financial Ombudsman Service or the Financial Services Compensation Scheme.

5️⃣ Czech Republic Scraps Capital Gains Tax On Crypto Held For Over 3 Years ‼️

The Czech Republic has reportedly passed a law exempting residents who have sold BTC held for more than three years from capital gains tax. This decision, approved unanimously by the country’s parliament on Dec. 6, is set to take effect on Jan. 1, 2025.

The new law reportedly introduces clear conditions under which cryptocurrency transactions can be excluded from personal taxation. The Czech media outlet stated,#CryptoAMA

Individuals can benefit from these exemptions if their total gross annual income from cryptoasset transactions does not exceed CZK 100,000 ($4,000). Additionally, digital assets held for more than three years before being sold are also eligible for tax exemption, encouraging long-term holding strategies.

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