Casey Wagner

The IRS is looking to up its game in terms of ensuring crypto tax compliance, and it wants the industry’s help.&nbsp;



The IRS’s Digital Asset Initiative Project Office (DAIPO) issued a Source Sought Notice last month asking “industry partners and other parties” to send in solution and product ideas to help the agency improve its pricing and market data capabilities. A Source Sought Notice is issued by a government agency when they are seeking potential sources for collaboration and information.



“We are primarily interested in solutions which can provide efficiencies to aid in compliance efforts to include, but not limited to, identifying digital asset transactions and transaction patterns, bulk data analysis, computing tax consequences of digital asset activity and assessing and analyzing digital asset transactions,” the IRS said in its <a href="https://sam.gov/opp/f553a50991d7437cb4b5369bc18fce7e/view">request</a>. 



Currently, the IRS uses “various public sources” for finding digital asset prices, including CoinMarketCap and Investing.com, the agency said. The IRS is looking for additional pricing data vendors who are able to provide pricing data by the hour, minute and second.&nbsp;



The IRS also wants help with how to process and analyze blockchain data and help with asset gain and loss computations. Blockworks requested comment but did not receive a reply.



The request for information is part of an agency-wide <a href="https://aboutbtax.com/7o7">initiative</a> announced in April to ramp up its detection of compliance violations when it comes to complex assets such as crypto. 



“For issues known to have high, ongoing risks of noncompliance or complexity, such as digital assets and listed transactions, we will prioritize resources to increase enforcement activities, including criminal investigation as appropriate,” the IRS wrote in the April report, which was mandated as part of the Inflation Reduction Act.&nbsp;



The Source Sought Notice also comes as tax experts and investors <a href="https://blockworks.co/news/tax-experts-best-practices-irs" target="_blank" rel="noreferrer noopener">continue to wait for new guidance from the IRS and the Treasury</a> on changes in how digital assets may be taxed. The crypto industry is specifically looking out for the new Form 6045, which will include an updated definition of “broker,” potentially having a major impact on what firms and individuals are expected to report. 



The IRS and Treasury have promised changes are coming, as Congress mandated more than 18 months ago, but have not provided any updates on the timeline or expected release date.&nbsp;



Industry members and potential vendors who respond to the IRS’ request for information may be invited to participate in a series of virtual meetings between July 19 and August 4, the agency said. The deadline to submit responses is July 12.



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The IRS uses CoinMarketCap, and it’s asking the industry for other ideas

Jon Rice

CoinDesk, a leading crypto news and events company and a core component of the Digital Currency Group (DCG) empire, has been an acquisition target for Binance Capital Management (BCM) in recent weeks, according to sources with direct knowledge of the matter.&nbsp;



BCM, registered in the British Virgin Islands, has been exploring ways to buy the company through its CoinMarketCap subsidiary, a Delaware corporation. Those talks are said to be on hold at the moment.



CEO Kevin Worth confirmed that the outlet was for sale in January, although it was widely-known that DCG was shopping CoinDesk after the parent company’s well-documented travails with Genesis and its lending arm, which <a href="https://blockworks.co/news/genesis-in-chapter-11-wont-insulate-silbert-winklevoss-says">sought bankruptcy protection</a> earlier this year.



Worth told CNBC in January that the outlet had received “numerous inbound indications of interest” and that the company had contracted with Lazard, a financial advisory firm, “to explore various options to attract growth capital to the CoinDesk business.”



Early estimates of CoinDesk’s market value ranged as high as $300 million, although the actual acquisition price is expected to be significantly lower, according to another source, who pegged the value of the potential deal at closer to $75 million. Sources for this story were granted anonymity to discuss sensitive information.



Barry Silbert’s DCG acquired the company in 2016, some three years after its launch, for around $500,000. It grew to become a leader in crypto news and events, culminating in the news recently that two of its journalists, Ian Allison and Tracy Wang, had received a prestigious George Polk Award for their financial reporting.



CoinDesk’s story on the Alameda balance sheet that exposed frailties in FTX’s financial position has been widely-acknowledged as the first domino in the collapse of Sam Bankman-Fried’s empire.



One source told Blockworks last month that initial talks between CoinDesk and Binance broke down, as the exchange anticipated a mass exodus of journalists from the news company if it became the majority owner.



A different source explained that Binance had considered an acquisition through a blind trust, but that talks had “moved past” this notion over the last two weeks. However, they said, talks were resuscitated by Binance Capital Management, with the focus on using CoinMarketCap as the acquisition vehicle. Those talks were described by the source as “on the backburner” over the last week, a characterization confirmed by a second source.



According to one source, Binance considers CoinDesk a “significant force for good” in the cryptocurrency industry, but they noted that an investment in the company would be primarily driven by the fear that other investors might not step in to save the news outlet.



They suggested that an acquisition of CoinDesk by Binance itself would have a “fairly minimal” likelihood of completion, due to three factors: It might be a drag on revenue, it could involve significant oversight, and it may require further injections of cash over time.



CoinDesk CEO Kevin Worth told Blockworks &#8220;No decisions have been made about a sale of CoinDesk or other options we are exploring to attract growth capital to the business. This is an ongoing process and there is no set timeline.&#8221;



BCM acquired CoinMarketCap, the world’s most-visited crypto data aggregation website with almost 100 million visits per month according to SimilarWeb, in April 2020. On its website, CoinMarketCap claims that “There is no ownership relationship between CoinMarketCap and Binance.com” and that “CoinMarketCap and Binance are separate entities that maintain a strict policy of independence from one another.”



A source within a Binance subsidiary told Blockworks earlier this year that the exchange was interested in acquiring media properties, but was wary that their neutrality might come into question as a result of the exchange’s potential ownership. This was confirmed by a second source, who suggested that crypto-native publications did not make obvious targets.



Binance previously <a href="https://blockworks.co/news/what-does-binances-investment-in-twitter-mean-for-the-social-networks-future">invested in Twitter</a>, but a proposed $200 million investment in Forbes did not <a href="https://www.forbes.com/sites/forbespr/2022/02/10/forbes-announces-200-million-strategic-investment-from-binance/?sh=6542af0d57e2">proceed</a> when the SPAC was canceled.



The crypto media landscape continues to evolve rapidly as the bear market persists. The Block recently <a href="https://blockworks.co/news/the-block-lays-off-27">laid off 27 employees</a> following the disclosure of $27 million in secret loans made by Sam Bankman-Fried to former CEO Mike McCaffrey, who resigned after they became public.



Updated March 13 at 7:33pm ET: Comment added from CoinDesk&#8217;s Kevin Worth.