Jamison Sites

The President's Digital Asset working group report is out. There is a lot to digest and tax got a whole section. Lets walk through some of the key items. 🧵whitehouse.gov/wp-content/upl…

Running bitcoin

This is why the Arbitrum Security Council was not kind to the DAO. Lawyers for DPRK victims have now found a large pile of DPRK assets to seize to make good on a 2015 judgement against DPRK. It appears a restraining order prohibiting the transfer of funds will complicate the request to turn over the funds for Kelp recovery

The Arbitrum Security Council has taken emergency action to freeze the 30,766 ETH being held in the address on Arbitrum One that is connected to the KelpDAO exploit. The Security Council acted with input from law enforcement as to the exploiter’s identity, and, at all times, weighed its commitment to the security and integrity of the Arbitrum community without impacting any Arbitrum users or applications. After significant technical diligence and deliberation, the Security Council identified and executed a technical approach to move funds to safety without affecting any other chain state or Arbitrum users. As of April 20 11:26pm ET the funds have been successfully transferred to an intermediary frozen wallet. They are no longer accessible to the address that originally held the funds, and can only be moved by further action by Arbitrum governance, which will be coordinated with relevant parties.

March 17, 2026: CFTC issued a no-action letter saying non-custodial wallet providers aren't intermediaries. SEC issued a rule clarifying, finally, how the Howey test applies to crypto. Chair Atkins announced plans for "Reg Crypto," a safe harbor for token issuers. Surreal.

apnews.com/article/snowba… The officers went crying back to mommy

There have recently been some discussions on the ongoing role of L2s in the Ethereum ecosystem, especially in the face of two facts: * L2s' progress to stage 2 (and, secondarily, on interop) has been far slower and more difficult than originally expected * L1 itself is scaling, fees are very low, and gaslimits are projected to increase greatly in 2026 Both of these facts, for their own separate reasons, mean that the original vision of L2s and their role in Ethereum no longer makes sense, and we need a new path. First, let us recap the original vision. Ethereum needs to scale. The definition of "Ethereum scaling" is the existence of large quantities of block space that is backed by the full faith and credit of Ethereum - that is, block space where, if you do things (including with ETH) inside that block space, your activities are guaranteed to be valid, uncensored, unreverted, untouched, as long as Ethereum itself functions. If you create a 10000 TPS EVM where its connection to L1 is mediated by a multisig bridge, then you are not scaling Ethereum. This vision no longer makes sense. L1 does not need L2s to be "branded shards", because L1 is itself scaling. And L2s are not able or willing to satisfy the properties that a true "branded shard" would require. I've even seen at least one explicitly saying that they may never want to go beyond stage 1, not just for technical reasons around ZK-EVM safety, but also because their customers' regulatory needs require them to have ultimate control. This may be doing the right thing for your customers. But it should be obvious that if you are doing this, then you are not "scaling Ethereum" in the sense meant by the rollup-centric roadmap. But that's fine! it's fine because Ethereum itself is now scaling directly on L1, with large planned increases to its gas limit this year and the years ahead. We should stop thinking about L2s as literally being "branded shards" of Ethereum, with the social status and responsibilities that this entails. Instead, we can think of L2s as being a full spectrum, which includes both chains backed by the full faith and credit of Ethereum with various unique properties (eg. not just EVM), as well as a whole array of options at different levels of connection to Ethereum, that each person (or bot) is free to care about or not care about depending on their needs. What would I do today if I were an L2? * Identify a value add other than "scaling". Examples: (i) non-EVM specialized features/VMs around privacy, (ii) efficiency specialized around a particular application, (iii) truly extreme levels of scaling that even a greatly expanded L1 will not do, (iv) a totally different design for non-financial applications, eg. social, identity, AI, (v) ultra-low-latency and other sequencing properties, (vi) maybe built-in oracles or decentralized dispute resolution or other "non-computationally-verifiable" features * Be stage 1 at the minimum (otherwise you really are just a separate L1 with a bridge, and you should just call yourself that) if you're doing things with ETH or other ethereum-issued assets * Support maximum interoperability with Ethereum, though this will differ for each one (eg. what if you're not EVM, or even not financial?) From Ethereum's side, over the past few months I've become more convinced of the value of the native rollup precompile, particuarly once we have enshrined ZK-EVM proofs that we need anyway to scale L1. This is a precompile that verifies a ZK-EVM proof, and it's "part of Ethereum", so (i) it auto-upgrades along with Ethereum, and (ii) if the precompile has a bug, Ethereum will hard-fork to fix the bug. The native rollup precompile would make full, security-council-free, EVM verification accessible. We should spend much more time working out how to design it in such a way that if your L2 is "EVM plus other stuff", then the native rollup precompile would verify the EVM, and you only have to bring your own prover for the "other stuff" (eg. Stylus). This might involve a canonical way of exposing a lookup table between contract call inputs and outputs, and letting you provide your own values to the lookup table (that you would prove separately). This would make it easy to have safe, strong, trustless interoperability with Ethereum. It also enables synchronous composability (see: ethresear.ch/t/combining-pr… and ethresear.ch/t/synchronous-… ). And from there, it's each L2's choice exactly what they want to build. Don't just "extend L1", figure out something new to add. This of course means that some will add things that are trust-dependent, or backdoored, or otherwise insecure; this is unavoidable in a permissionless ecosystem where developers have freedom. Our job should make to make it clear to users what guarantees they have, and to build up the strongest Ethereum that we can.

@jbillinson @grok what percentage of accidents in DC involve MD drivers? How does that compare to others like DC or VA?

I don’t think it’s an exaggeration to say that people will die if you put a giant glowing distraction like that right on the side of a highway filled with Maryland drivers

@dnapway @barstoolsports Because they are on the same real team and just having fun. That's how mites on ice works

@barstoolsports why did these guys just high five mid fight??

We’ve got kids throwing haymakers during intermission of a professional hockey game

Kids getting AFTER it on the ice in the Hershey Bears intermission game #ElectricFactory

17 years ago today bitcoin started

@grok @GoldenGatsby @ChadSlimeBased @grok you still need a bona fide sale or the IRS can challenge under other doctrine

Actually, this isn't tax fraud. As of 2025, the IRS classifies cryptocurrency as property, not securities, so wash sale rules (which disallow claiming losses if repurchasing within 30 days) don't apply to crypto. This allows legitimate tax-loss harvesting by selling and rebuying immediately. Confirm with a tax professional for your situation.

If you buy one Bitcoin at $126,000 And it goes to $89,000 You can sell it And buy it back 6 seconds later You still have the same one Bitcoin But you can realize a capital loss of $37,000 for tax purposes

@ChadSlimeBased 6 seconds is probably too soon. You need a bona fide sale. Sell for another digital asset and reverse 2 days later and you're likely good.

1/ Citadel got DeFi wrong. Today, DEF, @a16z, @DigitalChamber, @orca_so, @theblockprof, & @UniswapFND wrote to @SECGov in response to @citsecurities' letter misrepresenting how DeFi technology works. Why this group? Citadel blatantly miscited us, and we feel obligated to correct the record.

OCC Interpretive Letter 1188 confirms that a national bank may engage in riskless principal crypto-asset transactions as part of the business of banking. occ.gov/news-issuances…

@gregbradyx You clearly don't drive a truck

I never back into a spot. Almost never. There’s people at my gym who do exactly this & need to take 4-5 runs at it. It is MUCH easier to back out of a spot, than it is to back in. Fight about it in the mentions. One question / one follow-up only.

@seanfrank @RepDanGoldman Not taxing you on this is viewed by the government as a tax expenditure. They view it as not taxing you on the rent you should be paying yourself to live in a more expensive home. This "imputed rental income" 'costs' the US government $152b a year. home.treasury.gov/policy-issues/…

@RepDanGoldman what if your houses goes up in value? should you pay income tax on that?

Elon Musk paid an effective tax rate of 3.3%. Jeff Bezos paid 1%. How? They take out tax-free loans against their stock.   Today I'm introducing the ROBINHOOD Act to tax these loans and generate at least $276B for universal childcare and other programs to restore access to the American Dream.   It’s time for billionaires to pay their fair share.

A more nuanced fix for this perceived abuse would be to ensure that a minimum interest rate is charged, and impute income on anything below that rate. If there's abuse in these transactions it on the near 0% interest rate that many banks charge on these loans. Banks take a loss on the executive's loan to keep the business account. Very few would pay the Applicable Federal Rates in perpetuity, they would just pay the one time capital gains charge. Simply taxing collateralized loans as deemed sales would undermine many core principles of taxation.

A more nuanced fix for this perceived abuse would be to ensure that a minimum interest rate is charged, and impute income on anything below that rate. If there's abuse in these transactions it on the near 0% interest rate that many banks charge on these loans. Banks take a loss on the executive's loan to keep the business account. Very few would pay the Applicable Federal Rates in perpetuity, they would just pay the one time capital gains charge. Simply taxing collateralized loans as deemed sales would undermine many core principles of taxation.

A major loophole is borrowing against stock. It works as follows for very high net worth: 1 - Have stock. 2 - Have large taxable gains if you sell the stock. 3 - Don't want to pay taxes. 4 - Borrow against the stock, instead of selling. You pay no taxes. Simply making all borrowing above the cost basis a taxable event like a sale fixes this.

@austincampbell @b_kochkodin The estate tax exemption limit is $15 million so the rest of that is being taxed at 40%, massively higher than the top capital gain rate 23.8% + state tax.

@b_kochkodin Because you can't have a billion dollar home with a zero cost basis, borrow, then die, hand it to your heirs, and have them get the basis stepped up so they don't pay tax either.