The latest in crypto: Binance’s bitcoin withdrawals, Coinbase, crypto mining tax

Yahoo Finance's Rachelle Akuffo details several headlines emerging from the crypto space, including Binance's bitcoin withdrawals resuming after a second pause, Coinbase's assurances on its U.S. presence, and an energy tax the Biden administration is considering for crypto miners.

Video transcript

- Crypto exchange Binance halted Bitcoin withdrawals earlier today. Let's bring in Yahoo Finance's Rachelle Akuffo, who has the details for us. Rachelle, how do we see some of the moves on the back of that?

RACHELLE AKUFFO: Well, so we're taking a look at some of the takeaways from the selling action that we've been seeing in some of these cryptos, especially Bitcoin. You mentioned Binance, the world's largest cryptocurrency exchange, suspending those withdrawals. And that was due to too many pending transactions, according to CEO CZ. He tweeted that the problem was due to an unexpected surge in Bitcoin transaction fees, which had fluctuated an 18x from last month.

He also added in it was FUD, or fear, uncertainty, and doubt, also fueling this. But that skepticism and speculation about whether it was some of these big crypto whales selling their positions, that spread. So, of course, down went Bitcoin and dragged down other tokens with it on a day that already had a mixed picture in general for investors. Now, CEO CZ also tweeting, we're aware that some data are showing a large volume of outflows from Binance. This outflow is actually movements between Binance hot and cold wallets due to the BTC address adjustments.

Now, if this had been just effective outflows, this would have marked the largest withdrawal in its history at over 162,000 Bitcoin, worth over $4.6 billion. Now, Julio Moreno, who's the head of research at CryptoQuant, he noted that these two transactions in question of 117,000 and 40,000 Bitcoin respectively were between Binance addresses. So putting those effective outflows closer to about 10,100 Bitcoin. So not as big of a deal as originally thought. But still, a lot of skepticism here.

- There's a lot of skepticism there. Rachelle, let's also talk about what we're seeing take place at Coinbase because Coinbase shares were under a little bit of pressure today. The CEO there coming out, doubling down on criticisms of regulatory headwinds, also saying that they're not going to back down. They will gladly go face to face with the SEC. What are we learning there?

RACHELLE AKUFFO: I mean, this is quite the turnaround. We had Coinbase saying they're not leaving the US. CEO Brian Armstrong walking back those earlier comments on the possibility of having Coinbase leave the US because of those regulatory headwinds. He told CNBC this morning, Coinbase is not going to relocate overseas. We're always going to have the US presence. But the US is a little bit behind right now.

In terms of examples you could look to, he praised the more thoughtful approaches, as he called them, in the EU for passing comprehensive crypto legislation, as well as the UK he said being incredibly welcoming as a reason why it's a hub that they've decided to serve as well. But, of course, SEC is still in the headlights there. Armstrong called the SEC an outlier in the way it's approaching crypto to curtail it rather than regulate it. But he says that these lawsuits-- you look for a silver lining here-- they offer a chance for more clarity, which will benefit the industry as a whole. Hopefully, get some answers on some of these different criteria.

- Yeah. Brian Armstrong has had some pretty strong words for the SEC on the back of some concerns around that regulation. All right. What's the latest coming out of DC when it comes to crypto mining?

RACHELLE AKUFFO: Well, it's interesting because we thought we pretty much just had to look at the SEC in this. And we that the Biden administration was looking at not being fond of having people adding crypto to their 401(k). But now on the mining side, the Biden administration added the new Digital Asset Mining Energy. That's DAME. That's the excise tax. Its proposal to its budget last week.

So basically, what will happen is after a phase in period, crypto miners would face a tax equal to 30% of the cost of the electricity they use in crypto mining, essentially, the White House saying pay your fair share. Now, the White House estimates that in 2022, US crypto mining used about the same amount of electricity used to power the entire country's home computers or residential lighting. So to give you some context there. And, of course, the United States by far the biggest crypto mining country in the world. So this will really be a blow for crypto miners.

- It will be something we will continue to track. All right. Rachelle, thanks so much.