Consensys announced the acquisition of Wallet Guard, a leading, user-centric browser extension, security dashboard, and security engine that protects users’ wallets, digital assets and data from theft, scams, and fraud. Through this acquisition, Consensys intends to integrate Wallet Guard’s capabilities to further bolster MetaMask, the world’s leading self-custodial crypto wallet, with state-of-the-art security features ensuring users receive the utmost protection in web3.

Despite the industry’s commitment to safeguarding users, hacks and scams still persist in web3. According to the 2024 Crime Report by Chainalysis, over $1.7 billion worth of crypto was stolen from users through scams alone in 2023, following $3.7 billion in 2022 and over $3 billion in 2021. As web3 continues to gain adoption, the prevalence of scams poses a significant threat to users and new entrants. The acquisition of Wallet Guard marks a significant advancement for Consensys in our commitment to safeguarding our users against ever-evolving threats and building a robust ecosystem that welcomes the next generation of users.

“Wallet Guard has quickly become a premier security tool with advanced capabilities and constant innovation that strategically aligns with Consensys' goal of putting user safety at the forefront. We're excited to welcome them to our team”, said Joe Lubin, co-founder of Ethereum and CEO & Founder of Consensys.

 

"Their innovative security solutions will be instrumental in our mission to create a safer and more secure environment to continuously pave the way for the industry's mass adoption. This integration means a significant step in the right direction".

“MetaMask is unique among wallets in providing not only strong default security features, but also security-enhancing plugins through our Snaps extensibility platform, combining to make MetaMask the leading choice for securely building and using all of web3. With their best-in-class security engine and talented team, Wallet Guard will enhance and accelerate MetaMask’s security roadmap and market position, as well as complementing well our ongoing collaborations with web3 security partners,”  said Patrick Berarducci, MetaMask & Infura Business Group Lead at Consensys. 

This integration will enhance MetaMask’s security by improving scam and drainer detection through transaction validation and client-side heuristics, thereby providing users with superior real-time protection against malicious dapps and scams while preserving privacy and self-sovereignty.

The team will join Consensys within the MetaMask Team, leveraging their expertise to build multiple layers of protection that make it harder for scammers and hackers to target MetaMask users and prevent hacks and scams before they occur. Additionally, MetaMask will continue to collaborate with its security partners to ensure comprehensive coverage of all threat vectors.

“We're thrilled at the opportunity to bring our knowledge and commitment to end-user security to millions of MetaMask users worldwide!”, said Ohm Shah, Co-Founder & Co-CEO of Wallet Guard. 

 

“Advancements in security, fraud and scam prevention are essential for the mass adoption of web3, and we’re proud to be joining a company that is equally committed to ensuring the best and safest experience imaginable.”

“User experience and safety is our top priority. It’s more important than ever to keep web3 users safe from scammers and we’re excited to bring our innovative cybersecurity solutions to MetaMask”, added Martin Peko, Co-Founder & Co-CEO of Wallet Guard.

Consensys' acquisition of Wallet Guard follows its strategic move in acquiring Special Mechanisms Group (SMG) eight months prior, enhancing its offerings for web3 users, builders, and businesses. Building on previous successful acquisitions, including HAL in 2023 and MyCrypto in 2022, Consensys continues to consolidate and strengthen its position in the web3 and blockchain industry.

During this process, Consensys was represented by Brendan Dignan at the law firm of Baker Botts.

Consensys is the leading blockchain and web3 software company. Since 2014, Consensys has been at the forefront of innovation, pioneering technological developments within the web3 ecosystem. Through our product suite, including the MetaMask platform, Infura, Linea, Diligence, and ourNFT toolkit Phosphor, we have become the trusted collaborator for users, creators, and developers on their path to build and belong in the world they want to see. Whether building a dapp, an NFT collection, a portfolio, or a better future, the instinct to build is universal. Consensys inspires and champions the builder instinct in everyone by making web3 universally easy to use and develop on. To explore our products and solutions, visit https://consensys.io/.

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The US Internal Revenue Service (IRS) maintains that profits from crypto staking are taxable even before the participant cashes in on them.

The governmental parastatal has reiterated that crypto staking does not constitute a new property. As a result, crypto enthusiasts staking their assets should account fully for them and pay taxes upon staking.

A Bloomberg report on Tuesday stated the IRS’s stance in an ongoing legal proceeding between the agency and a US couple. For context, Joshua Jarret and his wife, Jessica Jarret, filed a lawsuit against the tax collectors in October, seeking to reform how the IRS views taxes on crypto staking.

Background of the IRS Tax Case

The years-long legal battle originated from an initial lawsuit against the IRS over a tax feud. The couple argued against the agency’s stance on staking taxes and insisted that, like a farmer’s proceeds are only accounted for after harvest, rewards for staked cryptocurrencies should be taxable after the sales.

Notably, the IRS repaid the couple’s overdraft tax of $4,000 for its 8,876 Tezos (XTZ) earnings in 2019. However, they pursue a greater course, seeking to establish a legal framework treating staked cryptocurrencies as new properties.

Although the court closed the case on the premise that Joshua and Jessica had received a refund, the couple filed a fresh lawsuit on the case two months ago. They asked for a refund of the $12,179 paid in tax for its 13,000 XTZ earnings.

Meanwhile, the IRS has maintained that crypto stakers should pay liability tax upon locking up their assets. The tax collectors cited the Revenue Ruling 202314 bill, which supports a tax imposition on staked assets as soon as their owners can sell, exchange, or dispose of them.

Revolving View of Cryptocurrency

Notably, views on cryptocurrency and its activities are evolving amidst a friendly global stance. In opposition to the IRS’s view that crypto is not property, legal entities in some other countries have started adopting digital assets as a prominent financial tool.

For context, an English High Court recognized Tether as property. The presiding judge noted that the stablecoin has all the qualities of a property, including tangibility, traceability, and usage.

Russia’s President, Vladimir Putin, recently signed a similar treaty on digital assets. He also approved a bill recognizing cryptocurrencies as property and exempting them from value-added tax.

Meanwhile, cryptocurrencies continue to gain global traction. The sector’s firstborn, Bitcoin, has become the subject of a broader adoption among countries as a strategic reserve asset.

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Who Holds the ETF Market Now?

As of now, hedge fund managers dominate the ETF space, controlling 45.3% of the market. Investment advisors follow in second place with a 28% share. CF Benchmarks anticipates that by 2025, investment advisors will surpass the 50% mark in both Bitcoin and Ether (ETH) ETF markets.

What Trends Will Shape the Future?

According to CF Benchmarks, a UK-based index provider specializing in cryptocurrency indices, the adoption of these instruments by the expansive $88 trillion U.S. asset management sector is crucial for increasing advisors’ market share. The firm notes that factors such as heightened consumer demand, the growing appeal of crypto assets, and maturing products will drive this shift.

Key insights from the report include:

• By 2025, tokenized real-world assets could exceed $30 billion.
• New stablecoin projects, like Ripple‘s RLUSD, may disrupt Tether’s current market leadership.
• The easing of Federal Reserve policies may elevate Bitcoin’s role as an inflation hedge.

The anticipated rise in investment advisors’ participation in Bitcoin and Ether ETFs signifies a broader integration of crypto assets into traditional financial portfolios, potentially enhancing investor access and diversification strategies.

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