Ethereum’s Dencun upgrade, which introduces “proto-danksharding,” has successfully completed its final testing phase via the Holesky testnet and is now awaiting scheduling for its mainnet deployment.
Data indicates that the Dencun upgrade was initiated on Holesky at approximately 11:35 am UTC on February 7, with Nethermind promptly sharing the news on X.
This upgrade is widely anticipated to reduce transaction costs on Ethereum layer-2s.
Dencun will notably introduce proto-danksharding through Ethereum Improvement Proposal-4844 (EIP-4844).
The key feature of EIP-4844 is the introduction of “blobs,” which will enable Ethereum nodes to temporarily store and access large amounts of off-chain data.
Philippe Schommers, head of infrastructure at Gnosis, previously explained to Cointelegraph that the implementation of Dencun on the Ethereum mainnet could potentially lower rollup costs by up to 10 times.
A decision regarding the mainnet deployment date of Dencun is expected to be made on February 8 during an AllCoreDevs call, while Ethereum enthusiast Anthony Sassano stated on February 7 that “all signs point to early-mid March.”
READ MORE: Ethereum Foundation Explores Strategies to Optimize Blockchain for Rollup-Centric Roadmap
Combining the Cancun and Deneb upgrades, Dencun is poised to be the most significant upgrade of Ethereum since the Shapella upgrade last April, which marked the first instance of unstaking Ether (ETH) from the Beacon Chain since its launch on December 1, 2020.
Cancun primarily focuses on network scalability at the execution layer, with EIP-4844 being the central component.
Additionally, EIP-1153, EIP-4788, and EIP-6780 are included in the upgrade.
Deneb, on the other hand, concentrates on enhancing Ethereum’s consensus layer.
Before being tested on Holesky, Dencun underwent deployment on the Goerli and Sepolia testnets on January 17 and January 30, respectively.
However, the deployment of Dencun to Goerli encountered a four-hour delay due to a bug that hindered the testnet from completing the upgrade.
“The network faced syncing issues with nodes due to a bug in Prysm, Ethereum’s proof-of-stake client,” explained Nebojsa Urosevic, a founder of the Ethereum development platform Tenderly, to Cointelegraph at the time.
“This incident underscores the importance of having multiple clients and the necessity of testnets,” Urosevic added.
Effective January 1st, 2024, a significant change will take effect for businesses operating in the United States. The Corporate Transparency Act (CTA) now requires both domestic and foreign companies to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This move aims to increase transparency and combat financial crimes such as money laundering and terrorist financing.
Shining a Light on Beneficial Owners
The CTA aims to combat financial crime by identifying the individuals who ultimately control companies. These “beneficial owners” are those who hold at least 25% of the company’s equity or exert substantial control through other means. Prior to the CTA, such information often remained shrouded in secrecy, making it easier for criminals to launder money or finance illicit activities through shell companies.
Reporting Requirements and Deadlines
Companies existing before January 1st, 2024 have a grace period until January 1st, 2025 to submit their initial reports. Newly formed companies have 90 days after registration to comply. The reports require detailed information about the company itself, including its legal and trade names, address, and tax ID number.
For beneficial owners, companies must disclose names, dates of birth, addresses, government-issued ID numbers, and even a photo of the ID. This level of detail aims to create a clear picture of who truly wields power behind the scenes.
Failure to Comply Comes at a Cost
The CTA isn’t without teeth. Individuals who willfully violate the reporting requirements can face hefty fines of up to $500 per day for the duration of the non-compliance. Additionally, criminal penalties including imprisonment and even larger fines are possible. Violations can include failing to file a report altogether, submitting false information, or neglecting to update information when ownership structures change.
Keeping Up-to-Date Crucial
Companies are also responsible for updating their reports within 30 days of any major changes to their ownership structure or company information. This ensures FinCEN maintains an accurate and up-to-date database of beneficial owners.
Transparency: A Step Towards Financial Security
The Corporate Transparency Act represents a significant step forward in the fight against financial crime. By shedding light on the true owners of companies, law enforcement will have a more powerful tool to identify and disrupt criminal activities. Businesses that operate legally have nothing to fear, and the benefits of increased transparency can help foster trust and stability within the American financial system.
To provide further insights into this change, we consulted Claudemir Ramos, a widely recognized accountant specializing in both Brazilian and American regulations. As the Owner and Founder of CR Accounting & Consulting LLC, Claudemir is a renowned professional within the field who provides insights from current tax law. Regarding this matter, he states:
“As specified in the Corporate Transparency Law, a person who willfully violates the BOI’s reporting requirements may be subject to civil penalties of up to US$ 500 for each day the violation persists. That person may also be subject to criminal sanctions of up to two years in prison and a fine of up to US$ 10,000. Possible violations include willfully failing to file a beneficial ownership information report, willfully filing false beneficial ownership information, or willfully failing to correct or update previously reported beneficial ownership information.”
When investigating financial crimes, law enforcement often needs to trace the flow of money. The CTA provides a valuable tool for investigators by allowing them to quickly identify the beneficial owners of companies involved in suspicious transactions. This can lead to faster and more effective investigations, ultimately helping to recover stolen funds and hold criminals accountable.
According to the specialist Claudemir Ramos:
“By requiring disclosure of beneficial owners, the goal of the CTA is to make it more difficult to hide behind layers of bureaucracy. Law enforcement will have a clearer picture of who is truly behind a company, making it easier to identify and investigate suspicious activity.”
It’s important to note that the CTA is just one piece of the puzzle in combating financial crimes. Other regulations and law enforcement efforts are still needed. However, by increasing transparency in corporate ownership, the CTA provides a valuable tool for law enforcement and can significantly hinder the ability of criminals to operate in the shadows.
For more information on Beneficial Ownership Reporting and how to comply with the CTA, visit the FinCEN website at https://boiefiling.fincen.gov/.