Token Chronicle - Week 2 January 2025

Top cryptos

Meme of the week

Market update: The market continued to decline over the week due to the US market context, with BTC dropping to around $89K, before a significant rebound in recent days, bringing it back to $97K today. D. Trump is set to take office in 5 days and plans to announce major news for the ecosystem as soon as he assumes his position. It remains to be seen how the market will react, but it is likely that we will see a strong upward movement starting next week.

Main points this week:

International Section:

1. A U.S. Senator Proposes Legalizing Bitcoin Payments: Things seem to be moving quickly across the Atlantic. A senator has proposed a law, the Binance Freedom Act. The goal? To make Bitcoin a legal currency in the state of Oklahoma. This initiative could pave the way for other states in the country and free people from Washington’s money printing. This law would allow merchants and employees to make transactions in Bitcoin to replace a dollar subject to inflation. Thanks to Bitcoin, residents of the American state could finally regain control over their wallets and free themselves from the dictates of the Federal Reserve (Fed), or as Dusty Deevers says: "The reckless spending and money printing of Washington."

2. Thailand: They Stole Electricity to Mine Bitcoin: 996 Rigs Seized: The main concern for Bitcoin mining operations is the cost of energy. So, when the price of Bitcoin soars, some do not hesitate to steal electricity to maximize profits, at the expense of risks. A losing bet for this company, which had nearly 1,000 mining rigs seized. The Thai police dismantled a large clandestine mining operation in the Phanat Nikhom district, between Bangkok and Pattaya. Alerted by unusual energy consumption, several police services visited the offices of JIT Co, accompanied by the regional electricity authority.

3. Kenya Is About to Legalize Cryptocurrencies: Thanks to a bill, cryptocurrencies are about to be legalized in Kenya. The country is currently working on establishing a legal framework for this asset class and ecosystem companies. This position contrasts with the 2015 warning from the Central Bank, which discouraged citizens from investing in cryptocurrencies, recalling that they had no legal tender and describing them as "largely untraceable and anonymous."

4. Singapore’s Gambling Regulator Bans Polymarket: Singapore’s turn. The local Gambling Regulatory Authority has banned the predictive market Polymarket. The protocol has been struggling in recent weeks, facing the mistrust of international regulators. In Singapore, the Gambling Regulatory Authority (GRA) declared this week that the protocol was "an illegal betting site." For reference, Polymarket is a predictive market protocol: bettors can wager on the outcome of certain events, such as elections or current news.

5. Tether Chooses El Salvador as Its New Headquarters After Obtaining a Local License: Tether finalizes its establishment in El Salvador after obtaining a digital asset service provider (DASP) license. This move marks a significant step in the company’s mission, according to its CEO Paolo Ardoino: to promote global Bitcoin adoption and develop innovative solutions in a conducive environment for technological experimentation. By working closely with the Salvadoran government, local businesses, and communities, Tether aims to play an active role in the evolution of financial technologies in the region. Between Bitcoin mining and citizenship programs, Tether is already well established in El Salvador. It remains to be seen what the crypto giant will do in the coming years with its new license and future local headquarters.

6. Trump: The New Administration Could Include a Position Dedicated to Cryptocurrencies from Its Inauguration: With Donald Trump's victory, a turning point is expected for cryptocurrencies in the United States. The elected president plans measures favorable to their adoption, including creating dedicated roles and executive orders to protect crypto companies' access to banking. The Washington Post recently revealed that the Trump administration plans to appoint David Sacks, PayPal co-founder and partner at venture capital firm Craft Ventures, as the "AI and Cryptocurrency Czar." This person should assume a strategic and informal role, serving as a link between technology companies and the government, particularly Congress, to promote innovation and defend the interests of both industries. The newspaper also reports that Donald Trump could issue executive orders on his first day in the White House. These measures would aim to ensure crypto companies' access to the banking system, some of which are currently denied this right, and to remove the requirement for banks to treat digital assets as liabilities on their balance sheets, a constraint that forces them to hold the equivalent in dollars.

7. The Bank of England is set to launch a "Digital Pound Lab" in 2025 to experiment with central bank digital currency (CBDC) innovations within a sandbox environment. The lab will work alongside private sector partners to explore various use cases and business models, aiming to refine the digital pound concept. According to a progress report released Tuesday, insights from this collaborative effort will inform the development of the CBDC and help address inefficiencies in the UK's existing payment systems.

Compliance/Regulation/Justice:

1. Terra Case: Do Kwon will not be judged until early next year: Extradited from Montenegro, where he was detained for more than a year and a half, to the United States, Do Kwon is now awaiting trial. While it was thought that the verdict would fall quickly regarding the founder of Terraform Labs, this will not be the case.

2. Coinbase subpoenaed by CFTC regarding Polymarket: In the context of an investigation into Polymarket, the CFTC has subpoenaed the cryptocurrency exchange Coinbase to provide information. It seems clear that Polymarket is the subject of a CFTC investigation and not Coinbase, but the predictive market platform has not yet commented on the situation.

3. Mango Markets platform will permanently close following an injunction from the SEC: The platform, which suffered a major hack in 2022 before becoming entangled in legal troubles, will close.

4. Court of Appeal confirms major trial for Binance exchange: The suspense ends for Binance in a case against investors. The latest attempt to avoid the "class action" was rejected by the 2nd Court of Appeal in Manhattan: the trial will indeed take place. Binance is accused by investors of selling unregulated tokens that lost much of their value: particularly ELF, EOS, FUN, ICX, OMG, QSP, and TRX. According to the complaint, the purchases were made on the platform in 2017 without any warning about the extreme price volatility or associated risks. Binance attempted to appeal the decision made by another court that had validated the collective action, known as the "class action". To avoid such a trial, Binance recalled not being a U.S. company. However, the 2nd Court of Appeal in Manhattan judged that, since the cryptocurrencies were bought in the United States, U.S. law could apply.

5. Discovery of a "flaw" in Uniswap's wallet — What you need to know: ScaleBit's security teams have highlighted a flaw in Uniswap's Web3 wallet (UNI), allowing easy access to the wallet's 12 recovery words. This morning, ScaleBit's security teams reported discovering a flaw in Uniswap's (UNI) wallet. Indeed, this vulnerability would allow anyone with physical access to a potential victim's phone to access the mnemonic phrase for wallet recovery.

6. U.S. justice pressures the SEC to account for its actions: Throughout Gary Gensler's tenure as chairman of the Securities and Exchange Commission (SEC), relations between the regulatory authority and the crypto industry actors have deteriorated. In one of its disputes with Coinbase, the SEC had to explain to U.S. justice why it had not called for clear cryptocurrency regulation.

7. Southeast Asia is tightening crypto regulations, with new rules emerging in the Philippines, Indonesia, and Cambodia. The Philippines SEC has proposed a framework for crypto asset service providers (CASPs), requiring licenses and local incorporation, open for consultation until January 18. Indonesia's Otoritas Jasa Keuangan (OJK) will implement new digital asset regulations on January 10, focusing on licensing and compliance as it transitions oversight from Bappebti. Meanwhile, Cambodia’s National Bank has allowed banks to engage with tokenized assets and stablecoins, marking its first official stance on digital assets, with plans to license CASPs outlined in upcoming regulations.

Traditional Finance:

1. Luxembourg: Standard Chartered bank obtains a cryptocurrency license: Standard Chartered bank announced obtaining a digital asset custody license in Luxembourg. This operation paves the way for compliance with the MiCA regulation to expand its services in Europe.

2. BlackRock launches its spot Bitcoin ETF in Canada: While the spot Bitcoin ETFs proposed by BlackRock in the United States are booming since their launch, the asset manager intends to offer others elsewhere in the world, notably to increase Bitcoin (BTC) adoption among institutional actors. Now, Canadian investors will be able to acquire spot BTC ETFs issued by BlackRock. Cboe Canada, a Canadian exchange specializing in securities, announced the launch of a new spot Bitcoin ETF proposed by asset manager BlackRock. Like their American counterparts, Canadian investors will be able to acquire shares of the iShares Bitcoin Trust.

3. Italy's largest bank bought 1 million euros worth of Bitcoin: Intesa Sanpaolo, Italy's largest bank, has entered the crypto market by purchasing 11 Bitcoin for about 1 million euros. Made through the institutional platform Boerse Stuttgart Digital, this transaction, described as a "test" by its CEO, reflects the bank's desire to align with its institutional clients' demands. This purchase is a way to explore the cryptocurrency market and prepare to meet future client needs. "We will not become a Bitcoin provider, but we need to know how to respond if our institutional clients ask," said the CEO of Intesa Sanpaolo. In 2023, Intesa Sanpaolo already set up a proprietary trading desk dedicated to digital assets, focusing on options, futures, and exchange-traded funds linked to cryptocurrencies. This first spot Bitcoin purchase marks a clear expansion of the bank's activities in this area.

4. Goldman Sachs has pushed its forecast for the next Federal Reserve rate cuts from March to June following a robust December jobs report. Nonfarm payrolls rose by 256,000, surpassing the expected 160,000, and marking the highest increase since March. The unemployment rate dipped to 4.1%, while average hourly earnings grew 0.3% month-on-month and 3.9% year-on-year, slightly below expectations. Despite Goldman and JPMorgan anticipating future rate cuts, Bank of America warns of a prolonged pause, with potential for renewed tightening. The U.S. 10-year Treasury yield has already climbed 100 basis points since the September 18 rate cut.

Tech News:

1. Mark Zuckerberg announces the end of Meta's fact-checking program: Meta has decided to abandon its fact-checking program in the United States, a decision already sparking debate. As the fight against disinformation becomes increasingly crucial, this announcement raises questions about the future of online content moderation. Following the 2016 presidential election and Russian propaganda campaigns, Meta developed one of the most extensive fact-checking partnerships. This approach became a reference for limiting the spread of false information on social media. Mark Zuckerberg explains having tried in good faith to address these threats to democracy without acting as a "truth arbiter." However, he now believes that "we have reached a point where there are too many errors and too much censorship." According to him, fact-checkers have been too influenced by political biases, which has further undermined trust, particularly in the United States. As Donald Trump's inauguration approaches, this announcement could be linked to accusations of electoral interference and threats of imprisonment made by Donald Trump against Mark Zuckerberg.

2. Will Elon Musk buy TikTok USA?: As TikTok faces a potential ban in the United States from January 19, rumors suggest that Elon Musk might buy the local branch of the social network. Starting January 19, TikTok could be forced to cease operations in the United States if it fails to sell its local branch. This situation arises from a bipartisan bill adopted in April 2024 and signed by Joe Biden. Last Friday, Supreme Court judges announced that they might give the green light to this measure, which presents a dilemma between national security and freedom of expression. In this context, Elon Musk's intervention could indeed involve buying TikTok's U.S. operations to have them managed by X. This is one of the options reported by Bloomberg on Monday.

Partnerships and Fundraising:

1. Revolut and Pyth Network collaborate — What does this partnership entail?: This week, Pyth Network announced that fintech Revolut joined its network of oracles as a data publisher. This collaboration will lead Revolut to provide its financial data on digital assets to Pyth Network, which can then be used in DeFi by decentralized application (dApp) developers.

2. Story and Stability AI: An alliance to ensure creators' rights in the age of artificial intelligence: As artificial intelligence profoundly transforms the creative world, Story offers an innovative solution. Thanks to its partnership with Stability AI, this blockchain redefines how creators can protect, trace, and monetize their contributions, paving the way for a more equitable and decentralized creative economy. The goal of this collaboration is to establish an ecosystem where every creative contribution is traceable, transparently attributed, and fairly remunerated. Thanks to Stability AI's advanced models, Story integrates tools to track creators' contributions throughout the AI development cycle. This innovative framework offers deserved recognition and opens the way to a more equitable decentralized economy where every link in the chain can benefit from its contributions.

3. Mantra drives tokenization in the Middle East with a $1 billion partnership: Mantra, a pioneer in real-world asset (RWA) tokenization, has just concluded a major agreement with investment group DAMAC for $1 billion. By leveraging blockchain, this initiative aims to expand access to sectors such as real estate, hospitality, and data centers. The strategic alliance between Mantra and DAMAC aims to boost RWA adoption through fractional ownership and real estate tokenization in the Middle East. In practice, by partnering with DAMAC, Mantra targets a vast portfolio of assets worth over $1 billion. The idea is to allow all investor categories to invest in projects previously reserved for a select few. Besides real estate, the agreement includes the potential tokenization of other sectors like hospitality, fashion, and data center management.

4. MoonPay acquired Solana-based payments app Helio in a $175 million deal, as reported by Fox Business. Launched in 2022, Helio supports over 6,000 merchants in accepting cryptocurrencies such as BTC, ETH, and SOL, managing transactions exceeding $1.5 billion and integrating with platforms like Discord, WooCommerce, and Shopify. This acquisition complements MoonPay's strategy to strengthen its position as a key bridge between fiat and crypto payments, enhancing its existing collaborations with PayPal, BitPay, and Onramper. Additionally, MoonPay now facilitates the purchase of Ripple's RLUSD stablecoin.

5. Sony's blockchain subsidiary launched the mainnet of its Ethereum Layer 2, Soneium, on Tuesday, focusing on empowering content creators and their communities. Built on Optimism's OP Stack, Soneium aims to merge web2 and web3, addressing challenges like creators' rights and fair value distribution with fans. Since its testnet debut last year, Soneium has recorded 15.4 million wallet addresses and 50 million transactions. Despite its promise of an open network, Soneium faced backlash for blacklisting certain memecoins, including "Aibo," due to intellectual property concerns. This move sparked debate on the balance between protecting IP and ensuring a decentralized, permissionless blockchain environment. Sony Block Solutions Labs defended the decision, emphasizing the importance of safeguarding IP while upholding web3's openness and innovation.

Adoption:

1. U.S. entities now hold 65% more bitcoin reserves than offshore counterparts, with the ratio rising from 1.24 in September to 1.65 by Jan. 6, according to CryptoQuant. This metric compares the bitcoin holdings of U.S. entities, including MicroStrategy, ETFs, exchanges, miners, and the government, to those of offshore entities, as explained by CryptoQuant CEO Ki Young Ju. Pro-crypto sentiment surged following Donald Trump's re-election and his pledge to establish a national bitcoin reserve, pushing BTC prices to record highs above $108,000. Spot Bitcoin ETFs attracted inflows exceeding $108 billion in assets, while MicroStrategy expanded its bitcoin holdings to 447,470 BTC under its corporate treasury strategy.

2. MicroStrategy isn't letting Bitcoin's dip below $100,000 go to waste. The company just invested $243 million more in BTC, pushing its total holdings past 450,000 Bitcoin. That's not even the most interesting part. While MicroStrategy was busy buying at around $95,972 per Bitcoin, something unusual was happening on exchanges - Bitcoin reserves hit their lowest point since 2018.

Disclaimer: The information disclosed here does not constitute an investment advice ; it is for informational purposes only and does not constitute investment advice. You should do your own research while investing in crypto and only invest money you are ready to lose.