Token Chronicle - Week 4 February 2025

Author

Julien Bordas
March 01, 2025

Token Chronicle - Week 4 February 2025

Top cryptos

Extract from CoinMarketCap.com on March 1st 2025

Meme of the week

Market update: Big market drop this week with BTC touching $79K and ETH around $2K, despite a strong rebound today to $85K. The "bearish market sentiment" is mainly due to macroeconomic concerns related to Trump's tariff war (including a 25% tariff on the EU), his approach to resolving the Ukraine crisis, and to some extent, the Bybit hack (the largest hack in history by North Korea’s Lazarus group, though impressively handled by Bybit). Billions in net outflows from ETFs and a fearful market sentiment right now, although this is only temporary and, in my opinion, presents good buying opportunities.

Main points this week:

International News:

  1. Confusion within the U.S. government: The Bitcoin account has been lost – The U.S. Marshals Service (USMS), responsible for managing cryptocurrencies seized by the American justice system, is reportedly facing serious tracking issues. Anonymous sources claim the agency has lost access to Bitcoin wallets, potentially representing over $1 billion. It is estimated that the agency holds approximately 200,000 BTC, worth over $19 billion at the current Bitcoin price, primarily from judicial seizures linked to the Silk Road darknet market and the Bitfinex exchange hack. The agency allegedly uses inadequate tools and struggles to accurately estimate its Bitcoin holdings. It may have lost access to at least $1 billion in BTC. In November 2022, the agency also lost access to two Ethereum wallets due to a software update, making recovery impossible.

  2. Donald Trump wants to impose a 25% tariff on European products – In his usual style, Donald Trump announced on Wednesday that he would increase tariffs on European products to 25%. "We made a decision. We’re going to announce it very soon, and it will be 25%, generally speaking, and it will apply to cars and all sorts of things. [...] They don’t accept our cars. They don’t accept our foreign products either. There are all sorts of reasons why they don’t. And we, we accept everything that comes from them. We have a trade deficit of about $300 billion with the European Union."

Regulation/Compliance/Justice/Hack:

  1. The SEC ends its investigation into OpenSea – After issuing a Wells notice to OpenSea in August 2024, the Securities and Exchange Commission (SEC) has decided not to proceed with its investigation. In August 2024, OpenSea, the NFT platform, received a Wells notice from the SEC, which, while not necessarily leading to legal action, indicated an ongoing investigation into potential violations. As has been common under Gary Gensler’s leadership, the issue concerned alleged violations of the Securities Act of 1933, suggesting that NFTs sold on OpenSea could be considered securities.

  2. Bybit hack: The stolen funds are being moved by the hackers – The largest hack in cryptocurrency history took place last Friday on the Bybit exchange. The stolen funds are reportedly being transferred to be anonymized by the hackers. The attackers, allegedly linked to North Korea, split the $1.46 billion into 54 wallets.

    • Bybit announces full reimbursement of customer assets despite over $6 billion in withdrawals – Following the massive hack, Bybit announced that customer funds are once again fully secured thanks to new ETH acquisitions.

    • Bybit repays 40,000 ETH to Bitget in 3 days following the hack – In an unprecedented crisis, Bybit demonstrated exceptional responsiveness by quickly implementing measures to restore user trust and ensure operational continuity. One such action was repaying a 40,000 ETH loan to Bitget in record time.

    • "War against Lazarus": Bybit launches a bounty program after the massive attack – Is this the final straw? Bybit, the latest victim of the North Korean Lazarus group, is fighting back. The exchange is inviting bounty hunters to join the "war against Lazarus" to track the stolen funds. A list of "good" and "bad" actors has also been published.

    • Lazarus converts $500 million in stolen Ether into Bitcoin via ThorChain – The Lazarus group, accused of hacking Bybit for $1.46 billion in ETH, has begun converting the funds into Bitcoin through ThorChain. This strategy complicates the tracking and seizure of the funds, despite Bybit's efforts to recover the stolen assets.

  3. OKX pleads guilty in the U.S. and will pay $505 million in penalties – After pleading guilty in a U.S. Department of Justice (DOJ) investigation, OKX must pay $505 million. On Monday, the cryptocurrency exchange OKX admitted guilt in the U.S. for violating anti-money laundering laws through its subsidiary, Aux Cayes FinTech. The company had allegedly served some U.S. customers without a license between 2018 and 2024.

  4. Another one: The SEC drops its investigation into Uniswap – The thaw continues. Uniswap is the latest crypto protocol to have an SEC investigation dropped. This is yet another sign that the U.S. financial watchdog is becoming more open to the cryptocurrency ecosystem.

  5. U.S. Congress debates cryptocurrency regulation – Towards an unprecedented legal framework? – The U.S. is taking a major step in cryptocurrency regulation as Congress begins discussions on governing this rapidly expanding sector. The initiative aims to balance innovation and security while clarifying the legal status of digital assets and stablecoins. The subcommittee also discussed stablecoin legislation and the proposed "Genius Act," backed by Senators Cynthia Lummis, Kirsten Gillibrand, and others. The Genius Act seeks to regulate dollar-backed stablecoins and ban algorithmic stablecoins like DAI. The law would require 1:1 reserves, dedicated subsidiaries, and full transparency. Stablecoin issuers would be monitored by both state and federal regulators.

  6. The SEC drops its investigation into Gemini, and Cameron Winklevoss demands compensation – In a series of dropped cases, the SEC has ended its probe into Gemini. However, one of the exchange's founders did not hold back in his criticism. He argues that this anti-crypto crusade has driven engineers out of the ecosystem or discouraged new project creators. He believes several measures should be taken, such as forcing the SEC to reimburse three times the legal fees of companies it investigates without filing charges and firing the employees responsible, with their names publicly listed on the SEC's website.

  7. Coinbase: The SEC drops its lawsuit against the crypto exchange – The SEC has officially announced the end of its lawsuit against Coinbase. This marks a major shift in U.S. digital asset regulation and could redefine the relationship between regulators and crypto companies. The SEC had accused Coinbase of operating as an unregistered exchange, violating federal securities laws. The agency alleged that Coinbase provided brokerage, exchange, and clearing services simultaneously without complying with regulatory requirements. However, the case dismissal does not mean the SEC acknowledges wrongdoing in its accusations. Instead, the agency stated that dropping the case aims to refocus its regulatory approach towards greater clarity and transparency.

  8. Hong Kong-based stablecoin neobank Infini lost $49 million in a hack exploiting compromised admin privileges. The attacker altered smart contract settings, draining USDC, which was later converted into ETH and sent via Tornado Cash. Security analysts linked the exploit to a contract allegedly developed within Infini. The company is investigating, offering a bounty for fund recovery, and assuring affected users of compensation.

  9. Robinhood just closed a critical chapter in its crypto journey. The SEC's Enforcement Division has officially dropped its investigation into Robinhood Crypto, less than a month after the company reached a $45 million settlement with the regulator. "This investigation never should have been opened," said Dan Gallagher, Robinhood's compliance officer, taking a direct shot at the SEC's approach. "Robinhood Crypto always has and will always respect federal securities laws."

  10. Hackers are using GitHub to distribute malware that steals bitcoin and crypto, according to a Kaspersky report. The "GitVenom" campaign plants malicious code in fake GitHub projects, targeting developers with Trojan-like scripts. Attackers hide harmful Python code after 2,000 blank tabs or embed rogue JavaScript functions in main files. Once executed, the malware downloads additional tools from hacker-controlled repositories. Users can protect themselves by verifying project authenticity and scrutinizing code before use. Kaspersky warns these attacks will likely continue with evolving tactics.

  11. Malaysia’s Securities Commission released its Regulatory Sandbox Guidelines, outlining eligibility and application processes for testing innovative capital market products, including digital assets. The sandbox allows companies to trial solutions in a controlled environment, addressing regulatory barriers and promoting innovation. Key criteria include introducing new tech or market structures, readiness with a functional prototype, and sufficient resources. Applications open from April 15 to May 31, 2025, with initial notifications within 30 days. The initiative is part of broader fintech innovation efforts announced in 2024.

  12. BitMEX, the crypto exchange known for popularizing perpetual futures, is reportedly seeking a buyer and has enlisted Broadhaven Capital Partners for the sale. Interest in crypto derivatives M&A has been rising, with Kraken and Coinbase eyeing Deribit, and FalconX acquiring Arbelos Markets. BitMEX faced legal issues in 2020 over AML violations, leading to guilty pleas and the resignation of co-founders, including Arthur Hayes.

Traditional Finance:

  1. The largest market maker on the NYSE wants to enter cryptocurrencies – After cautiously experimenting with cryptocurrencies in recent years, Citadel Securities now intends to offer its services to industry giants. As the largest market maker on the New York Stock Exchange (NYSE), this is a significant step. The company is reportedly seeking partnerships with Binance, Coinbase, and Crypto.com to provide its expertise, initially outside the U.S. In June 2023, Citadel took its first step into crypto by launching the EDX Market exchange in collaboration with Charles Schwab, Fidelity, Paradigm, Sequoia Capital, and Virtu Financial.

  2. Bank of America could launch its own stablecoin – Bank of America may soon enter the stablecoin race. CEO Brian Moynihan stated that the bank is ready to issue its own digital dollar, provided a clear regulatory framework is passed by Congress and signed into law by President Donald Trump. This move is notable, as Bank of America has historically taken a cautious approach to cryptocurrencies. Meanwhile, institutions like JPMorgan and Citigroup have been exploring digital assets for years. Payments giants like PayPal are also positioning themselves in this space.

Tech News:

  1. Apple removes end-to-end encryption in the UK
    Apple has made a surprising decision by modifying iCloud data security in the UK without providing a clear explanation. This move, far from being trivial, could significantly impact global privacy protection. By giving in to British government pressure, Apple is not only weakening its users’ data security but also creating a precedent that other governments could exploit to demand similar access. This rollback raises a critical question: if the UK has succeeded, what would stop other countries from following suit?

  2. Apple unveils a $500 billion plan to boost “Made in USA” and bypass Donald Trump’s tariffs
    Tech giant Apple has confirmed a massive $500 billion plan to strengthen its presence in the United States. This appears to be a response to President Donald Trump's expectations, following a recent meeting with Tim Cook. In a statement released yesterday, Apple announced that it will build new infrastructure across nine U.S. states, supported by this $500 billion investment—the largest financial commitment in the company's history. Apple pledges to create 20,000 jobs over the next four years through this initiative. Additionally, the company will open an "academy" to train engineers and other professionals. The tech giant is clearly adapting to the Trump era.

  3. Bitcoin and Solana integration: MetaMask reveals all upcoming roadmap updates
    In addition to a visual identity change, MetaMask has unveiled a series of major updates, including support for Bitcoin and Solana. Notable user experience improvements include default activation of Smart Transactions and the introduction of the ERC-5792 standard, allowing multiple transactions to be grouped into one. Additionally, starting in March, users will be able to pay transaction fees with any token, not just ETH. Until now, MetaMask was a Web3 wallet exclusively compatible with blockchains supporting the Ethereum Virtual Machine (EVM), but this is set to change in 2025 with the upcoming integration of Bitcoin (BTC) and Solana (SOL).

  4. Ethereum’s Pectra upgrade went live on the Holesky testnet on Feb. 24 but failed to finalize on time. The hard fork includes 11 major Ethereum improvement proposals (EIPs). EIP-7702 enhances wallet usability by adding smart contract capabilities. EIP-7251 increases the validator staking limit from 32 to 2,048 ETH to streamline node setup. A second test on Sepolia is scheduled for Mar. 5 but may be delayed. Developers will finalize a mainnet launch date after both testnets run successfully.

  5. The Avalanche Foundation has launched the Avalanche Visa Card, allowing users to spend AVAX, wrapped AVAX, USDT, and USDC at any Visa-accepting store. Developed with Rain, a blockchain-based card issuer, the card integrates crypto with traditional finance. It features a self-custody wallet with unique addresses per asset. Initially targeting Latin America and the Caribbean, the initiative aims to expand DeFi adoption. The card enhances accessibility for crypto payments in everyday transactions.

Adoption:

  1. Strategy now holds nearly $50 billion in Bitcoin (BTC)
    Strategy, formerly known as MicroStrategy, continues its massive Bitcoin (BTC) acquisitions. Its latest purchase brings it close to the $50 billion mark in Bitcoin holdings.

  2. Altvest follows MicroStrategy’s lead, becoming the first African giant to adopt Bitcoin
    Altvest Capital has made history as the first publicly listed company in Africa to adopt Bitcoin as a strategic asset, aligning itself with industry giants MicroStrategy and Metaplanet. 2025 could be the year Bitcoin cements itself as a key asset in institutional and state reserves.

  3. Five U.S. states reject a strategic Bitcoin reserve
    Despite Donald Trump’s campaign promise to create a strategic Bitcoin reserve, the initiative is struggling to gain traction, with five states already rejecting the proposal. This raises questions about the future of this innovative economic policy. However, 23 other states are currently considering the creation of a strategic Bitcoin reserve, which could mark a historic turning point for both the U.S. and Bitcoin. Among them, Arizona and Oklahoma are the closest to adopting the measure, awaiting only a second approval from the Committee and the House.

  4. PayPal aims to bridge traditional finance and cryptocurrencies
    PayPal is positioning itself as a key player in crypto integration by simplifying everyday use, creating a seamless bridge between traditional and digital payments. With ambitious goals for 2025, the company seeks to drive widespread adoption of its stablecoin, PYUSD, introducing it to millions of merchants worldwide. By embedding crypto into its payment ecosystem, PayPal aims to eliminate one of the biggest barriers to digital commerce: complexity. Now, millions of consumers can pay with Bitcoin, Ethereum, or other digital assets in just a few clicks—just like a standard credit card transaction, according to the company's statement.

  5. Binance Pay surges in 2024 with $72.4 billion in payments
    The year 2024 marks a record-breaking milestone for Binance Pay and the growing adoption of cryptocurrency payments. Once seen merely as investment assets, cryptocurrencies are now establishing themselves as a mainstream means of payment. Binance Pay is experiencing exponential growth, signaling a global shift in crypto adoption. According to company data, Binance Pay's user base has tripled within a year, reaching 41.7 million users. In 2024, Tether’s USDT alone accounted for 80% of payments made via Binance Pay, representing a staggering $57 billion in transaction volume.

Partnerships & Funding:

  1. Ethena raises $100 million to expand into traditional finance
    The cryptocurrency sector continues to attract institutional investors, with ambitious projects pushing the boundaries of decentralized finance (DeFi). Ethena, a major player in the ecosystem, has secured $100 million in funding to strengthen its market position and facilitate institutional adoption of its solutions. With this new capital, Ethena aims to develop a regulated financial product, iUSDe, a stablecoin version with transfer restrictions to comply with institutional requirements. The goal is to simplify adoption for major banks and investment funds by offering them attractive returns without requiring traditional crypto infrastructure. Additionally, the raised funds will support the development of Ethena’s own blockchain, enhancing the project’s autonomy and improving security and efficiency for users.

  2. Crypto ETF issuer Bitwise raises $70 million: This week, Bitwise announced the second-largest crypto funding round in February, securing $70 million from over a dozen investors. The funding round saw participation from prominent firms, including Electric Capital, MassMutual, MIT Investment Management Company, and Highland Capital.

  3. HashKey Group, the operator of Hong Kong's largest licensed crypto exchange, HashKey Exchange, reportedly raised $30 million from China's Gaorong Ventures — a rare instance of a major Chinese VC backing a crypto startup. The funding is said to have pushed HashKey's post-money valuation closer to $1.5 billion.

  4. Plasma, a startup building a blockchain designed for stablecoin payments, raised $24 million across its seed ($4 million) and Series A ($20 million) rounds. The funding was led by Framework Ventures and Bitfinex/Tether. Other investors include DRW/Cumberland, Bybit, Flow Traders, 6th Man Ventures and Nomura — along with angels and advisors such as Tether CEO Paolo Ardoino, Peter Thiel, Cobie and Zaheer Ebtikar.

  5. YZi Labs, formerly Binance Labs, has invested an undisclosed amount in crypto-AI startup Vana, which focuses on data ownership. Binance co-founder Changpeng "CZ" Zhao joined Vana as an advisor through YZi Labs after its rebrand. YZi was the sole investor in Vana’s January 2025 strategic round, following its mainnet launch last December. Vana’s blockchain allows users to pool data into Data DAOs, earning rewards while retaining ownership in AI models. The startup previously raised $25 million from Paradigm, Coinbase Ventures, and Polychain Capital.

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.