The crypto community’s biggest legislative push in years delivered nothing specific for crypto.  President Trump’s mammoth “One Big Beautiful Bill” – a $3.3 trillion tax and spending package that passed Congress this week – contains absolutely zero provisions for digital assets, despite months of intense lobbying and last-minute amendment efforts that had crypto Twitter buzzing with excitement.

The Great Crypto Letdown

Senator Cynthia Lummis (R-WY), crypto’s biggest champion on Capitol Hill, had crafted what many called a “hail Mary” amendment package that would have revolutionized how Americans use and trade digital assets. The proposed changes were crypto-friendly enough to make Bitcoin maximalists weep with joy:

• No more coffee shop tax nightmares: Transactions under $300-$600 would have been exempt from capital gains reporting – meaning you could finally buy that latte with Bitcoin without tracking it for the IRS
• End the mining tax double-whammy: Miners and stakers would only pay taxes when they actually sell their crypto, not when they earn it
• Corporate crypto accounting relief: Companies like MicroStrategy could report their Bitcoin holdings with much more flexibility

Source: Senator Cynthia Lummis X

But when the final votes were tallied, crypto got completely shut out. Every single digital asset provision was stripped from the legislation to secure broader bipartisan support.

The Plot Twist: Bitcoin Might Win Anyway

Here’s where it gets interesting, while the Act contains nothing for crypto market analysts are nonetheless pointing to an unexpected silver lining buried in the bill’s massive spending spree.

The legislation adds a staggering $3.3 trillion to the national debt while delivering huge tax cuts – a combination that has inflation hawks circling like vultures. The U.S. Dollar Index is already having its worst year since 1973, and economists warn this could accelerate dollar devaluation. Translation? Bitcoin’s time to shine as the ultimate inflation hedge might be just beginning.

“This bill ensures that our fiat currency continues its death spiral,” said one crypto analyst who requested anonymity. “Sometimes the best thing for Bitcoin is when politicians completely ignore it.”

Lummis Refuses to Give Up

But Senator Lummis isn’t throwing in the towel. Within hours of the bill’s passage, she introduced a standalone cryptocurrency tax reform bill containing nearly identical provisions to her failed amendment. “We cannot allow outdated tax policies to stifle American innovation,” Lummis declared, promising to get the legislation “to the President’s desk” as a separate measure.

The senator’s new bill tackles the same issues that frustrated crypto users for years. From the absurdity of tracking every $5 transaction to the Byzantine tax treatment of DeFi activities that even accountants can’t figure out.

What Happens Next

The crypto industry now faces a harsh reality check. Despite having more political influence than ever before, they couldn’t get a single provision into the year’s biggest legislative vehicle.

But the failure might actually energize the movement. Crypto advocates are already regrouping around Lummis’s standalone bill, and the macroeconomic conditions created by the “Big Beautiful Bill” could provide the perfect backdrop for Bitcoin’s next major rally. The question now is whether crypto can turn this legislative defeat into a market victory, and whether Lummis can build enough momentum for round two. In the meantime, the market is looking towards the upcoming “Crypto Week” for more insights into the Trump administrations crypto priorities

The Independent Electricity System Operator (IESO) awarded capacity contracts to all four of Hut 8’s natural gas-fired power plants in Ontario through a competitive auction process. The deal covers 310 megawatts of capacity across facilities in Iroquois Falls, Kingston, Kapuskasing, and North Bay, with operations set to begin May 1, 2026.

The contracts provide Hut 8 with a weighted average capacity payment of approximately CAD $530 per megawatt per business day in the first year, with built-in inflation adjustments that could increase payments over time. The arrangement transitions the company from short-term seasonal agreements to a stable, long-term revenue stream backed by Ontario’s government-rated electricity operator.

Mixed Financial Performance

The power contract announcement comes as Hut 8 navigates mixed financial results. The company reported full year 2024 revenue of $162.4 million, net income of $331.4 million, and Adjusted EBITDA of $555.7 million. However, for the first quarter of 2025, the company posted revenue of $21.8 million and a net loss of $134.3 million.

The company’s stock has a 52-week high of $45.20 and a 52-week low of $11.86 reflecting the volatility common among Bitcoin mining companies.

Legal Challenges

The company has faced legal challenges related to its acquisition activities. Multiple class-action lawsuits were filed against Hut 8, with the lead case captioned Mayiras v. Hut 8 Corp., No. 24-cv-00904 (S.D.N.Y.), covering the period between November 9, 2023 and January 18, 2024. The class action lawsuit alleges that between November 9, 2023 and January 18, 2024, the company and its executives made materially false and misleading statements regarding its merger with US Bitcoin Corp. (USBTC), specifically failing to disclose that USBTC had an undisclosed related party as a major shareholder, that USBTC’s core King Mountain facility in Texas had historically failed to provide reliable energy and internet services, and that the profitability of USBTC assets was overstated.

The lawsuit claims these misrepresentations led Hut 8 to overpay approximately $745 million for USBTC (which sources allegedly valued at 70% less), and when J Capital Research published a report exposing these issues on January 18, 2024, Hut 8’s stock price plummeted 23.3% in a single day, causing significant investor losses.

In December 2024, Hut 8 filed a motion to dismiss the shareholder lawsuit, claiming it stemmed from a “short-and-distort” scheme by J Capital Research, a short-selling firm. At this time the court has not ruled to dismiss.

Market Context

Despite its obstacles, the deal provides Hut 8 with exposure to a government-backed counterparty rated AA3 with a positive outlook by Moody’s – resulting in many  analysts now rating the company as a “Strong Buy” with a 12-month stock price forecast of $26.64. Hut 8 trades on both the Nasdaq and Toronto Stock Exchange under the symbol HUT.

GameStop’s board unanimously approved an update to its investment policy to add Bitcoin as a treasury reserve asset on March 25, marking a strategic pivot that would transform the video game retailer into a hybrid retail-crypto company. This decision came after CEO Ryan Cohen posted a picture of himself with MicroStrategy’s Michael Saylor at Mar-a-Lago in February –  sparking widespread speculation about GameStop’s crypto ambitions.

Gamestop Major Fundraising Through Convertible Notes

The story begins with GameStop’s aggressive fundraising strategy. In March GameStop completed a $1.3 billion convertible notes offering, with the full $200 million greenshoe option exercised, bringing total proceeds to $1.5 billion. However, this was just the beginning.

This month, GameStop has announced an even larger $1.75 billion convertible notes offering, which was subsequently increased to $2.25 billion with an additional $450 million option. If fully exercised, this could bring total fundraising to $2.7 billion, significantly expanding beyond the initial figures mentioned in your story.

The Bitcoin Purchase & Market Reaction 

GameStop has purchased 4,710 Bitcoin between May 3 and June 10, 2025, for approximately $513 million in cash.  According to BitcoinTreasuries.net data, this makes GameStop the 13th largest corporate Bitcoin holder globally The announcement initially led to a 4.4% rise in GameStop’s shares during pre-market trading, but the stock experienced a 10.9% decline later that day reflecting investor uncertainty about the strategic direction. GameStop shares fell 22.5% on the day of the June convertible notes announcement.  GameStop is part of a $50 billion institutional surge into Bitcoin as a treasury asset, following companies like MicroStrategy (now called Strategy) Wedbush Securities MD analyst Michael Pachter has expressed skepticism, stating “The company’s strategy, which has changed about six times in three years, is they’re going to buy cryptocurrency and be just like MicroStrategy.”

GameStop acknowledged the risks in its SEC filings, stating “Bitcoin, for example, is a highly volatile asset and has experienced significant price fluctuations over time. Our Bitcoin strategy has not been tested and may prove unsuccessful”

Coinbase has secured a license from Luxembourg to offer crypto services across the European Union and will make Luxembourg its central hub in the region, obtaining its Markets in Crypto Assets (MiCA) license from Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF). The announcement, made Friday, represents far more than a regulatory milestone for the American crypto giant, as it may signal the beginning of crypto’s transformation from a borderless, permissionless technology into a fragmented global landscape that essentially mirrors traditional banking.

It makes Coinbase the first U.S. crypto exchange to receive a MiCA license, highlighting how even the world’s largest crypto platforms must now navigate an increasingly complex patchwork of regional regulations. This development comes as emerging regulatory frameworks worldwide are creating divergent paths for crypto adoption, with implications that extend far beyond compliance costs.

The Borderless Dream Deferred

What emerges from this regulatory evolution is a troubling picture for crypto’s original vision. Rather than creating a truly global, permissionless financial system, the industry appears to be replicating the geographical and institutional barriers that characterize traditional finance. Crypto bag holders have long cried out for ETFs and regulatory clarity, primarily to attract ‘institutional’ capital to crypto markets and boost the value of their holdings as a result. But the irony is palpable: in seeking legitimacy through regulation, crypto may be surrendering the very characteristics that made it revolutionary.

Instead of a global financial revolution, crypto is becoming just another battleground for market dominance. “We’re falling behind Europe,” said Republican Rep. Patrick McHenry of North Carolina during the House debate on FIT21. “This bill catches [us] up so that we do not lose out on innovation policy to the Europeans, to the folks in the UK, to Singapore, to Japan, to Hong Kong”. This framing reveals how crypto policy is increasingly viewed through the lens of national competition rather than global innovation.

The question facing the crypto industry is whether this regulatory fragmentation is an inevitable maturation process or a fundamental betrayal of crypto’s foundational principles. The license allows Coinbase to serve approximately 450 million Europeans under a unified regulatory framework, which represents scale and efficiency yes, but it also represents the institutionalization of geographical boundaries into a technology designed to transcend them.

As major crypto companies adapt to this new reality, smaller innovators will find themselves unable to navigate the compliance requirements necessary to operate globally. The result will likely be a crypto ecosystem that, while more regulated and “respectable,” bears little resemblance to the decentralized, permissionless vision that originally inspired the technology.

The European Opening vs. American Gatekeeping

While crypto was born with the promise of being truly global and permissionless, regulatory realities are creating distinct regional approaches. Europe’s MiCA framework, which covers crypto-assets that are not currently regulated by existing financial services legislation and provides passporting rights, meaning that, if a crypto asset service provider is authorised in one EU state, it can operate across all member nations, represents a more inclusive approach to global participation.

In contrast, pending U.S. legislation appears increasingly focused on protecting American interests. The Financial Innovation and Technology for the 21st Century Act (FIT21), which passed the House of Representatives with a 279-136 vote that saw Democrats crossing party lines to support it, aims to clarify regulatory jurisdiction between U.S. agencies but raises questions about its approach to international players.

The Trump Factor: America First Meets Crypto

The Trump administration’s approach to crypto regulation appears explicitly designed to benefit American companies and interests. President Trump signed an executive order that sets forth the administration’s policy “to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy,”  but so far the focus and legislation remains distinctly domestic.

President Trump promised to make the United States the “crypto capital of the world,” emphasizing the need to embrace digital assets to drive economic growth and technological leadership. However, this vision appears rooted in American dominance rather than global collaboration. The administration has moved quickly to establish a Strategic Bitcoin Reserve that will treat bitcoin as a reserve asset, positioning the U.S. government as a major market participant with obvious conflicts of interest.

Faryar Shirzad, Coinbase’s chief policy officer, said the administration has already met two core expectations: ending the regulatory crackdown on crypto and working with Congress to deliver clarity – clarity albeit designed primarily for domestic benefit.

The Banking Parallel: When Innovation Meets Compliance

The crypto industry’s evolution toward regulatory compliance bears striking similarities to how global banking developed into its current oligopolistic structure. Just as international banks must maintain massive compliance departments to navigate different jurisdictions, crypto companies are discovering that regulatory complexity favors large, well-capitalized firms over innovative startups. Small players will have to partner with the majors to get any traction – and will be absorbed as a result.

MiCA regulations have resulted in the delisting of non-compliant stablecoins. Crypto exchanges like Kraken and Crypto.com have recently removed support for Tether’s USDT, clearly demonstrating how regulatory requirements force platforms to choose between compliance and innovation.

The DeFi Innovation Squeeze

Perhaps nowhere is the regulatory divide more apparent than in decentralized finance (DeFi).  MiCA’s main focus is on centralized exchanges. This leaves a hole for decentralized finance (DeFi).  This regulatory gap creates an uncomfortable reality: the most innovative aspects of crypto, permissionless protocols that can theoretically serve anyone globally, remain largely unaddressed by major regulatory frameworks. Meanwhile, traditional crypto exchanges face increasing compliance burdens that favor incumbents.

Global Fragmentation Accelerates

The contrast between regulatory approaches is becoming more pronounced. Laurenth Alba, head of business development at Rome Protocol and legal consultant, told Cryptonews that MiCA is a regulatory benchmark, but it won’t automatically become a global standard. “MiCA’s clear framework for stablecoins, exchanges, and compliance provides much-needed clarity, something jurisdictions like the US still lack”

Alba pointed out that the US relies on enforcement-first tactics, while Asia-Pacific (APAC) markets lean toward sandbox models, highlighting how different regions are developing fundamentally different philosophies toward crypto regulation.

The practical implications are already visible. Previously, Coinbase held separate licenses in Germany, France, Ireland, Italy, The Netherlands, and Spain, but now must consolidate under MiCA. This represents efficiency for European operations but underscores how regulatory requirements are forcing geographical boundaries onto previously borderless services.

Fidelity Digital Assets has released groundbreaking research revealing that Bitcoin has reached a historic milestone: for the first time since its creation, coins that haven’t moved for 10 years or more, dubbed “ancient supply”, are accumulating faster than new bitcoins are being mined.

According to the  firm’s latest analysis, an average of 566 bitcoin per day is entering the ancient supply category, compared to the current daily mining reward of 450 Bitcoin following the 2024 halving event. This represents a fundamental shift in the cryptocurrency’s supply dynamics.

A $360 Billion Phenomenon

The scale of Bitcoin’s ancient supply is staggering. Fidelity’s research shows that nearly 3.4 million bitcoin have joined this ultra-long-term category since January 1, 2019—the date when Satoshi Nakamoto’s coins first reached the 10-year threshold. At Bitcoin’s price of $107,000 as of June 9, 2025, this ancient supply represents over $360 billion in value.

A Bitcoin supply squeeze seems all but inevitable has more BTC turns ‘ancient’, the BTC price continues its steady climb, and institutional treasury stacking mounts.

The research indicates that ancient supply now accounts for more than 17% of Bitcoin’s total issued supply, with approximately one-third owned by the cryptocurrency’s pseudonymous creator, Satoshi Nakamoto. While some portion of these coins may be lost or inaccessible, their continued dormancy reinforces what Fidelity describes as the “long-term conviction of this cohort.”

Even Diamond Hands Have Limits

Despite their legendary holding power, Fidelity’s analysis reveals that even the most committed Bitcoin holders respond to market conditions. Since the 2024 U.S. election, ancient supply has declined on a day-to-day basis 10% of the time—nearly four times the historical average of around 3%.

“If the highest-conviction group of bitcoin holders is moving coins at an elevated rate in this environment, it is reasonable to assume those with shorter holding periods are doing the same,” the research notes, suggesting this movement may explain some of the sideways price action observed in early 2025.

Scarcity Economics in Action As Corporate Hodlers Join the Mix

The research also highlights the growing influence of corporate Bitcoin treasuries. As of June 8, 2025, 27 public companies held over 800,000 bitcoin, with many having accumulated positions of 1,000 bitcoin or more. When factoring in these institutional holders, Fidelity projects that ancient supply could potentially reach 30% of total Bitcoin supply by 2035.

Fidelity’s projections paint a picture of increasing scarcity over time. The firm anticipates Bitcoin’s ancient supply will reach 20% of total issued supply as soon as 2028. “This is one of the most unique attributes of bitcoin that no other existing investment or commodity currently possesses,” the research concludes, “and one that could become increasingly important if demand rises as ancient supply grows.”

Implications for the Market

The research introduces a new metric called the “ancient supply HODL rate,” which calculates the net flow of bitcoin into the 10-year category after accounting for new issuance. This figure turned positive for the first time in April last year, marking what Fidelity sees as a potential inflection point for Bitcoin’s long-term supply dynamics.

While the firm emphasizes that scarcity alone doesn’t drive prices without corresponding demand, the growing cohort of ultra-long-term holders represents a unique dynamic in Bitcoin’s maturation as an asset class. The findings come as institutional adoption continues to accelerate, with new Bitcoin ETFs and corporate treasury strategies potentially contributing to the ancient supply phenomenon in years to come.

The full research report is available on Fidelity Digital Assets’ website under “Research and Insights.”

This environment calls for a flexible, transparent, and user-focused approach, something that crypto exchanges have mastered to succeed globally. With more people exploring crypto each year, the importance of smart, responsible marketing continues to grow.

What Makes Crypto Marketing Different?

Crypto marketing isn’t better or worse than traditional marketing, but it is built for a different environment. The crypto audience is typically tech-savvy, curious, and highly engaged. Instead of relying on static platforms and long-term brand messages, crypto campaigns must adapt quickly, often in response to changing regulations or new technologies.

Key differences include:

• Faster Pace: Trends evolve quickly, and marketing must keep up. Only fast movers were able to capitalize on crypto’s explosive growth between last year’s U.S presidential election and President Trump’s inauguration.
• Community Focus: Success relies heavily on engaging and growing active user communities.
• Trust Building: With skepticism still high, transparency and education are essential.

In crypto, marketing is not just about promotion. It’s about guiding users through a new financial landscape, helping them feel informed and empowered as they explore unfamiliar tools and concepts.

Challenges of Marketing in the Crypto Space

Crypto marketing comes with a unique set of challenges:

1. Platform Restrictions and Ad Bans

Major platforms like Google, Facebook, and YouTube have historically banned or restricted crypto ads. While these actions limit scams, they make it harder for legitimate projects to reach users. To meet that challenge, crypto exchanges must explore alternative ways to reach their target audience, particularly when it comes to partnering with crypto-friendly ad networks.

2. Global Regulations

Crypto is global, but regulations are not. What’s legal in one country may be banned in another – and in the case of the United States, that issue is even more granular – with crypto law often different state to stater or even city to city. This fragmented landscape makes global marketing campaigns tricky.

Exchanges must:

• Adapt messaging to fit local legal standards and cultural expectations;
• Stay agile and ready to update campaigns in real time;
• Maintain a consistent brand voice across diverse regions.

Failure to adapt to local laws can result in penalties or bans, making regulatory understanding a crucial skill for any crypto marketing team.

3. Overcoming Negative Perceptions

Crypto still struggles with a reputation problem. Scams, hacks, and failed projects have made some people wary.

To build trust, crypto marketing must:

• Be transparent about risks and platform security;
• Focus on education to demystify blockchain and crypto use cases;
• Highlight compliance and ethical practices.

The more users feel informed and safe, the more likely they are to participate in the ecosystem and recommend it to others.

Bitget: A Marketing Powerhouse

Bitget is a strong example of how strategic crypto marketing can drive global growth. Since launching in 2018, the exchange has become one of the top players in the industry, with users in 150+ countries and regions. Behind this growth is a clear and well-executed marketing strategy focused on trust, relevance, and user engagement.

Rather than relying only on traditional campaigns, Bitget has developed a marketing approach explicitly tailored for crypto, where users are digital-native, fast-moving, and highly selective.

1. Targeted Campaigns Through Crypto-Native Channels

Bitget prioritizes reaching the right users by focusing on platforms and environments with high crypto engagement. Instead of broad demographic targeting, Bitget partners with crypto-specific ad networks to serve ads across high-traffic, relevant websites in the Web3 space.

A recent case study illustrates how this focused approach, combined with strategic regional targeting and performance optimization, significantly boosted user acquisition and brand visibility.

Key benefits of this strategy include:

• Reaching users already active in the crypto ecosystem;
• Improving ad efficiency and engagement rates;
• Enhancing message relevance in targeted regions.

By aligning ad delivery with crypto user behavior and platform selection, Bitget ensures its marketing stays efficient, relevant, and tightly integrated into the digital asset community.

2. Localized Content

Bitget customizes its marketing messages for different regions. This localization helps build better relationships by respecting local cultures, languages, and norms.

For example:

• Content in local languages;
• Promotions tied to regional events or holidays;
• Compliance with local advertising standards.

Localized marketing also builds credibility. Users are more likely to trust a platform that understands their local context rather than one that sends generic global messages.

3. Clear and Consistent Messaging

Bitget’s campaigns consistently highlight three core values:

• Security: Emphasizing platform safety and risk management;
• Ease of Use: Showcasing user-friendly interfaces and onboarding;
• Innovation: Highlighting new features and forward-thinking tools.

This clarity helps users understand what Bitget stands for and why it can be trusted. Consistent communication builds brand recognition and strengthens user confidence, especially in a volatile market.

4. Strong Community Engagement

Bitget invests heavily in maintaining an active user community. This includes:

• Hosting AMAs (Ask Me Anything sessions);
• Supporting meetups, conferences, and regional events;

These efforts create stronger user loyalty and valuable word-of-mouth promotion.

Lessons from Bitget’s Strategy

Bitget’s success offers key insights into effective crypto marketing:

• Use on-chain data to target real users, not just curious browsers;
• Adapt to regional needs for better global reach;
• Communicate transparently, focusing on user education and platform safety;
• Invest in the community to build loyalty and drive organic growth.

By combining data-driven strategies with authentic engagement, Bitget has positioned itself as a leader in a highly competitive space.

Final Thoughts

As adoption grows, crypto marketing will play an even larger role in shaping public perception and platform success. The most effective strategies will balance innovation with responsibility and speed with clarity. Bitget’s example shows that smart, targeted, and transparent marketing can do more than attract users; it can build a global brand that earns trust in an industry still defining its future.

Crypto marketing isn’t just a trend; it’s a critical part of the crypto ecosystem. Exchanges willing to adapt, educate, and engage authentically have enormous opportunities. As the industry matures, marketing will continue to evolve, rewarding those who invest in users, not just impressions.

The math is simple: Treasury Secretary Scott Bessent predicts the stablecoin market could reach $3.7 trillion by decade’s end—but only for companies that can survive the regulatory gauntlet that could start as soon as later this year.

The Senate’s passage of the GENIUS Act yesterday marks the beginning of the end of crypto’s Wild West era. With the first comprehensive stablecoin regulations now heading to the House, a massive industry shakeout is coming. Some companies will emerge as trillion-dollar powerhouses. Others will simply cease to exist. Here’s who wins, who loses, and what it means for your portfolio.

The Clear Winners: Traditional Finance Goes Crypto

Major Banks – The New Crypto Kingmakers

Forget Kraken, Gemini and Crypto.com – JPMorgan Chase, Bank of America, and Wells Fargo are about to become the biggest players in crypto without anyone realizing it. The GENIUS Act allows bank subsidiaries to issue stablecoins with minimal additional capital requirements which is a massive advantage for legacy banking businesses over crypto-native competitors. None of them are truly ready for this, but once they figure out which crypto native to partner with (hello Coinbase and Bitgo!), they’ll be off to the races.

Why? Because these institutions possess everything crypto companies spent years trying to build (and were typically blocked at every turn): existing regulatory relationships, compliance infrastructure, access to Federal Reserve accounts, and most importantly, consumer trust. Their balance sheets are large enough to back billions in stablecoins without breaking a sweat. The real kicker? They can leverage existing payment rails and customer relationships to instantly scale.

Circle (USDC) – The Regulatory Golden Child

Circle has been positioning for this moment since 2018, methodically building compliance infrastructure while competitors chased yield and innovation. With USDC already meeting most GENIUS Act requirements, they’re perfectly positioned to capture market share as competitors scramble to comply.

Their advantage is simple: they’re already publishing monthly attestations, backing reserves with US Treasuries, and maintaining established relationships with major exchanges. USDC’s $61.5 billion market cap provides the scale advantages necessary to compete (or partner) with incoming traditional finance players – and of course, the company is also Wall Street establishment now on the heels of its recent IPO.

Custodial Infrastructure Players

As mentioned, Coinbase Custody, BitGo, and Anchorage Digital should see explosive growth as every stablecoin issuer needs compliant custody services. The Act’s strict segregation requirements create a massive total addressable market that didn’t exist before. Qualified custody services become mandatory for all stablecoin operations, creating high switching costs once integrated and regulatory moats that protect incumbents. As corporate adoption accelerates, these infrastructure providers sit at the center of every transaction.

The Inevitable Losers: Compliance Kills Innovation

Tether (USDT) – The $120 Billion Question Mark

Tether’s $120 billion market cap makes it too big to ignore, but they have few friends in Washington and their historical opacity makes their capacity for GENIUS Act compliance questionable. Their offshore structure and years of regulatory resistance have created an insurmountable compliance gap.

The fundamental problem is transparency. Tether has never provided full audits, only “attestations,” and maintains significant exposure to commercial paper and foreign assets that don’t meet the Act’s backing requirements. Their offshore legal structure complicates US regulation, and their history suggests they’ll resist rather than comply. The prediction is stark: USDT will likely retreat from US markets rather than submit to comprehensive oversight, creating a massive opportunity for compliant alternatives (hello again Circle) to capture their market share.

Algorithmic Stablecoins – Extinction Level Event Incoming! 

If TerraUSD’s $60 billion collapse wasn’t enough warning that this dog won’t hunt, The GENIUS Act finishes the job by effectively banning algorithmic stablecoins by requiring 1:1 backing with traditional assets, ending the experiment in “stability through smart contracts.” Any stablecoin backed primarily by crypto assets, algorithmic mechanisms, or fractional reserves becomes instantly non-compliant. The Act’s backing requirements eliminate the entire category of experimental stability mechanisms that defined much of DeFi innovation.

Offshore Stablecoin Issuers

Companies operating outside US jurisdiction will find themselves locked out of the world’s largest crypto market. The Act’s strict licensing requirements create an “island effect” for non-compliant issuers, forcing them to choose between US market access and regulatory independence. Cayman Islands-based issuers without US subsidiaries, European stablecoin projects targeting US users, and DeFi protocols issuing unbacked synthetic dollars all face the same choice: comply or exit.

The Wild Cards: Big Tech’s Crypto Invasion

Meta (Facebook) – Diem’s Revenge

After regulatory pressure killed Facebook’s Diem project in 2021, the GENIUS Act ironically gives Meta a clear pathway to launch a stablecoin. With 3 billion users and massive cash reserves, they could instantly become the largest stablecoin issuer overnight. Meta already operates payment infrastructure through Facebook Pay and WhatsApp Pay, serving a global user base hungry for digital payments. Their balance sheet can easily back hundreds of billions in stablecoins, and their political relationships have been rebuilt since the Cambridge Analytica era.

A Meta stablecoin integrated across their social ecosystem could flip the entire market dynamics, making current leaders look like startups by comparison.

Amazon – The Silent Threat

Amazon’s AWS already powers much of crypto infrastructure, but adding a native stablecoin for e-commerce payments would create an unstoppable competitive moat. Imagine instant adoption across their entire e-commerce ecosystem, integration with existing payment methods, and corporate treasury management services for business customers. Amazon’s international expansion advantages could also help navigate the complex web of global stablecoin regulations that other issuers struggle with.

PayPal – The Payments Bridge

PayPal’s existing crypto integration makes them a natural stablecoin issuer, with regulatory relationships and mainstream user base providing significant advantages over crypto-native competitors. They understand both traditional payments and digital assets in ways that pure-play crypto companies don’t.

State-Level Arbitrage: The $10 Billion Sweet Spot

The Act’s $10 billion threshold for state regulation creates a new category of “mid-tier” stablecoin issuers that could exploit regulatory arbitrage opportunities. State regulation offers lower compliance costs, faster approval processes, and local regulatory relationships that nimble players can leverage. Regional payment processors, state-chartered banks, and crypto-native startups willing to accept growth limits could find profitable niches in this space, serving markets that larger players consider too small to address.

Investment Implications: How to Position Your Portfolio

Immediate Actions for the Next Six Months

Smart money will probably buy before the institutional rush begins. Coinbase (COIN) will see explosive growth in custody services as compliance becomes mandatory. Circle equity (CRCL) of course – and major bank stocks like JPM, BAC, and WFC will benefit significantly from crypto expansion opportunities. Conversely, avoid the regulatory cliff. Any platform heavily dependent on USDT faces significant transition risk. Offshore exchanges will struggle with persistent regulatory uncertainty. Many DeFi tokens represent protocols that will need to restructure completely or shut down.

Medium-Term Opportunities Over 6-18 Months

Infrastructure plays become increasingly valuable as the market matures. Compliant custody providers, regulatory technology solutions, and auditing services will see sustained demand growth. Direct stablecoin exposure should favor USDC allocations before bank competition intensifies, while avoiding anything not backed 1:1 with US assets.

Long-Term Bets Beyond 18 Months

Big Tech partnerships represent the highest upside potential. Companies providing infrastructure to Meta, Amazon, and Apple will benefit from massive scale advantages. Payment processors bridging traditional and crypto rails will capture significant value as adoption accelerates. International expansion plays become valuable as other countries follow the US regulatory model, creating global opportunities for compliant players. The contrarian opportunity lies in non-US stablecoin projects that achieve critical mass outside US jurisdiction, though regulatory risk remains high for privacy-focused alternatives.

The $3.7 Trillion Question

Treasury Secretary Bessent’s prediction of a $3.7 trillion stablecoin market by 2030 assumes the GENIUS Act succeeds in bringing institutional adoption. Bitmex founder Arthur Hayes thinks he’s right – describing the Act as a liquidity bazooka. The winners will be determined by regulatory compliance speed, scale advantages in absorbing compliance costs, and distribution power to reach mainstream users and institutions.

The bottom line is clear: The GENIUS Act doesn’t just regulate stablecoins—it industrializes them. Crypto-native innovation gives way to traditional finance efficiency, and the companies that understand this transition will capture the majority of that $3.7 trillion market, while the rest become footnotes in crypto history.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice.

Coinbase’s newly announced Bitcoin rewards credit card promises up to 4% back on every purchase, but the mandatory Coinbase One subscription requirement raises questions about whether this is primarily a customer acquisition tool for the company’s ‘struggling-to-scale’ premium service. A deeper look at the fee structure and timing suggests this may be less about revolutionizing crypto rewards-  and more about driving recurring revenue growth.

The Subscription Imperative

The Coinbase One Card requires an active, paid Coinbase One membership to open and maintain the card account, and introduces a new Coinbase One tier ‘Basic” priced at $4.99 a month or $49.99 a year.  If you don’t keep the subscription going – you’ll lose the card. “If your membership becomes inactive or is canceled, your Coinbase One Card account may be closed.”

The timing appears strategic. Coinbase is simultaneously introducing the Basic tier “to make saving and earning more accessible to everyone,” suggesting the previous Coinbase One $29.99 monthly pricing had achieved limited adoption. While the service has grown to more than one million members since launching in 2023 this represents a fraction of Coinbase’s total user base of over 100 million.

The Revenue Growth Imperative

Coinbase’s subscription and services revenue reached $698.1 million in Q1 2025, compared to $1.26 billion in trading revenue. William Blair analyst Andrew Jeffrey has alluded to the fact that despite Coinbase being the market leader in the US, its trading fee revenue is far from its only focus. “Coinbase is the dominant U.S. crypto exchange, with more than 50% of the domestic market,” Jeffrey said.  We expect this competitive advantage to persist, even if retail trading fees decline.” Jeffrey believes subscription revenue growth will be the reason long-term investors own Coinbase stock.  This Wall Street expectation for recurring revenue growth provides context for why Coinbase would tie its most compelling new retail targeted product exclusively to Coinbase One subscriptions.

Competitive Fee Analysis Raises Questions

When compared to existing crypto cards, Coinbase’s approach stands out for its subscription dependency rather than competitive advantages. At this time Coinbase has not revealed what balance a user must maintain to receive 4% back on purchases – stating “Bitcoin back rewards rates are based on the cardholder’s assets held on Coinbase. We’ll share more when the Card becomes available.”

Fee-Free Alternatives:

• Gemini Credit Card: Up to 4% back on gas, 3% on dining, 2% on groceries with no annual fee.
• Nexo Card: Up to 2% cashback with no annual or monthly fees
• Crypto.com: Up to 8% cashback with no annual or monthly fees

X users highlight the Coinbase strategy of getting clients to increase the balances held in their Coinbase accounts to receive maximum rewards. “Not your keys not your crypto”

Market Context

The launch comes as the crypto industry prepares for a boom in product launches thanks to pro-crypto policies and the promise of clearer regulations making it an opportune time to introduce subscription-driving products. The recent launch of Gemini’s Bitcoin Credit Card was also heavy on hype at the expense of new or compelling benefits, simply being its old credit card with an orange color option.  For a publicly traded company like Coinbase, demonstrating predictable recurring revenue growth becomes increasingly important for investor confidence.

The Strategic Verdict

While the Coinbase One Card offers genuine value for heavy spenders already committed to the Coinbase ecosystem, the subscription requirement and competitive landscape suggest this may be more about business model evolution than pure customer benefit. For consumers, this means carefully evaluating whether the convenience and integration benefits justify ongoing subscription costs, especially when fee-free alternatives exist. The card’s success will likely depend on whether users find the broader Coinbase One ecosystem valuable enough to maintain subscriptions long-term, rather than just the card’s reward rates alone.

When Brian Armstrong, CEO of Coinbase, publicly admitted on X this week that account freezing has been “a major issue for longer than is acceptable,” it wasn’t just corporate damage control, it was an acknowledgment of a crisis that has left thousands of users locked out of millions in crypto assets.

Coinbase CEO Brian Armstrong on X.

The Unsettling Reality Behind Coinbase’s “Fraud Prevention”

The numbers tell a disturbing story. Users aren’t being locked out for suspicious activity, they’re being punished for behaving exactly as legitimate crypto investors should.

Consider this: A 10-year Coinbase customer @v1nm4n had their entire account frozen for a week after attempting to send $10 worth of cryptocurrency. Not $10,000. Ten dollars. The restriction didn’t just affect that transaction, it locked down all their assets. Or take Eric Conner, co-founder of EthHub, whose account was frozen simply for using a VPN to access his account. In December 2024, his public complaint triggered an avalanche of similar stories from users who had been locked out for months or even years. The pattern is clear: Coinbase’s algorithm-driven “fraud prevention” system has been treating normal crypto activities as criminal behavior.

The VPN Trap: How Privacy Protection Became a Red Flag

Here’s where it gets particularly troubling for privacy-conscious crypto users. Coinbase’s risk models automatically flag VPN usage, despite VPNs being standard security practice for many crypto investors. Scott Shapiro, Coinbase’s product director, defended this policy last December by claiming VPNs are “always used by miscreants.” This reveals a fundamental misunderstanding of legitimate crypto security practices and suggests the exchange views user privacy as inherently suspicious. In Coinbase wishes to expand globally (as it obviously does) it will need to get its corporate head around the fact that lots of people, in many countries, have to use a VPN to access any website that is crypto related.

For crypto investors who value privacy and security, core principles of cryptocurrency itself, this creates an impossible choice: sacrifice your privacy or risk having your account frozen indefinitely. This is a point raised by another Coinbase ‘lock out’ Michael Chen –  “Please save me from this endless thread of emails I’ve been on stretching back months and months just constantly being asked to upload my most sensitive personal data into some random drives.” Chen’s comment is particularly pertinent, given Coinbase’s recent privacy ‘dump’ where its own customer service staff sold private customer information to criminal gangs.

Why Long-Term HODLers Are Particularly Vulnerable

The data reveals that account tenure provides zero protection from arbitrary restrictions. In fact, established users might be at higher risk during periods of increased activity. One documented case involved a user whose daily ACH limits were raised from $250 to $5,000, only to have their account frozen for “fraud prevention” after they used those newly approved limits. The logic is baffling: Why raise limits if using them triggers a freeze? This pattern suggests Coinbase’s systems are poorly integrated, with different departments applying conflicting rules that trap users in algorithmic contradictions.

An Attempted Fix

In the last couple of months the frozen account issues have seen Coinbase hire a frozen account czar @dorvonlevi. who, after nine weeks on the job, says “there’s so much more for us to do to get to a great state” (full credit for honesty). Mr Levi says Coinbase has “reduced the frequency of account locks by ~82% so far, and new changes are currently rolling out that will bring further reductions.” Despite this, the issue continues for many, as Levi’s X thread clearly shows.

Coinbase Frozen Account Czar Brian Dorvon Levi on X

How To Get Your Coinbase Account Unfrozen

If the worst has happened and your Coinbase account has been frozen, this comprehensive guide walks you through the step-by-step process to get it unfrozen, starting with contacting Coinbase support directly and escalating through official complaint channels and regulatory bodies if needed.

1. Contact Coinbase Support (Fast-Track First)

• Live Chat / Email / Phone: Go to Coinbase Support, log in (if possible), and start a live chat or email support@coinbase.com. If locked out, use their email or mail option.

• Support Ticket: Note your case number. Keep it for escalation.

• Choose “Escalate” Phone?: Some users have report that pressing for escalation can delay, not speed up resolution

Pro Tip: Be clear, concise, and polite. As a former lawyer I can say it’s very important to assemble your evidence – both to help them help you and in case you need to take legal action at some point. So provide dates, links to support messages, and document copies.

2. Official Coinbase Complaint Process

Coinbase’s terms (which you’ve agreed to when you signed up) require you to use their formal complaint form after support. 

• Steps:

  1. Submit online via help.coinbase.com or email.

  2. Include your case number, timeline, documentation.

  3. Coinbase must respond within 15 business days (or issue an interim reply by day 35)

3. Filing External Complaints (US Customers)

If Coinbase stalls or declines your formal complaint then use the power of the government to help you:

Consumer Financial Protection Bureau (CFPB): You can file at no cost for “Money transfers, virtual currency”. They forward your complaint to Coinbase and expect a response in ~15 days.

Federal Trade Commission (FTC): Use ReportFraud.ftc.gov to report unfair business practices. Sure it sounds a bit extreme, but they’ve got your money and they won’t give it back – simple as that really. 

Better Business Bureau (BBB): File a complaint against Coinbase here.

State Attorney General: Submit via your state AG’s website. Multiple complaints in your state get more traction

These are all free, and often trigger much faster responses than waitin – get others, with some leverage working on your behalf. 

4. For Non‑US Customers

UK/EU users must follow Coinbase’s formal complaint process first, then escalate to:

Financial Ombudsman Service (FOS): in the UK you can file a complaint here. 

EU consumer protection agencies—look up your local ombudsman or financial regulator and complaints process here.

What This Means for Your Crypto Investment Strategy

The Coinbase account freezing crisis exposes fundamental flaws in how centralized exchanges must prioritize legal compliance over customer rights. But it also reveals three critical investment considerations:

1. Diversification Risk Beyond Portfolios Keeping all your crypto on a single exchange, even the largest US exchange, creates unnecessary single points of failure. The “not your keys, not your crypto” principle isn’t just philosophical; it’s practical risk management.

2. Due Diligence on Exchange Policies Before choosing an exchange, investigate their account restriction policies, customer service response times, and data security track record. Coinbase’s issues aren’t unique (the writer has has similar problems with Nexo) but their scale makes them particularly concerning.

3. The Hidden Costs of “Convenience” Centralized exchanges offer convenience, but that convenience comes with the risk of arbitrary account actions that can lock you out of your assets when you need them most, particularly during volatile market conditions. Consider self custody. Yes, managing your own private keys requires more technical knowledge, but it also eliminates the risk of arbitrary account restrictions.

The Bigger Picture: Regulatory Compliance vs. User Rights

Coinbase’s problems reflect broader tensions in the crypto industry between regulatory compliance and user experience. Exchanges face intense pressure from regulators to implement stringent anti-money laundering (AML) and know-your-customer (KYC) procedures. The issues at Coinbase are common across the sector – and demonstrates how regulatory fear can lead to algorithmic overreach that punishes legitimate users.

The Investment Verdict

If true, Coinbase’s 82% reduction in unnecessary account restrictions is a good start, but it’s a solution to a problem that arguably should never have existed at this scale. For crypto investors, the question isn’t whether Coinbase has improved, it’s whether you’re comfortable trusting your assets to a platform with a documented history this type of issue.  Smart crypto investors will evaluate exchanges not just on fees and features, but on their track record of respecting user rights and maintaining accessible customer service.

A legislative wave is brewing in California that could redefine how you manage your digital assets. While the headlines might sound benign – “unclaimed property laws updated for crypto” – the reality of Assembly Bill 1052 (AB 1052) is sparking debate and raising questions for cryptocurrency holders.  Dry legal jargon aside, the real question is could your carefully hoarded crypto vanish into the state’s coffers, just because you’re quietly HODLing?

The Three-Year Time Bomb: Are You Really “Engaging” with Your Assets?

At its core, AB 1052 states that if crypto assets held in a custodial account (think your Coinbase or Kraken account) show no “act of ownership interest” for a period of three years, they could be transferred to the state as unclaimed property. This isn’t an outright “seizure” in the conventional sense, as the state intends to hold the assets in-kind (Bitcoin remains Bitcoin) and allows for reclamation.

But consider this: are you actively logging into your exchange account every few years? Are you making minor transactions just to prove you’re there? For the long-term holder, the “set it and forget it” investor, or even someone who just wants to ride out a bear market without daily interaction, this law introduces an unsettling new layer of diligence. Are you certain your current passive approach meets California’s definition of “ownership interest”? If not, are you prepared for the potential hassle and uncertainty of reclaiming assets from a state bureaucracy?

The Hidden Risks of Centralized Trust: Why This Law Matters

While traditional unclaimed property laws have long applied to dormant bank accounts, extending them to crypto strikes a nerve for a fundamental reason: it highlights the inherent tension between centralized control and decentralized freedom. When you leave your crypto on an exchange, you’re trusting that third party to safeguard your assets and act on your behalf. AB 1052 essentially grants the state the power to step into that relationship if you appear “absent.”

Critics are quick to point out the chilling effect this could have on crypto adoption, particularly for those seeking an alternative to traditional financial systems. If a government can classify your “dormant” digital wealth as public property, how secure is it truly within a centralized framework? This isn’t just about California; it’s a potential precedent for other states, reshaping the regulatory landscape of digital assets across the nation.

Your Action Plan: Don’t Let Your Crypto Become “Unclaimed”

This isn’t a moment for passive observation. It’s a call to action.

• Review Your Custodial Holdings: If you have significant crypto on exchanges, now is the time to understand their terms of service regarding dormancy and how they intend to comply with AB 1052 (should it pass).
• Prioritize Self-Custody: For many, this law underscores the compelling argument for taking control of your own private keys. Hardware wallets and decentralized solutions offer a pathway to truly owning your crypto, beyond the reach of third-party intermediaries and, by extension, state unclaimed property laws. Are you ready to make the leap to true self-sovereignty?
• Stay Informed, Stay Engaged: This legislation is still in progress, heading to the Senate. Its final form could still change. Understanding the nuances and potential impacts is crucial for protecting your digital wealth.

What’s the End Game For ‘Unclaimed’ Crypto?

So what happens if your dormant Bitcoin or Ethereum is transferred to the state and you, or your heirs, never come forward to reclaim it? While the state acts as the perpetual custodian, not the owner, meaning your right to claim never truly expires, California’s Unclaimed Property Law allows these assets (or the value derived from traditional property) to be placed into the state’s General Fund. For crypto specifically under AB 1052, the mandate is to hold the assets in-kind rather than liquidating them.

This means the state theoretically becomes a permanent, albeit reluctant, HODLer of your digital fortune, safeguarding it indefinitely. The “end game” for California isn’t a windfall from your crypto, but rather a long-term custodial responsibility that continues until the rightful owner, or perhaps a distant descendant, eventually remembers to claim it.

VivoPower International PLC has completed a dramatic transformation from a failing renewable energy company to what it claims will be “the world’s first XRP-focused digital asset enterprise,” raising questions about corporate governance and opportunistic market timing.

The NASDAQ-listed company announced it raised $121 million in a private placement to purchase $100 million worth of XRP cryptocurrency, marking a complete departure from its original sustainable energy mission. The move comes as the company faces financial distress and follows a pattern of struggling companies pivoting to trending sectors during market booms.

Financial Collapse Preceded Crypto Pivot

VivoPower’s crypto strategy emerges from a position of financial weakness evidenced by its cash position. As of June 30, 2024, VivoPower held only $0.8 million in cash reserves, also reported an adjusted EBITDA loss of $5.9 million from continuing operations. This after a loss of 5.7 million in the 2023 financial year.

Complete Business Model Abandonment

VivoPower was originally founded in 2014 and has operated as “an award-winning global sustainable energy solutions B Corporation company” with two primary business units: Tembo, focused on electric solutions for fleet applications, and Caret Digital, a power-to-x business focused on renewable power applications including digital asset mining.  The company now plans to accelerate the spin-offs of both Tembo and Caret Digital subsidiaries by the third quarter of 2025. This represents an abandonment of its renewable energy mission in favor of what the company describes as “acquisition, management, and long-term holding of XRP digital assets as part of a diversified digital treasury strategy .

The XRP Investment Strategy

The $121 million private placement was priced at $6.05 per share, above the last market closing price of $6.04. The funding round was led by Saudi Prince Abdulaziz bin Turki Abdulaziz Al Saud, who invested $100 million through Eleventh Holding Company.

VivoPower has partnered with BitGo as an exclusive over-the-counter trading desk to acquire the initial $100 million worth of XRP tokens. The company will use BitGo for both trading XRP holdings through their 24/7/365 OTC trading desk and custody services through BitGo’s platform.

Market Reaction and Timing Concerns

VivoPower shares surged as much as 26% following the crypto announcement before giving back some gains, ultimately stabilizing with an 11% gain around $6.75 . Notably, XRP itself declined 2% to $2.29 despite the announcement, trading below key resistance levels. At the time of writing the VivoPower price has fallen to $4.30

VivoPower’s choice of XRP as its primary treasury asset comes with regulatory risks. While a July 2023 federal court ruling found that XRP is not a security when sold to retail investors on exchanges, the SEC has appealed this decision. The court did rule in favor of the SEC regarding $728 million in institutional sales, finding these constituted unregistered securities offerings. The ongoing legal uncertainty creates compliance challenges for corporate XRP holders. The SEC’s appeal means the regulatory status of XRP remains unsettled, potentially exposing corporate treasuries to future enforcement actions.

Contrast with Established Corporate Crypto Strategies

VivoPower’s approach differs markedly from established corporate cryptocurrency strategies. MicroStrategy (now Strategy), the largest corporate holder of Bitcoin, has accumulated 528,185 BTC worth approximately $42.9 billion while at the same time maintaining its core software business. Other companies like Marathon Digital Holdings (48,237 BTC) and Riot Platforms (19,211 BTC) have built their crypto treasuries while continuing their primary mining operations. Unlike Bitcoin mining companies that can claim energy-related synergies, XRP requires no mining infrastructure and has no connection to renewable energy applications. This makes VivoPower’s pivot a complete departure from any energy-related business rationale.

Corporate Governance Implications

The transformation raises questions about corporate governance and shareholder protection. VivoPower’s executive chairman Kevin Chin has provided little insights into the rationale for the move, saying “We are incredibly privileged to have His Royal Highness, Prince Abdulaziz bin Turki Abdulaziz Al Saud of Saudi Arabia leading this transformational capital raising”. The Prince’s comments on the investment don’t offer any additional depth – stating; “After reviewing a number of listed vehicles seeking to embrace a digital asset treasury model, we selected VivoPower given its strategic focus on XRP and its objective to contribute to building out of the XRPL ecosystem.” This statement is confusing given that prior to the capital raise VivoPower had no focus on XRP and appears to be no position  to contribute to building out the XRPL ecosytem. Essentially, shareholders who originally invested in a renewable energy company now own shares in what is essentially a crypto investment vehicle.

Risk Factors and Market Context

VivoPower’s strategy introduces several risk factors uncommon in traditional corporate treasury management:

Concentration Risk: The company is committing $100 million—roughly 83% of its raised capital—to a single cryptocurrency, representing extreme portfolio concentration.

Volatility Risk: Cryptocurrency markets are notably more volatile than traditional treasury assets.

Operational Risk: VivoPower’s reliance on BitGo for trading and custody indicates the company lacks internal capabilities to manage crypto assets independently.

Regulatory Risk: Beyond XRP-specific issues, the broader cryptocurrency regulatory environment remains in flux, with potential impacts on corporate holders.

Looking Forward

VivoPower’s transformation from renewable energy company to crypto treasury vehicle represents a dramatic corporate pivot in recent market history. The company’s executives argue this positions them at the forefront of digital asset adoption, while critics question whether this represents sound corporate strategy or opportunistic market timing.

The success or failure of VivoPower’s XRP gamble will likely influence how other struggling companies view cryptocurrency pivots as a survival strategy. For now, the company has successfully raised significant capital and positioned itself as a pure-play XRP investment vehicle, though the ultimate value creation for shareholders remains to be seen and will be dependent on the expertise of Ripple Labs and Bitgo as opposed to anything VivoPower may or may not do.

The cryptocurrency industry received a significant win in late May 2025 when the SEC’s Division of Corporation Finance published a staff statement spelling out how the regulator may evaluate proof-of-stake networks, mainly noting that covered activities do not “involve the offer and sale of securities”. This guidance effectively legitimized staking activities at the federal level, providing relief to an industry that had been operating under a cloud of uncertainty since early 2023.

However, this federal clarity hasn’t translated to uniform state-level acceptance. Industry sources indicate that several states continue to treat staking services as securities offerings requiring registration, creating a complex compliance environment for cryptocurrency platforms.

The Coinbase Catalyst

Coinbase CEO Brian Armstrong has emerged as a vocal critic of this state-by-state inconsistency. In a recent tweet, Armstrong criticized these states for “holding on to a bogus theory on crypto staking” and harming consumers, suggesting that the lack of access to staking is costing them financially. Despite the apparent regulatory clarity and that staking rewards are one of the primary avenues for yield generation from crypto assets, California, New Jersey, Maryland, Washington, and Wisconsin still restrict the practice.

In a recent blog post, Coinbase has provided a map of the United States that quantifies the yield distributions citizens of those states would have received, but for the restrictions.

Source: Coinbase

The conflict dates back to early 2023, when Armstrong first warned about potential federal restrictions on staking. Armstrong expressed concerns about “rumors” that the SEC would like to get rid of crypto staking for retail customers, calling it a “terrible path for the U.S.” His early warnings proved prescient as regulatory scrutiny intensified throughout 2023 and 2024.

State-Level Enforcement Actions Continue

New Jersey provides a prime example of state-level resistance to federal guidance. The New Jersey Bureau of Securities issued a Summary Cease and Desist Order against Coinbase for violations of the Securities Law in connection with Coinbase’s crypto staking offerings, determining that Coinbase violated the Securities Law by offering unregistered securities through its staking offerings to New Jersey residents.

Importantly, the action didn’t ban staking outright but required compliance with state registration requirements. “This action does not prohibit Coinbase from offering staking securities, so long as it complies with New Jersey law,” the Bureau noted, highlighting the registration-focused approach that many states continue to pursue.

The Economic Stakes

As the image above shows, the financial implications for investors are substantial. The value of staked assets was about $42 billion in the fourth quarter of 2022, with annualized staking rewards of $3 billion, according to industry data. For the individual states that maintain restrictive policies, residents are effectively cut off from participating in this growing segment of the digital asset economy.

Industry Arguments for Staking

Crypto advocates argue that staking fundamentally differs from traditional securities offerings. Alison Mangiero, the executive director of the Proof of Stake Alliance (POSA), told industry publications that “staking tends to get misconstrued with unrelated activities like lending, but staking is fundamentally a way for anyone to join in providing security for proof-of-stake networks”. Armstrong has emphasized that “staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints”, positioning it as a technological advancement rather than an investment product.

The Broader Regulatory Landscape

The staking debate reflects broader tensions in crypto regulation. The US regulatory landscape includes a patchwork of state regulation and guidance that has encouraged only a select few national banks and financial services companies to embrace cryptocurrency. This fragmented approach has led to what industry participants describe as “regulation by enforcement” rather than clear, prospective guidance.

President Trump’s recent executive order on digital financial technology may signal a shift toward more crypto-friendly federal policies, but state-level resistance could persist regardless of federal direction.

Looking Ahead

The crypto industry now faces the challenge of operating in an environment where federal guidance suggests staking is permissible, but state-level restrictions continue to create compliance burdens and limit market access. Industry experts note that the SEC statement will likely start speeding up the process for securing approvals, particularly for exchange-traded funds that incorporate staking.

However, until states align their approaches with federal guidance or Congress provides definitive legislation, such as that in the Stable Act, the regulatory patchwork will likely persist, forcing crypto companies to maintain state-by-state compliance programs and potentially limiting innovation in proof-of-stake technologies. For investors, the message is clear: while staking may be permissible under federal securities law, the availability of staking services will continue to depend significantly on where they live and which platforms they choose to use.

Under the proposed regulations outlined in consultation paper CP25/14, firms providing cryptocurrency custody services in the UK or to UK consumers would face stringent new requirements designed to protect client assets. The proposals establish requirements for qualifying stablecoin issuers and requirements for qualifying cryptoasset custodians , creating a regulatory framework that extends beyond current anti-money laundering requirements.

Enhanced Asset Protection Through Trust Structures

To date, UK  firms have not been at all prominent globally in providing cryptocurrency custody services. While bank deposits in the UK are covered by the Financial Services Compensation Scheme (FSCS), which protects deposits in authorized banks, building societies, and credit unions, no such protection exists for crypto assets under UJ law. Although the proposed regulations do not go so far as to set up a similar scheme for crypto, or mandate insurance coverage, they do attempt to close the gap somewhat with;

• Trust structures – requiring firms to hold client crypto in legal trusts
• Asset segregation – keeping client assets separate from firm assets
• Capital requirements – firms must hold reserves to cover potential losses
• Daily reconciliations – to quickly identify and address any shortfalls

Central to the custody proposals is a requirement that firms must segregate client crypto assets from their own, hold those qualifying crypto assets on behalf of clients in a trust, have accurate books and records of clients’ crypto assets holdings, and have adequate controls and governance to protect clients’ crypto assets holdings .

This trust requirement represents a significant departure from current practices where many firms co-mingle client and company assets. The FCA notes that such practices have contributed to substantial losses in recent exchange failures, including FTX where consumers faced delays or complete loss of assets due to inadequate segregation.

The proposals mandate daily reconciliations of client assets and require firms to immediately address any shortfalls. Firms will be required to segregate client crypto assets from their own and maintain detailed records enabling them to distinguish assets held for different clients at any time.

Stablecoin Backing and Redemption Requirements

For stablecoin issuers, the FCA proposes robust backing requirements ensuring qualifying stablecoins are fully backed at all times with specific asset classes. Backing assets would be limited to highly liquid, low-risk instruments including cash deposits, short-term government debt, and in some cases, longer-term government bonds and money market funds.

A key consumer protection is the proposed redemption guarantee: Qualifying stablecoin issuers will be required to offer redemption of qualifying stablecoins in exchange for money to all holders. Payment orders to transfer redeemed funds to qualifying stablecoin holders should be placed at the latest by the end of the next business day following receipt of a redemption request .

This would address a significant current market failure where many stablecoin issuers restrict redemption rights to institutional users only, leaving retail consumers dependent on secondary market trading during market stress.

Market Context and Consumer Impact

The proposals come as cryptocurrency adoption in the UK has surged. The FCA’s recent survey found that 12% of UK adults now own crypto assets, up from 10% in previous findings. Just over a quarter (27%) of crypto asset users who responded to this survey had bought stablecoins .

However, current consumer protections remain limited. The FCA identifies custody of crypto assets by firms offering these services in the UK or to UK consumers will be in scope of the custody regime , covering an estimated £12.6 billion in UK consumer holdings.

The regulatory framework aims to address repeated instances of consumer harm, with poor organisational arrangements and hacks being the most frequent reason for harm associated with custody failures . Historical data suggests approximately 0.7% of the global crypto asset market value is lost annually due to custody failures.

Implementation Timeline and Industry Response

The consultation runs until July 31, 2025, with final rules expected to be implemented in 2026. The FCA estimates the proposals would affect approximately 50 custody firms and 10 potential UK stablecoin issuers.

For firms providing custody services, compliance costs are estimated at £1.8 million in initial implementation expenses and £500,000 in ongoing annual costs per firm. However, the FCA projects £395 million in consumer benefits over 10 years through avoided losses.

The proposals include scaled prudential requirements, with smaller firms facing a £150,000 minimum capital requirement while larger operations must hold capital equivalent to 0.04% of assets under custody.

Market Structure Changes

The regulatory framework would fundamentally alter the UK’s digital asset landscape. Currently, most UK consumers custody their cryptocurrencies with overseas platforms, with 72% storing assets on the exchange where they made their purchase.

Under the new regime, qualifying stablecoin issuers and qualifying crypto asset custodians will be required to be authorised by the FCA to carry on these activities by way of business in the UK .

The FCA emphasizes that these protections would not extend to overseas stablecoins or unregulated cryptocurrency products, maintaining the distinction that the majority of crypto assets remain high risk, speculative investments and consumers should be prepared to lose all their money if they buy them .

The proposals represent one of the most comprehensive regulatory frameworks for digital assets globally, potentially positioning the UK as a leader in cryptocurrency consumer protection while maintaining space for innovation in the rapidly evolving digital asset sector.

The bankrupt cryptocurrency exchange, operating under court-approved reorganization plans, expects eligible creditors to receive funds from distribution partners BitGo or Kraken within 1 to 3 business days of the May 30 announcement.

Recovery rates vary significantly across different creditor classes. Allowed Class 7 Convenience Claims Convenience claims holders are receiving 120% distributions, while other customer groups see recovery rates between 54% and 72%. Specifically, FTX.com customer claims receive 72% payouts, U.S. customer claims get 54%, and general unsecured claims along with digital asset loan claims each receive 61% distributions.

The substantial payouts mark a remarkable turnaround for what was initially expected to be a total loss scenario when FTX collapsed in November 2022 amid fraud allegations against founder Sam Bankman-Fried and other senior staff. Bankman-Fried was ultimately convicted and is currently serving a 25 year prison term.

To qualify for future distributions, customers must complete several requirements including logging into the FTX Customer Portal, completing know-your-customer verification, submitting required tax forms, and onboarding with either BitGo or Kraken as distribution service providers.

The estate continues warning users about phishing attempts, emphasizing that FTX will never ask customers to connect their wallets and directing them only to the official claims portal at claims.ftx.com.

This second distribution follows an earlier payout round, with additional distribution dates to be announced as the estate continues recovering assets. The recovery has been aided by the broader cryptocurrency market rally, which increased the value of digital assets held by the estate.

]]> https://bravenewcoin.com/insights/savage-peter-schiff-at-the-bitcoin-2025-conference-calls-entire-crowd-bag-holders-in-epic-takedown Sat, 31 May 2025 02:40:28 +0000 https://bravenewcoin.com/?p=85105

Hong Kong has moved to rein in the stablecoin market with new licensing law with the Legislative Council officially passing the Stablecoins Bill on May 21. The new law imposes a licensing requirement on any entity issuing fiat-referenced stablecoins (FRS) — digital tokens pegged to traditional currencies — a move designed to protect retail investors and enhance the city’s regulatory framework for digital assets.

The bill comes at a time when stablecoins are playing an increasingly critical role in the global crypto economy, often serving as gateways between traditional finance and decentralized ecosystems. Hong Kong’s new rules will apply to stablecoins issued domestically or abroad if they claim to be tied to the Hong Kong dollar.

Under the law, only licensed entities will be permitted to offer these stablecoins to the public. Issuers must meet strict regulatory standards, including robust reserve management, mechanisms for redeeming tokens at face value, and comprehensive anti-money laundering (AML) and financial reporting obligations.

Crucially, even during the six-month transition period, only advertising by licensed stablecoin issuers will be allowed — a pointed attempt to reduce scams and fraudulent schemes targeting retail investors. “This law is clearly aimed at curbing the ‘anything goes’ era of stablecoins,” said one digital finance analyst in Hong Kong. “It sends a message: if you want to operate here, you’ll have to play by the rules — and those rules are getting tighter.”

While the Hong Kong Monetary Authority (HKMA) will be responsible for granting licenses and conducting enforcement, officials are still finalizing the fine print. Additional consultations are planned to define the details of the regime, including how stablecoin issuers must manage user funds and how audits will be enforced.

Financial Secretary Christopher Hui said the bill aligns Hong Kong’s policies with international norms and helps “lay a solid foundation” for a safer, more transparent virtual asset industry. Meanwhile, HKMA Chief Eddie Yue framed the law as “pragmatic and flexible,” calling it a key step toward supporting a sustainable digital asset ecosystem.

The law is expected to come into force later this year, with a built-in grace period giving current and prospective issuers time to comply.

The legislation also signals broader ambitions: the government says it plans to launch consultations on regulating crypto custody services and over-the-counter (OTC) trading platforms next. With this move, Hong Kong continues to positioning itself not just as a hub for crypto innovation — but one where regulatory oversight and investor protection are no longer optional.