Ariva

Katherine Ross

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Don’t panic.&nbsp;



That’s the <a href="https://blockworks.co/podcast/empire/55f5d904-ced5-11ef-ac06-576c7c9a1fcd">gist of the message</a> from Asset Reality’s Aidan Larkin on this week’s Empire Roundup. Jason Yanowitz and Santiago Santos specifically asked him about all that US government bitcoin.



Basically, the recent court approval is par for the course for any civil forfeiture. And, no, it doesn’t mean that the US is immediately hitting the sell button.



 ”There&#8217;s a very strict process that has to get followed,” Larkin said.&nbsp;



“ At some point in the future, it&#8217;ll just go through the normal government processes. There will be a civil forfeiture application hearing. They will get their green light and then it will fall into the normal Marshals process and public domain,” he added. Asset Reality (which is a firm both Santos and Yanowitz invested in) helps governments manage seized assets, so Larkin is not just some armchair expert.&nbsp;



From here, we’ll eventually see Coinbase move the bitcoin onchain before it’s sold off.&nbsp;



Blaming the price action on the possibility of trying to time when the gov is going to sell some of its stash isn’t the right move, Larkin said. Instead, when you see that type of selling pressure, then it’s more than likely due to folks speculating and selling themselves.&nbsp;



And now you know.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">The US Govt has been given the greenlight to liquidate 69,000 BTC ($6.5B) from Silk Road, an official confirmed to DB News today Interesting situation less than 2 weeks away from the new admin who vowed to not sell <a href="https://t.co/HqD1KnhJK3">https://t.co/HqD1KnhJK3</a> <a href="https://t.co/xn8ATSEL7H">pic.twitter.com/xn8ATSEL7H</a>&mdash; db (@tier10k) <a href="https://twitter.com/tier10k/status/1877176406905356670?ref_src=twsrc%5Etfw">January 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



So how did we get here? Well, a Nevada company called Battle Born Investments initially sought to prevent the US from offloading the bitcoin. However, a judge in California overruled their motion earlier this week, which allows the US to move on with the civil forfeiture, as Larkin noted.&nbsp;



The likelihood of the bitcoin in question being funneled into a potential bitcoin strategic reserve is not very high either, so don’t get your hopes up.&nbsp;



(ICYMI: This summer, Trump <a href="https://blockworks.co/news/revisiting-trumps-crypto-promises-after-his-election-win">said</a> he planned to make it so that the US holds all its current bitcoin and uses it as a strategic reserve.)



To sum it up: Any bitcoin to be sold must first go through older processes. We’re talking pre-crypto processes designed for seized assets such as gold.&nbsp;



Then, there could be a slew of agreements to be made, from using the generated funds to make victims whole to asset sharing agreements with other governments. It’s pretty complicated.&nbsp;



Besides, as Larkin noted, would the US really want to use bitcoin linked to crimes for its reserve stash? Seems unlikely.



When dealing with the government, always assume there’s going to be a lot of bureaucratic red tape. What seems cut and dry probably isn’t.&nbsp;



Instead, Yanowitz thinks we could see — if we get a reserve, mind you — the government buying up bitcoin mined on US soil to stash away. And, honestly, that sounds a lot more interesting than bitcoin simply linked to Silk Road.



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US gov has to follow a ‘strict process’ before unloading $6.5B of bitcoin

Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



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On Tuesday, <a href="https://blockworks.co/news/backpack-wallet-acquires-ftx-eu">we reported</a> that Backpack had purchased FTX EU in a $32.7 million deal. The next day, FTX put out a <a href="https://www.prnewswire.com/news-releases/ftx-clarifies-certain-statements-by-backpack-regarding-backpacks-purported-acquisition-of-ftx-eu-302346394.html">statement</a> clarifying Backpack’s announcement. Then in a press release of its <a href="https://www.prnewswire.com/news-releases/backpack-responds-to-ftx-statement-302346689.html">own</a>, Backpack clarified FTX’s clarification.&nbsp;



This is how companies fight, I guess.&nbsp;



Here’s the crux of it all: What’s left of FTX said it wasn’t aware that Backpack bought FTX EU, and it swore off responsibility for the repayment of FTX EU customers and said it can&#8217;t verify whether what Backpack is saying is true. Backpack responded by saying that much of the saga leading up to its FTX EU acquisition had already been reported, and it would be renaming FTX EU to Backpack EU before it begins doling out customer claims.



The dueling press releases seem to stem from some bad blood FTX still has with FTX EU. FTX <a href="https://www.reuters.com/legal/litigation/ftx-reaches-33-million-settlement-over-failed-european-expansion-2024-02-23/">sued</a> its European arm to try and claw back some of the $323 million Sam Bankman-Fried spent for the startup. The suit ended in a settlement whereby FTX EU’s original founders Patrick Gruhn and Robin Matzke bought back FTX EU for $32.7 million. Backpack then bought FTX EU from Gruhn and Matzke, and the ownership shares are apparently awaiting transfer.



Backpack failed to elucidate this whole chain of events in its original press <a href="https://www.prnewswire.com/news-releases/backpack-announces-acquisition-of-ftx-eu-expands-crypto-trading-across-europe-302342778.html">release</a>, but it also doesn’t materially change much. Whether Backpack bought FTX EU from FTX or from the people who bought it from FTX, the basic fact remains that Backpack owns the asset.



Still, the sale itself remains a bit weird, at least to my mind. Backpack told me it bought FTX EU in April 2024 for $32.7 million. That’s just a month or two after FTX EU’s founders bought the company back for that exact price as part of a lawsuit settlement. At the time, FTX <a href="https://www.reuters.com/legal/litigation/ftx-reaches-33-million-settlement-over-failed-european-expansion-2024-02-23/">reportedly</a> concluded that “no other buyer would agree to purchase” FTX EU.&nbsp;



It doesn’t seem very business savvy for Backpack to pay the full $32.7 million for an exchange that no one else apparently wanted — and which was sold in a court settlement. Couldn’t they have asked for a few million off the sticker price just for getting it off Gruhn and Matzke’s hands? It’s also just a large amount for a startup like Backpack to pay: The project <a href="https://www.coindesk.com/business/2024/02/28/solana-veterans-raise-17m-for-backpack-crypto-wallet-exchange">reportedly</a> lost much of its funding in the FTX collapse, and it only raised $17 million in its last funding round. Where did it get $32.7 million to spend on FTX EU? Backpack did not return my request for comment on the financial side of the deal.&nbsp;



In any event, FTX seems to be nitpicking the Backpack press release, the broad strokes of which don’t appear to warrant much doubt. But we’re talking about FTX here, so it just makes sense things wouldn’t go as smoothly as planned.



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FTX didn’t know Backpack bought its EU arm

Ben Strack

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After witnessing the post-election rise in crypto asset prices and ETF flows, here’s another data point backing up a sentiment shift: 56% of 430 <a href="https://blockworks.co/news/financial-advisers-evaluate-etf-approval">surveyed financial advisers</a> say they’re more likely to allocate to the space because of the November results.&nbsp;



This number came from the Bitwise/VettaFi report we referenced a couple times this week as the companies teased findings before the formal release.



We mentioned, for example, that just 35% of advisers say they’re able to buy crypto for client accounts. Looking a bit deeper, 71% of these financial pros said at least some of their clients were investing in crypto on their own.&nbsp;



“These held-away assets represent a major business opportunity for advisers seeking to help clients integrate crypto into a broader wealth plan,” the report notes. This sort of statement is nothing new, but rather <a href="https://blockworks.co/news/wealth-managers-bitcoin-etfs">drives the point home</a>.



While nearly two-thirds report the inability to own crypto for clients, 22% allocated for clients in 2024 (twice the 11% <a href="https://blockworks.co/news/tradfi-bitcoin-economics-crypto-etf">in 2023</a>).&nbsp;



Of the advisers who haven’t yet invested, 19% plan to “definitely” or “probably” add exposure to the asset class this year. That’s more than double the percentage (8%) who said as much in last year’s report.



Other findings surprising to me:



<ul class="wp-block-list">
<li>Though US spot bitcoin ETFs notched $36 billion of net inflows in their first year, flows into ETH products accelerated in December and <a href="https://blockworks.co/news/solana-etf-filing-futures">filings</a> <a href="https://blockworks.co/news/canary-capital-litecoin-etf">for</a> <a href="https://blockworks.co/news/us-sol-etfs-unlikely-to-be-approved-soon">other</a> <a href="https://blockworks.co/news/bitwise-files-for-spot-xrp-etf">spot</a> crypto funds have proliferated, advisers thinking about jumping into crypto favor equity funds. Perhaps State Street Global Advisors’ <a href="https://blockworks.co/news/state-street-galaxy-crypto-etfs">mindset has legs</a>, and we recently heard about how BLOK co-PM Dan Weiskopf is <a href="https://blockworks.co/news/2025-crypto-stocks-to-watch">thinking about things</a>.</li>



<li>Secondly, despite the 56% swayed <a href="https://blockworks.co/news/crypto-impacts-since-election-outcome">by the election</a>, half the surveyed advisers still consider regulatory uncertainty the top hurdle for future crypto investments. That’s down from closer to two-thirds in previous years, but shows the wins of Trump and pro-crypto Congress members have not solved everything overnight.</li>
</ul>



The latter point confirms that amid the <a href="https://blockworks.co/news/2025-crypto-industry-predictions">optimism of progress</a>, there remains plenty of <a href="https://blockworks.co/news/2025-crypto-questions-to-answer">healthy skepticism</a> — or at least patience — from those weighing their next move.



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Election swayed advisers, but crypto adoption has room to run

Felix Jauvin

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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Back in September, the market priced one of the most aggressive cutting cycles I’ve ever seen, with multiple 50-basis point cuts priced in that would swiftly take us to 3% on the fed funds rate in 2025. Fast forward to today, and it&#8217;s a completely different story, with one to two cuts at best priced for 2025.



Let’s dig into what has driven the change and what to expect.



Below is a chart that compares the effective federal funds rate (EFFR) against the two-year Treasury note.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcR0plmd2BY79J0Lm8s1uFtSBQrfsoMG1zgJo30zNgC5us4A5efOH49YkJ-Gz0_epW-eb2ydI0htUZyJGOFcTdR72bujpyIOyn989MT-amU2ExbxjF_NarlLfB5O-ag6L6kq_n2Mw?key=6LM0Kvlki2uiEmtTlAQaY0px" alt=""/></figure>



There’re a few takeaways we can grab from comparing these two yields:



<ul class="wp-block-list">
<li>Throughout the last two years, we’ve seen many moments where the two-year has priced in an imminent and aggressive cutting cycle (as seen when two-year heads lower below EFFR).</li>



<li>For the first time since mid-2022, we see these two yields are parity. This implies the market is pricing in a rate-cutting cycle that is essentially over, but it sees no chance of any hikes either.</li>
</ul>



One of the big drivers behind talk about a swift end to this short-lived cutting cycle is around surprisingly stubborn inflation. As we can see in the December summary of economic projections, FOMC members have aggressively shifted from seeing inflation as being broadly balanced to seeing risks weighted to the upside.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="934" height="696" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png" alt="" class="wp-image-96051" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png?w=934 934w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png?w=345 345w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png?w=350 350w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png?w=294 294w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed.png?w=80 80w" sizes="(max-width: 934px) 100vw, 934px" /></figure>



This, paired with what is proving to be a much more resilient and solid labor market than what it appeared in September when the FOMC started to cut rates, is shifting the distribution of probable outcomes more toward a hawkish monetary reaction function.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="915" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=1024&amp;h=1024" alt="" class="wp-image-96052" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=456 456w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=383 383w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/unnamed-1.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



Putting these pieces together shines a light on why there’s increasing conviction in the idea that the rate-cutting cycle is over.



That said, there are still dovish voices within the FOMC.&nbsp;



In his speech this week, Governor Waller mentioned he still believed in cutting this year: “So what is my view? If the outlook evolves as I have described here, I will support continuing to cut our policy rate in 2025. The pace of those cuts will depend on how much progress we make on inflation, while keeping the labor market from weakening.”



Much like the last two years, 2025 is shaping up to be another <a href="https://blockworks.co/news/fed-dovish-hawkish-2024-conduct">year of extremes</a> where the market goes from pricing in aggressive hawkishness to aggressive dovishness.&nbsp;



Investors will need to quickly decide whether to try and ride these changes in sentiment or ignore them as noise.



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Is the Fed’s rate-cutting cycle over?

Macauley Peterson

ThorChain founder JP Thorbjornsen and the development team have decided to pause the ThorFi Savers and Lending programs for the next 12 months. The decision, announced Thursday, comes after consultations with key community members, devs and node operators, according to the project’s Discord.



Thorchain is a decentralized liquidity protocol that enables cross-chain asset swaps without the need for wrapped tokens or centralized exchanges. It allows users to trade native assets like Bitcoin, Ethereum and others directly on the platform, using its native token, RUNE, to facilitate transactions and secure liquidity pools. But the protocol is undergoing a major restructuring to make it more secure and easier to understand.



THORFi, a complex component of the ecosystem, has been identified as a primary source of volatility, particularly due to un-throttled redemptions that are driving away new participants and hindering progress on the 2025 roadmap, developers say. By pausing these features, the team aims to ensure that the protocol is ready to scale efficiently.



Read more:<a href="https://blockworks.co/news/rune-code-vulnerability"> Code vulnerability puts damper on RUNE’s wild run</a>



<h2 class="wp-block-heading">Under pressure</h2>



Inflation of RUNE’s circulating supply has contributed directly to the token’s poor price action. Several mechanisms are behind this inflation, including block rewards distributed to validators. As with many chains, RUNE is minted to reward participants, thus diluting its value. There is a growing consensus that these rewards should be reduced, but the specifics and timing of such changes are a matter of debate.



Beyond block rewards, other mechanisms such as Savers and Lending programs have added additional pressure. The Savers program, which was designed to create buy pressure for RUNE, has instead exacerbated the situation by creating substantial sell pressure when users withdraw their deposits.



The dynamic is simple: When users enter Savers, they must purchase RUNE, but when they exit, they sell it. This cycle becomes problematic when RUNE is underperforming relative to bitcoin. As users exit at lower prices, they trigger further declines in RUNE’s value, creating a feedback loop.



Lending has similarly introduced inflationary effects. While it has already been shuttered, its lingering impact continues to affect the RUNE price. Loans and collateral, primarily backed by BTC and ETH, have created liabilities that are hard to repay as the value of RUNE declines. The situation is compounded by the fact that, due to the current state of the market, more RUNE is being minted to cover obligations, further diluting the token.



<h2 class="wp-block-heading">Sunset of Savers</h2>



In light of these concerns, community members have called for immediate action to address the protocol’s structural weaknesses. The most immediate of these is the sunset of the Savers program, which continues to exert downward pressure on RUNE’s price.



The plan put forward includes a 72-hour period for dissent and discussion, allowing the community to voice concerns and potentially campaign for an unwinding of the decision. If no changes occur, a six-month &#8220;timeout&#8221; will follow, during which no further discussions or economic changes will be entertained. Developers will shift focus entirely to the app layer, optimizing bandwidth and accelerating development without the overhang of THORFi-related distractions.



After six months, the idea is to tokenize Lending and Saver positions, offering holders early liquidity on a peer-to-peer market. By the 12-month mark, a restructuring plan will be presented to provide liquidity for legacy THORFi holders, potentially introducing a System Income Tax that would remain until all positions are cleared.



Some have called for a more radical solution: Force the closure of all outstanding loans. On X, ThorTrades <a href="https://x.com/ThorTrades8/status/1877337451334873141">expressed</a> his concern on the sunset plan.



“If BTC trades at $75-85k, Rune will trade under $3 likely. Best to use this bad moment in the market to get rid of something bad (loans),” he wrote, arguing this aggressive action should be taken immediately. “The right moment to force loans to close was above $6 but the second best moment might be now.”



So it seems Thorchain is at a crossroads. The combination of underperforming RUNE, inflated supply, and growing liabilities threatens to undermine the protocol’s long-term viability. It’s clear that some immediate action is needed to halt this spiral. The protocol has already made strides in decentralization and cross-chain liquidity, but to ensure its survival, the Thorchain team looks to confront these internal challenges head-on.



The question now is whether node operators will play ball, and what comes of brewing community backlash. As JP put it, “prepare your pitchforks,” and be prepared to make the tough calls to save the protocol.



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ThorChain struggles following executive decision

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ICYMI, Sol Strategies <a href="https://www.newsfilecorp.com/release/236287">announced</a> that it was investing CAD $25 million ($17.4 million) in the Solana ecosystem earlier this week.&nbsp;



CEO Leah Wald told me ahead of the new year that Sol Strategies was focused on building up the “next level” of its business strategy.&nbsp;



Obviously, given Sol’s focus, the firm is gonna be bullish on the ecosystem, but Wald noted how pleasantly surprised she was at the amount of developer activity and overall enthusiasm for Solana right now.&nbsp;



She is skeptical, however, about a solana ETF being approved in the US “anytime soon.”



“I think there&#8217;s quite a while until a SOL ETF gets approved. During that time, as a former issuer, I know that you have a long time where you&#8217;re working with the staff and you&#8217;re working on education. That gives [potential issuers] a year…to educate the staff and make sure that everybody&#8217;s up to speed on what you know SOL actually is, and the merits and benefits, and provide…that additional timeline for maturity,” she explained.&nbsp;



But she does think that Canada is likely to approve a SOL ETF from <a href="https://pages.3iq.io/solana">3iQ</a> before we see a slew of US products because the Canadian issuer is “always ahead of the US.”



Out of curiosity, and given Wald’s experience, I pushed her on why she thinks a potentially crypto-friendly regulator wouldn’t look to get an ETF that holds SOL out the door. She told me part of her reasoning was exactly because of the changing leadership at the SEC.&nbsp;



If the new SEC chair “came in and said, ‘okay, all crypto ETFs are approved overnight,’ I think that that&#8217;s dangerous, actually,” she explained. It would be better to see a regulator who’s willing to put in the work to understand the differences between something like Solana and Ripple and speak to potential issuers prior to just greenlighting ETFs.



I guess we’ll have to make do with the crypto ETFs we have at home.



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SOL ETFs unlikely to be approved in US ‘anytime soon’

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Market watchers have cast <a href="https://blockworks.co/news/lightspeed-newsletter-prediction-markets-post-election">doubt on prediction markets’ ability</a> to draw meaningful volumes after the presidential election. Enter: Livestreams of drugged-up mice trying to balance on a rotating rod.&nbsp;



The so-called DeSci platform pump.science announced a partnership with Solana-based prediction market Hedgehog Markets whereby users can place bets on the outcomes of longevity experiments on mice. It’s arguably a move in a more reputable direction for the speculative DeSci trend, which has drawn criticism for creating misaligned incentives.&nbsp;



Decentralized science, or DeSci, has <a href="https://blockworks.co/news/daos-nature-biotechnology-editorial-benefits-science">been around for some time</a> in crypto, generally in the form of DAOs crowdfunding scientific experiments that otherwise wouldn’t get funded. Pump.science emerged in the past few months, borrowing its name and funding mechanism from the popular memecoin launchpad pump.fun.&nbsp;



Researchers submit experiments focused on longevity, or the increasing of lifespans, to pump.science, and a corresponding token is listed on pump.fun. As the memecoin’s market cap increases, pump.science will run experiments testing the compound on increasingly-larger animals, ending with humans. The experiments are livestreamed, so investors can see whether the compound appears to be working. The project’s docs say chemical suppliers could eventually purchase the rights to the chemical interventions from the token holders, though it’s unclear how that would work, and obviously no experiments have gotten that far yet.



This is a wonky way to fund science by any standard, and pump.science has drawn its fair share of critics.



Gauntlet CEO and Robot Ventures partner Tarun Chitra, one of speculative DeSci’s loudest critics, <a href="https://x.com/tarunchitra/status/1865950366052868548">called</a> projects like pump.science “at best naive and at worst a predatory scam.”



With the Hedgehog Markets partnership, the rules of the pump.science game at least make a bit more sense. Mice will be injected with longevity compounds and then tested versus a control group on a rotarod, which is a rotating cylinder that can test mice motor skills. Users — brandishing data including how the compound performed in flies and what the mice’s names are, among other things — bet on which mice will perform best prior to the trials, which are then livestreamed. For Chitra at least, this could be a better road for DeSci.



Chitra said in a direct message that the lower potential returns offered by prediction markets compared to memecoins could limit the pool of bettors on DeSci prediction markets. “But philosophically, there&#8217;s nothing that is scam-like about this — it just might be very hard to bootstrap, especially if you look at how long it took Polymarket.”



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The hottest new betting market is mice motor skills

David Canellis

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This is not a happy story. But I can’t get it out of my head.



Earlier this month, it was <a href="https://www.tampabay.com/news/tampa/2025/01/02/blockchain-macdill-undead-apes-nowlin-rhoden/">reported</a> that 21-year-old Alabama resident Berman Nowlin — <a href="https://www.justice.gov/usao-mdfl/pr/jury-finds-non-fungible-token-developer-guilty-defrauding-investors-and-laundering">convicted</a> of wire fraud and money laundering charges over an NFT rug pull in 2022 — had died by suicide.



A district court in Florida had ruled him guilty only three weeks earlier. He was due for sentencing later in January and faced a maximum sentence of five years in prison.



The rug pull in question referred to a short-lived Bored Apes-inspired project Undead Apes Society, which included three NFT collections released over two months.



Nowlin was described as the developer who coded the smart contracts.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdHn6NJIvhVxPKDTNTB6yUp0QhjI_wLYH3Qo2Tbnfu5wZ0Xw2JlkxoEdbJ7sFXlGe3qC5eiXax2N_wea31ByapMIkFgOKbfWLu0J1px0UnGcC337GDJNwrxMR2JaWV_HxDs_tfiAQ?key=Zw6IOD2a_wvSfbUPWTWrY3AB" alt=""/><figcaption class="wp-element-caption">Undead Apes were briefly popular on <a href="https://opensea.io/collection/undead-apes">OpenSea</a></figcaption></figure>



A second individual, Devin Rhoden, managed the art model engine for the NFTs. Rhoden is a 23-year-old senior airman in the US Air Force who worked as a cyber analyst.



Here’s the timeline as presented in court filings:



March 2022: 2,500 Undead Apes NFTs were minted on Solana for 0.05 SOL each (~$10,000 at the time). UndeadApes were “unique Apes with over 60 hand-drawn traits on the Solana blockchain. Ready to take on the Metaverse.”



Later in March 2022: 750 Undead Lady Apes were minted on Solana for 0.75 SOL each (~$53,400). These had supposed DeFi functions — stakers would earn up to 6x, 75% of royalties would go back into the liquidity pool, with the rest going toward paying the team.



April 2022: Floor prices for the initial Undead Apes collections reached 3.6 SOL (~$400) and 6 SOL ($660), respectively. In terms of SOL, that&#8217;s 72x and 8x on their initial mint prices.



Later in April 2022: A third mint was announced for Undead Tombstones, featuring a collaboration with Stoned Ape Crew, an unaffiliated project, which allegedly drove up mint prices.



Tombstones were said to come with additional features for existing Undead Apes holders that could generate additional return on investment.



Two hours later: The Stoned Ape Crew denies any partnership or involvement with Undead Apes Society. The Undead Apes team abandons the mint shortly after — taking the proceeds — and floor prices for all related NFTs immediately crash 85%.&nbsp;



Discord members then received a message from Rhoden in the Undead Apes Society chat saying, “Yall are dumb as fuck.”



Authorities traced earnings from the rug pull amounting to $161,548, which had been cashed out into US dollars and split about evenly between the bank accounts of Nowlin and Rhoden.



Going by the evidence supplied by the prosecutors, there appeared to be a plan to rug the entire time. The Feds were initially tipped off by another Air Force member who lost money in the scheme.



Still, two things are haunting me. The first thing is the relatively low amount of money extracted from the rug pull.&nbsp;



Perhaps I’m desensitized by much larger fraud cases over the years, but it was still enough for Rhoden to receive five years probation after pleading guilty, and his testimony is said to have led to the conviction of Nowlin, now deceased.&nbsp;



The other is that Nowlin had been diagnosed with autism. His family described him as above-average when it came to intelligence but he had the emotional maturity of a 14-year-old. He reportedly taught himself to code and spent most of his time online, playing video games and chatting in Discords.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcuoQzgIiqZ-VWvXemSaAlMKSChJ_G-rH-AtS2tKZurs1y_zxcPuweJR9rkRg9GvV0JilDh7NpMT1eQzeH-vwR7FOGBovOSCXkTuHAYSQKYoZBFxVcgqtopuwkCdkPRxvb-Xmjs?key=Zw6IOD2a_wvSfbUPWTWrY3AB" alt=""/><figcaption class="wp-element-caption">Some messages between the Undead Apes team sourced from court documents</figcaption></figure>



There is so much about crypto that is larger than life — often larger than any life we could ever imagine. But the Undead Apes rug pull wasn’t any of that.&nbsp;



People, of course, lost money very quickly. Who knows what would have happened had the team actually followed through on their promises. More than likely, they would have still lost money.



Usually, reading about rug pulls comes with some schadenfreude. Perps get caught under all sorts of silly circumstances, which makes for compelling crime stories.



Fraud is bad and bad actors should be caught. That’s what happened with the Undead Apes rug pull. Woefully, though, it now serves as a dark reminder that while the money and assets are silly and digital, the stories are painfully real.



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Undead Apes rug pull reminds that magic internet money is totally real

Casey Wagner

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While some continue to hope that the upcoming Trump-era SEC will wave its magic wand and dismiss pending lawsuits against multiple crypto firms, Coinbase was just handed a win.&nbsp;



The exchange, which the SEC <a href="https://blockworks.co/news/sec-sues-coinbase">sued in 2023</a>, yesterday won its motion for an <a href="https://blockworks.co/news/sec-coinbase-motion-interlocutory-appeal">interlocutory appeal</a> on whether crypto assets constitute investment contracts. The ruling is not an end to the case. But it will require the Second Circuit to consider this question, which, Coinbase argued, “could not be more pressing” in “numerous cases pending…across the country.”&nbsp;



From Judge Katherine Polk Failla’s order to grant Coinbase’s interlocutory <a href="https://blockworks.co/news/coinbase-sec-foia-lawsuit-continues">appeal</a> motion:&nbsp;



<figure class="wp-block-pullquote"><blockquote>“At issue is more than how to apply Howey (about which, the Court agrees, there is an extensive body of case law); at issue is how to apply Howey to crypto asset transactions, in the context of the surrounding digital ecosystems. That is a difficult legal question of first impression for the Second Circuit — more than mere disagreement with the Court’s Order.” </blockquote></figure>



In other words, Failla thinks the legal question at hand — how and if crypto assets should be subject to securities laws — is too big to not consider at the appellate level.&nbsp;



Failla has ordered a stay in proceedings until the interlocutory appeal is resolved, which could take months, if not longer. A ruling from the Second Circuit bears more weight than the District-level orders we’ve seen in recent months, many of which contradict one another.&nbsp;



Coinbase’s expensive, time-consuming legal battle just may be exactly what the industry is looking for…assuming things go its way, of course.



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Judge sends Howey question to higher court in Coinbase case 

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Treasury yields were once again on the rise Wednesday while US equities struggled to recover from a rough day of trading yesterday.&nbsp;



The US government’s monthly 10-year Treasury note auction on Tuesday drew the highest yield since 2007: 4.68%. Benchmark yields on 10-years hit a high of 4.73% Wednesday morning, a level not hit since last spring.



Zooming out, since the Fed started its rate-cutting cycle <a href="https://blockworks.co/news/on-the-margin-newsletter-uk-japan-rate-decisions">in September</a>, yields on 10-year notes have increased from around 3.7% to 4.7%. It’s an inverse correlation not typically seen, at least if you look back upon the past 10 easing cycles.&nbsp;



What gives?&nbsp;



Well, first of all, we aren’t in a typical easing cycle. Normally, rate cuts signal an approaching recession. This time, the Fed is lowering interest rates because central bankers believe inflation is <a href="https://blockworks.co/news/fed-interest-rate-policy-mistake">sufficiently declining</a> — or at least, they did.



FOMC members’ inflation expectations have risen from 2.6% to 2.8% for 2024, and as such, their median projections for cuts to the fed funds rate has decreased by 50 basis points. Futures markets are now pricing in a 95% chance central bankers hold rates steady at their next meeting later this month.&nbsp;



Plus, bond traders are reacting to the new (old) administration headed for the White House in less than two weeks. Today’s selloff (remember, bond prices and yields move in opposite directions), is likely linked to rising <a href="https://www.reuters.com/markets/us/trump-mulls-national-economic-emergency-declaration-allow-new-tariff-program-cnn-2025-01-08/">concerns</a> about Trump’s incoming <a href="https://blockworks.co/news/unpacking-trump-potential-tariff-policies">tariff policies</a>.&nbsp;&nbsp;



So, it’s a strange situation with perhaps a reasonable explanation, but we’re keeping an eye on the situation. The latest Fed minutes — set to be released this afternoon — should also give us more insight.



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Yields up, rates down 

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Fidelity Digital Assets addressed a question in its 2025 outlook report that many investors have been asking: “Is it too late?”



The query isn’t absurd given BTC’s recent rise to an all-time high above $108,000 last month. Buying is of course more fun before a big run.&nbsp;&nbsp;



In the <a href="https://fwc.widen.net/s/zbhjbmppgq/fda-2025-look-ahead-report-v6">report</a>, Fidelity Digital Assets research director Chris Kuiper mentions starting to see “early signs of mass diffusion and adoption.”&nbsp;&nbsp;&nbsp;



He adds: “Although this process will likely take decades, 2025 has the potential to be the year that is looked back on as the pivotal time where the ‘chasm was crossed’ as digital assets begin to take root and embed themselves into multiple fields and industries.”&nbsp;



Kuiper cites existing and discussed <a href="https://blockworks.co/news/brazil-bill-for-national-bitcoin-reserve">nation-state</a> and <a href="https://blockworks.co/news/company-treasuries-btc-reserve-asset">corporate crypto adoption</a>, which we’ve tracked here in recent weeks.&nbsp;



“Therefore, it may be too late for the speculators that want another frenzy,” he explained. “However, we believe we are still incredibly early in terms of this new era of sustainable adoption, diffusion and integration.”



This “Am I too late?” question reminded me of my conversation with Franklin Templeton’s Roger Bayston last month. He too mentioned this was something on the <a href="https://blockworks.co/news/franklin-templeton-etfs-tokenization-2025">minds of institutions</a>.&nbsp;



“We’ve seen this price run up and now I’m going to buy it?” he said, imitating an investor questioning that logic and wanting to buy cheap.



But with a more favorable US regulatory environment <a href="https://blockworks.co/news/crypto-friendly-congress-steps-into-power">unfolding</a>, it appears there’s “plenty of run room,” Bayston added. Bullish <a href="https://blockworks.co/news/bitcoin-q1-analyst-predictions">2025 BTC price predictions</a> range from $125,000 to $200,000.&nbsp;&nbsp;



Beyond the potential regulatory catalysts, Kuiper wrote that inflation could come back in a second wave (given inflation measures resisting a return to the 2% target, large fiscal deficits and the Fed’s rate-cutting cycle).



“If a recession does occur, it will likely be responded to with additional monetary and fiscal stimulus, which historically has been good for bitcoin,” he noted. “If risk assets continue to appreciate and inflation continues to run above the 2% target, bitcoin will also likely do well.”



And then there’s the potential for a stagflationary environment, which Kuiper says BTC has not ever really encountered. A Fidelity Digital Assets chart illustrates gold’s performance during the stagflation era of the 1970s and early ’80s. It shows gold rallying most during the second wave of inflation, offering a potential parallel for how bitcoin might behave.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcOzxUkgRW1XAvJ4g_iMTip6-UCddfGY9JijOwgq8L6Y7SZjIfS3U1OYCl6yA6y2SebIQ5vkUtLL0g2woVQ3eIgv-AlWjOE2O07IZsHYEIzbgm8n40c7NDYYwG0LBWKhs77ACNjGw?key=4NP7wyvb3dLIhRYmIpR1QGIS" alt=""/></figure>



BTC is currently 13% below its all-time high, with potential corrections ahead that could present additional buying opportunities.



Swan Bitcoin co-founder Brady Swenson said it appears the market has largely priced in the creation of a <a href="https://blockworks.co/news/senator-lummis-bitcoin-reserve-bill-crypto-policy">strategic bitcoin reserve</a> soon after Trump takes office.



He added in an email: “If that does not happen quickly, the inauguration could actually be a ‘buy the rumor, sell the news’ event, which would send bitcoin price temporarily downward.&#8221;



You don’t need me to say none of this is investment advice. But I’ll remind you anyway.



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Fidelity exec addresses ‘too late?’ question, stagflation scenario

Donovan Choy

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Today, Starknet unveiled its dedicated rollup chain tech stack, SN Stack. The project was first <a href="https://medium.com/starkware/the-starknet-stacks-growth-spurt-ab7ea3ebd596">teased</a> in a July 2023 blog post.



The SN Stack offers developers the ability to build validity rollup chains with customized parameters like block times and sizes, using proven components of Starknet such as Starknet OS, CairoVM or the Blockifier execution engine.



Developers can opt to use Madara, an open source and modular framework to quickly develop appchains, or Dojo, a framework more suited to building onchain gaming apps. Starknet appchains will also be able to leverage the StarkWare sequencer infrastructure which in future will be open source.



“From now, projects will be able to build appchains using the gold-standard ZK-STARK cryptography with the ease and low-cost that has only been possible with optimistic rollups,” said StarkWare co-founder and CEO Eli Ben-Sasson.



ZK-STARKs are considered to be an <a href="https://blockworks.co/news/starkware-polygon-labs-stwo-zk-prover">improved version</a> of zk-SNARKs due to their lack of reliance on an initial trusted setup, though STARK proof sizes are larger.



For cross-chain interoperability, there is a proof-based interoperability solution in the pipeline that leverages Starknet’s upcoming open-sourced prover <a href="https://blockworks.co/news/starkware-starknet-zero-knowledge-prover">Stwo</a> (Stark Two), a Starknet spokesperson told Blockworks.



<a href="https://docs.paradex.trade/documentation/getting-started/what-is-paradex">Paradex</a>, a perpetuals exchange, is the only existing rollup built on SN Stack today.



<h2 class="wp-block-heading">A short history of rollup stacks</h2>



In 2020, Ethereum embarked on a rollup-centric roadmap that sought to offload execution to L2 chains for scalability. This introduced the incentive for rollup teams to develop their own custom rollup tech stacks, attract rollup chain developers and curate a gated ecosystem.



Optimism was first to the game. Optimism’s OP Stack was officially introduced in late 2022 and launched in early 2023. In 2023 followed the launches of Arbitrum’s “<a href="https://blockworks.co/news/ethereum-arbitrum-orbit-mainnet">Orbit</a>” then Zksync’s <a href="https://blockworks.co/news/zksync-launches-op-stack-rival">ZK Stack</a>.



Last month also saw the announcement of Commonware’s “<a href="https://blockworks.co/news/commonware-optimized-blockchain-development">anti-framework</a>” stack by ex-Ava Labs VP of engineering Patrick O’Grady. Commonware promises an even more modular architecture and less lock-in than the aforementioned rollup stacks.



Optimism’s first-mover advantage has largely paid off, as is the case with open-source tools. Based on L2Beat, OP Stack is the most widely used stack with at least 50 combined rollup and Validium chains built <a href="https://blockworks.co/news/optimism-interoperability-layer-superchain">on its technology</a>, including <a href="https://blockworks.co/news/kraken-ethereum-layer-2-superchain">Kraken’s Ink</a>, Coinbase’s Base and the upcoming <a href="https://blockworks.co/news/0xresearch-newsletter-uniswap-layer-2">Unichain</a>.



This network effect provides Optimism with a lucrative monetization opportunity. For instance, Optimism offers rollups the option to enter into a revenue-sharing agreement that shares 2.5% of sequencer revenues or 15% of transaction fee profits (whichever is higher).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc97Gs0wGFCj2hTJuMUEmmpTFmoznE1qrl-OQBfQbnEhAcqUiBGC9PudFEOl_9cap1cE3g7slfrsPuH1q4YGsrouxCIQJhj6HmD2foZwOC1o73VpWO25E31n3qfDTuWYZPtEJ-fNQ?key=qgLCVkfQQmtfMDLHMgqaypk0" alt=""/></figure>



While Starknet has yet to specify a monetization model for SN Stack, the team has confirmed details will be announced in the future.



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Starknet introduces SN Stack

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If you ask most people how they’re feeling about the next year, you’re more than likely to get a bullish response.&nbsp;



GSR’s Toe Bautista is among those who think crypto could continue its upward momentum, especially since it can leech off of some of the success that artificial intelligence is currently enjoying as a narrative out in the world.&nbsp;



But he has some concerns about AI.&nbsp;



“I think most recently, there has been a little bit of hesitation about how sustainable this recent move is, most visibly seen through AI. I think, as is typical with crypto, we get very over-ambitious [on how] quickly these narratives really crystallize into actionable products,” he explained.&nbsp;



For Bautista, this could set 2025 up for “one of the biggest bubbles we’ve seen probably since the dot com era with AI.”



“You have the ingredients of the biggest companies in the world throwing billions and billions of dollars at compute. You have these AI research labs that are saying we essentially have solved human-level reasoning, and we expect labor to be meaningfully impacted. And you&#8217;ve also seen, from the macro side of it, inflation is still high. But the biggest thing, I think, that markets are trying to figure out right now is how to weigh all of these things.”



Putting it simply: There needs to be more revenue or profit reported, not just multi-billion dollar <a href="https://www.nytimes.com/2025/01/07/technology/anthropic-ai-funding.html">funding rounds</a>. The demand and supply need to seem more even.&nbsp;



If Bautista’s correct, that doesn’t necessarily mean that the bubble will pop next year. When it does, though, there’s a risk that crypto could be impacted. To keep an eye on where we stand with the AI narrative, Bautista’s listening to Empire host Santiago Santos, who <a href="https://blockworks.co/podcast/empire/4cddc846-cc72-11ef-9ae7-cb1d9b6b1f2e">suggested</a> keeping an eye on Nvidia. The company is the “number one barometer” of the amount of capital flowing into AI, Bautista explained.&nbsp;



This isn’t to say that Bautista isn’t feeling bullish on AI, just that he thinks it warrants some caution. And Bautista’s the first to admit that he might be off, but that’s not stopping him from being slightly skeptical.



Crypto’s exposure to AI, at least right now, could be beneficial. Take a look at how AI coins have jumped in the past few months, for example.&nbsp;



“It’s very symbiotic to AI the asset class. And AI, the asset class, is probably going to be one of the biggest growth stories in the past couple decades, if not the biggest,” he said.&nbsp;



How’s that for cautious optimism?



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AI could be the ‘biggest bubble’ since dot-com

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Backpack, a crypto <a href="https://blockworks.co/news/crypto-exchange-solana-spot-trading">wallet and exchange</a> popular among Solana users, has acquired FTX EU for $32.7 million.



In buying the defunct exchange’s European arm, Backpack — which was started by FTX and Alameda alumni — gets access to more than 110,000 former FTX EU users, Backpack CEO Armani Ferrante told me. On top of that, it inherits FTX EU’s European regulatory license that will let European users trade perpetual futures, which are very popular among crypto traders.



Ferrante said the deal was signed back in April of 2024, and Backpack spent the next eight months going through due diligence with regulators. In buying FTX EU, Backpack now becomes responsible for distributing bankruptcy claims to the <a href="https://blockworks.co/news/ftx-impacts-on-cryptos-future">exchange’s former customers</a>.&nbsp;



Ferrante formerly worked at Alameda Research, the research and trading firm that totally wasn’t commingling bank accounts with FTX. Backpack Wallet co-founder Tristan Yver, who just stepped back from an operational role at the company, was the head of strategy at FTX US.



FTX is tied to Solana because it built its Serum DEX on the network in 2020 and is <a href="https://blockworks.co/news/solana-first-vc">widely credited</a> with helping put the network on crypto investors’ radars in Solana’s early days.&nbsp;&nbsp;



Backpack has never been shy about the connection to FTX, and it’s pitching this acquisition partly as a way to get customers their funds back. “FTX EU users have been waiting for their distribution for too long. We believed that we could do it faster and more efficiently,” Ferrante said.



Outside of those connections, this deal feels a bit surprising at first glance, because FTX obviously doesn’t have any staff or proprietary technology that Backpack can access. Backpack also now has to distribute bankruptcy claims, which it didn’t have to do before.&nbsp;



Perhaps the most lucrative part of the deal is FTX’s MiFID II license that lets Backpack offer trading services including perps in Europe. Convincing regulators to reactivate the FTX license — which was suspended after the exchange’s collapse — was part of what took the deal so long to be finalized, Ferrante told me.&nbsp;



Europe is a big trading market, and a large chunk of crypto trading volume comes in the form of perps, Ferrante said in an email. “Yet there are no compliant crypto perpetual futures offerings on the market right now in Europe.”



A Coinbase spokesperson said the exchange bought an EU MiFID II entity last year, and it plans to “expand our derivatives offering from the EU in due course.”



Crypto derivatives were also relevant to the only other FTX post-collapse acquisition: It <a href="https://blockworks.co/news/ftx-ledgerx-sale">sold the LedgerX derivatives platform</a> to a Miami-based holding company for $50 million in 2023.



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Backpack acquires FTX EU and its 110K former users

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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Core Scientific got a lot of attention in 2024 for its hosting deals with cloud provider CoreWeave.&nbsp;



But Hut 8’s plans to lease data center space to its own — for now unknown — AI hyperscaler may put it in an even stronger position than its rival, one analyst argues.



Various bitcoin miners embarked on revenue diversification efforts last year — particularly after last year’s Bitcoin halving. This included a focus on building out <a href="https://blockworks.co/news/btc-miners-evolving-revenue-post-halving">HPC verticals</a> to <a href="https://blockworks.co/news/hut-8-mining-ceo-interview">support AI applications</a>.&nbsp;&nbsp;



<a href="https://blockworks.co/news/2024-crypto-stock-winners">CORZ stock shot up</a> roughly 300% in 2024 after emerging from bankruptcy and <a href="https://blockworks.co/news/core-scientific-relisting-shares-tumble">relisting on the Nasdaq</a> last January.



A Tuesday research note from Benchmark’s Mark Palmer followed the West Feliciana Parish Planning &amp; Zoning Commission <a href="https://www.theadvocate.com/baton_rouge/news/business/25-billion-west-feliciana-data-center-approved/article_d6dce702-cc45-11ef-8ff0-1fd2550a45e5.html">reportedly</a> voting to approve Hut 8’s planned data center construction in Louisiana. It now seeks final approval.&nbsp;&nbsp;



Palmer described this project as a likely “game-changer” for the company, noting: “We believe that HUT’s agreement with the unnamed AI hyperscaler could feature better economics on a per [megawatt] basis than CORZ is slated to realize in its deal.”



The reason, he explains, was startup CoreWeave’s inability to offer support needed for CORZ to tap the project finance market. It instead agreed to provide most of the capital required to build the project.&nbsp;



On the other hand, Palmer explains, Hut 8 having the backing of a large, established AI hyperscaler enables it to access the finance market to raise the $2.5 billion it plans to invest in Phase One of the West Feliciana Parish project.&nbsp;



“The upshot is that HUT wouldn’t face the discount to its economics that CORZ had given CoreWeave’s fronting of the capex for its project,” he added.



Hut 8 shares were trading for ~$24.85 at 1:45 pm ET, while CORZ stock was at ~$14.20. Though both were down more than 6% on the day at that time, Hut 8 had the YTD stock price gain edge on Core Scientific, +17% to -1%. 



Palmer’s price target for Hut 8 stock is $41. It’s safe to say we’ll be monitoring those shares as the miner’s data center project progresses.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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Bitcoin miner’s data center project to be ‘game-changer’

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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The so-called “Trump effect” on crypto has materialized — at least for one prominent crypto player — in the form of a stateside hiring spree.&nbsp;



Ripple is seeking new pros across all departments. Roughly three-quarters of its open positions are based in the US, including those in its recently expanded San Francisco and New York offices.



Open roles include a general compliance manager and financial systems lead of enterprise performance management in San Fran, as well as a ​​KYC/due diligence specialist in NYC. Also a bunch of engineers.



The pick-up in hiring <a href="https://blockworks.co/news/trump-appoints-crypto-council-head">reflects optimism</a> in the US market as a new administration steps into power (<a href="https://blockworks.co/news/trump-appointments-cantor-fitzgerald-sec">Trump</a>, his <a href="https://blockworks.co/news/trump-nominates-commerce-dept-leader">cabinet nominees</a> and a <a href="https://blockworks.co/news/crypto-friendly-congress-steps-into-power">pro-crypto Congress</a>).&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">2025 is here and the Trump bull market is real. For Ripple, this is even more personal after Gensler&#39;s SEC effectively froze our business opportunities here at home for years. The optimism is obvious and very deserved. Today: ✅75% of Ripple’s open roles are now US-based, while…&mdash; Brad Garlinghouse (@bgarlinghouse) <a href="https://twitter.com/bgarlinghouse/status/1875939452226564177?ref_src=twsrc%5Etfw">January 5, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



&#8220;While initial SEC policy shifts could begin within the first few months under new leadership, legislative progress may advance steadily as policymakers prioritize clear frameworks for digital assets,” a Ripple spokesperson told me. “The most immediate impact will likely come through changes in enforcement and by way of offering more regulatory guidance.”&nbsp;



And perhaps less regulatory guidance, in some scenarios. The SEC, under <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">a new leader</a> (after <a href="https://blockworks.co/news/gary-gensler-resigning">Gary Gensler’s departure</a>) could revoke SAB121, for example — guidance deterring some major players from custodying crypto.



Ultimately, Ripple said it’s looking for an end to SEC regulation by enforcement (the company knows all about legal battles <a href="https://blockworks.co/news/ripple-fined-civil-penalty-sec-lawsuit">with the SEC</a>). It also seeks “fit-for-purpose frameworks” (rather than applying decades-old regulations) and “clear guidelines for institutional sales and distributions.”&nbsp;



Such aforementioned clarifications would allow the company to significantly expand its US operations, the spokesperson said.&nbsp;



The rep added: “We&#8217;ve already seen this starting to happen, closing as many enterprise deals in the two months post-election as in the previous six months.&#8221;



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

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