Merit Circle is a decentralized autonomous organization (DAO) focused on increasing accessibility and participation in the play-to-earn gaming industry by providing educational opportunities and  'scholarships' (in-game assets on loan) to people from around the world. In addition to profit-sharing with 'scholars', Merit Circle grows its treasury by holding various assets (i.e., game-related NFTs) and early-stage financial investments in Play-to-Earn games. Merit Circle's token ($MC) is used to govern the Merit Circle DAO and serve as an index for the Play-to-Earn industry.

Merit Circle

Casey Wagner

The Republican-sponsored GENIUS Act, which seeks to establish regulatory guidelines for stablecoins, has passed a key procedural vote in the US Senate.&nbsp;



The legislation is now clear to advance to a full floor vote. The cloture vote passed  66-32 on Monday evening.



The passage comes after a cloture vote on the GENIUS Act <a href="https://x.com/Blockworks_/status/1920552806135538057">failed</a> earlier this month in a 48-49 vote.&nbsp;



Senators have been negotiating elements of the bill over the past few weeks, people familiar with the matter told Blockworks.



The latest draft of the bill states that foreign stablecoin issuers not predominantly engaged in financial services activities must be unanimously approved by the Stablecoin Certification Review Committee, according to a copy of the draft obtained by Blockworks.&nbsp;



The new draft also updates some of the language around data sharing, stating that stablecoin issuers are permitted to share consumer information only when needed to comply with existing laws or legal requirements.&nbsp;



Some Democrats, however, are still unsatisfied with the new language, which has not been released publicly. Sen. Elizabeth Warren, a longtime critic of crypto-friendly legislation, told Senators ahead of the vote that the GENIUS Act, as it currently stands, is “worse than no bill at all.”&nbsp;



“It is fitting that we are voting on the GENIUS Act just a few days before President Trump hosts a ‘private, intimate dinner and a VIP White House tour’ for the top investors in his memecoin,” Warren added.&nbsp;



While a floor vote on the GENIUS Act has not yet been scheduled, it could be on the calendar as soon as this week.



This story has been updated with finalized vote tally figures. 



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congress

Senate advances stablecoin bill in cloture vote redo

Byron Gilliam

This is a segment from The Breakdown newsletter. To read full editions,&nbsp;<a href="https://blockworks.co/brand/the-breakdown" target="_blank" rel="noreferrer noopener">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Public service is my motto. Ninety-nine percent of the people in Chicago drink and gamble. I’ve tried to serve them decent liquor and square games. But I’m not appreciated.”&nbsp;



— Al Capone
</blockquote>



<h2 class="wp-block-heading">Breaking the law can be productive (for everyone)</h2>



Here are two things I believe: Tipping in cash so your server doesn’t owe taxes is good — but officially making income earned from tips tax-free is bad.



Let me explain.



Paying tips in cash is good because it helps low-margin businesses like restaurants hire staff they might not otherwise be able to afford.



More broadly, cash payments for off-the-books work enable quick hiring and firing, which benefits both high-risk businesses and workers in informal or gig-style jobs.



This makes the economy more efficient, to everyone’s benefit.



But officially making tips tax-free is bad because it would unfairly favor one industry over others and distort incentives by making income earned in tips more valuable than income earned in salary.



Also, it’s regressive.



Consider the case of the exotic dancer in Miami who made <a href="https://x.com/baldridgecpa/status/1922386539218194813?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1922386539218194813%7Ctwgr%5Ed50b8cf2378b2c2fd06884a66e56e9ea6b1ddcb2%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.totalprosports.com%2Fgeneral%2Fsocial-media-is-freaking-out-over-mind-blowing-video-of-exotic-dancer-explaining-how-she-does-her-taxes%2F">$710,635 last year</a>, including $297,385 of “self-reported cash.”&nbsp;



(That’s 14,869 $20 bills, in case you’re wondering.)



As detailed in her very revealing TikTok video, she chose to report that cash to the IRS only because she wouldn’t otherwise be able to explain where her substantial investment income comes from.



But if that cash income was made tax free, high-income dancers in Miami would pay a lower marginal tax rate than, say, medium-income newsletter writers in Chapel Hill.



I know what you’re thinking, and, in this particular example, it’s hard to argue — some professions contribute more to society than others, so maybe her tips should be tax free.



But the tax code shouldn’t be making judgment calls like that.



Ideally, the IRS would treat all forms of earned income equally — if the goal is to help low-income workers, then just lower taxes for all low-income workers, not just for those who get tips.



But tax-free tips is good politics and politics is what has turned the tax code into an incomprehensible labyrinth of counterproductivity.&nbsp;&nbsp;&nbsp;



To escape that labyrinth, you sometimes have to do something “productively illegal” — like tipping your waiter in cash, paying someone to clean your house without reporting it on your taxes, or hiring an undocumented migrant to harvest crops that would otherwise wither in the fields.



This is one of the benefits of physical cash: “You want to have ways you can evade the law up to a point,” Ken Rogoff, an otherwise law-abiding economist, recently <a href="https://www.youtube.com/watch?v=u1bqpyqLn0A">told</a> Tyler Cowen.



Cowen agreed: &#8220;You’re lowering output by not enabling them to pay the nanny with cash.”&nbsp;



In other words, people probably wouldn’t bother hiring a nanny if it meant complying with the full suite of employment bureaucracy, so the economy would be less productive if physical cash didn’t enable them to break a few laws.



But what about breaking laws with crypto?



Stablecoins, for example, enable people to hold and send money without being KYC’d in the same way physical cash does.



But cash allows people to evade the law “up to a point.” With stablecoins, there is no stopping point — cash enables law evasion at a small scale and crypto enables it on a large scale.



That might still be a net positive, though, assuming there are some forms of socially desirable economic activity that are precluded by KYC — like using stablecoins to avoid banking rules in countries with hyperinflating currencies or autocratic governments, for example.



The places where stablecoins have most caught on are also the places most likely to benefit from the “productive illegality” of informal economies, as scholars like <a href="https://hir.harvard.edu/an-economists-view-of-the-informal-economy-interview-with-friedrich-schneider/">Friedrich Schneider</a> and <a href="https://www.elibrary.imf.org/view/journals/023/0029/021/article-A005-en.xml">Hernando de Soto</a> have documented.&nbsp;



In the relatively sensible US economy, by contrast, stablecoins have so far mostly been used to trade crypto tokens, many of which are functionally equivalent to equity, but with no investor protection, no rights, and no rules.&nbsp;



I’d argue that makes them illegal under current US law.



But that, too, may be productive.



If unregulated crypto equity is used to fund useful new services that would not have been funded otherwise, then it could well be a net positive that regulators are currently leaving crypto unregulated.



Not for much longer, of course — both stablecoins and equity-like crypto tokens are on the verge of being legally recognized in the US.&nbsp;



But if they go on to be truly productive, their few years of illegality will be equally to thank.



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regulation

Breaking the law can be productive (for everyone)

Jeff Albus

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



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If you want to build in Web3, you&#8217;ve pretty much always needed to know how to code. Not necessarily at an elite level, but at least a baseline understanding. That plus lots of late nights, semicolon-heavy syntax, compiler errors, and a burly stack of ever-open documentation tabs.



The technical barrier was part of the “chewing glass” culture.



Gatekeeping, maybe, but also a necessary filter in an ecosystem where one misplaced line in a smart contract could drain a treasury.&nbsp;



That filter is eroding fast these days, however.



Brace yourselves, friends. We&#8217;ve now entered the era of vibe coding. The term, coined by computer scientist Andrej Karpathy, refers to a novel AI-native coding style where developers (and perhaps more importantly, non-developers) describe what they want and, at the click of a button, an LLM generates a working iteration of their request.



Tools like Cursor, Dev.fun and Poof.new are already lowering the floor, turning ideas into dApps with a few lines of stumbling prose. A Poof co-founder told Lightspeed that vibe coders have created over 2,000 apps on the platform since its open beta started on Thursday.



But, of course, there&#8217;s a dark side to every moon. Because if it&#8217;s easier than ever to build something legitimate, it&#8217;s also easier than ever to build something that only has the appearance of legitimacy.



The ICO boom of 2017 gave us a glimpse of this dynamic. Once the profit motive was clear, hundreds of anonymous teams emerged from the woodwork to spin up faux white papers and (usually crap) landing pages. They promised revolutionary tech, launched tokens, raised millions&#8230;and vanished into vapor.



Now imagine that, but times infinity. 



Imagine some clown throwing up an LLM-generated codebase, a slick AI-generated branding package, wholly-believable GitHub activity, a world-class website UI with Web3 login, and then getting his fake chatbot founders to do some live AMAs.



Honeypot contracts with backdoors phishing sites that buoy authentic functionality as an indicator of legitimacy…Mint buttons that seed approvals you don&#8217;t notice ‘til your wallet is drained…The potential for bad actors runs deep.



Once things really get going, reputation systems and persistent identities will likely be the only hope we have of ever trusting another product. Proof-of-humanity systems, social graphs and third-party attestations will form the backbone of trust in an AI-coded world in Web3 and beyond.



We&#8217;ll need open auditing tools built for non-coders, and sandbox environments that simulate contract behavior before anything hits mainnet. Smart contract registries could begin to mirror app store models, with verified publishers, community ratings, and AI-generated trust scores.



The responsibility won&#8217;t just fall on users — it&#8217;ll sit with platforms, protocols, and indeed, the vibe coders themselves.



But even with those risks, even with the inevitable rough edges, something big is happening here. We&#8217;ve spent years saying Web3 is about empowering creators. Now it actually can be. Not just for the technically-minded or the crypto-native.



The poet, the game designer, the high school kid with a better idea for an auction format or voting platform — they can actually build. And if we establish proper protection early enough, the best ideas may finally have a chance to win. Not because they raise the most capital but because they exist — functional, forkable, live.



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The rise of vibe coding on Solana

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



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Assets whipsawed to start the week as investors weighed growing concerns over US debt, a new budget that looks poised to pass and, of course, ongoing trade war updates.



US equities were on the recovery path after a rocky start Monday morning. The S&amp;P 500 was trading virtually flat at 2 p.m. ET after opening almost 1% lower. The Nasdaq Composite similarly had rebounded to Friday’s closing level after starting off 1.3% in the red.&nbsp;



Bitcoin dipped this morning, but it had recovered some losses by the early afternoon. The largest cryptocurrency was trading just above $105,000 — around 1% lower than its Sunday high.



After the close on Friday, Moody’s downgraded the US government’s triple-A credit rating to Aa1. That’s one notch lower, representing a slightly higher risk; the change is likely what had indexes in the red and Treasury yields on the rise this morning.&nbsp;



Moody’s analysts attribute the downgrade to the growing fiscal deficit in the US. The move follows downgrades from others: S&amp;P Global Ratings in 2011 and Fitch Ratings in 2023.&nbsp;



All three groups have similarly cited a growing deficit and debt-interest costs.&nbsp;



While the updated Moody’s rating is likely driving the increase in Treasury yields we’re seeing today, DataTrek Research co-founder Nicholas Colas warns not to put too much weight on it.&nbsp;



“While the Moody’s downgrade may cause a bit of near-term equity market volatility, history shows it does not portend structurally higher interest rates, an imminent recession or declining stock prices,” Colas said.&nbsp;&nbsp;



“Rating agencies play a critical role in capital markets, but their decisions about US sovereign debt have never signaled anything useful about future asset prices,” he added.&nbsp;



The Trump administration was also unfazed, with Treasury Secretary Scott Bessent calling Moody’s a “lagging indicator” during an NBC <a href="https://www.nbcnews.com/politics/trump-administration/scott-bessent-calls-moodys-lagging-indicator-us-credit-downgrade-rcna207535">appearance</a> this morning.&nbsp;



Meanwhile, Trump’s “big, beautiful” tax bill — which experts on both sides of the aisle <a href="https://www.wsj.com/politics/policy/tax-plan-budget-national-debt-analysis-e9822072">agree</a> will increase the deficit over the next decade — advanced through a key House committee over the weekend in a rare Sunday night vote.&nbsp;



Speaker Mike Johnson said that “some minor modifications” have been made to appease the more budget-conscious members of the Republican Party. The bill is still under negotiation, House Budget Committee Chair Jodey Arrington told reporters last night.&nbsp;



We’ll be watching this play out, but Republican leadership has said the bill could pass as soon as Thursday.&nbsp;



Over in the Senate, the stablecoin-focused GENIUS Act is headed to a key procedural vote this afternoon. The bill narrowly missed passing cloture (which ends debate and allows legislation to advance) earlier this month, but Hill insiders tell us today is expected to have a different outcome.&nbsp;



And, of course we’d be remiss not to mention tariffs. We didn’t see any major updates on the trade war (or any negotiations that will end it) over the weekend, but Trump is still going after Walmart for their decision to pass on higher prices to consumers. Unfortunately, it’s a move we think other retailers will soon follow should rates not come down.&nbsp;



The European Commission today lowered its growth forecast for the year, citing lower exports due to US levies. Not surprising, but still disappointing for investors. 



That’s what’s going on around the market. Keep an eye on <a href="http://blockworks.co">Blockworks.co</a> tonight for an update on the GENIUS Act vote.



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US equities, bitcoin par losses while yields rise on deficit fears

Kate Irwin

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Pengu Clash has kicked off its launch today by letting in a portion of its waitlist ahead of a full public release.



The new Telegram game featuring the Pudgy Penguins NFT collection’s cutesy seabirds is a 1v1 multiplayer battler. Players can dress up their penguins and fight each other at different types of minigames, whether it’s curling, darts, football or something else.&nbsp;



Pengu Clash isn’t a pay-to-win game but instead rewards skill, Michal Dabrowski, CEO and founder of crypto gaming protocol Elympics, told me in an interview.



Elympics built Pengu Clash for Pudgy Penguins with the goal of starting a trend around skill-first crypto social games.&nbsp;



“Pengu Clash is created with great care for actual gameplay,” Dabrowski said, emphasizing that it’s different from other Telegram-based crypto “clickers.” Such clicker games have short lifespans because they revolve around users farming for an airdrop, he added.



“I have mixed opinions about some games that have been out there on Telegram. But this…this connects to the trend and to the topic [of] why crypto gaming has not, you know, fulfilled its promise to bring a lot of users to crypto up until now. I think that a lot of the games created were very superficial, let’s say.”



Dabrowski continued: “So ‘crypto’ was just to have some kind of trading, or have some kind of crypto component, and not really focusing on the gameplay. And I deeply believe that it should be the other way around.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdgC3QpUf5Dn1VlGVVYYkQ8U9i6GWmsBUi4Vh7E_zSsTTpHlXigF7taVf8S7OG_nj5pRIfTpBTt5EULXImiOAhn1mbg1LH05z-9fR6KFKve0inzkBk0ED3ahG22T7RaCiw7WhqatA?key=J0xDdw6PHTElYzdsP9UReA" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd4unvUnKkOTJfmpgjok1JDeKLr-_fokV35VYg5fHVJhMSjsJvvHMfkpj2rBqD8uWul8nWUon3rF24fSehnXNLnlUBmhGGdFCNujkzQdAa3B-oDxDGt5DlUtAuDS-zU4Ws-mTqWtQ?key=J0xDdw6PHTElYzdsP9UReA" alt=""/><figcaption class="wp-element-caption">A look at Pengu Clash’s shop and curling minigame.</figcaption></figure>



The game offers quickplay matches, a “PVP arena,” and a shop tab as of right now, with quests coming soon. The waitlist currently consists of more than 1.1 million Telegram accounts.&nbsp;



Like other crypto Telegram games, Pengu Clash is using TON for its in-game NFTs and optional wagering component (the original Pudgy NFTs are on Ethereum and the Pudgy memecoin is on Solana).&nbsp;



Players can enjoy Pengu Clash without logging in or creating a wallet, but those who want to buy cosmetic items can connect the Telegram built-in wallet (that’s <a href="https://wallet.helpscoutdocs.com/article/113-wallet-where-to-start#Wallet-doesnt-work-on-my-device-what-is-the-issue-y8T1u">not yet available</a> in the US, UK, and some other countries), or connect an external TON wallet to the game.



Pudgy Penguins has also recently made broader consumer plays toward younger audiences, like <a href="https://www.penguinrandomhouse.com/books/807250/pudgy-penguins-worst-birthday-gift-ever-by-michael-leviton-illustrated-by-kuma-labs-and-pudgy-penguins/">releasing</a> a children’s picture book and a kid-friendly animated series on YouTube.



When asked why Pudgy Penguins chose to build a Telegram-based game using TON — instead of its own Ethereum L2 <a href="https://blockworks.co/news/rekt-abstract-apple-seltzer-nfts">Abstract</a> — CEO Luca Netz told me in a message that their goal is “to become the face of crypto” and the world’s “most popular penguin.”



“That vision is chain-agnostic,” Netz said, adding that a desktop version of Pengu Clash using Abstract is also part of the plan.



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The Drop newsletter

Pudgy Penguins’ Telegram game Pengu Clash begins launch

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Fluid’s flagship ETH-USDC pool has recorded more than $8.5 million in cumulative losses since launch, <a href="https://x.com/danrobinson/status/1923194745095905588">according to</a> a Dune dashboard by Paradigm researcher Dan Robinson. The issue: a rebalancing mechanism that not only underperformed during volatility, but appears to be systematically unprofitable, even outside of rebalance windows.



The pool, launched in December 2024, was designed to auto-rebalance liquidity once ETH’s price moved beyond ±10%. That design worked well during periods of modest volatility, but as ETH dropped from around $3,800 to $1,560 and then rebounded to $2,400, rebalancing dragged down liquidity provider (LP) capital. CEX-DEX arbitrage opportunities swamped any trading fee income LPs received.



The <a href="https://dune.com/queries/5142347/8473747?markout_minutes_t6c1ea=15">markout data</a> paints a grim picture. As the chart shows, LP PnL has been consistently negative, not just during rebalances. This contradicts the assumption that fee income from the concentrated liquidity <a href="https://blockworks.co/news/understanding-automatic-market-makers">AMM</a> model would offset rebalancing-related losses. Instead, it appears the entire design structure allowed MEV-extractive trades to bleed LP value, even under normal conditions.



Since the May 11 <a href="https://gov.fluid.io/t/current-issues-with-eth-usdc-pool/1606">governance post</a> detailing the problem, Fluid co-founder Samyak Jain has been playing defense.



As Sorella Labs CEO, who goes by @0xvanbeethoven, <a href="https://x.com/0xvanbeethoven/status/1923147878148735100">noted</a>, LPs lost millions in rebalancing-driven losses — effectively subsidizing arbitrage with no meaningful upside.



Critics argue the problem isn’t simply rebalance frequency, but the fact that arbitrageurs are able to consistently extract value, while LPs are structurally disadvantaged.&nbsp;



Fluid’s team has responded to the criticism, drawing parallels to the early days of Uniswap v3. Referencing a similar debate around using markouts as a proxy for LP returns, they point to <a href="https://x.com/xin__wan/status/1589321975767666688">prior commentary</a> from Uniswap researchers, such as Xin Wan, who argued that short-interval markouts can be misleading and don’t fully account for fee accrual or LP lifecycle behavior.



The planned Fluid v2 upgrade — targeted for June or July — will introduce dynamic fees, permissionless pools, and custom LP ranges. It may also work out the LP issues in other ways.



“There are multiple things that can be added including adding them via hooks on v2,” chief operating officer DMH told Blockworks. “I actually like [the] <a href="https://x.com/0xvanbeethoven/status/1923147944926249398">Angstrom solution</a> but have to study it more,” he added.



As proposed interim relief, the Fluid team suggests distributing 500,000 FLUID tokens (0.5% of supply) over a year to affected ETH-USDC LPs, plus $400,000/month in rewards until DEX v2 launches.



Rather than widening the rebalance band to reduce loss frequency, Fluid also proposes narrowing the range from ±10% to ±7.5%, increasing fee accrual per unit of liquidity, although that would also increase rebalancing events and potential losses.



This short-term fix has raised eyebrows. “If your pool is losing money on average, increasing concentration will increase both losses and variance,” wrote Dan Robinson. “So concentrating liquidity more would be a double whammy.”



Even if DEX v2 gives LPs more control, it assumes users will be able to model volatility risk and pick defensible ranges, a challenge even protocol governance struggled to get right in v1.



It’s to Fluid’s credit that the team has acknowledged the issue publicly, citing their own $1 million LP position as evidence of skin in the game. They also emphasize that correlated pairs (like cbBTC–WBTC) have performed well, and so the ETH-USDC pool’s struggles are not representative of the broader DEX performance.



Still, the damage to LP trust is real. Whether DEX v2 can reverse that dynamic will be the true test of Fluid’s unified architecture.



For now, the ETH-USDC pool stands as a cautionary tale: capital efficiency can cut both ways, especially when market volatility meets rigid strategy design.



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

0xResearch Newsletter

Swimming in red: Fluid’s ETH-USDC pool springs a leak

David Canellis

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://blockworks.co/newsletter/supplyshock" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Stacking sats?



Chances are you’d be buying alongside any one of the dozen or so companies that are actively accumulating right now.



An estimate of the number of bitcoins held by corporate treasuries, both private and publicly-listed, has today reached a new all-time high: 1,082,164 BTC ($110.8 billion), according to <a href="https://bitcointreasuries.net/">BitcoinTreasuries</a>.



It’s equivalent to almost 5.5% of the current circulating supply. And if we don’t include Satoshi’s million or so coins, or the <a href="https://river.com/learn/what-happens-to-lost-bitcoin/">estimated</a> 1.57 million BTC believed to be lost forever, corporate treasuries are actually holding 6.25%.



That’s four times more bitcoins on corporate balance sheets than three years ago, as Terra/Luna was driving a wrecking ball through crypto markets.&nbsp;



Most of that growth is coming from public companies, led by Strategy of course, but Metaplanet, Semler Scientific and Tether are proving to be as ravenous as Saylor’s firm was in 2020.&nbsp;



The Jack Mallers-led XXI is on track to do the same, starting off with 31,500 BTC ($3.2 billion) disclosed late last month.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="862" height="648" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png" alt="" class="wp-image-102630" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=862 862w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=342 342w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=291 291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=80 80w" sizes="auto, (max-width: 862px) 100vw, 862px" /><figcaption class="wp-element-caption">This morning, Strategy disclosed buying another 7,390 coins, bringing its running total to 576,230 BTC ($59 billion). Purple bubbles point to Strategy’s bitcoin acquisition.</figcaption></figure>



Tether now holds over 25% more bitcoin than it did last October: 100,521 BTC ($10.3 billion) as of its latest disclosure.&nbsp;



Metaplanet holds 700% more coins across the same period, today reaching 7,800 BTC ($800 million). Semler has meanwhile tripled its stack to 3,808 BTC ($390.1 million).



Some of the data on BitcoinTreasuries may be a little screwy (does Block. one really still have 164,000 BTC, worth $16.8 billion?), but that’s besides the point.



The rate at which businesses are adopting bitcoin to reinforce treasuries (and copy the Strategy acquisition playbook) has, in turn, advanced Bitcoin to its intermediate phase.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="860" height="647" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png" alt="" class="wp-image-102628" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=860 860w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=342 342w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=291 291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=80 80w" sizes="auto, (max-width: 860px) 100vw, 860px" /><figcaption class="wp-element-caption">Every bubble is more bitcoin added to corporate balance sheets. Not shown: Strategy’s buys.</figcaption></figure>



And just like the internet, mobile phones and social media, businesses were significantly slower to adopt Bitcoin than the public. It was now a decade ago, in 2015, that individuals in Venezuela and Argentina adopted bitcoin to protect their wealth from hyperinflation.



A handful of governments have clearly developed a keen understanding of the technology adoption curve and acted accordingly. We all know what comes next.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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Bitcoin

Strategy, Metaplanet take bitcoin treasuries to new all-time high

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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You know what’s better than big, splashy M&amp;A deals?&nbsp;



A bunch of smaller ones that show the appetite isn’t just isolated to the top.&nbsp;



Take, for example, three M&amp;A deals announced last week: Alchemy acquiring DexterLab, 0x buying up Flood, and Gnosis buying <a href="http://hq.xyz">HQ.xyz</a>.&nbsp;



That means that, so far in May, we’ve already seen a handful of acquisitions. Just last week, we had announcements from Robinhood, Alchemy, 0x, Anchorage and Gnosis.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcRluzZtZHpGdx2zH-0vnQ8m17q9grdb3_hv0IvHsv6y274lWfeokhMZ6YJq1usf-dITEddRL2w-ZGx3t-IAUgKT8k_EuX1_BIpWMLo9k7hAt7EZ56akGwBPh6U7UFwETzUVp5R?key=tOhX2MjK5hSWxQJ7tAu5eA" alt="" style="width:1023px;height:auto"/><figcaption class="wp-element-caption">Source: <a href="https://blockworks.co/analytics/deal-flow/markets-fundraising-m-a">Blockworks Research</a></figcaption></figure>



We certainly fared better last year than we did the year prior, but we’re already on track to surpass 2021 levels, thanks to the mega-deals we’ve seen from the likes of Coinbase and Kraken.&nbsp;



The majority of deals tend to fall in the “Finance” category, per Blockworks Research, which isn’t necessarily a surprise given that companies are looking to add to their toolboxes as crypto sees wider adoption and activity picks up.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeKa5WKnFatpxByRBVsJC68O8H0BdZkBmqEUAL5IAw4Wf7NS5LPocNBx_-Mgd2pXlgkN94mGaG9t8MdFNpIm7P_akR-R6rgMhhb4Z3yNcWgmbiCGPzywHN8O3FhaepUsihjmDhM?key=tOhX2MjK5hSWxQJ7tAu5eA" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://blockworks.co/analytics/deal-flow/markets-fundraising-m-a">Blockworks Research</a></figcaption></figure>



Both Robinhood and Anchorage’s respective deals last week gave some insight into how the firms are looking to develop their offerings: Robinhood gained a Canadian foothold, while Anchorage widened its stablecoin exposure (although it won’t continue Mountain’s yield-bearing stablecoin <a href="https://blockworks.co/price/usdm">USDM</a>).&nbsp;



The <a href="https://blockworks.co/tag/gnosis">Gnosis</a> acquisition looks like a further foray into stablecoin payments, a la Anchorage. <a href="http://hq.xyz">HQ.xyz</a>, now Gnosis HQ, gives Gnosis the ability to offer stablecoin offramps, treasury oversight controls and accounting tool integrations.&nbsp;



“If <a href="https://blockworks.co/news/non-custodial-crypto-cards-ftx-industry-trend">Gnosis Pay</a> represents our commitment to empowering everyday consumers with self-custodial financial tools, Gnosis HQ completes that vision on the enterprise side: offering crypto-native teams and traditional businesses alike the tools they need to operate with autonomy, compliance, and clarity,” the team said.



Meanwhile, <a href="https://blockworks.co/tag/0x-labs">0x</a> is taking another step to stay competitive in the DEX aggregation space by acquiring Flood. This acquisition was of particular interest to me because it involves a firm buying up a competitor, and it speaks further to some activity I think we’ll see down the line as crypto really heats up.&nbsp;



The terms of the deal weren’t disclosed, but 0x <a href="https://0x.org/post/0x-acquires-flood-to-optimize-trade-execution?utm_source=social&amp;utm_medium=tw&amp;utm_campaign=flood">said</a> it’s “consolidating our leadership in aggregation infrastructure, bringing together elite technical talent and pioneering routing architecture to accelerate the evolution of decentralized trading.”



But Alchemy’s <a href="https://www.coindesk.com/business/2025/05/16/alchemy-acquires-solana-developer-dexterlab-for-undisclosed-sum">acquisition</a> of DexterLab is a bit of a different story. At first glance, my read is that Alchemy is acknowledging that firms want to build on <a href="https://blockworks.co/tag/solana">Solana</a>, and this acquisition gives them exposure to that play. 



Per CoinDesk’s report, the team said DexterLab will help the development of Web3 applications on Solana, which will help organizational demand. 



At this point, I might have to rethink calling it “M&amp;A season” and instead call it crypto’s M&amp;A year… But maybe I’m getting ahead of myself.&nbsp;



Either way, these deals show that firms have the appetite to grow or consolidate their offerings, which is a very healthy sign for crypto.&nbsp;



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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Empire Newsletter

Crypto M&A picks up in May

This is a segment from The Breakdown newsletter. To read full editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Macroeconomics in this original sense has succeeded: Its central problem of depression prevention has been solved.”&nbsp;



— Robert Lucas, 2003
</blockquote>



I’m old enough to remember when people thought recessions might not be a thing anymore.&nbsp;



By the early 2000s, economists like Robert Lucas and Alan Greenspan argued that traditional recessions, in which a cyclical decline in demand led to a shrinking economy, were becoming an endangered species: less frequently seen and less dangerous when they were.



This was known as “The Great Moderation,” but just as the idea was catching on, it was seemingly discredited by the “Great Recession.”&nbsp;



There was nothing moderate about the 2008 recession: Peak to trough, US GDP fell 4.3%, the largest decline since World War II.



That should not have discredited the moderation thesis, however, because the Great Recession is more accurately known as the Great Financial Crisis — a financial own-goal that had little to do with macroeconomics.



Nearly two decades later, the US still hasn’t experienced a recession in “the original sense.”



The last traditional, business-cycle recession was way back in 1991, when Fed Chair Greenspan raised interest rates to 10.5% and unemployment rose to 7.8% — and even that was considered a mild downturn by the standards of the time.



In the 34 years since, we’ve only had three recessions and they were all triggered by non-cyclical shocks: the dotcom bust and 9/11 in 2001, the financial crisis in 2008, and the Covid pandemic in 2020.



As recently as last week it seemed like we were inevitably headed for a fourth.



But this week, markets rallied on a rising consensus that we’d avoid it yet again.



Which makes me wonder: If a sudden trade war can’t tip an aging expansion into recession, what can?



Is it only pandemics and banking accidents that cause recessions now?



Probably not.



But equally, Greenspan was probably right that the recessions we do have will be less frequent and less severe.&nbsp;



His <a href="https://www.federalreserve.gov/boarddocs/speeches/2004/20040220/default.htm">hypothesis</a> was based primarily on a belief in “better monetary policy,” and that seems to have been borne out: If Fed Chair Powell guides the US to a soft landing despite pandemic-induced inflation and tariff-induced uncertainty, I expect he’ll go down in history as the second greatest central banker of all time (behind only the patron saint of inflation fighting, Paul Volcker).



Another reason Greenspan cited for optimism was the ongoing “shift away from manufacturing toward services,” and that, too, might now be vindicated: This week’s market action seems to suggest that even a 10x increase in tariff rates won’t derail the US economy.&nbsp;



“The more flexible an economy,” Greenspan concluded, “the greater its ability to self-correct in response to inevitable, often unanticipated, disturbances and thus to contain the size and consequences of cyclical imbalances.”



The US economy, he explained, was getting more flexible thanks to automatic stabilizers, just-in-time logistics, deregulation and the “increased depth and sophistication of financial markets.”



More sophisticated markets give policymakers better information to work with — and the best information, of course, comes in the form of charts.



So let’s see what they’re saying.



It won’t be this quarter:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfMxzB_wOyEfVHWj9yzY3PvOix0pbZOgar9mrr-jTcBGEggUwM1W-sE2YI3gJwmhXBKY701c_vFv2aIakkE1sA92JiDhvx15zfKDBgGTharO6GMjb7uXUGygqbZlq5iOnSt2e_5?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Suddenly, the next recession seems as far off as ever: The Atlanta Fed’s GDPNow model sees the US economy growing 2.4% in the current quarter.



It’s unlikely in Q3 or Q4, too:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcMseWSFUM-UGrtrOp-c1jmDZJ8gP5yzbG8pmIs1Aaj9w8OA2n8TnwyQuUWwsGIX4seTv1AVXlYbx4uAveBSdS1rtZ5EhLgtx2aFswxBRYKFvdW7MaWY-n0OcxZJBrvFHtsUwuD?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Polymarket odds of a US recession in 2025 are down to 36%.



Are tariffs priced in now?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcTuhGTM3ilSuipq0dFNbppJ-WyL18gjWZjtO02hFKuNbzR6xs8q_36bKIsUvbJt3mKKy4WxK7bBEv11JoPCtSIAwphJBhVeLlwoFtlCLYyRSz09gtEb1j9nnlErejCHfbeo9ppMg?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Barclays Research (via the Odd Lots newsletter), estimates that the current trade-weighted US tariff rate is now around 14% and analysts at Goldman Sachs said it “would probably remain elevated for the foreseeable future.” That’s lower than expected just a couple of weeks ago, but we may not be out of the woods yet. President Trump <a href="https://www.politico.com/news/2025/05/16/trump-says-us-will-set-new-tariff-rates-for-countries-skirting-negotiations-00353370">said today</a> that, because there are too many countries to negotiate with, he will unilaterally decide tariff rates sometime in the next two or three weeks.



Wages &gt; inflation, still:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcTYNo9Y4O2BeZRJLF6BPsc4ZNoVORjl0FiYjzN-LSFh661RMJd1PAvoEQncmVRbOEpwiqt2NSe1-LtCJh5ZyICOJuoghk8LSBNKo5rk3Ht5W6vddUcBoJfymYjISB7AS0fHBFm?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



US wages are still growing at 4.3%, according to the Atlanta Fed — well in excess of CPI, which ticked down to just 2.3% in April. The top line above is wage growth for job switchers, which may have further to fall: The Wall Street Journal <a href="https://www.wsj.com/lifestyle/careers/job-market-overpaid-salary-9eeabbaa?mod=djem10point">noted</a> this week that two-thirds of US workers believe they are overpaid.



Apropos of nothing:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcVkmjeIzxnygDYiHL86eFZwzZCAuFYHb-6qbZ-4QEAME9obEu2I2Z1TO7rgC0VyIqUyTvEcRamR0wzifGqN8Z6IKLww-thCJ9TRjP1bklIlXub8lV5nEBI1dB9bITNzBRWeNjQFA?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



This is from 2024, but I only found it this week: An Ipsos survey found that Asian (and some Latin American) countries are “excited” about AI while Europe and the Anglosphere are “nervous.” Let’s check back in a decade or two and see if that’s correlated to growth rates. (I suspect it will be.)



Why Joe Rogan should be for free trade:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcOHB7aSF7zc2GJn30XrbhrDowS9gsAnY4RLdMAlAN64MuazH85MWU6_9k8K9sijjchB18EkPUuTQV1EPw34Pi3cTKw3z8PqOf7PsjWvlLGrcvZkpVbCgzgv6EcMzZlGyWVNCfIow?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



John Lettieri notes that the beginning of globalization (marked by NAFTA in 1994) was coincident with a trend change in male earnings: After two decades of decline, male wages began rising again.&nbsp;&nbsp;



Why everyone should be for free trade?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcpAPh63mCcGhHx6tNMtq3R97tiwJIzm9d7I-_4LtSPEyTLRGxQ9VRMpQ2yIEZzRzQzixFMCsTJanu3x-ToKOoywzfm8fH1eayZAm5NS1Y8SFn2nOgWQpRwmpG_r5qajN4JvuA2PQ?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Lettieri also finds that, starting with NAFTA, wages for the lowest quartile of earners rose faster than wages for the top quartile. If, like me, you enjoy these kinds of narrative violations, his <a href="https://x.com/LettieriDC/status/1922704137088577873">full thread</a> on trade is a must-read.



The other deficit problem:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcayiXEE18ElJk88KrsQYgL72jvMCn48ibhGrGwdWI0Sw0BQc7UoW8oYF_BnZam8_3LWkVEhJOpIoZALF_m1njFTyyd7BVTTGDjK79sWTFVUkdjstlLO0JNy25bK2b7mbDmcBWW3A?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



The current House budget proposal would add $3.3 trillion to federal debt through 2034. It probably wouldn’t pass the Senate, but it seems a safe bet that whatever eventually does will be only marginally more responsible.



In good times and bad: 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1224" height="630" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=1024&amp;h=1024" alt="" class="wp-image-102609" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=1224 1224w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=80 80w" sizes="auto, (max-width: 1224px) 100vw, 1224px" /></figure>



The really bad news about the US budget is not that it’s running a big deficit — it’s that it’s running a big deficit while the economy is booming. What’s this chart going to look like in the next recession? (If there ever is one.) Also, if your goal is to reduce the trade deficit, running a trillion dollar budget deficit year after year is, uh, not the way to do it.



Deficits are good for business, though:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcQlAPjbz4gJrhDoT8vI2zpiwuMC9cir_PqkzkfWrcUnNSoyGkOmw4zIPWzFB2R456zLE5jHQKjuD-LrJP1ikgDN7x-6K098zoVZpxkJZoEjGEeHWX-13G90-15m3weOBaoHLEwxw?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Global equities (orange) and a 60/40 portfolio of global stocks and bonds (purple) both made all-time highs today. Global equities ex-US (blue) made the highest highs.&nbsp;



Who said investing is hard?



If we don’t have to worry about traditional recessions anymore, it might not be.



Have a great weekend, moderate readers.



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</ul>

The Breakdown Newsletter

Friday Charts: What if there are no more recessions?

Jack Kubinec

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



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Continuing a string of recent hires, Jito Foundation has appointed Nick Almond as its head of governance, Lightspeed has learned exclusively.



An academic by training, Almond comes to Jito following a stint as CEO of the DAO-focused R&amp;D shop Factory Labs. In comments shared with me, Almond said he hopes to steer Jito’s DAO clear of some common pitfalls that have befallen these organizations by “cautiously expanding” what the DAO tries to do.



Jito is Solana’s most important infrastructure project. Its Jito-Solana client, which adds <a href="https://blockworks.co/news/solana-top-protocols-by-fees">revenue-boosting</a> MEV modifications to the original Solana Labs client, is <a href="https://jito.retool.com/embedded/public/3557dd68-f772-4f4f-8a7b-f479941dba02">run</a> by 96% of Solana stake.



Jito has a labs entity, which develops software, and a foundation entity, which tries to grow Jito’s ecosystem of products and oversees the Jito DAO. Both sides have been staffing up recently: Jito Labs brought on veteran DeFi-focused lawyer Rebecca Rettig as its <a href="https://blockworks.co/podcast/lightspeed/3f681e50-efe0-11ef-9dea-1391c9fce092">chief legal officer</a> in January, and Jito Foundation made Jane Street veteran Thomas Uhm its chief commercial officer in April.&nbsp;



The headcount growth likely has something to do with Jito’s central positioning to benefit from Solana’s uptick in network usage. A majority of Solana’s <a href="https://blockworks.co/analytics/solana#:~:text=What%20is%20Network%20REV%20in%20Solana%20analytics%3F">REV</a>, a Blockworks Research metric for value accrual to blockchains, <a href="https://app.blockworksresearch.com/analytics/solana?dashboard=15">comes</a> from Jito tips that users pay to get transactions included in Solana blocks.&nbsp;



Jito also boasts perhaps Solana’s most advanced DAO, which has a lucrative revenue source vis-à-vis its 2.7% cut of those Jito tips. To put that in perspective, Jito tips were on pace to total roughly $1.5 billion this year at the end of April. 2.7% of that number would put Jito DAO at roughly $40 million in annual revenue.



Almond said Jito DAO’s “high potential” drew him to the role. I asked him about the favored governance mechanism among Solana governance nerds in <a href="https://blockworks.co/news/metadao-solana-governance-platform">futarchy</a>, which he said still needs to “prove itself as an effective decision-making mechanism.”



Probably the first question Almond will need to answer in his new role will deal with value accrual for the JTO token, which Jito launched in 2023 but which does not yet directly benefit from Jito revenue. Almond moderated multiple livestreams on JTO’s tokenomics before joining Jito Foundation.



“Fee switches, yield boosting mechanisms and buybacks have all been discussed heavily,” Almond said. “It’s going to be up to the DAO which direction we take very soon. I’d like to see one of and potentially more of the above, all implemented as quickly as possible.”



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Jito Foundation hires head of governance

Ben Strack

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



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After a process that took years (1,300 or so days, Galaxy CEO Mike Novogratz noted on a Tuesday earnings call), GLXY shares are trading on the Nasdaq.&nbsp;



The US listing boosts the stock’s visibility — i.e. via Robinhood and perhaps, one day, in indexes (S&amp;P, MSCI, Russell, etc.) More than that, though, we’re watching how it helps the firm scale as competition stiffens in the growing crypto space.&nbsp;



“Most of Galaxy&#8217;s growth over the last seven years was internally funded with investing profits or trading profits, and so there was a regulator on how fast we could grow,” Novogratz explained. “Depending on the opportunities we see, being able to tap the deepest capital market in the world is a huge advantage.”



In other words, the CEO added on the call: “Bigger is better in financial services, and we plan to get a lot bigger.&#8221;



We’ve seen some huge crypto M&amp;A so far this year. To name a few: <a href="https://blockworks.co/news/coinbase-deribit-deal-focus-derivatives">Coinbase-Deribit</a> (a $2.9 billion deal); <a href="https://blockworks.co/news/crypto-ma-mergers-feeding-frenzy-kraken">Kraken-NinjaTrader</a> ($1.5 billion); and <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">Ripple-Hidden Road</a> ($1.25 billion).



Novogratz noted that having a more fairly-valued stock — after historically trading below its book value — allows Galaxy to more seriously look at acquisitions.&nbsp;



“There are some businesses that make sense to grow organically, and some that make sense to add on,” Novogratz said. “And so, I think you&#8217;re going to see a little of both in the coming 36 months.”&nbsp;



DeFi Technologies also listed on the Nasdaq this week.&nbsp;



That company, like Galaxy, has been trading publicly in Canada (and continues to).&nbsp;



But as DeFi Technologies CEO Olivier Roussy Newton put frankly: “Canada is a small population base compared to the United States. The world trades on the US capital markets.”



He also alluded to M&amp;A, telling me: “You [present] your equity for investors, and if you can do that effectively you trade at a high multiple and you raise more money and you buy more companies.”



DeFi Technologies looks to have 100 crypto investment product listings by the end of the year. The company bought ETP issuer Valour in 2021 before acquiring Reflexivity Research and crypto liquidity provider Stillman Digital last year.



As for future acquisition targets, Newton said: “There’re a lot of private trading technology companies in the digital asset space that would want to…access capital market equity financings and other derivatives mechanisms to enhance those opportunities.”



Scale and product breadth will be especially important for firms like Galaxy and DeFi Technologies as more financial giants wade deeper into crypto.&nbsp;



One area that TradFi players entering the space are focused on (or will be) <a href="https://blockworks.co/news/yield-bearing-settlement-network-tokenization">is tokenization</a>, Novogratz said.



“We are trying to build our moat through domain expertise, through better customer relationships, and through kind of staying one step ahead of those guys,” he noted on the earnings call.



All’s to say, we’ll be watching more than just the GLXY and DEFT stock prices.



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DeFi Technologies

Galaxy, DeFi Technologies look to leverage new Nasdaq listings

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Coinbase said on Thursday that “less than 1%” of its monthly users’ personal identifiable information has been exposed in a <a href="https://www.coinbase.com/blog/protecting-our-customers-standing-up-to-extortionists">breach</a>, including names, addresses, phone numbers, the last four digits of Social Security numbers, government ID data and other information.



According to the exchange, “overseas” Coinbase support agents gave private customer data — including government IDs and customer addresses, among other info — to scammers. The scammers are believed to be using that data to target Coinbase customers via social engineering scams.&nbsp;



Coinbase has declined to pay the $20 million bitcoin ransom the attackers reportedly demanded. CEO Brian Armstrong says they’re taking steps to prevent something like this from happening again, and they are paying back those who were impacted by the incident.



Coinbase estimates this data breach may cost it anywhere from <a href="https://www.reuters.com/business/coinbase-says-cyber-criminals-stole-account-data-some-customers-2025-05-15/">$180 million</a> to $400 million.



“People are terrified,” <a href="https://x.com/GivnerAriel/status/1923130484873121917">wrote</a> crypto and IP attorney Ariel Givner in a post, reporting that she has received multiple concerned messages from clients who were notified that their information was exposed in the Coinbase breach.&nbsp;



So what can people do to protect themselves from data breaches, which have become <a href="https://www.wsj.com/tech/cybersecurity/why-are-cybersecurity-data-breaches-still-rising-2f08866c">increasingly common</a>?



If you were notified by Coinbase that your data was impacted and you want to be cautious, there are a number of things you can do. Identity theft, fraud in your name, and targeted financial scams toward you or your immediate family are the most likely areas of concern.



There are personal information removal services out there, like DeleteMe, that can remove information about you from the internet. You can also request this <a href="https://support.google.com/websearch/answer/12719076?hl=en">through Google</a>. But if the data is already in an attacker’s hands, you may want to consider <a href="https://www.aarp.org/home-family/personal-technology/info-2021/remove-home-from-google-street-view.html">blurring out</a> your home from Google Maps’ street view and freezing your credit to stop anyone from opening lines of credit in your name. And as Microsoft <a href="https://support.microsoft.com/en-us/topic/national-public-data-breach-what-you-need-to-know-843686f7-06e2-4e91-8a3f-ae30b7213535">suggests</a>, you may want to place a fraud alert with the major credit bureaus.



For further awareness, you may want to warn immediate family members and close friends that attackers may attempt to socially engineer them in a scam tied to you. You can also talk to loved ones about having a <a href="https://x.com/netdragon0x/status/1923062046632837291">secret word</a> or phrase that’s unrelated to your personal info that you use to verify your identity with them.



The Texas Attorney General’s office <a href="https://www.texasattorneygeneral.gov/consumer-protection/identity-theft/help-prevent-identity-theft#:~:text=Store%20documents%20that%20have%20your,them%20for%20a%20specific%20reason.">advises</a> Americans to not use debit cards for online purchases, and to only use one credit card for online purchases to streamline and better protect your online identity.&nbsp;



California’s Attorney General <a href="https://oag.ca.gov/idtheft/facts/top-ten">agrees</a> that using antivirus software, being wary of unrequested phone calls, and being careful to not click on potential “phishing” emails are additional ways to protect yourself. <a href="https://www.optoutprescreen.com/">Opting out</a> of pre-approved credit card offers is another way to prevent credit card fraud in your name, and it’s good practice to review monthly statements and free annual credit reports.



When it comes to crypto, of course, never share your seed phrase or recovery phrase — or even your wallet password — with anyone, including those who claim to be customer support. Only storing recovery phrases on pen and paper in a safe location is your best bet.



You can also consider using an encrypted password manager app, ensure two-factor authentication via an authenticator app is enabled on as many accounts as possible, and make sure you’re using strong, unique passwords for every account you have.



Coinbase is telling users to “expect imposters” and to turn on withdrawal allow-listing, lock their Coinbase accounts if something feels off, and <a href="https://www.coinbase.com/blog/hang-up-the-phone-stop-social-engineering-scams">review tips</a> on avoiding social engineering scams.



Data breaches, more broadly, are unfortunately common. Last year, AT&amp;T, UnitedHealth’s Change Healthcare, Ticketmaster, Dell, Disney, Roku, Trello, and other companies, government entities and data brokers faced data breaches. Sometimes, such breaches result in class-action lawsuits or government-issued fines, with the average data breach costing a company <a href="https://nordlayer.com/blog/data-breaches-in-2024/">$4.88 million</a> last year.



NordLayer reported that <a href="https://nordlayer.com/blog/data-breaches-in-2024/">68% of data breaches</a> last year involved human errors, citing Verizon’s latest Data Breach Investigations report.



A lot of data breaches are preventable, and it starts with access and data storage practices.



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Coinbase

Coinbase breach fallout: What to do if your data was exposed

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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A Solidity developer friend of mine reached out on Signal the other day in a tizzy. “I can’t believe this,” he wrote. “How did <a href="https://blockworks.co/tag/ethereum">Ethereum</a> developers let this happen?”



He was referring to a <a href="https://cointelegraph.com/news/pectra-wallet-exploit-offchain-signature-risk">recent article</a> worrying about Ethereum’s <a href="https://blockworks.co/news/ethereum-pectra-fork-live">Pectra upgrade</a> — specifically EIP-7702 — and its supposed ability to let hackers “drain wallets with just an offchain signature.” The piece has been bandied about on X/Twitter, it seems, though not by people I follow. Fears were clearly being stoked in some circles that a new transaction type quietly enabled attackers to seize control of wallets without an onchain transaction or even a user’s knowledge.



But like many things in crypto, the reality is both more nuanced — and less dramatic.



Ethereum’s recent Pectra upgrade, <a href="https://blockworks.co/news/ethereum-pectra-fork-live">activated on May 7</a>, introduced a powerful mechanism that enables externally owned accounts (EOAs) to temporarily act like smart accounts. But the rollout has been accompanied by breathless claims that it exposes users to some insane new risk.



Those headlines are misleading. While <a href="https://blockworks.co/news/ethereum-upgrade-account-abstraction-proposal">EIP-7702</a> could introduce a new attack surface for phishing, it doesn’t bypass wallet signatures or allow unauthorized access per se. Instead, it signs a special message for the temporary superpowers. But if that message falls into the wrong hands, someone else could take control — as if handing over a private key to your wallet for a single session.



Sounds dangerous, and it can be, but only if a user is tricked into signing a malicious delegation. It’s not a protocol failure, but something for wallet software publishers to take account of.



Security <a href="https://www.fireblocks.com/blog/security-first-approach-to-eip-7702">researchers</a> and <a href="https://x.com/AmbireWallet/status/1920068000901734459">wallets</a> responded proactively to 7702. For example, alongside support for the feature, Ambire and Trust Wallet released patches or warnings. Wallets that don’t yet support 7702 are not suddenly made insecure. But confusion <a href="https://x.com/0x_AgentSmith/status/1921574316040454548">spread</a> with viral tweets claiming EIP-7702 made hardware wallets “no longer safe,” for example.



Will Hennessy, a product manager at Alchemy, strongly pushed back on that narrative:



“It’s a non-issue for end users,” he told Blockworks. “No wallet supports signing arbitrary delegations, nor is there a wallet RPC for a dapp to request an arbitrary delegation signature.”



He’s right…today. Mainstream wallets like <a href="https://blockworks.co/tag/metamask">MetaMask</a> and <a href="https://blockworks.co/tag/ledger">Ledger</a> don’t expose a method for signing EIP-7702 authorization tuples — the term for the one-time-use permission slip, signed by the wallet owner.



But that’s beginning to change. Embedded wallet SDKs — including Alchemy’s own Account Kit — already include a method called signAuthorization that creates valid EIP-7702 signatures. These products can bypass the <a href="https://eips.ethereum.org/EIPS/eip-1193">EIP-1193</a> standard entirely by bundling their own provider. As wallets begin to natively support smart accounts, this functionality will likely spread.



“The article describes signing a message with a wallet from a malicious website,” Hennessy added, “but it is not possible for any website to request an EIP-7702 delegation signature from an external wallet.”



Keep an eye on this threat vector. Just as existing standards have been exploited in “<a href="https://blockworks.co/news/security-firms-react-to-bybit-hack">blind signing” attacks</a>, the same could happen with EIP-7702 if wallet UX isn’t explicit about what the user is delegating and to whom.



TL;DR — the criticism of 7702 as an “auto-drain” threat is exaggerated. There is no magical backdoor, and attackers still need your signature. But the phishing risk is there if wallets don’t clearly show the contract, <a href="https://app.blockworksresearch.com/glossary/#nonce-which-stands-for-number-only-used-once">nonce</a> and scope of a delegation.



So, don’t sign opaque 32-byte hex strings, people. Favor wallets that flag EIP-7702 requests and simulate the delegated contract. Pectra opens the door to powerful smart account features, but remember, with great power…



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc5QPbFh7b3V0Ao_C7lG1sYes9-xOe_tgmyP8KAW_k_KmPx1wFvjZtfu0H9rRiEXlLtDhWStkxv5qwS8ldcgsNxVlqAY0-3t0GjtHL3a11X07QwbBRS1dkfXVDatUQ2TS2XWsEfEg?key=fATPsJ4nUj3pjzttTi_B_Q" alt="" style="width:629px;height:auto"/></figure>



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Ethereum smart wallet mode panic, unpacked

Amid the shifting regulatory landscape, crypto firms are expanding their US footprint and ramping up hiring across policy, compliance, and go-to-market roles.



Companies looking to capitalize on <a href="https://blockworks.co/news/washington-dc-blockchain-summit-takeaways">US opportunities</a> are hiring policy and compliance pros, as well as leaders focused on “go-to-market” strategies, recruiters told Blockworks.  



Wintermute became the latest to reveal a new US headquarters on Thursday. The crypto-focused trading firm’s New York office will focus on business development and partnerships, a spokesperson told Blockworks — with managing director David Micley leading those efforts.&nbsp;



Ron Hammond, a former government relations director at Blockchain Association, is set to lead Wintermute’s policy engagement in the United States.



Wintermute currently employs about 100 people in London and 25 people in Singapore. Its projected US headcount for this year is 10, with Wintermute CEO Evgeny Gaevoy telling Blockworks the firm plans to add policy, legal and compliance leaders in New York.



“The US is at a pivotal moment in shaping digital asset market structure,” Gaevoy said. “While we remain policy agnostic, this is the right time to be part of the conversation and offer our expertise.” On the commercial side, being “on the ground” allows Wintermute to engage directly with new and existing counterparties, the CEO explained.



While London and Singapore have historically offered clearer crypto regulatory frameworks than the US, the new office “follows the country’s greater openness toward digital asset innovation and large financial institutions’ accelerated adoption of the asset class,” Gaevoy added.



Wintermute’s New York office announcement came a couple weeks after MoonPay said its new 5,000 square-foot space in Manhattan would be the “central hub” for its growing US staff.



MoonPay now has roughly 70 people in the US, representing about 20% of its global workforce. That is second only to the UK, where the company opened its largest office last year.



Keith Grossman, MoonPay’s president of enterprise, is set to lead the New York City office, a spokesperson told Blockworks. Espi Elio, a VP of operations, and Treasurer Derek Yu will also be based there, along with the company’s directors of social media, engineering, solutions engineering, partnerships and accounting.



The New York office will be the base for various MoonPay legal professionals too, including two of its deputy general counsels. The company is looking to fill a <a href="https://jobs.lever.co/moonpay/539ada88-7654-4885-b7c4-f0036e0b7195">position</a> for a senior product director focused on stablecoins as well.



“We plan to hire across a range of roles, which may include product, compliance, operations, engineering and more,” the representative added.



Just as Wintermute and MoonPay cited US regulatory developments as a reason to open a new site, so too did Crypto.com upon last week opening its new Washington DC office. That location will focus on public and government affairs work, the company noted in a May 7 release.



Matt David, the company’s North America President and Chief Corporate Affairs officer, called the US market “the most exciting frontier for our entire industry” in a statement.



This new office follows the crypto platform last year creating a North American headquarters in Tyler, Texas.



A company spokesperson declined to comment further.&nbsp;



<h2 class="wp-block-heading">Building out US workforces</h2>



WorkInCrypto.Global founder Sam Wellalage said many of his European clients are thinking about how to boost their presence in the US.&nbsp;&nbsp;



“There’s a growing sense of urgency, partly driven by the perception that Trump-era policies and ongoing de-regulation are making it easier for crypto businesses to set up in the US and acquire both retail and institutional customers more quickly,” he said.



Wellage added: “It’s also widely acknowledged that the US has access to some of the best crypto talent globally.”



The most common roles Wellalage has helped clients fill have been what he called “go-to-market” positions. Those include sales directors, as well as heads of commercial and heads of revenue roles.&nbsp;&nbsp;



“Marketing roles like growth marketing and digital marketing are also in high demand,” he said.



Zachary Plotkin, a managing partner at recruiting firm Madison-Davis, said most of the small and midsize crypto companies he’s seeing expand to the US are looking for technology, compliance, risk and data security professionals.



“I have noticed that more of these firms are willing to hire a temporary chief compliance officer, a temporary chief risk officer or temporary [Bank Secrecy Act] officer that can handle the load of the work to see if the firm&#8217;s US footprint can expand,” he said.



Crypto exchange OKX, which last month debuted its US headquarters in San Jose, California, is searching for a US-based head of risk strategy, a head of product compliance and a senior compliance manager focused on anti-money laundering investigations.



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crypto hiring

As crypto firms boost US footprint, the race for talent is on

Pete Rizzo

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://blockworks.co/newsletter/supplyshock" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Bitcoin Pizza season is back.



This Sunday will mark 15 years since early adopter Laszlo Hanyecz first posted his historic, cheesy request to Bitcointalk: <a href="https://bitcointalk.org/index.php?topic=137.msg1141#msg1141">Pizza for bitcoins</a>?



Hanyecz boldly offered to pay 10,000 BTC to anyone who could deliver two large pizzas — two, “so I have some left over for the next day. I like having leftover pizza to nibble on later.”&nbsp;



Those coins were worth about $42 at the time and more than $2 billion today, enough to make your stomach grumble!&nbsp;



In many ways it was the most important transaction in Bitcoin’s history, even to this day. As Laszlo put it best: “Somebody had to start it off.”



<h2 class="wp-block-heading">Bitcoin Legends — Laszlo Hanyecz</h2>



Long-time subscribers to Supply Shock, from when it was called Bitcoin History, might remember our feature profile on Hanyecz from last year.&nbsp;



It does a fantastic job of plotting Hanyecz’s legacy, from early miner, to Satoshi collaborator, to Bitcoin Pizza Guy and beyond. Be sure to <a href="https://bitcoinhistorynl.beehiiv.com/p/laszlo-hanyecz-bitcoin-legend?utm_source=bitcoinhistorynl.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=laszlo-hanyecz-is-a-bitcoin-legend">check it out in our archives</a>.



This time around, let’s collect a few slices of the story that are sometimes left out.



<h2 class="wp-block-heading">1. Hanyecz kept spending bitcoins on pizza.&nbsp;</h2>



In June 2010, about a month on from the original purchase, Laszlo posted: “This is an open offer by the way. I will trade 10,000 BTC for 2 of these pizzas any time as long as I have the funds (I usually have plenty). If anyone is interested please let me know.”



By August of that year, Laszlo cut the experiment short due to demand. The bitcoin hash rate had multiplied by more than 26 times since his initial offer, a monster jump attributed to <a href="https://x.com/pete_rizzo_/status/1890763182555197539">pioneering pseudonymous miner ArtForz</a>, who’d built their own GPU mining software and kept it private for a competitive edge.



“Well I didn&#8217;t expect this to be so popular but I can&#8217;t really afford to keep doing it since I can&#8217;t generate thousands of coins a day anymore. Thanks to everyone who bought me pizza already but I&#8217;m kind of holding off on doing any more of these for now.”



<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">5/ Laszlo was one of the first 5 developers to work on <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a>. Here’s Satoshi crediting him for his work helping to test and review the 3rd version of the software in history 🏆 <a href="https://t.co/vEjTX2oySB">pic.twitter.com/vEjTX2oySB</a>&mdash; The Bitcoin Historian (@pete_rizzo_) <a href="https://twitter.com/pete_rizzo_/status/1829158445905301666?ref_src=twsrc%5Etfw">August 29, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Laszlo would share in 2014 that he’d spent every coin he mined on pizza. His bitcoin <a href="https://mempool.space/address/1XPTgDRhN8RFnzniWCddobD9iKZatrvH4">address</a> shows him receiving 81,432 BTC, presumably from his mining operations, with the same in outgoing transfers representing his pizza trades.&nbsp;



So, if what Laszlo says is true, that would mean he spent today’s equivalent of $8.45 billion on pizza.&nbsp;



If he’d held until today, Laszlo would only be $1.5 billion short of Michael Saylor on Forbes’ billionaires rich list. But he <a href="https://www.coindesk.com/markets/2020/05/22/10-years-after-laszlo-hanyecz-bought-pizza-with-10k-bitcoin-he-has-no-regrets">doesn’t seem to mind</a>.



<h2 class="wp-block-heading">2. The other guy also sold his bitcoins.</h2>



Jeremy “Jercos” Sturdivant was only 18 when he used his credit card to buy pizza for Laszlo from across state lines.



Jercos wasn’t an active poster on Bitcointalk and instead coordinated the deal with Laszlo via IRC, where the two had already crossed paths. It was on IRC that Studivant first learned of Bitcoin, and thought it interesting in light of the failure of e-gold around the same time.



He was even a bitcoin miner in his own right, “probably mining several thousand coins” by remotely running a cpuminer through Linode’s cloud computing service.



Studivant has shown similar grace as Laszlo when asked if they regret the experiment.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdlB3T2YnkceGEIu3vwk_bHSQOkixjqVxA8x_CcLkoc-OmP2RJr7PJKH85dQIqm7wC8OhHYkIG10XAHF8C2OiSTXnpmJh1R_xhqE4cxZMMQOqZWGLy9JBDv0su0Wjcf8VTrYcYilA?key=i5DYGJeOmBGtu_z4AmZ77w" alt=""/></figure>



“Bitcoin as a currency is meant to be spent,” he said in an <a href="https://www.bitcoinwhoswho.com/jercosinterview">interview</a> from 2015. “&#8230; Naturally there will always be people hoarding coins, trying to get rich, and quite a few people did get quite rich, but they wouldn&#8217;t have got that way without economic growth allowing it.”&nbsp;



At the time, Jercos appeared to still be sitting on quite a few coins, and was indeed using them as money.&nbsp;



“To that extent my bitcoin holdings do usually measure in hundreds or thousands of USD, simply because I use them much as I would a checking account, to conduct business both online and offline when I have the opportunity.”



“Notably the ‘humble bundles’ and the attached store accepting bitcoins significantly bolstered my video game library.”



<h2 class="wp-block-heading">3. Satoshi invented GPU mining before Laszlo.</h2>



The mainstream mostly knows Hanyecz as the Bitcoin Pizza Guy.&nbsp;



Around these parts, across the Rubicon, he’s also well-respected for porting Bitcoin Core to macOS in the space of a week, and being the first person ever to mine bitcoin with a GPU, even before ArtForz.



It could be that Satoshi had beaten Laszlo to the punch. In an <a href="https://cointelegraph.com/news/satoshi-invented-gpu-mining-to-defend-the-network-says-early-dev">interview</a> from May 2020, Hanyecz said that Satoshi had already invented GPU mining as a sort-of-secret Death Star to protect Bitcoin from 51% attacks.



“And he actually shared with me his version of it,” Hanyecz said, after he’d shown his own GPU mining code to see what Satoshi thought. Satoshi then famously cautioned Hanyecz in private over potentially developing GPU miners too quickly.&nbsp;



“So even though it wasn&#8217;t in Bitcoin, he did have GPU mining code and he said he was just keeping it ready in case he had to defend the network with it.”



In late 2009 on Bitcointalk, Satoshi softly <a href="https://satoshi.nakamotoinstitute.org/posts/bitcointalk/20/">pushed</a> for “a gentleman’s agreement to postpone the GPU arms race for as long as we can for the good of the network,” which looking back is quite interesting phrasing, considering they were already sitting on serious firepower.



<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">9/ Rather than quit mining, Laszlo decided to give back to <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a>. In fact, he dusted off one of Satoshi’s own ideas – taking an example from the official Bitcoin FAQ. <a href="https://t.co/zfc895dLrV">pic.twitter.com/zfc895dLrV</a>&mdash; The Bitcoin Historian (@pete_rizzo_) <a href="https://twitter.com/pete_rizzo_/status/1829158545876529509?ref_src=twsrc%5Etfw">August 29, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The legacy of Laszlo and Jercos within the context of Bitcoin Pizza Day is largely ironic. Bitcoin is absolutely money, and anyone who swapped bitcoins for pizza with Laszlo or anyone else was absolutely reasonable to do so.&nbsp;



Money is for spending, just like Jercos said, and the term HODL would only be coined three and a half years after the first Bitcoin Pizza Day.



At the same time, bitcoins became so valuable so quickly that these days, actually spending them is instinctively viewed as tempting fate.&nbsp;



Nobody wants to accidentally spend billions of dollars on pizza. And that’s precisely why Laszlo will forever be a Bitcoin Legend.



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3 piping hot Pizza Day facts for Bitcoin connoisseurs

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<hr class="wp-block-separator has-alpha-channel-opacity"/>



The Department of Justice will continue its case against Tornado Cash’s Roman Storm.&nbsp;



Previously, the DoJ said it was going to reconsider, after an <a href="https://www.justice.gov/dag/media/1395781/dl?inline">internal memo</a> from Deputy Attorney General Todd Blanche said that the department would “stop participating in regulation by prosecution in this space.”



There was a slight change in the case, per the letter, which will drop the charge of Storm allegedly not complying with the money-transmitter business registration rules.&nbsp;



Storm now faces a trial, and the remaining charges are focused on money laundering.&nbsp;



ICYMI: Storm is one of the founders of <a href="https://blockworks.co/tag/tornado-cash">Tornado Cash</a>, which has had a <a href="https://blockworks.co/news/ny-fed-tornado-cash-report">bumpy road</a> with the US government (though it recently received a <a href="https://www.coindesk.com/policy/2025/04/29/tornado-cash-can-t-be-sanctioned-again-texas-judge-rules">court win</a> when a judge ruled it can’t be sanctioned again by the government). The DOJ initially <a href="https://blockworks.co/news/roman-semenov-tornado-cash-ofac-list">charged Storm</a> back in 2023 alongside his co-founder Roman Semenov. 



In the April memo from Blanche, he outright said that the DOJ will focus its cases on the bad actors who are using the various platforms, rather than the platforms or the developers themselves.&nbsp;



Here’s Blanche’s direct quote: “The Department will pursue the illicit financing of these enterprises by the individuals and enterprises themselves, including when it involves digital assets, but will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities.”



The DeFi Education Fund noted that the dropped charge is “consistent” with the April memo.



<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">Today, the DOJ filed notice it is dropping the Section 1960(b)(1)(B) charge against <a href="https://twitter.com/rstormsf?ref_src=twsrc%5Etfw">@rstormsf</a> in U.S. v. Roman Storm, but will continue to trial on other charges. While this was consistent with an April 2025 DOJ Memo, calling for the end to “regulation by prosecution” and for the… <a href="https://t.co/STDP2xXzP2">pic.twitter.com/STDP2xXzP2</a>&mdash; DeFi Education Fund (@fund_defi) <a href="https://twitter.com/fund_defi/status/1923100662147035538?ref_src=twsrc%5Etfw">May 15, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



It seems that, even with the changes, this potential trial sets up a tricky situation — with the US just opening up, is there a possible precedent set legally that could impact developers?&nbsp;



Potentially.



Variant Fund’s Jake Chervinsky said in a post on X that the case “should end, period.”



<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">DOJ clearly ordered the end of regulation by criminal enforcement in crypto. But SDNY dropped only one of many inappropriate charges against Roman Storm. Like spitting in DOJ’s face. This is why people call it the Sovereign District of New York. The case should end, period. <a href="https://t.co/JXdJSg7aDf">https://t.co/JXdJSg7aDf</a>&mdash; Jake Chervinsky (@jchervinsky) <a href="https://twitter.com/jchervinsky/status/1923113075139322090?ref_src=twsrc%5Etfw">May 15, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Back in April, Paradigm chief legal officer Katie Biber <a href="https://x.com/katiebiber/status/1914392536795455822">wrote</a>, “If developer liability is unlimited and tied to the conduct of unknown third parties, no developers will want to build in America. It destroys the innovation economy here and ships crypto, AI &amp; all nascent tech offshore.”



DEF, in another post, said that the case moving forward with the current charges means that the prosecutors are arguing that Storm “‘[transferred] funds on behalf of the public,’ pursuant to 1960(b)(2), which means the accused must have custody and control over other people’s funds.”



<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">In short, the DOJ will continue with its illogical and unlawful theory of money transmission. For any Section 1960 charge, the accused must be “transferring funds on behalf of the public,” pursuant to 1960(b)(2), which means the accused must have custody and control over other…&mdash; DeFi Education Fund (@fund_defi) <a href="https://twitter.com/fund_defi/status/1923100664881942651?ref_src=twsrc%5Etfw">May 15, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“That is plainly not the case with software devs of noncustodial p2p protocols, and under any fair reading of the law, both charges should be dismissed,” DEF continued.&nbsp;



So now Storm heads to trial, and this could be a very important one to keep an eye on for the space.&nbsp;



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