🔮 Digital Asset Metrics Soar, Retail Engagement, Robinhood Launches in the EU, Tether Freezes Wallets, IBM Gives it a Try

Token Specific News

Crypto Metrics: DeFi TVL Surges to $50B, Altcoin Market Cap Hits $700B, Cryptoassets outperform gold, top equities, and S&P500 YTD

$50B: The total value locked (TVL) in decentralized finance (DeFi) protocols has surged to $50 billion, marking a 43% increase in six weeks. This rise indicates fresh inflows into DeFi protocols, such as Blast, Marinade, and Jito, accompanied by increasing DeFi token prices.

$700B: The market capitalization of altcoins has reached $700 billion, breaking free from a two-year range between ~$430 billion and ~$650 billion. This shift suggests a potential start of Altcoin Season, with certain memecoins and BRC-20 tokens, like BONK, PEPE, and ORDI, experiencing significant market cap gains.

Source: Messari

Solana-Based DeFi Platform Jito Launches $225 Million Airdrop Amidst Price Volatility and Website Disruptions

Solana-based DeFi platform Jito initiated a highly anticipated airdrop, distributing around $225 million worth of free tokens to Solana users globally. Initially priced at $6.01, the token's value experienced volatility, dropping 58% to $2.50 according to CoinGecko. Other platforms, such as CoinMarketCap and Coinbase, reported less initial volatility, indicating a potential rise in price since the airdrop. Over 54 million of the 90 million Jito tokens available have been claimed by Solana DeFi users, with eligibility criteria including JitoSOL holders, Solana validators running Jito MEV clients, and users of Jito’s MEV services. Some Solana whales expressed dissatisfaction with the airdrop distribution, favoring smaller holders, while others defended the strategy, anticipating positive impacts on Solana's DeFi ecosystem. Additionally, Jito's website faced a Distributed Denial-of-Service (DDoS) attack, causing disruptions. See similar: Starknet Foundation plans to distribute 1.8 billion tokens as rewards

Assessing Retail Crypto Engagement: App Store Rankings and Recent Trends

Amidst the recent surge in crypto prices, observers are questioning whether casual retail traders have re-entered the market. Unlike previous bullish cycles, there seems to be a lack of broader hype in mainstream media. The fallout from the FTX incident and the trial of Sam Bankman-Fried may have contributed to lingering skepticism, despite Bitcoin briefly crossing $44,000. Notably, the App Store rankings of major exchanges provide insights into retail interest. While Coinbase faces challenges, surprisingly, Binance.US has experienced a significant surge in rankings, rising from 189 to 26 in the free Finance category in the US. This unexpected growth raises questions, considering Binance's recent legal issues and the halt of USD deposits and withdrawals on its platform. The rise in app downloads for Binance.US suggests an interesting development, possibly influenced by changes in App Store listings.

Source: The Block

Bitcoin Faces Security Dilemma as Halving Approaches: Can Transaction Fees Save the Day?

Bitcoin's upcoming halving event in April 2024 raises concerns about the network's security as miners become more dependent on transaction fees due to reduced block emissions. The potential contraction in Bitcoin's security budget could lead to the attrition of miners, making the network vulnerable to attacks. Ethereum commentator Anthony Sassano suggests alternative solutions, but the conservative Bitcoin community may resist compromising core principles. To secure its future, Bitcoin must increase transaction fee revenue, with recent spikes attributed to the utilization of the Taproot upgrade. Initiatives like Botanix's EVM integration and BitVM aim to enhance Bitcoin's programmability, but challenges and conservatism persist in the pursuit of long-term security.

Watson Tries Crypto

IBM has introduced the IBM Hyper Protect Offline Signing Orchestrator (OSO), a cryptographic signing technology designed for managing digital assets in cold storage. This technology aims to mitigate risks associated with manual procedures while ensuring that assets remain isolated from internet connections. The OSO provides additional security layers for high-value transactions, including disconnected network operations, time-based security measures, and electronic transaction approval by multiple stakeholders. IBM's focus on key management, particularly in confidential computing technologies, underscores its commitment to enhancing security in the realm of digital assets and cryptocurrencies.

DeFi Loans Soar to 15-Month High, Reaching $6 Billion

Decentralized finance (DeFi) protocols see a surge in loan activity, hitting the highest level in 15 months. As of November 30, outstanding borrows on the top seven platforms reach $6 billion, the highest in 2023 and since August 2022. Aave leads with $3 billion, up 9.6% in the last thirty days. Rising Bitcoin and Ethereum prices boost investor risk appetite, driving increased use of crypto as collateral for maximizing returns in other DeFi protocols. Tarot and Spark show significant monthly increases, mirroring the broader trend of expanding DeFi loan activity. The total value locked (TVL) on the top ten lending protocols reaches $19 billion, 38% of the entire DeFi market at $50.83 billion. Tokens related to borrowing and lending protocols have a combined market cap of nearly $4.5 billion, constituting 6% of the total DeFi market cap and 0.2% of the overall crypto market, which rises by 4.3% in the past 24 hours to $1.676 trillion.

Source: Messari

Regulation

Pay the Government Before the Citizens: FTX Challenges IRS Claim of $24 Billion Unpaid Taxes, Citing Impact on Victims

FTX is challenging the IRS's claim of $24 billion in unpaid taxes from the era when Sam Bankman-Fried ran the bankrupt exchange. The current leadership, under Enron's liquidator John J. Ray III, contends that fulfilling this tax obligation would reduce restitution for FTX fraud victims. In a court filing, FTX disputes the IRS's claims, stating there is no basis for the alleged tax amount, which is "orders of magnitude greater than any income" FTX ever had. The exchange argues that meeting these tax obligations would result in minimal restitution for victims of the FTX fraud.

New York Financial Regulator Emphasizes Cryptocurrency's Anonymity Challenges and Regulatory Efforts

Adrienne Harris, the Superintendent of the New York Department of Financial Services (NYDFS), spoke at the Financial Times Crypto Winter Summit, highlighting concerns about cryptocurrency's potential for illicit finance due to its "element of anonymity." Harris pointed out the challenges of socializing crypto firms to regulatory standards, emphasizing the need for a "tone reset" to align expectations. She cited enforcement actions, including a $100 million case against Coinbase, as part of NYDFS efforts to ensure compliance and address issues related to illicit finance and cybersecurity violations within the crypto industry.

U.S. Treasury Seeks Expanded Anti-Money Laundering Powers Amidst Crypto Challenges

The U.S. Department of the Treasury, led by Wally Adeyemo, is requesting Congress for increased resources and expanded anti-money laundering (AML) authority to combat sophisticated crypto-related money laundering schemes. Adeyemo proposes significant measures, including secondary sanctions, to cut off both bad actors and organizations engaging with them from the U.S. financial system. The Treasury also seeks a new category under the Bank Secrecy Act, extending AML rules to crypto exchanges, virtual asset service providers, wallet providers, and certain DeFi services and blockchain validator nodes. Critics argue the proposal may be an overreach of power, questioning the extent of terrorist funding and its application to transactions involving dollar-pegged stablecoins outside U.S. touchpoints.

Brazil’s Crypto Rails Get Boost from Itau and Nubank

Brazil's largest bank, Itau Unibanco, has launched a crypto trading platform supporting BTC and ETH, while neobank Nubank partnered with Circle to introduce USDC. With a combined customer base of 195 million in Latin America, these moves signal a broader acceptance of crypto in the region. This aligns with regulatory efforts in Brazil to address tax evasion associated with crypto assets.

Exchange in Green Tights Tries Europe

Robinhood is introducing its crypto app in the European Union (EU), accompanied by a Bitcoin rewards program for customers. The rewards program is based on trading volume, with users earning a percentage back in Bitcoin each month. Bitcoin rewards start at 0.10% for trading volumes between €0.10 and €100,000, scaling to 0.325% for volumes exceeding €1 million. Additionally, a referral program offers rewards for signing up and referring friends. Robinhood Crypto's EU launch follows its recent introduction in the UK, featuring trading in over 25 cryptocurrencies. The platform promises additional tokens, crypto transfers, staking, and learning rewards in 2024. While users cannot transfer crypto in and out initially, Robinhood plans to enable this feature in the future. The expansion aligns with the EU's comprehensive crypto asset regulation, marking a strategic move in the platform's international expansion plans.

Frozen in Tether

Stablecoin issuer Tether has taken a "precautionary" step by freezing 41 wallets controlled by individuals sanctioned by the U.S. Treasury's Office of Foreign Assets Control (OFAC). CEO Paolo Ardoino stated that this action is part of a broader effort to proactively adhere to global rules and standards. Many of the frozen wallets had interacted with the OFAC-sanctioned crypto mixer Tornado Cash, and at least one was associated with the $625 million Ronin Bridge attack. This move follows Tether's October decision to freeze 32 wallets linked to terrorism and conflict in Ukraine and Israel.

Other Domestic Regulation Updates

• BlackRock, Bitwise file updated spot bitcoin ETF applications with the SEC
• KuCoin settles with New York for $22 million and agrees to block users from state
• Boston Fed seeks software engineer for CBDC research
• U.S. Crypto Lobbying Spend Set to Hit Record High in 2023
• Do Kwon will be extradited to US by Montenegro Justice Minister: WSJ

Other International Regulation Updates

• Banks of Italy, Korea will share CBDC knowledge under new memorandum
• Cryptocurrency exchange Binance withdrew its bid for an investment-management license in Abu Dhabi
• UK Will Hit Crypto Users With Penalties for Unpaid Taxes
• 28 Indian Crypto Service Providers Register With Country’s Anti-Money Laundering Unit 
• Binance CEO Richard Teng made his public debut
• How a Brazilian banking giant’s latest move reflects the ongoing TradFi-crypto convergence
• Robinhood Crypto Launches in EU With 'Crypto Back' Bitcoin Rewards Program
• El Salvador's planned Bitcoin bonds have received regulatory approval from the country's Digital Assets Commission (CNAD), and are expected to be issued in the first quarter of 2024

Pain & Gain

Pain

• AI Chatbot Jailbreaks Reveal Private Data from OpenAI and Amazon
• Ark Invest offloads more Coinbase and GBTC shares amid market rise
• JPMorgan’s Jamie Dimon: I’d shut crypto down

Gain

• Crypto mining firm Phoenix rises 50% on first day of trading after $370 million IPO
• Gamers Are Paying Big Bucks for Square Enix NFT Characters Like 'Egg' and 'Starvation'
• Ethereum DEX Matcha Aims to Make It Easier to Trade Assets Across Chains
• Key derivatives market metrics show sophisticated traders are turning their attention to ether (ETH) from the recent market standout
• Solana's answer to the “dog token" takes a leap
• Circle’s Allaire Proposes Recoverable Token Standard to Address Theft
• Report: Blur Now Has 80% of NFT Market Share