🔮Are NFTs Coming Back, FTX Payouts, Talk Tuah Judge, Digital Euro

Top Stories

Polygon Community Rejects $1 Billion DeFi Yield Proposal

The Polygon community has rejected a proposal by Allez Labs, Morpho, and Yearn to deploy over $1 billion in stablecoins from the PoS Chain bridge into DeFi protocols to generate yield. While the proposal aimed to enhance ecosystem liquidity and create additional revenue streams, concerns over security risks, governance control, and the lack of an opt-in mechanism led to its defeat. The decision highlighted divisions within the community, with Polygon contributors advocating for safety-first approaches and Aave contributors emphasizing DeFi innovation. The debate underscores the challenges of balancing security, decentralization, and growth in blockchain ecosystems.

Pudgy Penguins Launches PENGU Token With $3.5B Valuation

Pudgy Penguins has launched its PENGU token, allowing NFT holders and eligible wallets—including approximately 7 million users from various communities—to claim allocations within 88 days before unclaimed tokens are burned. The token debuted on Solana, with plans to expand to Ethereum and Igloo's Abstract Chain, achieving a fully diluted valuation of $3.5 billion and $290 million in trading volume within two hours. PENGU tokenomics allocates nearly half the supply to the Pudgy Penguins ecosystem and other communities, while unlucky traders rushing ahead of the launch highlighted risks in the volatile token market.

Ripple Launches RLUSD Stablecoin to Advance Digital Payments

Ripple has officially launched its RLUSD stablecoin, pegged to the U.S. dollar, marking a significant milestone in its U.S. regulated market expansion. RLUSD operates on Ethereum and Ripple's XRP Ledger, with listings on multiple exchanges like Uphold and MoonPay. Backed by dollar reserves, U.S. government bonds, and cash equivalents, RLUSD aims to streamline cross-border payments, enhance remittance liquidity, and integrate with DeFi protocols. Analysts view this launch as a pivotal step toward mainstream adoption of digital assets in global finance.

Hyperliquid TVL Soars to $3.11 Billion Before Dropping Amid Profit-Taking and Security Concerns

Hyperliquid’s spot ecosystem reached an all-time high TVL of $3.11 billion, following the launch of its HYPE token on November 29. The TVL skyrocketed over 1,480% in one week due to mass USDC bridge inflows as users participated in its Dutch auction-based token listing mechanism. Tokens like PURR and HFUN saw explosive market cap growth, while HYPE’s FDV peaked at over $34 billion before settling at $27 billion. However, TVL has since declined 42% to $1.79 billion due to profit-taking on ecosystem tokens and concerns over Hyperliquid’s security, prompting $96 million in net USDC outflows in record withdrawals.

Source: The Block

Regulation

El Salvador Limits Bitcoin Activities for $1.4 Billion IMF Loan

El Salvador has agreed to restrict public-sector bitcoin purchases, mandate tax payments in U.S. dollars, and phase out its Chivo bitcoin wallet in exchange for a $1.4 billion IMF loan aimed at promoting fiscal and external stability. The agreement also makes private-sector bitcoin adoption voluntary, diverging from the country’s 2021 Bitcoin Law. The financing package, expected to exceed $3.5 billion with additional support from other international lenders, awaits final IMF board approval, contingent on the implementation of fiscal and regulatory reforms.

FTX to Begin $16 Billion Bankruptcy Payouts in 2025

FTX has announced that its Chapter 11 reorganization plan will take effect on January 3, 2025, with plans to distribute approximately $16 billion to creditors within 60 days. The payouts, facilitated by BitGo and Kraken exchanges, will be made in stablecoins, with initial distributions expected by early March 2025. This initiative marks a significant step in resolving FTX’s bankruptcy proceedings and reimbursing affected customers.

European MP Advocates for Bitcoin Reserve, Opposes Digital Euro

Sarah Knafo, a French MP from the far-right Reconquête! party, has called for the European Union to create a Bitcoin strategic reserve, mirroring U.S. President-elect Donald Trump's proposal. In her Brussels speech, she criticized the European Central Bank's (ECB) plans for a digital euro, warning of potential surveillance and loss of financial freedom. While Knafo’s influence may be limited, given her party's small representation in the European Parliament, her remarks echo growing skepticism around CBDCs and advocate for Bitcoin as a safeguard against inflation and economic mismanagement. Meanwhile, the ECB is in a preparatory phase for a digital euro, with no launch decision expected until next year.

Debanking Debate in Crypto Industry Heads to Congress

The crypto industry’s struggle to maintain banking access is set to reach the new U.S. Congress, reignited by newly revealed FDIC letters obtained through Coinbase’s legal case. The letters stem from a joint statement by banking regulators in January 2023 warning banks about unmitigated risks from the crypto sector. While some industry leaders, including Marc Andreessen, allege a coordinated anti-crypto campaign, regulators deny such claims, citing unclear regulatory frameworks as the root issue. Observers note mixed evidence, with some claims of debanking being overstated. As banks juggle compliance with financial crime rules and shareholder interests, clearer regulatory guidance could help resolve the ongoing tension.

Talk Tuah Judge

A federal lawsuit has been filed against the creators of the Hawk Tuah (HAWK) meme coin, including influencer Haliey Welch, following its catastrophic collapse shortly after launch. The token initially soared to a $490 million market cap but plummeted by 93%, leading to allegations of a rug pull and coordinated wallet manipulation. The lawsuit, representing 12 plaintiffs with over $151,000 in claimed damages, names Welch, Alex Larson Schultz (Doc Hollywood), OverHere Limited, and Tuah the Moon Foundation as defendants. The controversy intensified with revelations of 96% of the token supply being held by connected wallets, many of which sold off during the collapse. While Welch’s team denies wrongdoing, legal experts warn this case underscores the risks influencers face when endorsing crypto projects.

Other Domestic Regulation Updates

• Bitcoin's market cap reaches new all-time high against gold
• Trump-backed World Liberty Financial and Ethena eye collaboration starting with sUSDe implementation
• Record $680 million daily outflows hit US spot Bitcoin ETFs, ending positive flow streak
• Crypto.com Drops SEC Lawsuit As CEO Meets With Trump
• SEC approves first spot Bitcoin and Ethereum combo ETFs from Hashdex and Franklin Templeton
• Justin Sun-Linked BiT Global Sues Coinbase For $1B Over WBTC Delisting
• Austin Man Sentenced to Two Years in Prison for Underreporting $4M in Bitcoin Gains
• Grayscale Launches Lido, Optimism Investment Funds - Cointelegraph 
• New Regulatory Landscape Could Yield a Slew of ETFs in 2025 - CryptoSlate

Other International Regulation Updates

• Crypto Funds Attract Record $20.3 Billion in Inflows Over 10 Weeks
• Bitwise Launches Solana Staking ETP in Europe
• Bitcoin ETF Ads Are Appearing in China’s Alipay App
• Digital Euro Head Steps Aside Due to Differences Over Launch Plans
• UK Outlines Plan for Next Phase of Digital Asset Regulation
• US imposes sanctions on North Korea’s crypto laundering network

Pain & Gain

Pain

• Lido begins phasing out staking service for Polygon PoS chain
• LastPass threat actor drains $5.4 million in crypto from over 40 victim addresses
• Aave Community Considers Proposal to Exit Polygon

Gain

• ENS picks Linea to develop 'Namechain' Layer 2 network
• LastPass threat actor steals $5.4M in crypto from victims
• Crypto Market Tumbles After Fed Signals Rate-Cut Caution