The fallacy of scalability — why layer 2s won’t save crypto
Opinion by: Dan Hughes, founder of Radix Crypto has spent years betting on layer-2 (L2) solutions as its magic bullet for fixing issues with scalability. What if they’re the very thing putting us at risk?Instead of paving the way for mass adoption, this fixation has created a tangled web of rollups, bridges and fragmented liquidity, threatening blockchain’s core principles of decentralization and security. The dream of a seamless, decentralized network is fading, overshadowed by a complex system that echoes the inefficiencies and centralization of the traditional financial world. Are we scaling innovation or just recreating the past?The blockchain trilemmaL2s were supposed to mitigate the blockchain trilemma. Yet, while they may fill the gaps at the individual level, as a movement, L2 solutions have put crypto at risk of losing all three.The growing mass of L2s has led to a highly fractured ecosystem that’s difficult to navigate and relies on complex rollups and bridging solutions. This has led to parts of the ecosystem centralizing, drawing assets into fragmented liquidity silos, hindering security and stifling competition for smaller projects. These “solutions” have introduced large-scale friction and have also brought unnecessary security risks. While bridge-related hacks have become much less common in the last two years, hackers will always find new ways to balance the books — exploiting rollups, channels and sidechains. Many L2s’ reliance on sequencers or trusted validators creates additional cracks in the armor, single points of failure, while siloed liquidity reduces validator availability for smaller L2s, threatening network resilience.These solutions also leave an immense technical challenge for developers building applications hoping to integrate with L2s, requiring in-depth and specific knowledge of the mechanics of each L2 the application may need to touch.L2 proponents argue that these trade-offs are necessary and easily overcome, but there are even more fundamental issues here than sacrificing security, scalability or liquidity. Recent: AI has had its Cambrian moment — Blockchain’s is yet to comeCrypto’s endgame is a universal network where any asset or decentralized application can instantly interact with any other in a trustless, secure way. The friction that L2s introduce, however, sabotages this instant interoperability, while the centralization of sequencers and validators undermines the fundamentals of a trustless system. It is not just that this stymies scalability in decentralized finance (DeFi), but rather that it leads toward scaling something completely different, recreating the inefficiencies of the existing siloed, fragmented and middle-man-infested TradFi system.If the goal of DeFi is to move all financial activity onchain, it is imperative to do better than what we already have. Building the foundationsCrypto needs to build from the foundations up. Instead of outsourcing scalability and security, blockchain networks must prioritize them at layer 1.Sharding offers a clear path forward, but the industry must set higher goals and build a long-term solution rather than just a quick fix to “band-aid” the immediate scalability problem of the day. It is not just about increasing the shard count; it is how we shard. The Beacon Chain just adds a bottleneck, and dynamic sharding is complicated, limiting scalability with massive overheads. Even intra-validator sharding seems to solve all of these problems until you reach resource saturation on the network-facing node, which has to ingest all transactions, simply kicking the can down the road in search of more validators and diminishing returns.The obvious solution for scaling DeFi to the same capabilities as TradFi is state sharding, which is the state of the blockchain distributed across many different shards. Transactions that involve states from different shards create a temporary consensus process. The validators responsible for the transaction state communicate, agree (or not), and update the state atomically in all relevant shards. This allows transactions to be processed in parallel across multiple shards and even within shards themselves, leaving a shard’s only concern that the transactions modifying the state for which they are responsible do not have intersecting dependencies, significantly increasing throughput without compromising decentralization or accessibility. When these shards are integrated with atomic commitment, if any part of the transaction fails, everything aborts cleanly, and there’s no work needed to untangle hanging state changes.This is just one solution. DeFi will scale to onboard the planet. It is just a question of how soon and by what means. That said, solutions that focus on the fundamentals of L1 development rather than relying on a patchwork of L2s will eliminate fragmentation, reduce complexity, and ensure scalability and accessibility are again at the heart of blockchain networks. It comes down to the future that developers want to prioritize — tokenomics or the founding promises of Web3 — decentralization, efficiency and security. Scaling for the futureL1 solutions are solutions for everybody. They secure the very foundation of the ecosystem for developers, traders, general users and even several billion prospective users. Without resilient and scalable architecture in the foundations, one strong push is all it will take to cause this house of cards to collapse. Of course, specific use cases might be better with L2 solutions. A high-frequency trade settlement is a perfect example, but exceptions never prove the rule. From a whole-ecosystem perspective, developers must focus on integrated, native scalability solutions instead of just adding complexity and balancing more precarious “solutions” on top. Without adequately attending to the L1, nothing but problems await.Opinion by: Dan Hughes, founder of Radix.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
TON-based XDAO protocol grants legal status to 367k DAOs
XDAO, a protocol based on The Open Network (TON), has enabled over 367,000 decentralized autonomous organizations (DAOs) to achieve legal status through its initiative that automates legal recognition for such organizations. In an announcement, XDAO said it had streamlined the DAO creation process to allow DAOs to achieve legal status. An XDAO spokesperson told Cointelegraph that the protocol offers a standard for other “sub-entities” within its legal framework. “Basically, those sub-entities exist both in relation to each other and outside entities that had acknowledged their existence and assented to some articles of the XDAO Labs’ Constitution,” the spokesperson told Cointelegraph. XDAO added that the parties recognize Singapore, where XDAO Labs is incorporated, as the primary jurisdiction where disputes may be resolved if necessary. Signing legally-binding documents through Telegram botsThe protocol also said it could enable the signing of legally binding documents using Web3 wallets. XDAO said DAOs could archive their transactions using a Telegram bot. When asked about the security and practicality of its Telegram bot-based legal framework, the XDAO spokesperson said agreements formed through the messenger work in “most jurisdictions.” However, the XDAO representative outlined its limitations, including “real estate, securities, and other matters that call for a prescribed procedure for the contract’s formation.” The spokesperson told Cointelegraph: “However, when making agreements through a Telegram bot, it is important to approach the recording of all details and specifics responsibly, as this can later facilitate dispute resolution.”The spokesperson added that the bot can store information that DAO participants consider significant. It can even be used to conduct basic Know Your Customer procedures. Related: Texas court issues judgment against Bancor DAO after it ignored summonsHow smart contract-based compliance would work in practiceWhen asked how their smart contract compliance models would work in arbitration scenarios, XDAO said the parties could form valid arbitration agreements through messenger or e-signature methods such as Docusign and Ethsign. This requires personalities to be firmly established and the “intention to adjudicate the dispute is clearly expressed.” “Arbitration is a commonly recognized dispute resolution procedure, which exists under influential international conventions. Those conventions do not specify the exact way of making an arbitration agreement, apart from it being in writing,” the spokesperson told Cointelegraph. The spokesperson added that if payment is required, an arbitrator can be added to the DAO with the right to a key vote. This would allow them to sign a transaction with their digital signature if the parties fail to reach a consensus. Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express
Ripple celebrates SEC’s dropped appeal, but crypto rules still not set
Ripple is celebrating the United States Securities and Exchange Commission’s (SEC) decision not to pursue a court case against the firm, but it provides little legal certainty for the crypto industry. The US financial regulator has apparently dropped an appeal against Ripple, the issuing firm of crypto asset XRP. The industry saw the case as a prime example of regulatory overreach by the SEC under former chair Gary Gensler.Ripple CEO Brad Garlinghouse said the decision “provides a lot of certainty for RIpple” and that while the case is effectively over, there are still some loose ends the firm needs to tie up with the SEC. “We now are in the driver’s seat to determine how we want to proceed.”Stuart Alderoty, Ripple’s chief legal officer, wrote on X, “Today, Ripple moves forward — stronger than ever. This landmark case set a precedent for the domestic crypto industry.”Ripple and the crypto industry as a whole are counting this as a major victory, but the SEC’s decision provides no legal precedent, and the “guardrails” the industry has lobbied for are yet to be defined. Consequences of Ripple case on lawmaking and precedentThe cryptocurrency lobby was quick to celebrate the SEC decision, announced by Garlinghouse at the Digital Asset Summit in New York on March 19. Markets took notice — XRP price spiked 9% in the first hour following the announcement.Supporters and observers posted on X about the precedent the case would set for the crypto industry. But legal observers are less certain about the overall impact the SEC’s appeal decision will have on the broader crypto industry.Lawyer Aaron Brogan told Cointelegraph that the Ripple case “creates no precedent that any other firm can rely on.” He added there is “no question that the regulatory environment is more favorable to crypto firms today,” but the SEC’s exact policy won’t become clear until Paul Atkins is nominated as chair of the commission.Related: Crypto regulation must go through Congress for lasting change — Wiley NickelBrian Grace, general counsel at the Metaplex Decentralized Autonomous Organization, further noted that the 2023 decision to which the SEC was appealing does not set a legal precedent.He wrote on March 19, “The Ripple decision is not binding legal precedent. It was a single district court judge’s ruling based on the facts of that case.” The SEC appeal repeal also has limited influence on the ongoing legislative efforts to create a framework for the cryptocurrency industry in the US. Grace said that the onus is on Congress, not the SEC, to make lasting legal changes for the cryptocurrency industry. “The U.S. crypto industry needs new legislation to provide clarity and protection. Without it, the Plaintiffs bar can continue to sue in district courts across the country relying on Howey. A friendly SEC also does not change this. We need a crypto market structure law,” he said. Brogan said that he didn’t think the decision would have any direct effect on the lawmaking process, but the SEC could still solve questions regarding rulemaking. “I think many in Congress would welcome that as the market structure legislation currently percolating appears dead in the water,” he said.Garlinghouse wants to tie up loose ends with SECThe SEC appeal decision may put the “final exclamation point” on whether XRP is a security, but the legal battle between Ripple and the SEC could be set to rage on.In a March 19 Bloomberg interview, Garlinghouse brought up the possibility of going on the offensive with a cross-appeal, i.e. an appeal from an appellee requesting that a higher court review a lower court’s decision. Related: Bitnomial drops SEC lawsuit ahead of XRP futures launch in the USNamely, Garlinghouse wants to revisit the 2023 decision in which Judge Analisa Torres, while ruling Ripple’s publicly sold tokens did not constitute a security, levied a $125 million fine on Ripple, stating that the tokens should have been sold to institutional investors. The firm is also subject to a five-year “bad actor” prohibition on fundraising which, says Brogan, could meaningfully impact its operations. “At this point, all we’re fighting for is do we want to fight to get the $125 million back,” said Garlinghouse.He added that while the XRP-securities decision was a “clear legal victory,” there are “pieces of it that we think could be kind of cleaned up. And the question is, do we want to fight that fight? Or can we come to an agreement with the SEC to drop everything?”Outside of the courtroom, Congress is still working to make meaningful progress on the stablecoin bill. Bo Hines, the executive director of the President’s Council of Advisers on Digital Assets, expects the final version to be ready in a couple of months. The crypto framework bill FIT 21 failed to make it through the Senate in the 2024 legislative session, but some lawmakers are optimistic that it will make it through this session with “modest changes.”The Blockchain Association, a crypto lobby group, expects both laws to pass by August, while US Representative Ro Khanna, a Democrat from California, says they could be finalized by year’s end. Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge
Solana futures ETF to grow institutional adoption, despite limited inflows
The crypto industry is set to debut the first Solana futures exchange-traded fund (ETF), a significant development that may pave the way for the first Solana spot ETF, as the “next logical step” for crypto-based trading products, according to industry watchers.Volatility Shares is launching two Solana (SOL) futures ETFs, the Volatility Shares Solana ETF (SOLZ) and the Volatility Shares 2X Solana ETF (SOLT), on March 20.The debut of the first Solana futures ETF may bring significant new institutional adoption for the SOL token, according to Ryan Lee, chief analyst at Bitget Research.Volatility Shares Solana ETF SEC filing. Source: SECThe analyst told Cointelegraph: “The launch of the first Solana ETFs in the US could significantly boost Solana’s market position by increasing demand and liquidity for SOL, potentially narrowing the gap with Ethereum’s market cap.”The Solana ETF will grow institutional adoption by “offering a regulated investment vehicle, attracting billions in capital and reinforcing Solana’s competitiveness against Ethereum,” said Lee, adding that “Ethereum’s entrenched ecosystem remains a formidable barrier.”Still, other industry participants are concerned that the Solana futures ETF will lead to investor disappointment due to a lack of inflows, as we’ve seen with the spot Ether ETF launch, which was only a “sidekick” to Bitcoin ETFs in terms of inflows, as predicted by Bloomberg’s senior ETF analyst, Eric Balchunas.Related: Bitcoin beats global assets post-Trump election, despite BTC correctionSolana futures ETF may see disappointing inflows, but spot Solana ETFs may be nextWhile the futures ETF may not bring significant inflows, it legitimizes Solana’s status as a top cryptocurrency, especially after US President Donald Trump announced that his Working Group on Digital Assets would include Solana in the US crypto strategic reserve, along with Cardano’s (ADA) token and XRP (XRP).“Solana ETFs are in motion creating the possible avenues for more wide-scale adoption,” according to Anmol Singh, co-founder of Bullet, a Solana-native perpetual futures decentralized exchange.Singh told Cointelegraph:“Solana spot ETF is yet to be approved but given the increased awareness around Solana and the Futures ETFs this would be a logical next step.”“We can expect moderate inflows into the futures ETF – spot ETF is generally a better instrument for getting exposure and that will be the major milestone,” he added.Related: Trump-linked WLFI triples Ether holdings, Solana sees $485M outflows: Finance RedefinedWhile the adoption rate of futures ETFs is difficult to measure, a spot Solana ETF may attract between $3 billion to $6 billion of net assets in the first six months, eclipsing the adoption rate of Ether ETFs, according to a JPMorgan report seen by Cointelegraph. SOL and XRP ETPs could attract $3–8 billion. Source: JP Morgan“When applying these so-called “adoption rates” to SOL and XRP, we see SOL attracting roughly $3 billion-$6 billion of net assets and XRP gathering $4 billion-$8 billion in net new assets,” the report stated.However, “the timeline could extend into 2026 due to the SEC’s precedent of taking […] 240–260 days to review filings,” James Seyffart, Bloomberg Intelligence analyst, said on Jan. 16.Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge
Spot crypto scams early: California’s new tracker tool, explained
What is California’s crypto scam tracker tool? On Feb. 16, 2023, the Department of Financial Protection and Innovation (DFPI) in California launched the crypto scam tracker tool to help residents spot and avoid crypto scams. The tracker details crypto scams identified through a review of complaints submitted by the public.California’s DFPI crypto scam tracker is a searchable database that compiles complaints about fraudulent schemes. Investors can use the database to identify and avoid crypto scams. You can search the database using company name, scam type or keywords.The tracker includes a glossary to explain commonly used crypto terms and is regularly updated with new scam reports. The glossary may not provide extensive information on prevalent crypto scams, but it equips you with the knowledge required to identify scams and protect yourself.The scam tracker tool has compiled the information from public complaints and has not independently verified reported losses. As the DFPI receives complaints about new crypto scams, it updates the information on the tracker to keep the investors informed.Anyone who has fallen victim to a crypto scam or fraud or becomes aware of a scam not yet listed on the scam tracker can inform the DFPI. You can submit a complaint online at dfpi.ca.gov/file-a-complaint or contact the department via toll-free phone at (866) 275-2677. Companies that have been mistakenly included in the tracker can contact the DFPI at [email protected] for assistance.Did you know? In 2024, the DFPI received more than 2,668 complaints from investors in California and across the US. Based on these complaints, in partnership with the California Department of Justice, it shut down more than 26 different crypto scam websites and unraveled $4.6 million in consumer losses. How to use California’s crypto scam tracker tool California’s scam tracker tool is invaluable for identifying patterns in scammer behavior and helping investors avoid similar scams. Additionally, it encourages investors to report scams, contributing to the safety of the community.The tracker can be broadly used in three ways:For due diligence: You can search for specific companies or websites using the tool to uncover existing complaints. This feature helps you gain insights into others’ experiences with similar offers, allowing for a preliminary risk assessment. However, it’s important to note that the absence of complaints doesn’t guarantee legitimacy, as scam sites often rebrand or operate under different names.For analysis of messaging: The scam tracker enables you to analyze suspicious messaging by searching relevant keywords. You could use terms like “lending” or “insurance” to discover patterns and similarities between the offers you have received and past complaints. This comparative approach helps you identify potential red flags and recognize the tactics of the scamsters.For education and prevention: The tracker’s glossary serves as an educational resource, outlining various terms used in crypto scams. By familiarizing yourself with these tactics, you can significantly enhance your awareness and protect yourself from falling victim to fraudulent schemes. This proactive approach to education is essential in navigating the complex and often risky cryptocurrency market.Did you know? The Federal Bureau of Investigation’s (FBI) 2023 Cryptocurrency Fraud Report shows California faced the highest crypto-related losses in the US, reaching $1.15 billion. Within the FBI San Francisco Field Office’s jurisdiction, losses totaled $260,313,902, affecting 1,226 victims across 15 counties, including Alameda, San Francisco and Santa Clara. How does California’s scam crypto tracker tool work? The tracker compiles scams reported directly by consumers. The entries detail descriptions of losses to the complainants. To view the information shared with the DFPI, you may use the search function to explore complaints by company, scam type or keywords.For instance, if you search using the keyword “trading platforms,” the tracker lists scams associated with the keyword. The tracker is segregated into five columns, comprising primary subject, complaint narrative, scam type, website and screenshot.To change the order of the list, you can click the arrow beside the column header. You can also determine the number of entries you want to see at the time. To select the number of entries on a page, click the dropdown box at the bottom of the list and select your chosen number.To toggle between the pages displaying the entries, you can use the buttons “Previous” and “Next.” Fraudulent schemes listed by California’s crypto scam tracker tool The crypto scam tracker exposes many fraudulent schemes plaguing the crypto space. From fake job offers to pig butchering scams, the tracker sheds light on the tactics used to deceive investors. Here are some examples of scams listed in the glossary section of the tracker tool. Pig butchering scam: A pig butchering scam involves fraudsters building trust with you through social, romantic or business interactions before luring you into a fake investment scheme and persuading you to transfer funds to a fraudulent platform. These platforms might even display fake profits to encourage further deposits. Victims are denied withdrawal of funds on various pretexts, and scammers eventually disappear with the money. Rug pull scams: These schemes involve developers who intentionally attract investors with false promises of high returns only to disappear with the money later. They often create a buzz on social media by roping in celebrities, which shoots up the cost of the tokens. Then the developers sell off their tokens to make big profits and crash the price, leaving investors with worthless tokens.Did you know? A single X post by Argentine President Javier Milei, promoting the LIBRA token, caused its market capitalization to surge to $4 billion. However, the subsequent deletion of the post within hours led to a rapid crash, resulting in substantial losses for investors.Crypto job scams: Fraudsters pose as recruiters, luring victims with fabricated job offers to steal cryptocurrency and sensitive data. These positions usually offer easy money in return for “jobs” that don’t require any specific expertise. For instance, the fraudster may be offering 100 US dollars for watching an hour of advertisements. These scams are designed to trick individuals into depositing crypto with fraudsters and getting access to critical information such as passwords to their wallets.Wallet drainer scams: Crypto drainers are designed to steal your digital assets by transferring them to a scammer’s wallet. These schemes tend to use social engineering, where fraudsters build trust with you through deceptive emails, calls and fabricated documents. They create fake crypto websites, enticing you with promises of airdrops or non-fungible token (NFT) minting. You end up approving transactions, believing you are signing legitimate contracts or claiming rewards, only to have your wallet emptied.Fraudulent trading platform: The scammer creates a deceptive website or application, persuading victims to deposit funds by presenting it as an exclusive investment opportunity. These fraudulent platforms are designed to look authentic, often mimicking actual price movements and generating fake profits to appear legitimate.Imposter scams: Imposter scams involve fraudsters posing as trusted figures, such as company executives, support staff or government officials, to deceive victims into sending funds or sharing sensitive information. These scammers often use fake websites, social media accounts or phishing emails to appear credible. Bitcoin mining scams: Bitcoin mining scams lure investors with fake opportunities to fund mining operations. Scammers claim invested capital will build the necessary infrastructure, like GPUs and servers, promising a share of the mined Bitcoin (BTC) as returns. But these investments are fraudulent, and the promised infrastructure rarely, if ever, exists. Steps taken by other US agencies and states to raise crypto scam awareness Protecting crypto investors from these fraudulent practices requires a robust and multifaceted approach. US federal and state regulators are collaborating to educate investors about emerging scam patterns and compile a comprehensive defense against fraudsters.The Federal Trade Commission (FTC) protects consumers from scams. Users can report fraudulent activities on the FTC website and also find information on different types of scams. The FTC also manages the National Do Not Call Registry, which helps consumers block unwanted calls. Another key agency, the Consumer Financial Protection Bureau (CFPB), plays an active role in regulating crypto assets. It issues fraud warnings, investigates companies, and reviews consumer complaints. Several US states have also taken initiatives to combat scams:New York: The New York Attorney General’s Office runs the Consumer Frauds and Protection Bureau, which investigates scams and offers tips to help consumers stay safe.Massachusetts: The Massachusetts Attorney General’s Office uses advanced tools like the TRM Labs blockchain intelligence platform to trace stolen funds and fight crypto-related scams.Texas: The Texas Attorney General’s Consumer Protection Division assists scam victims and guides them to avoid fraud.Florida: The Florida Department of Agriculture and Consumer Services maintains a Consumer Protection webpage with scam prevention tips and a complaint submission option.The US follows a multi-layered approach to crypto scam prevention and consumer protection. Federal agencies like the FTC and CFPB provide nationwide oversight and resources regarding the crypto space, while state-level initiatives offer localized support and specialized tools. This collaborative effort, combining education with enforcement, underscores the importance of vigilance and proactive measures in dealing with the complex landscape of scams.However, due to the fragmented crypto crime reporting system in the US, industry leaders advocate for a unified platform that consolidates data and allows victims to track complaints. While still in development, understanding this need helps set realistic expectations and supports ongoing reform efforts.As more stakeholders push for standardized measures, such a platform could significantly improve transparency, support victims, and foster stronger accountability within the crypto space.
Tether’s US treasury holdings surpass Canada, Taiwan, ranks 7th globally
Tether, the $143 billion stablecoin giant, was the world’s seventh-largest buyer of United States Treasurys, surpassing some of the world’s largest countries.Tether, the issuer of USDt (USDT), the world’s largest stablecoin, was the world’s seventh-largest US treasury buyer, surpassing Canada, Taiwan, Mexico, Norway, Hong Kong, and numerous other countries.The stablecoin issuer acquired over $33.1 billion worth of treasuries, compared to over $100 billion purchased by the Cayman Island in the first place in global rankings, according to Paolo Ardoino, the CEO of Tether. “Tether was the 7th largest buyer of US Treasurys in 2024, compared to Countries,” wrote Ardoino in a March 20 X post.Source: Paolo ArdoinoHowever, Luxembourg and the Cayman Islands figures include “all the hedge funds buying into t-bills,” noted Ardoino in the replies, whereas Tether’s figures represent the investments of a single entity.Tether is investing in US Treasurys as additional backing assets for its US dollar-pegged stablecoin since treasuries are short-term debt securities issued by the US government and are considered some of the safest and most liquid investments available.Related: US Bitcoin reserve marks ‘real step’ toward global financial integrationTether’s significant growth comes during a period of growing stablecoin adoption among both investors and US lawmakers.Source: IntoTheBlockThe growing stablecoin supply recently surpassed $219 billion and continues to rise, suggesting that the market is “likely still mid-cycle” as opposed to the top of the bull run, according to IntoTheBlock analysts.Related: Paolo Ardoino: Competitors and politicians intend to ‘kill Tether’Stablecoin bill may pass as soon as August: Blockchain AssociationUS lawmakers are on track to pass legislation setting rules for stablecoins and cryptocurrency market structure by as soon as August, Kristin Smith, CEO of industry advocacy group the Blockchain Association, said during Blockworks’ 2025 Digital Asset Summit in New York.Smith’s timeline echoes a similar forecast by Bo Hines, the executive director of the President’s Council of Advisers on Digital Assets, who said on March 18 that he expects to see comprehensive stablecoin legislation in the coming months. “I think we’re close to being able to get those done for August […] they’re doing a lot of work on that behind the scenes right now,” Smith said on March 19 at the Summit, which Cointelegraph attended. US President Donald Trump sits beside Treasury Secretary Scott Bessent at the March 7 White House Crypto Summit. Source: The Associated Press“I’m optimistic when you have the chairs of the relevant committees in the House and the Senate and the White House that want to do something, and you’ve got bipartisan votes in Congress to get it there,” she added.Magazine: ETH may bottom at $1.6K, SEC delays multiple crypto ETFs, and more: Hodler’s Digest, March 9 – 15
South Korea raids Bithumb amid ex-CEO’s alleged $2M embezzlement
Update March 20, 10:50 am UTC: This article has been updated to add a Wu Blockchain report on Bithumb listings, claiming that multiple crypto projects paid intermediary fees to have their tokens listed. South Korean prosecutors raided crypto exchange Bithumb following suspicions that its former CEO embezzled funds to purchase an apartment. On March 20, Seoul’s Southern District Prosecutors’ Office reportedly searched Bithumb’s offices in the country. The investigation centered around allegations that the crypto exchange gave a 3 billion Korean won (over $2 million) apartment lease deposit to Kim Dae-sik, its former CEO and board member, who now works as an adviser to the firm. Prosecutors raised concerns over potential financial misconduct within the company, suspecting that Kim used some of the funds to purchase a personal apartment. Bithumb says its former CEO repaid the fundsLocal media outlet YTN reported that the country’s Financial Supervisory Service (FSS) had previously investigated the suspicions and handed their findings to the prosecutor’s office. In an interview with The Chosun Daily, a Bithumb representative said some of the allegations are true. The exchange said the executive took a loan from a lender immediately after the FSS investigation. After this, Bithumb said Kim repaid the funds spent on the apartment purchase in full. Apart from the apartment, rumors that projects paid intermediary fees to get listed in Bithumb also circulated online. Citing anonymous sources, Wu Blockchain reported on March 20 that two projects claimed to have paid $2 million and $10 million, respectively, to get listed on Bithumb and Upbit. The report claimed that the “intermediaries” were related to Upbit’s shareholders and market makers. Wu Blockchain also said that some intermediary fees ranged from 3% to 5% of entire token supplies. Related: Wemix denies cover-up amid delayed $6.2M bridge hack announcementBithumb faces probe amid IPO pushThe investigation comes as the crypto exchange attempts another push to go public. On March 18, the Business Post reported that Bithumb CEO Lee Jae-won is expediting the process of the company’s long-awaited initial public offering (IPO). The report said the company has reorganized to eliminate judicial risks on major shareholders. In 2021, Bithumb’s former board of directors chairman, Lee Jeong-hoon, was indicted on alleged fraud charges. As South Korea’s Supreme Court acquitted the Bithumb executive, the exchange is expected to speed up its IPO in 2025. Bithumb’s IPO plans date back to 2020 when local media reported that the exchange platform had been preparing for a stock market launch. However, the company faced obstacles that prevented it from successfully conducting an IPO. In 2023, the company chose an underwriter for its IPO plans, reigniting the chatter it’s working on conducting an IPO. In 2024, the rumors were confirmed as Bithumb Korea set up a non-exchange business to accelerate its debut on the stock market. However, the news was paired with a 57% loss in annual revenue for the exchange operator in the fiscal year 2023. Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express
Russian Gotbit founder strikes $23M plea deal with US prosecutors
Aleksei Andriunin, a Russian national charged with manipulating cryptocurrency through the Gotbit market maker platform, has reportedly struck a plea deal with prosecutors in the United States.Gotbit founder and CEO Andriunin has agreed to forfeit about $23 million in Tether USDt (USDT) and Circle’s USDC (USDC) in a plea deal with Massachusetts federal prosecutors, the legal news service Law360 reported on March 19.As part of the plea, Andriunin will plead guilty to three counts charging conspiracy to commit wire fraud and market manipulation, according to the letter signed by the defendant on March 19.An excerpt from letters in the Gotbix founder case related to the $23 million forfeiture as part of the plea with Massachusetts prosecutors: Law360 “Defendant understands and agrees that forfeiture shall not satisfy or affect any fine, lien, penalty, restitution, cost of imprisonment, tax liability or any other debt owed to the United States,” the letter reads.The agreement doesn’t bind the US Attorney GeneralIn the letter to the defendant, the US Attorney for the District of Massachusetts, Leah Foley, stressed that the agreement to forfeit $23 million is only between Andriunin and the attorney.“It does not bind the Attorney General of the United States or any other federal, state, or local prosecuting authorities,” the letter reads.The letter also states that the defendant understands that the court is not required to follow proposed sentencing calculations within the guidelines from the Massachusetts attorney.An excerpt from legal letters in the Gotbix founder case related to sentencing guidelines with Massachusetts prosecutors: Law360 “Defendant may not withdraw defendant’s guilty plea if defendant disagrees with how the court calculates the guidelines or with the sentence the court imposes,” attorney Foley wrote.Andriunin was extradited to the US in October 2025Gotbit founder’s deal with Massachusetts prosecutors came months after Andriunin was extradited to the US in October 2024 after being arrested by Portuguese authorities.Since extradition, Andriunin has appeared in a federal court in Boston, Massachusetts, where he was ordered to remain detained until further notice.Andriunin, 26, was charged with wire fraud and conspiracy to commit market manipulation and wire fraud in a superseding indictment in October 2024.Source: Alex Andriunin According to Massachusetts court documents, Gotbit was a crypto “market maker” that orchestrated a “widespread cryptocurrency market manipulation scheme.” The platform was registered in Belize and was said to provide artificial trading volume for global firms, including those in the US, between 2017 and 2024.Related: Telegram founder Pavel Durov given permission to leave FranceApart from Andriunin, the criminal complaint from Massachusetts authorities in September 2024 also involved other Gotbit employees, such as marketing director Fedor Kedrov and sales director Qawi Jalili, both living in Russia.In the plea letter, Massachusetts attorney Foley mentioned that the assets listed in the forfeiture section of the Gotbit plea agreement are solely controlled by the defendant on Gotbit’s behalf despite these assets belonging to Gotbit.Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge