The Blockchain Monitor

Home | The Blockchain Monitor

core/heading

<a href="#crypto">Crypto Companies Launch New Products, Expand Partnerships</a>

core/list-item

<a href="#multiple">Multiple Reports Comment on Outlook for Crypto in 2025</a>

<a href="#treasury">Treasury Issues Final Rule on DeFi Tax Reporting; Crypto Groups File</a>

<a href="#sec">SEC and CFTC Settle Crypto Enforcement Actions</a>

<a href="#cryptojacking">Cryptojacking and Phishing Schemes Reported; 2024 Hack Data Published</a>

core/list

Crypto Companies Launch New Products, Expand Partnerships

By <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a>

core/paragraph

A major U.S. cryptocurrency exchange recently launched Ink, a Layer 2 network built on the Optimism Superchain blockchain. According to a blog post by the crypto exchange, “Ink is focused on building on the standout success of Ethereum and L2s as we advance our shared objective to make DeFi more accessible than ever before and accelerate the migration of assets and activity on-chain.”

Another major U.S. crypto exchange recently announced two new product initiatives. The first announcement provided details on a new U.S.-based custody solution for all North American customer digital assets and eligible North American institutions. The custody product will be offered through a U.S. trust company. The crypto exchange also announced that it has established a banking relationship with a major global bank to provide corporate banking services in support of the exchange’s activities in Singapore, Australia and Hong Kong.

In related news, a major crypto trading firm and liquidity provider recently announced that it has received approval from the U.K.’s Financial Conduct Authority (FCA) to operate as a registered crypto asset business. According to a press release, the company is “the first crypto liquidity provider to secure regulatory authorisations from both the FCA and the Monetary Authority of Singapore (MAS).”

In a final development, a U.K.-based fintech company recently announced a partnership with Pyth Network, a leading blockchain oracle, in which the fintech company will begin delivering digital asset price data to Pyth. According to a blog post, Pyth “brings real-world data sets to blockchain ecosystems to secure hundreds of user applications — such as Kamino Finance, Drift Protocol, and Ondo Finance.”

For more information, please refer to the following links:

<a href="https://blog.kraken.com/news/ink-mainnet-launch" target="_blank" rel="noreferrer noopener">Ink fast-tracks Layer 2 mainnet launch, driving DeFi development boom</a>

<a href="https://crypto.com/en/company-news/cryptocom-announces-launch-of-cryptocom-custody-trust-company" target="_blank" rel="noreferrer noopener">[] Announces Launch of Crypto.com Custody Trust Company</a>

<a href="https://crypto.com/en/company-news/cryptocom-teams-up-with-deutsche-bank-in-banking-milestone" target="_blank" rel="noreferrer noopener">[] Teams up with Deutsche Bank in Banking Milestone</a>

<a href="https://www.businesswire.com/news/home/20250106959007/en/GSR-Achieves-UK-FCA-Approval-Solidifying-Leadership-in-Global-Crypto-Markets" target="_blank" rel="noreferrer noopener">[] Achieves UK FCA Approval, Solidifying Leadership in Global Crypto Markets</a>

<a href="https://www.revolut.com/blog/post/pyth-partnership-uk/" target="_blank" rel="noreferrer noopener">Announcing our partnership with Pyth Network: supercharging the future of mainstream finance with [] price data</a>

Multiple Reports Comment on Outlook for Crypto in 2025

Multiple companies recently published reports with outlooks and predictions for the digital asset market in 2025. In one report, a major U.S. financial services company opined that “2025 has the potential to be the year that is looked back on as the pivotal time where the ‘chasm was crossed’ as digital assets begin to take root and embed themselves into multiple fields and industries.” The report provides “a collection of insights” on what the financial services company predicts for 2025, focusing on outlooks for Bitcoin, Ethereum, stablecoins, DeFi and drivers for mainstream adoption. Another report by a major digital asset company made 23 specific predictions for crypto in 2025 and provides related commentary. A complete list of 2025 crypto outlook reports can be found in the links below.

<a href="https://www.linkedin.com/posts/marcphilippeb_list-of-2025-crypto-outlooks-with-links-activity-7282488448819552258-tEBS?utm_source=share&amp;utm_medium=member_ios" target="_blank" rel="noreferrer noopener">List of 2025 Crypto Outlooks</a>

<a href="https://www.fidelitydigitalassets.com/research-and-insights/2025-look-ahead" target="_blank" rel="noreferrer noopener">2025 Look Ahead: Is it “too late” to enter digital assets?</a>

<a href="https://fwc.widen.net/s/zbhjbmppgq/fda-2025-look-ahead-report-v6" target="_blank" rel="noreferrer noopener">2025 Look Ahead</a>

<a href="https://www.galaxy.com/insights/research/crypto-predictions-2025/?utm_campaign=GAM%20Newsletter&amp;utm_medium=email&amp;_hsenc=p2ANqtz-_w1fopHFC9ZNgK5Hp5qjJEE8fsHMgOZSoLNh8Im9P59gFnI0cfP1pW95l7wApvZrHlZqejiXpasnG4HQAasoVXDKYohg&amp;_hsmi=341767913&amp;utm_content=341767913&amp;utm_source=hs_email" target="_blank" rel="noreferrer noopener">Crypto Predictions for 2025</a>

Treasury Issues Final Rule on DeFi Tax Reporting; Crypto Groups File Lawsuit

By <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a><a href="https://www.bakerlaw.com/VeronicaReynolds"></a>

On Dec. 27, the U.S. Department of the Treasury and the IRS published final regulations addressing reporting requirements for “trading front-end service providers interacting directly with customers on digital asset transactions, often referred to as ‘DeFi brokers.’” According to a Treasury press release, “the rules … require brokers – not digital asset holders – to report on the gross proceeds of the sale of their digital assets through a Form 1099.” The press release further states that the rules “ensure DeFi brokers of digital assets are subject to the same information reporting rules as brokers for securities and operators of custodial digital asset trading platforms.” According to the press release, “The final regulations do not treat operators of digital protocols or developers of protocol software as brokers and modify the proposed regulations in ways that limit burdens on brokers while ensuring taxpayers and the IRS receive the information they need.”

According to reports, the Blockchain Association, the Texas Blockchain Council and the DeFi Education Fund have teamed up to challenge the new rule by filing a complaint in Texas federal court. Among other things, the complaint reportedly argues the rule violates the Fourth Amendment, alleging the rule invades the privacy rights of participants in DeFi transactions and equates to an unconstitutional search of the entities that are required to collect and report vast amounts of information. Additionally, the complaint reportedly alleges (i) the rule’s vague definitions violate the Fifth Amendment’s due process rights to fair notice of the law, (ii) the Treasury overreached its authority in issuing the rule, and (iii) compliance with the rule would be technologically impossible due to the nature of DeFi and blockchain technology.

<a href="https://home.treasury.gov/news/press-releases/jy2762" target="_blank" rel="noreferrer noopener">U.S. Department of the Treasury Releases Final Regulations Implementing Bipartisan Tax Reporting Requirements for Brokers of Digital Assets</a>

<a href="https://public-inspection.federalregister.gov/2024-30496.pdf" target="_blank" rel="noreferrer noopener">IRS Final Rule: Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales</a>

<a href="https://www.irs.gov/pub/irs-drop/n-25-07.pdf" target="_blank" rel="noreferrer noopener">IRS Notice 2025-7: TEMPORARY RELIEF UNDER SECTION 1.1012-1(j)(3)(ii)</a>

<a href="https://www.defieducationfund.org/_files/ugd/84ba66_b6af3a8d9414462d8a34897cfec39c5e.pdf" target="_blank" rel="noreferrer noopener">BLOCKCHAIN ASSOCIATION, TEXAS BLOCKCHAIN COUNCIL, DEFI EDUCATION FUND v. INTERNAL REVENUE SERVICE, UNITED STATES OF AMERICA, UNITED STATES DEPARTMENT OF THE TREASURY, and JANET YELLEN, in her official capacity as Secretary of the Department of the Treasury</a>

<a href="https://www.law360.com/fintech/articles/2278719?nl_pk=269c598f-8e37-49e3-bf43-b88e05d4215b&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=fintech&amp;utm_content=2025-01-03&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=1" target="_blank" rel="noreferrer noopener">Crypto Groups Challenge Decentralized Finance Broker Rule</a>

SEC and CFTC Settle Crypto Enforcement Actions

In late December, the U.S. Securities and Exchange Commission (SEC) announced a cease-and-desist order and a $123 million penalty settling charges against the subsidiary of a major digital asset company. According to an SEC press release, the defendant allegedly “mis[led] investors about the stability of Terra USD (UST), a purported ‘algorithmic stablecoin’ issued by Terraform Labs PTE Ltd. (Terraform).” The press release noted the defendant “acted negligently by trading UST in a manner that deceived the market into believing that Terraform’s algorithmic mechanism was working to stabilize UST, when in reality the price was being stabilized, at least in part, by [the defendant’s] large purchases of UST, which were incentivized by Terraform.” According to the press release, the SEC also alleged the defendant offered and sold securities in unregistered transactions “by acting as a statutory underwriter with respect to certain of its offers and sales of LUNA, a crypto asset issued by Terraform and offered and sold as a security.”

In a more recent enforcement action, according to reports, a major U.S. cryptocurrency exchange has agreed to pay a $5 million penalty to settle charges by the U.S. Commodity Futures Trading Commission (CFTC) alleging the exchange made false and misleading statements of material facts or omissions of material facts related to proposed bitcoin futures contracts. The settlement reportedly settles CFTC charges dating back to June 2022.

In a final notable item, the T3 Financial Crime Unit (T3 FCU) recently announced that it has “frozen more than USD 100 million in criminal assets globally, passing a significant milestone in its fight against cryptocurrency-related financial crime.” According to a blog post, the T3 FCU was launched in August 2024 and is focused on disrupting cybercriminals from using the USDT stablecoin.

<a href="https://www.sec.gov/newsroom/press-releases/2024-212?utm_medium=email&amp;utm_source=govdelivery" target="_blank" rel="noreferrer noopener">[] to Pay $123 Million for Negligently Misleading Investors About Stability of Terra USD</a>

<a href="https://www.reuters.com/technology/gemini-agrees-5-mln-fine-injunction-over-cftc-charges-filing-shows-2025-01-06/" target="_blank" rel="noreferrer noopener">[] agrees to $5 mln fine, injunction over CFTC charges, filing shows</a>

<a href="https://www.law360.com/fintech/articles/2280117?nl_pk=269c598f-8e37-49e3-bf43-b88e05d4215b&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=fintech&amp;utm_content=2025-01-07&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=0" target="_blank" rel="noreferrer noopener">[] To Pay CFTC $5M For Bitcoin Contract Statements</a>

<a href="https://www.trmlabs.com/post/t3-financial-crime-unit-marks-enforcement-victory-100-million-in-criminal-assets-frozen-across-five-continents" target="_blank" rel="noreferrer noopener">T3 Financial Crime Unit Marks Enforcement Victory: $100 Million in Criminal Assets Frozen Across Five Continents</a>

Cryptojacking and Phishing Schemes Reported; 2024 Hack Data Published

By <a href="https://www.bakerlaw.com/professionals/john-e-robertson/">John Robertson</a>

According to a recent report, a popular JavaScript bundler written in Rust was hit with a supply chain attack, affecting two of its npm packages. The report indicates the attack’s primary objective appeared to be cryptojacking – the process of installing and executing cryptocurrency mining software without authorization. The attack also appeared to gather the victim’s IP addresses, geographic location and other network details. The development team has since released a new version of the bundler that removes the malicious code.

In other news, a phishing scam has been revealed to be targeting Pudgy Penguins NFT users through the use of a major U.S. technology company’s ad network. The attack is said to embed in ads harmful code that scans users’ browsers for Web3 wallets. When such wallets are found, the malicious code is said to redirect the user to a fake Pudgy Penguins website that is designed to steal the user’s wallet credentials. The organization responsible for uncovering the scam has since announced that the malicious code appears to have been removed in its latest update.

Three recent reports by Chainalysis, Cyvers and Peckshield summarize crypto theft in 2024. All three reports state that approximately $2.2 billion was stolen in crypto hacks, which, according to Chainalysis, represents a 21.07 percent year-over-year increase from 2023. Other key findings from the reports include the following:

Cyvers’ report details an additional $4 billion that was stolen in other crypto scams and frauds, with the majority being from pig butchering schemes.

The Chainalysis and Cyvers reports provide summaries of major hacks in 2024.

The Chainalysis report finds that North Korea-affiliated hackers accounted for 61 percent of the funds stolen in 2024.

<a href="https://socket.dev/blog/rspack-supply-chain-attack" target="_blank" rel="noreferrer noopener">Supply Chain Attack on [] npm Packages Injects Cryptojacking Malware</a>

<a href="https://coinpedia.org/news/crypto-scam-alert-pudgy-penguins-nft-users-targeted-by-google-ad-network-phishing/" target="_blank" rel="noreferrer noopener">Pudgy Penguins Crypto Scam: [] Ads Used to Steal Web3 Wallets!</a>

<a href="https://www.chainalysis.com/blog/crypto-hacking-stolen-funds-2025/" target="_blank" rel="noreferrer noopener">$2.2 Billion Stolen from Crypto Platforms in 2024, but Hacked Volumes Stagnate Toward Year-End as DPRK Slows Activity Post-July</a>

<a href="https://netorg9950245-my.sharepoint.com/personal/shiri_cyvers_ai/_layouts/15/onedrive.aspx?id=%2Fpersonal%2Fshiri%5Fcyvers%5Fai%2FDocuments%2FMarketing%2FREPORTS%2F2024%20Report%2FKey%20security%20trends%202024%20%20%282%29%2Epdf&amp;parent=%2Fpersonal%2Fshiri%5Fcyvers%5Fai%2FDocuments%2FMarketing%2FREPORTS%2F2024%20Report&amp;ga=1" target="_blank" rel="noreferrer noopener">2024 Web3 Security Report</a>

<a href="https://decrypt.co/300204/crypto-losses-3-billion-2024-peckshield" target="_blank" rel="noreferrer noopener">Crypto Losses Surpassed $3 Billion in 2024: Peckshield</a>

Weekly Blockchain Blog – January 13, 2025