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Home | BakerHostetler

Douglas Grady Speaks at PNAA Advance 2025

Eric Gyasi, Daryl Leon Comment on Potential Rule Changes Under New Administration

Peter Roskam Assumes Role of Chairman for National Endowment for Democracy

George McCormick Delivers CLE Program on Foreign Trusts for myLawCLE

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<a href="#web3">U.S. Web3 Companies Launch Products and Tech Integrations</a>

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<a href="#foreign">Foreign Web3 Companies Launch Networks, Gain Licenses</a>

<a href="#reports">Reports Provide Data and Analysis on Crypto Market Trends</a>

<a href="#cfpb">CFPB Proposes to Expand EFTA Over Crypto; NY DFS Addresses Meme Coins</a>

<a href="#mixers">Crypto Enforcement Actions Target Mixers, BSA Violations, Fraud Schemes</a>

<a href="#dprk">U.S. Warns of DPRK Crypto Activities, Reports Provide Data on Crypto Threats</a>

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U.S. Web3 Companies Launch Products and Tech Integrations

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

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A major U.S. cryptocurrency exchange recently launched a “Bitcoin-based loans” product that allows customers to post BTC as collateral for USDC loans. According to a blog post, the loans are “powered by Morpho, an open source lending protocol on Base.” (Base is an Ethereum L2 network initially launched by the crypto exchange in 2023.) According to the blog post, “Borrowing against bitcoin instead of selling it, can help delay a tax gain or loss.”

In other news, the software company that developed the protocol for the world’s largest decentralized exchange (DEX) recently announced an integration with Ledger Live, an application for swapping digital assets directly on user hardware devices. According to a press release, with the integration “[u]sers can now swap tokens on the [DEX] without leaving the Ledger Live interface, all the while maintaining complete control of their digital assets through Ledger’s industry-leading hardware wallets.”

In another integration, Ripple Labs announced that it has adopted the Chainlink standard “to bring high-quality pricing data around the Ripple USD (RLUSD) stablecoin onchain.” According to a Ripple blog post, “[t]he Chainlink standard provides … the data required to accelerate RLUSD’s adoption within DeFi and fully realize the stablecoin opportunity.”

For more information, please refer to the following links:

<a href="https://www.coinbase.com/blog/now-get-a-USDC-loan-without-selling-your-bitcoin" target="_blank" rel="noreferrer noopener">Now get a USDC loan without selling your bitcoin</a>

<a href="https://www.businesswire.com/news/home/20250114470940/en/Uniswap-Labs-and-Ledger-Unveil-Ledger-Live-Integration-Enabling-Seamless-Access-To-DeFi-Directly-From-Self-Custody" target="_blank" rel="noreferrer noopener">Uniswap Labs and Ledger Unveil Ledger Live Integration, Enabling Seamless Access To DeFi Directly From Self-Custody</a>

<a href="https://ripple.com/ripple-press/ripple-adopts-the-chainlink-standard-to-further-rippleusd-utility-and-access-in-defi/" target="_blank" rel="noreferrer noopener">Ripple Adopts The Chainlink Standard To Further Ripple USD (RLUSD) Utility and Access in DeFi</a>

Foreign Web3 Companies Launch Networks, Gain Licenses

A major Japanese technology company recently announced that it has launched its Soneium blockchain network. According to a press release, the company has also launched updated versions of its crypto exchange and NFT issuance services as part of the new Soneium ecosystem.

Separately, Tether, the issuer of the USDT stablecoin, announced that it has obtained a license to operate in El Salvador and intends to relocate to the country. According to a blog post, “The move enhances Tether’s flexibility to explore groundbreaking solutions in a supportive regulatory and business environment.”

In Europe, a major global bank headquartered in the U.K. announced that it has obtained a license in Luxembourg to offer digital asset custody services to EU clients pursuant to the MiCA regulation. Additionally, a major global crypto exchange announced that it “has become the first major global crypto asset service provider to announce securing an in-principle MiCA licence.”

<a href="https://www.sony.com/en/SonyInfo/News/Press/202501/25-002E/" target="_blank" rel="noreferrer noopener">Soneium: Launch of a comprehensive blockchain-centric Web3 solution</a>

<a href="https://tether.io/news/tether-licensed-in-el-salvador-strengthening-focus-on-emerging-markets-and-innovation/" target="_blank" rel="noreferrer noopener">Tether Licensed in El Salvador, Strengthening Focus on Emerging Markets and Innovation</a>

<a href="https://www.sc.com/en/press-release/standard-chartered-granted-licence-in-luxembourg-to-offer-digital-asset-custody-services/" target="_blank" rel="noreferrer noopener">Standard Chartered granted licence in Luxembourg to offer digital asset custody services</a>

<a href="https://crypto.com/en/company-news/crypto-com-receives-in-principle-approval-of-markets-in-crypto-assets-mica-licence" target="_blank" rel="noreferrer noopener">Crypto.com Receives In-Principle Approval of Markets in Crypto Assets (MiCA) Licence</a>

Reports Provide Data and Analysis on Crypto Market Trends

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

Several recent reports provide additional data and analyses on the 2024 crypto market and expected trends for 2025. Notable reports include those by (1) a major U.S. crypto payment processor citing 2024 crypto payment trends; (2) a U.S. venture capital firm addressing crypto market predictions for 2025; (3) a report on the state of Web3 adoption that addresses crypto trends in corporate adoption, gaming, stablecoins, AI and meme coins; and (4) a Swiss crypto exchange-traded product (ETP) issuer that discusses nation-state adoption of crypto, Bitcoin and Ethereum network trends, institutional adoption, and stablecoins.

<a href="https://www.bitpay.com/decrypted/2024" target="_blank" rel="noreferrer noopener">BitPay |  DECRYPTED  2024 CRYPTO’s  BIGGEST YEAR</a>

<a href="https://panteracapital.com/blockchain-letter/the-year-ahead-in-crypto-2025/" target="_blank" rel="noreferrer noopener">Pantera: The Year Ahead In Crypto</a>

<a href="https://drive.google.com/file/d/19vTR8fmTaceuKD70cIX9AbISSfmRCjmR/view" target="_blank" rel="noreferrer noopener">51 Insights: 2025 State of Web3 Adoption</a>

<a href="https://www.globenewswire.com/news-release/2024/12/09/2993474/0/en/21Shares-Releases-Annual-Market-Outlook-Projecting-Strong-Year-Ahead-for-Digital-Assets.html" target="_blank" rel="noreferrer noopener">21Shares Releases Annual Market Outlook Projecting Strong Year Ahead for Digital Assets</a>

<a href="https://5994002.fs1.hubspotusercontent-na1.net/hubfs/5994002/21Shares_M_SOC-13_EN_web.pdf" target="_blank" rel="noreferrer noopener">21Shares State of Crypto: Market Outlook 2025</a>

CFPB Proposes to Expand EFTA Over Crypto; NY DFS Addresses Meme Coins

The U.S. Consumer Financial Protection Bureau (CFPB) recently published a proposed rule that if finalized would extend certain terms in the Electronic Fund Transfer Act (EFTA) and its implementing regulation, Regulation E, to cover digital asset wallets, video game accounts, credit card reward point accounts and other fintech payment products. Among other things, the proposed rule would interpret the term “funds” as used in the EFTA to include “stablecoins, as well as any other similarly situated fungible assets that either operate as a medium of exchange or as a means of paying for goods or services.” The proposed rule also states that “the fact that an asset may fluctuate in value” does not exempt it from the EFTA definition of “funds.” The proposed rule notes that “Several courts interpreting ‘funds’ in the context of Federal money transmitter and money laundering statutes have similarly held that the term ‘funds’ is not limited to fiat currency and encompasses other types of assets, including widely held currencies like Bitcoin.” Comments on the proposed rule are due by March 31.

In a separate development, the New York State Department of Financial Services (NY DFS) recently published its Notice Regarding Rapidly Proliferating, Sentiment-Based Virtual Currencies. Media reports have interpreted the notice as referring to so-called meme coins. According to the notice, NY DFS “is closely monitoring the rapid proliferation of sentiment-based virtual currencies” and such virtual currencies “generally are incompatible with the Department’s Guidance on Coin-Listing and on Market Manipulation, in that they carry significant regulatory, market, and legal risk, and may be favorable instruments for the facilitation of illicit finance.”

<a href="https://www.consumerfinance.gov/rules-policy/notice-opportunities-comment/open-notices/electronic-fund-transfers-through-accounts-established-primarily-for-personal-family-or-household-purposes-using-emerging-payment-mechanisms-electronic-fund-transfer-act-regulation-e/" target="_blank" rel="noreferrer noopener">Electronic Fund Transfers Through Accounts Established Primarily for Personal, Family, or Household Purposes Using Emerging Payment Mechanisms (Electronic Fund Transfer Act; Regulation E)</a>

<a href="https://www.law360.com/fintech/articles/2282602?nl_pk=269c598f-8e37-49e3-bf43-b88e05d4215b&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=fintech&amp;utm_content=2025-01-13&amp;read_main=1&amp;nlsidx=0&amp;nlaidx=0" target="_blank" rel="noreferrer noopener">CFPB Floats Protections For Crypto, Video Game Payments</a>

<a href="https://www.dfs.ny.gov/industry-guidance/industry-letters/il20250114-rapidly-prolif-sentiment-based-vc" target="_blank" rel="noreferrer noopener">Notice Regarding Rapidly Proliferating, Sentiment-Based Virtual Currencies</a>

Crypto Enforcement Actions Target Mixers, BSA Violations, Fraud Schemes

The U.S. Department of Justice (DOJ) recently announced the indictment of two Russian individuals for their involvement in operating the cryptocurrency mixing services Blender.io and Sinbad.io. According to a DOJ press release, the defendants were arrested on Dec. 1, 2024. Among other things, the press release notes that Blender.io laundered funds for multiple ransomware groups and Sinbad.io laundered funds for cybercriminals and a DPRK state-sponsored hacking group.

Another DOJ press release announced that a New York federal court has imposed a $100 million fine on a foreign-based cryptocurrency exchange for violations of the Bank Secrecy Act. The fine is in addition to a $110 million penalty previously imposed on the company and its principals.

And in a state-based action, the New York attorney general recently announced “a lawsuit to recover $2.2 million worth of cryptocurrency held in digital wallets and stolen from New Yorkers and victims across the country in a remote job scam.” According to a press release, the fraud involves scammers that send text messages offering fake online job opportunities in a scheme designed to trick victims into sending stablecoins to the scammers.

<a href="https://www.justice.gov/usao-ndga/pr/operators-cryptocurrency-mixers-charged-money-laundering" target="_blank" rel="noreferrer noopener">Operators of Cryptocurrency Mixers Charged with Money Laundering</a>

<a href="https://www.justice.gov/usao-sdny/pr/global-cryptocurrency-exchange-bitmex-fined-100-million-violating-bank-secrecy-act" target="_blank" rel="noreferrer noopener">Global Cryptocurrency Exchange BitMEX Fined $100 Million For Violating Bank Secrecy Act</a>

<a href="https://ag.ny.gov/press-release/2025/attorney-general-james-stops-text-message-scam-targeting-vulnerable-new-yorkers" target="_blank" rel="noreferrer noopener">Attorney General James Stops Text Message Scam Targeting Vulnerable New Yorkers Looking for Remote Job Opportunities</a>

U.S. Warns of DPRK Crypto Activities, Reports Provide Data on Crypto Threats

The United States, Japan and the Republic of Korea recently issued a joint statement “to provide a new warning to the blockchain technology industry regarding the ongoing targeting and compromise of a range of entities across the globe by Democratic People’s Republic of Korea (DPRK) cyber actors.” The statement specifically warns of DPRK attacks involving “well-disguised social engineering attacks that ultimately deploy malware” and insider threats by information technology employees that work for the DPRK. The statement encourages the private sector to share information with enforcement agencies through forums such as the Illicit Virtual Asset Notification (<a href="https://www.mitre.org/news-insights/news-release/illicit-virtual-asset-notification-public-private-partnership" target="_blank" rel="noreferrer noopener">IVAN</a>) information sharing partnership, the Cryptoasset and Blockchain Information Sharing and Analysis Center (<a href="https://www.cryptoisac.org/" target="_blank" rel="noreferrer noopener">Crypto-ISAC</a>), and the Security Alliance (<a href="https://securityalliance.org" target="_blank" rel="noreferrer noopener">SEAL</a>).

In a recent blog post, blockchain analytics firm Elliptic reported that Huione Guarantee, “a multi-billion dollar marketplace for online fraudsters, including those responsible for so-called pig butchering scams,” has recently launched “a range of crypto-related products including a U.S. dollar stablecoin, blockchain, crypto exchange and messaging app.” Among its many findings, the report notes that “Huione Group entities have received at least $89 billion in cryptoassets to date.”

Another blockchain analytics firm, Chainalysis, recently published a blog post previewing its forthcoming 2025 Crypto Crime Report. Among other things, the blog reported that in 2024, (1) $40.9 billion was received by illicit crypto addresses, representing 0.14 percent of total on-chain transaction volume; (2) 63 percent of all illicit transactions used stablecoins, although ransomware and darknet market sales remain BTC-dominated; (3) stolen funds increased by approximately 21 percent year over year to $2.2 billion; (4) ransomware has continued to see revenues in the hundreds of millions of dollars; and (5) the crypto crime landscape is becoming increasingly diverse and professionalized, with an array of illicit actors – including transnational organized crime groups – increasingly leveraging cryptocurrency for traditional crime.

<a href="https://www.mofa.go.jp/files/100779661.pdf" target="_blank" rel="noreferrer noopener">Joint Statement on Cryptocurrency Thefts by the Democratic People’s Republic of Korea and Public-Private Collaboration</a>

<a href="https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin" target="_blank" rel="noreferrer noopener">Huione: the company behind the largest ever illicit online marketplace has launched a stablecoin</a>

<a href="https://www.chainalysis.com/blog/2025-crypto-crime-report-introduction/" target="_blank" rel="noreferrer noopener">Illicit Volumes Portend Record Year as On-Chain Crime Becomes Increasingly Diverse and Professionalized</a>

Weekly Blockchain Blog – January 20, 2025

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