Former SEC Chair Jay Clayton Speaks About Crypto Regulation

Bitcoin (BTC) recently surpassed $100K for the fourth time, with market sentiment shifting to greed as the price ranged between $90,000 and $100,000 throughout this week.

Support Remains Strong

There are various reasons why BTC rose above $100K again, chief among which being the upcoming inauguration for Donald Trump. After reaching a high of around $108,000 on December 17th, Bitcoin has posted a series of lower highs, similar to the 2024 consolidation phase.

The $90,000 level remains strong support, with Bitcoin holding above it since November 18th, except for a brief dip on January 13th. Leverage also plays a key role in gauging market sentiment, seen through Bitcoin futures OI (Open Interest).

Spot-Driven

Data by Coinglass shows the aforementioned OI has dropped to 621,000 BTC ($61.6 billion), its lowest since early November, indicating recent price action has been more spot-driven than leverage-driven.

For accurate analysis, it is important to track open interest in Bitcoin terms rather than nominal value, which fluctuates with price. Still, all eyes are on the flagship crypto now, as investors hope the correction is all but over.

Telegram-based malware scams have now surpassed traditional phishing attacks, according to Scam Sniffer. Between November 2024 to January 2025, incidents involving malicious Telegram groups skyrocketed by over 2,000%, while phishing-based attacks remained relatively stable.

Advanced Tactics

These new scams utilize a variety of methods including fake verification bots, fraudulent trading and airdrop groups, and exclusive alpha groups. Once users interact with these, attackers gain access to sensitive data like passwords, wallet files, clipboard activity, and browser data.

This shift towards Telegram-based malware reflects a strategic move by cybercriminals, as malware offers broader access and makes financial losses harder to trace. To protect against these threats, Scam Sniffer advises users to avoid running unknown commands, installing unverified software, and using clipboard-based verification methods. Hardware wallets also provide added security.

A Losing Battle

Scam Sniffer has also reported an increase in scams where cybercriminals impersonate influencers and lure victims into fraudulent Telegram groups. These groups use bots like OfficiaISafeguardBot to inject harmful PowerShell code into clipboards, compromising sensitive data.

The latest scams target legitimate project communities, urging users to run code for updates, bypassing traditional phishing tactics and relying on sophisticated social engineering. Security companies are also under pressure to come up with reliable mechanisms to protect everyone, albeit easier said than done.

The XRP/USD pair has now accounted for over 25% of the 24-hour trading volume on Coinbase, with more than $1.7 billion in trades.

XRP Skyrockets

After XRP/USD, the BTC/USD pair follows in second place with $1.3 billion (19.6%). XRP ranks third in overall trading activity, behind only Bitcoin (BTC) and Ethereum (ETH), with a massive $20 billion in trading volume.

This surge in market activity comes as XRP reached a new all-time high after seven years, with over $18 million worth of XRP shorts liquidated in the past 24 hours. XRP also saw its futures OI (Open Interest) rise to $8 billion, reflecting an 8% increase.

Digital Asset Reserves

The recent price surge coincides with rumors that the U.S. government may be considering establishing a reserve involving digital assets like XRP, a claim first reported by the New York Post, though such speculation should be taken with caution.

Still, there appears to be some substance to these rumours, especially since President-elect Donald Trump has said on multiple occasions that he plans to establish a strategic Bitcoin reserve for the United States.

Nasdaq has submitted a request to the U.S. Securities and Exchange Commission (SEC) seeking approval for a spot Litecoin (LTC) ETF.

The Canary Litecoin ETF

The application, filed on Wednesday on behalf of Canary Capital, aims to introduce the Canary Litecoin ETF. Bancorp Fund Services will serve as the fund administrator, with U.S. Bank NA designated as the cash custodian for the ETF. Coinbase Custody Trust Company LLC will hold the LTC in custody.

This filing represents the second phase of a two-step procedure. It coincides with Canary Capital recently submitting an updated Form S-1. The approval of this filing will trigger the Canary Litecoin ETF approval process once the SEC certifies and publishes Form 19b-4 in the Federal Register.

A Much Needed Boost

Litecoin, which launched in 2011, offers faster transaction speeds compared to Bitcoin and lower transaction fees. It also utilizes a distinct hashing algorithm that promotes a more decentralized mining process, unlike Bitcoin.

Should the SEC approve the listing of the Canary Litecoin ETF, it could reinvigorate the dormant altcoin, which has seen its lowest daily active address count since 2023. Canary Capital took its first step towards the Litecoin ETF in October 2024.

Hindenburg Research has announced that it will be shutting down, effective immediately. The decision was made after the firm completed its pipeline of ideas and emphasized that there are no personal or health-related reasons behind the closure.

The Time Was Right

Hindenburg gained widespread attention for its investigative reports on companies such as the Adani Group, Nikola, and Carvana, which stirred major controversies, particularly in India. The firm accused Adani of corporate wrongdoing, triggering significant financial losses and political turmoil.

Known for publishing research sold to hedge funds and investors while simultaneously making the findings public, the firm capitalized on market shorts. Still, the plan all along was to wind down once the pipeline of ideas was finished.

Stocks Rise
The closure occurs amid increased regulatory scrutiny, particularly by the U.S. Department of Justice, the SEC, and SEBI (based in India). Hindenburg faced allegations of breaching regulations by using offshore instruments to short the Indian market, with SEBI issuing a show-cause notice to the firm.

The Adani case remains unresolved, though Adani Enterprises saw a sharp rise in its stock price at the start of trading today. Other companies in the Adani Group, such as Adani Power, also saw significant gains.

The United Arab Emirates (UAE) is set to build a 17-story Crypto Tower in Dubai by 2027, according to DMCC and REIT Development. The tower will include office floors for crypto startups, blockchain incubators, an AI innovation floor, a crypto club, and an NFT art gallery.

A Top Destination

Dubai has long been a top destination for crypto enthusiasts due to its progressive regulations, strong infrastructure, and government support for digital innovation. The city offers a thriving ecosystem for crypto startups, investors, and professionals.

This project follows a pre-existing crypto center in Uptown Tower, which supports crypto-oriented firms with licensing and regulatory services. DMCC expects the new tower to be completed by Q1 2027, with operations beginning shortly after.

Global Expansion

Elsewhere, a Bitcoin Hotel in Tokyo, planned by Metaplanet, will open in Q3 2025, aiming to promote Bitcoin adoption, education, and community. Other crypto-themed projects include IKAR Holdings, which is currently planning a chain of Bitcoin Hotels in Portugal and Cyprus.

Similarly, the Satoshi Island project, aiming to create a blockchain-based economy on an island near Vanuatu, is progressing with villa designs, while Akon City, a crypto-powered smart city in Senegal named after the famous singer, has faced setbacks, with local authorities threatening to reclaim 90% of the land unless progress is made soon.

Oklahoma has introduced House Bill 1203, aiming to allow state pension funds and savings accounts to allocate assets to Bitcoin (BTC) as a hedge against inflation.

Several States Consider Bitcoin

Representative Cody Maynard, who proposed the bill, highlighted the decentralized nature and fixed supply of Bitcoin, positioning it as a safeguard against inflation risks driven by government currency manipulation.

Other states like Pennsylvania, Texas, North Dakota, and New Hampshire are also proposing Bitcoin-related legislation. Pennsylvania is considering allocating up to 10% of state assets to Bitcoin, Texas has proposed a five-year holding period for Bitcoin reserves, North Dakota has introduced a bipartisan-backed Bitcoin reserve bill, and New Hampshire is exploring a broader initiative that includes other digital assets.

A Much Needed Alternative

These efforts reflect growing concerns over inflation and economic instability, with Bitcoin offering a potential alternative for preserving purchasing power. Still, as many states look toward BTC as a store of value, critics remain wary of its volatility and regulatory uncertainties.

Despite these challenges, states like Oklahoma are pushing forward, recognizing the potential benefits that Bitcoin adoption can offer, despite the risks.

Sony Group has officially launched the Soneium Mainnet, a new Ethereum (ETH) Layer-2 protocol developed by Sony Block Solutions Labs and powered by the Optimism Foundation and their Superchain technology.

Transforming The Internet

First announced in August, Soneium is designed to offer innovative use cases for creators and fans, aiming to enhance creativity, engagement, and profit-sharing in both the digital and physical worlds.

Sony believes that Web3 can transform the Internet, empowering millions globally to collaborate, innovate, and onboard new users. Since its testnet launch, Soneium has garnered over 14 million active wallets and processed more than 47 million transactions.

Growing Potential

Sony is currently integrating various blockchain tools into the Soneium ecosystem, including a Fan Marketing Platform, which leverages NFTs for digital marketing purposes. Additionally, users will be able to trade crypto assets through the BLOX platform.

In any case, the launch underscores the growing potential of Web3 across entertainment, gaming, music, art, and community apps. It highlights how creativity can be amplified and supported using blockchain technology.

Intesa Sanpaolo has made history as the first Italian financial institution to invest in Bitcoin (BTC), acquiring 11 BTC for approximately $1.02 million on January 13th, 2025.

This move follows closely on the heels of Bitcoin surpassing the $100,000 threshold in December, with the acquisition coming just over a month after that milestone.

Timing Is Everything

The news broke through a leaked internal email by Niccolò Bardoscia, the Head of Digital Assets Trading at Intesa Sanpaolo. Though Intesa Sanpaolo itself has yet to make any kind of public announcement, the bank did confirm the Bitcoin purchase to the media outlet Wired.

The timing of the investment coincides with a surge in institutional interest in Bitcoin. On January 13th, Bitcoin exchange reserves dropped to a near seven-year low as crypto hedge funds capitalized on the price dip, further fueling expectations of a supply shock.

This phenomenon occurs when strong demand by buyers meets a dwindling supply of BTC, leading to potential price gains.

Buying The Dip
Bitcoin remained below the $100K psychological barrier since January 7th, as institutional investors seized the opportunity to buy BTC at a lower price. While some analysts predict an end to the current correction, BTC remains susceptible to macroeconomic factors in the absence of favorable regulatory news.

According to Bybit, Bitcoin and crypto have become reactive to macroeconomic events at the close of 2024 and into 2025, especially with the Federal Reserve not making as many rate cuts in the new year.

Despite these macroeconomic concerns, some analysts anticipate that Bitcoin could reach a new cycle high above $150,000 by late 2025, spurred by a projected $20 trillion increase in global money supply, which could drive $2 trillion of new investment into BTC.

South Korea has officially initiated discussions to develop the second phase of its cryptocurrency regulatory framework, with plans to draft the legislation by the second half of this year.

The Financial Services Commission (FSC) of South Korea convened a meeting on Wednesday to identify the key areas that the upcoming bill will address, as reported by the news outlet Edaily.

Protecting Investors

During the meeting, FSC Vice Chairman Kim So-Young highlighted that major global economies are speeding up the development of crypto regulations to protect investors and reduce regulatory uncertainty.

The initial crypto regulatory framework came into effect in July of last year, after being passed the year before. This framework focused on investor protection by imposing stricter requirements on exchanges, such as mandating that service providers store at least 80% of customer crypto deposits in cold storage, separate to their own assets.

A Comprehensive Approach

According to the Vice Chair of the FSC, the next phase of regulatory measures should take a thorough and structured approach that addresses service providers, crypto users, and the broader crypto market.

During the meeting, several topics were discussed, including improving transparency in the listing of new cryptocurrencies on exchanges and applying the same disclosure requirements for crypto entities as those for companies in traditional finance.

The meeting also covered stablecoin regulation, with authorities examining global practices regarding reserve asset management for issuers and user redemption rights.

Tom Emmer has been appointed Vice Chair of the Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence.

Collaborating with Bryan Steil and French Hill, Emmer aims to create policies that support the growth of digital assets, opposing restrictive federal regulations and advocating for a fair environment for cryptocurrencies, stablecoins, and CBDCs.

Power To The People

A long-time supporter of crypto in Congress, Emmer introduced the Anti-Surveillance CBDC Act, which passed the House in May 2024, preventing the issuance of CBDCs that could track individual spending, thus protecting privacy and keeping monetary policy in the hands of the people.

Emmer has also often criticized the SEC and proposed reforms to limit what the agency and its Chairman, Gary Gensler, were allowed to do, especially since Gensler has been anti-crypto since the beginning, according to Tom.

Key Appointments

As the inauguration of President Donald Trump approaches, the crypto industry expects swift pro-crypto policies to be executed, with key appointments including Elon Musk as head of the Department of Government Efficiency (D.O.G.E.), and Paul Atkins as SEC Chair.

Other notable appointments include David Sacks as White House Advisor on Crypto and AI, Bo Hines leading the Presidential Advisory Council on Digital Assets, and Sriram Krishnan as Senior AI Policy Advisor. With Emmer at the helm, the subcommittee is poised to play a key role in shaping the future of U.S. crypto and AI policy.

AI-driven tokens have surged after a Franklin Templeton report predicted that AI agents will transform content creation on social media.

Still A Ways To Go

The report, released on January 14th, envisions AI agents launching brands, products, and content, much like human influencers, driving significant economic value across industries.

AI agents are systems capable of autonomous decision-making and goal-directed behavior. However, Franklin Templeton noted that they are still in early development stages with limited utility.

Market Reacts

AI researcher, s4mmy, commented that crypto allows AI agents full control over finances, and predicted that evolving on-chain agentic solutions will drive the next crypto cycle. OpenAI CEO Sam Altman also predicted that AI agents could impact company productivity by 2025.

In response, AI tokens like Virtuals Protocol (VIRTUAL) and ai16z (AI16Z) have surged, with VIRTUAL up over 8% and ai16z rising 20%. Other AI-related tokens, including Near Protocol (NEAR), Internet Computer (ICP), and Freysa AI (FAI), have also seen notable gains.