The United Kingdom Financial Conduct Authority (FCA) has not yet imposed penalties on companies that fail to eliminate illegal cryptocurrency advertisements. Despite clear instructions by the regulatory authority to remove such promotions, half of the prohibited ads remain online as of this writing.

It is worth mentioning that the FCA does not possess the authority to enforce the removal of unapproved content on online platforms and instead depends on negotiations with tech companies in good faith. 

Exercising Authority

Data acquired via a freedom of information request shows that between October 2023 and October 2024, only 54% of the 1,702 alerts issued by the FCA led to the removal of illegal crypto ads, apps, or websites.

The regulatory body holds the power to levy fines or pursue criminal charges against entities breaching new regulations, which stipulate that crypto ads must be approved by the FCA or an FCA-authorized entity before they are published, or face the stringent actions the regulator has promised.

Clamping Down On Influencers

Sources familiar with the FCA suggest that the agency has not yet used its full authority, instead concentrating efforts on financial influencers promoting such schemes online. The FCA has launched criminal cases against nine individuals accused of endorsing unauthorized schemes involving high-risk derivatives on Instagram, including TV personalities known for shows like Love Island and The Only Way Is Essex.

In October of the prior year, the FCA revealed that it was interviewing 20 additional financial influencers who had been cautioned for unlawfully promoting financial products. Former FCA chairman Charles Randell stressed the necessity of penalizing firms that refuse to eliminate non-compliant content, arguing that substantial legal threats are essential to drive change among tech platforms and authorized crypto asset exchanges.

Several crypto projects that saw notable growth in 2024 are anticipated to hold a Token Generation Event (TGE) in the first quarter of 2025. Platforms like Monad and Pump.fun secured significant investments throughout the year, fueled by rising user engagement and key advancements. These projects are expected to unveil their own tokens in early 2025.

Upcoming TGEs
Blockchain analyst Colin Wu shared a list of potential TGE projects via social media, albeit offering little explanation. Previously, he predicted that $HYPE would debut by the end of 2024. The list for Q1 2025 features both returning and new projects.

For instance, Wu foresaw Monad launching a TGE in 2024 back in July, and it remains a top contender. Monad achieved impressive fundraising success last summer, and a TGE could further boost the company in 2025. However, Wu has shifted focus, now identifying Pump.fun as the leading candidate, which previously reached $100 million in revenue.

Other Notable Names

Wu and his team highlighted other successful fundraisers that may launch a TGE soon. Story Protocol, one of the largest recipients of venture capital in August, has yet to issue a token. Likewise, Polymarket teased a token launch following a major pre-election trading surge, but nothing has come to fruition so far.

This analysis includes an additional insight, namely the volume and origins of investment capital leading up to a potential token launch. Some prominent names have backed multiple candidates, including Polychain, which supported several large airdrops in December. This could indicate a forthcoming TGE or airdrop in the near future.

Scam Sniffer has identified a fraudulent link titled Optimism x Base Airdrop, which was subsequently added to its domain warning list.

Damage Control

Although the Superchain team has yet to release a statement regarding the issue, the deceptive tweet is no longer visible on the Superchain Eco X account. Users are urged to avoid clicking on associated links and are advised to verify the authenticity of any related information to avoid falling victim to such scams.

The Superchain Ecosystem
The Superchain, designed by Optimism, is a network of interconnected Layer-2 blockchains that operate using common development toolkits, security models, and shared communication layers. This ecosystem is horizontally scalable, allowing for the sharing of security and communication protocols across chains, thus speeding up development on the OP Stack.

Moreover, it utilizes a different model as compared to the traditional siloed structure of blockchains by enabling the creation of interconnected Layer-2 networks, all built on the same OP Stack.

Ai16z, a decentralized autonomous organization (DAO) powered by an AI agent, surpassed a $1 billion market cap following the release of its launchpad proposal.

A Huge Milestone

On December 28th, Ai16z saw a 50% surge, reaching a market cap of $1.5 billion, becoming the first Solana-based AI agent token to achieve this milestone. By December 29th, it corrected to $1.3 billion but surged again, hitting a new all-time high of $1.7 billion, according to Coingecko. As of now, the token has experienced over 600% growth in the past month.

Several Proposals

Following the price surges, the Ai16z community is considering various proposals to expand its ecosystem in 2025. One proposal is to launch a meme coin platform, similar to Pump.fun, set for Q1 2025. The platform will use Eliza, an AI agent framework, to support agent-to-agent interactions and multi-chain integration. The aim is to build a self-sustaining economic system that helps facilitate easier launches, scaling, and liquidity.

Other ideas include transforming Ai16z into a Layer-1 blockchain for AI agents and applications, and implementing a community curation process to vet projects before they launch, ensuring they align with the DAO and its mission.

Political instability in South Korea continues to strain markets, with XRP down 2% in the past 24 hours and the won trading below 1,470 per dollar. The arrest warrant for former President Yoon Suk Yeol has worsened market fears both locally and globally.

Political Fallout

On Tuesday, the Seoul Western District Court issued a search and arrest warrant for Yoon, related to his attempt to impose martial law during a televised address on December 3rd. This is the first time in South Korean history that an arrest warrant has been issued against a sitting president.

Yoon refused to comply with summons by the Corruption Investigation Office (CIO), which led to local regulatory agencies investigating him for treason and abuse of power. His martial law announcement, citing anti-state elements and North Korean threats, was swiftly overturned by parliament on December 4th, but the political fallout has been significant.

Impact On Crypto
The political crisis has extended to the broader cryptocurrency market, with major cryptocurrencies like BTC, ETH, and XRP briefly dropping by up to 4%. Trading in South Korea surged as retail traders targeted altcoins like XRP and DOGE.

Despite recovery after parliament overturned martial law, volatility persists. Bitcoin fell to $92,500, a 0.6% drop in 24 hours, with trading volume rising 62%. Ethereum dropped 2.4% to just above $3,300, with volume growing by 56%. XRP dropped 2% in 24 hours on Upbit, trading below 3,000 won and down 12% over the past week.

The broader crypto market declined by 1.3% to $3.22 trillion, though trading volumes surged 40%, as investors seek to lock in profits.

Tokens inspired by the Squid Game series on Netflix have surged in the market following the release of its second season. However, members of the community have raised concerns that these tokens could be scams or potential rug pulls.

PeckShield Issues Scam Warning

On December 26th, Netflix debuted the second season of the hugely popular Korean dystopian thriller Squid Game. The series centers around a private competition where players, facing severe financial hardship, risk their lives for the chance to win a large cash prize.

On December 27th, blockchain security firm PeckShield issued a warning to the community about potentially fraudulent Squid Game tokens. According to the firm, scam tokens based on the Netflix series are circulating in the wild.

PeckShield also highlighted a particular token deployed on the Base network, where the wallet of the deployer was its largest holder. Since its release, the value of the token has plummeted by 99%. Additionally, other similar Squid Game tokens have emerged on the Solana blockchain.

Previous Squid Game Token Scams In 2021

An account on X, using the same name as the Squid Game series, had been promoting one of these tokens. However, a community member cautioned users against purchasing it, pointing out that the largest token holders appeared to be concentrated among a few addresses. This raised concerns that these holders could dump their tokens once the price rises, leading to potential losses for new investors.

When Squid Game premiered in 2021, tokens associated with the series quickly appeared in the crypto market. One token saw an astronomical rise in value, soaring over 45,000%. However, suspicions of a scam emerged when users reported being unable to sell their coins. At the time, CoinMarketCap issued a warning that the tokens could not be traded on PancakeSwap, leading many to suspect that it was a rug pull.

Nodepay raised $7M in Undisclosed Funding with support by IDG Capital. Nodepay is a decentralized network that rewards users for contributing their internet resources to AI.

GT-Protocol secured an undisclosed amount in Strategic Funding with help by ChainGPT Labs. GT Protocol is an innovative DeFi platform that combines decentralized social trading and DeFi investment pools management.

ChainOpera AI obtained $17M in Seed Funding with assistance by Finality Capital Partners. ChainOpera AI is a Layer 1 blockchain and protocol for AI apps and agents.

Swan Chain acquired $2M in Undisclosed Funding with support by DWF Labs. SwanChain is an AI blockchain infrastructure utilizing OP Stack and their Ethereum Layer 2.

Trrue raised $10M in a Private Token Sale with help by Gem Digital. Trrue provides a verified credential network and Layer 1 trust infrastructure for financial services.

Melos Studio obtained an undisclosed amount in Series B Funding with assistance by LBank. Founded in 2020 in Taiwan, Melos is a decentralized Web3 collaboration platform for musicians and music creators.

The Grid secured $624K in Angel Funding without any notable investors. The Grid provides standardised metadata about blockchain and Web3 projects.

easeflow raised an undisclosed amount in Strategic Funding with help by Impossible Finance. Easeflow is a platform that focuses on simplifying the deployment and management of blockchain nodes through a one-click solution.

Usual acquired obtained $10M in Series A Funding with support by Binance Labs. Usual is focused on issuing secure and decentralized fiat stablecoins, redistributing ownership and governance through the $USUAL token.

RuneMine secured $2M in Undisclosed Funding without any notable investors. RuneMine focuses on establishing the groundwork to facilitate value exchange within the Bitcoin network.

Galaxy Digital has boldly claimed that the United States government will not purchase more Bitcoin (BTC) in 2025 but will focus on safeguarding its current holdings, which total about 183,850 BTC valued at around $17.24 billion.

Everyone Wants A Piece

It is worth mentioning that discussions about using Bitcoin as a reserve asset will continue, but the government seems focused on its existing stockpile. Federal agencies will also likely assess the impact of a Bitcoin reserve policy, aligned with Senator Cynthia Lummis and her Bitcoin Act of 2024. If passed, the bill would allow the U.S. government to accumulate 200,000 BTC annually for five years, ultimately creating a reserve of 1 million Bitcoin.

Galaxy Digital analysts suggest that a U.S. shift toward Bitcoin could spark competition by other nations, especially those with large sovereign wealth funds or those opposed to the United States, such as Russia. Bitcoin adoption might also extend to corporations, with Nasdaq 100 companies potentially adding Bitcoin to their balance sheets.

Varied Global Reactions

Japanese Prime Minister Shigeru Ishiba is uncertain about what other countries may do regarding Bitcoin, while former Binance CEO Changpeng Zhao predicted smaller nations will lead in adopting Bitcoin reserves. He also suggested China might play a key role in this shift.

Despite potential hesitation by the U.S. government to acquire more Bitcoin, MicroStrategy continues its aggressive BTC acquisition. At the same time, pro-crypto policies are becoming more urgent with a two-year legislative window during the incoming Trump administration.

The DeFi Education Fund, the Blockchain Association, and the Texas Blockchain Council are contesting the Internal Revenue Service (IRS) and their decision to classify DeFi platforms as brokers, arguing that it exceeds the authority of the agency, violates the Administrative Procedure Act (APA), and infringes on constitutional rights.

Lawsuit Against the IRS

Filed on December 27th, 2024, the lawsuit challenges the aforementioned broker rule, which expands the definition to include decentralized exchanges (DEXs) and other platforms facilitating digital asset transactions.

The rule requires DeFi platforms to report detailed transaction information, such as gross proceeds, transaction dates, and user identities (names, addresses, TINs) via Form 1099-DA, starting in 2027, to improve transparency and reduce tax evasion.

The crypto community argues that the IRS has overstepped its bounds, as DeFi platforms do not execute transactions like traditional brokers. They also claim the rules would burden software developers, who lack access to the required user data, potentially further stifling innovation.

Broader Impact On DeFi

The lawsuit also claims violations of the APA and the Constitution, highlighting that public concerns raised during the comment period were ignored. More importantly, the lawsuit comes amid increased scrutiny of the crypto industry, with potential far-reaching effects on DeFi and the broader digital asset ecosystem.

Between December 23rd and December 27th, Bitcoin (BTC) spot ETFs experienced significant outflows totaling $388 million. However, FacebookTC (by Fidelity) stood out with an impressive weekly inflow of $183 million.

Time To Reassess

These fluctuations in inflows and outflows reflect the changing sentiment of investors during the Christmas to New Year period, highlighting the uneven performance of Bitcoin ETFs. Currently, the total net asset value of Bitcoin spot ETFs stands at $106.683 billion.

The recent withdrawals suggest that investors may be reassessing their positions amid market volatility, marking a shift compared to the inflows observed in previous weeks. Despite this trend, some ETFs like FBTC demonstrated resilience, continuing to attract capital during this period.

Ethereum ETFs Outperform Bitcoin ETFs
While Bitcoin ETFs experienced withdrawals, Ethereum spot ETFs saw positive movement, attracting a net inflow of $349 million last week. Leading this growth, ETHA (by BlackRock) garnered a weekly inflow of $182 million, followed closely by FESH (by Fidelity), which drew $160 million in inflows.

These gains indicate growing investor interest in Ethereum-based assets. In fact, Ethereum spot ETFs have now experienced multiple consecutive weeks of positive net flows, remaining robust. Even as Bitcoin ETFs contend with outflows, Ethereum continues to strengthen its appeal, attracting both institutional and retail investors alike.

As Tether (USDT) takes a step back, many financial institutions like Standard Chartered and Revolut are positioning themselves to take advantage of the growing demand for blockchain-powered financial services, particularly stablecoins.

Banks Go All In

EURt, introduced by Tether in 2016, initially struggled to gain momentum and was eventually discontinued to comply with new MiCA regulations in Europe. This regulatory clarity has opened the door for banks to create their own euro-backed stablecoins, with Société Générale-Forge leading the way and others preparing to launch similar products.

On a global scale, Visa is facilitating stablecoin issuance, while Standard Chartered and JPMorgan Chase are investigating blockchain-based alternatives. However, challenges remain in the form of liquidity risks, regulatory uncertainties, and competition by Central Bank Digital Currencies (CBDCs). 

Changing Times

Despite the aforementioned obstacles, the profitability of stablecoins continues to attract banks keen on advancing within the digital finance sector. As more banks enter the stablecoin arena, competition may significantly impact the way digital currencies are integrated into traditional finance going forward.

With new players entering the market and forging partnerships, the stablecoin sector is set to grow, providing consumers with a combination of the reliability of conventional banking and the speed and efficiency of blockchain technology.

As 2024 comes to a close, many experts believe the performance for Bitcoin (BTC) has been a little disappointing, with the asset falling to below $94,000 yesterday, down by $14,000 since peaking last Tuesday.

Altcoins have experienced significant losses as well, with sharp declines for tokens like AVAX, LINK, SUI, and others. Still, many are currently in the green as of this writing. The total cryptocurrency market capitalization also dropped by $150 billion in just two days.

BTC Faces Continued Struggles
The downturn began last week as Bitcoin fell to $92,000 in a matter of days despite reaching a new ATH of over $108K earlier this month. While it managed to somewhat recover last weekend, even briefly reaching $99,000, the rally was short-lived, and the price quickly dropped again on Monday. After another dip to around $92,000, Bitcoin saw a brief resurgence, reaching a multi-day high of just under $100,000. However, this rally was also quickly halted, and the price started to decline once again.

Yesterday, after failing to hold at $97,000, Bitcoin slid to below $94,000. Though it has since recovered slightly and is now trading above that level, it is still down by more than 2% on the day. Bitcoin also saw its market capitalization fall to $1.87 trillion, with its dominance over altcoins dropping to 54.4%.
 

Altcoins Face Significant Losses
Ethereum (ETH) leads the market with a current price of $3,396, seeing a modest increase of 0.2% over the past 24 hours and maintaining strong performance in the last 7 days. Tether (USDT) and Dogecoin (DOGE) follow closely, with USDT at $0.9983 and a market cap of $138.76 billion, and Dogecoin at $0.3275 with a 4.8% gain in the last week. Solana (SOL) and Binance Coin (BNB) are also notable, trading at $195.13 and $714.92, respectively, with Solana seeing a solid 6.0% rise in the past week.

Other key players include XRP, which is priced at $2.19, and Cardano (ADA) at $0.8896, both showing slight gains. The market also highlights the stablecoins USDC and USDE, priced at $1.00 and $0.9972, and the dynamic rise of tokens like Bitget Token (BGB), which has surged 86.5% in the past 7 days. The diverse crypto landscape also includes newer assets such as Hyperliquid (HYPE) and Aptos (APT), both showing impressive short-term growth.

Other Markets

China has taken steps to stimulate its economy by encouraging banks to lend more and cutting key interest rates, as Shanghai remains a focal point of these efforts. Meanwhile, hedge funds are continuing their bullish stance on the banking sector, while momentum trading reaches new heights despite emerging vulnerabilities. In Singapore, former oil mogul Lim Oon Kuin faces sentencing after his empire collapsed, leading to his bankruptcy declaration.

Elsewhere, the Argentinian economy is slipping into recession, spurred by President Milei and his austerity measures, with the country spending $803 million this week to meet the demand for dollars by importers. On the commodities front, oil prices are set to record their largest weekly gain since early 2023, driven by growing risks surrounding Middle East crude flows.

In Canada, stocks have dropped following a global market selloff, but strategists remain optimistic, predicting the TSX will reach 28,000 next year as interest rates fall. Meanwhile, companies in the U.S. and Europe are scrambling to place orders early and consider price hikes, as tariff threats by Trump disrupt global supply chains and Chinese factories search for new buyers.