The biggest crypto news and ideas of the day |
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Tether Books $13B Profits in 2024 |
Tether, the crypto company behind the largest stablecoin USDT, said on Friday it generated $13 billion group-wide net profits last year in a record-breaking year. Some $7 billion of the profits derived from the firm's vast U.S. Treasuries and repo holdings, and $5 billion from unrealized appreciation of the company's gold and bitcoin (BTC) holdings. Other investments contributed $1 billion. According to the company's latest quarterly attestation signed by accounting firm BDO Italy, the group's stablecoin issuer arms Tether International Limited and Tether Limited disclosed $143.7 billion of assets in reserve against $136.6 billion in liabilities, adding up to $7 billion of excess reserves backing its stablecoins. Treasury bills in the reserve rose to $94.5 billion. The group also increased its bitcoin holdings last quarter for the first time since March, holding nearly 84,000 BTC worth about $7.8 billions as of year-end, according to the attestation. Tether's USDT is the fourth-largest cryptocurrency with its $140 billion market capitalization, and a key piece of infrastructure for digital asset trading and increasingly popular in developing regions for payments, remittances and savings in U.S. dollars. However, several exchanges have delisted or announced to suspend USDT for EU users recently due to MiCA regulations, spurring a decrease in the token's supply. The firm this year announced plans to move its headquarters to El Salvador, the bitcoin-friendly nation state in Central America that has become an emerging hub for crypto firms under President Nayib Bukele's leadership. |
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Grayscale Unveils Dogecoin Trust |
Grayscale has rolled out a new trust offering exposure to dogecoin (DOGE), the asset manager announced Friday. “Dogecoin represents a paradigm shift in global financial accessibility,” Grayscale’s head of product & research, Rayhaneh Sharif-Askary, told CoinDesk. “Its low transaction costs and rapid transfer speeds make it an optimal vehicle for international remittances, particularly in regions with underdeveloped banking infrastructure.” The launch of the Dogecoin Trust, which charges investors a management fee of 2.5%, comes only weeks after President Trump — who (likely with an assist from Elon Musk) named one of his newly formed groups the Department of Government Efficiency (D.O.G.E.) — took office with the promise of promoting the crypto industry. Since the Trump election victory, several asset managers have filed applications for memecoin exchange-traded funds (ETFs), including DOGE, an unthinkable move just months ago under the previous administration and its SEC head Gary Gensler. With a market capitalization of nearly $50 billion, DOGE is the world’s largest memecoin. Wrapping the token in an ETF or in Grayscale's case, a trust, could attract capital from institutional investors. The token’s price has already increased three-fold over the past year, with a particularly large move happening in the immediate weeks after the November election. |
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A clawback amendment went live on XRP Ledger earlier Friday following a validator vote with more than 90% in favor. The amendment means Ripple’s dollar-pegged stablecoin RLUSD, a clawback token, can be floated and exchanged directly on XRP Ledger’s DEX, enhancing its liquidity and trading options and likely boosting decentralized finance (DeFi) activity on the network. Clawback refers to tokens that have a feature allowing the issuer to reclaim or "claw back" these tokens from users' wallets under certain conditions. This feature is typically implemented for regulatory compliance, to recover assets in cases of fraud, illegal activities, or when tokens are sent to unintended addresses. The Friday update will improve the regulatory compliance of XRP Ledger’s Automated Market Maker (AMM) pools, allowing tokens with the clawback enabled to be used. It further modified the “AMMDeposit” transaction type to prevent frozen tokens from being deposited into the AMM. XRP Ledger features an in-built decentralized exchange (DEX) that allows users to swap tokens with each other. An Automated Market Maker (AMM) on the XRP Ledger uses liquidity pools instead of traditional order books to facilitate trades. AMM functionality with the amendment XLS-30D in March 2024 and has since processed over $1 billion in swap volumes. January has been heralded as a standout month for the DEX, with over $400 million in trades processed. |
Musk's Dad Eyes $200M Memecoin Raise |
Elon Musk’s dad is promoting a memecoin that capitalizes on the family name to raise upto $200 million for various engineering projects, despite the father-son duo apparently being estranged.
Errol Musk, alongside business partner Nathan Browne, will officially back the “MUSK IT” token with the ambitious goal of establishing the Musk Institute, a new for-profit think tank that Errol aims to spearhead, per Fortune. The Musk Institute plans to “go beyond rockets” and build flying vehicles and other scientific pursuits. It is unclear how Elon Musk will be involved in this, if at all. "I’m the head of the family. It really started with me in our family—I’ve been ‘Musking It’ for years,” he told Fortune, dismissing any concerns about leveraging his surname for this project. The Musk Institute plans to collaborate with nobility in the UAE to foster innovative engineering projects, though specifics on timelines or project details are still forthcoming. A Middle East-based crypto company initially launched the token in December. Errol and Browne were later onboarded and attached themselves after conceiving the idea for the Musk Institute. MUSK IT boasts a $25 million market capitalization as of Friday, CoinMarketCap data shows, with $79 million in trading volumes and a 130% price rise in the past 24 hours. The token was issued on Solana platform Pump.fun, its contract address shows, with one billion tokens in circulation. Token data shows 44,000 MUSK IT holders and the top ten addresses hold over 20% of the token’s total supply — cumulatively worth over $7 million at current prices.
It zoomed from 1 cent to 20 cents shortly after Fortune’s publication on the low liquidity and muted trading volumes and is back to just over 2 cents during Asian afternoon hours.
However, the specifics of how "Musk It" will operate, particularly its "tokenomics," remain shrouded in mystery. Neither Errol Musk, Browne nor the Musk It website provided detailed insights into the token's structure or distribution plans.
Errol’s promotion is the latest in a long list of so-termed celebrity tokens, or typically short-lived memecoins that ride the hype of a known personality before eventually dying out.
As such, one of the conditions laid out by Errol and Browne before the partnership was that the MUSKIT token “cannot be a pump and dump.”
But despite the distance from Elon Musk’s projects, the Musk It site prominently features several of his innovations — from a SpaceX rocket to a Tesla Cybertruck with only a “Mars Base; Opening Soon” note on the homepage. |
The Takeaway: Market Structure Principles |
By Kristin Smith, CEO of the Blockchain Association: The digital asset industry stands at a critical, hopeful juncture. After years of fragmented approaches to regulation and legislation, we've reached a moment where clarity is both urgent and achievable. Blockchain Association's consensus-driven market structure principles, which represent the perspective of the leading companies in the industry, offer a framework for the path forward. The market structure principles that emerged from this collaborative effort reflect the maturation of the industry and the focus required to enact meaningful legislation and achieve smart regulation. The principles tackle twelve key areas – at their core is a recognition that consumer protection and innovation are complementary, not competing, priorities. We call for standardized disclosures and robust safeguards while ensuring businesses can innovate without undue burden. This balanced approach extends to custody, where we advocate protecting individuals' right to self-custody their assets while establishing clear frameworks for institutional custody solutions. A crucial element of our framework is the distinction between financial activities and other, varied applications of blockchain technology. Smart regulation must focus on genuine financial risks without stifling innovation in non-financial uses of this technology. This extends to the treatment of non-custodial software, services, and smart contracts, which shouldn't face the same regulatory requirements as traditional financial intermediaries when they don't custody user assets.
The principles also address one of the industry's most pressing challenges: token classification. We need clear frameworks for distinguishing between securities, commodities, and other digital assets. This clarity is essential for compliance and growth, particularly as the market matures and new types of tokens emerge.
Our framework recognizes the global nature of digital assets while emphasizing and strengthening U.S. competitiveness. We advocate for reducing friction in cross-border transactions while ensuring U.S. markets remain attractive for investment and innovation. This includes establishing a single secondary trading market to enhance liquidity and price discovery.
Developer protections form another crucial pillar of Blockchain Association’s principles. Open-source software developers shouldn't face liability when independent actors misuse their code. This protection is essential for maintaining the innovation that drives our industry forward. Similarly, we emphasize the importance of network participation - protecting the ability of individuals and institutions to engage in activities like staking, voting, and peer-to-peer transactions on permissionless networks. This consensus we’ve achieved on these principles matters because it signals to Congress and regulators that the industry is and has been ready for common sense regulation. We're not asking for special treatment or regulatory carve-outs. Instead, we're proposing clear rules of the road that protect consumers, foster innovation, and ensure U.S. competitiveness in a rapidly evolving global market. But this window of opportunity won't remain open indefinitely. Market developments, election cycles, and global competition create urgency for action. The industry has demonstrated its readiness to engage constructively with policymakers. We've shown that we can find common ground on complex issues and that we're committed to responsible innovation. For our Congressional allies, regulators in Washington, and those newly engaging with these issues, these principles demonstrate that the industry is ready for serious policy discussion. For industry participants, they represent a shared vision of responsible market structure. For everyone involved, they offer a path forward at a crucial moment for the future of digital assets in the United States. The work of enacting smart regulations and drafting and passing legislation remains ahead. But with clear principles, industry alignment, and growing policy sophistication on both sides, we have an unprecedented opportunity to get this right. We have precious few months to get this done, let's not let this moment pass. |
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