During a freelancer meetup at Café Oz in Paris on 3 December, Scott Horlacher, a software engineer, found himself caught in a crypto scam. While discussing with two individuals who claimed to represent a new crypto exchange called Lainchain, Horlacher grew suspicious. The platform’s design and its request for users to input wallet seed phrases instead of standard security measures made Horlacher realise he was dealing with a scam.
After confronting the duo, they swiftly left the event. Horlacher, along with others, began to warn fellow attendees. A subsequent investigation by AMLBot, a blockchain forensics firm, revealed that Lainchain was a sophisticated phishing scam designed to steal personal and wallet information from users. The scam relied on fake identities and social engineering tactics to deceive victims.
Lainchain’s website appeared professional but was full of red flags, including the manipulation of wallet access and demands for seed phrases. The platform’s hosts were found to be connected to other fraudulent websites, and investigations showed their use of stolen identities to create false legitimacy. The scammers also exploited Telegram and other social media platforms to lure victims.
This case serves as a reminder of the growing threat of phishing scams in the crypto space. Users are urged to be cautious of any platform requesting private keys or seed phrases and to verify the legitimacy of any crypto-related website or service before engaging with it.
Ethereum’s price dropped sharply this week, falling to a key support level of $3,540, marking a 10% decline from its recent peak. The pullback comes in the wake of the Federal Reserve’s hawkish interest rate announcement, which also affected other cryptocurrencies like Bitcoin and Solana. The decline, however, does not change Ethereum’s strong fundamentals, as it continues to attract significant institutional interest, particularly through Ethereum Exchange-Traded Funds (ETFs), which have seen 18 consecutive days of inflows, totalling over $2.46 billion.
Despite the drop, Ethereum remains a dominant player in the blockchain space. The amount of staked ETH continues to rise, now surpassing 54.7 million tokens, with more than 206,000 unique stakers. This reflects long-term optimism from investors who are holding onto their positions. Ethereum’s Decentralized Finance (DeFi) ecosystem is also growing, with total value locked surpassing $73.7 billion, far ahead of competitors like Solana, Base, and Arbitrum.
The price retreat follows the Federal Reserve’s decision to cut its 2025 interest rate forecast, from four cuts to just two. This hawkish tone has had a cooling effect on cryptocurrencies and other risky assets, which typically perform better under a more dovish stance. Ethereum’s price chart shows a bearish double-top pattern, indicating potential further declines if the $3,526 support is broken. However, if Ethereum can break past the $4,090 resistance level, it may see a stronger recovery.
A former vice president of finance at Delphi Digital has been sentenced to four years in jail after admitting to embezzling nearly $4.5 million from the cryptocurrency research company. Dylan Meissner will also serve two years of supervised release and must repay more than $4.6 million, including funds he stole and an unpaid loan.
The Connecticut District Court found that Meissner, who managed Delphi’s finances between October 2021 and November 2022, accessed the company’s crypto wallets and bank accounts to steal millions. He also fabricated financial records to cover up the theft. In one instance, he took a 50 Ether loan worth $170,000 but failed to repay it, marking the start of his fraudulent activities.
Prosecutors argued that Meissner’s actions were part of a calculated scheme, not a reckless act of desperation. Though his defence cited substance abuse and efforts to atone for his actions, the court noted the sustained nature of his crimes. Meissner pleaded guilty to wire fraud as part of a deal and will report to jail in February 2025.
El Salvador has agreed to make Bitcoin acceptance voluntary for companies and limit public sector involvement in Bitcoin-related activities as part of a $1.4 billion loan deal with the International Monetary Fund (IMF). The agreement aims to reduce the country’s debt-to-GDP ratio, with the IMF highlighting that these measures will minimise risks associated with the Bitcoin project.
The government will also scale back its involvement with the Chivo wallet, the state-backed application launched to promote Bitcoin adoption, and taxes will continue to be paid in US dollars. Despite these reforms, the National Bitcoin Office confirmed El Salvador’s dedication to Bitcoin, stating that it will keep accumulating the cryptocurrency and maintain its strategy of daily Bitcoin purchases.
The loan deal, which awaits IMF Executive Board approval, ends years of negotiation that began after President Nayib Bukele made Bitcoin legal tender in 2021. While the IMF has criticised cryptocurrency’s volatility, Bukele’s advisers have dismissed the agreement’s restrictions as insubstantial. Meanwhile, surveys show limited adoption, with over 90% of Salvadorans not using Bitcoin for transactions.
Deutsche Bank is advancing its blockchain ambitions with a Layer 2 platform called Dama 2, designed to address regulatory concerns surrounding the use of public blockchains. Built on Ethereum, the platform is part of a broader effort to integrate tokenised assets into financial systems.
According to Boon-Hiong Chan, Deutsche Bank’s Asia-Pacific lead for innovation, public blockchains like Ethereum pose challenges for institutions due to concerns over transaction validators and potential interactions with sanctioned entities. Dama 2 aims to mitigate these risks by offering a more controlled network, allowing banks to curate trusted validators and provide regulators with monitoring tools to trace fund movements.
The initiative forms part of Project Guardian, a collaborative effort led by the Monetary Authority of Singapore, which includes major financial players like JPMorgan Chase and DBS Group. With Dama 2 leveraging ZKsync technology, Deutsche Bank is paving the way for tokenised funds and hopes to roll out a minimum viable product next year, subject to regulatory approval.
The Hong Kong Securities and Futures Commission (SFC) has granted conditional licences to four virtual asset trading platforms, including Accumulus GBA Technology, DFX Labs, Hong Kong Digital Asset EX, and Thousand Whales Technology. However, the platforms must meet certain regulatory conditions before they can begin fully operating.
These licences follow the SFC’s risk-based inspections, which were introduced in June to assess compliance with the region’s virtual asset regulations. The inspections are aimed at ensuring investor protection while promoting growth in the cryptocurrency sector.
The platforms must undergo third-party vulnerability assessments and penetration tests to address any potential security risks. The SFC will oversee the process, ensuring the platforms meet all necessary requirements before expanding their operations.
The SFC has also issued a roadmap to streamline the licensing process, providing clear guidance to ensure that licensed platforms maintain the highest security and compliance standards, safeguarding user funds and preventing fraud.
Bitcoin and the broader crypto market experienced a sell-off following the Federal Reserve’s announcement of a 25 basis point rate cut to its benchmark policy rate. While the rate cut was anticipated by many traders, the market reacted negatively to Fed chair Jerome Powell’s indication that fewer rate cuts than initially expected could take place in 2025. Following the announcement, Bitcoin’s price dropped by 4.6%, falling to $101,300, and Ether saw a 5.96% decline, dropping to $3,600.
Powell’s comments about only two rate cuts in 2025 and an increased inflation outlook raised concerns among market participants. The Fed’s revised inflation forecast, which now expects a 2.5% rate in 2025, also contributed to a more cautious sentiment. Some traders view these shifts in perspective as a sign of a more hawkish stance from the central bank, particularly with the potential policy changes under the incoming administration.
Crypto analysts noted that the drop in Bitcoin’s price cleared out both long and short positions, with BTC falling into a bid zone between $100,000 and $98,000. The key for Bitcoin to maintain upward momentum will be reclaiming the $100,000 to $101,400 zone before the daily candlestick closes. The recovery is seen as crucial to restore market confidence.
Ohio may soon lead the charge in government cryptocurrency adoption, with proposed legislation aimed at incorporating Bitcoin into the state’s financial strategy. Derek Merrin, Leader of the Ohio House Republicans and former Mayor of Waterville, introduced House Bill 703, which would authorise the state treasurer to invest in Bitcoin. Dubbed the ‘Ohio Bitcoin Reserve,’ this initiative is positioned as a hedge against the declining purchasing power of the US dollar, preserving the value of public funds for future generations.
If passed, the bill would grant Ohio the flexibility to allocate treasury funds into Bitcoin, marking a significant step towards crypto integration in government finances. Advocates argue that such a move could enhance the state’s financial resilience, encourage corporate adoption of digital assets, and position Ohio as a trailblazer in global finance. Cynthia Lummis and other proponents believe Bitcoin’s growing acceptance by businesses and even some government agencies underscores its potential as a reliable financial tool.
Ohio’s $72.16 billion public debt, largely tied to infrastructure and education funding, adds urgency to innovative financial strategies. By diversifying its reserves with Bitcoin, the state could improve long-term solvency, potentially reducing the need for tax increases or service cuts. As digital assets gain traction, Ohio’s initiative could set a precedent for other states exploring crypto adoption to bolster fiscal stability.
The US Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on two individuals and a company based in the United Arab Emirates (UAE) for allegedly aiding North Korea’s use of digital assets in illegal activities.
The sanctions target Lu Huaying and Zhang Jian, along with Green Alpine Trading, LLC, a front company linked to a broader scheme of money laundering. These actions aim to disrupt a network that, according to US authorities, funnels millions of dollars to North Korea’s nuclear weapons and missile programs.
North Korea has a history of using digital assets and cybercrimes to fund its military efforts, employing IT workers and hackers to generate funds that are often obscured through complex laundering operations. The sanctions focus on Sim Hyon Sop, a representative of North Korea’s state-run Korea Kwangson Banking Corporation, who has been previously sanctioned. Sim is accused of using a mix of cryptocurrency cash-outs and money mules to move funds back to the regime for its military projects.
Under the new sanctions, any property owned by the designated individuals or entities in the US is blocked, and US citizens and companies are prohibited from engaging in transactions with them. Non-compliance could lead to further enforcement actions, even against those outside the US. The move reflects a coordinated effort with the UAE to combat North Korea’s destabilizing activities. It highlights the importance of international cooperation in tackling illicit financial networks that exploit new technologies, including cryptocurrencies.
European Parliament Member from France, Sarah Knafo, has called on the EU to embrace Bitcoin by establishing national strategic reserves and rejecting the European Central Bank’s (ECB) proposal for a digital euro. In a video shared on her X account, Knafo advocated for European nations to develop their crypto-mining industries and cease increasing taxes on cryptocurrency holders. She highlighted Bitcoin as a means to secure freedom and protect citizens from the overreach of centralised financial systems.
Knafo, citing the example of El Salvador‘s adoption of cryptocurrency and the US plans for a Bitcoin reserve, criticised the EU for clinging to outdated financial systems that are prone to inflation and crises. She warned that the ECB’s digital euro could lead to an over-centralised system, where officials could control transactions and potentially exclude individuals from the banking system for expressing dissenting opinions.
Knafo also pointed to the growing global trend of nations considering Bitcoin reserves to safeguard their financial stability, with countries like Japan, Russia, and Brazil exploring similar initiatives. She argued that Bitcoin could serve as a more reliable financial system, offering long-term protection from economic mismanagement.
The call for a Bitcoin reserve reflects the increasing global recognition of decentralised finance as a potential solution to financial instability, with various countries looking to Bitcoin as a safeguard for national funds.
