Binance is one of the most recognized names in Web3, and the company is on a hot streak right now. Its former CEO got a US government pardon, its cryptocurrency token recently hit new highs and its business is producing exciting new services at the forefront of the industry.

Binance may be in the best shape since its launch in 2017. Let’s dig into the details.

Best,

Gary and Jon

What’s going on?

Binance is on a tear this year. It’s not news to say that this is one of the most important and influential businesses in Web3, but Binance has bounced back successfully after a challenging last year set its business back significantly.

During the Biden administration, the company ran into trouble which included:

• November 2023: Binance paid a $4.3 billion fine to settle federal criminal charges for sanctions violations that included running unlicensed money transmitter business and failing to maintain an adequate anti-money laundering (AML) program

• That settlement saw former CEO Changpeng Zhao “CZ” step down and pay a $50 million fine

• Richard Teng, a veteran compliance executive whose past roles included Chief Regulatory Officer at the Singapore Exchange (SGX), became the new CEO

• April 2024: CZ was sentenced to four months in prison after pleading guilty to violating US money-laundering laws

This year, however, CZ was pardoned by the Trump administration and Binance’s BNB token surged to an all-time-high in October, doubling its value over 12 months.

Plenty has happened within the industry and the company itself to facilitate this resurgence.

SO WHAT?

1. Controversial pardon gives CZ new Binance role

CZ is the public face of Binance, and that’s been the case since the business launched almost a decade ago. It was inevitable, then, that when US regulators came for Binance, he would also pay a price.

The multiple blows of a huge $4.3 billion fine and CZ’s imprisonment hit Binance hard, and the company’s reputation was hit hard by both those outside of Web3 and the traders who use its services.

CZ’s replacement Teng was ideally suited to the task of rebuilding the then-struggling company’s business. Binance needed to plot a new course as a regulator-friendly crypto company, and that 180-degree switch gained credence with Teng at the helm. But that, in turn, was seen as a negative for many in the Web3 space who distrusted governments and regulators, the very groups Binance now needed to be cozier with.

Teng may run Binance, but CZ’s strong presence online—which includes over 10 million Twitter followers and nearly half a million more on Instagram—has seen him become a vocal advocate and unofficial spokesperson for the company.

President Trump’s decision to pardon CZ in October 2025 is controversial given the overlap between Trump’s business interests in the Web3 space—which are said to have generated more than $1 billion for his family—and Binance itself.

• Trump’s World Liberty Financial (WLF) stablecoin business held talks about developing products with Binance

• WLF deployed its stablecoin on Binance’s chain

• The WLF stablecoin was used directly to facilitate a $2 billion investment in Binance from an Abu Dhabi state-backed company

Binance and CZ denied the conflict, and Trump himself has denied knowing CZ.

Despite the optics, the pardon gives CZ newfound legitimacy that Binance is using to shape its strategy.

CZ was front and centre when the country of Kazakhstan announced the launch of a national stablecoin and a central bank digital currency in partnership with Binance. The stablecoin will be on Binance’s BNB chain, cementing a long-standing partnership with Binance. CZ is an official advisor to the government, and Binance signed an MoU with Kazakhstan in 2022.

These are the types of moonshot projects that CZ would spearhead more readily following the US government pardon. His fingerprints certainly appear to be across other parts of Binance’s strategy, with Teng handling the core business.

There’s also plenty of self interest for the former Binance CEO.

CZ has never disclosed his full crypto holdings, but he is known to own Bitcoin and BNB. He did not confirm his holdings, but did say on Twitter that he acquired BNB for less than $1. Today, it trades at over $1,020.

2. Doubling down on its blockchain and ecosystem

In the world of Web3, building a business isn’t simply about revenue and profitability for your core units. Companies launch and develop tokens and blockchains, which can succeed through very different goals and milestones.

Binance’s BNB is a layer-one blockchain, which means it can host trading exchanges, games, wallets, and other services directly.

BNB is directly comparable to Solana for the fact that it is rivaled by Ethereum, a chain that is heralded and used by many long-time cryptocurrency enthusiasts and academics. BNB is by far the best-performing and most adopted blockchain from a crypto exchange, most of which have very limited utility and activity from developers.

It may not be widely-acclaimed but fees and revenue from apps on the BNB chain generate an estimated $1.5 million per day for Binance, according to data from DeFi Llama. That puts BNB in the top 10, behind the likes of Solana, Ethereum, Hyperliquid (which we’ve written about) and others.

Solana has enjoyed an impressive recovery over the last two years, having been dragged down by the bankruptcy of key advocate FTX. We explained in past issues how Solana zeroed in on working with developers and hosting the most promising new Web3 services, which includes memecoin launchpads like Pump.fun and prediction markets.

Binance has taken a leaf out of Solana’s playbook, and tapped into emerging Web3 trends to develop Binance owned and affiliate services that it hopes will add value to BNB. The price of BNB reached an all-time-high in October suggesting that the narrative, at least, is working.

Data via CoinGecko

3. Aggressively building beyond its ecosystem by following hot topics

CZ appears to have been firmly involved in aggressively developing the BNB ecosystem and associated services.

There’s a clear increase in transactions on the chain from May 2025, when BNB launchpads for memecoins caught attention. CZ himself even became part of the movement as tweets about his cat and other topics became memecoins that surged in value, generating significant transaction volume and fees.

Memecoins generate plenty of attention and action, but the BNB ecosystem expanded in other meaningful ways this year.

BNB got its own version of Hyperliquid, the decentralized perpetual trading service that’s boomed into a serious revenue-generating product.

We previously wrote about Binance’s concern at Hyperliquid’s rise, which had taken a slice out of Binance’s own market share with traders looking for less centralized marketplaces. Binance wasn’t able to stop Hyperliquid, so it introduced its own answer to it: Aster.

Founded by former Binance employees, backed by investment from Binance’s YZi Labs fund and living on the BNB chain, Aster is Binance’s Hyperliquid.

Aster launched its token in September 2025 and, as the chart above shows, that boosted awareness of the service and sent the number of transactions on the BNB chain soaring further still. Aster’s ascent continued this week as the price jumped by 30% after CZ disclosed he had acquired the project’s token.

CZ and Binance are not done there though. He went to X, as he often does, to put out a call for a prediction-market oracle on BNB which could allow prediction markets on the BNB chain, and perhaps within Binance’s own business units.

That makes sense considering the explosive growth that market leaders Kalshi, Polymarket and others are seeing.

Kalshi recently raised $300 million at a valuation of $5 billion, which reports suggest could soon jump to at least $10 billion for its next funding round. Polymarket just raised $2 billion from Intercontinental Exchange (ICE), owner of the New York Stock Exchange, at an $8 billion valuation. Reports claim that it could reach as much as $15 billion with its next funding round.

With BNB already an established chain for liquidity, trading and other activity, developing quality prediction markets is entirely logical.

Aggressively growing the BNB ecosystem seems like an ideal pursuit for CZ, and you would expect to see him push further especially now that he has been pardoned.

News bytes

Animoca Brands, a high profile Web3 firm best known for investing, gaming and metaverse, filed for a Nasdaq listing via a reverse Singapore’s Currenc Group—it is targeting a $1 billion valuation

DeFi project Balancer appears to have lost $71 million following an exploit

Latin America-based crypto exchange Ripio, which has 25 million registered users, launched a stablecoin that’s pegged to the Argentine peso

Malaysia’s central bank launched a three year exploration of real world asset tokenization, potential use cases range from supply chain finance to Islamic finance products

Coinbase is reportedly in late-stage talks to acquire stablecoin infrastructure startup BVNK in a deal valued at around $2 billion

That would represent another major acquisition in recent times after Coinbase acquired Web3 investment platform Echo for $375 million in October

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

AI prompts are a core part of today’s internet experience as the world is increasingly attached to a personal assistant in their pocket.

But this is just the first iteration of what artificial intelligence promises. In the coming years, we can expect AI to handle our payments, travel bookings and much more as AI agents are equipped with digital currency and the ability to engage with each other.

There’s one crucial element, however, privacy, as we dive into details in this week’s newsletter.

Best,
Gary and Jon

PS: You can read more on this topic in our newest report

What’s going on?

We’re at an inflection point in how people interact with the internet. The shift from browsing and typing to chatting with AI means we’re not just searching anymore, we are sharing.

People are sharing relationship challenges, fitness goals, career aspirations and more. For companies, it can be more serious. Code bases, business development plans and planned announcements are among the sensitive details to have been inputted into AI chat conversations.

Every prompt reveals something about us. What we value, how we think and what we plan to do next.

AI feels private based on the conversational window we use to interact and the nature of chats, but it often is not.

Prompts can be logged. They are used for model training or, at times, even leak through connected systems.

Privacy is already a huge issue, but it is about to get even more serious. AI will be the nucleus of the agentic web, systems that will enable AIs to interact, collaborate and act autonomously.

Privacy will no longer be an option, it will be essential.

SO WHAT?

1. AI prompts are a huge data leak waiting to happen

Google is still the search king, but even it has been forced to incorporate AI-generated results right below its search bar such is the ubiquity of using AI to find answers.

Once, we typed into a search engine. Now, people are increasingly not even going there. AI is direct, easy and in your pocket and it gives you answers in spite of typos, response accuracy and more.

There are major differences between using Google and ChatGPT, Claude, Gemini or others. Principally, it collects far more concentrated data which is inherently more personal.

The conversational interface of AIs makes people overshare.

It feels like chatting to a friend or a knowledgeable colleague. That may be a reason why people open up and tell their AI chatbot the type of information that’s very personal. That could be financial worries, relationship issues, product roadmaps, or code snippets.

They feel like personal assistants, but those interactions live on servers controlled by third parties. The data is often used to train AIs to be more efficient and there are examples of information leaking out.

OpenAI confirmed in July 2025 that ChatGPT users now send 2.5 billion prompts every single day. That’s a 150% increase in just eight months. And ChatGPT is just one player in an increasingly crowded field.

A security breach on Meta’s AI chatbot earlier this year saw information including medical concerns, financial information and other intimate personal details were temporarily made available to other users.

The issue was patched, but it showed how easily such personal details could be exposed.

Then there is general naivety.

Samsung banned the use of ChatGPT and other AI products in 2023 after it found its employees had inputted sensitive company information and proprietary company code into the AI chatbot.

That release of confidential IP showed that even well-intentioned use of AI (Samsung staff were looking to improve their work and increase efficiency) can generate major privacy and security issues. Unsurprisingly, other companies have since followed suit.

For companies, that’s a nightmare scenario. Employees feeding confidential data into models and servers that they don’t control. For individuals, it’s like sending your digital diary straight to Silicon Valley or China, with anyone potentially able to access the data.

The response has been educating users or even banning products, as Samsung did. But, ultimately, prompt privacy must be treated like end-to-end encryption. It should be a baseline expectation, not an afterthought.

2. Digital money increases the stakes massively

AI agents have established themselves as an internet companion or pocket personal assistant, but much more is coming as they evolve into autonomous financial actors.

That’s to say that, beyond drafting emails and asking questions, they will begin helping you handle tasks automatically and that will include spending your money.

Back in May 2025, Web3 giant Coinbase introduced x402, a payment protocol that allows APIs, apps and AI agents to transact seamlessly using stablecoins.

X402 is being used to instruct agents to book flights, manage subscriptions, send tweets and do other activities that a person would typically handle. Stablecoins in a crypto wallet are used for transactions.

This concept is being pursued by other companies beyond Coinbase. Cloudflare, which is not a Web3 company, recently announced plans for a US dollar-denominated stablecoin that it says will be used for transactions in the agentic web. So paying for online services and more.

This future of AIs paying for APIs, making purchases, managing subscriptions and transferring funds between wallets without direct human intervention is very real.

We’re heading toward a world where digital assistants can handle invoices, negotiate prices and rebalance investment portfolios. All in real time.

This makes security even more essential.

In the agentic web, prompts become a potential transaction, which means the metadata associated with those actions, such as frequency, timing, amounts and counterparties, forms a detailed financial fingerprint for each user.

That data is important, since it could be used for credit, insurance and other services that may not exist now. But in the wrong hands, those details could be dangerous.

Combined with identity or behavioral data, financial information can expose business strategies, wealth levels, purchasing habits or even future intentions. There’s potential for a malicious actor to model your transactions well enough to predict and impersonate your behavior, even if they don’t have your bank password.

3. The agentic web dream risks turning nightmarish

Agents won’t just handle your prompts and money, the roadmap for the agentic web will see agents connect with others to handle tasks that would usually require a middleman.

Coinbase’s X402 and Cloudflare digital dollar are rooted around enabling agent-to-agent activities. Already, we are seeing early pilots that will only become more sophisticated over time.

Here’s how it could play out, as outlined in a recent Terminal 3 whitepaper:

Picture this: You woke up this morning and asked your AI assistant to book a weekend getaway.‌ ‌

Within minutes, it researched multiple accessible destinations, compared prices across dozens of travel sites, booked flights and hotels, arranged ground transportation, prepared an itinerary, and even made dinner reservations, all before you had your morning coffee.‌ ‌

The potential for AI to act and talk on your behalf is exciting.

Like a cyberpunk vision. Your personal agent could negotiate with your employer’s AI, connect with your bank’s system and share data with your health provider’s bot. Agent-to-agent interactions will power the agentic web, but it will usher in a new level of privacy risk.

Without clear, enforceable privacy protocols, there’s a risk that sensitive data will drift across networks invisibly.

Imagine cookies, but on steroids. Think machine-readable behavioral trails stitched together from every automated interaction.

For the agentic web dream to come together, a privacy layer is needed to prevent it turning nightmarish. Just as HTTPS became the web’s default security layer, the agentic web needs a universal protocol to safeguard user data.

The time to act is now, before the system builds itself without guardrails.

At Terminal 3, we are developing a trust platform for AI agents to enable them to operate within safe, secure and auditable boundaries. This is an issue we see as crucial to the future of the internet.

News bytes

Coinbase acquired Echo, a platform for fundraising and token launches, for $375M in a move that massively widens the scope of its services

A16z released its latest crypto report, highlights include: the number of active crypto users is estimated at 40-70M, stablecoins handled $46T in transactions over the last year and details on the convergence of Web3 and AI

There’s consolidation in Web3 trading firms with FalconX buying 21shares, which offers exchange traded funds for digital assets—also: FalconX may be the next Web3 name to go public in US

BlackRock and other funds are encouraging Bitcoin holders to move their digital assets into ETFs: it has already converted $3B in BTC, according to Bloomberg

Ethereum co-creator Vitalik Buterin is under pressure from critics who claim he has excessive control of the Ethereum Foundation and that a handful of groups exert too much influence

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

It’s that time of the year again: we spent last week in Singapore at Token2049. The show is one of the most popular Web3 events, attracting a record 25,000 attendees this year.

In this issue, we’ll look at our three top takeaways from the show.

Best,
Gary and Jon

PS: You can catch up on our review of the show from 2024 and 2023

What’s going on?

We are back and refreshed after an intense but insightful week in Singapore at Token2049, an event that we’ve written about before and which we consider to be among the most important on the Web3 calendar.

Token2049 Singapore was paired with the Singapore Formula 1 race, as it is every year. That’s an association that raises prices significantly (hotels in Singapore already feel expensive for Southeast Asia, as it is) but it plays into the ‘yolo money’ side of Web3.

Big companies, investors and influencers have a natural play for the ostentatious, and F1 is the world’s most expensive and fastest sport, not to mention one of the most dangerous. It’s an apt pairing, for sure.

This year’s event saw the show take up the full five floors of the Marina Bay Sands convention center. The organizer claims 25,000 people attended, a new record by some margin for the already-popular franchise, and there were more than 600 side events to keep those without a ticket suitably occupied. ‘Token2049 Week’ was once again a carnival of Web3.

After hopping between dozens of meetings, coffee mornings, cocktail parties, fight nights, fireside chats, pickleball games and more, here are the biggest takeaways we took from the show.

SO WHAT?

1. Stablecoins are the hot topic

Stablecoins were the biggest talking point all week. That’s not a huge surprise given that the US passed the GENIUS Act to regulate stablecoins over the summer.

The act not only makes it possible for Web3 companies to set up shop in the US, something industry leader Tether plans to do for the first time, but it also provides a bridge for non-crypto companies to step into the industry.

That latter point was apparent at Token2049 just by looking at the major companies that took part in the event. Most obviously, Donald Trump Jr, the son of the US President, took the stage to discuss his stablecoin company, World Liberty Financial (WLF).

Issuing stablecoins is just the minimum: companies running with the ball are looking to offer new types of banking and financial services using these tokens. Increasingly, too, there are a number of companies that enable Web3 companies of any size to issue their own token. That allows them to enjoy yield, offer benefits to users, and have greater control of their treasury.

There’s been a proliferation of stablecoin-powered debit cards, with more than a dozen that have been backed by investors visible around the show. Some of the biggest parties were held by these companies, including Kast’s evening event which had more than 1,250 attendees on its RSVP list.

In parallel, the stablecoin industry is becoming more open than many had foreseen.

Analysis from Nic Carter, partner at Castle Island Ventures, shows the duopoly between Tether and Circle may be over. Or, at least, their dominance is declining as new entrants like WLF and smaller players powered by stablecoin issuers take up more ground.

Carter posits that this could usher in a more balanced future in which the big two do not completely own the space. Certainly, it is clear that neobanks are interested in taking parts of the Web3 experience, such as trading as Robinhood and Revolut have done. By the same token, no pun intended, Web3 fintech players are adding traditional banking services for on- and off-ramping.

We expect to see a lot more fintech and stablecoin activity at next year’s event, even if Singapore is a long way from Washington DC.

2. Stripe leads the payment pack

Traditional finance was not the only incumbent increasingly jostling for space at Token2049 in Singapore, tech companies were there in force: none more so than Stripe.

The payment giant attended the event for the first time this year. That’s a big deal but one that was expected since Stripe is a Web3 company now thanks to a flurry of activity which has included:

• Acquiring Bridge, which helps manage stablecoins

• Acquiring Privy, a crypto wallet platform

• Accepting crypto payments after a 6-year hiatus

• Launching a stablecoin issuance and management feature

• Launching its Tempo blockchain for moving stablecoins globally

Typical of others at the event, Stripe had a strong presence at the exhibition and hosted a number of side events throughout the week. Yet its involvement is more than just another corporate showing. That’s symbolic of how the Web3 industry is expanding to include some of the most important players in global finance. Stripe’s mission has always been about building the economic infrastructure of the internet; now, that infrastructure includes blockchains, stablecoins, and on-chain identity.

Stripe wasn’t alone. Mastercard, Visa, and several global banks were also present in Singapore, many of them sponsoring side events or quietly meeting with startups to explore partnerships. The difference this year was intent: these companies weren’t just sniffing around for PR or experimentation; they were scouting infrastructure, compliance tools, and potential integrations.

That convergence between Web2 and Web3 was one of the defining undercurrents of Token2049. It’s becoming harder to tell where fintech ends and Web3 begins. Custody startups are acting like banks, banks are experimenting with tokenized deposits, and payment companies like Stripe are turning crypto from an add-on into a core product line.

Stripe’s appearance in Singapore didn’t just underscore that trend, it confirmed it. The world’s largest payment rails are no longer watching from the sidelines. They’re joining the show, quite literally.

3. Asia remains the world capital of Web3, for now

We say it every year when we wrap up the show, but Token2049 again illustrated that Asia is at the center of the Web3 focus, and maybe Singapore itself is the eye of that storm.

That may seem counterintuitive given the inauguration of President Trump, who many in the industry are calling the first crypto President based on his policy approach and advisors. It is undeniably true that the US is opening itself to Web3 like never before, but that hasn’t seen it leapfrog Asia just yet.

That may be because it takes time for processes and companies to bear fruit. Tether and others that have announced stablecoin launches are still yet to come to market.

But Asia retains the attention because it has an existing and captive audience, whilst governments across the region are racing to follow suit with the US, although many made moves before Trump entered the White House for the second time this year.

That was reflected in the attendance of Token2049 which rose again this year, from 20,000 last year, with many being part of the Singapore event for the first time. Beyond that, we met people for whom this was their first trip to Singapore, let alone Southeast Asia. Many in that latter bracket are located in the US.

Asia’s position as the world’s lead Web3 market is certainly under threat, however.

Not only is Trump’s America friendlier to the industry than ever before, but the Middle East is also becoming a destination, and a serious one at that. The region had traditionally been seen as brash, awash with capital but little credibility.

That’s changed over the past year, at least, as credible projects, investors and other high-profile figures moved to the Middle East either permanently or semi-regularly. Those we talked to explained that the appeal is no longer just access to capital, but Web3-centric laws and regulations, a growing community and access to talent. Those are compounding factors that only serve to increase the Middle East’s significance.

Asia remains on top. But Token2049 reminded us that the center of gravity in Web3 can move faster than anyone expects.

News bytes

Fintech PayPay, which is backed by SoftBank, acquired a 40% stake in Binance Japan with a view to integrating their two services

YZi Labs, a now independent investment firm that was previously owned by Binance, announced a new $1 billion fund that’s focused on Binance’s BNB ecosystem

Coinbase has launched its decentralized exchange (DEX) in the US market as trading continues to shift away from centralized platforms

Predictions market platform Polymarket raised $2 billion from the parent company of the NYSE at a $9 billion valuation

We wrote about predictions market last year, and there’s clearly money flowing as Polymarket’s CEO confirmed it closed two funding rounds: a $55 million round at a $350 million valuation last year, and a $150 million round at a $1.2 billion valuation this year

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

The final installment of our three-part series on Tether, the backbone of Web3 which makes tens of billions per year, looks at the future as it bids to grow its influence from the stablecoin leader to one of the most powerful firms in technology.

Best,
Gary and Jon

PS: Read our issue one (how Tether’s simple model is so profitable) and two (how controversy didn’t kill it) in the series for the full picture

What’s going on?

Tether’s evolution is far from done.

In the last two issues we explained how USDT, a simple, offshore product, became the default stablecoin for traders and a gushing money tap for Tether. That’s despite skepticism from critics and action from regulators.

That paradox has defined Tether since its creation in 2014. More than a decade on, though, it’s widening its scope. The core remains the same, but its vast profits (which reached $13 billion in 2024 alone) are going into an expansion of scope and influence.

Earlier this month, Tether announced plans to introduce its first US-compliant stablecoin (USAT) by the end of the year leaning on the recently passed GENIUS Act, which regulates stablecoins on American soil. Notably, Tether appointed former White House Crypto Council executive director Bo Hines to lead that effort.

But there’s more. Tether is reportedly looking to raise as much as $20 billion in additional capital from external investors with financial services giant Cantor Fitzgerald—which also has White House links—said to be in charge of the fundraising efforts, which are focused on major names. Two rumoured investors are SoftBank and Coinbase-backer Ark, according to a separate Bloomberg report.

The timing doesn’t appear to be accidental. With a federal stablecoin framework now in place in the US, Tether has an opportunity to plant a compliant flag on American soil, without abandoning the offshore engine that built the franchise.

The next act is clear: turn market dominance into durability.

SO WHAT?

1. Diversifying through investment

Tether’s serious profitability gives the company the capital to bet on the future through investment.

The company has disclosed multibillion-dollar commitments, but this is less about venture capital and more about alliances and deals that naturally complement its business, and drive adoption of its stablecoins.

Energy and mining are responsible for significant capital. Tether has committed multiple billions of dollars to build out Bitcoin mining operations across Uruguay, Paraguay and El Salvador, while exploring renewable energy and other sustainable options for doing so. Latin America is already well known for its renewable energy rates—which are as high as 94% in Uruguay—and Tether has been part of that scene since 2023.

Mining enables the firm to add to its crypto balance sheet, which already includes over 100,000 BTC. CEO Paolo Ardoino said earlier this year that Tether aspires to be the world’s largest Bitcoin mining company, and estimates show it is close. The goal is not just to accumulate BTC (Ardoino said 15% of profit will go to buying BTC or mining hardware) but also to participate in the network’s security.

Every company on Earth is investing in AI, and Tether is no different. Its focus ranges from infrastructure to platforms, and even more audacious plays.

The company acquired a major stake in Northern Data, which provides cloud, data and Bitcoin mining services, in partnership with Rumble, a censorship-resistant alternative to YouTube which Tether owns 48% of.

Alongside that infrastructure play, Tether is building QVAC (QuantumVerse Automatic Compute), a development platform to enable AI agents and services to run on user devices without a dependence on centralized services or cloud infrastructure. The first batch of apps is yet to arrive, but you can expect that the platform will be tightly aligned with USDT.

Tether has also forayed into brain-computer interfaces with Blackrock Neurotech, a rival of Elon Musk’s Neuralink. It paid $200 million to gain a controlling interest in the business last year—that’s the type of moonshot that could help futureproof its position as technology advances.

Its AI plays naturally parlay into communication, where Tether has invested resources to build tools for developers.

It operates encrypted communication protocol Holepunch, which it used to build a secure video calling service, peer-to-peer protocol Pears.com, which it showcased through a credit system developed by Tether itself, and its Hadron blockchain for tokenized assets.

Finally, Tether also institutionalized its deals with Tether Ventures, which formally launched in July to back technology startups focused on decentralization, payments, AI, energy and more. The fund uses Tether’s balance sheet for capital and it has already invested in more than 120 companies. This venture arm broadens Tether’s focus so it can touch more emerging technology.

2. US market opportunity opens

For a decade, Tether thrived by being everywhere except the US.

The company has historically avoided the US due to hostile regulators—it paid fines to both the SEC and CFTC over use of its reserves and misleading statements. Now, the country looks inviting. The US passed the GENIUS Act to allow regulated stablecoins, there’s a crypto-friendly President in office, and institutions are embracing Web3.

Tether is making a major play for the US market with USAT, an upcoming stablecoin that will adhere to America’s freshly minted regulations and live on Tether’s Hadron chain. That US play is also boosted by the arrival of Bo Hines, an entrepreneur who is the former executive director of the White House Crypto Council.

Hines’ network is sure to help Tether as it negotiates the challenges of this newly opened window of opportunity in the US market. A number of companies have gone so far as to partner with businesses aligned with President Trump himself. Crypto.com, for example, has partnerships with Trump Media, which operates Trump’s Truth Social platform, and World Liberty Financial, the crypto venture that’s backed by the Trump family.

Another signal of the changing winds is the IPO of Circle, Tether’s closest stablecoin rival, which went public in April. Its share price has increased more than 50% since the listing. Exchanges Gemini and Bullish have also gone public in 2025, while Coinbase shares are up 20% this year-to-date.

It isn’t just stock market watchers who are taking up Web3, institutions are increasingly dipping their toes. That’s a huge opportunity for Tether, but the terms of the GENIUS Act will mean it needs to actively comply with regulations stateside for the first time.

That will require a new level of compliance that Tether has never dealt with, including policy-grade AML and KYC processes, monthly reporting and more. That said, critics have said the bill is fairly light on requirements given that stablecoin issuers will essentially be managing digital money in the world’s largest economy. In addition, the requirements will apply only to USAT, not USDT or any other aspect of Tether’s non-US business.

3. Legitimacy through major investors

The plot thickened with a recent Bloomberg report that the company is planning to raise between $15 billion and $20 billion in a deal that could value its business as high as $500 billion. If true, the move would not just cement Tether’s dominance in crypto but elevate it into the highest tier of global technology companies by valuation.

Ardoino, the Tether CEO, acknowledged discussions with potential investors but he did not confirm figures. He indicated that new capital would give Tether the firepower to significantly expand its operations and accelerate its presence in its expansion areas.

That ambition and those potential numbers would mark a turning point in how Tether is perceived outside crypto.

The scale of the reported fundraising becomes clearer when compared to other tech leaders.

• OpenAI raised $40 billion at a $300 billion valuation in its most recent round

• Elon Musk’s xAI is seeking $10 billion at a $200 billion valuation

• Anthropic secured $13 billion at a valuation of $183 billion

• Stripe, once Silicon Valley’s most valuable startup, now sits above $100 billion

Against this backdrop, Tether’s reported $500 billion valuation places it ahead of these peers and signals that its stablecoin business is not just lucrative but more important than ever.

For a company long defined by opacity, fines and regulatory skirmishes, such a raise would mark a transformative coming out moment.

Since its founding in 2014, Tether has brushed off critics that include the SEC, the CFTC, and international governments. Its reserves were questioned, its disclosures attacked, and it has been accused of propping up Bitcoin’s price. None of that derailed its ascent, though, because USDT became indispensable to traders worldwide. Distrust didn’t matter when it did all it needed to do.

The injection of blue-chip capital would change the equation. Reputable institutional investors would not only validate Tether’s business but provide further political cover and strategic alliances. The goal could well be to reposition Tether as a legitimate heavyweight in global finance, not just a crypto-native operator. Any such upgrade could be even more valuable than the capital itself.

Skeptics will argue this is an elaborate case of “fake it till you make it,” with Tether seeking respectability through association rather than transparency. Supporters will counter that the world’s largest stablecoin issuer is simply with the realities of mainstream adoption and institutional capital.

Either way, raising tens of billions from top-tier investors would mark a watershed. It would give Tether the same kind of balance-sheet strength and strategic latitude currently enjoyed by companies shaping the frontier of AI and fintech. That didn’t seem plausible even just a few years ago.

Whether this is the moment critics finally treat Tether with respect, or the start of a new phase of scrutiny, remains to be seen. What is clear is that the company that built crypto’s most essential dollar is now bidding to become one of the world’s most powerful technology firms. It may just get there faster than we thought.

News bytes

Circle is adding an on-chain refunds feature to broaden the appeal of its USDC stablecoin to more institutional users like banks

Kraken is reportedly in discussions to raise $200M-$300M at a $20B valuation, the exchange recently raised at a $15B valuation and it is planning an IPO

Nine banks in Europe have teamed up to issue a euro-denominated stablecoin that will be compliant with regulations in the EU

Content delivery company Cloudflare announced plans for its own stablecoin which will be used in transactions for using AI-based agents and related systems

We wrote about the incredible growth of decentralized exchange Hyperliquid, and already it has stiff competition through Astor, a project founded by Binance employees which is backed by Binance itself—Astor’s 24-hour trading fees have surpassed Hyperliquid, Uniswap and even Tether at the time of writing

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

This is the second in our three-part series looking at Tether, the shadowy company behind the world’s most traded cryptocurrency—the USDT stablecoin.

Previously, we looked at the successful but straightforward model that’s responsible for Tether’s astronomical profits, which reached $13 billion last year. This time, we focus on how Tether’s rise to prominence has been shadowed by suspicion and scandal, and take clues from its origins to question why it remains so dominant and indispensable.

Best,

Gary and Jon

What’s going on?

Tether is a certified OG when it comes to the crypto industry, which is famous for its volatility with some companies rising overnight and others seeming to disappear in a day.

It began life in 2014 as Realcoin, the first project of its kind to put real-world dollars on the blockchain so traders could move funds in and out of Bitcoin without the need for a bank.

That same year, it rebranded to Tether after deciding the name conjured up negative ‘altcoin’ connotations. The new name seemed to reflect its purpose with greater clarity.

“Our speciality at Tether is currencies on the blockchain, so Tether means a digital tie to a real-world asset and the digital assets that we're focused on is currencies,” its then-CEO told CoinDesk.

Slick rebranding aside, Tether’s rise has been anything but smooth. For more than a decade, critics have questioned whether every USDT is actually backed 1:1 by US dollars. Those doubts have been stoked by its continual avoidance of calls for audits, Tether has instead published partial attestations and unsupported claims.

Tether has been accused of minting tokens to pump Bitcoin and the crypto market generally, and it found itself in the crosshairs of the New York Attorney General.

Yet still, Tether’s utility as crypto’s de facto dollar outweighs those doubts. Traders continue to use it, exchanges still integrate it, and withdrawals rarely fail. That resilience under fire explains why Tether is the backbone of crypto markets despite many years of controversy.

SO WHAT?

1. Controversial from day one

Controversy is very much the go-to word for Tether’s story. From day one, critics doubted whether it really held the dollars it promised.

Its founders, including early Bitcoin pioneer Brock Pierce, claimed that every USDT token was backed 1:1, but their approach was very much ‘just trust us.’ That’s because Tether offered little more than short attestations as proof, including snapshots from accounting firms rather than full audits. Executives would avoid the question or denounce criticism as competitors throwing mud.

Things came to a head in 2017, however, as the price of Bitcoin surged from just under $100 in January to nearly $20,000 at the end of December.

Tether was being used to inflate Bitcoin’s price, according to an academic paper from University of Texas finance professor John Griffin, who is known for digging into financial fraud. The 66-page paper claimed the company ‘printed’ new USDT to support Bitcoin whenever the price dipped, using transaction history on the blockchain to support the thesis.

“It was creating price support for bitcoin, and over the period that we examined, had huge price effects. Our research would indicate that there are sophisticated people harnessing investor interest for their benefit,” Griffin told CNBC.

Tether survived the widely-read paper’s conclusions, but it was talk of the town in Web3. People in and around the industry would exchange tips about the company’s banking relationship woes, shadowy intermediaries and other scandalous details. Many felt it was a matter of time before the company imploded.

But it didn’t, and Tether only grew stronger. The secret to its resilience was not transparency but utility. Traders didn’t need to believe in Tether’s honesty, they just needed to know that their USDT could be redeemed or traded without issue. While the former could affect the latter, Tether continued to deliver for the traders who owned it.

Indeed, every scandal or accusation thrown at the company seemed to harden its reputation. In a market where bank accounts can vanish overnight and liquidity is everything, trust isn’t about glossy audits, it’s about the product actually working.

2. Surviving US regulatory heat

Tether critics did get their ‘told you so’ day, but it didn’t end as many expected.

The New York Attorney General launched an investigation into Tether and sister company Bitfinex, a crypto trading exchange, for dipping into customer reserves to fill an $850 million hole caused by a hack. (Side note: that’s something FTX would do years later.)

The case remained ongoing for nearly two years before the companies agreed to pay a fine of $18.5 million. The NYAG report claimed that Tether sometimes held no reserves to back its stablecoin’s dollar peg, that it had spent time without access to banking and it had misled its clients about its liquidity capabilities.

Tether also danced with the US CFTC (Commodity Futures Trading Commission), which protects the public from financial fraud, manipulation and abuses. It fined Tether $41 million in 2021 for making misleading statements about its reserves. The CFTC had repeatedly flagged USDT and other stablecoins as financial risks, a debate that culminated in the US passing the GENIUS Act to legalize stablecoins earlier this year.

Tether was able to avoid the full court press of US regulators thanks to its location. The company is based in the British Virgin Islands and Hong Kong, and it doesn’t serve US customers directly. That made it challenging for US regulators to use their full powers. Only now is Tether planning to introduce a US-focused stablecoin, thanks to the GENIUS Act.

Tether leaned into its outsider status. It tightened up disclosures enough to survive, while avoiding the kind of oversight that rival Circle must deal with for its USDC stablecoin business. Tether, instead, focused on its core appeal in Asia, Latin America and other markets where traders just wanted its token and regulators were slower or nonplussed. Many US traders would still use Tether’s USDT if they wanted to, despite considerable regulatory concern.

The lesson here is that the global nature of Web3 means any single country, including the world’s most powerful state, is powerless to stop a company if its product is popular enough.

The more US regulators fought it, the more Tether spotted gaps in the traditional banking system that it could fill and friendlier countries that could help legitimize its business away from America. The market has the ultimate say.

3. The ultimate paradox

On paper, Tether should not be trusted.

The premise for a stablecoin is simple. Prove that digital assets are backed by real-world money.

The company has faced allegations of market manipulation, paid multiple fines for misleading investors and still it is yet to deliver a full independent audit that would finally silence its longstanding audience of critics.

By contrast, its competitors are transparent and compliant. Circle, for example, went public with an IPO on the NYSE earlier this year which means that its finances and business details are publicly accessible by definition. That approach has helped it win serious traction among institutions looking to dip their toes into Web3.

Yet, the market chooses Tether.

Today, USDT accounts for more than two-thirds of all stablecoin trading volume. USDT is the default trading pair on most exchanges, and it is even an access point to the US dollar in some countries with weak local currencies.

That is the starkest contradiction in the Tether story, the gap between reputation and reality. The least trusted stablecoin is the world’s most indispensable.

Tether’s critics haven’t been silenced, by the way, they’ve just been drowned out by the market data, which shows Tether is the go-to choice. Traders don’t need to love, or even like, Tether. It just needs to work. Which it does.

It’s this paradox that makes Tether both fascinating and dangerous.

Its profits—$13 billion last year and $5.7 billion in the first half of 2025—are beyond what most public fintech companies could ever imagine. Tether owns more US Treasury bills than most countries. Yet, we know little about its inner workings and even whether its business foundations are sound.

If the company ever falters, the fallout would shake the entire crypto ecosystem beyond any price crash that’s been seen before. But its very survival, in spite of lawsuits, fines and constant speculation, has created a perception of invincibility.

Tether is not invincible, though. At least its assurance is not guaranteed until it produces an audit or tangible proof of its reserves. Its reputation among traders is secure, but how it fares in the increasingly institutionalizing world of Web3 is something that’s less sure.

News bytes

Tether released details of USAT, its planned US-regulated stablecoin that’s backed by US dollars—it also announced that a former member of President Trump’s digital asset advisory team will lead the project

Base, the blockchain run by Coinbase, is exploring the possibility of launching its own token—there’ll be plenty of interest in how a publicly traded business launch a token compliantly

Popular Web3 wallet Metamask launched its own stablecoin

US-focused Kalshi has rushed into the lead as the top predictions market, going from a mere 3% market share to over 60% today (we wrote about the state of play a year ago)

But rival Polymarket could be worth as much as $10 billion, according to a new funding round that the predictions market firm is raising

Australia is easing rules around stablecoins

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

This week is the first of a three-part series of Tether, the company behind USDT—the world’s most traded stablecoin—which has grown into a multi-billion dollar business that holds more US bonds than many countries, and is charging into AI and other areas.

Let’s start with a look at the company and its primary business.

Best,
Gary and Jon

What’s going on?

Forget Binance or Coinbase, the richest company in crypto is one that you might not know very well—but you are likely to have touched its products in some way, shape or form.

Tether announced a $4.9 billion profit in Q2 2025—that’s just three months. During the first half of this year, it made $5.7 billion in profit, after making a profit of $13 billion in 2024. Only Hyperliquid, the decentralized exchange we wrote about earlier this summer, makes more money per employee, that’s principally because Tether is now on a hiring spree as it looks to put its gigantic profits to work.

In comparison, closest rival Circle—which issues USDC—recently posted quarterly revenue of $658 million. It has a lot more staff and partnerships with players like Coinbase. Adding in those costs, Circle made a net profit of $156 million in 2024. That’s less than five days of profit at Tether.

All of this makes Tether a company to know and keep a close eye on as the Web3 industry grows and its influence broadens and reaches into new domains.

SO WHAT?

1. A simple approach to making billions of dollars

Tether was founded back in 2014, which makes it one of the oldest companies in Web3 today. Fittingly-perhaps, it makes money in a very traditional way, by using a mixture of long-term investment projects to generate yield.

Tether is able to do that thanks to its stablecoins, which include USDT—the most traded stablecoin on earth which is pegged to the US dollar. At the time of writing, nearly $117 billion of USDT was traded during the last 24 hours.

Individual trades don’t earn Tether income, that comes when institutional investors, crypto exchanges or other large entities go directly to Tether to buy USDT or other stablecoins in exchange for fiat currency. Retail traders typically buy and sell tokens from these USDT pools.

Stablecoins are backed by fiat currency on a 1:1 basis, to ensure that holders of the token can cash out, so Tether has that full amount in deposits. The company lists its total assets at $162 billion, and US Treasury bills (T-bills) are its asset of choice when it comes to monetization.

Tether owns over $105 billion in T-bills, which typically pay out up to 4%. In recent years, it has branched out into other investment products to diversify its income. Those include corporate bonds, precious metals, secured loans and even Bitcoin. That Bitcoin holding is worth around $10 billion, so it is a significant portion of the firm’s overall exposure—and it continues to acquire more through mining and purchases.

Expansion has included Tether’s product mix, too. The company remains best known for USDT, which accounts for 99% of its assets, but it also offers:

• EURT: a stablecoin pegged to the Euro

• CNHT: a stablecoin pegged to the Chinese yuan

• MXNT: a stablecoin pegged to the Mexican peso

• XAUT: a stablecoin backed by physical gold

These new products don’t move the needle right now, but it is possible that Tether will need to develop and issue new stablecoins to adhere to regulatory requirements. It may also issue new tokens to adhere to increased demand in markets where stablecoins become part of the banking landscape, or at least laws allow regulated stablecoins to be issued and traded.

We wrote recently that Tether is planning to launch a US-version of USDT to comply with America’s new GENIUS Act stablecoin regulation. It may also do similar in South Korea and other countries that are following the US lead.

2. Raft of stability in a sea of volatility

The Tether empire is centered entirely around being the easiest asset for converting between fiat currencies and crypto. There’s huge demand for this trade, typically for a few main reasons.

It is a logical landing point when converting fiat currencies to cryptocurrencies. Tether’s US dollar denomination makes it easy to know what you get for your real-world US dollar.

Its stability lets traders cash out profit (or loss) when they want to exit a position on a cryptocurrency. For example, selling Bitcoin if they believe the price is going to fall or they simply want to realize some profit. Stablecoins remove the volatility while allowing the value to remain on-chain.

USDT is commonly used to stockpile ‘dry powder’ if a trader believes there will be investment opportunities in the market. On-ramping currency can be costly and time consuming, so building USDT positions can enable more nimble trading.

Stablecoins, and USDT in particular, have also become popular for non-crypto purposes, too. They are increasingly used to move money across borders without the hassle and cost of transacting with banks and cross-border remittance companies. Although, off-ramping USDT does incur cost and require a customer to be KYC (know your customer) verified by their bank.

As the biggest stablecoin in the market, Tether has attracted significant scrutiny for its popularity among shadowy groups.

Tether is one of the cryptocurrencies of choice for criminals. Russian weapons dealers, European cocaine kingpins, sanctioned oligarches and Hamas terrorists are among the many to use USDT to move money across the world, according to intelligence releases and analyst reports.

With KYC far less intrusive than traditional banking, getting an account on crypto exchanges or simply doing OTC (over the counter) deals makes Tether the channel of choice to funnel money outside of the traditional financial system.

Tether has pushed back in recent years. It says it has worked with nearly 200 law enforcement agencies across the world to identify criminals and freeze assets where it can. This is an ongoing battle, and certainly one that comes with turf if you’re the world’s most traded crypto asset.

3. The backbone of Web3

If you trade, build, lend, or move money in crypto, you’re almost certainly touching USDT, even if there's no direct contact. Tether’s stablecoin sits beneath the scenes like pipes behind a wall. It is unglamorous, ever-present and absolutely essential when things are flowing fast.

On most centralized exchanges and a growing number of decentralized options, USDT is the quote currency for price discovery. That means that liquidity concentrates around USDT pairs, which tightens spreads and lowers slippage. That gravitational pull means most project tokens list against USDT first, and market makers provision depth there before anywhere else.

Even in more advanced trading with perps, lending markets, and structured products, USDT is margin and treasury cash. Funds and market makers park idle capital in USDT because it holds $1 on-chain while remaining instantly deployable, and it has a greater critical mass than any other stablecoin.

Outside of trading, USDT has been one the go-to bridges for merchants, freelancers, OTC desks, and cross-border remittances where banking is slow, expensive, or politically fragile. This is one area where it is under pressure from Circle’s USDC stablecoin, which is more regulatory compliant. But USDT has longevity and a brand even among novice crypto owners.

Historically, there has been concern at Tether’s reserves. The company issues quarterly reports, but it has never released an audit of its reserves. Doing so would prove that the business has the requisite funds to support every token it has issued on a 1:1 basis, but that’s never materialized despite years of pressure.

It’s unclear why, but earlier this year, Tether CEO Paolo Ardoino said the company was “engaging” with a Big Four auditor, now that the Trump administration has made Web3 more mainstream.

Certainly, the lack of an audit isn’t just Tether’s problem—it is a market-wide risk factor. A disruption to issuance, redemptions, or key bridges would ripple through trading, DeFi collateral, and cross-border settlements in hours.

If Bitcoin is crypto’s brand and Ethereum its operating system, Tether is the cash drawer and the pipes. Understanding Tether isn’t optional diligence. It’s table stakes for anyone deploying capital, building products, or making policy in this industry.

News bytes

Hyperliquid is looking for alternatives to replace Circle’s USDC stablecoin on its platform—that represents 10% of Circle’s revenue, and its share price has taken a hit

Fintech startup Stripe and crypto fund Paradigm have launched a blockchain for stablecoin payments called Tempo

The Nasdaq is moving to enable the trading of tokenized securities for the first time in the US

Nasdaq is also investing in crypto trading exchange Gemini, the deal will see $50M invested with Gemini’s custodial services offered to Nasdaq’s institutional clients

Vietnam is preparing to enable digital asset trading platforms on a five-year trial with a focus on domestic providers

India, meanwhile, is reportedly resisting the urge to roll out a full crypto regulation framework—particularly as there’s a belief that stablecoins could undermine its existing financial system

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Can you imagine Amazon Bucks? Google Dollar? Apple Coin?

The possibility of the world’s top tech companies issuing their own digital dollars just got a lot closer after President Trump signed the GENIUS Act: that’s short for Guiding and Establishing National Innovation for US Stablecoins.

The act is the first piece of US regulation for stablecoins—crypto tokens backed by the US dollar—and it opens a whole host of opportunities for Web3 native companies and, most crucially, for new entrants to jump in.

In this issue of SO WHAT, we break down the details to get you fully up to speed.

Best,
Gary and Jon

What’s going on?

President Trump wants to make the US the “crypto capital of the world,” and he has certainly done more for the industry than any other administration after just six months in office.

Trump established a Strategic Bitcoin Reserve and a US Digital Asset Stockpile and now the GENIUS Act lays the foundations for digital assets to become part of the mainstream financial system. It’s all part of a strategy to regulate crypto, a major shift from previous White House offices which have aggressively gone after the nascent industry.

The GENIUS Act’s passing means Amazon, Google and even Apple are among those researching the feasibility of issuing their own stablecoins now that there is a regulatory framework, as we’ve explained in past issues. That could help them move money globally, boost user engagement and much more.

The Act doesn’t answer everything, though. Questions remain on areas like accounting. We can expect further legislation to address those topics, but already the US impact is being felt.

Asian countries are pushing the envelope for digital assets, but they’re inspired by the US. South Korea is expediting its newest stablecoin regulation and countless other governments worldwide will be paying close attention.

SO WHAT?

1. A light touch for stablecoin issuers

The Act provides clarity to the grey area of stablecoins through a federal regulatory framework.

The requirements are light, but largely as you’d expect:

• Companies that are approved to issue US stablecoins must show that their digital token is backed by US treasury bills (T-bills) bonds, or US dollars themselves at a minimum 1:1 ratio and held in a segregated account.

• Issuers are subject to the US Bank Secrecy Act, which requires them to adhere to anti-money laundering and sanctions compliance standards. They must also be able to freeze, seize or burn their tokens.

• Issuers provide a monthly report to confirm the composition of their reserves, with sign-off from an accounting firm.

• They have a choice of state or federal regulation unless the total FDV (fully diluted valuation) of their stablecoin surpasses $10 billion, in which case it must be the latter.

There’s been concern that issuers aren’t subject to the same rigorous protections as banks. Corey Frayer, director of Investor Protection for the Consumer Federation of America, told CNBC that a stampede of stablecoin issuers could be ripe for “another financial crisis.”

The Act prioritizes stablecoin holders in the event of a bankruptcy, but Frayer argues issuers are still being asked to essentially police themselves

Risk is high with most digital assets, as we’re constantly reminded with slogans such as ‘don’t invest what you can’t afford to lose.’ Stablecoins may be backed by fiat assets—the clue is in the name—but they could still be volatile, even with the GENIUS act.

Stablecoins won’t be allowed to pay interest, aren’t backed by the federal government, don’t fall under deposit insurance and don’t come with consumer protections, Frayer warned.

2. Finally, definition for digital asset companies

But wait, there is more. GENIUS was accompanied by CLARITY, the Digital Asset Market Clarity Act, which sets out how digital assets should be governed in the US.

It categorizes digital asset companies and lays out the division of power between the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC).

• The CFTC is responsible for regulating digital commodities—that is defined as digital assets that are decentralized and do not include a right to profits, such as Ethereum or Bitcoin.

• Digital assets that represent investment contracts, such as early-stage funding, are restricted digital assets that fall under SEC jurisdiction.

• There’s an important clause that allows blockchain companies to raise up to $75 million per year without triggering securities laws if they meet specific criteria, which include providing source code, details of governance and token functionality.

This law is potentially equally transformative. It gives a baseline for Web3 companies to finally base themselves in the US with regulatory clarity.

Previously, companies have lamented the uncertainty of being a Web3 company that’s based in the US. Even Coinbase, the largest Web3 native company in terms of impact, valuation and more, considered relocating a large part (or even all) of its business overseas. Such was the aggressive way that the previous administration went after companies.

It isn’t all roses, though. Critics have claimed that the law will weaken the SEC’s role of protecting retail consumers from the volatile nature of the Web3 industry and related investment opportunities.

It remains to be seen how the law will play out in reality, but the controversy has already begun.

3. Trump’s own interests loom large

The two acts (which are coupled by a third piece of legislation outlawing a US central bank digital currency) provide welcome ground for both Web3 native companies and existing businesses venturing into Web3, but there is the issue of self-interest for President Trump.

Trump and his family have already profited significantly from cryptocurrencies:

• The President’s shares in World Liberty Finance, his family’s blockchain business which are listed on the Nasdaq, are worth around $2 billion

• A disclosure filed last month suggested he made over $57 million from selling World Liberty Finance tokens ($WLFI)—those he hasn’t sold could be worth over $1 billion, according to Forbes

• Members of Trump’s family have acquired major cryptocurrencies, such as Bitcoin, while his policies have arguably influenced prices, for example the Strategic Bitcoin Reserve

• Then there’s the Trump memecoin, which is harder to value but did gross $100 million in trading fees as far back in January

These ventures will directly benefit from these new laws.

Notably, Trump’s memecoin won’t violate securities laws, The World Liberty Finance stablecoin will have a framework to exist within and any other blockchain businesses from Trump stand to benefit, too.

With an estimated 50% of the Trump wealth now tied to Web3-related ventures, it is hard to avoid the self interest.

Despite that, there’s been significant movement.

Tether—which issues the largest stablecoin on the planet, USDT—has already said it plans to launch a US-version of its token in response to the passing of the GENIUS Act. Ethena, another stablecoin issuer, has partnered with US bank Anchorage Digital for a US launch and Polymarket—the predictions market we previously wrote about—is reportedly planning a stablecoin.

These laws are sure to have an almost immediate impact.

The GENIUS and CLARITY Acts represent a pivotal shift in how the US approaches digital assets. The move is from enforcement-first chaos to a framework that encourages innovation, clarity, and competition. For the first time, global tech giants, traditional financial firms, and crypto-native companies have a regulatory runway to build—and potentially reshape—the future of money.

But big questions remain. How will businesses outside of Web3 adapt to this new framework? Will additional laws close the remaining gaps, especially around accounting and consumer protection? And can a president with deep personal stakes in the crypto space fairly oversee its growth?

Regardless, the US has thrown down the gauntlet. With Tether already responding and other countries watching closely, this could be the moment the race to digitize finance truly takes off.

News bytes

Western Union is exploring ways to offer on-ramp and off-ramp stablecoin services, according to its CEO

Centralized exchange Woo X was hacked for more than $12 million

Ghana is set to become the latest country to regulate crypto firms as digital assets

Tether confirmed it worked with US authorities to freeze around $1.6 million in USDT that allegedly used used for terrorist financing in Gaza

JPMorgan has downgraded its estimate that the stablecoin market could reach $2 trillion by 2028 due to underdeveloped infrastructure—but it still forecasts the market tripling from $260 billion right now

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Stablecoins, cryptocurrencies that maintain a price and are pegged to fiat currencies like the US dollar, are one of the biggest topics of Web3 this year.

Traditionally, stablecoins help traders move between cryptocurrencies and fiat currencies, and serve as a mechanism for storing value amid the crypto industry’s volatility. But in recent years, adoption has grown among companies, regulators and governments who see them as a key stepping stone to digitizing money.

We recently looked at stablecoin payment adoption, and this week’s issue extends our analysis to regulators and the traditional financial industry where Asia is leading the way.

Best,

Gary and Jon

What’s going on?

The Web3 industry scored a major win in the US last month when the Senate passed the GENIUS Act, a piece of legislation that will regulate stablecoins.

The act has prompted companies like Amazon, Uber and maybe even Google to wonder if they can issue their own tokens that could be used by customers of their businesses worldwide. Regulating stablecoins is an important first step to not only encouraging digital money, but also adding further legitimacy to Bitcoin, Ethereum and other cryptocurrencies that rely on stablecoins for investment inflow.

For a look at how the US and other countries might go about addressing the challenges of introducing regulated stablecoins, we are turning our attention to three places in Asia. Each is at a distinctly different level of adoption. Analysis of their progression may throw up clues as to how things will develop in the US and other countries in the future.

SO WHAT?

1. Hong Kong: blazing a trail for regulated stablecoins

Hong Kong is one of the most forward thinking countries when it comes to Web3.

Companies can apply for a license to issue stablecoins from Hong Kong from August 1 but there are some restrictions. Most notably, they are not permitted to pay interest to stablecoin holders and all holders must have their identity verified.

Stablecoin license applicants must also be able to show transparency and disclosure around the reserve assets backing up the proposed stablecoins, with a clear separation between reserve assets and the company’s own assets.

As a special administrative region of China, Hong Kong maintains strong links with the mainland and it is no surprise that many of China’s top tech firms are keen for the opportunity to issue stablecoins. Reportedly, Alibaba-linked Ant Group and fellow e-commerce giant JD.com are among 40 companies to have applied for a license. Bank Standard Chartered and USDC issuer Circle have applied, too.

Beyond that, Chinese companies are also said to have strongly suggested that Hong Kong issued stablecoins should be pegged to the Chinese yuan. They claim it will boost China’s economic prowess, since most global stablecoins are backed by the US dollar.

Hong Kong regulation will mean the first stablecoins will peg to the Hong Kong dollar, with plans for yuan and US dollar versions later. (It’s worth noting that the Hong Kong dollar itself is pegged to the US dollar.) These introductions will be particularly important given the geopolitical tension between the US and China, and also Circle’s breakout success following its recent IPO.

With China taking a zero tolerance approach to Bitcoin, cryptocurrencies and all things Web3, Hong Kong has emerged almost as a pressure relief valve for Chinese companies and investors seeking exposure to the industry.

But its influence could run further. Hong Kong’s governance framework is likely to be studied by regulators across the world as they figure out how to embrace the benefits of blockchain technology and digital money, without undermining existing financial systems.

2. Korea: finding harmony between new digital money and old

South Korea has long been an important market for Web3. It is estimated that 16 million people in the country own cryptocurrency—that’s more than the total number of stock market investors.

Interestingly, Koreans in their 40s are the most interested in investing in cryptocurrencies ahead of those in their 20s. One-quarter of people aged 50 or over are said to be interested in Web3 investments, principally for retirement funds.

These stats give some indication of why cryptocurrency startups prioritize South Korea as a market to attract retail investors. But the government has been very careful around crypto companies—only now is it in the process of allowing them to be classified as venture-backed businesses, which would allow them to take loans and other financial assistance. Stablecoins are also an area where Korea has been conservative to date.

Politics has been a difference maker. Recently elected President Lee Jae‑myung made opening the stablecoin field a key election pledge, alongside a Bitcoin ETF and looser cryptocurrency rules.

New legislation—the Basic Digital Asset Act—will allow non-banks and payment providers to issue stablecoins. Crucially, Korea’s central bank will no longer approve issuers, that responsibility is now held by the Financial Services Commission.

The central bank this week cautioned that stablecoins should be introduced “gradually” to avoid negatively impacting the current financial system and foreign currency exchange programs.

The issue is still playing out, but the central bank’s stark warning is a reflection of what many global financial institutions are currently thinking. It just so happens that the central bank’s concern is playing out in public.

Like Hong Kong, plenty of eyes will be on how Korea’s adoption of stablecoins goes—and how the central bank is impacted.

3. Japan: the early adopter pushing new boundaries

Japan is one of the most advanced countries for regulating stablecoins. It introduced a legal framework for stablecoins back in 2022 following the collapse of Terra, the algorithmic stablecoin which wiped out nearly $50 billion in digital assets.

However, stablecoins and other cryptocurrencies only became recognized as digital money as recently as June. The changes won’t come into effect until next year, and issuers must be able to guarantee on-demand redemption in Japanese yen.

Japan’s stablecoin framework, like the other two aforementioned countries, focus on local and regulated token issuances. They cover Japanese yen-backed stablecoins that are issued from licensed domestic providers.

The framework does not apply to algorithmic stablecoins or stablecoins issued overseas. Those are instead classified as crypto assets or governed by securities laws.

The avenue for overseas entry is through partnership; that’s the approach Circle took. Its local entity expanded its partnership with ​​SBI Holdings, the $11 billion financial services business which also operates a crypto exchange, in March to bring its USDC stablecoin to Japan.

Traditional financial institutions have shown strong interest in issuing their own stablecoins for a number of years.

The Japan Open Chain blockchain is an Ethereum-based project that includes a number of the country’s banks and other financial companies among its members. It has trialed bank-issued stablecoins for business, but it takes a more centralized approach than traditional blockchain networks.

Three of the country’s largest banks—MUFG, SMBC and Mizuho—joined a system that used stablecoins for cross-border payments between institutions. The trio also created a tokenized network that uses distributed ledger technology.

The newest trend looks to be embracing more decentralized networks, as opposed to the focus of control through centralized networks which incumbent financial institutions tend to prefer.

Minna no Bank, the digital banking arm of the Fukuoka Group, partnered with custody provider Fireblocks and a local IT firm to explore the potential of the Solana chain. Then there’s Sumitomo Mitsui Financial Group—which owns SMBC and is evaluating the potential for issuing a stablecoin on the Avalanche blockchain.

Those approaches are much bolder than you’ll find from the financial industry in most other global markets.

News bytes

Memecoin launch platform Pump.fun, which is already incredibly lucrative as we’ve previously written, raised over $500M from a token sale which sold out in minutes—it is unclear how the new funds will be spent

The GENIUS Act to regulate stablecoins in the US has now passed the Senate and is due to be signed off by President Trump

Tornado Cash developer Roman Cash’s trial takes place in New York this week—we’ve previously written about why the trial could dampen Web3 innovation

Hungary introduced new cryptocurrency laws that criminalize unauthorized crypto trading with penalties of up to 5 years in prison for individuals and 8 years for service providers

Two executives from Web3 payment company MoonPay are thought to have sent $250,000 to a Nigeria scammer, after thinking they were donating to the Trump Presidential campaign

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Decentralized identity is the hot topic in Web3 right now.

The launch of a token for the billion-dollar valued Humanity Protocol and World’s big-name partnerships with Tinder, Razer, and Visa mark a turning point: decentralized ID is finally going mainstream.

As AI blurs the line between real and fake, and data breaches expose millions, the need for reliable, human-first identity systems has never been greater. From bot detection to proof-of-personhood, decentralized ID could become a core pillar of Web3—and beyond.

A lot has happened since we covered the topic over a year ago—let’s dive in,

Best,
Gary and Jon

What’s going on?

Decentralized ID has been in the news in recent months after Humanity Protocol launched mainnet and released its token, while World has been on a tear with partnerships, signing up Tinder, Razer and even payment giant Visa.

Suddenly, the concept of using a decentralized platform to verify identification has real world use cases, although these are still relatively simple deployments that don’t fully convey the broader potential.

SO WHAT

1. Partnerships, partnerships, partnerships

World has made a sustained effort to strike partnerships over the last year, having rolled out crucial infrastructure that includes its token and user wallet.

The company took some time before it launched in the US, despite being conceived and headquartered there, as the regulatory landscape began to become clearer.

In the case of Razer, that’s mostly around its gaming ecosystem—including plans for a dedicated gaming tournament—as a method to authenticate users. A large part of Razer’s business is physical products such as gaming mice, keyboards and other peripherals. Related to that, the hardware-maker has plans to sell World’s Orbs, which now include a pocket device for users in an attempt to drive wider adoption.

In Tinder’s case, the dating app will offer World as a log-in option to prove a user isn’t a bot. That’ll start with a trial in Japan that could be expanded to other countries over time.

In these cases, logging in via World is similar to using Google, Facebook or email as an authenticator except it has more precise information about a user and is resistant to bots or malicious activity. In the case of Tinder, it could help battle against fraud or scams, which commonly use romance as a vector to reach targets.

There have, however, been cases of World accounts being traded for use within nefarious activities. In Singapore, for example, migrant workers were paid upfront to create accounts that were then passed on.

2. Criticism from crypto royalty

That example from Singapore highlights that no system is immune from tampering when there are ultimately human beings behind them.

That point was made last week by Ethereum co-founder Vitalik Buterin in a blog that looked at the operational risks behind decentralized identification.

Vitalik Buterin sounded the alarm last week: tying your entire digital life to one decentralized ID is risky. He warned about privacy loss, government overreach, and centralized honeypots. Even ZK proofs, he said, can’t solve the human layer of corruption and coercion.

Furthermore, the manipulation of IDs could be a very serious issue given the amount of access that it could enable, or data it could hold.

It may sound counterintuitive but any ID system that holds too strong a market share faces peril, Buterin explained, as it becomes a target for attacks. It’s not hard to imagine a surge in World ID hacks or spoofs if the platform became key to establishing or verifying identification on key platforms. Much like passport fraud, it could become its own black market.

The Ethereum creator instead sees the future as a constellation of identification platforms, each secured using ZK proofs and ideally tied together in a way that doesn’t place too much emphasis on any part of the chain.

Interoperability is a core part of the Web3 movement, but it is hard to see at this early stage as rival platforms fight it out to grow their base of users, partnerships and more.

3. Reaching the mainstream

One of the first orders of business for decentralized ID protocols is to onboard more users. The major players have both taken different routes to achieving that goal.

Humanity Protocol launched its token in June. It uses palm scanning for verification but its methodology allows users to complete part of the process using their own device.

The concept is similar to World, but palm scans are designed to be less invasive. It uses vein scanning technology to complement the initial prints users take themselves via an Android mobile app.

Founder Terence Quok, who previously launched VC-backed startups, believes the ‘proof of humanity’ graph can grow the same way Facebook’s social graph did. Investors certainly agree. Animoca Brands, Pantera Capital and Jump Crypto were among the investors to put more than $20 million into the business at a valuation of $1.1 billion.

World, meanwhile, has finally put its focus on the US market—a region that seemed out of reach until the more crypto-friendly Trump administration came into office.

Those big name partnerships made a splash, but more impactful is the launch of World’s Orbs on American soil. These large camera-like contraptions scan a user’s iris to onboard them into the platform, and they’re now available in Atlanta, Austin, Los Angeles, Miami, Nashville and San Francisco with more to come.

But World is also betting that its users will become advocates. It is launching a portable device—Mini Orb—that will let existing World users verify others without them needing to visit the scanning centers.

Those who buy Mini Orbs—which World says it has spent millions of dollars developing—will earn rewards in World token for onboarding new users.

For now, that will be the sole use when they begin to ship in October. There’s hints it could be used for secure payments (think Apple Pay or other RFID solutions) further down the line, but that feels a long way off right now.

Decentralized ID is finally finding traction—but it’s not without flaws. Privacy, security, and adoption remain open questions.

The real test is whether these systems can scale without turning into the very gatekeepers they aim to replace.

News Bytes

Spain’s second largest bank is launching Bitcoin and Ethereum trading and custody services for retail customers

A previously-dormant Bitcoin ‘whale’ just moved over $8 billion in BTC—but nobody knows why or what it might mean

Robinhood now offers European users access to ‘tokenized’ US stocks to democratize access to capital markets—the move has attracted regulator attention and equally praised and denounced

Top DeFi company Ondo Finance acquired a regulated US broker to advance its plan to offer tokenized US stocks

China’s top tech firms are reportedly encouraging the government to explore issuing CNY-backed stablecoins to combat the dominance of digital tokens pegged to the US dollar

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

It takes something special to worry Binance, the crypto trading juggernaut with a near-40% market share, but Hyperliquid, a pioneering decentralized rival, ruffled its feathers earlier this year.

Hyperliquid has become the biggest platform for perpetual trading in crypto—that’s what worries the big boys of the industry—and it did it without any investment from VCs. Zero. Instead, it rewarded its users with an airdrop worth billions.

Hyperliquid is redefining the playbook for building Web3 companies, and now it is catching the attention of those beyond crypto. This week we dig into why and how.

Best,

Gary and Jon

What’s going on?

Centralized exchanges are tolerated rather than loved in the Web3 industry.

A number of Binance users sued the crypto exchange in 2021 alleging that they had collectively lost tens of millions of dollars due to outages on the platform. There are plenty of incidents including a trader losing $3.7 million due to a Binance rule change and, of course, users losing their assets when platforms like FTX abruptly shut down.

Crypto startups can be at risk if their tokens are delisted. In the case of Mantra, which we wrote about recently, it alleged that “reckless forced closures” on centralized exchanges wrecked its token price.

Hyperliquid has changed the game by enabling a trading experience that’s as fast as on Binance, Coinbase and other centralized platforms but with the freedom and transparency of decentralization.

Leveraged trading, in particular, requires trading speed and platform uptime, which has raised issues on centralized platforms in the past.

SO WHAT?

1. The decentralized concept

Decentralization is the core concept behind the Web3 movement. Principally, users should be able to own their assets themselves without reliance on a third-party. That applies to assets like cryptocurrencies, artwork like NFTs, and even user data.

The clearest example of that is in self-custodial wallets, which enable direct ownership of cryptocurrencies like Bitcoin or Ethereum. Using self-custody, owned assets can be accessed at any time without the need for a centralized entity’s permission. The obvious benefit is your assets are not lost if a company becomes insolvent or steals deposits.

Decentralization struggled as a concept for some time because trading and swapping was limited to centralized exchanges that didn’t support self-custodial wallets.

The launch of Uniswap, the first truly decentralized exchange (DEX), in 2018 was a major step forward but its functionality was limited. Advanced trading such as perpetuals—which lets traders speculate on future prices—were usually made on Binance or Coinbase, which had deeper liquidity and greater trust among traders.

That changed, however, when Hyperliquid established itself in late 2024. The decentralized platform lets traders:

• Trade perpetual futures with up to 50X leverage

• Deploy assets into vaults run by other traders

• Stake assets for yield

• Trade without gas fees and takes small maker/taker fees on transactions

That’s turned Hyperliquid into the largest on-chain perpetual trading platform, with over $13 billion in daily trading volume.

Hyperliquid overtook the top perp DEX Dydx rapidly, but its numbers are still well behind market leader Binance’s $62 billion daily futures volume—from a centralized product. But it’s impressive for a product that only established itself six months ago and with a very unique proposition.

Binance certainly sees Hyperliquid, and the potential of sophisticated DEXes, as a major threat to the dominance of its business.

That came to a head in March 2025 when Binance appeared to take advantage of suspicious market activity around a memecoin called Jelly Jelly to force a liquidation that could have caused Hyperliquid’s main liquidity vault to lose millions of dollars.

Ultimately, Hyperliquid stepped in to settle its trade at a more advantageous price, which raised concern that it is not fully decentralized. A number of centralized exchange executives criticized the platform for creating systemic risks for users and not being fully decentralized as it claims.

2. Community, not investors

Hyperliquid survived that rocky episode around Jelly Jelly thanks to the strong community that it has built since it launched its token in November 2024.

Its rise is marked by a very different approach to financing and launching the platform. Hyperliquid decided against raising venture capital, and instead decided to incentivize early users with an airdrop—we’ve written about airdrops before and they’re key to marketing a token launch.

But this was no ordinary airdrop. It was the largest of all time. Hyperliquid gave $1.6 billion worth of its HYPE token to more than 90,000 users that had traded on its platform since its initial launch in 2023.

That was 31% of all HYPE tokens—far more than the typical 5-10% seen at most launches. The average airdrop amount was worth over $9,000, with biggest allocations running into millions.

By not taking money from VCs, Hyperliquid mitigated the risk that some of its earliest investors would sell large portions of their token allocation once it launched and trading went live. Instead, early users held onto most of their tokens.

Their loyalty was rewarded as the token price has risen from $3.20 back in November to over $40 in early June.

Community has been a key part of its development as Hyperliquid has tapped the social side of Web3.

It has a leaderboard of traders, and many of its most active users share referral codes and flex their trades directly on Hyperliquid. Indeed, this year’s most notorious trader—who goes by James Wynn—has conducted a series of aggressive trades on Hyperliquid, including losing nearly $100 million by trading Bitcoin perps.

The buzz around Wynn’s wild trading is one of many that has helped cement Hyperliquid as the place for experienced traders.

3. Appealing beyond Web3 and facing regulators

The charge of the HYPE token has pushed Hyperliquid beyond the Web3 and crypto Twitter community and into the view of the financial world.

Eyenova, a NASDAQ-listed firm that specializes in eye health tech, bought $50 million of HYPE to build a “strategic treasury.” One week earlier, Singapore’s Lion Group Holding—which also trades on NASDAQ—announced that it will launch a $600 million treasury fund anchored by HYPE.

The token has become synonymous with decentralized trading, while its spectacular returns over a short period of time—during a period in which traditional institutions are embracing Web3—makes it an obvious target for some enterprises.

Hyperliquid has also moved to be part of mainstream conversations. In May, it submitted formal responses to the US Commodity Futures Trading Commission (CFTC) regarding proposed regulation of perpetual swaps and 24/7 trading.

That was unexpected as decentralized platforms don’t tend to proactively engage with US regulators. Indeed, the concept of decentralization hasn’t been embraced (or perhaps even grasped) by American lawmakers.

But these are unprecedented times for Web3 regulation, and that’s a topic that Hyperliquid will need to grapple with at some point.

The platform doesn’t require any KYC for users to trade, although it is not available in the US, Canada’s Ontario and sanctioned regions such as Russia, North Korea, Iran, Cuba, and Syria. But with 180 other markets supported, you can be sure that regulators will come knocking sooner rather than later.

Hyperliquid is part of a new wave of decentralized platforms that now make up core Web3 services. We’ve written about the other two—memecoin marketplace Pump.fun and predictions marketplace Polymarket—and their rapid rises show how dynamic and fast-moving Web3 can be.

For now, we can expect Hyperliquid to expand the breadth of services that it offers. Its trading platform is based on its own proprietary blockchain, which was developed to combine the speed of trading on platforms like Binance with the transparency of Ethereum.

Armed with a war chest from its surging token, Hyperliquid is just getting started.

News bytes

Thailand has approved a five-year tax exemption on crypto gains—if the trades are on licensed exchanges

Eight major banks in South Korea are working on a stablecoin that will be pegged to the country’s won currency

Polymarket and rival predictions market platform Kalshi are both reported raising new capital at valuations of $1 billion

Exchange OKX could be the next major crypto company to go public through a US IPO

Coinbase secured a Markets in Crypto-Assets (MiCA) licence from Luxembourg’s CSSF, allowing it to offer regulated crypto services across all 27 EU member states

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Shopify, Stripe, PayPal, Visa, Uber, Apple, Google… these are some of the companies that have integrated or are considering integrating stablecoins into their business.

We wrote about the potential of stablecoins nearly 18 months ago, but the concept of digital money has rapidly gained traction even over that short period. It’s now possible to live entirely from stablecoins on a daily basis.

What better time to do so now that major companies are diving in?

Best,

Gary and Jon

What’s going on?

Stablecoins are having a moment.

There’s never been such attention thrust on them. We know payment aggregators have embraced stablecoins: PayPal has its own, and Stripe spent more than $1 billion when it acquired stablecoin platform Bridge.

Now, companies themselves are stepping forward.

Shopify just announced plans to allow its merchants to accept stablecoins, in partnership with Stripe—while Stripe itself acquired crypto wallet provider Privy.

And it isn’t just the payment providers. Uber CEO Dara Khosrowshahi said publicly this month that the ride-hailing firm is investigating how it could use stablecoins to move money around its international business.

Uber is likely one of many tech giants conducting research. A recent Fortune report claimed Apple, Google, X and Airbnb are among others investigating the feasibility of integrating stablecoins.

These aren’t isolated, data from a Coinbase survey shows. The crypto exchange found that nearly one in five executives at Fortune 500 companies are making plans that include an on-chain strategy—with 29% explicitly saying stablecoins will be part of their company’s future. That’s up from 8% one year ago.

What is it that’s getting everyone so interested?

SO WHAT?

1. Bridging the gaps

Stablecoins are gaining momentum because they make it easier for sellers to accept money from any customer in the world.

They’re not replacing currencies like the US Dollar, Euro, British Pound or Japanese Yen. Instead, they provide a universal currency that’s particularly useful in countries with less liquid currencies.

“By embracing stablecoins, merchants aren’t just adopting a new payment method, they’re tapping into global markets, opening the door to global customers, and joining the future of borderless, accessible commerce,” wrote Shopify in its announcement.

“Small businesses should be able to sell to a customer on the other side of the world as easily as their next-door neighbor,” it added.

The company will initially accept Circle’s USDC stablecoin on Base—the Coinbase-operated blockchain that we’ve written about extensively—but you’d imagine there are plans to broaden the options. Shopify isn’t new to crypto payments—Bitcoin has been available as a payment option for more than a decade.

Stripe allows its merchants to receive stablecoins across four different blockchains, although all payments are settled in US Dollars. That means that, for now, stablecoins are just another currency to enable merchants to reach more customers. It also makes sense because it avoids regulatory uncertainty as many countries, including the US, are still finalizing laws around stablecoins.

Shopify, however, has added an option for merchants to keep their stablecoin payments in a crypto wallet, which is where things can start to get interesting.

2. Digital money means digital banking

Merchants holding stablecoin on their balance sheet, as they can if they are a Shopify customer, potentially unlocks a range of new options further down the line.

In the immediate term, it would allow them to generate yield on their stablecoin balance if they use a DeFi service or other treasury management options. Depending on the appetite for risk, rates can exceed bank interest and APY (Annual Percentage Yield) can potentially reach double-digits.

Those that want to be more adventurous could invest directly in cryptocurrencies. That’s not as crazy as it once might have sounded given that there are numerous listed companies, countries and US states with strategic crypto reserves.

After that, we can start to speculate and future-gaze based on trends that are gathering speed.

The last couple of years have seen an acceleration in the idea of Central Bank Digital Currencies (CBDCs) and appetite for company stablecoins is growing, too. Companies including M0 allow businesses to mint and manage their own stablecoins.

Uber, for example, could create ‘Uber Coin’—or UberUSD—which could add a whole new dimension to its user experience.

• Customers could earn yield for keeping a balance in their Uber account

• Uber could provide incentives through its coin—saving its balance sheet

• Uber could make money from transaction fees on its coin

With stablecoins on its balance sheet, Uber could generate yield by carefully managing its treasury using DeFi strategies and other Web3-centric strategies.

We haven’t seen a deluge of company-issued stablecoins yet, but we’d expect to see some high-profile examples arrive before the end of this year. Particularly given an increase in stablecoin acceptance from payment platforms.

3. Digital futures

The initial use case is likely to be behind the scenes, reducing the cost of moving money around the world—particularly in ‘exotic’ markets where the local currency is less traded.

In that respect, stablecoins have already impacted the global financial plumbing without necessarily changing the end-user experience. But there’s potential to change as digital money becomes a more mainstream phenomenon.

Right now, off- and on-ramping charges mean that stablecoins are still not an effective way of handling liquid currencies such as those of G10 nations, as Jack Zhang—the founder of global banking platform Airwallex—pointed out in a LinkedIn post that attracted plenty of attention.

But things get interesting when there’s no need to off-ramp.

For example when a merchant selling a product using Shopify is able to use the USDC that it receives from customers to pay salaries, buy raw materials or cover its marketing agency costs. In such a situation, banks, credit card companies and other financial institutions are disintermediated.

The above already happens with many Web3 startups, but regulatory uncertainty prevents larger companies from taking the plunge. Plus, in first-world countries or for domestic-only companies, the current banking system suffices.

It’s no wonder, then, that the likes of Stripe, Shopify, Visa, Mastercard, PayPal and others have jumped in to integrate stablecoin payments into their existing products. They need to. If they don’t, they could become irrelevant.

News bytes

Circle’s share price is flying after it went public earlier this month—the clues are in this newsletter, dear reader

Vietnam will introduce a framework for managing digital assets from January 1 2026

Stripe acquired Privy, which develops API for wallets and other on-chain transactions

Memecoin platform Pump.fun and a number of other Web3 projects had their X accounts abruptly suspended—it’s not clear why, but the moves will make it challenging to communicate directly with their users and the wider industry

Crypto exchange ByBit launched its first decentralized exchange (DEX), which is based on the Solana chain

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Launching a token can make founders of Web3 startups rich—and in far quicker time than it takes to be acquired or go public in an IPO. Cryptocurrency markets are liquid, but that can also spell peril for companies if their token price falls.

That’s the subject of this week’s newsletter: how one company that’s leading an emerging Web3 financial market got kneecapped overnight when its token plunged by 90%.

Is this game over for MANTRA? Let’s dive in.

Best,

Jon and Gary

What’s going on?

In January, MANTRA Network was the toast of the Web3 industry after it announced a $1 billion deal with DAMAC Group, one of the largest property development companies in the Middle East, to convert ownership rights into digital tokens.

MANTRA launched its mainnet—fully launching its blockchain—in October 2024 with the goal of tokenizing real-world assets (RWA) such as property, bonds and more. Partnerships like DAMAC coupled with renewed belief in blockchain-based services thanks to the growth of institutional investors entering Web3—catalyzed by the launch of US ETFs—saw MANTRA’s token ($OM) soar to nearly $8.50 on 24 February.

But, just over two weeks later, $OM crashed to $0.59 after losing 95% of its value overnight.

The price crash was triggered by a huge volume in token sales, but exactly who sold and why isn’t clear.

Critics accused the MANTRA team of selling a large volume of their tokens. Others accused investors of doing the same.

JP Mullin, MANTRA’s founder, blamed the centralized exchanges (CEXs) that trade $OM for allowing “reckless forced closures.” Millions of dollars-worth of token sales were “initiated without sufficient warning or notice,” Mullen said.

Today, the price is just over $0.44 as the company fights hard to overturn a narrative. Can it really turn the narrative after a token death spiral?

SO WHAT?

1. Confidence is lost

Narrative plays a huge part in pricing cryptocurrencies. Many crypto businesses are still at an early-stage which means that traders buying their tokens are betting on their future growth with limited fundamentals at best, or none at worst. Unlike stock trading with its revenue-ratios and other metrics, most crypto valuations are based on reputation or narrative.

So when a token like $OM crashes, the ‘value’ is hard to rebuild.

The fact that the cause of the sell-off is unknown, and the situation becomes murkier and less certain. The trust and confidence that underpinned every partnership, pitch deck, and community call was shattered.

So while the fundamentals and deals done haven't collapsed?, many looking in don’t have the same belief as before. Potential partnership deals that would give investors confidence, may now be in jeopardy due to the collapsed token price. Those would have been the very partnerships needed to revive the confidence in the project.

The MANTRA response has focused around burning tokens—meaning the founders and team have chosen to permanently remove their own token allocation.

This move is aimed at increasing scarcity of the token to give it more value, and showing that the core insiders behind MANTRA are prepared to forgo some of their profits from the business in order to help regain its position. In other words, they’re prepared to give up personal gains to see the business prosper.

MANTRA burned 300 million $OM tokens—that’s worth around $120 million at current rates, or $3.4 billion at the token’s all-time high. Half are from Mullen, the founder, with the remaining half belonging to the team and core contributors. Mullen said investors and the community “can decide if I have earned it back” further down the line.

The company also removed some validator partners, whose job is to manage the network, and will onboard new validators.

Returning confidence is no easy thing, but sacrificing monetary gains and changing those who manage the network have been the main focus.

2. The challenge of centralized exchanges

Mullin decried the role that CEXs play with crypto companies that issue a token.

They’re unavoidable right from the start. They offer liquidity, visibility, and user access for token launches, but they come at a serious price. Projects can expect to spend upwards of $100,000 in stablecoins and more in their own token to list on mid-tier exchanges. The price for the most popular exchanges is higher.

Even once your token is listed, the process is challenging:

• Price discovery on CEXs is opaque

• Prices can be easily manipulated

• Prices often move independently of real fundamentals

There’s also no transparency around volumes. And volume is very much needed. Tokens that don’t meet minimum standards are delisted from exchanges—that means most companies need to employ market makers to keep volumes up. That’s another costly line item.

Yet for all of that, Mullin argues that CEXs have the capacity to sink a token price, as happened with $OM. He said MANTRA is working with CEXs to prevent similar incidents in the future and he said he believes that it is an issue for the whole industry.

Most exchanges want to work with major cryptocurrency companies because they need their tokens, but there have been examples that follow $OM’s struggle.

Decentralized exchange (DEX) Hyperliquid faced a crisis when two Binance-linked accounts were accused of manipulating a memecoin that could have cost it $230 million. Hyperliquid used a centralized method to close the trade, but Binance and fellow CEX OKX were accused by some as trying to destabilize Hyperliquid, which is seen as a threat to their centralized businesses.

3. The perils of launching a token

Tokens are favored by many crypto startup founders because they give them potential exit liquidity and incentives. Rather than having to hope for an exit via IPO or acquisition—which happens to few companies—tokens can allow them to slowly vest their position in the business. Investors certainly enjoy the easier liquidity.

In an ideal world, that’s combined with interest in the token that sees retail investors buy in and generate demand.

But, once a token is live, your business becomes inseparable from its price chart. And sentiment is often the biggest driver. That has led to the growth of narrative-centric marketing, which ranges from a glut of paid-advertorial opportunities on crypto media, to armies of influencers ready to shill the newest token in exchange for money, pay-to-play speaking events and much more.

Reliance on centralized exchanges continues to be a major bugbear for all—one that is impossible to avoid. Even though DEXs like Uniswap and Hyperliquid have significant trading volumes each day, they don’t have the size of Binance, OKX and others—which also help widen the base of traders holding a token.

MANTRA’s redemption is going to be a major arc to keep an eye on. In spite of the growth in belief around institutional Web3 services and some impressive deals of its own, the company finds itself battling a tough fight. It’s one that Mullen said has hit his team hard—with many struggling to sleep, for instance.

Whether MANTRA can recover will depend not just on fundamentals—but on whether it can win back the one thing it lost overnight: trust.

News bytes

We recently wrote about consolidation from crypto exchanges, which are adding traditional finance features, and that trend was epitomized when Coinbase agreed a deal to buy derivatives platform Deribit for $2.9 billion

Robinhood continued the consolidation in trading exchanges with the acquisition of Canada-based digital asset platform WonderFi

Crypto and stock trading platform eToro listed on the Nasdaq above the predicted range: which saw it raise $310 million at a $4.2 billion valuation

Tether announced its upcoming AI product—called QVAC (QuantumVerse Automatic Computer), it will be able to run AI apps and agents on devices without relying on the cloud or centralized services

Thailand is planning to raise $150 million using a government investment token that would be tied to national bonds—details are a little light at this point, however

JPMorgan just settled its first transaction on a public ledger

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Circle’s IPO has been talked about for a number of years, and finally it just took a big step to reality after the US firm—which issues popular stablecoin USDC—filed to go public on the New York Stock Exchange (NYSE).

This week we’re digging into its 200-page plus financials to give you the low down on this major crypto IPO.

Best,

Gary and Jon

What’s going on?

Going public has long been a key objective for Circle. In 2021, it joined the wave of companies trying to list through a merger with a SPAC (Special Purpose Acquisition Company) but its deal fell apart more than a year later.

The SPAC craze was a passing fad, but Circle’s intention to list on the NYSE is no joke—even though its papers were filed on April 1.

The Circle business has grown even stronger during the intervening period, although that hasn’t played out in top line numbers. Circle’s revenue more than doubled over the last two years—from $772 million in 2022 to $1.45 billion in 2023—but it is aiming to go public at $5 billion, a small increase on its proposed $4.5 billion valuation for the SPAC deal.

So what do its hopes look like?

SO WHAT?

1. A simple model that makes money—but at a cost

Circle is a money printing business in every sense of the word.

The model is simple. Circle issues two stablecoins USDC, which is pegged to the US dollar, and EURC, which is pegged to the Euro and available in Europe.

USDC currently has a circulating supply of around $60 billion, and Circle’s primary revenue comes from income on that reserve via yield from short-term US Treasuries.

It is lucrative:

In 2024 Circle made $1.66 billion in reserve income, up from $1.4 billion and $735,000 the two years prior.

But it comes at a cost.

Circle paid out over $1 billion in distribution fees last year—that’s money to the networks, exchanges and other partners whose use of USDC (and EURC) on their platforms creates demand.

Beyond those whopping fees and other costs—salaries are the second largest spend at $260 million—Circle made a net profit of $156 million in 2024.

That’s decent for a company with 900 employees, but it is far from the wild profitability that rival Tether claims.

Tether said its net profit for 2024 was $13 billion, but there’s little chance of the company becoming publicly traded. It claims its treasury reserves are $113 billion, according to its most recent report—which it says is audited by BDO.

That’s down to a very different approach to operations. While Circle has designed itself to be regulation-friendly since its inception, Tether has been plagued by questions and suspicion around its treasury and whether it is able to back its USDT stablecoin fully.

Without Tether’s accounts, it is hard to make a comparison but Circle’s reliance and partners—as mentioned above—looks to be another key difference. One strategic friend in particular will worry prospective Circle IPO investors, even though it is an early and crucial partner.

2. The Coinbase factor

Coinbase is a crucial part of the Circle business—it is mentioned by name more than 100 times in Circle’s IPO prospectus.

The US crypto firm helped create the Circle business we see today when the two joined hands to launch USDC in 2018. Until that point, Tether’s USDT had been the undisputed stablecoin of choice.

Circle was designed to be fully transparent with its reserves and natively built for blockchains, two areas USDT was frequently criticized for. Coinbase was key to distribution as it instantly put USDC into the reach of tens of millions of users.

An initial 50-50 joint venture was restructured in 2023 to give Circle full ownership. Today, Coinbase has a minority stake in the Circle business but it also retains a punchy 50% cut of the net revenue from USDC reserve assets, effectively splitting the income with Circle.

That arrangement has been very lucrative for Coinbase: bringing in $908 million in 2024, up from $248 million in 2022 and $691 million in 2023.

This cost is part of the distribution bill that weighs on Circle, and the company candidly says it expects to see the costs increase with more partners on board. Increasing the amount of partnerships is, of course, crucial to growing Circle’s overall revenue. In this case, it is the cost of doing business with partners who are central to the model.

Coinbase is the main driver, but other exchange partners are cosying up. Circle struck a deal with Binance to keep at least $1.5 billion of USDC in its exchange for liquidity. That arrangement included an upfront fee of $60.25 million alongside an undisclosed monthly fee based on Secured Overnight Financing Rate (SOFR) from the Treasury.

This deal looks like the blueprint for increasing distribution without the lavish payouts that Coinbase enjoys. But still Coinbase remains a crucial partner for Circle.

3. USDC brand potential

Circle is said to be targeting a valuation of $5 billion for its IPO, which has received a mixed reaction.

Impressive top line revenue and a tight partnership with Coinbase, the bellwether for publicly traded crypto companies, is the fuel for some to argue that $5 billion is a low target.

But the counter-argument is that Coinbase is a millstone that’s weighing down the Circle business.

Either way, the reality is that USDC is incredibly well positioned in the market today. Unlike Tether, Circle has been built with transparency and regulation in mind—you’d imagine that it is not going to take much adjustment or adaptation to reach the compliance levels required to be a NYSE-listed business.

USDC is the standout contender as a regulatory compliant stablecoin, and it has partnerships that run beyond crypto. BlackRock plans to use USDC exclusively for a money market fund, and cooperate in other areas, too.

There’s little doubt that financial institutions and even governments will introduce stablecoins within the confines of market verticals or geographies. USDC could be a broader bridge to connect them and encourage liquidity. Even the name, USDC, is an ideal brand in a world in which there’s fewer names and ticker symbols left for new stablecoins.

There may be pressure applied from stablecoin platforms, such as M Zero Labs, which enable any company or even product to easily develop and deploy their own stablecoin. That eases or even entirely removes the need to use USDC within their product, giving the issuer opportunities to optimize the user experience and generate income.

Circle could potentially offer something similar in the future, or enter the space through an acquisition, but that’s some way out for now. First up, Circle needs to convince investors of the benefits of its distinctive business model—and address the polarizing role Coinbase plays in it.

News bytes

We wrote about the convergence between Web3 and traditional finance in our last issue, and just days later, Ripple agreed to buy prime broker Hidden Roads for $1.25 billion

There’s more on that convergence: The Wall Street Journal reports that Circle, BitGo, Coinbase and Paxos are all applying or consider whether to apply for bank charters or licenses in the US

The Singapore Stock Exchange plans to launch Bitcoin perpetual futures in the second half of 2025

Panama City Council voted to become the first government institution to accept cryptocurrency payments—citizens can pay taxes, fees, tickets, and permits using BTC, ETH, USDC, and USDT

Cryptocurrency comparison index CoinGecko released a thorough analysis of Q1, noting that the total cryptocurrency market fell by nearly 20% in the first three months of 2025 and plenty of other data

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

This week we’re looking at the growing convergence between traditional finance and payments and the Web3 industry. This year alone, billions have been spent on acquisitions both ways and companies on both sides are likely to increasingly look like each other.

Let’s dive in!

Best,

Jon and Gary

What’s going on?

The year may be young but already we’ve seen huge deals between traditional and Web3 finance and payment companies suggesting that convergence between the two is accelerating.

It may have sounded crazy just a few years ago to imagine trading stocks, shares and cryptocurrencies side by side; or for a payment company to explore stablecoin-based transactions… and then spend over $1 billion to make it happen.

There’s often talk that Web3 doesn’t have broader adoption. The ever-increasing overlap between these two industries is one way that new technology will reach a larger audience.

SO WHAT?

1. Traditional finance players want a slice of Web3

The Web3 market entered a period of relative depression this year, after the price of Bitcoin and other cryptocurrencies sailed at the tail end of last year buoyed by the imminent arrival of Donald Trump as President.

So far, 2025 has been a ‘sell the news’ event—a popular trading phrase that essentially means the anticipation outweighed the reality. But the depressive cycle hasn’t stopped major tech players entering or deepening their presence in the Web3 space.

• Stripe completed its acquisition of Bridge, a platform that enables stablecoins for payments, for $1.1 billion in February

• Neobank Revolut launched a mobile app for its fledgling crypto business X in March

• Robinhood, the mobile stock trading platform, just added prediction markets (made famous by Web3) to its growing cryptocurrency offering

The acquisition figure for the Bridge deal did raise eyebrows, but none of these news developments are a surprise.

That’s because Web3 has a lot in common with trading, investing and financial services. It makes sense that Stripe is assessing how it can use stablecoins within its payment solutions, which take in the likes of Visa, Mastercard and other middlemen, not to mention the complexity of linking international bank accounts.

For Revolut, cryptocurrency trading expands its existing focus on public market investing. Its primary focus is to be a bank, but when you hold customers’ money for them, it makes sense to give them ways to put it to work—and it makes sense to (carefully) offer exposure to cryptocurrencies when you already have stock investing.

Robinhood, meanwhile, has offered cryptocurrency trading for some time—Robinhood Crypto launched in 2021—and it even offers more sophisticated wallet options for customers. Prediction markets have gained huge attention, not to mention revenue, so this is also a logical extension of its business. It’s worth noting that it is using a US-licensed (and non-crypto) prediction market partner in Kalshi in order to be compliant.

These companies are merely the tip of the iceberg. It is likely that all payment companies that aren’t already researching or investigating stablecoins publicly, are doing so privately. Platforms that offer stocks can see easy scope to introduce cryptocurrency trading, and those already in the space are exploring newer and more edgier features.

2. Web3 players want the legitimacy of traditional finance

This trend isn’t just traditional finance companies getting into Web3, it flows the other way, too. Kraken announced in March that it would fork out $1.5 billion to acquire NinjaTrader, a US-based futures trading platform for retail customers.

The logic is the same as the traditional players. Kraken is already serving millions of customers in the US who want to trade cryptocurrencies, now it can offer futures and derivatives services for traditional assets.

With NinjaTrader’s license, it is also poised to offer those services for cryptocurrency assets too. There’s also an international angle. Kraken plans to “accelerate” NinjaTrader’s expansion into the US, Europe and Australia which can also be used to expand its core business.

This deal comes as Kraken is rumored to be preparing its business for an IPO in the US, a move that would see it join Coinbase as the only other publicly traded US Web3 company. Plotting growth into more traditional trading markets, overseas territories and acquiring licenses is a major narrative to show investors its business can seriously develop.

License acquisition isn’t new, of course. Crypto.com, for example, made two acquisitions in 2021 in order to grab licenses to offer derivatives and futures products. A similar deal that closed last year gave it a green light for equities and equity options. Coinbase has made deals too, buying an institutional digital asset manager and SEC-registered investment adviser.

Reports this month suggested that Coinbase is in talks to buy crypto derivatives exchange Deribit for up to $5 billion to massively expand the services it offers.

Crypto.com has said repeatedly in public that it is a fintech company and not a cryptocurrency business. That may well sound like spin, but increasingly its peers are seeing the opportunity to offer more than just crypto trading in the US market.

3. Catalysts kick in

Overlap has always existed, but a number of catalysts may be behind this accelerating convergence including:

1. Regulatory clarity

The key ingredient here is likely to be the US SEC’s new focus on developing regulation for Web3 technology and concepts. To state the obvious, that means these technologies and features won’t land companies in trouble or don’t operate in a grey zone.

The fact that the market and prices aren’t flying shows that these companies are looking at these deals and launches purely in terms of tech and product, not simply FOMO.

2. Time

In the case of stablecoins, the concept is not new and a number of companies have spent years looking into the feasibility of stablecoins and distributed ledgers as payment rail alternatives. PayPal and Visa being two prime examples we’ve written about before.

Over the course of time, it makes sense that use cases have emerged and alliances have been formed between traditional payment companies and Web3 firms. It is still early, however, and whilst advances have been made and billions of dollars have been spent, we still haven’t seen the full potential yet.

3. Disruption

Technology can be a great leveler and the introduction of cutting-edge technology like AI could allow companies to iterate faster and develop products that can challenge incumbents in traditional markets. For one thing, traditional markets are aware and responding.

The Nasdaq, for instance, is moving away from traditional operating hours to a new schedule that would see it open for trading 24-hours a day on weekdays. That’s in direct response to the 24/7/365 nature of crypto trading markets, which never close and include traders from all corners of the globe.

We’ll be keeping an eye on the convergence of traditional and digital finance and payments this year. Not only for new deals, but new services and use cases that hit the market and change the user experience.

News bytes

Japan's second-largest bank, SMBC, is planning to launch a stablecoin, according to media reports

Circle, which issues USDC—the world’s second-largest stablecoin—filed for a US IPO with plenty of interesting data:

The company reported revenue and reserve income of $1.68 billion for last year, compared with $1.45 billion in 2023. Net income from continuing operations was nearly $157 million in 2024 versus $271.5 million in the previous year.

FTX will start paying its main creditors at the end of May using a cash hoard of $11.4 billion the company has collected since its shut down

BNB, the token for the Binance blockchain, could be the next US ETF after investment manager VanEck completed a key filing to start the process

The SEC may have made positive noises towards Web3, but a top US politician has said there is no consensus to allow stablecoins to generate yield for users, dismissing the pleas from industry leaders like Coinbase CEO Brian Armstrong

The Japanese Financial Services Agency plans to revise its law to formally position crypto assets as financial products, which could include new "insider trading" regulations

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

It’s been a month since Web3’s largest ever hack took place: ByBit lost $1.5 billion at the hands of North Korea-affiliated hackers. The audits are in, the real-time stories have been written, but what are the bigger takeaways from this catastrophic event?

Our newsletter this week has answers, but also raises further questions.

Best,

Gary and Jon

What’s going on?

ByBit was hit by a record hack on February 21 which saw it lose nearly $1.5 billion after North Korean hackers intercepted a scheduled transfer of funds between wallets owned by the crypto exchange, which is the world’s second largest based on trading volumes.

The result was the company lost all of its Ethereum holdings to the hacking group, which it has now been proven is linked to the notorious North Korea-affiliated Lazarus Group.

Despite the magnitude of the attack, ByBit remains solvent, none of its users were affected and the cryptocurrency market hasn’t seen severe price drops.

Those three things seem incredible, and they represent just how far the Web3 industry has come. But still the incident raises some very pertinent questions about how big players handle their security and existentially, and how this industry deals with thieves and larceny on a major scale.

1. The biggest players don’t take security seriously enough

The most striking element of the ByBit hack is the difference that a few weeks made to the narrative. Initially, it looked like a mistake from ByBit had granted the hackers access to its entire stash of Ethereum. It turns out, however, that the attack vector lay elsewhere.

The attackers were able to manipulate the software that ByBit used for multi-sig transfer, a free-use-tool from security protocol company Safe. A perfectly good product for the individual crypto holder, it is not befitting of an organization that moves billions of dollars in assets. As even ByBit CEO Ben Zhou admitted.

“We should have upgraded and moved away from Safe. We’re definitely looking to do that now,” he told The New York Times in an interview.

The Times story claims that months earlier, ByBit had noticed that the Safe product “was not fully compatible” with other security products that it used. Yet it ploughed on and ultimately paid the price.

Using a more robust security layer could have prevented the attack altogether. You’d think this would push every other exchange to act—if they haven’t already.

As for how Safe itself was compromised, it looks like the classic case of targeting an individual within the company. No further details of that have been revealed, but typical attacks from North Korea focus on phishing employees using communication via email or LinkedIn.

In this case, they likely lurked on the network or in the individual’s computer to determine exactly what their access could bring them.

2. Crypto exchanges enjoy ungodly wealth and power

Another interesting nugget from real-time accounts of the hack is how others in the industry rallied around to help ByBit fill the hole that the hackers created with their digital thieving.

From the same New York Times article:

To limit the damage, other crypto companies offered to help. Gracy Chen, the chief executive of a rival exchange, Bitget, lent Bybit 40,000 in Ether, or roughly $100 million, without requesting any interest or even collateral.

The fact that other exchanges were rallying to offer hundreds of millions of dollars without any question it would be repaid (to paraphrase Bitget’s Chen) shows two things.

Firstly, that these are highly-lucrative businesses that can afford to loan significant funds to their peers.

And, secondly, that the industry was so concerned at the potential impact of the hack that it put rivalry to the side to ensure that ByBit would not go bankrupt.

That’s a very real issue. Looking at history, FTX and Terra/Luna are recent examples of prominent cryptocurrency firms that have gone insolvent due to mismanagement or price collapses. As far back as 2014, then-leading exchange Mt. Gox abruptly shut down after losing around 650,000 bitcoins (then worth around $460 million, now $2 billion).

Even without the help of the industry, ByBit CEO Zhou said the company was still solvent and able to cover all user deposits.

That’s despite losing $1.5 billion!

These companies are lucrative at a level that is hard to find in an emerging industry like Web3, which is barely 10 years old.

3. Decentralization was a boon for the hackers

There’s little doubt that decentralization is a core pillar of Web3. It represents a technology with the potential to enhance the internet and all online services, independently of cryptocurrencies.

Decentralization promises to:

• Make online services resistant to tampering and censorship

• Enhance network security and efficiency

• Give users control of their data and identity

• Provide greater transparency and accountability

• Enable permission-less development on protocols

Despite those undoubted positives, decentralization does have its drawbacks. It’s often said that ‘code is law’ and that means that once a hack like ByBit happens, it requires centralization (centralized entities) to step in and take action, such as freezing assets, reversing transactions, etc.

There was talk about ‘rolling back’ the Ethereum chain to reverse the hackers’ actions (in short: that would be wide-ranging and therefore complicated) or forking Ethereum itself, as happened following a major hack in its early days. But, likely given the maturity of the Ethereum ecosystem, no response was made.

In fact, the hackers used a number of services to move their ill-gotten Ethereum stash into other cryptocurrencies or places where it could no longer be tracked.

The transparent nature of blockchains meant that the hackers’ wallets were found and the stolen assets were traced. Despite that, services like THORchain—which enables swaps between assets on different blockchains—profited from the hackers’ activity.

THORchain saw a record $4.6 billion in asset swaps on its platform in just one week, on account of the spike from the hackers. The protocol is said to have made $5.5 million in revenue from fees directly related to the ByBit loot.

THORchain wasn’t alone, and ultimately these services allowed the hackers’ entire haul to be ‘laundered’ clean in just 10 days. It is thought that some of that figure may be traceable by professional blockchain forensics companies but, in general, most of it is gone.

The tension between the benefits and drawbacks of decentralization has never been more clear. But, still it is a tough situation.

Critics can simply point to the ByBit saga, but the same system offers security, too. Persecuted individuals, for example, can hold and transfer assets freely despite any government or private pressure. That could be important in authoritarian regimes—although it is hard to imagine over $1 billion flowing in such a manner.

The ByBit case highlights the need for more nuanced discussions about how decentralization should coexist with security measures.

News bytes

Binance closed a $2 billion investment from UAE-based MGX, in a deal it claims was completed using stablecoins

US VC firm a16z published its annual look at “things we’re excited about in crypto in 2025”

Thailand has approved Tether’s USDT stablecoin as an approved cryptocurrency that can be traded in the country

MicroStrategy announced it would raise a further $21 billion via a stock sale to buy Bitcoin—the firm already owns nearly 500,000 BTC, that’s worth around $40 billion

Ripple has become the first company to receive a license to offer regulated crypto payments and services in the UAE

Exchange OKX is moving closer to offering derivatives products in Europe after it acquired a company that holds a MiFID II license—OKX was reported to have come under the radar of European regulators

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

It’s been a huge week for Web3. Regulation of the industry has entered a new era after the US SEC dropped a range of actions against Coinbase, Kraken, Robinhood and other major crypto companies, undoing years of work from the previous administration.

It’s not uncommon for a new administration to reverse course, but the significance of these cases being dropped cannot be understated. Now, we finally get to see how the Trump administration plans to regulate Web3. There’s a lot to unpack!

Best,

Jon and Gary

PS: We are hiring for a range of roles at Terminal 3, check out the openings here

What’s going on?

The SEC dropped its landmark lawsuit against Coinbase in a move that draws a clear line under the Gensler-led SEC and marks the start of a new era regulating digital assets.

The suit against Coinbase was significant. Coinbase is the highest-profile company in Web3 and the only one listed on a US stock exchange.

It often symbolizes the Web3 industry, and this attack on it certainly symbolized the Gensler-led SEC’s approach. Rather than seeking new laws, it used existing securities regulations; rather than working with the industry and its largest players, it went down a route of litigation, which lacked clarity and flexibility.

The SEC’s new approach throws all of that out of the window. This won’t be open season for Web3 but now there’s a chance for a new approach to regulate digital assets based on what they are, rather than applying a dated framework.

SO WHAT?

1. An end to regulation by litigation

The allegation from the SEC was that Coinbase’s core business was in breach of SEC laws, but other areas of the suit could have set regulatory precedence that would impact the entire industry and sway other governments.

In more detail, it alleged that:

• Coinbase acted as an unregistered exchange and broker

• Coinbase traded 13 “crypto asset securities”

• Coinbase illegally solicited new customers (comingling exchange, broker-dealer, and clearinghouse functions)

• Coinbase’s staking program was identified as an investment contract and as an unregistered security

The suit was filed in 2023 and it caused particular controversy because, just two years earlier, Coinbase got permission to go public on the NYSE. Nothing had changed since its IPO, so why suddenly was it not compliant?

Going after the only US publicly traded Web3 company in the industry, so dropping the case is equally as symbolic in paving the way for a new approach to regulation.

The SEC has formed a taskforce that will draft a new framework to analyse and regulate digital assets.

This regulatory pivot isn’t happening in isolation—Trump’s administration is doubling down on crypto in a way that was unthinkable a few years ago.

US policymakers have rejected a proposal to regulate DeFi using existing rules and President Trump continues to talk up the creation of a national crypto reserve fund, which he has now said will include Bitcoin, Ethereum, Ripple’s XRP, Solana and Cardano.

US states are already frontrunning that development by adding Bitcoin to their own reserve funds. Those are more likely to bear fruit before the federal government’s plan.

Such a development was unthinkable during the previous administration. Then, the regulatory landscape was such that US companies including Coinbase, Ripple and Gemini had considered building or moving core parts of their business overseas to more regulation-friendly jurisdictions.

The new approach is to build and grow on US soil, and that’s a remarkable change.

2. A green light

The news headlines are around Coinbase, and it was the main target, but it was far from the lone case.

The SEC served Well Notices—correspondence that confirms the recipient is being investigated by the commission—to at least half a dozen other prominent businesses in a sign that it was looking at the whole industry in detail.

Just as the Coinbase suit has been dropped, so early-stage investigations with the following companies have ceased, too:

• Kraken

• Robinhood

• Gemini

• Uniswap

• OpenSea

• Metamask (via parent company Consensys)

• TRON

• Yuga Labs (which owns Bored Ape Yacht Club)

In the case of TRON, both parties are exploring a settlement in a civil fraud case against its founder, Justin Sun—who serves as an advisor to President Trump. The situation looked bleak for Sun, who faced charges around illegally distributed crypto assets, inflating trading volumes and secretly paying for celebrity endorsements.

It was an open-and-shut case. The fact that it is being settled suggested more clearly than anything that the SEC is moving on and abandoning all previous approaches.

Over the last week, the SEC even came out with a comment which suggested that memecoins may not fall under its regulatory jurisdiction.

These changes have prompted companies to reintroduce services in the US that had been suspended given the uncertainty of the Gensler-era commission. Uphold, a smaller rival to Coinbase, moved fast to reintroduce staking in the US this week and you’d expect others will do the same.

3. A more promising future

The situation isn’t all rosy for the industry right now with current market prices down from previous highs in December.

Sentiment among founders, investors and others in the industry that we at SO WHAT speak to on a regular basis isn’t high.

Project founders are unsure whether to launch tokens, with mainnet announcements continually pushed back or canceled altogether. Investors spent last year enjoying a buoyant market but have been somewhat cautious in 2025 so far. The memecoin market has dropped significantly since December and January, and trader sentiment on social media is that ‘the top’ was in and it is downhill now.

Yet the SEC has made the kind of moves that the industry could only have dreamed of over the last few years. And it has made them very publicly and clearly.

For the first time, the US market doesn’t need to intimidate Web3 companies, and those building Web3 businesses on US soil don’t need to look overseas to figure out where they should move to continue running their company.

Indeed, other countries are paying close attention to America’s new approach to digital assets. India has traditionally been one of the most conservative countries when it comes to cryptocurrencies, but it has said publicly that it is reevaluating its stance. Hong Kong, meanwhile, has doubled down on its efforts to become a global Web3 hub.

Regulation is unlikely to make the US a Web3 haven in which anything goes. There will still be restrictions. But increasingly it looks like the framework will be made in consultation with the industry and with the goal of harnessing the valuation that its technology can bring: be that decentralized networks, tokenization, cross-border payments or DeFi yields.

Regulation won’t turn the US into a free-for-all, but for the first time, the industry has a real chance to build on home soil—with clarity. That’s more valuable than any price pump.

News bytes

The North Korean hackers who stole $1.5 billion from Bybit have laundered the full amount using Thorchain—which earned $5.5 million in handling fee

Binance will delist Tether’s USDT from a range of EEA countries (in Europe) because the stablecoin does not comply with the region’s Markets in Crypto Assets Regulation (MiCA)

Crypto.com affiliated blockchain Cronos announced a controversial proposal to reissue 70 billion CRO tokens, which were originally burnt in 2021 and are worth just under $5 billion at today’s price

Top Ethereum Web3 wallet Metamask is adding support for Bitcoin and Solana in a signal that their ecosystems are developed significantly over the last year

Franklin Templeton filed for the Solana ETF which could break ground by giving investors not only access to Solana as an asset, but also staking rewards—staking has been absent from other crypto-themed ETFs to date

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

It didn’t take long for the Trump administration to cause chaos in Web3. It happened before the President even took office—as our readers will likely know, Trump launched his own “official” cryptocurrency—which became the fastest-growing memecoin, rocketing to a high of $16 billion. He promptly launched a similar coin for his wife 24 hours later.

Despite this unorthodox moment, the first week of the new administration has yielded a tangible piece of news: the SEC has revamped its focus on Web3 with the formation of a new “Crypto Task Force.”

Best,

Gary and Jon

What’s going on?

“The SEC can do better.”

You don’t often see bureaucrats throw their peers or seniors under the bus, but the announcement of “SEC Crypto 2.0” has some scathing words for the previous administration’s approach to Web3, and by association its former head Gary Gensler.

Gensler’s approach of using enforcement created “an environment hostile to innovation and conducive to fraud,” the announcement noted. It criticized the approach for failing to bring about clarity.

Instead, the new approach promises to usher in a new era of regulatory and legal clarity. If that comes to fruition it will not only benefit the US and those in the Web3 industry, but other countries may follow suit.

Let’s dig into the details.

SO WHAT?

1. A new clear and sensible approach

The Gensler-era SEC was marked by inconsistency and a lack of clarity around regulation.

Gensler took a tough stance on Web3 projects, pursuing legal action against companies that include Coinbase, Binance and others. Coinbase, in particular, argued that they needed clarity. He was criticized for regulation by enforcement.

Ultimately, the SEC is stepping up now because the Gensler regime left unresolved issues between the industry and the regulator, even before Trump lit the fire by introducing his own memecoin. Rather than treating Web3 as a new asset, his tenure was marked by a determination to classify digital assets using the same frameworks as regular investment products—and a continued focus on defining cryptocurrencies as securities.

The gap was so pronounced that the US risked losing out on the Web3 industry altogether. US companies looked to other markets with more coherent frameworks, including the EU, Hong Kong and Singapore, in order to find greater certainty.

“The Task Force’s focus will be to help the [SEC] draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously,” read the announcement.

That’s exactly what US companies, many of which had resorted to considering overseas relocation, wanted to see. More than that, it may encourage a new cohort of future founders to decide to base their Web3 business in the US. That in turn could benefit the US economy, and take a big step towards bringing the type of innovation that’s within Web3 on the technical side—such as decentralization, blockchain transparency, and online currencies—into the mainstream.

2. A very different looking team

The task force has been set up to assist the SEC—a number of its staff are particularly notable for their criticism of the previous regime’s agenda:

• SEC Acting Chairman Mark T. Uyeda—launched the task force

• Commissioner Hester Peirce—will lead the task force

Peirce, in particular, is well regarded within the Web3 industry where she is affectionately referred to as ‘Crypto Mom.’ That’s because she has consistently spoken out with criticism of the SEC’s approach to Web3 regulation.

A former lawyer, Peirce was the obvious candidate to pick the task force up. She has a history of almost pleading for a change-of-course within the SEC, and you’d imagine that she enjoyed some heated conversations with Gensler since stepping into the SEC in 2020 as an appointee of President Trump.

Peirce said in May 2022 that the SEC had “dropped the ball” on regulating crypto which enabled “a lot of fraud”.

One month later, Peirce doubled down:

“Watching the SEC refuse over the past four years to engage productively with crypto users and developers has prompted feelings of disbelief at the SEC’s puzzling, out-of-character approach to regulation,” she said.

There’s little doubt that Peirce will relish a role and responsibility that has been years in the making for her.

Then there’s Uyeda who has stepped into Gensler’s shoes on a temporary basis following his exit and the planned appointment of Trump nominee Paul Atkins to the role full-time. Like Peirce, Uyeda has been a dissenting voice on Gensler-led crypto policy for some time.

The two commissioners voiced their disagreement at the end of 2023 when the agency denied a petition by Coinbase to add crypto to its rulemaking agenda.

Meanwhile Atkins, a former SEC commission who would ultimately sign-off on the task force’s proposals and regulatory recommendations should his nomination carry, has spoken out against Gensler’s approach and worked with Web3 firms and crypto lobbyist groups. The CFTC, which works in tandem with the SEC, also got a new head who is also prioritizing clarity over digital assets.

3. It will take time and may not be universally ‘good’ news

The mandate and the team couldn’t be more different to the previous SEC regime, but still expectations among the industry should be tempered.

Devising and implementing regulatory policy doesn’t happen overnight and, whilst many of the key figures are seen as ‘crypto friendly’ and clarity is sorely needed, that doesn’t equate to some kind of crypto utopia.

Expectation around Trump’s own position on Web3 has also been reset during his first week in office. The President said he didn’t know much about the coin and hadn’t checked it, when asked this week about the soaring value it had reached.

Whilst he would be right to be coy given the ethical backlash and potential regulatory breaches that the launch has brought to him, it does seem he has little awareness of the project. It, and other Web3-related projects, got no mention during his inauguration speech, despite plenty of rumors circulating prior. Similarly, none of the Executive Orders signed on his first day related to Web3 which disappointed expectant industry leaders.

The fact that Trump even launched the coin, and then one day later another for his wife Melania, has undermined his label as a ‘Bitcoin President.’ Bitcoin and memecoins don’t mesh together easily, as we’ve written previously.

As we wrote last week, there is a lot of uncertainty around Trump’s second term and particularly whether the big talk on policy, regulation and other Web3 topics will result in tangible changes. The task force, whilst just an announcement, is perhaps the punchiest move Trump could have made this early—and it could inspire other nations to follow suit and reassess their own approaches to Web3.

News bytes

Taiwan is reportedly planning a law that will allow banks to issue stablecoins for the first time

Trump pardoned Ross Ulbricht, who created dark web selling platform Silk Road and was jailed to life in prison in 2015

Thailand could become the next country to launch Bitcoin ETFs

Popular prediction market platform Polymarket has been banned in Singapore with Thailand ready to follow suit

Telegram has made TON its exclusive blockchain for mini apps, meaning all mini app developers must build on the platform

Meanwhile Line has followed Telegram’s playbook by launching its own decentralized apps for users of its messaging service

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Ladies, gentlemen, boys and girls, it is that time of year once again as we cast our eyes into the future and make sense of what might happen to Web3 in 2025.

Best,

Jon and Gary

What’s going on?

Our predictions last year have aged fairly well—read on for our review—but let’s get to this year’s first and foremost.

SO WHAT?

1. USA

America is hardly synonymous with Web3. Key projects including Bitcoin and Ethereum were created outside of Silicon Valley and it took a number of years before cryptocurrencies became a concept that was broadly accepted in America’s tech hotbed. And yet the US is going to be a major factor in what happens to Web3 this year.

That’s down to one thing: President-elect Donald Trump.

It does seem ridiculous that one event can be potentially so pivotal, and an event that features a man who is best-known for making populist statements that don’t always result in action. But here we are.

The Trump Presidency has already breathed fresh life into cryptocurrency markets. His comments during his successful election campaign sparked markets into life with Bitcoin rallying to over $100,000 through pledges that included:

• Creating a Bitcoin strategic reserve

• Supporting Bitcoin mining in the US

• Easing regulatory pressure on the Web3 industry

• Establishing a Bitcoin and crypto advisory council

• Preventing a US-based CBDC

• Removing SEC chairman Gary Gensler, who resigned in the wake of Trump’s electoral victory

• Freeing Ross Ulbricht, the Silk Road founder who was jailed for 40 years in 2015

The general gist is that Trump wants the US to embrace the Web3 industry, whereas previous administrations have shackled it with caution fed by disaster stories that include the implosion of FTX and Terra/Luna, exchanges like Binance evading securities and more.

A pivotal piece of that is going to be legislation. If America is truly to become the world’s hub for Web3, as Trump has said, it will not need to clarify securities laws for staking, trading and more but it will have to find ways to deal with newer services. We’ve seen Pump.fun and Polymarkets explode in popularity and revenue over the last year, and there will be others that challenge regulations and laws.

Trump has already assembled the crypto advisory council, which will reportedly include approximately 24 CEOs and founders from the Web3 industry. His approach to handling the impending ban on TikTok in the US, which is slated to come into effect on 19 January, will give clues as to how the Trump administration will approach tech policy. There’s widespread confusion over whether the ban will be extended, dismissed or if TikTok could be sold to a suitor, one of which is rumored to be Trump advisor Elon Musk.

If America can even pull off some of the goals Trump has spoken of, it will mark progress for Web3 and it may prompt other nations to adopt similar policies. It’s just a sad indictment that crypto is reliant on a pragmatic politician, rather than able to use the undoubted power of concepts like decentralization, DeFi and others to break ground for itself.

2. Artificial intelligence

Artificial intelligence (AI) has been a major theme in tech for the last two years since OpenAI released ChatGPT, but it only made its way into Web3 in the second half of last year. That means there’s huge room for growth over the next twelve months as the technology matures, new services and use cases are explored and more developers flock to adopt the tools.

AI in Web3 to date has been agents, which are most visible on X and other social services. Whilst these can be impressive in their authenticity, they are far from gamechangers for now. Beyond sending tweets, some agents are able to trade cryptocurrencies and maintain a wallet.

On the fundamental side, a number of projects have emerged with frameworks to develop agents, including ElizaOS, Virtuals and Swarms. This year will likely see their capabilities extend into playing games, speaking in online calls, and more. One long-term goal from the creators of ElizaOS is to develop a hedge fund staffed with AI traders which can outperform top firms and venture capital funds. That seems some way away, although the basics are in place and AI agents can trade.

There are also looming automation possibilities, which may not be as sexy as robot traders but they could be crucial given the difficulty of Web3 user design, user experience and concepts. Even experienced tech followers find Web3 wallets and transaction systems complicated or new.

In September, Coinbase claimed to have carried out the first transaction between two AI agents. That innovation could allow users who are not crypto savvy to interact and make transactions indirectly via AI agents.

Another big push around AI and Web3 is using blockchain technology as a transparency and authenticity layer for AI agents. That’s to say that AI agents would be granted verifiable credentials and their processes and actions would be logged on a blockchain to provide verification of actions that were taken, or to perhaps prove authenticity.

Much of the hype around AI agents is years away if possible at all, but AI and crypto have become early bedfellows because of the lack of friction in trading in Web3.

“AI agents cannot get bank accounts, but they can get crypto wallets. They can now use USDC on Base to transact with humans, merchants, or other AIs. Those transactions are instant, global, and free,” Coinbase CEO Brian Armstrong said at the time of his company’s AI breakthrough.

3. Developers, developers, developers

To use the famous Steve Ballmer meme in our title, this is the year when Web3 could attract developers from outside its field in a meaningful way.

The industry is always looking for mainstream adoption but one of the biggest issues that has held that back has been the types of services that are available to users. As mentioned above, they can be difficult to understand for those who are new to the industry. The same applies to developers, however, with even social media alternatives requiring elements like wallets, private keys and other concepts that can put prospective new users off.

There’s been progress but Web3 needs to find user frameworks and services that are not only useful to the average internet users but don’t require years of Web3 experience to sign up and use them. We’ve seen with Farcaster, the Web3 social media service, that there has been innovation but it is still tough for the average social media user to meaningfully become involved.

In many ways, 2024 could be a perfect storm for attracting non-crypto developers to using elements of Web3. Greater clarity on regulations in the US combined with sophisticated tools and frameworks for AI could enable devs who had shied away from crypto to build services that don’t just pay lip service to Web3 but can actually provide value for the average internet user.

The Web3 industry must accept that it is not ready for mainstream adoption in its current iteration. We’re excited to see products that are in development or not even conceived yet to come to the fore.

What might these products do? That’s a tough call but we are looking for innovation around payments, identification, social media and investment products.

How did we do with our 2024 predictions?

Predictions mean nothing if they’re not revisited. These were ours 12 months ago:

1. The first US Bitcoin ETFs arrive and make an impact

It’s impossible to know what sends a market higher, but ETFs injected momentum to take the price of Bitcoin to $100,000. Bitcoin was the best performing investment asset of the year—it grew 125%, well ahead of the S&P 500 which clocked a still respectable 23%.

2. Stablecoins win true appreciation—and profit

This prediction played out with stablecoin adoption soaring and profits rocketing. Tether, which operates the largest Web3 stablecoin (USDT), claimed it clocked over $10 billion in net profit for the year. Circle, which runs USDC, is looking to go public this year which will arm us with plenty of insight.

3. Real World Assets show signs of taking off

While there hasn’t appeared to be any crazy visible movement on RWA tokenization, it has happened. At the time of our prediction there were over $860 million tokenized in US treasuries, today that figure stands at $3.75 billion—an increase of over 400%. That figure is sure to increase this year at an even faster pace.

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

Happy New Year! We enjoyed a restful festive period here at SO WHAT and we are excited to be back. How excited you ask? Excited enough to 10X our annual recap, which includes 30 must-note topics from the year that was 2024.

Stand by for our predictions, which will drop next week.

Best,

Gary and Jon

What’s going on?

In recognition of a crazy year for Bitcoin and Web3, we decided to 10X our annual review. Typically we break topics down into three areas of analysis, but last year was remarkable in many ways and we want to reflect on the key topics that developed.

SO WHAT?

1. Bitcoin

Bitcoin is the star performer of cryptocurrencies, as we have consistently noted over the last year. Bitcoin looked outdated when Ethereum and Solana ushered in the era of developer-focused blockchains but Bitcoin has grown into its own as the front door to Web3. Last year, it added new features to enable NFTs and memecoins but the introduction of US ETFs marked its entry as a mainstream investment asset. Who could have predicted that when the Bitcoin whitepaper was released in October 2008.

2. Donald Trump

There’s a lot to say about Donald Trump, who added to his Web3 businesses with a new NFT collection and a DeFi project. But Trump’s election win and his proclamations in favour of Web3, including his apparent desire to buy Bitcoin with the federal reserve, got the market excited. The big question is whether he will deliver on his promises, or whether they were simply opportunistic pledges as part of his campaign.

3. Memecoins

Memecoins existed before 2024, but they came alive this year with viral tokens like WIF (dogwifhat), MOODENG (Moo Deng) and MEW (cat in a dogs world) bursting onto the scene and making traders millions of dollars. Even ‘older’ coins like Dogecoin and Pepe saw a resurgence.

4. New token launches

Speaking of new token launches, 2024 didn’t just open the door for memecoins, Web3 companies launched tokens thanks to more favorable market conditions. That’s including highly-anticipated launches including infrastructure like ZK Sync, Blast, Scroll and Movement, not to mention popular decentralized exchange Hyperlink.

5. Pudgy Penguins

Another major token launch was Pudgy Penguins, which released its token just before Christmas. The highly-anticipated launch sent the price of Pudgy Penguin NFTs skyrocketing to over $100,000 and, at the time of writing, it appears to have breathed new life into the struggling world of NFTs—time will tell.

6. ETFs

The introduction of ETFs (exchange traded funds) for Bitcoin and later Ethereum in the US opened the door to crypto for a lot of traditional retail investors. That promise sent the price of Bitcoin soaring, and there are plans for ETFs for other cryptocurrencies. The US launches also kicked off ETFs in other markets including Hong Kong.

7. Gary Gensler

All the while, though, the US SEC has cracked down on the Web3 industry consistently across this year. That included a massive $4.5 billion fine for Terraforma Labs (behind Terra/Luna), an ongoing case with Binance—which paid a $4.3B settlement to the US justice department—and ongoing action with companies including Coinbase, Opensea, Immutable, Crypto.com and others.

8. Pump.fun

The memecoin platform became one of the most significant Web3 companies this year after birthing memecoins including Moo Deng. Pump.fun’s daily revenue surpassed $1 million in the final months of the year, as memecoin trading became a universe all of its own within the broader Web3 galaxy.

9. Mt. Gox

From a new player to an old one, Mt. Gox became a headline name again after the trust overseeing the remaining funds of the defunct exchange began refunding customers impacted by its abrupt closure in 2014 following a string of hacks. The exchange lost 950,000 Bitcoin, a haul worth around $90 billion based on today’s prices.

10. Crypto media

A less publicized controversy of the year has been the purchase of two of Web3’s most influential media brands by companies operating in the industry. During the same month (November), Coindesk was purchased by Bullish, a crypto exchange run by long-standing crypto firm EOS, and rival The Block was sold to Foresight Ventures—the investment arm of crypto exchange Bitget. We asked if their integrity would be compromised, critics believe it has already.

11. Singapore vs Hong Kong

There’s a battle to be Asia’s regulatory center, and it is between Hong Kong and Singapore. Singapore had traditionally taken a slow road but this year it doubled the number of licenses awarded to overseas platforms, Bloomberg reported, with Hong Kong progressing more slowly. A number of platforms have even withdrawn applications in Hong Kong.

12. Solana

2024 completed an incredible resurgence for Solana, which was mocked and written off by critics when FTX, one of its major backers, went bust in 2022. But Solana low gas fees and fast transactions have made it the go-to blockchain for memecoins and payment solutions, despite concern around centralization.

13. Stablecoins

The growth of Bitcoin and general vibrancy of Web3 has seen stablecoins—tokens fixed to fiat currency—thrive this year. Tether is the biggest player and its CEO claims it is on track to book $10 billion in profit this year alone. Smaller rival Circle is widely reported to be planning an IPO in the US, its books will make for fascinating analysis when that listing comes around.

14. Ethereum

Ethereum remains the silver to Bitcoin’s gold and while it got major performance updates in 2024, it fell behind as other chains surged thanks to faster speeds and lower transaction costs. Solana, Base and TON saw stablecoin volumes surge and some are tipping them to overtake Ethereum, a change that would indicate significant activity on each chain.

15. Payments

There was once a gulf between traditional payments and banking and crypto, but today the gap is narrowing. PayPal introduced a stablecoin to help connect its payment systems with the Web3 world, Stripe added support for crypto last year and it spent over $1 billion to buy stablecoin firm Bridge, while Solana has actively made partnerships to bring off and on-ramping into its ecosystem. This trend will only accelerate in 2025.

16. Identity

Decentralized identification is beginning to become a major topic in itself. We wrote about an anonymous polling service based out of Ukraine but major players including Worldcoin and Humanity (disclaimer: a project that works with Terminal) are gathering steam. Worldcoin has caught the attention of regulators who are concerned, but there are also some countries that have teamed up with the startup that’s co-founded by OpenAI CEO Sam Altman.

17. AI

AI is the biggest topic in Web3 for developers. Protocols like Fetch.ai and Ocean Protocol are building the tools to enable AI systems, while open source projects like ElizaOS are making it easier than ever to create AI agents. With big names like Coinbase dabbling in AI-based transactions, this will be a breakthrough year for AI in Web3.

18. Airdrops

The start of the year began with a number of major airdrops, a marketing strategy that’s unique to Web3, sending users thousands, if not tens or hundreds of thousands of dollars of tokens. The number of airdrops slowed as the year progressed and fewer new tokens launched, but the topic came alive again when Pudgy Penguins launched its token in December.

19. Base

Coinbase’s Base has been one of the year’s success stories, catapulting itself to become one of the most important blockchain networks in Web3. While Coinbase hasn’t done anything unexpected with Base, it has grown thanks to low fees, fast transfers and a connection to millions of users. Base’s big challenge this year is to be more decentralized and grab a meaningful share of developer activity.

20. North Korea

Hackers linked to the North Korean government are estimated to have stolen $1.3 billion in cryptocurrency—astonishingly that’s more than half of the total of all hacks in 2024 and double what the state is said to have stolen the previous year. We wrote about how its attacks are growing in sophistication, and why Web3 is a fertile hunting ground.

21. Justin Sun

Justin Sun has long been a polarizing figure with his TRON blockchain and his purchase and repurposing of once-beloved streaming site BitTorrent. Last year, Sun divided the Web3 industry by becoming involved in wrapped BTC (WBTC) a crucial token for linking Web3 tokens and Bitcoin—but he returned to publicity stunts when he bought an artwork featuring a banana duct-taped to a wall for $6.2 million and promptly ate the fruit.

22. Telegram

Telegram doubled down on its focus on Web3 with the launch of its own blockchain-based payment system and support for decentralized apps. This spawned mini games that rapidly accrued millions of users and created new revenue sources. Telegram’s associated TON blockchain has been a core part of its business, accounting for most of its assets as we noted in an earlier newsletter.

23. Prediction markets

Web3 prediction markets flourished in 2024 as platforms like Polymarket and Augur saw increased use for forecasting elections, sports outcomes, and market trends. US-based users are blocked but have found ways to use them, particularly Polymarket, which is likely to attract regulatory attention this year.

24. Donald Trump

There’s a lot to say about Donald Trump, who added to his Web3 businesses with a new NFT collection and a DeFi project. But Trump’s election win and his proclamations in favour of Web3, including his apparent desire to buy Bitcoin with the federal reserve, got the market excited. The big question is whether he will deliver on his promises, or whether they were simply opportunistic pledges as part of his campaign .

25. MicroStrategy

Michael Saylor’s MicroStrategy continued its bold Bitcoin accumulation strategy, passing 250,000 BTC in reserves by year’s end. The company’s steadfast commitment to Bitcoin remains a beacon of institutional support for the cryptocurrency despite market volatility—the company entered the Nasdaq 100 but its share price is down some 30% since highs in November.

26. IPOs

IPOs are also becoming a talking point as the industry enjoys a renaissance on price. Japanese exchange Coincheck listed on the Nasdaq in December through a reverse merger, but there’s constant speculation that fellow exchanges Kraken and eToro are seeking to go public, too. This is a topic to watch in 2025!

27. Chain abstraction

A major theme in 2024 was chain abstraction, where users interact with blockchain applications without worrying about the underlying chain. That has to be the goal if blockchains are to onboard mainstream users and fulfil the potential of decentralized internet services. Solutions like LayerZero and Axelar made cross-chain interactions seamless, fueling a new wave of multi-chain applications.

28. Governments

From CBDCs (central bank digital currencies) to crypto tax regulations, governments worldwide grappled with how to integrate Web3 into traditional systems. Countries like El Salvador doubled down on Bitcoin, while others like India introduced stricter controls. Governments were also critical in impacting Bitcoin’s price, with Germany selling off $2.8 billion in BTC over the same—a figure that could have been much higher were it done later in the year.

29. Gaming

It was a mixed year for Web3 gaming. Total investment dropped 8% year-on-year to fall below $1 billion across 2024, but Telegram emerged as a new platform to reach the messaging app’s 950 million active users. Titles like Notcoin and Hamster Combat took its tap to play concept to millions of users, which parlayed into token launches. But the industry is still to see a landmark Web3 game outside of casual mini games and it isn’t clear if 2025 will change that.

30. USA

The US remains the largest market for crypto and Web3, but regulatory uncertainty continues to be a sore point. All of this could change in 2025 with the Trump Presidency offering a different voice around Web3—ETFs have already landed in the US, and the industry will be keeping a keen eye on whether Trump comes good on his talk.

News bytes

Do Kwon, the co-founder of Luna-Terra which lost investors as much as $40B, has finally been extradited to the US to face charges after Montenegro, where he is currently located, chose the US over South Korea

The FTX Europe business has been sold to Backpack, another crypto exchange, for $32.7 million—the deal includes licenses in Cyprus and Backpack will offer a full suite of crypto derivatives throughout the EU

President-elect Trump is reportedly planning to include crypto policy among the executive orders and directives that will be issued on his first day in office link

Binance had a tough year with a $4.3 billion dollar fine in the US and co-founder Changpeng Zhao sentenced to prison but the exchange said it grew to 250 million users, up nearly 50%—marking a new era of tighter compliance it said it doubled its institutional users and increased its compliance team to 650 employees

Bhutan has mined Bitcoin for a number of years but now it is adding Bitcoin, Ethereum and Binance’s BNB token to the strategic reserves of Gelephu Mindfulness City (GMC), its new Special Administration Region

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io

The world of Web3 is crazy at the best of times, but it’s been a particularly wild ride over the last few weeks since Donald Trump won the US Presidential election. The President-elect has said a number of positive things about crypto and Bitcoin generally—his win saw the market prices jump with Bitcoin now on the gates of $100,000 per coin.

Bitcoin’s price fell back in recent days, but its overall rise led us to assess what major things have changed since Bitcoin was at $1,000-$2,000 less than 10 years ago.

Best,

Jon and Gary

What’s going on?

Twelve years ago—at the end of November 2013—Bitcoin surged to a then-record-high of $1,000. It would be another three and a half years before it reached $2,000.

It feels quite surreal to remember that now with the cryptocurrency on the verge of hitting $100,000. As a journalist, I’d written about Bitcoin for many years before I finally made my first (sadly non-substantial) BTC purchase via Coinbase in 2016 so it is fair to say I’ve followed it closely.

For this week’s issue, I wanted to look back at what has changed from those early days and what that might mean for the future of Web3.

SO WHAT?

1. Bitcoin is more accessible than ever

Bitcoin wasn’t easy to buy in the previous decade. Not like it is today.

Exchanges like Coinbase, Binance, Crypto.com and others allow users to buy Bitcoin in large quantities typically after verifying their identity. Then, since last year, there are ETFs that enable a different type of owner—one who doesn’t want to get into the weeds of buying (or storing) their BTC and one who may take investment advice from a financial advisor.

In 2016, when I bought my first fractions of Bitcoin, I went through Coinbase which had a strict purchase limit of $50 per day. But that felt like a safer bet than other exchanges, given how Mt Gox—once the world’s largest exchange holding 70% of all BTC—went belly up in 2014 after a theft saw 25,000 BTC from customers lost. That was $400,000-worth at the time,; today it’sthat’s more like $2.5 billion.

There’s a funny story of how Pantera, one of the first institutional purchasers of Bitcoin, had to ditch Coinbase to buy Bitcoin back in 2013—a move that made its partners billions of dollars.

Acquiring Bitcoin wasn’t just difficult, keeping hold of it was, too.

There was little trust in exchanges due to the Mt Gox theft, but Bitcoin technology was also slow and ungainly, too.

Self-custodial wallets, which allow users to keep hold of their crypto assets without relying on a third-party, were rudimentary and Bitcoin had a scaling issue. Transactions were expensive and slow, often leaving the sender to wonder when the asset transfer would be completed.

Miners were divided on what technology pathway to take in order to ease network congestion, as I wrote as recently as 2017.

Things look much different today.

Bitcoin has introduced a number of technology advancements that have eased network congestion, and even introduced new features including NFTs and memecoins.

Transactions now are far quicker and considerably cheaper. There’s still work to be done to improve both of these but the user experience is significantly improved, and there’s no longer that lingering worry that you accidentally sent assets to a wrong address or made another critical error.

The technology side may not be sexy, but it is an essential evolution that paved the way for Bitcoin to become more widely adopted.

2. Bitcoin is legitimate now

It seemed unlikely in the early days of Bitcoin, which was used to buy illicit goods on black markets like The Silk Road, that it could ever become an asset for institutional investors and even governments. But here we are.

The Bitcoin ETFs opened the door for anyone in the US to easily own BTC, not to mention banks and funds, too. That has’s spawned similar ETF products in other countries, and even an ETF for Ethereum in the US. Many other crypto-based ETFs are likely to follow in future years., you’d imagine.

Then there is government adoption.

Incoming President Trump wants to put Bitcoin into the US federal reserve. While there is plenty of debate as to whether that will actually happen—and if so, whether it will be a meaningful amount—other governments are already using Bitcoin as part of their economy.

• El Salvador introduced Bitcoin as legal tender in June 2021—today its BTC assets are worth over $500 million

• Bhutan has been quietly mining Bitcoin for years—today it is the fifth largest Bitcoin holder with assets worth over $1 billion

The corporate world is adopting Bitcoin in some areas, too:

• Both Tesla and Block (the payment firm formerly known as Square) park some of the funds in Bitcoin

• Meitu, a company that makes selfie apps and hardware, is Asia’s largest Bitcoin holder after it started buying crypto assets in 2021

• MicroStrategy has a very aggressive Bitcoin acquisition strategy: it is buying another $10 billion in Bitcoin funded by a $42 billion equity and debt fundraise—it now holds 2% of all BTC and is pledging to buy at above $100,000

The arrival of such imposing corporate Bitcoin custodians suggest that Bitcoin has found its market fit as an investment asset that’s akin to ‘Digital Gold’ rather than cross-border or payments, as it had been heading to a decade or more ago.

3. But has Bitcoin sold out?

The US Presidential election has sent the value of Bitcoin, Ethereum and other cryptocurrencies soaring. Bitcoin is up 39% over the past month at the timing of writing, Ethereum is up 48% and the list goes on…

Yet for all the green candles in the market, there is a strong sense that Bitcoin has adjusted its moral compass.

Satoshi Nakamoto created Bitcoin as a hedge from the dominant existing financial and political institutions that run the global economy, and caused the 2008 economic depression which Nakamoto’s creation was a response to. The idea was a borderless currency that couldn’t be manipulated or influenced by those in power.

Now, though, there’s excitement when MicroStrategy doubles down or Donald Trump, a man known for hyperbolic and jingoistic statements, airs vague plans to buy BTC for the US government.

Bitcoin’s continued progress and future price inflation is reliant on adoption from those very institutions that it was built to safeguard against—and that doesn’t feel like progress. That feels like Bitcoin has been co-opted.

It could be, though, that this is Bitcoin’s premise all along. To be the front door to Web3. To be the asset that brings liquidity into Web3 and eases the pathway for more disruptive services and strategies that are more tightly aligned with Nakamoto’s whitepaper.

At the recent Devcon conference in Bangkok laid on by the Ethereum Foundation, there were dozens of talks and events that focused on areas where decentralized internet or networks can improve society. Around elections, or better social networks and more inclusive, payment systems, to name just a few.

That cyber punk-like spirit hasn’t disappeared from Web3, but increasingly it feels like Bitcoin no longer defines the movement. Instead, it has moved on to mean something else altogether. A mainstream manifestation of Web3, which those who believe in the virtues of decentralization, will hope can act as a trojan horse for future Web3 innovation.

News bytes

We wrote about Pump.fun last month and the memecoin launch platform shut down its livestreaming feature after it was abused and poorly moderated

Gary Gensler will step down from his role as the chairman of the US SEC in January—it is not yet clear who will replace Gensler, who had taken an aggressive stance on regulating crypto

Alex Mashinsky, the former CEO of Celsius—the crypto lender that filed from bankruptcy in 2022—has pleaded guilty in a crypto fraud case

Coinbase is listing virtual memecoin Moodeng on its exchange—this is significant since Coinbase represents the most conservative and regulated exchange while Moodeng is the coin that kicked off frenzied memecoin activity and Pump.fun’s success

MicroStrategy CEO Michael Saylor has implored Microsoft to buy Bitcoin, giving a 3-minute presentation to the company’s board

Nike is closing down RTFKT, the NFT store it purchased in 2021 which sold virtual sneakers

That’s all for this week!

Share your feedback, questions or requests via email to: sowhat@terminal3.io