GM, frens! 🥂

We made it through the holidays in one piece - cheers to starting the new year with a (hopefully) fresh slate of green candles! 🥳 

As we dust off the confetti and get used to writing “2025,” let’s check out what happened in the space:

• 📜 Breaking down BIG changes in crypto laws for 2025

• 🥷 Crypto scams cooled off in December

• 🧼 When staking rewards outlast the marriage: Solana’s new soap opera

• 🔥 Elon Musk’s memes fuel crypto dumpster fires

Our W3OF degen portfolio is about as lively as that leftover New Year’s champagne - still bubbling, but not exactly blasting off. We’ll keep our eyes peeled for bigger moves on the horizon 🫡 

Got a new year’s strategy you’re dying to share? Swing by our Discord - let’s swap insights and keep each other hyped for what’s next!

Breaking down BIG changes in crypto laws for 2025

The crypto world is no stranger to change, but 2025 is shaping up to be a seismic year for regulations across the globe.

With major shifts coming from the U.S., Europe, and Asia, everyone in the crypto space - from casual hodlers to massive institutions - needs to pay attention.

Let’s break it all down and see what’s ahead 👇️ 

The US

SEC makeover:

• Over in the U.S., the SEC is undergoing a leadership shake up. Paul Atkins, a likely advocate for business-friendly policies, has been nominated (as we’ve speculated before) to replace the much-hated evil clown Gary Gensler 🤡 

• Gensler’s approach leaned heavily on enforcement, earning him endless criticism for stifling innovation.

• Atkins is expected to bring a more open and industry-friendly approach, signaling a potential thaw for crypto 🫠 

But don’t get too comfy - lawsuits and compliance hurdles aren’t going to just vanish overnight.

Other legal developments to watch 👀

• The Stablecoin Act: This legislation aims to establish clear guidelines for stablecoin issuers, including reserve transparency and redemption processes.

• The FIT21 Act: Designed to integrate crypto into traditional financial systems, this bill could clarify the legal classification of digital assets as either securities or commodities.

• Executive Orders on crypto: Trump’s administration is rumored to be considering executive actions to reduce tax burdens on crypto transactions and encourage the adoption of bitcoin and other digital assets 🧠 

Europe’s MiCA moment

On the other side of the world, the European Union’s Markets in Crypto-Assets (MiCA) regulation has officially taken effect, setting a unified framework for the oversight of digital assets across all member states.

• MiCA is introducing strict guidelines for stablecoins, token issuance, and crypto service providers 💶 

• With great changes come great challenges, though. While MiCA provides much-needed clarity, smaller firms might be finding it tough to meet the stringent compliance requirements. This could lead to further market consolidation, with larger players gaining even more dominance.

Interestingly, MiCA largely leaves some decentralized protocols and NFTs alone altogether, focusing instead on centralized services. But it places privacy tokens under closer scrutiny, raising questions about the future of some niche markets.

Tether became the poster child of MiCA’s immediate impact 🥶 

• As MiCA enforcement began, Tether failed to meet its stringent licensing requirements. The regulation demands that stablecoin issuers hold licenses to operate within the EU and comply with e-money regulations tied to a single national currency. Tether, pegged to the US dollar, didn’t qualify 🤷 

Major exchanges like Coinbase and Binance delisted USDT from their European platforms by December 30, triggering a sharp market reaction:

• USDT’s market cap saw its largest weekly drop in two years, falling to $137 billion - a significant blow to its dominance.

Despite the delisting, Tether remains a global heavyweight. Over 80% of its daily trading volume originates from markets outside the EU, particularly in Asia and the US.

Analysts predict that while the EU’s move could temporarily disrupt liquidity, its overall impact will remain localized 💣️ 

In response, Tether has partnered with MiCA-compliant platforms like StabIR and Quantoz Payments to navigate the new rules, but we’re yet to see what can come out of that.

Hong Kong: a high-stakes balancing act

Hong Kong continues its push to reclaim its status as a global crypto hub, in contrast to mainland China 🤔 

With one of the strictest regulatory regimes in the world, the city allows only a handful of licensed exchanges to operate. While this limits market access, regulators argue it enhances investor protection and reduces systemic risks.

Recent legal cases, including those involving DAOs and fraud, highlight Hong Kong’s focus on enforcement ⚖️ 

By setting clear legal precedents, the city aims to establish itself as a leader in crypto governance in Asia.

AI becomes an issue

• The rise of AI in the crypto world is adding a new layer of complexity.

• From algorithm-driven DAOs to trading bots, the intersection of AI and crypto is a regulatory minefield.

Who’s responsible when an autonomous bot breaks the law? How do you regulate something that evolves on its own? 🤖 

• Expect 2025 to bring court cases that set important precedents for AI in the crypto space. As the law tries to catch up, the industry will need to adapt to a future where AI isn’t just a tool but a participant in the ecosystem 🔧 

All in all, the legal landscape for crypto in 2025 is one of both opportunity and challenge.

With global efforts aiming for clarity and consistency, this could be the year where the industry finds its balance between innovation and regulation. The road ahead isn’t without hurdles, but we can hope it’s one step closer to a more defined and sustainable future for crypto 💎 

Crypto scams cooled off in December

As 2024 wrapped up, the world of crypto scams, rugs and hacks decided to take a winter vacation.

December recorded "only" $28.6 million in losses - a mere breeze compared to November's $63.8 million. Have the rug Grinches finally found some holiday cheer?

The highlight was GemPad, a DeFi platform, taking a ~$2.1M L after attackers found a smart contract vulnerability 🥷 

Another $1M vanished from FEG, thanks to a cross-chain messaging error.

And let's not forget the infamous 2022 LastPass backup theft. “A gift that keeps on giving” to this day 🤦‍♂️ 

But if you zoom out, the year wasn’t so jolly 👇️ 

• Across 165 incidents, $2.3 billion in crypto was wiped out - a 40% jump from 2023. Hacking is responsible for $1.47 billion.

• Scams and rug pulls lagged at a "humble" $28 million. No matter how you slice it, the thieves had a feast.

• Whether decentralized or centralized, platforms were prime targets. DeFi bore the brunt with 51.4% of losses, while CeFi came close at 48.6%. Ethereum and Binance Smart Chain remained the hackers' favorite playgrounds.

So, while December brought a relative cooldown, the industry’s pains are far from over. Hacks are still evolving, and the only way forward is better security and smarter practices.

Here’s hope that 2025 can bring fewer heists, smarter tech, and a little less chaos.

When staking rewards outlast the marriage: Solana’s new soap opera

Crypto isn’t just about moonshots and rug pulls - it’s also about relationships going off the rails. Apparently.

Check out Stephen Akridge, co-founder of Solana, and his ex-wife Elisa Rossi, who’s taken their split to the next level with a lawsuit that’s part drama, part crypto soap opera 🙄 

• Back in March, the divorce papers were signed, and Elisa walked away with access to three SOL wallets. All seemed good - until it wasn’t. Turns out, Stephen kept staking those tokens, raking in rewards while Elisa remained blissfully unaware.

• Elisa says she only found out about the secret staking hustle in May, and let’s just say she wasn’t thrilled. She’s now suing Stephen, accusing him of leveraging her lack of crypto knowledge to keep control of the assets and make some extra SOL on the side.

Honestly, Stephen, teaching her how to unstake might’ve been easier than a court case.

Elisa says Stephen’s sneaky staking raked in over $25,000 in rewards. While that might sound like a rounding error in crypto billionaire terms, it’s apparently enough to justify dragging him into court 🔨 

This whole fiasco lands at a time when Solana has been riding high (certainly a coincidence 🙃 ) but it’s a bad look when one of its pioneers gets dragged into a courtroom over staking rewards.

It’s ironic, really, crypto was supposed to decentralize trust, but here we are, watching a very centralized trust issue play out in court.

Elon Musk’s memes fuel crypto dumpster fires

Elon Musk just set the shitcoin world on fire again - and this time, with a memecoin that couldn’t possibly be more disgusting 🐸 

• The trigger was a post from Musk featuring an old meme of Apu Apustaja (a slightly jankier cousin of Pepe the Frog) grappling with IRS math, paired with a cheeky takedown of capital gains taxes on, well, CUMROCKET and other ultradegen shitcoins.

• In this case, Musk tweeted a meme poking fun at tax season, and before you could even blink, degens had already dragged CUMMIES out of obscurity and onto a rocket ride.

• The tweet sent trading volume for CUMROCKET (CUMMIES) into orbit, pumping it to 1451% and the marketcap to $15 million in a microsecond 💰️ 

But this also isn’t the first time he did it recently. He also changed his profile name to “Kekius Maximus” for a while - based on another Pepe meme - causing other memecoin to also get a wild pump.

The wild part is that everyone knows how absurd it is. Even the degens will tell you that these are pump and dump plays, where the only winners are those who cash out first. That’s IF they can even cash out.

But hey, who needs logic when you’ve got memes?

After all, why build something of value when you can YOLO into something called CUMROCKET and hope for the best? 🤐

Also, can you really write off gas fees for minting NFTitties? Let Musk know - as a government official he might need that info.

Other worthy reads

2025 prediction from Alex Kruger:

An update on Polymarket, by EffortCapital:

Some TA by Eugene Ng:

MEMES

That's all for now, frens.

We'll meet in a week! And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us, and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

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