🔥GM, frens! 

Another day, another chance to sharpen our skills, swap alpha, and push forward.

Let’s see what surprises pop up this time around:

• 🤖 China’s new AI RATTLED the markets

• 🪞 Solana’s Teleport meets reality – dead after 8 months

• 🫡 Vaults.fyi x Ambire Wallet - an example of proper UX in crypto

• 😶 KuCoin exits the US: crime, compliance, or just a convenient cash grab?

In the meantime, our W3OF portfolio just hit the iconic meme digits (yep, totally by accident):

P.S. Got your own take on these? Drop by our Discord and let’s hear it!

China’s new AI RATTLED the markets

When DeepSeek, a Chinese-built AI model, hit the scene, nobody expected it to punch Wall Street and the crypto market in the face at the same time 👊 

But that’s exactly what happened. Stocks tanked, Bitcoin stumbled, and everyone started asking the same question - what the hell just happened?

Let’s talk about this 👇️ 

• DeepSeek’s launch wasn’t some new app drop - it was China going full on flex mode. The AI model boasted efficiency levels that could compete with OpenAI and Google at 0 cost for the regular user.

• The moment traders realized China could develop something along the lines of this on a shoestring budget, sentiment flipped.

Stonks got bodied. Nvidia, the golden child of AI hardware, saw its shares tumble 17% in a day. The AI arms race was now a geopolitical battlefield, and investors weren’t sure if the U.S. could keep its edge.

And of course, when stocks get shaky, crypto usually follows.

• Bitcoin took a 6% dive, Ethereum lost 7%, and some altcoins were bleeding double digits. Not because DeepSeek had anything to do with crypto - but because traders treat crypto like a risk-on asset.

It’s the same story every time: when stocks tank, Bitcoin catches a cold. Funds panic, risk gets cut, and BTC takes a hit, even if the reason has nothing to do with crypto itself.

The AI war gets political

Then came the paranoia. Some analysts called DeepSeek a “Sputnik moment” for AI, others called it a Chinese Trojan horse.

For example, the famous investor Kevin O’Leary called DeepSeek“China’s first shot” in the economic war against the U.S.

Politicians started questioning if the AI was being used to siphon Western data. The usual data privacy fears kicked in - was this just another TikTok situation, but worse? 🤔 

For crypto, this is just another lesson: it doesn’t live in a vacuum. When the macro scene shifts, Bitcoin and the broader market feel it.

If you actively trade you might want to keep an eye on this AI war because, whether we like it or not, it's going to continue moving the markets.

Solana’s Teleport meets reality – dead after 8 months

Teleport, a ridesharing app based on Solana was pitched as a gamechanger - it was supposed to have shot at shaking up an industry dominated by Uber and Lyft 🚗 

A decentralized, blockchain powered ridesharing network that promised lower fees for drivers, cheaper rides for users, and a system free from corporate interference.

The dream was simple: cut out the middlemen, put drivers in control, and use crypto payments to make everything more efficient 💰️ 

But eight months later, the dream is dead.

• Teleport has shut down, admitting that the market just isn’t ready for decentralized ridesharing.

• Turns out, building a Web3 version of Uber is a lot harder than slapping “on chain” onto a business model and hoping for the best 🤷 

The harsh reality check

• Teleport raised $9 million in 2022 but fully launched in mid-2024, and tried to differentiate itself with a 15% commission cut - far lower than Uber’s 25-30% 🪙 

• It gave drivers the option to accept payments in USDC or fiat. On paper, it sounded like a win for both riders and drivers.

In practice, it was a different story 🥴 

The app struggled with low driver availability, poor liquidity, and an adoption rate that simply couldn’t compete with the convenience of existing solutions.

• Riders didn’t want to deal with the friction of managing a crypto-based app, and drivers weren’t willing to take a chance on an ecosystem with a smaller user base and unproven earnings potential.

• Blockchain in general, as well as Solana’s infamous downtime and congestion issues are one thing when it comes to trading shitcoins, but entirely different when you’re trying to book a ride.

• No one wants to deal with blockchain transactions when they’re standing in the rain waiting for a car 🤔 

Teleport’s collapse is part of a larger pattern - Web3 projects trying to “disrupt” real world industries without solving the actual problems that matter to users.

Crypto native solutions are often more complex, less reliable, and harder to integrate into everyday life. People don’t want to think about wallets, gas fees, or smart contracts when they’re ordering a ride 🚕 

They want speed, convenience, and reliability - things Web3 still struggles to deliver at scale.

• We’ve seen this story before. Crypto social networks that nobody uses. Decentralized marketplaces that can’t compete with Web2 platforms. Blockchain gaming projects that overpromise and underdeliver. The reality is that most users don’t care about decentralization to that extent - but they do care about a seamless experience 🙃 

So until Web3 can offer good UX, it seems that mass adoption for these kind of projects will remain out of reach…

Talking about good UX...

Managing DeFi shouldn’t feel like a full-time job.

Chasing yields, tracking positions, and flipping between five different tabs just to move funds? That’s old news.

Here’s an example of how Vaults.fyi and Ambire Wallet are making it seamless - batch transactions cut out the hassle, letting you deposit into top DeFi protocols in under 60 seconds 👀 

No approvals, no wasted clicks - just straight to the yield.

This is what DeFi should feel like: smooth, efficient, and actually user-friendly 🫡 

KuCoin exits the US: crime, compliance, or just a convenient cash grab?

Another day, another crypto exchange paying off the US government like it’s a mob boss. KuCoin just took a $300 million hit after settling with the DOJ, pleading guilty to operating an unlicensed money-transmitting business 💵 

• The punishment is a two-year exile from the US and some conveniently fat fines for Uncle Sam’s pockets.

• The official allegations are failure to register with FinCEN, inadequate AML safeguards, and enabling illicit transactions. 

Sounds bad on paper, but let’s discuss it 👇️ 

1. “Unlicensed Money Transmitting”

The DOJ says KuCoin was illegally transmitting funds because they didn’t register with FinCEN. 

Yet, half of the CEX platforms (including Binance before it bent the knee) operated in the US for years without that paperwork. The real crime seems to be KuCoin not playing ball with regulators fast enough or buying enough lobbyists 🫠 

2. “Money Laundering Risks” – but no proven crimes

Prosecutors claim KuCoin facilitated billions in “suspicious transactions,” including potential ties to dark markets and fraud schemes. But here’s the thing - there seems to be no actual smoking gun 🔫 

• Did KuCoin process transactions from bad actors? Almost certainly - so does every major exchange.

• Did the DOJ provide a clear case of KuCoin knowingly laundering money? Nope. Just the usual vague accusations.

Funny how no traditional banks get this level of scrutiny - even after some banks literally forged millions of fake accounts and some of them even got caught washing cartel money 🥷 

3. “Optional KYC”

KuCoin allowed 1.5 million US users to trade without KYC for years. But here’s the kicker - it only became a problem after regulators decided it was. 

KuCoin eventually introduced stricter KYC in 2023, but that wasn’t enough. Now, they’re being penalized for not doing it sooner.

Pay up or get out

Let’s be clear - this doesn’t look like it’s about protecting users or stopping financial crime. If it were, FTX wouldn’t have been allowed to operate under US regulators’ noses until it imploded 💨 💸 💸 

This is definitely about control and money:

• KuCoin pays $300M → DOJ takes a victory lap → US regulators look “tough on crypto” and get political points 🤦‍♂️ 

• US users lose another offshore option → More market share consolidation for compliant players (aka the ones cutting deals with the SEC).

• Meanwhile, VCs and other insiders shift back to the US → Because their money shapes policy, not the other way around.

The takeaway is, If you’re a crypto company, you’re either bending the knee, buying influence, or leaving the industry entirely. And if you’re an investor, you’re left with fewer options and more government interference in what’s supposed to be a free market 🤷‍♂️ 

Another lesson here is the same one crypto veterans have been repeating for years: exchanges are a temporary convenience, not a bank.

• Not your keys? Not your coins. If your funds are sitting on an exchange, they’re not yours 🗝️ 

• Regulators don’t care about your financial freedom. They’ll shut down, fine, or restrict any platform they can’t control 🐖 

• The best defense? Cold storage. If you actually believe in crypto’s core principles, self-custody is the only option 🔒️ 

KuCoin might just be the latest casualty. Who’s next? Better not be the CEX that holds your funds.

Other worthy reads

Shitcoin launchpads are still a meta?

Coinmetric’s RWA update:

A list of potential airdrops that’s making rounds on CT:

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

Brought to you by Ambire: The Only Web3 Wallet That You’ll Need!