Crypto firms operating in the EU must report transactions and holdings in a standardised format.
Regulators will gain wider access to user data, raising privacy concerns.
ESMA may oversee major exchanges, centralising EU crypto supervision.
The European Union has unveiled a new set of rules that will significantly change how crypto-asset service providers operate across the bloc.
These changes are set to take effect on January 1, 2026, marking one of the EU’s most ambitious attempts to tighten control over crypto activities.
The rules will introduce standardised reporting requirements that will give tax authorities deeper visibility into the cryptocurrency market.
Tougher reporting requirements are coming
At the heart of the new framework is the expansion of the Directive on Administrative Cooperation, known as DAC8.
This update requires crypto exchanges, wallet providers, and other digital-asset operators to report customer holdings and transactions in a standardised digital format.
Once submitted, these reports will be automatically shared among EU tax authorities, enabling regulators to monitor crypto flows and trading activity more effectively.
The regulation, formalised under Implementing Regulation (EU) 2025/2263, also mandates the creation of a comprehensive Crypto-Asset Operator register.
Each reporting operator will receive a unique 10-digit identification number, starting with an ISO country code, to simplify cross-border supervision.
Even when an operator is removed from the register, the information must be retained for up to 12 months, ensuring continuity in regulatory oversight.
Member states are expected to submit annual assessments to the European Commission using standardised reporting templates.
Privacy under the microscope
While the regulation is framed as a measure to combat tax fraud, financial crime, and market abuse, it raises significant privacy concerns for crypto users.
The Transfer of Funds Regulation, which extends the so-called “travel rule” to crypto transactions above €1,000, already requires identification of both senders and recipients, including interactions with self-hosted wallets.
Users may also be asked to verify ownership of their private wallets.
Combined with DAC8, these measures give regulators unprecedented insight into individual trading behaviour, wallet flows, and the activities of service providers.
Large crypto operators will be expected to carry out detailed customer due diligence, report suspicious activities, and disclose energy consumption for their operations.
Supporters of the new rules, including ECB President Christine Lagarde, argue that a unified EU approach will replace fragmented national supervision, which has historically hindered consistent enforcement.
However, the plan to give the European Securities and Markets Authority direct oversight over major cross-border exchanges and clearing houses has drawn criticism from smaller financial hubs, including Luxembourg, Malta, and Ireland.
They warn that consolidating supervisory powers could raise compliance costs and disadvantage operators in smaller jurisdictions.
The Financial Stability Board, the G20’s leading financial watchdog, also recently noted that strict privacy laws worldwide often impede cross-border cooperation.
ALT5 Sigma, a crypto treasury company with ties to US President Donald Trump, replaced CEO Jonathan Hugh and cut ties with chief operating officer Ron Pitters in November as part of a broader leadership overhaul.
Tony Isaac, the president of ALT5 Sigma and a member of the company’s board of directors, has been appointed as acting CEO, while the company works with Hugh to “finalize the terms of his departure,” according to a Securities and Exchange Commission (SEC) filing submitted on Wednesday.
ALT5 Sigma’s crypto treasury strategy includes purchasing tokens from World Liberty Financial (WLFI), a decentralized finance platform tied to the Trump family.
The company said that the departures were “without cause.” Cointelegraph reached out to ALT5 Sigma, but did not receive a response by the time of publication
ALT5 Sigma discloses the leadership shakeup in a recent SEC filing. Source: SEC
The company raised $1.5 billion in August to create a crypto treasury dedicated to purchasing WLFI tokens, with Eric Trump, the son of US President Donald Trump, serving as a director on its board.
World Liberty Financial and other Trump-linked crypto ventures have come under scrutiny from Democratic lawmakers in the United States, who argue that the president and his family’s involvement with the industry represents a conflict of interest.
Trump-linked crypto projects come under fire from US lawmakers
In August, rumors surfaced that venture capitalist and ALT5 shareholder Jon Isaac was under investigation by the SEC for earnings inflation and insider sales, which the company denied.
“For the record: Jon Isaac is not, and never was, the president of ALT5 Sigma, and he is not an advisor to the company. The company has no knowledge of any current investigation regarding its activities by the US SEC,” ALT5 Sigma said in response.
The WLFI token has been in decline amid scrutiny from US lawmakers. Source: CoinMarketCap
Eric Trump scaled back his involvement with the company in September to comply with Nasdaq listing rules and was designated as a board observer, according to an SEC filing.
In November, Democratic lawmakers in the US urged Pam Bondi, the US attorney general, to investigate allegations that WLFI sold tokens to sanctioned entities in North Korea and Russia.
The lawmakers said the Trump family’s crypto ventures and the $1 billion in profits from their projects represent a national security threat and a way to peddle influence through selling access to the president.
The crypto markets staged a convincing comeback on Nov. 27, snapping a prolonged period of stagnation as a critical shift in the United States’ liquidity forced capital back into risk assets.
While the headline price action saw Bitcoin surge 5% to reclaim the psychologically vital $90,000 threshold and Ethereum clear $3,000 for the first time in a week, the true story lies in the fact that the rally provides much-needed relief to a market that had been grinding lower for a month
Indeed, the extent of the recent capitulation is evident in trailing returns. Data from Santiment shows that, leading into this week, losses among average wallet investments in the major digital assets were deeply underwater.
According to the firm, Cardano’s investors had shed an average of 19.2% of their value, Chainlink traders were down 13.0%, and even the market leaders were underwater, with ETH and Bitcoin nursing losses of 6.3% and 6.1%, respectively. XRP fared slightly better but was still down 4.7%.
Crypto Assets Undervaluation (Source: Santiment)
So, the current 3.7% lift in total crypto market capitalization appears less driven by sector-specific news and more by a structural reopening of the fiscal spigot, combined with a sudden thawing in risk appetite among institutional allocators.
Why the crypto market rallied
To understand the mechanics of this rally, one must look past the order books and at the US Treasury’s balance sheet.
In an X post, asset management firm Ark Invest explained that the primary catalyst for the reversal was the normalization of liquidity following the resumption of US government operations.
The six-week government shutdown, which concluded recently, acted as a massive drain on the financial system, effectively siphoning approximately $621 billion in liquidity. This contraction left markets parched, hitting a multi-year low in liquidity on Oct. 30.
US Market Liquidity (Source: Ark Invest)
However, the reopening of federal operations has begun to reverse this dynamic. While roughly $70 billion has trickled back into the system so far, the “tank” is still overly full; the Treasury General Account (TGA) currently holds elevated balances near $892 billion.
Against a historical baseline of $600 billion, this deviation suggests a massive cash deployment is imminent.
So, as the Treasury normalizes this account over the coming weeks, that excess capital is mathematically mandated to flow back into the banking sector and the broader economy.
For macro-aware crypto traders, this represents a predictable wave of liquidity that historically buoys risk assets first.
Meanwhile, the fiscal tailwind arrives alongside a pivot in monetary messaging.
Ark noted that the “higher for longer” narrative that capped upside earlier in the quarter effectively dissolved this week as a chorus of Federal Reserve officials, including Governor Christopher Waller, New York Fed President John Williams, and San Francisco’s Mary Daly, telegraphed a willingness to cut rates.
This coordinated dovishness has repriced the probability of a near-term rate reduction to nearly 90%.
Considering this, the firm highlighted a critical calendar convergence: the TGA cash injection is set to align with the scheduled conclusion of Quantitative Tightening (QT) on December 1. The firm noted that the removal of the Fed’s balance sheet runoff removes a persistent dampener on liquidity, creating a setup where beta assets face fewer headwinds.
Institutional interest returns
Apart from the strong liquidity plumbing, institutional flows have painted a nuanced picture of where allocators are positioning for the year-end.
Spot ETFs saw a distinct rotation toward Ethereum. For the fourth consecutive session, ETH products attracted net inflows, totaling approximately $61 million, according to SoSo Value data.
Ethereum ETF Flows in November (Source: SoSo Value)
Meanwhile, Bitcoin funds saw more modest inflows of around $21 million, while XRP investment vehicles added roughly $22 million. Conversely, Solana products faced headwinds, seeing $8 million in redemptions.
This flow profile suggests the current bounce is a “repair” operation rather than a speculative frenzy.
Timothy Misir of BRN told CryptoSlate that while buyers have re-engaged, volumes remain relatively thin. At the same time, he pointed out that open interest has not spiked significantly, despite perpetual futures funding rates having reset to positive territory.
This lack of froth is constructive, as it implies that weak hands have washed out and that accumulation is occurring without the dangerous leverage that often precedes a crash.
Risks ahead
For crypto traders, the immediate focus is whether this liquidity-fueled bounce can turn into a sustained trend, as significant risks loom ahead.
Misir pointed out that the “swing factor” remains the macro environment, as a hot inflation print could force the Fed to walk back its dovish signaling, instantly tightening conditions.
Furthermore, the upcoming holiday season often leads to thinning order books, where lower liquidity can exacerbate volatility. At the same time, a sudden spike in exchange deposits would signal that whales are using this liquidity event as exit liquidity rather than an entry point.
Considering this, Misir concluded that if Bitcoin can hold the $90,000 line, the top asset could eye the $95,000 zone as the next major test.
However, a failure here would likely see a retreat to the $84,000 pivot area.
Countries around the world are grappling with inflation, and in many places, investors and everyday savers are turning to crypto to protect their savings.
The early 2020s saw a sharp uptick in global inflation rates amid government stimulus programs during the COVID-19 epidemic. Supply chain disruptions led to increased costs for businesses, and food and energy prices rose following Russia’s war in Ukraine.
Central banks responded aggressively, hiking interest rates and easing pressure on supply chains. As a result, inflation rates have somewhat calmed in the last two years.
Still, some countries are suffering from extremely high inflation, even soaring into the triple digits. In these places, crypto has become one tool for people to save their finances.
Bolivia
Inflation rate (October 2025): 22.23%
Bolivia’s fiat currency, the boliviano, has seen skyrocketing inflation over the last year. Although it has fallen since hitting a high this summer, it remains above 20% as of October 2025.
The economy has declined over the last decade. Bolivia’s usable foreign reserves fell from $15 billion in 2014 to $1.98 billion by December 2024, equivalent to just over three months of imports.
Crypto use has grown in the country as a result. According to Chainalysis’ 2025 crypto adoption index, annual crypto transaction volume from June 2024 to June 2025 amounted to $14.8 billion.
Over the summer, shops in Bolivia began to display price tags in Tether’s US dollar-pegged stablecoin USDT (USDT). A notice next to one of the price tags read, “Our products are priced in USDT (Tether), a stable cryptocurrency with a reference price informed daily by the Central Bank of Bolivia, based on the rate from Binance (a cryptocurrency trading platform).”
Tether CEO Paolo Ardoino shared photos of goods being sold for USDT. Source: Paolo Ardoino
Adoption is also occurring at the government level. On Tuesday, Bolivia’s economic minister, Jose Gabriel Espinoza, announced that banks will now be allowed to offer crypto custody. Crypto will also function as legal tender for savings accounts as well as for credit products and loans.
Venezuela
Inflation rate (April 2025): 172%
Inflation has run rampant in Venezuela. According to Trading Economics, the inflation rate crossed 170% in April 2025. More recent estimates from the International Monetary Fund (IMF) indicate an annual inflation rate of 270% for 2025. By October 2026, the IMF projects an annual inflation rate of 600%.
As a result, Venezuela ranks fourth in Latin America for value received in cryptocurrencies. Venezuelans received $44.6 billion in digital assets from July 2024 to June 2025, according to Chainalysis.
According to The New York Times, President Nicolas Maduro has managed to “rewire Venezuela’s economy to stablecoins” with many Venezuelans referring to stablecoins as “Binance dollars.”
María Corina Machado, a former Venezuelan presidential candidate, has publicly supported the use of Bitcoin (BTC). Machado was awarded the Nobel Peace Prize for her opposition to Maduro but has since become a center of controversy for pushing exaggerated or false claims to justify US military actions against Venezuela.
For the first time in history, the Nobel Peace Prize was awarded to a Bitcoiner.
Congratulations to Maria Corina Machado, and also to @HRF who continues to explain to the world what is so obvious to so many-
Argentina’s inflation rate hit a high of nearly 300% in April 2024 and was 200% when President Javier Milei took power.
Milei has managed to address the inflation by a hardline austerity program, making sweeping cuts to public spending and subsidies, as well as ending domestic money printing.
Argentina’s inflation is still high, but has been on a downward trajectory. Source: Semaforor
This sweeping program, which Milei has symbolized with a chainsaw at political rallies, has led to a dramatic drop in the inflation rate, which now stands at just over 30%. It is still one of the highest inflation rates in the world.
The front-runner of the Argentine presidential election, Javier Milei, swinging a chainsaw during a rally
The chainsaw symbolizes the cuts in public spending that are in his electoral program:
“It’s time to put an end to the caste. We are tired of politicians who steal & lie” pic.twitter.com/1l20XcK0UU
According to Chainalysis, Argentina is the second-largest country in Latin America in terms of value received in cryptocurrency, at $93.9 billion in transaction volume. Use has been growing relatively stably.
Argentinians may be using crypto and stablecoins to preserve their finances, but adoption of crypto is not reflected at the government level. Despite crypto-friendly rhetoric from Milei and some deputies, the government has done little to formally adopt digital assets.
Turkey
Inflation rate (October 2025): 32%
Turkey’s inflation peaked in 2022 for a number of reasons, one of the most notorious being President Recep Tayyip Erdoğan’s belief that high interest rates lead to inflation. Using this unorthodox policy, the president lowered interest rates dramatically. This, in combination with increasing production and import costs, saw inflation peak at 85% in October 2022.
A return to more conventional methods of monetary policy has lowered the inflation rate to just over 30%. However, it remains one of the highest globally.
Many people in Turkey have turned to cryptocurrencies for payments and investments. According to Chainalysis, Turkey leads the Middle East and North Africa, with $200 billion in crypto transactions from July 2024 to June 2025.
Turkey leads the MENA region in crypto transactions. Source: Chainalysis
As inflation lowers, the historical preference for stablecoins in Turkey has become increasingly dominated by altcoin trading.
“The timing of this altcoin surge coincides with broader regional economic pressures. It may reflect a desperate yield-seeking behavior among remaining market participants, who, faced with diminishing purchasing power and a more restrictive regulatory regime have embraced greater risk in pursuit of outsized returns,” Chainalysis stated.
Iran
Inflation rate (September 2025): 45.3%
Iran’s inflation rate is on the rise again, crossing 40% in June and reaching 45% as of September.
The country has been plagued by inflation for years. Iran is currently under a heavy international sanctions regime, both in terms of products allowed for import and its ability to use international payment rails.
Government spending has increased while the costs of living have risen. The government is also planning a redenomination of the local currency, the rial, as transactions in rial notes have become unwieldy.
Iran has long recognized the potential for crypto to avoid sanctions. It legalized mining in 2019, and exchanges are popular among retail investors. However, the space is heavily regulated. As far as mining is concerned, high energy tariffs (the result of the country’s ongoing energy crisis) have driven many miners underground.
Despite this, crypto inflows are growing and are on track to surpass 2023 and 2024.
Over the last year, inflation in Nigeria has decreased from over 30% to just 16% at the time of writing. It has fallen to its lowest level in three years.
Nigeria marks three-year low in inflation. Source: Trading Economics
Improved supply conditions have relieved one of the primary factors driving inflation, food price inflation. This fell to 16.87% in September from 21.87% in August, according to Reuters. President Bola Tinubu introduced several reforms, including the removal of fuel subsidies and the unification of the exchange rate. In August, the Central Bank of Nigeria cut its benchmark interest rate for the first time in three years.
According to Chainalysis, Nigeria leads Sub-Saharan Africa in crypto transactions, receiving $92.1 billion in value from July 2024 to June 2025.
“Nigeria’s scale is tied not only to its population and tech-savvy youth, but also to persistent inflation and foreign currency access issues that have made stablecoins an attractive alternative,” they stated.
Global inflation may be slowing down, but in areas where the local monetary system still cannot be relied upon, crypto remains a viable and attractive alternative.
Bitcoin’s hashrate is near record levels, yet miner revenue per unit of compute has fallen to record lows, pushing the network into a ‘high-security, low-profitability’ phase.
While the network’s hashrate has pinned itself above the one-zettahash watermark, which is a record for aggregate computing power, the revenue underpinning that security has disintegrated to historic lows.
Still, the system appears robust to the protocol. However, the mining sector is undergoing a slow-motion liquidation in the capital markets.
Bitcoin mining difficulty folds, hashrate holds
According to Cloverpool data, Bitcoin mining difficulty slipped approximately 2% at block height 925,344 on Nov. 27 to 149.30 trillion. This was the second consecutive decline this month, yet block intervals remain stubbornly close to the ten-minute target.
This falling difficulty coincides with a period where Bitcoin mining economics have become increasingly punishing.
Hashprice, the industry’s metric for daily revenue per unit of compute, has collapsed almomst 50% in recent weeks to an all-time low near $34.20 per petahash per second. At this valuation, the average operator’s gross margins have evaporated.
Nico Smid, the founder of Digital Mining Solution, explained that this means fleets running hardware with an efficiency below 30 joules per terahash now require all-in power costs below 5 cents per kilowatt-hour to break even, once rent, labor, and maintenance are factored in.
Bitcoin Hashprice Breakeven (Source: Nico Smid)
This threshold has forced a bifurcation, where thousands of older rigs are going dark, only to be immediately offset by industrial-scale deployment.
However, this does not explain why total hashrate has barely budged and why aggregate security work remains above one zettahash.
The answer lies in the fleet’s composition. Small miners without access to cheap power are capitulating. On the other hand, deep-pocketed operators with long-term power purchase agreements (PPAs), sovereign-linked facilities, or off-grid generation are holding steady or expanding.
For context, stablecoin issuer Tether has reportedly halted its mining venture in Uruguay, citing high energy costs and tariff uncertainty. So, if a firm of Tether’s stature is unable to lock in durable terms, smaller miners face even steeper odds.
Consolidation through distress
The two consecutive BTC difficulty drops are not a signal that the protocol is faltering. Instead, they are a signal that the network’s competitive set is changing.
When revenue compresses, distressed fleets migrate. Creditors seize inefficient sites, and brokers repackage used rigs for lower-cost regions. The most efficient miners sweep up stranded capacity.
So, the current headline hashrate resilience is, in practice, consolidation. The network appears stronger by the usual metric, while the number of entities capable of funding that strength shrinks.
This concentration carries tradeoffs. Exposure tightens to single points of failure, from extreme weather to grid curtailments and local permitting fights.
At the same time, financing also shifts toward a narrower group of balance sheets that can secure fixed-price energy, post collateral for interconnection, and carry inventory through long drawdowns.
As a result, the capital markets are rethinking the definition of a miner.
So, instead of pure-beta Bitcoin proxies, many investors now treat the sector as power-rich data center businesses with a volatile crypto overlay. This is evidenced by the fact that many miners are now embracing high-performance computing (HPC) clients to shore up earnings amid falling BTC revenue.
Bitcoin mining shifting map of power
Geopolitics is also redrawing the Bitcoin hashrate map. China’s estimated return to roughly 14% of global hashrate, despite the blanket 2021 ban, marks a structural turn.
Underground and gray-market operations have rebuilt a footprint that almost disappeared. Energy-rich provinces with surplus hydro or coal-adjacent industrial loads allow sites to operate intermittently and largely off the radar.
This “zombie capacity” keeps hashrate elevated, acting as a permanent tax on compliant Western miners.
Squeezed by higher financing costs, stricter disclosure requirements, and volatile interconnection timelines, operators can compete on cost only if they lock multiyear power contracts, migrate to more flexible grids, or share infrastructure with data center tenants.
Unsurprisingly, this has impacted their business, with public mining stocks erasing nearly $30 billion of market value in November.
Bitcoin Mining Stock Market Cap (Source: BitcoinMiningStocks.io)
These BTC miners saw their stock slide from a peak near $87 billion to about $55 billion before a partial rebound toward $65 billion.
What to Watch Next
Considering this, industry players are monitoring three specific dials to gauge the next phase of this restructuring.
The first is difficulty: deeper negative retargets would confirm rolling shutdowns among high-cost fleets. A sharp snapback would imply sidelined capacity is re-energizing as power contracts reprice or as fee spikes return.
The second is transaction fees. Inscription waves and persistent mempool congestion can lift miner revenue for weeks at a time, but the base case is a lean fee environment that keeps hashprice pinned near breakeven for many fleets.
The third is policy and supply chain. Any escalation in export controls, security reviews, or grid interconnection rules could shift the cost of capital overnight.
Miners have already begun adapting by broadening their business mix. Many are repositioning as data infrastructure firms, signing multiyear contracts for AI and high-performance computing to smooth cash flow that Bitcoin alone cannot guarantee.
That model can preserve marginal sites and retain upside exposure if the hash price recovers. Still, it also pulls scarce power toward steadier margins, leaving Bitcoin as the flexible sink that absorbs volatility.
For Bitcoin, the immediate risk is not a collapse in security. The zettahash era has delivered record aggregate work, and the protocol continues to calibrate on schedule.
The risk is structural: a system that looks healthier by aggregate metrics while relying on fewer actors to provide the work.
If capital remains tight and energy costs stay elevated, more asset sales, mergers, and migrations toward friendly jurisdictions are likely. However, if prices and fees rebound, some of today’s idled capacity will return, but often under new owners and new power terms.
That is the paradox of the zettahash age. At the protocol level, Bitcoin has never looked stronger. Beneath the surface, the mining business is facing significant distress.
A malicious Google Chrome browser extension is letting users trade on Solana, while quietly skimming a fee from every swap into the creator’s wallet.
According to a Tuesday report by cybersecurity company Socket, the Google Chrome extension allows users to trade on Solana (SOL) from their X social media feed. Unlike typical wallet-draining malware that tries to steal the entire balance, Crypto Copilot “injects an extra transfer into every Solana swap, siphoning a minimum of 0.0013 SOL or 0.05% of the trade,” Socket found.
On the back end, Crypto Copilot uses the decentralized exchange Raydium to perform swaps for the user, but appends a second instruction that transfers SOL from the user to the attacker. The user interface only shows the swap details while wallet confirmation screens “summarize the transaction without surfacing individual instructions.”
“Users sign what appears to be a single swap, but both instructions execute atomically on-chain,“ Socket said.
Featured image of the Google Chrome extension. Source: Chrome Web Store
Socket noted that it submitted a takedown request for the extension to the Chrome Web Store security team. The malicious extension is relatively long-lived, having been published on June 18, 2024, but the store reports that it only has 15 users at the time of writing.
Crypto Copilot markets itself as a convenience tool allowing Solana traders to execute swaps directly from Twitter. It promises “allowing you to act on trading opportunities instantly without the need for switching between apps or platforms.”
The latest of many malicious Google Chrome extensions
Google Chrome’s massive user base and extensible design have long made its extension ecosystem a target for crypto-focused scams. Earlier this month, Socket warned that the fourth-most-popular crypto wallet extension in the Chrome Web Store was draining user funds. In late August, decentralized exchange aggregator Jupiter said it had identified another malicious Chrome extension that was emptying Solana wallets.
In June 2024, a Chinese trader reportedly lost $1 million after installing a Chrome plugin called Aggr. That extension stole browser cookies to hijack accounts, including access to the trader’s Binance account.
Tether, the issuer of the USDT stablecoin, has spent the past year accumulating Bitcoin and gold at a pace that puts it on par with several sovereign treasuries.
For context, the firm purchased more gold than every central bank combined over the last quarter alone, pushing its total holdings to 116 tons of physical bullion.
Yet the build-up has not impressed traditional finance.
On Nov. 26, credit rating firm S&P Global downgraded its assessment of USDT’s ability to maintain its dollar peg to a 5, the lowest score in its stablecoin rating structure.
The agency pointed to rising allocations to Bitcoin, secured loans, and other higher-risk instruments, and said these exposures create uncertainty around reserve liquidity. In S&P’s view, these assets’ accumulation sits outside the simple, dollar-denominated model that a stablecoin reserve should reflect.
The result is an unusual split. Tether is buying assets that central banks have used for centuries to signal financial strength. S&P has concluded that the mix weakens the stablecoin’s reliability.
Why S&P took this position on Tether USDT
S&P’s downgrade rests on concerns about liquidity and reserve clarity rather than about asset quality. The agency’s model evaluates whether a stablecoin issuer can meet redemptions quickly and without friction during periods of market stress.
According to the firm, Tether’s increasing allocation to Bitcoin and secured loans introduces price volatility and counterparty exposure. The firm holds approximately $10 billion in BTC and has around $15 billion in secured loans, according to its latest quarterly attestation report.
At the same time, gold is also central to its reserves, with roughly $13 billion in assets. The precious metal, while a hard asset with long-term value, is harder to liquidate on short notice and cannot settle a large redemption as easily as a Treasury bill can.
Considering this, S&P’s view is that the reserve mix has become less suited to a product that promises instant one-for-one redemption.
The agency also highlighted gaps in disclosure. It noted:
“There is no public disclosure about the type of assets eligible for inclusion in USDT’s reserves or the action to be followed if the value of one of the underlying assets or asset classes were to drop significantly.”
Moreover, Tether does not publish detailed information on custodians, counterparties, or the composition of its money-market exposures.
These omissions matter because the quality of those institutions directly affects the reliability of reserves.
Even though Tether’s US Treasury holdings exceed $130 billion, making it one of the largest holders globally, the lack of transparency into its operational plumbing limits S&P’s confidence.
Notably, Tether has defended its approach in the past by presenting a different macro thesis.
Paolo Ardoino, the firm’s chief executive officer, has argued that Bitcoin, gold, and land are long-term hedges against global instability and the erosion of sovereign balance sheets.
The company has backed that view with investments in mining and royalty companies, a growing tokenized-gold business, and partnerships to offer vault services and collateralized lending tied to gold.
In a direct response to S&P’s downgrade, Ardoino said,
“We wear your loathing with pride… The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system.”
From Tether’s standpoint, these moves strengthen the corporate balance sheet even if they deviate from the conventional stablecoin reserve model.
Why the crypto market does not care
Meanwhile, the market’s interpretation of Tether differs sharply from S&P’s framework.
This is because USDT has maintained its dollar peg across ten years of market cycles, including collapses in exchanges, lenders, and rival stablecoins. That track record shapes user trust more than a formal rating ever could.
Moreover, USDT’s liquidity on global trading venues is deep. The digital asset remains the base pair for much of crypto trading and is widely used for payments in emerging markets that lack stable access to the dollar.
As a result, the stablecoin’s demand continues to rise, and USDT’s market capitalization is at an all-time high of more than $184 billion.
Meanwhile, the most significant feature of Tether’s balance sheet is its earnings power. With more than $130 billion in short-term US bills, the stablecoin issuer earns about $15 billion a year.
That yield creates a rapidly growing equity cushion that can absorb price swings in Bitcoin or secured loans more effectively than standard risk models assume.
For traders and emerging-market users, these details matter more than S&P’s view of asset mix. The market sees a company with substantial US Treasury exposure, a rising gold reserve, a profitable business model, and a stable redemption mechanism.
So, even if part of the reserve is allocated to volatile assets, the scale of Tether’s retained earnings provides a buffer that would be unusual for a regulated bank.
Indeed, Ardoino underlined the extent of the firm’s innovation in an X post, saying that Tether has developed what he described as an overcapitalized business with no impaired reserves, and that it remains highly profitable.
He also added that Tether’s performance highlights weaknesses in traditional finance, which he said is increasingly unsettled by the company’s model.
He added:
“The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system. No company should dare to decouple itself from it.”
Transparency still matters
Still, none of this removes the need for clearer disclosures.
The main vulnerability in Tether’s structure is not its gold allocation or its Bitcoin exposure. It is the lack of detailed insight into how the reserves are custodied, how counterparties are selected, and how secured loans are managed.
Even a balance sheet supported by significant equity buffers and hard assets is harder to evaluate without transparent reporting.
For institutional users and regulators, this is the central unresolved issue.
Thus, greater visibility would reduce uncertainty for large holders and align USDT with the standards expected of a global settlement asset.
Ethereum crossed a threshold in execution capacity as its mainnet block gas limit reached 60 million, the highest level the network has seen in four years.
Data tracker Gas Limit Pics showed that in November, over 513,000 validators signaled a 60 million gas limit, pushing the Ethereum network over the threshold needed for the protocol to begin moving the gas limit upward.
A higher gas limit allows Ethereum to fit more work into each block, including swaps, token transfers and smart contract calls. In practice, that can ease congestion during busy periods and help the network process more activity at the base layer.
As more than 513,000 validators transitioned from the 45 million ceiling to the higher 60 million configuration, Ethereum’s effective block size began to increase automatically, thereby raising the throughput across the network’s base layer.
Over half a million validators signal a gas limit of 60 million. Source: GasLimit.Pics
The effort to “pump the gas” on Ethereum
In March 2024, Ethereum developers initiated an effort to increase the network’s gas limit, claiming that the change could help scale Ethereum.
Ethereum developers Eric Connor and Mariano Conti created an initiative called Pump The Gas to raise the Ethereum gas limit, which they said would reduce transaction fees on the layer-1 blockchain.
The duo called on solo stakers, client teams, pools and community members to push the agenda.
In December 2024, the movement gained momentum as validators started signaling an increase in gas limits. The community rallied to increase the maximum amount of gas allowed for transactions to be included in a single Ethereum block.
The gas limit increase comes ahead of a forthcoming major network upgrade, called Fusaka, which aims to improve Ethereum’s scalability. On Oct. 29, the upgrade made its way into the Hoodi testnet, the final step before its mainnet debut on Dec. 3.
Ethereum community says the 60 million gas limit is “only the beginning”
Ethereum leaders say the jump to a 60 million gas limit is just the start of a broader expansion of the network’s execution capacity.
Ethereum Foundation researcher Toni Wahrstätter credited teams, researchers and ecosystem contributors for coordinating the push.
“Just a year after the community started pushing for higher gas limits, Ethereum is now running with a 60M block gas limit. That’s a 2× increase in a single year — and it’s only the beginning,” Wahrstätter wrote on X.
Ethereum co-founder Vitalik Buterin echoed the sentiment. He said that the network can expect continued growth over the next year. However, this would be in a more targeted and less uniform way.
He floated a future where the network increases overall capacity while making certain inefficient operations more expensive.
He also pointed toward a more refined form of scaling, which involves larger blocks but smarter pricing to ensure that the network can expand safely without introducing new problems.
Representatives of European Union member states reached an agreement on Wednesday in the Council of the EU to move forward with the controversial “Chat Control” child sexual abuse regulation, which paves the way for new rules targeting abusive child sexual abuse material (CSAM) on messaging apps and other online services.
“Every year, millions of files are shared that depict the sexual abuse of children… This is completely unacceptable. Therefore, I’m glad that the member states have finally agreed on a way forward that includes a number of obligations for providers of communication services,” commented Danish Minister for Justice, Peter Hummelgaard.
The deal, which follows years of division and deadlock among member states and privacy groups, allows the legislative file to move into final talks with the European Parliament on when and how platforms can be required to scan user content for suspected child sexual abuse and grooming.
The existing CSAM framework is set to expire on April 3, 2026, and is on track to be replaced by the new legislation, pending detailed negotiations with European Parliament lawmakers.
EU Chat Control laws: What’s in and what’s out
In its latest draft, the Council maintains the core CSAM framework but modifies how platforms are encouraged to act. Online services would still have to assess how their products can be abused and adopt mitigation measures.
Service providers would also have to cooperate with a newly-established EU Centre on Child Sexual Abuse to support the implementation of the regulation, and face oversight from national authorities if they fall short.
While the latest Council text removes the explicit obligation of mandatory scanning of all private messages, the legal basis for “voluntary” CSAM detection is extended indefinitely. There are also calls for tougher risk obligations for platforms.
To end the Chat Control stalemate, a team of Danish negotiators in the Council worked to remove the most contentious element: the blanket mandatory scanning requirement. Under previous provisions, end-to-end encrypted services like Signal and WhatsApp would have been required to systematically search users’ messages for illegal material.
Yet, it’s a compromise that leaves both sides feeling shortchanged. Law enforcement officials warn that abusive content will still lurk in the corners of fully encrypted services, while digital rights groups argue that the deal still paves the way for broader monitoring of private communications and potential for mass surveillance, according to a Thusday Politico report.
Lead negotiator and Chair of the Committee on Civil Liberties, Justice and Home Affairs in the European Parliament, Javier Zarzalejos, urged both the Council and Parliament to enter negotiations at once. He stressed the importance of establishing a legislative framework to prevent and combat child sexual abuse online, while respecting encryption.
“I am committed to work with all political groups, the Commission, and member states in the Council in the coming months in order to agree on a legally sound and balanced legislative text that contributes to effectively prevent and combating child sexual abuse online,” he stated.
The Council celebrated the latest efforts to protect children from sexual abuse online; however, former Dutch Member of Parliament Rob Roos lambasted the Council for acting similarly to the “East German era, stripping 450 million EU citizens of their right to privacy.” He warned that Brussels was acting “behind closed doors,” and that “Europe risks sliding into digital authoritarianism.”
Telegram founder and CEO Pavel Durov pointed out that EU officials were exempt from having their messages monitored. He commented in a post on X, “The EU weaponizes people’s strong emotions about child protection to push mass surveillance and censorship. Their surveillance law proposals conveniently exempted EU officials from having their own messages scanned.”
The latest movement on Chat Control lands in the middle of a broader global crackdown on privacy tools. European regulators and law‑enforcement agencies have pushed high‑profile cases against crypto privacy projects like Tornado Cash, while US authorities have targeted developers linked to Samurai Wallet over alleged money‑laundering and sanctions violations, thrusting privacy‑preserving software into the crosshairs.
Session president Alexander Linton told Cointelegraph that regulatory and technical developments are “threatening the future of private messaging,” while co-founder Chris McCabe said the challenge was now about raising global awareness.
Market chop aside, Wall Street is rolling out Bitcoin (BTC) exposure to advisors through structured notes and ETF-collateralized lending.
The bank simultaneously faces debanking blowback after Strike CEO Jack Mallers said his personal Chase accounts were shut. The juxtaposition spotlights institutionalization for clients versus risk-control for crypto-native principals.
On one side, JPMorgan moves BTC exposure into familiar wrappers, such as structured notes tied to spot-ETF performance, and lets select clients pledge Bitcoin-ETF shares as loan collateral.
On the other hand, Strike’s Jack Mallers says JPMorgan closed his personal accounts without explanation.
Together, they show the split-screen of crypto’s mainstreaming: products for wealth platforms, scrutiny for industry figures.
The asymmetry isn’t subtle. JPMorgan filed with the SEC for a leveraged structured note referencing BlackRock’s iShares Bitcoin Trust (IBIT), offering investors 1.5x IBIT’s gains if they hold to 2028.
The $1,000 note includes an early call: if IBIT trades at or above a preset level by December 2026, the bank pays out at least $160 per note, a minimum 16% return over roughly one year.
Miss that trigger and the note runs to maturity, delivering what JPM describes as “uncapped” upside as long as Bitcoin rallies. The downside buffer ends abruptly, as a roughly 40% drop from the initial IBIT level wipes out most of the principal, with losses beyond that threshold tracking the ETF’s decline.
This is not principal-protected. It’s classic structured-product math: limited cushion, leveraged gains, and the real possibility of large losses if Bitcoin sells off into 2028.
The product sits at the “filed with the SEC” stage, with no public disclosure yet on distribution channels or volume expectations. Structured notes of this design typically flow through broker-dealer and private-bank channels to advised or accredited clients, not walk-in retail.
JPMorgan tests a BTC-linked payoff within the same wrapper that high-net-worth clients already see for equities and indexes, but availability and sizing remain unknown.
The collateral play expands the playbook
Bloomberg reported that JPMorgan plans to let institutional clients use Bitcoin and Ethereum holdings as collateral for loans by year-end, using a third-party custodian and offering the program globally.
The move likely builds on an earlier step of accepting crypto-linked ETFs as loan collateral.
JPM has already been accepting crypto-linked ETFs as collateral and is now moving to accept spot Bitcoin ETFs, such as IBIT, for secured financing.
In parallel, it stands up a program for institutional clients to borrow against direct BTC and ETH positions held with an external custodian.
Public reporting does not list the full ETF roster or haircut schedule. Still, the examples given are mainstream US spot BTC ETFs, with the program described as global and initially aimed at institutional and wealth clients rather than the mass market.
Scale and distribution details remain sparse. The signals available point to “selected institutional and wealth clients” and “building on a pilot of ETF-backed loans” rather than broad availability across every advisor on the platform.
ETF-collateral lending would naturally sit in the private bank, wealth management, and trading client stack rather than in basic branch banking.
Public reporting gives no hard numbers on volumes or explicit advisor channels yet.
The closure that breaks the pattern
Jack Mallers wrote that “J.P. Morgan Chase threw me out of the bank” last month. His father has been a private client for more than 30 years.
Every time Mallers asked why, the staff told him, “We aren’t allowed to tell you.” He posted an image of what he says is the Chase letter. That letter cites “concerning activity” identified during routine monitoring, references the Bank Secrecy Act, and says the bank commits to “regulatory compliance and the safety and integrity of the financial system.”
It also warns that the bank may not open new accounts for him in the future. Mallers’ personal banking has moved to Strike.
There is no detailed on-the-record explanation from JPMorgan of the specific trigger for Mallers’ account closure.
Coverage notes that a spokesperson either declined to comment or stressed generally that the bank must comply with federal law, including the Bank Secrecy Act, when reviewing customer accounts.
JPMorgan declined to provide details on the rationale, citing Bank Secrecy Act obligations.
The timing is excellent. On Aug. 7, President Donald Trump signed the “Guaranteeing Fair Banking for All Americans” executive order, framed squarely at “politicized debanking.”
Legal analyses describe it as directing regulators to identify and penalize banks that deny or terminate services to customers based on their political or religious views or industry affiliations.
Following the order, the OCC issued guidance in September telling large banks not to “debank” customers over politics or religion and to limit unnecessary sharing of customer data in suspicious-activity reports.
However, the guidance concerns how banks weigh reputational risk and fair access; it does not relax their duty to monitor accounts and report suspicious activity under the Bank Secrecy Act.
The compliance track runs separately
On one track, a friendlier White House and Congress try to stop banks from blocklisting whole categories, such as crypto, on “reputational” grounds. On the other track, nothing in the executive order or OCC bulletins rewrites BSA/AML statutes.
When JPMorgan invokes “concerning activity” found during BSA surveillance, it leans on obligations that predate the Trump order and remain fully in force.
Regulators pushed banks to crack down on politically motivated account closures and to remove “reputational risk” from safety-and-soundness assessments. However, banks still file suspicious-activity reports and manage money-laundering risk.
The split shows how institutionalization proceeds on two planes. Product teams wire Bitcoin exposure into structures that wealth advisors already understand, such as notes with call features, loans backed by ETF shares.
Meanwhile, compliance teams keep running the same KYC and transaction-monitoring playbooks they ran before the election.
The executive order changes rhetoric, not the underlying BSA framework. Banks can no longer cite “crypto is too risky” as a blanket reason to exit relationships, but they retain full authority to close accounts when transaction patterns trip internal controls.
What’s at stake is whether banks treat crypto-industry principals differently from crypto-owning clients. A wealth-management customer who buys IBIT through a managed account gets access to structured notes and collateralized lending.
A CEO who built a Bitcoin payments company gets a form letter citing “concerning activity” with no further explanation. The products roll out, and the principals get cut off.
JPMorgan tests whether it can serve one without accommodating the other, betting that Washington’s fair-banking push will not override BSA-driven closures and that clients will keep buying exposure even as the bank distances itself from the industry’s executives.
The bank decides the line between acceptable and unacceptable crypto participation, and so far, that line runs between holding the asset and building the infrastructure.
