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Centralised finance lending has contracted sharply, with the total loan book falling to $11.2 billion by the end of 2024—a 68% decline from its 2022 peak of $34.8 billion. This downturn underscores the profound impact of regulatory tightening, shifting investor sentiment, and evolving risk management practices within the financial sector.

The dramatic reduction in CeFi lending is attributed to a confluence of factors. Regulatory authorities have implemented stringent measures to mitigate systemic risks, compelling financial institutions to reassess their exposure to high-risk lending. These measures have included increased capital requirements and enhanced scrutiny of lending practices, particularly concerning unsecured and high-yield loans.

Non-banking financial companies , often referred to as shadow banks, have been significantly affected. Loan growth among NBFCs moderated to 6.5% in the first half of fiscal year 2024–25, a notable decrease from previous periods. This deceleration is particularly evident among upper-layer NBFCs, which predominantly engage in retail lending. The Reserve Bank of India’s Financial Stability Report highlights that the growth of bank borrowings in NBFCs’ liabilities declined from 26% to 17%, indicating a shift in funding dynamics.

In response to these challenges, NBFCs are diversifying their funding sources. There has been a marked increase in the issuance of non-convertible debentures and a growing reliance on foreign currency borrowings. However, this shift introduces new risks, particularly related to currency fluctuations, which could affect the financial stability of these institutions.

The regulatory landscape has also prompted financial institutions to enhance their risk assessment frameworks. Banks are increasingly evaluating the carbon footprint of their loan portfolios, aligning with global environmental, social, and governance standards. This trend reflects a broader commitment to sustainable lending practices and a recognition of the long-term risks associated with climate change.

Cardano founder Charles Hoskinson has reaffirmed his commitment to foundational principles over market valuations, emphasising that the long-term success of cryptocurrencies hinges on decentralisation, transparency, and real-world utility rather than short-term price movements.

In a series of public statements and interviews, Hoskinson has consistently highlighted the importance of adhering to the core values that underpin the cryptocurrency movement. He argues that the true potential of blockchain technology lies in its ability to empower individuals and foster global inclusivity, rather than serving as a vehicle for speculative gains.

Hoskinson’s perspective is shaped by his extensive experience in the crypto industry, having co-founded Ethereum before establishing Cardano. He has witnessed the volatility and hype cycles that often dominate the market, cautioning against the distractions they pose. Instead, he advocates for a focus on building robust, scalable systems that can deliver tangible benefits across various sectors, including finance, education, and healthcare.

Central to Cardano’s philosophy is the emphasis on scientific research and peer-reviewed development. This approach aims to ensure that the platform’s evolution is grounded in rigorous analysis and long-term viability. Hoskinson believes that such a foundation is essential for achieving “perfect operability,” where information, value, and state can seamlessly move across different blockchain networks.

However, he acknowledges that regulatory challenges remain a significant hurdle. Hoskinson points out that inconsistent and often restrictive policies across jurisdictions can impede innovation and adoption. He calls for a more harmonised regulatory framework that balances oversight with the need to foster technological advancement.

In line with his vision for a decentralised future, Hoskinson has been vocal about the importance of community governance. He envisions a system where stakeholders have a direct say in the protocol’s development, ensuring that the network evolves in a manner that reflects the collective interests of its users. This democratic approach is exemplified by Cardano’s ongoing efforts to implement on-chain governance mechanisms.

Hoskinson’s commitment to principles over price is further evident in his stance on market speculation. He warns against the dangers of equating a cryptocurrency’s value solely with its market price, arguing that such a narrow focus can lead to unsustainable practices and undermine the technology’s broader potential. Instead, he urges the community to consider the societal impact and transformative capabilities of blockchain solutions.

This ethos is reflected in Cardano’s initiatives aimed at driving real-world adoption. The platform has been actively involved in projects across Africa, seeking to provide decentralised solutions for identity verification, supply chain management, and financial inclusion. Hoskinson views these efforts as critical steps toward demonstrating the practical benefits of blockchain technology.

Bybit, the Dubai-based cryptocurrency exchange, is grappling with the aftermath of a massive cyberattack that resulted in the theft of approximately $1.4 billion worth of digital assets. The breach, attributed to the North Korean-linked Lazarus Group, has been described as the largest in the history of the crypto industry.

The hackers exploited vulnerabilities in Bybit’s cold wallet infrastructure, which is typically considered more secure than online hot wallets. Bybit’s CEO, Ben Zhou, disclosed that the attackers manipulated transaction interfaces and hijacked the cold wallet, redirecting its contents to unidentified addresses. The stolen assets, primarily Ethereum, have been rapidly converted into Bitcoin and dispersed across thousands of wallets to obfuscate their trail.

Zhou provided a detailed breakdown of the stolen funds: approximately 77% remain traceable, 20% have “gone dark,” and 3% have been successfully frozen. The term “gone dark” refers to funds that have been laundered through complex methods, making them untraceable. The traceable portion, roughly $1.07 billion, offers a glimmer of hope for recovery efforts.

The hackers employed sophisticated techniques to launder the stolen assets, including the use of decentralized exchanges like THORChain. Approximately 83% of the stolen Ethereum was converted into Bitcoin and distributed across nearly 7,000 wallets, each holding an average of 1.71 BTC. This fragmentation strategy complicates tracking and recovery efforts.

Bybit has initiated a bounty program to incentivize the recovery of stolen funds, offering up to 10% of the recovered assets to individuals who assist in freezing or retrieving the stolen cryptocurrencies. The exchange has also assured its users that it remains solvent and is taking measures to compensate for any unrecovered coins.

The incident has raised significant concerns about the security of cryptocurrency exchanges and the evolving tactics of cybercriminals. The Lazarus Group, known for its cybercrime operations linked to North Korea, has been implicated in several high-profile crypto thefts in recent years. Their methods often involve spear-phishing attacks and the use of malware to infiltrate systems.

Russia’s Finance Ministry has proposed the development of domestically issued stablecoins pegged to non-dollar currencies, following the freezing of Russia-linked digital wallets holding over 2.5 billion roubles in USDT by Tether. Osman Kabaloev, Deputy Head of the Ministry’s Financial Policy Department, stated that the incident underscores the need for internal tools similar to USDT, potentially pegged to other currencies.

The move comes after the European Union imposed sanctions on the Russian crypto exchange Garantex, leading to the suspension of operations involving USDT. The Finance Ministry’s proposal aims to establish sovereign financial tools to circumvent global financial restrictions and reduce reliance on Western-dominated financial systems.

Despite the Finance Ministry’s push, the Bank of Russia remains opposed to the use of cryptocurrencies in domestic transactions. However, Russian firms are participating in experimental international crypto payments, especially as conventional cross-border payments become more challenging under Western sanctions.

The proposal aligns with Russia’s broader strategy to establish a stablecoin settlement platform with “friendly” nations, avoiding the use of U.S. dollars and euros. Deputy Finance Minister Alexey Moiseev has indicated that the government is working with countries such as China and Belarus to create platforms using tokenized instruments pegged to recognized assets like gold.

This initiative is part of a larger effort by BRICS nations to develop a single payment system and make settlements in a unified cryptocurrency. The BRICS Pay platform aims to link national payment systems of member countries, facilitating digital wallet transactions and reducing dependence on the U.S. dollar.

The Central Bank of Russia, however, has expressed skepticism about private stablecoins, citing high risks and lack of guaranteed redemption at nominal value. The Bank prefers the development of a digital ruble, which combines the advantages of digital payments with the reliability of national currency.

Google will implement a new advertising policy across the European Union from April 23, mandating that all cryptocurrency-related advertisers be authorised under the Markets in Crypto-Assets regulation and certified by Google. This move aligns the tech giant’s advertising standards with the EU’s comprehensive crypto regulatory framework, aiming to enhance consumer protection and market integrity.

Under the updated policy, advertisers promoting crypto exchanges, wallets, or related services must obtain Google certification, which requires proof of authorisation as Crypto Asset Service Providers under MiCA. Non-compliance will trigger a minimum seven-day warning period before potential account suspension.

MiCA, fully applicable since December 2024, establishes a unified regulatory framework for crypto assets across the EU. It aims to streamline the adoption of blockchain and distributed ledger technology while safeguarding users and investors. The regulation mandates that CASPs adhere to stringent requirements, including capital reserves, governance standards, and consumer protection measures.

Google’s policy update reflects a broader industry trend towards stricter oversight of crypto advertising. The company had previously revised its policies in January 2025 for the UK market, requiring advertisers to be registered with the Financial Conduct Authority and certified by Google. Similar measures are now being extended to the EU, with specific transition periods for certain member states: Finland until June 30, 2025; France until June 30, 2026; and Germany until December 30, 2025.

The enforcement of these policies is expected to impact a wide range of crypto businesses operating within the EU. Advertisers must ensure compliance with both Google’s certification process and MiCA’s regulatory requirements to continue promoting their services on the platform. This dual-layered approach aims to mitigate risks associated with unregulated crypto promotions and enhance the overall trustworthiness of crypto-related advertisements.

Banking powerhouse Standard Chartered, in collaboration with global cryptocurrency exchange OKX, has launched an innovative pilot programme in Dubai aimed at reshaping the landscape for institutional investors trading in digital assets. This new initiative, known as the collateral mirroring programme, promises to transform how cryptocurrencies and tokenised money market funds are used as collateral, potentially setting a new standard in the industry.

The programme enables institutions to use their digital assets as collateral for trading purposes without needing to transfer these assets onto an exchange. This method significantly reduces counterparty risk, one of the primary concerns in the crypto world, particularly for large investors. The model allows firms to maintain control over their assets while still participating in the market, addressing long-standing issues surrounding asset security and liquidity.

This venture marks the first time that a major global bank, a regulated crypto platform, and a traditional asset manager have come together to support secure crypto trading for institutional investors. By collaborating, the entities are not only offering a new approach to collateral management but also strengthening the framework for institutional participation in the crypto space.

Dubai, a hub for both traditional and digital finance, serves as the ideal location for this pilot programme. The city has long been at the forefront of adopting innovative financial technologies, positioning itself as a global leader in digital asset regulation. The Dubai Financial Services Authority has consistently supported initiatives that balance innovation with regulatory oversight, providing a clear framework for the crypto industry to grow within secure boundaries.

Institutional investors have traditionally been hesitant to fully engage in cryptocurrency markets due to concerns about volatility, security, and regulatory ambiguity. The new programme addresses these concerns by ensuring that assets are not exposed to the vulnerabilities of traditional exchanges. Instead of transferring assets directly onto an exchange, they remain in the custody of the institutional investors, with their value mirrored for trading purposes. This provides a layer of protection, reducing the risks associated with custodial services and enhancing capital efficiency.

Capital efficiency is another critical factor for institutional investors, who often deal with large volumes of assets. By using cryptocurrencies and tokenised funds as collateral without the need to move them onto exchanges, investors can free up their capital for additional trading opportunities. This is a significant improvement over the current model, where assets typically need to be held in exchange accounts or liquidated to meet collateral requirements.

The programme comes at a time when institutional interest in cryptocurrencies is growing. The global market for digital assets continues to expand, with more traditional financial institutions looking to integrate crypto services into their portfolios. According to industry experts, such initiatives are a necessary step to bridge the gap between the traditional financial system and the emerging world of digital currencies. The collaboration between Standard Chartered and OKX highlights how traditional financial institutions can innovate while still adhering to regulatory standards.

The partnership is also a response to the increasing demand for tokenisation in financial markets. Tokenisation, the process of converting real-world assets into digital tokens, has gained significant traction in recent years. With tokenised assets, transactions become faster, cheaper, and more transparent, making them attractive to institutional investors. This new initiative builds on the growing trend of tokenisation, offering a secure and regulated way for investors to participate in the digital asset market.

OKX, known for its compliance with global regulations, is well-positioned to offer the technological infrastructure needed for such a programme. As one of the largest cryptocurrency exchanges in the world, it provides a secure platform for trading and asset management, making it an ideal partner for institutional investors who demand reliability and transparency.

Standard Chartered’s involvement brings an additional layer of credibility to the initiative. As one of the world’s leading banking institutions, its participation signals a growing acceptance of cryptocurrencies within the mainstream financial system. By partnering with OKX, Standard Chartered is signalling its commitment to staying ahead of the curve in the rapidly evolving world of digital assets.

The collaboration also reflects a broader trend within the financial industry towards digitalisation. More and more, traditional financial institutions are recognising the potential of blockchain and cryptocurrency technologies to enhance financial services. As digital currencies continue to gain acceptance, the lines between traditional and digital finance are becoming increasingly blurred. This programme is a tangible example of how these two worlds can work together to create a more secure, efficient, and transparent financial system.

While this pilot programme represents a major step forward, the broader implications for the global financial system remain to be seen. The success of the programme will likely influence how other financial institutions and regulators approach the integration of digital assets into their operations. Should it prove successful, it could lead to similar initiatives being launched in other financial hubs around the world.

However, challenges remain. The regulatory landscape for digital assets is still evolving, with countries and jurisdictions adopting varying stances on how cryptocurrencies should be treated. This uncertainty could pose challenges for institutions looking to engage in digital asset trading. Nevertheless, Dubai’s proactive regulatory environment provides a model that other financial centres may look to replicate as they develop their own frameworks for crypto regulation.

Dubai’s property market, which has enjoyed a robust 70% rally over the past few years, now faces uncertainty amid growing concerns over global trade tensions and rising tariffs. These external factors are posing risks to the region’s otherwise bullish real estate sector, which had been buoyed by strong demand from both international investors and affluent buyers seeking stable assets.

While the property market in Dubai had been thriving thanks to its appeal as a safe haven for foreign capital, the shifting landscape of international trade and geopolitical issues are beginning to create ripples. Tariffs, particularly those affecting the construction sector, have seen a marked increase, potentially driving up the cost of raw materials such as steel and cement, which could ultimately disrupt the market’s growth trajectory.

Dubai’s real estate market has long been a barometer of economic sentiment, drawing investors from across the globe who have been eager to tap into its lucrative prospects. However, with the imposition of new tariffs between major global economies, analysts suggest that both developers and investors are likely to face additional challenges, as supply chains are strained and costs climb higher.

The UAE government had, up until now, maintained a favourable regulatory environment, with policies aimed at attracting foreign capital and ensuring a favourable investment climate. These efforts have been part of a wider strategy to diversify the nation’s economy and reduce its dependence on oil revenues. However, with rising global inflation rates and the unpredictability of international tariffs, even the UAE’s free-market policies might not be enough to shield the market from external pressures.

The construction sector, which directly impacts the overall real estate market, has already started feeling the heat. Many developers have raised concerns that rising tariffs on imported materials could force them to increase the prices of new homes and commercial properties. This could result in a slowing of the rapid sales pace observed over the last few years, as potential buyers and investors may hesitate to commit to higher-priced assets.

Global economic instability is causing some caution among international investors. High inflation and a fluctuating global market have dampened investment appetites, and the UAE is not immune to these international economic trends. A reduction in international investment could lead to less capital flowing into Dubai’s property market, making it harder for the city to sustain its property price increases.

Despite the looming risks, there are still some positive indicators for Dubai’s property market. The UAE’s economic diversification strategy, alongside government efforts to ensure the stability of the banking system, has helped sustain confidence in the country’s real estate. Furthermore, Dubai’s positioning as a global financial hub, coupled with its luxury real estate offerings, continues to attract high-net-worth individuals, particularly from regions like Europe, Russia, and parts of Asia.

The growth of Dubai’s tourism sector and events such as Expo 2020 have been contributing factors to the property boom. With a steady influx of visitors and the growing number of residents moving to Dubai for work or lifestyle, the demand for high-quality, well-located properties remains strong.

However, as Dubai continues to build its reputation as a global luxury real estate destination, the sector’s reliance on external factors cannot be ignored. Political shifts in major economies, fluctuations in currency values, and trade disruptions are all variables that could significantly affect the long-term outlook of Dubai’s property market.

Anchorage Digital Bank, the only federally chartered crypto bank in the United States, is under investigation by the Department of Homeland Security’s El Dorado Task Force. The inquiry focuses on the bank’s financial practices, particularly its compliance with anti-money laundering regulations. This development follows Anchorage’s recent appointments as a custodian for major crypto products, including those of BlackRock and 21Shares.

The El Dorado Task Force, established to combat financial crimes, has initiated the probe by reaching out to former employees of Anchorage Digital. While specific details of the investigation remain undisclosed, it aligns with the bank’s ongoing challenges in meeting AML compliance standards. In April 2022, the Office of the Comptroller of the Currency issued a consent order against Anchorage for failing to implement an adequate AML program, citing violations of the Bank Secrecy Act.

In response to regulatory pressures, Anchorage has made significant leadership changes aimed at strengthening its compliance framework. In January 2023, the bank appointed Mark duBose as Chief Compliance and Risk Officer and brought in Palmer, a former Department of Homeland Security attorney, to enhance its AML controls. These appointments are part of Anchorage’s broader strategy to address regulatory concerns and reinforce its commitment to compliance.

Despite these efforts, Anchorage’s role in the crypto industry has expanded. The bank has been selected as a custodian for several high-profile crypto exchange-traded funds , including the ARK 21Shares Bitcoin ETF and the 21Shares Core Ethereum ETF. These appointments underscore Anchorage’s growing influence in the institutional crypto custody space, even as it navigates regulatory challenges.

Tether, the issuer of the USDT stablecoin, has reported a 13% increase in its user base during the first quarter of 2025, highlighting the growing demand for digital dollar alternatives in emerging markets. CEO Paolo Ardoino attributes this growth to USDT’s role in providing financial services to unbanked populations and its integration into various sectors beyond traditional stablecoin operations.

The company now serves over 400 million users globally, with approximately 35 million new wallets added each quarter. This expansion is particularly notable in regions with limited banking infrastructure, where USDT offers a stable medium for savings and transactions. Ardoino emphasizes that USDT functions as a “bridge” in these markets, facilitating access to the US dollar and supporting local economies.

Tether’s influence extends beyond user adoption. The company is among the top three global purchasers of short-term US Treasury bills, holding approximately $90.87 billion in such securities as of March 31, 2024. This significant investment underscores Tether’s role in the global financial system and its commitment to backing USDT with substantial reserves.

In addition to its stablecoin operations, Tether is diversifying its portfolio through investments in artificial intelligence and other emerging technologies. The company plans to launch an AI platform by the end of Q1 2025, signaling its intent to compete with established tech giants and expand its offerings beyond the cryptocurrency space.

Despite its growth, Tether faces regulatory scrutiny and challenges in various jurisdictions. The company has been proactive in addressing these concerns by enhancing its compliance measures and increasing transparency regarding its reserves and operations. Ardoino has dismissed allegations of Tether’s involvement in illicit activities as unfounded, emphasizing the company’s commitment to regulatory compliance.

The cryptocurrency market is undergoing notable shifts as key players continue to evolve and capture the attention of investors. BlockDAG, a blockchain alternative, has secured a substantial $213 million, marking a significant milestone in its rise as an emerging contender in the blockchain space. Meanwhile, Ethereum is pushing forward with upgrades aimed at improving scalability and reducing transaction costs, while Shiba Inu is testing key price levels, potentially positioning itself for a strong rally.

BlockDAG, a Distributed Acyclic Graph technology, has been garnering significant interest due to its ability to overcome some of the limitations of traditional blockchain systems. Unlike conventional blockchains, where transactions are linked sequentially, BlockDAG allows for multiple branches to be added in parallel, offering greater scalability and speed. This new approach is seen as a potential game-changer for industries requiring high throughput and low latency.

The recent funding round, which saw BlockDAG secure $213 million without the involvement of traditional venture capital firms, underscores the growing confidence in the technology’s potential. Investors have expressed interest in the efficiency of BlockDAG’s architecture, which promises to provide faster and cheaper transactions than established blockchains. The funding will be pivotal for BlockDAG to accelerate its development and expand its reach.

BlockDAG’s appeal is evident in its potential to scale more efficiently than other blockchain systems. Ethereum, for instance, continues to face scalability challenges despite its status as one of the most widely used blockchain networks. Ethereum has been pushing forward with key upgrades such as Pectra, which aims to significantly enhance the network’s scalability and reduce gas fees. These upgrades are intended to address ongoing concerns regarding transaction speed and high costs, which have often been cited as barriers to broader adoption.

The upgrade is part of Ethereum’s ongoing efforts to make the platform more efficient as it seeks to maintain its dominance in the decentralised finance space. As Ethereum progresses with its upgrades, it remains to be seen whether it will successfully fend off emerging competitors like BlockDAG, which offer distinct technological advantages.

In parallel, Shiba Inu , often referred to as a meme coin, is witnessing heightened interest as it tests a critical resistance level at $0.0000134. A breakthrough above this resistance could pave the way for a potential 20% rally, enticing speculative investors who have supported SHIB’s meteoric rise. SHIB’s rise from a meme coin to a more serious contender in the crypto space highlights the power of community-driven assets, with its strong social media presence and dedicated following.

SHIB’s price movements have attracted attention from analysts who are closely watching the cryptocurrency for signs of sustained growth. The current resistance level is seen as a crucial point for determining whether SHIB can maintain its momentum or face a downturn. If SHIB manages to break through the $0.0000134 level, it would likely attract further investment, particularly from retail traders seeking high-risk, high-reward opportunities.

Ethereum’s position as the second-largest cryptocurrency by market capitalisation also plays a significant role in the broader market’s direction. The advancements Ethereum continues to make with its ongoing upgrades could have a ripple effect across the broader cryptocurrency market. Other blockchain projects and tokens that rely on Ethereum’s network, such as decentralized applications , will likely benefit from improvements in scalability and transaction efficiency.

The continued growth of DeFi, along with the rise of alternative Layer-1 blockchains such as Solana, Avalanche, and now BlockDAG, signals an increasingly competitive landscape for Ethereum. As these platforms push the envelope on speed, cost-effectiveness, and scalability, Ethereum’s position as the go-to blockchain for smart contracts and decentralised applications will be tested in the years ahead.

Developments in the Ethereum network, especially with projects like Pectra, highlight the ongoing arms race among blockchain platforms to deliver superior performance for various use cases. Ethereum’s transition to Ethereum 2.0 is designed to address long-standing issues such as network congestion, with the proof-of-stake consensus mechanism playing a crucial role in making the network more energy-efficient.

Despite the growth of Ethereum and other competitors, the market remains highly volatile, with projects like BlockDAG, which promises high throughput and low transaction fees, providing a compelling alternative to the limitations of traditional blockchain systems. With institutional and retail investor interest intensifying, the race to capture market share in the rapidly growing blockchain space is becoming more competitive than ever.

New York State Assembly Member Clyde Vanel has introduced a bill that would permit state agencies to accept cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, as payment for fines, taxes, and other financial obligations. The proposed legislation, Assembly Bill A2532, aims to modernize the state’s payment systems by integrating digital currencies.

The bill outlines that state agencies could enter into agreements with individuals to accept cryptocurrency payments for various charges, such as fines, civil penalties, rent, rates, taxes, fees, and other financial obligations owed to the state. While it does not mandate agencies to accept digital currencies, it clarifies that they have the legal authority to do so if they choose. Additionally, the legislation allows state agencies to charge a service fee to cover any costs associated with processing cryptocurrency transactions.

Assembly Member Vanel, representing the 33rd District in Queens, has been an advocate for cryptocurrency and blockchain technology. In 2019, he was instrumental in creating a cryptocurrency and blockchain task force to study the potential effects of these technologies on New York’s economy.

The introduction of this bill comes amid a complex regulatory environment for cryptocurrencies in New York. The state has been known for its stringent regulations, notably the BitLicense framework, which imposes strict disclosure and consumer protection requirements on businesses offering cryptocurrency-related services to New York residents. In November 2022, the state enacted a law temporarily halting the renewal of air permits to companies performing cryptocurrency mining operations out of former fossil fuel plants, citing environmental concerns.

South Korea has deferred the enforcement of the Credit Information Act on cryptocurrency exchanges until 1 December 2025, providing a grace period during which penalties will not be imposed unless violations involve intent or gross negligence. The Act mandates that crypto exchanges treat user transaction records as sensitive credit information, aligning them with traditional financial institutions in terms of data handling and protection.

This postponement allows exchanges additional time to adapt their systems and processes to comply with the stringent requirements of the Act. The Financial Services Commission has indicated that during this grace period, it will focus on guiding exchanges towards compliance rather than penalising them, unless there is clear evidence of deliberate or grossly negligent misconduct.

The Credit Information Act’s application to the crypto sector is part of South Korea’s broader initiative to regulate digital assets more comprehensively. The Act’s provisions require exchanges to implement robust data protection measures, including the secure storage of user data and the establishment of protocols to prevent data breaches. These measures are intended to enhance user trust and align the crypto industry’s practices with those of the traditional financial sector.

In the interim, the Virtual Asset User Protection Act, which came into effect on 19 July 2024, continues to govern the crypto industry. This Act mandates that exchanges store at least 80% of user deposits in cold storage, separate from their own funds, and entrust users’ cash deposits to licensed local banks. Additionally, exchanges are required to maintain cryptocurrency reserves matching customer deposits and to have insurance or reserve funds to cover potential losses from hacks or liquidity issues.

President Donald Trump has signed legislation repealing a Biden-era Internal Revenue Service rule that mandated cryptocurrency brokers, including decentralised finance platforms, to report user transactions via Form 1099s. The rule, finalised in December 2024, aimed to extend tax reporting obligations to DeFi platforms, treating them similarly to traditional financial intermediaries.

The repeal follows bipartisan votes in both the House and Senate, utilising the Congressional Review Act to overturn the regulation. Critics argued that the rule imposed unworkable requirements on DeFi platforms, which, by design, lack centralised control and user data necessary for compliance. Industry stakeholders contended that enforcing such reporting standards on DeFi would stifle innovation and drive activity offshore.

The original IRS rule was part of a broader effort to enhance tax compliance in the digital asset sector, stemming from the 2021 Infrastructure Investment and Jobs Act. It sought to align cryptocurrency reporting with that of traditional financial instruments, estimating an increase in federal revenue. However, the DeFi community maintained that the decentralised nature of their operations made adherence to the rule impractical.

Supporters of the repeal, including Senator Ted Cruz and Representative Mike Carey, emphasised the importance of fostering innovation and avoiding regulatory overreach. They argued that the rule exceeded congressional intent and posed significant burdens on emerging technologies.

Opponents of the repeal expressed concerns about potential revenue losses and the risk of increased tax evasion. The Joint Committee on Taxation projected that rescinding the rule could reduce federal revenue by $3.9 billion over the next decade. Tax experts warned that the absence of reporting requirements might complicate efforts to monitor illicit activities within the crypto space.