Happy Wednesday!

Markets are as fickle as ever—traders are now pricing in a Fed rate cut for July after an unexpected CPI decline, pushing bitcoin and crypto higher.

In today’s newsletter, the U.S. government says that bitcoin stolen via the 2016 Bitfinex hack should be returned to the exchange in-kind, HashKey predicts bitcoin will surpass $300,000 this year, South Korea plans a new crypto law and more.

Let’s get started.

US government says bitcoin stolen from Bitfinex should be returned in-kind

The U.S. government stated in court documents that 94,000 BTC stolen from the 2016 Bitfinex hack should be returned to the crypto exchange as in-kind restitution.

• The Tuesday filing is in line with an October court document stating that both defendants in the case, Ilya Lichtenstein and Heather Morgan, and the exchange’s parent company iFinex agreed that Bitfinex is the sole victim of the hack.
• The pair were arrested in 2022 and charged with conspiracy to commit money laundering and conspiracy to defraud the U.S.
• In August 2023, Lichtenstein and Morgan, also known as “Razzlekhan,” pleaded guilty to laundering 119,754 BTC from the 2016 hack, with the DOJ having seized $4 billion worth of bitcoin from their devices — its largest asset recovery to date.
• In November, Morgan was sentenced to 18 months in prison, while Lichtenstein received a five-year sentence for his leading role in the scheme.
• Bitfinex previously committed to selling 80% of the recovered funds to repurchase and burn outstanding UNUS SED LEO — the debt token it issued following the hack to help make up for customer losses — aiming to eventually remove all LEO tokens from circulation.

HashKey predicts bitcoin to break $300,000

Hong Kong-based regulated digital asset financial services provider HashKey Group predicted bitcoin to surpass $300,000 and ether to exceed $8,000 this year, driving the total crypto market cap to $10 trillion.

• HashKey also expects DEXs to leverage AI agents and memecoins to grow market share while centralized exchanges adopt more DeFi strategies to attract capital via high-yield investment products.
• The spot Bitcoin and Ethereum ETF issuer additionally projects the stablecoin market cap to rise above $300 billion, fueled by demand for compliant, yield-bearing and real-world asset-backed digital dollars.
• New crypto ETFs, including XRP and SOL, alongside security tokens and central bank digital currencies, could also add $3 trillion to the crypto market in 2025, it said.
• Furthermore, HashKey expects the incoming Trump administration to establish a bitcoin strategic reserve in the U.S. and approve the FIT21 Act to strengthen crypto market oversight under the CFTC.

South Korea plans new crypto law

South Korea plans to draft a follow-up crypto regulatory framework by late 2025, with initial discussions focusing on transparency and accountability from exchanges and stablecoin issuers, local media reported.

• The country’s Financial Services Commission aims to enforce stricter standards for crypto exchanges, including disclosure rules similar to traditional finance under the new legislation.
• South Korea’s first crypto regulatory framework went into effect in July 2024 after legislation was passed a year prior, focused on investor protection.
• The country has one of the world’s largest and most active crypto markets, with local exchange Upbit ranking as the third-largest centralized exchange by trading volume globally last month.

Trump’s SEC set to overhaul crypto policy

SEC Commissioners Hester Peirce and Mark Uyeda are poised to reset the agency’s crypto stance, possibly starting next week, Reuters reported, citing people briefed on the situation.

• The agency is expected to begin reviewing pending crypto enforcement cases soon, potentially freezing those unrelated to fraud, according to the outlet.
• The incoming Trump administration, favoring a more crypto-friendly approach, aims to establish a strategic bitcoin reserve and halt what it calls an “unlawful and un-American crackdown” on the industry.
• Paul Atkins, a crypto-friendly former regulator, is set to lead the SEC under Trump, while current Democratic Chair Gary Gensler and Commissioner Jaime Lizárraga are preparing to exit imminently.

Arweave’s moon mission

Arweave has sent encrypted data stored using synthetic DNA technology to the moon aboard space exploration firm LifeShip’s lunar lander, aiming for it to last thousands of years undisturbed.

• The mission uses California-based Iridia’s molecular technology, which is designed to deliver “orders-of-magnitude gains in density and durability,” the decentralized data storage platform said.
• Arweave’s long-term goal is to permanently archive the entirety of human knowledge and history while reducing storage costs to improve global access to information.

In the next 24 hours

• UK GDP data are due at 2 a.m. ET on Thursday. U.S. jobless claims figures follow at 8:30 a.m.
• U.S. FOMC member John Williams will speak at 11 a.m.
• Arbitrum is set to unlock 92.65 million ARB tokens worth $70.5 million, representing 2.2% of the circulating supply.

Never miss a beat with The Block’s daily digest of the most influential events happening across the digital asset ecosystem.