Appold Market Watch - Week ending 28 February 2025

Market Update & Industry News - Week ending 28 February 2025

🔷 The U.S. Securities and Exchange Commission (SEC) has announced that it is dropping lawsuits against several digital asset companies, including Robinhood, Gemini, Uniswap Labs, and OpenSea. This follows reports from last week that the SEC dropped its case against Coinbase over an alleged securities law violation.

Appold view: The SEC’s dropping of these cases signals a major shift in its regulatory stance towards digital assets, which will, of course, be welcomed by the industry. The decision follows increasing industry pressure and bipartisan support in the U.S. for legislative clarity in digital asset markets.

🔷 The U.S. Federal Bureau of Investigation (FBI) has named the North Korean hacking group the Lazarus Group as potentially responsible for stealing $1.5bn of Ethereum from digital asset exchange Bybit last week. The hackers are reportedly moving rapidly, with the stolen assets dispersed across thousands of addresses and multiple blockchains. Bybit has claimed to have replenished reserves with nearly 447,000 ether tokens through emergency loans and has launched a bounty program offering up to 10% of the stolen funds to anyone who can help recover them.

Appold view: While Bybit and countless others have scrambled to track and recover the stolen funds, the reported sophistication of North Korean hackers at digital asset laundering calls into question how successful recovery attempts will be.

🔷 U.S. market-maker Citadel Securities is looking to become a liquidity provider for digital assets, according to a report by Bloomberg. The report states that Citadel is looking to be added to the roster of market makers on a number of digital asset exchanges, including Coinbase, Binance, and Crypto.com.

Appold view: With Citadel’s historically cautious stance toward digital assets, this development would mark a significant shift. That said, it would align with a broader trend that has seen firms such as Goldman Sachs, Millennium Capital Management and Jane Street increasing their involvement in digital assets, thus aligning Citadel with a broader trend of institutional adoption.

🔷 UK legislators formally introduced a new bill to Parliament that will enhance law enforcement’s ability to confiscate digital assets linked to criminal activities. The Crime and Policing Bill is set to advance and strengthen confiscation powers previously granted under the Proceeds of Crime Act, further streamlining asset recovery and removing legal loopholes that could potentially prevent asset seizures.

Appold view: The Crime and Policing bill would require authorities to take a more aggressive approach than the existing Act provides for. However, it is essential to note that the legislation has only just been introduced to Parliament and is yet to undergo Parliamentary scrutiny. As such, it could undergo substantial amendments with time.

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