Major financial institutions move into stablecoin sector as crypto security improves
DATA from CryptoCompare shows that over the last week, the price of the flagship cryptocurrency Bitcoin (BTC) rise by over 5.5% from around $93,344 to around $99,500 at the time of writing.
Ethereum’s Ether - the second-largest cryptocurrency by market capitalisation - outperformed the flagship cryptocurrency over the week with an 8% rise from around $3,350 to $3,650 amid a wider crypto market rally.
Headlines in the cryptocurrency space this week revealed that major financial institutions, which have for years remained on the sidelines of the stablecoin sector, are now aggressively moving into the space to get a slice of the market.
A wave of activity is sweeping across the sector, particularly in Europe, where regulatory clarity and Tether’s withdrawal from the Markets in Crypto Assets (MiCA) legislation have created an opportunity for banks. Earlier this year, Société Générale-Forge made its euro-backed stablecoin available to retail investors, while financial group Oddo BHF SCA is also in the process of developing a EUR-backed stablecoin.
Other major market players, including Deutsche Bank-owned DWS and Revolut, are actively considering issuing their own stablecoins. Banks in the United States are also widely anticipated to enter the stablecoin sector once legislation is cleared.
The sector, according to CCData’s latest Stablecoins & CBDCs report, is now worth more than $200 billion after surpassing the milestone in December, after rising more than 5.5% that month.
Meanwhile, one of the world’s largest asset managers - Morgan Stanley - is reportedly looking to add cryptocurrency trading to its E-Trade online brokerage platform as it anticipates a friendlier regulatory environment in the United States under the incoming administration.
This move would position E-Trade as one of the largest traditional retail brokerages to provide direct access to cryptocurrency markets, thereby competing with established platforms such as Coinbase.
This week also saw crypto prime brokerage firm FalconX acquire Arbelos Markets, a derivatives startup launched in 2023.
Crypto losses from hacks and scams reach 2024 low in December
Cryptocurrency losses from scams, exploits, and hacks experienced a significant decline in the final months of 2024, culminating in the lowest monthly total of the year in December.
Blockchain security firm CartiK noted on social media that known losses from exploits, hacks, and scams totaled $28.6 million in December. This figure represents a substantial reduction from the $63.8 million recorded in November and the $115.8 million reported in October.
Exploits, which occur when attackers exploit code vulnerabilities, accounted for the majority of December’s losses, amounting to $26.7 million.
PeckShield, another blockchain security firm, corroborated the downward trend, reporting $24.7 million in losses for December, a 71% decline from November. Despite the late-year decline, overall losses from cryptocurrency hacks and scams in 2024 surpassed those recorded in the previous year.
That drop came as the T3 Financial Crimes Unit, a collaborative effort between the Tron blockchain, Tether, and blockchain intelligence firm TRM Labs, froze a total of 100 million USDt used by illicit actors since its launch.
T3 leverages TRM Labs’ blockchain intelligence and monitoring tools to assist Tron and Tether in identifying and freezing USDT associated with illicit activities. Approximately $60 billion in USDT has been issued on the Tron blockchain, making it the second-largest network for the stablecoin, behind Ethereum where $75 billion circulates.
As much as $3 million worth of the frozen USDT had connections to North Korea, which has been actively seeking to infiltrate cryptocurrency projects to generate revenue for the country’s leadership.
Montenegro extradites Terraform Labs co-founder Do Kwon
Do Kwon, the co-founder of Terraform Labs - a pivotal figure in the multibillion-dollar collapse of the Terra ecosystem - has been extradited from Montenegro to the United States.
The extradition, confirmed by Montenegro’s Ministry of Justice, concludes months of intricate legal proceedings within the country, during which Kwon faced competing requests for extradition from both the United States and South Korea.
Kwon is scheduled to face criminal charges in the United States, including conspiracy to commit fraud related to securities transactions, money laundering, and electronic fraud. These charges are rooted in his involvement in the collapse of the Terra ecosystem, which marked the largest loss of wealth in the cryptocurrency industry’s history within a mere three days.
As outlined by Montenegro’s Ministry of Justice, the decision to extradite was contingent upon a multifaceted evaluation of factors, including the severity of the alleged offenses, the jurisdiction in which they transpired, and the chronological sequence of extradition requests.
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
