PA Daily News | Hong Kong Securities and Futures Commission issues regulatory guidelines for virtual assets; Trend Research suffers $869 million loss on ETH in this round.

Today's top news highlights:

The US CFTC is cutting its "top enforcement" team as it expands oversight of crypto and prediction markets.

The Hong Kong Securities and Futures Commission has officially issued new guidelines allowing licensed brokers of virtual assets to expand their service scope.

Russian State Duma passes bill on cryptocurrency seizure and confiscation procedures

Tools for Humanity, the parent company of Worldcoin, is losing several senior employees.

Robinhood shares fell after the earnings release, as its Q4 cryptocurrency revenue declined by 38%.

Arkham will shut down its cryptocurrency exchange, Arkham Exchange.

The CEO of Crypto.com stated that after he purchased the AI.com domain, someone offered him $500 million to acquire it.

Arkham: Trend Research's final loss on ETH in this round was $869 million.

Regulatory news

The US CFTC is cutting its "top enforcement" team as it expands oversight of crypto and prediction markets.

According to Decrypt, the entire enforcement team at the Commodity Futures Trading Commission's (CFTC) Chicago office has left the agency. This office, once considered the agency's "top enforcement force" and previously boasting 20 enforcement lawyers, is now entirely wiped out. This downsizing comes as the CFTC seeks to significantly expand its regulatory scope to the cryptocurrency and prediction market sectors.

The report points out that the same leadership that oversaw the CFTC's downsizing last year actively advocated for expanding the agency's jurisdiction to include most of the cryptocurrency market and sports betting platforms. Caroline Pham, who will serve as acting chairman of the CFTC until 2025, spearheaded a reduction of over 21% in the agency's staff last year and is currently working at the crypto company MoonPay. A former CFTC enforcement lawyer stated that the layoffs were targeted because the Chicago office has expertise and a key role in negotiating multi-billion dollar settlements with crypto companies like FTX and Binance.

Russian State Duma passes bill on cryptocurrency seizure and confiscation procedures

The Russian State Duma has passed a procedural law on the seizure and confiscation of cryptocurrencies in criminal cases during its final reading. The bill recognizes cryptocurrencies as property and clarifies the seizure process.

According to the bill, law enforcement agencies are required to record the type, quantity, and wallet address of digital assets seized. Related storage devices, information carriers, and wallet access keys must be kept in sealed containers. If technically feasible, seized cryptocurrencies can be transferred to designated national wallets. The bill also authorizes Russian government departments to formulate specific rules for the transfer and storage of seized cryptocurrencies and allows Russian state agencies to cooperate with foreign cryptocurrency exchanges in carrying out seizures or confiscations. The bill is pending approval by the Federation Council and signature by the President, and will take effect ten days after its official publication.

The Hong Kong Securities and Futures Commission has officially issued new guidelines allowing licensed brokers of virtual assets to expand their service scope.

According to its official website, the Hong Kong Securities and Futures Commission (SFC) issued new guidelines today, allowing licensed brokers providing virtual asset trading services to expand their related services to margin financing. At the same time, a high-level framework was established to provide guidance to virtual asset trading platforms to assist them in developing recommendations for leveraged virtual asset-related products intended for sale to professional investors.

• The Securities and Futures Commission (SFC) is expanding its product and service diversification in accordance with its ASPIRe roadmap. As one of the latest measures, the SFC now allows virtual asset brokers to offer virtual asset financing services to their securities margin clients, provided they have sufficient collateral and robust investor protection. This move will encourage margin clients with sound credit standing and collateral to participate more actively in virtual asset trading, thereby improving liquidity in the Hong Kong market within a manageable risk framework.

• For licensed virtual asset trading platforms, the Securities and Futures Commission (SFC) has for the first time developed a high-level framework to guide them in developing perpetual contracts that are leveraged products intended for professional investors only. This initiative aims to assist investors in implementing risk management strategies and enhance the spot market liquidity of their underlying assets. To ensure investor protection, the framework outlines the high transparency required for these leveraged products, including clear disclosures and robust operational monitoring measures.

• To further promote virtual asset trading activities in Hong Kong, the Securities and Futures Commission (SFC) has permitted affiliates of licensed virtual asset trading platforms to act as market makers on their platforms, provided that strong safeguards are in place to minimize conflicts of interest. The participation of these affiliates should provide licensed virtual asset trading platforms with new liquidity channels.

Leung Fung-yee announced three new measures for the regulation of virtual assets in Hong Kong, including margin financing and perpetual contracts.

At Consensus 2026, Hong Kong Securities and Futures Commission (SFC) Chief Executive Officer, Ms. Leung Fung-yee, stated that the agency is committed to establishing a complete regulatory ecosystem for virtual assets and announced three new initiatives: 1. Margin Financing: Allowing brokers to provide financing services to clients with good credit, with collateral including securities and virtual assets. Initially, this will only be open to Bitcoin and Ethereum, and will require prudent deduction rates in accordance with traditional financial standards. 2. Perpetual Contracts: A high-level regulatory framework will be announced, allowing licensed platforms to offer perpetual contract products. This service is currently limited to "professional investors" and requires platforms to have extremely high transparency and the ability to manage volatility rates and automatic liquidation risks. 3. Affiliated Market Makers: Regulations are proposed to be relaxed to allow licensed platforms to provide liquidity through their affiliated market makers, provided they can demonstrate functional independence and strict management of conflicts of interest.

Leung Fung-yee pointed out that tokenized assets have developed rapidly over the past year, with tokenized gold assets under management reaching US$400 million, doubling in the past six months. Currently, the Securities and Futures Commission (SFC) has authorized 11 tokenized money market funds. In addition, Project Ensemble is piloting the use of tokenized deposit settlement money market funds.

The Central Bank of Malaysia will test a practical application plan involving a ringgit stablecoin and tokenized deposits in 2026.

The Central Bank of Malaysia announced a plan to test the practical application of RM stablecoins and tokenized deposits in 2026. It stated that the test will allow the central bank to assess the impact of stablecoins and tokenized deposits on monetary and financial stability and provide a basis for policy direction in these specific areas. The plan aims to provide clearer guidance on the use of RM stablecoins and tokenized deposits by the end of 2026.

A Russian court fined Telegram 3.8 million rubles.

According to RIA Novosti, a Russian court has fined Telegram 3.8 million rubles. The Kremlin stated regarding Telegram: "The law is the law, and businesses must abide by it."

Project Updates

Tools for Humanity, the parent company of Worldcoin, is losing several senior employees.

Tools for Humanity, the parent company of Worldcoin led by Sam Altman, has recently experienced a series of high-level personnel changes. Chief Architect and Security Officer Adrian Ludwig and Chief Legal and Privacy Officer Damien Kieran have both recently departed the company. Following this, heads of the company's protocols, human resources, talent, and product departments have also left. Internal Slack sources indicate that CEO Alex Blania has appointed several interim executives to fill key roles. Former employees suggest that issues with company culture and leadership style are among the reasons for the personnel turnover.

This personnel shake-up comes at a time when the company faces regulatory hurdles in Kenya and parts of Europe due to its collection of biometric data. Meanwhile, Altman and Blania have founded Merge Labs, a company focused on brain-computer interface technology, drawing attention to their leadership role in identity verification startups.

Coinbase has included ETHGas (GWEI) in its listing roadmap.

According to an official announcement, Coinbase has included ETHGas (GWEI) in its listing roadmap. Trading on the platform will require meeting market-making and technical requirements, and the specific timing is yet to be determined.

Coinbase has included OPINION (OPN) in its listing roadmap.

According to an official announcement, Coinbase has included OPINION (OPN) in its listing roadmap. Trading on the platform will require meeting market-making and technical requirements, and the specific timing is yet to be determined.

Robinhood shares fell after the earnings release, as its Q4 cryptocurrency revenue declined by 38%.

According to The Block, Robinhood's fourth-quarter earnings report showed a 38% year-over-year decline in cryptocurrency trading revenue, causing the company's stock price to fall by approximately 8% in after-hours trading. Total net revenue for the quarter increased by 27% year-over-year to a record $1.28 billion, with trading revenue growing 15% to $776 million. Cryptocurrency trading revenue was $221 million, a significant decrease compared to the same period last year, contrasting sharply with options revenue growing 41% to $314 million and stock trading revenue growing 54% to $9.4 million.

The platform's total crypto trading volume reached $82 billion, but this was primarily driven by the Bitstamp exchange, which was acquired last year; crypto trading volume on Robinhood's own app declined by 52% year-over-year. Other businesses performed strongly: net interest income grew 39% to $411 million, Robinhood Gold subscribers grew 58% to 4.2 million, and total platform assets grew 68% to $324 billion.

The former CEO of SafeMoon was sentenced to eight years in prison for defrauding investors; the funds were used to purchase luxury homes and sports cars.

According to The Block, the U.S. Attorney's Office for the Eastern District of New York announced Tuesday that former SafeMoon CEO Braden John Karony was sentenced to more than eight years in prison for defrauding investors and had approximately $7.5 million and two residential properties forfeited. Karony, 29, was convicted in May by a federal jury of securities fraud, wire fraud, and conspiracy to commit money laundering. Prosecutors stated that he misled investors through false advertising, illegally misappropriating over $9 million in project funds to maintain a lavish lifestyle, including purchasing a $2.2 million Utah home, an Audi R8 sports car, a Tesla, and a custom Ford F-550 truck.

The SafeMoon project issued its tokens in 2021, at one point reaching a market capitalization exceeding $8 billion. Its transactions included a 10% tax mechanism, half of which was intended to be injected into a liquidity pool. However, prosecutors allege that Karony and his accomplices fraudulently transferred millions of dollars from this pool for personal use. His accomplice, Thomas Smith, pleaded guilty in February 2025 and is awaiting sentencing; another accomplice, Kyle Nagy, remains at large.

Arkham will shut down its cryptocurrency exchange, Arkham Exchange.

Data analytics platform company Arkham Intelligence plans to shut down its cryptocurrency exchange, Arkham Exchange. The platform was conceived in 2024 and launched spot trading in early 2025, but struggled to maintain operations due to poor trading volume. The company has not yet responded to requests for comment regarding the closure.

Google warns: North Korean hackers are using AI technology and fake Zoom meetings to launch malicious attacks against the crypto space.

According to Decrypt, Google's security team Mandiant recently released a report warning that North Korean-linked hacking groups are using AI-generated deepfake videos and fake Zoom meetings to launch more targeted cyberattacks against cryptocurrency and fintech companies.

The report indicates that a hacking group known as UNC1069 (or CryptoCore) recently compromised a fintech company, using a hijacked Telegram account to launch a fake Zoom meeting. During the meeting, they used a deepfake video of a well-known cryptocurrency executive to gain the victim's trust. The attackers used the pretext of an "audio malfunction" to trick the victim into running malicious commands, ultimately deploying seven different families of malware on the system, designed to steal credentials, browser data, and session tokens. This group primarily targets businesses and individuals in the cryptocurrency industry, including software companies, venture capital firms, and their employees.

Coinbase CEO's wealth has fallen out of the top 500 of the world's richest people, shrinking by more than $10 billion in seven months.

According to Bloomberg, Coinbase CEO Brian Armstrong's wealth has fallen out of the top 500 of the world's richest people as cryptocurrency prices continue to decline. According to the Bloomberg Billionaires Index, his net worth has shrunk by more than $10 billion in seven months, from a peak of $17.7 billion to approximately $7.5 billion. Armstrong holds about 90% of his wealth in his 14% stake in Coinbase. The stock has fallen about 60% since its peak on July 18 last year, with a single-day drop of 2.8% on Tuesday.

Other cryptocurrency billionaires have also seen their wealth shrink significantly. The Winklevoss brothers, co-founders of Gemini, saw their net worth drop from $8.2 billion in October of last year to $1.9 billion. Galaxy Digital CEO Michael Novogratz's net worth fell from a peak of $10.3 billion to $6.2 billion. Strategy founder Michael Saylor's net worth has evaporated by about two-thirds since its July 2025 peak, currently standing at approximately $3.4 billion.

Stablecoin infrastructure startup Levl has raised $7 million in seed funding, led by Galaxy Ventures.

According to Fortune magazine, stablecoin infrastructure startup Levl announced the completion of a $7 million seed funding round, led by Galaxy Ventures, with participation from Protagonist, Deus X, Blockchain Builders Fund, and other institutions.

Opinion

Galaxy Digital CEO: The "speculative era" of cryptocurrencies may be coming to an end.

According to CNBC, Galaxy Digital CEO Mike Novogratz stated at a digital finance forum on Tuesday that the "speculative era" of cryptocurrencies may be coming to an end, and the industry will shift towards a development phase characterized by real-world assets and lower returns. Novogratz pointed out that this market correction reflects a structural shift in the industry, rather than being caused by a single event. He specifically mentioned the massive liquidation of leveraged positions in October 2025, believing it "cleared out a large number of retail investors and market makers" and put sustained pressure on prices. As more institutional investors with lower risk appetites enter the market, the industry will gradually shift from expectations of high returns to the widespread adoption of global financial services based on blockchain infrastructure.

Regarding regulation, Novogratz revealed that he recently spoke with Senate Minority Leader Chuck Schumer, and both parties are keen to push for the passage of the CLARITY Act. He believes the bill is not only driven by multiple practical needs but will also "revitalize" the crypto market, and he is confident that the crypto market structure bill will eventually become law.

The CEO of Crypto.com stated that after he purchased the AI.com domain, someone offered him $500 million to acquire it.

According to DEGEN NEWS, Crypto.com CEO Kris Marszalek revealed that after purchasing the AI.com domain for $70 million, someone offered more than $500 million to buy it.

Michael Saylor: Concerns about Strategy selling off Bitcoin are "unfounded"

According to CoinDesk, Strategy Executive Chairman Michael Saylor stated in an interview with CNBC that market concerns about the company potentially being forced to sell Bitcoin due to a price drop are "unfounded," and reiterated the company's commitment to continuing to accumulate Bitcoin. Saylor pointed out that the company's net leverage ratio is only half that of a typical investment-grade firm, and its balance sheet has cash reserves sufficient to cover 50 years of dividends. He emphasized, "We will not sell; we will continue to buy Bitcoin. I expect to buy Bitcoin every quarter going forward."

Important data

Arkham: Trend Research's final loss on ETH in this round was $869 million.

According to Arkham, Trend Research's final loss on ETH in this round was -$869 million. The firm closed its final ETH positions last Sunday. Its peak ETH long positions reached $2.1 billion. Now, their on-chain accounts are completely empty, with a final loss of $869 million.

Goldman Sachs significantly reduced its holdings of spot Bitcoin and Ethereum ETFs in Q4 of last year.

Goldman Sachs significantly reduced its holdings of spot Bitcoin and Ethereum ETFs in the fourth quarter of 2025, by 39.4% and 27.2% respectively compared to the previous quarter.

According to Goldman Sachs' latest 13F filing with the U.S. Securities and Exchange Commission, as of December 31, 2025, it held approximately 21.2 million shares of the Bitcoin ETF, valued at $1.06 billion, and approximately 40.7 million shares of the Ethereum ETF, valued at approximately $1 billion. Both holdings decreased significantly compared to the third quarter. Meanwhile, Goldman Sachs added positions in the XRP and Solana ETFs during the quarter, holding $152.2 million in XRP ETF and $108.9 million in Solana ETF as of the end of last year.