Unchained - Why Sony Launched Soneium, an Ethereum L2, and Blacklisted Some Memecoins - Ep. 767

Episode Date: January 17, 2025

This week, Sony launched the mainnet for Soneium, its Ethereum Layer 2 blockchain built on the OP Stack from Optimism. Soneium is designed to support creators, developers, and fans through tools like Sony’s NFT-based Fan Marketing Platform and Soneium Spark. However, Soneium’s launch has sparked controversy. Its decision to blacklist some memecoins—over intellectual property concerns—has raised questions about the balance between decentralization and protecting creators’ rights. Even Ethereum co-founder Vitalik Buterin weighed in, highlighting the tradeoffs businesses face in Web3. Sota Watanabe, CEO at Startale, took a quick interview to clear up the misunderstanding about IP infringement. He also explains the vision for the platform and what’s next for Soneium in entertainment and finance. Plus, at the end of the episode, Laura speaks to Ari Gore, head of communications at Zengo Wallet, about protecting your private keys and your cryptocurrencies from natural disasters. Show highlights: 01:52 Why Sony decided to launch a layer 2 on Ethereum 05:39 How Soneium will work with creators to support them 11:29 Sota’s response to the backlash about blacklisting memecoins 18:46 How Soneium’s technical implementation protects IP rights 23:56Why Soneium attracts people from certain demographics 27:05 What the L2 blockchain will focus on next 27:05 Tips to protect your crypto safe from natural disasters 34:47 News Recap Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! Stellar Build Better Quai Network Polkadot Guests Sota Watanabe, CEO at Startale Ari Gore, head of communications at Zengo Wallet Links Soneium Mainnet: Invoking Emotion And Empowering Creativity Tweet by PopPunkOnChain Tweet by 0xKawz Tweet by Vitalik  Tweet by donnoh_eth Soneium's Philosophy for Responsible Innovation Learn more about your ad choices. Visit megaphone.fm/adchoices

It's all about the parents. And right now, if IP is freely used by anyone, a meme coin, monetized by someone, we will never onboard mainstream creators on-chain. So I think we are taking the right step. Hi, everyone, welcome to Unchained, your Nohei resource for all things crypto. I'm your host, Laura Shin. We are now featuring quotes from listeners on the show. Today we have a comment from Chris the drummer on X, responding to the recent bits and bits

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Today's guest is Sota Watanabe, director of Sonium. Welcome, Soda. Yeah, thank you very much for having me, Lola. I'm big fun of the unchain. Oh, thanks. Thanks for listening. Sony launched its layer two, Sonium, this week. How did Sony decide to launch a layer two and how does Sonium differ from other layer two's? Yeah, I would like to explain the structure of the Sonium first. So Sonium is developed by Sony Block Solutions Lab, which is the joint venture between Sony Group Corporation, which is the HQ of Sony and the Starter Group. And I'm director of Sonium. And we kicked off the conversation two years ago and we have researched a lot of the block.

chain, a lot of the tech stock, regulation, you know, accounting tax, or I think almost everything. And we decided to launch ECRAM layer two with OPESTOC and joining the super chain. And I think one of the most important things as a Web3 project is to align with the direction of the Web 3. And I think ETHIUM is clearly getting a lot of attention and the most robust and decentralized platform. So it was a natural decision for us to launch the ECRAM layer 2 to align with Web 3 community. And what we would like to do is to onboard literally billion people on chain. And our mission is to realize the open Internet that transcend boundaries. And today we have a lot of other boundaries,

such as Web 2 versus Web 3, DGN versus regulators, and even more, right? But eventually we would like to make the world where people are using Web3 without knowing Web3, just like Internet of today. People don't care. The TCPIP, HTTP, the people does not care, this application is built on AWS, Azure, JCP. They're using because it's convenient. So we would like to penetrate Web3 technology into daily lives. And what's missing in the Web3 market is strong distribution channel and we would like to onboard other people through our existing distribution channel especially in our entertainment market. Okay.

And so your layer two though, it is a little bit different from other layer two, so how would you describe it? We are making the entertainment layer of the Web 3. So Sony Group is recognized as an entertainment company such as Sony Pictures, Sony Music, Sony Gaming, and even more. Sony Interactive Entertainment is the gaming department of the Sony Group. And I think today we onboarded around 220 million monthly active wallet addresses in the market. But this is number of the address.

So I would say we onboarded around 1 or 2% of the human being, which is not enough. And Web 3 is already recognized as a finance layer of the next internet. And I think our next market is going to be entertainment. Because entertainment has power to penetrate the technology into the daily likes. People fundamentally wanted to be connected. Want to share enthusiasm. Want to share emotion and passion.

and want to be connected, right? And the SNS, like Facebook at the time, or Twitter at the time, was the pivotal product to onboard a lot of the people to the internet. And we would like to make a pivotal product to onboard a billion of the people through the power of entertainment, which is we are good at.

So Sonium hopes to support creator economies and leverage the connections to Sony's subsidiaries for film, music and games. So if sodium becomes widely used someday, then what will that vision look like for creators and their fans? Creators, fans, and the developers are the most important people in our on Sonium, and we are here to unleash creativity, to connect people, and onboard a lot of people on chain. And I would like to give you some of the example, which is already public, and are published by a Sony group today's ago. The one use case is built by Sony Picture Entertainment in Japan.

And the company is offering free access to exclusive contents for Z's who purchased eligible title on Prime Video, which is Amazon Prime Video. And customers will be able to join the specific group by having digital. by having digital collection, which is the NFT, and enjoy the film, exclusive film. So it functions a little bit like as both a ticket and a souvenir in a way. Yeah, yeah, yeah. And we are not saying an NFT much because people does not need to know.

This is an NFT or not, right? This is what we would like to do. Ordinary people does not care, which is, you know, blockchain or non-Blockchain, this is using an NFT or, you know, just a database. Yeah, database, they don't care. So we would like to penetrate the technology in the daily lives. And another example is Sony Music Entertainment France.

They're working with a lot of the artists. And to celebrate the second anniversary of the artist, the Sony Music Entertainment France is going to make the NFD together with the artist. And if you have the NFD, you can get exclusive opportunity, for example. And the last one is Sony Music Publishing, Japan. And the artist is constantly doing a lot of the concerts. Artist is singing song, artist is making contents and so on.

And when you go to the concert, you can get exclusive NFD. And if the same artist hosts another concert, you can get another NFD, which is SVT. So you can prove the loyalty of the artist. So let's say you are the fun of the Taylor Swift. The benefit you can get now is exactly, you know, I mean, there are two type of the people who joined earlier and who joined later. The benefit of the former people is almost the same as the latter people. So we would like to visualize loyalty on-chain so that the,

a fan who have been supporting the artist from the beginning can get more benefit. And we would like to visualize the fan's passion and supports on chain. Oh, that's so interesting. Yeah, in a way, it's sort of like how just in crypto generally, people will say what year they got into it. But yeah, you're applying that concept to, yeah, our artists and other creators. And I think like some of what you mentioned here references some other new products you launched, which are SNFT and S dot blocks.

SNFT is what it sounds like. It's a tool. Yeah. And then the S blocks, I guess, it seems to be like a way to exchange different assets. It's a crypto exchange. Licensed the crypto exchange in Japan. Oh, okay. Oh, so it's also for crypto.

Yeah. Generally not. Okay, got it. All right. Well, in a moment, we're going to talk a little bit about some of the drama that happened this week when Sonium launched, but first a quick word from the sponsors you make this show possible. Introducing Kwai Network, a next generation proof of work layer one for a new decentralized global

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Do you have a take you want to share? Leave a comment on an episode on YouTube or X. Back to my conversation with Soda. Users became upset when certain meme coins were blocked during the launch of Sonium. And Pop Punk, one of the Twitter users, tweeted, quote, Sonium is literally a Fed chain. somebody named Zero X cause tweeted, Sonium rugged users 100K-Eath and launch day. I've never seen anything like it.

And Defy Ignis tweeted, all current corporate L2s fall short and will probably never align with Ethereum as their incentive structures differ. Today's Sonium launch with IP and contract restrictions with freezing rights is a clear example. So why did Sonium choose to block certain meme coins and what's your response to these criticisms?

Let's talk about Vitalik's tweet as a lot of, well. He's, you know, supporting our approach as well. Vitalik's quote, I mean, his was a long thing. So only copied part of it. But he said, the Sonium situation is a good live demonstration of how launching an Ethereum L2 is great for businesses and users. Businesses can make very fine, greened choices around how much control they keep versus give to users.

But whatever rules they choose, that's what the rules are. And it went on from there. But, yeah, that was his. take? Yeah. First of all, I think, you know, Web3 is getting bigger and bigger, and we are onboarding a lot of the people who have never used Web3 before, and we are onboarding a lot of the company. So I think discussion itself is pretty fruitful, so which is, I mean, I would say this is very important discussion. And when it comes to this drama, I think we have three elements. First one, meme coin. And second one, IP infringement. And the third one, RPC

selection. So regarding the meme coin, I think meme coin is definitely the fun part, an important part of the website culture. So meme coin is absolutely fine. And I personally own a lot of the meme coin, and I like meme coin as well. And the second one, IP infringement. We don't allow IP infringement. because this is against our philosophy. The creators is the most important people, and most important, they have a huge role in our ecosystem. And I'm Japanese, so I have been working with a lot of the creators. They say anime creators, manga creators, and illustrators,

and so legendary creators. And they literally bet their life, use their time, a lot of time, to generate one single IP, literally whole life, let's say, if for example Dragon Ball or maybe Naruto or a lot of the things, I really respect them, right? Because some people are using their IP and monetize without permission. This is unacceptable, basically speaking. And the important things is how to make a best balance between ESOS of the decentralization while protecting a creator's IP, the creator's right.

So in terms of the IP infringement, Sony is a public company and Sony Value Creators, and that's why IP infringement is not acceptable on Sonium. And last one is RPC restriction. So this is RPC level restriction. So for non-technical people, I would say front-end restriction. So there is no censorship at the chain level. These two are completely the separate things. And thanks to OP stack, OP stack is amazing, by the way.

OP stack allow, you know, users to enforce layer two transaction on layer one. So meaning there is no censorship on layer one. you know, on Sonium by using Ethereum, layer one. This is the beauty of the Ethereum. This is the beauty of OP stack. So, so, we have to find the best balance, right? And we feel strong responsibility because I think, you know, Sonium is the largest chain, which is backed by largest company

in the Web3 market as of today in terms of the variation. So I think a lot of the company which is joining the Web3 market make this as the reference, make this as an example. So we need to make a great example for followers. And I would like to make this happen and make the rule, make the standard together with all builders in the Web3 market. So Vittalik supporters, OP team supporters, a lot of people support us while other people criticize, which is great. So we would like to make a standard together with entire industry. So this is our responsibility. So which is, yeah, we are very proud of this.

And I think we are on the right. We are taking the right step. And we could be better. But yeah, let's moving forward. Yeah, I was going to ask you about the tweet from somebody named Dono underscore Heath who said that they bypassed Sonium Sequencer and bought a band token with a forced transaction through L1. And he literally, or they or, I don't, you know, I don't know this person gave instructions

on how to do it step by step. So you just find it interesting that you're acknowledging that that's possible and that that is like part of this ecosystem. But, you know, you're saying like for the mainstream that you're targeting, you would like to enforce these rules. Yeah. I think, you know, it looks like they're escaping. they would like to say they escaped.

But we have been researching the blockchain, OP stock, and other tech stock for more than two years, right? So we knew it. So we are taking the balance. If we would like to completely ban, we chose maybe, you know, private blockchain, consortium blockchain, which other companies do. I personally are strong public blockchain believer.

The openness, verifiable, transparency, auditability, and so on. We would like to make the best balance between the essence of the public blockchain while keeping the creators right business side. Yeah, the way I view it is very similar to how when Apple Music and Spotify and all that came on, it's not like the, you know,

I actually don't know which ones are still around, today, but it's not like, you know, whatever the equivalent is of Napster, LimeWire, whatever. It's not like they just went away. So, but yeah, it's that the vast majority of people will probably use the one that, you know, doesn't require them to have a special technical knowledge. So let's just talk a bit, though, about how you're enforcing these IP protections. So let's say that somebody tries to use Sonium and the, you know, I don't even know like how you're identifying which tokens violate a pre-protection. So how do you identify that? And then once you

find a token where you think that there is some violation, what happens at that point? Like, you know, what do you do on that? And just in terms of the token, but also like your team, I'm sure, is like trying to resolve this. So yeah, how do you identify? And then what happens after that? Yeah, I will keep it showed. But we have published the guideline. So it would be great if the listener check it, if I could check it. But to make long story short, we have an internal team who is checking the network, and especially the meme coin, which is violating IP rights.

Let's say someone is using, you know, Sony's existing IP, such as Eyebow or Throne, which is the IP owned by Sony. and someone is using the Sony as the ticker of the token. So this is not good, right? And we are currently automating the process. And we are making the announcement procedure. And we would like to make it, and we would like to make whole process as transparent as possible.

And we would like to make the guideline together with the community. feedback is, you know, always welcome. The important things is this is RPC level as of today. So meaning there's some way to bypass the RPC, just like enforcing layer to transaction from layer one. Okay. But so in your blog post, you talked about how you're going to have a grace period if you notice a violation of 12 hours. So explain what that means, like what happens to the tokens during that 12 hours and what is Sonium doing in the background during those 12 hours. Yeah. Yeah, we have been speaking with the community and we have been speaking with the project

which violated the IP rights. And one thing we realize is they don't have a malicious attitude, the malicious, you know, intentions, which is too degen, right? It generally, it's not good in a web, too, or a real world, but they didn't know. Simply, they didn't know. And if we could communicate with them, they could change. They understood and they change. And then they are behaving good.

So we value communication. The communication is the key to make the great community, make that trust each other. So we have a grace period, 12 hours. if we could reach out to the project, we reach out to them. And if they change the illustration, let them go. Mim Korn is okay. We accept Mim Koi.

I love it. I personally love it. But if they did not comply, let's say they are using an eyeball's illustration with Sony Ticker, we needed to, you know, but the district at the RPC level, not chain level. Because we value creators and we value creativity. And the one insight I would like to share today is, as you said, some decisions,

some Web3 people complain. But at the same time, you know, we are facing Web3 community. At the same time, we are facing Web2 people, right? some of the web 2 people highly value our approach the balanced approach and some of the web 2 people and a lot of the illustrators say they feel comfortable they feel safe to join web 3 so this is the point we need to onboard web 2 people while valuing the web 3 while taking Web 3 approach. So it's all about the parents. And right now, you know, if IP is freely used by anyone, a meme coin, monetized by someone, we will never onboard mainstream creators

on chain. So, so I think we are taking the right step. Yeah, yeah. I've had debates about this with the chopping block and Haseeb Qureshi, the moderator of the chopping block, is a little bit more, what's the word, dismissive of the importance of creators and I being a creator, somebody who values creators. So I understand what you're saying. I did want to ask quickly, because I can't remember you said at the beginning something like, was it 200 million addresses or I forget the number you mentioned? Oh, yeah.

Today, Web 3 has 220 million monthly active wallets. So how many wallets does Sonium have? We launched the main net yesterday. And let me see, we launched the main net yesterday. Oh, well, okay. So during the test net, I saw 14 million. Yeah, I think it's more than 15 million or 16 million. So I don't know if you have any insight into who these users are,

what types of crypto activity they're interested in or what geographies they're from or what blockchain communities they tend to be active in like do you have any insight into who you're attracting yeah I think uh mainly uh people from US and the people from Japan and uh we are doing someone with a trial we are some of we are doing some of the POC which is not announced yet, and we are not saying NFT or we are not saying blockchain, we are not saying like a Web3. But we are actually using

Sonium TestNet for specific activities right now. So we are actually generating some decent number of the transaction from this kind of the POC. So once time is right, I think we are going to make an announcement. Okay.

But it sounds like it tends to be creators and people who tend to do like NFT type stuff. Okay. And so now that you've launched, what are the next plans for Sonium? Yeah. As I said, Sonium is going to be an entertainment layer of the next internet. But I think entertainment layer needed to be built on finance layer. Because finance amplify the power of the entertainment.

So in coming three months, we just launched a main net. So we are focusing on the finance layer. And then at the same time, we are going to deliver entertainment together with IP. So in coming weeks, we are going to have several great campaign by using IP, by working with a lot of the company. So you will be surprised. In the incoming months, we are going to focus on entertainment. I think starting from idol group, music, movie, and eventually the gaming. Gaming is the big market, but there are a lot of the specific chain, which is specifically focusing on gaming.

So it's all about strategy. We would like to start from a niche market and go into enter the big market step by step. All right. Well, it has been such a pleasure chatting with you. Thank you so much for coming on Unchained. Yeah, thank you very much for having me. Before we move on to the news recap, today we are doing something special. After the fires in Los Angeles, we'll have a discussion about protecting your private keys and crypto from natural disasters.

Stay tuned for those tips. Hi, everyone. I'm here now with Ari Gore, head of communications at Zanko Wallet. Welcome, Ari. Thank you. It's great to be here. So the fires in Los Angeles have been an utterly heartbreaking disaster. And generally, those kinds of things don't seem super related to crypto, but I'm sure people have seen that there have been

report surfacing here and there, that in addition to 12,000 homes being lost, there also have been people who have lost their seed phrase that, for instance, was maybe written on a piece of paper. And Ari, you reached out to me with some thoughts about this. You know, when you see these reports, what are your thoughts about how it is that the crypto industry can serve people better to keep their crypto safe? Yeah, thanks, Laura. So, I mean, the fire. in LA are devastating. And my heart really goes out to everybody who've been impacted. I know people who lost their homes completely. Everything was destroyed. And I would say my, the response by the crypto ecosystem has been both heartwarming and frustrating. Heartwarming in that, you know,

shout out to the giving block. They're helping raise hundreds of thousands, if not millions of dollars for people impacted. It shows the best of what we can do in crypto. But frustrating because a lot of the responses to people who have lost, their hardware wallets were burned, right? Their seed phrases were destroyed. It's been, oh, you need to create a more complicated seed phrase-based system. You need to, you know, use safe multi-sig, for example. You need to separate your seed phrase into three parts, separate them between different jurisdictions, geographies. Look, some people will do that, but the average person is not doing that. Your aunt, your uncle, brother, sister, our friends are not doing that.

And what frustrates me is there are better ways to securely self-custody your assets, right? These technologies already exist, right? MPC wallets, multi-party computation or AA account abstraction wallets. And to me, right, we're so focused on building the future. We are at the tip of the spear in technology. Why are we so conservative and dogmatic when it comes to seed phrases being the only way to self-cust. It just can't continue. So why don't we first talk about what tips you would have for everyday people so they can

protect their crypto in the case of these types of natural disasters? Yeah, I think so first of all, to everyone listening right now, right, you're hopefully in a safe and secure place and you can take a moment to reflect on your current crypto holdings. How are you currently custodying your assets? Maybe some are on an exchange or two. Maybe some are in a seed phrase wallet, hardware, software. How does your system work now? And what are the limits of that system?

Think about worst case scenarios that could happen. God forbid, another fire or massive natural disaster, an event of life, right? At some point, someone else is going to have to gain access to your assets when we all move on. So what system do you have set right now? And will you be able to recover it as is? Or will your loved one be able to recover it in the future? Just because we're good at self-custody, or at least we'd like to think we are, it doesn't mean that the person who loves us and will get access to them in the future that they are. So think about the limits of that system. And then

I would suggest reconsidering how you self-custody and to diversify that process. Or consider using an MPC wallet, consider using an account abstraction wallet. And just explain what those, explain what those are. Sure. So in the last few years, there have been new ways to essentially sign on chain transactions and take control of your private keys. One of my favorite, of course, is an MPC wallet. It stands for multi-party computation. And what it essentially does is it breaks the private key into more than one spot. Think of it kind of like a multi-sig wallet where it's more secure by default because there's no single point of failure. There's no singular private key in one

location. Think of it like a decentralized private key. And so people can use a multi-sig wallet, like a safe wallet, where you set up three different ones. But that tends to be more advanced. another alternative for that is simply using an MPC wallet. And I do think that we're going to start to see these types of solutions take over, over time, or at least be included for self-custody. And it's just a matter of time before people learn about them and start to use them. And so what types of technologies would you prefer to see the industry focus on going forward to, you know, keeping these types of situations in mind.

Yeah, I'd like the, I'd like us as an industry to kind of self-reflect a little bit and ask why are we being so dogmatic about seed phrases when we can build and are already building other solutions for secure self-custody. One of my kind of favorite and terrifying stats is in the last 10 years, now about a quarter trillion dollars worth of Bitcoin has been lost or stolen because of seed phrase mismanagement. I mean, it's just unbelievable. And that's by the early adopters. That's by folks who are supposed to be good at self-custody. So if they can't do it well, how can we expect normal people to do it well? When our, I wouldn't say, technically our competitors or other people in the space are centralized systems, exchanges, the ETFs, we as an ecosystem

need to come up with better and more secure ways to ensure that it's easy to self-custody and it's secure by default. And so to talk more about MPC wallets, about A-A wallets, and to start building in those directions. Well, Ari, thank you so much for explaining what is really important information that people should know, even if, you know, what prompted it was something that, you know, is just really heartbreaking to see. It's my pleasure. I hope that this never happened. to anyone again, and that in the future, when a disaster does happen, we can rely on the crypto that

we custody to help us get to the next phase of our lives instead of see it as another source of pain. Yes. All right. Well, thank you so much for explaining all this on Unchained. It's my pleasure. Don't forget, next up is the weekly news recap today presented by WonderCraft AI. Stick around for this week in crypto after this short break. Pocod is the original and largest layer blockchain with over 2,000 plus developers. The anticipated PogoDot 2.0 upgrade will be a massive accelerator for the ecosystem. Upgrading the infrastructure with 8 times higher transaction throughput and twice as fast block times, tailored core time for the needs of every protocol, trustless bridges to multiple chains,

and revise tokenomics with a token burn to reduce inflation. Perfect for GameFi and DeFi to build, grow, and scale. Get your Web3 ideas to market fast. Think big, build bigger, with Pocodot. Join the community at Pocodot.network slash ecosystem slash community. Welcome to this week's crypto roundup. In today's recap, we cover the U.S. government's $9 billion Bitcoin restitution to Bitfinex, tether's big move to El Salvador, and the Trump administration's plans to shake up crypto regulations. We'll also dive into Bitmex's hefty fines, the SEC's

appeal against Ripple, Coinbase's latest court victory, and how a chain link whale stirred up controversy. Plus, we have updates on Jupiter's massive $575 million air drop, Ethereum's social media reboot, and legal troubles brewing for pump dot fun. And don't miss the fun bits. How a TikTok ban sparked a pink dinosaur meme coin craze. Thanks for tuning in to the weekly news recap. Let's begin. U.S. approves $9 billion Bitcoin restitution to BitFinex after 2016 hack. The U.S. Department of Justice has announced plans to return over 90,000 Bitcoin, valued at over $9 billion, to crypto exchange BitFinex. These funds are part of the nearly 120,000 BTC stolen in a 2016 hack that was one of the largest in crypto history. In a court filing submitted on Tuesday, prosecutors identified BitFinex as the rightful owner of the recovered

Bitcoin, which represents the coins left in the hackers' wallets. The remainder, approximately 20,000 BTC, was laundered through complex methods and will require additional legal proceedings for recovery. The recovered funds were seized from Ilya Liechtenstein and Heather Morgan, who were convicted in 2023 of conspiracy to launder the stolen assets. Lichtenstein received a five-year sentence, while Morgan was sentenced to 18 months. BitFinex has stated that 80% of the the recovered funds will be used to repurchase and burn its LEO tokens. A debt token created to offset customer losses after the hack. XRP surges amid reports of U.S. Crypto Reserve proposal. A report by the New York Post, citing anonymous sources, has ignited a wave of speculation

about the possibility of an America First Crypto Reserve under the Trump administration. According to the report, Trump is receptive to the proposed reserve, which was reportedly discussed in recent meetings between Trump and U.S. Crypto Founders. and could see U.S. founded digital assets prioritized, including XRP, Salana, and U.S.D.C. This potential policy shift has sparked significant excitement and some criticism within the cryptocurrency community. Co-founder of crypto research firm Reflexivity Research Will Clemente commented, Sorry, but in my opinion, the reserve should be Bitcoin only, and maybe, to a lesser

extent, stable coins, backed by treasuries. for the sake of the United States' future. Seems like this was brought into Trump's mind by some of the people that have been in his ear. Following the report, XRP's price surged by 13.4%, hitting a seven-year high of $3.40 sealers. Trading volumes spiked across major exchanges, with Coinbase reporting $1.9 billion in XRP activity, accounting for 28.7% of its total volume, and Binance seeing $3.7 billion in, trades. However, Unchained discovered that the market-driving speculation might be unfounded.

Sources suggested that Ripple Labs, the primary contributor to XRP's blockchain, could have fueled the rumors to align with ongoing regulatory shifts. Ripple representatives had reportedly met with Trump recently, despite his past criticism of the company, according to two sources with knowledge of the meeting. Adding to the intrigue, Ripple's co-founder Chris Larson's political donations to Pax supporting Kamala Harris surfaced. with Axios quoting Trump allegedly saying, You weren't with me, and maybe you were with Kamala Harris, during a meeting with the company. Tether finalizes move to El Salvador.

Tether, the company behind the world's largest stablecoin USDT, is completing its relocation to El Salvador after receiving approval as a licensed digital asset service provider and stablecoin issuer. This marks the first time Tether will establish a physical headquarters, with Reuters reporting that the firm plans to hire 100, Salvadorans over the next few years. CEO Paulo Arduino and Tether's leadership team are also moving their residences to the Bitcoin-friendly nation, according to the report. Arduino highlighted El Salvador's supportive policies and a growing crypto-savvy community as key reasons for the move. On the Bits Plus Bips podcast, Ram Al-Aulia called the relocation a massive failure of U.S. stablecoin policy,

noting these are profits that could have been earned by American businesses, but regulatory decisions push them offshore. The Trump administration is also expected to tackle the accounting policy requiring banks to classify digital assets as liabilities, which many believe stifled institutional crypto adoption. At the Securities and Exchange Commission, Republican commissioners Hester Pierce and Mark Yeda will assume majority control and are reportedly planning to begin rulemaking processes to clarify when cryptocurrencies qualify as securities. They are also expected to review pending enforcement actions and may freeze non-fraud-related cases. SEC appeals. XRP ruling challenges retail sales exemption. The SEC has filed an appeal with the Second Circuit Court of Appeals

seeking to overturn a 23 district court ruling that Ripple's XRP token was not a security when sold to retail investors. Stuart Alderote dismissed the SEC's appeal as a rehash of failed arguments. The case stemming from the SEC's 20-Denton-2nden-2. The case, stemming from the SEC's 20-Denton-2, 20 allegations that Ripple raised $1.3 billion through unregistered security sales remains pivotal for the regulatory future of digital assets. Coinbase scores another legal victory. Following its appeal in the ex-RP ruling, the SEC faces further scrutiny after a federal appellate court ordered the agency to provide a clearer explanation of its refusal to create specific cryptocurrency regulations. The U.S. Court of Appeals for the Third Circuit ruled in favor of Coinbase

on Monday, stating the SEC's handling of the petition was arbitrary and capricious. Coinbase had filed the petition in 2022, seeking guidance on how securities laws apply to digital assets. While the court stopped short of mandating new crypto-specific rules, it directed the SEC to justify its position on crypto assets more thoroughly. Judge Stephanos Bibas emphasized the need for a well-reasoned explanation, cautioning the SEC against issuing another insufficient response. Coinbase's chief legal officer, Paul Grual, welcomed the decision, calling it a significant step toward regulatory clarity. Bitmex ordered to pay additional $100 million, crypto exchange. Bitmex has been fined in additional $100 million by the U.S. District Court for the Southern District of New York,

for violating anti-money laundering and know-your-customer rules under the Bank Secrecy Act. The judgment follows earlier penalties, including a $110 million settlement, reached last year after Bitmex admitted to the violations. The court found that Bitmex had failed to establish effective AML and KYC systems from 2015 to 2020, allowing illicit activity and U.S. user access without appropriate regulatory compliance. Prosecutors argued the exchange generated $1.3 billion in global revenue while evading U.S. laws. Bitmec's parent company, H.DR Global Trading Inc., now faces a two-year probationary period. The penalties come amid broader enforcement actions, including previous charges against Bitmex founders and executives for related violations by agencies such as the CFTC and FinC.

Chainlink whale exploits staking limits. A prominent trader, pseudonymously known as Old White, on the OpenC platform, has drawn attention for circumventing chain link's staking restrictions and recently moving millions in link tokens to Binance. Chainlink, a blockchain Oracle network, originally capped staking at 7,000 tokens per wallet, to encourage broad participation when it launched its staking program in 2022. The trader bypassed this limit by deploying over 100 wallet addresses, staking a total of more than 1 million link tokens, worth over $20 million at current prices. This strategy, referred to as Sibble manipulation, enabled the user to dominate the staking pool, which ChainLink had aimed to democratize.

Onchained data examined by unchained reveals that between November and January, Old White consolidated rewards from 113 wallets into a single address. As of December 29, the address sent 280,164 link, valued at $6 million to Binance. A move likely signaling intent to sell. Jupiter prepares 575 million jupe token airdrop. Jupiter, a decentralized exchange aggregator on the Solana blockchain, has announced details of its highly anticipated Jupewary AirDrop. Set to take place next week, the event will distribute 700 million JUP tokens valued at $575 million to the community. This marks

the protocol's second annual AirDrop following last year's event, which rewarded 955,000 wallets. The allocation includes 440 million tokens for users, 60 million for stakers, and 200 million for growth initiatives aimed at expanding Jupiter's ecosystem. According to Jupiter contributor Cash Donda, approximately 2 million wallets are eligible for this year's rewards. The 2 million wallets that do receive the airdrop will be more likely to be real cats and help us accelerate towards a decentralized future, Donda explained in a research post. The rewards are tier-based, favoring active participants. For instance, top-tier expert traders can receive up to 300,000 JUP worth around 250,000 $1,000, while lower-tier participants may get as few as 20 T's keep.

Jupiter also launched a rewards checker tool, allowing users to verify eligibility ahead of the drop. Ethereum Foundation revamp social media strategy. The Ethereum Foundation has unveiled a revamped approach to its social media presence, following community criticism over its lack of marketing. The Foundation announced the introduction of a new account, at Ethereum FNDN, to share updates on grants, projects, and treasury movements, while the Adethearium handle will now be used more actively for general updates. This shift comes after years of sparse activity on the Adetheum account,

which posted just 14 original tweets since mid-21. The announcement, shared on X, formerly Twitter, marks the EF's effort to address concerns that its minimal social engagement hindered Ethereum's growth and narrative. This is the beginning of a new approach. We plan to iterate and expand over time. time, wrote the foundation. Community members, including Ethereum builder Joseph Skierrezzi, expressed optimism, saying the change could help highlight the ecosystem's achievements.

The foundation also extended its social strategy to platforms such as blue sky and lens. Pump. Dot Fun faces legal threat. New York-based Berwick Law has announced plans to pursue legal action against Solana-based meme coin platform Pump. Fund, citing claims of investor harm and unethical activities promoted on the platform. The law firm is calling for affected users to step forward and support the case to seek restitution. Pump.fun, responsible for creating over 6 million tokens since its January 20-year launch, has faced criticism for fostering speculative trading and risky behavior. The platform controversially suspended its live-streaming feature for allegedly encouraging acts such as staged suicides and animal abuse to promote tokens. Despite its dominance, a

counting for 70% of recent transactions on the Solana network, data from Dune analyst Adam Teichie reveals only 0.4% of its users have profited over $10,000. Time for fun bits. As the U.S. malls kicking TikTok off the app store, crypto did what crypto does best, turn global drama into a meme coin frenzy. The unlikely star? A pink dinosaur named Momo. Yes, really.

Momo, a salana-based token, was chilling in obscurity until TikTok refugees flocked to China's Instagram-like app, RedNote, where users embrace the dino as a kind of digital mascot. The default username on Red Note is Momo. Fast forward a couple of days, and meme coin Momo's value shot up 160x, because why not? With a market cap under $5 million and trading volume barely $40 million, MoMo isn't exactly taking on Bitcoin. But hey, who needs fundamentals when you have a cute mascot and social media chaos? If TikTok gets banned, MoMo might just moon again. Because nothing screams freedom like on-chain dino memes.

And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to unchainedcrypto.substack.com, that is unchainedcropto. com and sign up for our free newsletter so that you can stay up to date with the latest in crypto. Unchained is produced by Laura Shin with help from Matt Pilchard, Juan Aram. Megan Gavis, Pam Majimdar, and Margaret Curia. The weekly recap was written by Juan Aranovich and edited by Kari McMahon. Thanks for listening.