A Plunge Postponed? 👀

Plus, 🔎 Trump’s crypto fund raises eyebrows, 🚀 Ethereum’s gas limit breaches records, 💸 Counting Coinbase’s scam losses, and more!

Author

Juan Aranovich
February 04, 2025

Hey, readers!

In today’s edition:

  • 🚀 Bitcoin bounces back

  • 🤨 World Liberty Financial: “Nothing to see.”

  • ⚡ Ethereum gas limit surges

  • 🚨 Coinbase’s scammer problem

  • 💔 A close call with fraud

  • 🛡️ Protection from pig butchering

Share your vision with Stellar’s Build Better initiative. Help shape blockchain’s future and enter to win from a $30,000 prize pool.

By Tikta

Crypto Rebounds After Trump Pauses Tariffs 

Bitcoin surged back above $102,500 and Ethereum rose 18% to an intraday high of $2,919 after U.S. President Donald Trump agreed to a temporary halt to his plans to levy 25% tariffs on imports from Canada and Mexico.

“I just had a good call with President Trump,” Canadian Prime Minister Justin Trudeau wrote on X, outlining plans for the U.S. and Canada to work together on stopping fentanyl being smuggled across their border.

“Proposed tariffs will be paused for at least 30 days while we work together,” Trudeau said.

Mexican President Claudia Sheinbaum announced a similar agreement with the U.S., saying that tariffs would go on hold for a month as Mexico ramped up drug trafficking countermeasures at its northern border.

China retaliated swiftly against tariffs the Trump administration levied against it on Tuesday, slapping tariffs of its own on a range of U.S. products, including crude oil, coal, LNG, farm equipment and vehicles. 

Meanwhile, European Union leaders are bracing for U.S. tariffs following bellicose remarks made by Trump late last week.

For now, at least, the lowering of the political temperature between the U.S. and its neighbors has seen market sentiment improve, with the global crypto market cap now above $3.23 trillion after gaining 7% following the initial tariff shock.

Mantle is building the largest sustainable hub for on-chain finance. Launching three new core innovation pillars: Enhanced Index Fund, Mantle Banking and MantleX. 

World Liberty Financial ‘Not Selling’ After Moving $307M

World Liberty Financial, a crypto platform run by President Donald Trump’s sons Donald Trump Jr. and Eric Trump, says it is not selling crypto, having moved $307 million worth of tokens to crypto exchange Coinbase Prime.

The transfer was flagged by onchain data tracker SpotOnChain, which also noted that the Trump platform still holds $96.62 million of various assets in nine known wallets. 

When tokens are sent to exchanges in the way that World Liberty Financial has moved its holdings, it normally implies that they are being sold off. However, the platform insists that the movements are part of its regular treasury management.

“To be clear, we are not selling tokens — we are simply reallocating assets for ordinary business purposes,” World Liberty Financial said in an X post. 

Ethereum Gas Limit Breaches 34M Ahead of Pectra Upgrade

Ethereum validators have been pushing for an increase in the network’s gas limit since core developer Eric Conner and former Sky Protocol developer Mariano Conti started their “Pump the Gas” campaign last March.

At the time of writing, 51.8% of blocks were signaling for a gas limit increase of more than 30 million. Data show that shortly after midnight on Feb. 4, the gas limit breached 34 million.

Raising the gas limit would enable each block to include more transactions or more complex transactions, which is essential for scaling Ethereum's capabilities. With more transactions included in each block, overall gas costs could fall, benefiting both users and developers.

The development comes ahead of Ethereum's highly anticipated Pectra upgrade, which is expected to go live next month.

Ethereum co-founder Vitalik Buterin says Pectra will double the capacity of layer 2 networks by increasing the blob target from three to six, facilitating better data handling and lower data storage costs. 

A multi-currency wallet that’s easy, quick, and secure? …That’s RockWallet! Discover how you can take control of your assets and feel confident in the digital economy.

Coinbase Users Lose $300M Scams Every Year: ZachXBT

Blockchain investigator ZachXBT says Coinbase users are losing more than $300 million annually due to social engineering scams.

Between December and January alone, users lost $65 million, according to ZachXBT’s data.

Scammers typically orchestrate such schemes by calling victims from spoofed phone numbers, using personal information from private databases to gain victims’ trust. 

They then instruct those victims to transfer funds to Coinbase wallets and whitelist an address, pretending that support is verifying their account security.

“For the vast majority of the time these theft addresses are not being reported at all by Coinbase in popular compliance tools even after the thefts went on for weeks,” said ZachXBT, noting that other major exchanges do not have the same issue.

Build real-time, reactive, fully on-chain applications with Somnia: 400,000 TPS, sub-second finality, and sub-cent fees. Perfect for gaming, social, and metaverse builders.

How I Almost Got Slaughtered in a Pig Butchering Crypto Scam

Personal Essay by Nelson Wang

When an attractive young woman named Millicent first messaged me on Instagram a little over a year ago, I was skeptical. After all, I’d received dozens of messages like this before from strangers on Instagram and other social media platforms, mostly consisting of random queries or comments on my posts, and I knew that most, if not all, were some kind of scam, the details of which I could only imagine. And as a longtime business journalist, being skeptical was my stock in trade. 

But something about Millicent’s message caused me to lower my guard.

For starters, her Instagram profile showed that she had a lot more followers than people she was following, which signaled to me that it wasn’t a quickly executed profile that someone had just created to start following lots of people so that they would follow her back.

Secondly, her photos, which went back at least two to three years and showed her in glamorous locales such as Paris and Florence with her companions, had what looked to be authentic comments from friends and followers, many of which included responses back from her.

Finally, her note to me asking about one of my photos in which I appeared to be wearing Chinese military garb seemed rather innocuous, and one whose backstory would be fun to recount if she turned out to be a real person.

8 Ways to Protect Yourself From Pig Butchering Scams

Pig butchering crypto scams, in which con artists meet and romance people online before convincing them to invest in a (fake) crypto venture and then absconding with their money, are one of the fastest-growing hoaxes in the world, costing roughly 18,000 Americans more than $650 million in 2023 and a whopping $2.3 billion from 2021-23, according to the FBI. 

And not only that, but most of the people executing these schemes, at least at the lower levels, are themselves victims of con jobs, forced to work grueling hours for little pay in gigantic scam compounds. 

Here are the top ways to guard against getting taken in by one of these nefarious schemes.

  • 🇺🇸 Trump-backed crypto platform World Liberty Financial sought blockchain projects for token swap deals, offering to buy their native tokens in exchange for a minimum $10 million WLFI token purchase, with higher buy-ins securing priority treatment, according to a Blockworks report. Despite denials from TRON and Movement Labs, onchain data confirm World Liberty holdings of $9.3 million in TRX and $2 million in MOVE, fueling speculation about undisclosed arrangements.

  • World Liberty Financial also purchased 86,000 ETH for $220 million, bringing its total holdings to $420 million, with analysts speculating that the firm was capitalizing on market dips to bolster its crypto portfolio.

  • 🏦 Coinbase urged U.S. banking regulators to ease restrictions preventing banks from offering crypto custody and trading services, arguing that existing laws already permit such activities and calling for clearer guidance on outsourcing to firms like Coinbase.

  • 🏈 The Commodity Futures Trading Commission questioned Crypto.com and Kalshi over the compliance of their Super Bowl LIX derivatives contracts, scrutinizing whether they meet regulatory standards after Crypto.com launched a betting platform in December and Kalshi expanded its event-based trading model.

  • ⚖️ U.S. prosecutors charged Canadian fugitive Andean Medjedovic with hacking Indexed Finance and KyberSwap for a combined $65 million, alleging he laundered funds through a crypto mixer, while Medjedovic maintained the exploits were legal under the “code-is-law” doctrine

  • 📉 MicroStrategy paused its weekly bitcoin purchases after a 12-week streak, holding at 471,107 BTC, with analysts speculating that the halt was due to an upcoming earnings report and blackout period.

  • 📜 Trump-appointed Treasury Secretary Scott Bessent took on an additional role as acting director of the Consumer Financial Protection Bureau, which has introduced crypto-related consumer protection rules, while Elon Musk’s government efficiency department hinted at dissolving the agency.

  • 🇷🇺 Russia’s energy ministry plans a mandatory registry for crypto mining equipment, aiming to track miners nationwide, while the Federal Tax Service introduced an online feature for reporting digital asset earnings following tax rules enacted by President Vladimir Putin.

  • 🇪🇺 Kraken secured an EU MiFID license to expand crypto derivatives trading, while Coinbase obtained a UK virtual asset service provider registration, allowing it to offer crypto-fiat services amid tightening European regulations.

  • 🇭🇰 Hong Kong’s Securities and Futures Commission proposed expanding its crypto regulatory team, requesting eight additional staff dedicated to virtual asset oversight, enforcement, and market surveillance in its $332.4 million budget for the 2025-26 fiscal year.