In this week’s edition:

• 💰 U.S. court approves $6.5B Silk Road Bitcoin sale.

• 📆 Do Kwon’s trial set for January 2026.

• 🔗 Hyperliquid addresses validator centralization concerns.

• ⚖️ Coinbase pauses SEC lawsuit with rare legal win.

• 🚨 FTX disputes Backpack’s unauthorized EU arm purchase.

• 💸 Gemini settles CFTC case with $5M fine.

• 📈 Coinbase explores tokenizing COIN on Base.

• ❌ Phantom quashes token launch rumors.

• 💼 MARA loans 16% of BTC reserves for yield.

• 🤔 Justin Sun reelected Liberland prime minister (again).

Why Travis Kling Thinks Not Looking at AI Agents Would Be ‘a Big Mistake’

As Bitcoin hovers around $100K, what’s causing the market turbulence, and should you be concerned? Travis Kling weighs in on the DOJ’s BTC stash, the rise of AI agents, and more.

It’s been a tough week for the markets, with bitcoin gyrating from $102,400 to $92,000.

Travis Kling, CIO of Ikigai Asset Management, shares his thoughts on the selloff, whether this market dip is a cause for alarm, and how macro factors like the Fed’s rate policy and ETF dynamics are shaping the landscape.

Plus, he dives into the explosive growth of AI agents and why crypto investors should start paying attention to this new frontier. Could AI agents revolutionize crypto, or are we witnessing another bubble?

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

Weekly News Recap

U.S. Court Clears Sale of $6.5 Billion in Seized Bitcoin From Silk Road Case

A U.S. federal court has approved the sale of 69,370 bitcoin, valued at approximately $6.5 billion, seized from wallets tied to the notorious Silk Road darknet marketplace. The decision, handed down by Chief U.S. District Judge Richard Seeborg in the Northern District of California, marks a significant milestone in one of the largest cryptocurrency forfeitures in history.

The ruling denies attempts to block the Department of Justice (DOJ) from liquidating the assets, following a legal battle spanning four years. According to court documents filed on December 30, the bitcoin was confiscated as part of efforts to dismantle the illegal operations of Silk Road.

While the DOJ has yet to comment on the ruling, the sale is expected to undergo administrative processes required under federal asset forfeiture laws.

Do Kwon’s Trial Scheduled for January 2026

The criminal trial of Terraform Labs founder Do Kwon, accused of orchestrating a $40 billion crypto collapse, has been set for January 26, 2026, in the U.S. District Court for the Southern District of New York. Judge Paul Engelmayer called the timeline "unprecedented" but granted the defense’s request for additional preparation time due to Kwon’s extensive legal challenges in multiple jurisdictions.

Kwon faces nine felony charges, including securities fraud and money laundering conspiracy, stemming from the failure of the TerraUST stablecoin in 2022. Prosecutors allege Kwon knowingly misrepresented the system’s stability, likening his actions to building a “Potemkin village.”

The U.S. government has revealed that the alleged fraud may have impacted over one million individuals and entities worldwide. A website will be established to inform victims of legal proceedings, with opportunities for them to participate. If convicted, Kwon could face up to 130 years in prison.

In related news, a federal judge postponed the sentencing of Avi Eisenberg, who was convicted for exploiting decentralized exchange Mango Markets, to April 10. The judge cited the case’s complexity and the need for additional review of sentencing issues when making the postponement decision.

Hyperliquid Addresses Concerns Over Validator Transparency and Centralization

Hyperliquid, a decentralized perpetual futures exchange, has responded to growing community concerns about its validator network. Critics raised issues of potential centralization, lack of transparency, and allegations that validator seats were being sold—a claim the Hyper Foundation firmly denies.

In a statement shared on X, the Hyper Foundation clarified that all 16 validators currently active were selected based on their performance during the testnet phase. “There is no way to buy a seat at the table,” the post emphasized, calling such accusations a disservice to the validators’ contributions.

Concerns over centralization persist as five validators under the foundation’s control manage over 81% of the staked HYPE tokens. The foundation acknowledged the issue, announcing a delegation program to redistribute tokens and promote decentralization.

Hyperliquid also addressed complaints about its closed-source node code, pledging to make it public once network security is ensured.

Coinbase Scores Rare Victory as Court Pauses SEC Lawsuit

In a significant legal development, Judge Katherine Polk Failla has granted Coinbase’s request for an interlocutory appeal in its case with the U.S. Securities and Exchange Commission (SEC). This ruling pauses proceedings while the Second Circuit Court of Appeals considers whether the SEC’s allegations fall under existing securities laws.

Judge Failla acknowledged the complexity of applying traditional securities tests, like the Howey Test, to digital assets, calling it an “issue of first impression” requiring higher court guidance. “Conflicting authority exists regarding Howey’s application to crypto-assets,” she wrote in her decision.

The case centers on whether certain crypto assets sold on Coinbase qualify as securities. If the second circuit takes up the appeal, it could shape the regulatory future of the cryptocurrency industry.

Amanda Tuminelli of the DeFi Education Fund described the ruling as “a potentially pivotal moment” that could bring long-awaited legal clarity to digital asset regulation.

FTX Challenges Backpack’s Acquisition of Its European Arm

The FTX bankruptcy estate has disputed the legitimacy of crypto exchange Backpack’s acquisition of FTX EU, claiming it was neither authorized by the U.S. Bankruptcy Court nor conducted with FTX’s knowledge. Backpack, which is a crypto exchange and wallet firm founded by former FTX and Alameda employees, announced the purchase on January 7, along with plans to repay FTX EU creditors and launch regulated crypto derivatives services.

In a statement, FTX emphasized that Backpack “has not been authorized to make any distributions to FTX customers or other creditors,” contradicting Backpack’s assertion that it could begin repayments as early as February.

Backpack countered FTX’s statement by citing approval from Cyprus’s financial regulator, CySec, and confirmed that the acquisition was finalized in June 2024. However, FTX maintains that it was unaware of the indirect transfer of FTX EU and insists that creditor repayments remain under court jurisdiction.

Gemini Settles CFTC Lawsuit Over False Claims With $5 Million Fine

Crypto exchange Gemini, led by identical twins Tyler and Cameron Winklevoss, has agreed to pay a $5 million fine to resolve allegations brought by the U.S. Commodities and Futures Trading Commission (CFTC). The lawsuit, filed in June 2022, accused Gemini of making “false and misleading statements” in 2017 while seeking approval for a bitcoin futures contract.

The settlement, outlined in a proposed consent order, includes a permanent injunction against Gemini. The exchange has neither admitted nor denied the allegations, a standard practice in such agreements.

This deal spares Gemini from a jury trial that had been scheduled for January 21. The consent order awaits final approval by a federal judge, bringing closure to a case that has lingered for over two years. Gemini has not yet issued a public comment on the matter.

Speaking of the CFTC, this week Chair Rostin Behnam announced his resignation, citing years of efforts to close regulatory gaps in crypto markets, including enforcement actions against major players such as FTX.

Coinbase Explores Tokenizing Its Stock on Base

Coinbase, the largest publicly traded crypto exchange in the U.S., is considering making its Nasdaq-listed stock, COIN, available as a tokenized asset on its layer 2 blockchain network, Base. Jesse Pollak, head of Base and Coinbase Wallet, revealed the initiative is in an exploratory phase, emphasizing the need for regulatory compliance.

“We are working to understand what needs to be unlocked from a regulatory perspective to bring assets like $COIN to Base in a safe, compliant, future-looking way,” Pollak stated on X. While tokenized COIN shares are already accessible to non-U.S. users via decentralized platforms, expanding access domestically hinges on clearer U.S. regulations.

Phantom Dismisses Token Rumors

Phantom, a popular non-custodial crypto wallet, has denied rumors of an impending token launch following its announcement of a social discovery feature. The feature, revealed on December 19, will allow users to create profiles, add friends, and choose privacy settings, sparking speculation about potential token rewards for gaining followers.

Addressing the rumors, Phantom stated on X, “We do not have any plans to launch a token,” while emphasizing their enthusiasm for the new feature. The company also highlighted ongoing efforts to enhance the social experience for its users.

MARA Deploys 16% of Bitcoin Reserves Into Lending Program

Bitcoin mining giant MARA has disclosed that 7,377 BTC, representing 16% of its reserves, has been loaned to third parties as part of a lending program. Valued at approximately $730 million, the loans aim to generate a “modest single-digit yield” to offset operating expenses, according to MARA’s head of investor relations, Robert Samuels.

The lending program, which has been active throughout 2024, involves short-term arrangements with established partners, though borrower details remain undisclosed.

MARA’s reserves now total 44,893 BTC, worth $4.2 billion, bolstered by mining operations and strategic purchases. The company also surpassed its hash rate target of 50 EH/s, achieving 53.2 EH/s by year-end.

😂 Fun Bits: Justin Sun Reelected Prime Minister of… Wait, Where?

Justin Sun has secured another victory as prime minister of Liberland, the micronation that claims seven square kilometers of disputed land between Serbia and Croatia. If you’re wondering how Sun found time between crypto controversies and banana art-eating stunts to become prime minister, you’re not alone.

Sun’s pitch to Liberland’s president included forging ties with the U.S. and, oddly enough, aligning with Donald Trump’s “unprecedented” policies. Sun even hinted at chatting with Eric Trump during the inauguration. Bold plans for a nation no one officially recognizes!

Liberland’s goals include luring crypto-loving digital nomads. Whether Sun will succeed or just rename Bitcoin as “SunCoin” in Liberland remains to be seen. For now, Liberland is a tiny patch of land with a lot of ambition—and one very ambitious prime minister.

Watch the Recap!