💥 The DOJ Just Did a 180

Hi! In today’s edition:

• ⚖️ DOJ halts mixer enforcement

• 💥 A $1.25B finance-meets-crypto merger

• 🧩 Aavegotchi ditches Polygon

• 🔐 Confidential token extensions on Solana

• 🎧 The latest Bits + Bips episode: rather depressing but very informative

The Financial Freedom Report explores the role currency and banking play in the civil liberties and human rights struggles of those living under authoritarian regimes and how Bitcoin is used to push back.

DOJ to End Enforcement Against Crypto Mixers

The U.S. Department of Justice will stop pursuing enforcement action against crypto mixers such as Tornado Cash, even if they are used to launder money, according to a memo issued this week by Deputy Attorney General Todd Blanche entitled “ending regulation by prosecution,” which outlines a sweeping overhaul of the DOJ’s stance towards the digital asset industry.

“The department will no longer target virtual currency exchanges, mixing and tumbling services, and offline wallets for the acts of their end users or unwitting violations of regulations,” except to the extent that any investigation is consistent with priorities it articulates elsewhere in the memo, it said.  

The DOJ said it would focus only on targeting individuals and organizations behind illegal financing, including those using digital assets, but that no action would be taken against the platforms they use for such activities.

In a swipe at the department’s Biden-era enforcement priorities, Blanche —  President Donald Trump’s former criminal defense attorney —  said the DOJ had been used to carry out what he called a “reckless strategy.”

“Ongoing investigations that are inconsistent with the foregoing should be closed,” he wrote. “All previously issued policies and directives that are inconsistent with any of the foregoing are rescinded, effective today.”

Ripple Acquires Hidden Road for $1.25B

XRP issuer Ripple has agreed to acquire prime brokerage firm Hidden Road in a landmark $1.25 billion deal that Ripple CEO Brad Garlinghouse described as a move that would “truly bring the worlds of traditional and decentralized finance together.”

Hidden Road, which processes more than $3 trillion annually for around 300 institutional clients, will migrate its post-deal operations to Ripple’s XRP Ledger (XRPL) to streamline settlements and reduce costs.

Ripple’s RLUSD stablecoin will serve as collateral for Hidden Road’s prime brokerage services, enabling cross-margining between the traditional and crypto markets.

The transaction follows Kraken's $1.5 billion acquisition of NinjaTrader last month, the biggest-ever merger between traditional finance and crypto entities to date.

Aavegotchi Leaves Polygon for Base

Ethereum-based game Aavegotchi is abandoning Polygon for Coinbase’s Base blockchain. 

The Aavegotchi DAO approved the migration with 93.25% of votes in favor, citing Base’s growing adoption and Polygon’s declining activity in a proposal entitled “Make Aavegotchi Based Again.”

“Polygon has not shipped any significant updates or features to [proof of stake] to enable better ecosystem coherence or discovery for gaming,” said pseudonymous Aavegotchi founder Coder Dan in an X post in February.

Total value locked (TVL) on Polygon has plummeted from a peak of $9.9 billion in 2021 to just $729 million today, while Base’s TVL has surged from $430 million in early 2024 to $2.9 billion currently.

The transition is expected to take four to six weeks, and all of Aavegotchi NFTs, wearables, gaming assets, and smart contracts will be cloned and redeployed on Base. Existing Polygon assets will remain accessible but frozen.

Solana Developers Launch Privacy-Boosting Token Extensions

Solana developers have launched token extensions that enhance onchain privacy by encrypting token balances and transfer amounts while maintaining compliance.

The developers said on X that the extensions, named Confidential Balances, “are now live on Solana mainnet — the first [zero knowledge]-powered encrypted token standard built for institutional compliance without sacrificing sub-second finality.” 

In a blog post explaining the extensions’ key features, the developers said they had opted for the word “confidentiality” over "privacy" to better describe the technology.

The extensions will encrypt token movement amounts between accounts, enable private fee deductions using cryptographic proofs, and allow discrete token creation and destruction, while keeping total supply opaque.

Bits + Bips: Why a U.S. Recession May Be Coming — And Still Isn’t Priced In

What if the worst-case scenario isn’t just priced in — it hasn’t even started?

The markets are rattled. Tariffs are rising. Investors are pulling back.

In this week’s Bits + Bips, the panel digs into what’s really driving the sell-off, why the Fed may be stuck, and how Trump’s tariff logic could trigger deeper economic shocks than anyone expects.

Plus:

• Whether Bitcoin becomes a safe haven

• What makes this downturn different from 2022 and 2020

• Why a potential recession still isn’t priced in

• Can Congress take Trump’s tariff button away?

And yes, Ram coins a new term: FAFO tariffs 😀

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

• 🇦🇷 Argentina’s Congress approved three motions on Tuesday to investigate officials involved in the Libra token scandal, after President Javier Milei promoted the now-collapsed Solana-based memecoin, sparking calls for impeachment and fraud charges.

• 🔗 Stablecoin infra project M^0 expanded to Solana, partnering with Kast to launch two Solana-native stablecoins using $M as a modular base, following previous integrations on Cosmos and with real-world asset issuers.

• 🔐 BlackRock added Anchorage Digital as a second custodian alongside Coinbase for its $45 billion bitcoin and $1.8 billion ethereum ETFs, implementing a dual-custody model with insurance and cold storage coverage.

• 🧾 Venus Labs is set to receive $1.7 million in BTC, BNB, ETH, and USDT for executing 92 protocol upgrades and multi-chain deployments during the second half of the year, as Venus Protocol readies for its V5 upgrade.

• 📱 Binance partnered with Worldpay to enable Bitcoin and Ethereum purchases via Apple Pay and Google Pay, expanding fiat on-ramps across more than 125 currencies and launching new services in 20 countries.

• 🌍 Mastercard’s partnership with Kraken will allow European users to pay with bitcoin at over 150 million merchants worldwide, further merging crypto with traditional payment infrastructure.

• 🧠 Octane raised $6.7 million from Winklevoss Capital and others to scale its artificial intelligence code auditor, which scans smart contracts in real-time to prevent exploits.

• 🛒 Lyzi secured $1.4 million from angel investors to expand its Tezos-based crypto payments platform to retail and e-commerce, with plans to launch next on Etherlink, Tezos’s Ethereum virtual machine-compatible layer 2.

1. The Fallout From Trump’s Tariff Push, by Matt Hougan, chief investment officer at Bitwise

2. Our Network: Layer 1s part 2