Trump’s Crypto Reserve: A Disappointment?

Plus, 🏦 Trump’s not so inner circle, ⚠️ SBF’s PR walks, 🚨 What Bybit missed, and more!

Author

Juan Aranovich
March 07, 2025

Hi! In today’s edition:

  • 🏛️ Bitcoin reserve underwhelms

  • 🎤 Is SBF losing it?

  • 🔍 Bybit hack: How Lazarus pulled it off

  • ⚡ Ethereum devs fork Holesky

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By Tikta and Veronica Irwin

U.S. President Donald Trump signed an executive order on Thursday establishing a national Strategic Bitcoin Reserve. 

The price of bitcoin fell 5% from $90,000 to less than $85,000 on the news, and the global crypto market cap dropped 4%, from $2.94 trillion to $2.82 trillion.

White House crypto and AI “czar” David Sacks said on X that the reserve would be capitalized with bitcoin obtained by the federal government through criminal and civil asset forfeiture proceedings.

“This means it will not cost taxpayers a dime,” he said. 

Sacks also said the reserve would hold approximately 200,000 bitcoin, and that the government would not sell any BTC held within it, treating it instead like a “digital Fort Knox.”

“Premature sales of bitcoin have already cost U.S. taxpayers over $17 billion in lost value,” Sacks said. 

The order also creates a U.S. Digital Asset Stockpile, overseen by the Treasury Department, for other confiscated cryptocurrencies. 

Meanwhile, the treasury and commerce secretaries will be authorized to develop budget-neutral strategies for acquiring additional bitcoin.

The executive order aligns with Trump's campaign promise to make the U.S. the "crypto capital of the world,” and comes after an announcement earlier in the week suggested that the reserve would include ETH, XRP, SOL, and ADA, in addition to BTC.  

The timing of that initial announcement took many industry insiders by surprise, particularly crypto policy advocates who have been helping the Trump transition team since last November.

In the period between November’s U.S. presidential election and January’s inauguration, crypto policy advocates were busy helping the Trump transition team prepare to take over the government. 

Acting as industry insiders, advocacy groups such as the Blockchain Association, the Digital Chamber, and the Crypto Council for Innovation were submitting lists of preferred candidates for crypto-relevant cabinet positions like the secretary of the treasury, comptroller of the currency, and chairs of the Securities and Exchange Commission and Commodity Futures Trading Commission, and providing their input on which assets should be in any crypto reserve.

But although these groups may have made some inroads with the administration on things such as personnel and policy statements, it appears that they were left out in the cold when it came to any decision related to the just-announced strategic crypto reserve, according to Washington insiders who spoke with Unchained. 

So, as key industry players, are they now going to be given a seat at the table? As the saying goes, if you’re not at the table, you’re probably on the menu…

SafeWallet has released a “post-mortem” report detailing the massive hack of Bybit last month, in which ETH worth $1.5 billion at the time was stolen.

The report, produced in collaboration with cybersecurity firm Mandiant, confirms previous reports that North Korean state-sponsored hacking group Lazarus carried out the attack.

Lazarus hijacked a SafeWallet developer's Amazon Web Services session tokens to bypass multi-factor authentication, the report summary said. They then initiated the attack by compromising a developer's MacOS system, likely through installing malware on the developer’s device.

“This developer was one of the very few personnel that had higher access in order to perform their duties,” the summary said.

The hackers took 19 days to prepare and execute the attack, which SafeWallet said did not affect its smart contracts. 

An investigation of the compromised workstation that was used to obtain “commit access” to SafeWallet servers is still ongoing.

Sam Bankman-Fried's crisis communications manager, Mark Botnick, has resigned abruptly following an unexpected prison interview the FTX founder gave to disgraced and dismissed former Fox News host Tucker Carlson.

Botnick, who has represented Bankman-Fried since the collapse of FTX in November 2022, told Business Insider that he had had no involvement in planning the interview with Carlson.

Bankman-Fried's interviews with journalists have caused problems for him before. His comments in interviews with media outlets including the Financial Times, Bloomberg, and Vox were presented as evidence during his criminal trial of how he had swindled FTX investors and customers.

In the nearly 45-minute conversation, Bankman-Fried discussed a number of topics, including his life in prison, which he described as "dystopian,” his interactions with fellow inmate and Sean "Diddy" Combs, who is awaiting trial for alleged sex trafficking, rape, and sexual assault, describing him as “kind,” and his views on the Democratic Party and the Trump administration.

Bankman-Fried, who is currently serving a 25-year sentence for fraud and other crimes related to the collapse of FTX, maintained his innocence during the interview, saying: "I don't think I'm a criminal.”

Ethereum developers are launching a "shadow fork" of the Holesky test network to continue research on the Pectra upgrade following issues encountered during testing.

The shadow fork would create a temporary copy of the Holesky network to allow users such as staking pools and developers to test their code while efforts to restore the main Holesky network continue.

During the latest “all core developers” call on Thursday, co-lead of the Ethereum Foundation’s research department Alex Stokes said “Holesky is not going to finalize until the end of the month … and is unusable right now.”

Holesky is expected to resume normal operations around March 28, according to developers’ current estimates. Only after Holesky is able to finalize again will the developer team have more data to make a decision on when Pectra can launch on the mainnet, Stokes added.

Trump’s Crypto Summit: Who Should Be Advising the White House?

As U.S. President Donald Trump prepares to host his first crypto summit today, industry voices weigh in on who should be advising the White House. 

Should the focus be on major exchange founders such as Coinbase’s Brian Armstrong and Kraken’s Jesse Powell? Or should protocol builders and infrastructure teams such as Ethereum, Solana, and L2 developers have a bigger say? 

From the ETHDenver innovation festival, Sebastien, Steven Goldfeder, Rushi Manche, Omar Azhar, and Zach Williamson discuss what’s at stake for the industry.

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  • 📜 U.S. Senator Tim Scott is championing a bill to prevent banking regulators from using “reputational risk” as a justification for steering banks away from legally operating businesses, a move driven largely by concerns over crypto debanking.

  • 💰 Layer 1 blockchain Sui’s token saw double-digit gains after Trump-affiliated DeFi project World Liberty Financial announced plans to integrate Sui assets into its reserves and collaborate on product development.

  • 🔄 A Jito Foundation contributor proposed a new model for utilizing the project’s growing revenues, suggesting options such as token buybacks and reinvestment to benefit the Solana-based ecosystem.

  • 🛜 Sky Mavis, creators of Axie Infinity, announced Axie Infinity: Atia’s Legacy, an upcoming cross-platform massively multiplayer online game due for a summer 2025 alpha playtest on the Ronin network.

  • 💊 U.S. authorities on Thursday put former Canadian Olympic snowboarder Ryan Wedding on the FBI’s Ten Most Wanted Fugitives list, offering a $10 million bounty for his capture due to his alleged leadership of a transnational cocaine trafficking empire involving murders and the use of Tether (USDT) to launder proceeds.

  • 🇧🇷 Brazilian fintech giant Méliuz committed to allocating up to 10% of its cash reserves to Bitcoin, purchasing $4.1 million of BTC as part of a long-term investment strategy.

  • 💲Digital asset manager Bitwise made its first institutional investment in DeFi through Maple Finance.

  • 🤑 Validation Cloud, an AI-powered crypto infrastructure company offering blockchain staking, validator software, and analytics, raised $15 million in a series-A round led by True Global Ventures, bringing its total funding to $30.8 million.

  • 💰 August, a crypto-focused prime brokerage firm, pulled in $10 million in a series-A round to simplify institutional access to decentralized finance (DeFi), aiming to become a centralized hub connecting investors to various DeFi protocols and blockchains.

  • 🔒 Seismic secured $7 million in funding, led by a16z crypto, to develop an encrypted blockchain that enhances privacy at the application level rather than just at the wallet level.

  • 🔐 Base acquired the development team behind privacy-focused blockchain Iron Fish to enhance its own privacy-preserving solutions, while Iron Fish’s blockchain and token remain independent.

  1. Solana developer platform Helius: SIMD-228: A Critical Analysis

  2. Cointelegraph Magazine: SEC’s U-turn on crypto leaves key questions unanswered

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