Weekly Recap: Do Kwon’s Guilty Plea, Qubic’s Monero 51% Claim

Crypto Firms, Fintechs and Banks Hope to Dominate Stablecoins. Who Will Win?

With Stripe and Circle launching layer 1s, the stablecoin wars are here. But the winners might not be very decentralized or censorship-resistant.

Stablecoin-focused blockchains are popping up everywhere. Stripe, Circle, and more are betting they can dominate payments. But are these chains even needed? And will Ethereum ever be ready for real-world assets? 

Austin Campbell, NYU professor and founder of Zero Knowledge Consulting, joins Unchained to cut through the hype. From why “the market eventually eats you” to how consumers, not companies, could be the real winners, Campbell unpacks the competitive landscape and warns that the ultimate champion might be someone who isn’t even on the field today.

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

Now, let’s get into this week’s news! In today’s edition:

• 📂 Do Kwon pleads guilty in TerraUSD fraud case

• 💻 Qubic claims Monero control sparking 51% attack fears

• 📈 Bullish rockets on NYSE debut after IPO price more than doubles

• 📱 Google Play to require wallet licenses with non-custodials exempt

• ⚖️ Uniswap seeks Wyoming legal status to formalize DAO governance

• 💸 ALT5 Sigma to raise $1.5B for WLFI treasury and new board seats

• 🏛️ White House adviser Bo Hines resigns after seven months

• 🔀 LayerZero offers Stargate buyout as DAO pushes back

• 🏦 Custodia touts patent edge in bank stablecoin race

• 🎭 Fun Bits: Arthur Hayes sells low, buys high and watches ETH rally

Do Kwon Pleads Guilty to Fraud Charges

Do Kwon, co-founder of Terraform Labs, has pleaded guilty in U.S. federal court to conspiracy to commit fraud and one count of fraud in connection with the 2022 collapse of the TerraUSD stablecoin and its sister token LUNA. The stablecoin’s failure wiped out an estimated $50 billion in value and impacted hundreds of thousands of investors worldwide.

Prosecutors said Kwon misled the public by concealing the role of an outside trading firm that helped restore TerraUSD’s dollar peg during a 2021 depegging event. “He knows that he should have disclosed that role…and takes responsibility,” said defense attorney Sean Hecker.

Kwon, a South Korean national, was arrested in Montenegro in 2023 while using a forged passport. He faces up to 25 years in prison, though prosecutors will seek no more than 12. As part of his plea, Kwon will forfeit $19 million and his interests in Terraform Labs and its cryptocurrencies.

Qubic’s Monero Takeover Claim Sparks Security Debate

Blockchain project Qubic says it has achieved majority control of Monero’s mining power, claiming a 51% share of the network’s hashrate. The move coincided with a six-block chain reorganization that replaced 60 previously validated blocks, raising concerns over the risk of double-spending and transaction censorship.

Led by former IOTA co-founder Sergey Ivancheglo, Qubic uses a “useful proof-of-work” model that redirects Monero mining rewards into USDT, which is then used to buy and burn its own QUBIC tokens. Its share of Monero’s hashrate has grown from under 2% in May to more than 25% in July before crossing the majority threshold this week.

While Ledger CTO Charles Guillemet warned Monero “appears to be in the midst of a successful 51% attack,” some developers dispute that conclusion. 

Bullish Stock Skyrockets in NYSE Debut

Crypto exchange Bullish surged onto the New York Stock Exchange on Wednesday, delivering one of the year’s most dramatic market debuts. Shares, trading under the ticker BLSH, opened at $90 — a 143% jump from the $37 IPO price — and briefly climbed to $118 before closing at $68. The rally pushed Bullish’s market capitalization above $10 billion, nearly doubling the $5.4 billion it had initially sought.

Led by former NYSE president Tom Farley and backed by investor Peter Thiel, Bullish caters to institutional clients, blending decentralized finance technology with centralized oversight. “The institutional wave in crypto has begun,” Farley told CNBC, pointing to strong interest from professional investors.

The Cayman Islands-based company processes more than $2.3 billion in daily trades and recently partnered with the Solana Foundation to integrate Solana-native stablecoins for faster settlements.

Google Play to Enforce Licensing for Custodial Crypto Wallets

Google Play will introduce new rules on October 29 requiring custodial crypto wallet and exchange apps in more than 15 jurisdictions, including the U.S., European Union, U.K., and Canada, to obtain local licenses and follow industry compliance standards.

In the U.S., affected developers must register with the Financial Crimes Enforcement Network as money services businesses, which involves implementing anti-money laundering programs. EU-based providers will need to register as crypto-asset service providers under MiCA rules.

Following criticism from industry figures, Google clarified that non-custodial wallets are exempt from the policy. “Non-custodial wallets are not in scope,” the company stated on X, adding that its Help Center will be updated to reflect the change.

Uniswap Proposes Wyoming Legal Framework to Advance Governance

The Uniswap Foundation has unveiled a proposal to register its governance under Wyoming’s Decentralized Unincorporated Nonprofit Association framework, or DUNA. The entity, to be called DUNI, would give Uniswap’s DAO legal recognition, liability protections, and the ability to handle off-chain functions such as tax compliance and contracting.

If approved, the DAO treasury would transfer $16.5 million worth of UNI tokens to a DUNI-controlled wallet to fund a legal defense reserve and cover an anticipated IRS bill of under $10 million for prior tax obligations.

The move could also pave the way for activating Uniswap’s long-discussed “fee switch,” which would direct a portion of liquidity provider fees to the DAO treasury. “We’re excited for Governance’s next era: one that’s defined by greater autonomy, recognition, and sustainability,” the Foundation posted on X.

ALT5 Sigma to Build $1.5 Billion WLFI Treasury

Fintech firm ALT5 Sigma announced plans to raise $1.5 billion to stock its corporate treasury with World Liberty Financial’s WLFI tokens and cash. The capital will come from selling 200 million shares at $7.50 each through a mix of direct and private offerings.

Under the deal, ALT5 will receive $750 million in WLFI tokens at $0.20 per token — equal to roughly 7.5% of the total supply — and $750 million in cash. World Liberty Financial cofounders Zach Witkoff and Eric Trump will join ALT5’s board, with COO Zak Folkman serving as a board observer.

ALT5 operates an OTC digital asset trading platform and a crypto payment gateway.

We did a full dive into altcoin treasury companies this week with Ethena founder Guy Young and Dragonfly partner Rob Hadick. Don’t miss it!

White House Crypto Adviser Bo Hines Resigns After Seven Months

Bo Hines, Executive Director of the White House Crypto Council and head of the Presidential Council of Advisers for Digital Assets, is stepping down after seven months in the role. Announcing his departure on X, Hines called the position “the honor of a lifetime” and said he will return to the private sector.

During his tenure, Hines helped organize the first White House crypto summit, supported the GENIUS Act regulating stablecoins, and opposed central bank digital currencies. Deputy Patrick Witt is expected to succeed him. Hines said he plans to remain active in advancing the U.S. crypto industry.

LayerZero Proposes Stargate Buyout Amid Pushback

The LayerZero Foundation has offered to acquire the Stargate cross-chain bridge in a deal initially valued at $110 million. The proposal would dissolve Stargate’s DAO, discontinue its STG token, and allow holders to swap for LayerZero’s ZRO token at a fixed ratio.

LayerZero CEO Bryan Pellegrino said the goal is to “help Stargate execute on its ambitious roadmap” and integrate more closely with the LayerZero ecosystem. Stargate, launched by LayerZero in 2022, is described as the industry’s most-used bridge, with over $70 billion in historical volume.

However, the offer has triggered an emergency counterproposal from DAO members seeking independent advisors and competing bids from Binance, Circle, Solana, and others. Critics have raised concerns over conflicts of interest, as both projects share founders and major token holders. 

The acquisition requires 70% approval from STG holders to pass.

Custodia Bank Patent Puts Spotlight on Bank Stablecoins

Wyoming-based Custodia Bank says it may hold a competitive edge in the post-GENIUS Act stablecoin market through a U.S. patent granted in 2022. The patent covers tokenized bank deposits — cryptographic tokens issued by banks and backed 1:1 by fiat deposits — and could apply to bank-issued stablecoins now being explored by major institutions such as JPMorgan, Citigroup, and Bank of America.

CEO Caitlin Long said Custodia is “aggressively pursuing infringers,” though no legal action has been disclosed. Experts note the patent could serve as a bargaining chip, enabling licensing or cross-licensing deals, while also cautioning that its validity could be challenged.

The renewed interest comes as banks ramp up stablecoin initiatives under the new federal law. JPMorgan has already piloted a USD deposit token on Coinbase’s Base network. Custodia, meanwhile, launched the Avit stablecoin in March with Vantage Bank, aiming to build a consortium of smaller banks protected by the patent.

Fun Bits: Arthur Hayes Sells ETH Low, Buys Back High, and Now It’s Working

BitMEX co-founder Arthur Hayes just speedran the crypto trading cycle — sell low, buy high, and hope for the best.

A week ago, he dumped 2,373 ETH for about $8.3 million at $3,507 each. This weekend, he marched back in with $10.5 million in USDC, buying them all back at over $4,150. On X, he tagged Fundstrat’s Tom Lee and vowed, “I pinky swear, I’ll never take profit again.”

Crypto trader James Wynn couldn’t resist: “Arthur sold the bottom, bought the top… when he aped back in, it was an insta short signal.”

But jokes aside, Hayes’ FOMO might be paying off — by the time of this recording, ETH was trading above $4,500. Sometimes the wrong trade is just early performance art.

Watch the weekly recap on YouTube!