Weekly Recap: Do Kwon Sentenced, Stablecoins Go Mainstream

How to Trade Prediction Markets Without an Opinion on the Event

Prediction markets are all the rage, but how do you trade them without a leg up on information? Markus Thielen says it’s about math and  “the wisdom within the crowd.”

The prediction market meta is piping hot and everyone wants a piece of the pie.

In this episode of Unchained, 10x Research founder Markus breaks down what the competition boils down to. Plus, will other platforms follow Polymarket’s lead and launch a token?

He also walks through a “near certain” trade nestled in Polymarket and shares 10 strategies that can be used to trade prediction markets without an opinion.

One key nugget: “It’s the wisdom within the crowd.”

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

We’ll continue with the weekly recap of news next, but first…

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

• ⚖️ Do Kwon sentenced to 15 years over the Terra collapse

• 🏦 OCC opens the door for stablecoin issuers to get U.S. banking charters

• 🛡️ Wall Street demands hefty protections in Ripple’s $500M funding round

• 📈 BlackRock moves closer to launching a staked Ethereum ETF

• 📜 SEC Chair Paul Atkins redraws the lines on ICO oversight

• 🎯 Gemini wins CFTC approval to launch U.S. prediction markets

• 📊 CFTC greenlights crypto as collateral in derivatives pilot

• 🔐 Circle unveils USDCx, a privacy-enhanced stablecoin for institutions

• 🔄 Farcaster pivots away from social, doubles down on wallet growth

• 🌙 New ETF bets on bitcoin’s stronger overnight performance

• 🍌 Banana memecoin chaos proves crypto scandals can still pump

Do Kwon Receives 15-Year Prison Sentence Over Terra Collapse

Terraform Labs co-founder Do Kwon was sentenced to 15 years in prison by a federal judge in New York for orchestrating a sweeping crypto fraud tied to the collapse of the TerraUSD stablecoin in May 2022. The sentence, imposed by Judge Paul Engelmeyer of the Southern District of New York, exceeded the 12-year term sought by prosecutors and far surpassed the five-year request from Kwon’s defense team.

Kwon pleaded guilty in August to conspiracy and wire fraud, admitting he knowingly misled investors about the stability of Terraform’s products. Prosecutors said the scheme wiped out roughly $50 billion in market value over three days. Judge Engelmeyer cited the scale of losses, the number of victims, and Kwon’s attempts to evade arrest using false passports as key factors in the decision, calling aspects of his conduct “despicable.”

Kwon must serve at least half of his sentence before seeking a transfer to South Korea, where he may still face additional charges.

OCC Clears Path for Stablecoin Issuers With Banking Charters

U.S. banking regulators have taken a major step toward integrating stablecoins into the traditional financial system. 

The Office of the Comptroller of the Currency has granted conditional approval for national banking charters to five digital asset firms, including Circle and Ripple. Circle’s First National Digital Currency Bank and Ripple National Trust Bank were approved as new entrants, while BitGo, Fidelity Digital Assets, and Paxos Trust Company received conditional approval to convert their existing state charters.

“New entrants into the federal banking sector are good for consumers, the banking industry and the economy,” said Comptroller of the Currency Jonathan V. Gould, citing increased competition and innovation.

The approvals come as the stablecoin market has expanded rapidly, reaching $313 billion in 2025. 

Wall Street Builds Safety Net Into Ripple’s $500 Million Raise

Bloomberg reported that Ripple’s latest fundraising round drew some of the biggest names in finance, but only with unusually strong protections attached. In November, the company sold $500 million in shares at a $40 billion valuation to investors including Citadel Securities and Fortress Investment Group, marking the largest valuation ever for a privately held digital-asset firm.

According to people familiar with the terms, investors secured the right to sell their shares back to Ripple after three or four years with a guaranteed annualized return of 10%. If Ripple opts to repurchase the shares itself, that return rises to 25%. The group also negotiated a liquidation preference that places them ahead of other shareholders in a sale or bankruptcy.

The structure reflects how some funds view Ripple as heavily tied to XRP, which accounted for roughly 90% of its net asset value in assessments by two participating firms. XRP has fallen more than 40% from its July peak, though Ripple continues to expand through acquisitions, including the $1.25 billion purchase of prime broker Hidden Road and a $1 billion deal for GTreasury.

BlackRock Advances Bid for Staked Ethereum ETF

BlackRock has taken its first formal step toward launching a staked Ethereum exchange-traded fund, filing an S-1 registration statement with the SEC for the proposed iShares Ethereum Staking Trust, or ETHB. 

The application would allow the firm to introduce a product that stakes between 70% and 90% of its ETH holdings and pays out yield on a quarterly basis. A separate 19b-4 filing from Nasdaq is still required to trigger the SEC’s review clock.

The move reflects a shift in regulatory posture under new SEC Chair Paul Atkins, who has shown openness to staking features after earlier filings were forced to remove them under previous leadership. BlackRock’s existing Ethereum fund, ETHA, holds roughly $11 billion in ETH and will operate independently from the staked version.

The filing arrives as Ethereum’s staked supply reaches record levels. About $108 billion worth of ETH is now staked, representing 28% of total supply.

Atkins Outlines New Boundaries for ICO Oversight

SEC Chair Paul Atkins signaled a major shift in how initial coin offerings may be regulated in the U.S., stating that most token launches fall outside the agency’s authority under his proposed token framework. Speaking at the Blockchain Association’s annual policy summit, Atkins explained that his taxonomy breaks tokens into four categories: network tokens, digital collectibles, digital tools, and tokenized securities. “ICOs transcend all four topics. Three of those areas are on the CFTC side, so we’ll let them worry about that, and we’ll focus on tokenized securities,” he said.

Atkins emphasized that ICOs tied to network, collectible, or utility tokens should not be treated as securities. His comments align with the SEC’s ongoing “Project Crypto” effort, which envisions exemptions and safe harbors for compliant token launches, airdrops, and network rewards.

The stance could pave the way for a resurgence in U.S. ICO activity. Industry momentum is already building, with Coinbase launching a new token-offering platform in November after acquiring Echo for $375 million.

Gemini Secures CFTC Green Light to Launch U.S. Prediction Markets

Gemini has received approval from the Commodity Futures Trading Commission to introduce regulated prediction markets in the United States. The authorization grants Gemini Titan, an affiliate of the exchange, a Designated Contract Market license after a five-year review process. “Today’s approval marks the culmination of a five-year licensing process and the beginning of a new chapter for Gemini,” CEO Tyler Winklevoss said, crediting the Trump administration for “ending the Biden administration’s war on crypto.”

The designation allows U.S. customers to trade event contracts directly through Gemini’s web platform, with mobile access expected later. Sample markets could include questions such as whether bitcoin will finish the year above $200,000.

The approval puts Gemini in direct competition with Kalshi and Polymarket, both of which have seen rising activity as regulators adopt a more permissive stance toward event-based trading.

CFTC Launches Pilot Letting Crypto Serve as Derivatives Collateral

The Commodity Futures Trading Commission has introduced a new pilot program permitting regulated derivatives firms to use bitcoin, ether, and payment stablecoins such as USDC as margin collateral. Acting Chair Caroline Pham announced the initiative, saying it “establishes clear guardrails to protect customer assets and provides enhanced CFTC monitoring and reporting.”

The program applies to approved futures commission merchants, which must meet strict oversight requirements. For the first three months, participating firms must deliver weekly disclosures on digital asset holdings and alert the agency to any issues. A separate no-action letter also gives firms limited permission to hold certain digital assets in segregated customer accounts.

The CFTC simultaneously withdrew a 2020 advisory that had restricted crypto collateral, calling it outdated in light of the GENIUS Act. Updated guidance now covers tokenized real-world assets, including Treasuries, which must still satisfy enforceability, custody, and valuation standards.

Circle Unveils Privacy-Enhanced USDCx for Institutional Use

Circle is developing a new privacy-preserving stablecoin, USDCx, designed for banks and other institutional users that require confidentiality while maintaining regulatory transparency. 

The asset is fully backed 1:1 by standard USDC and issued through Circle’s xReserve system, but transactions take place on the privacy-focused Aleo blockchain using zero-knowledge cryptography. This setup conceals details such as sender, receiver, and transfer amounts from public view.

Despite the added privacy, USDCx is not anonymous. Each transaction generates a compliance record accessible to Circle if requested by regulators or law enforcement.

USDCx is live on Aleo’s testnet and is expected to move to mainnet around late January. Circle says the model could support use cases ranging from corporate payments to cross-border remittances, with interoperability across other USDC networks planned.

Farcaster Retreats From Social-First Vision, Refocuses on Wallet Growth

Prominent decentralized social platform Farcaster is stepping back from its years-long push to build a Twitter-style network, with co-founder Dan Romero announcing that the team will shift future development toward its in-app wallet. 

Romero said, “We tried social-first for 4.5 years … it didn’t work for us (...) Wallet has been growing so we’re doubling down on that direction.”

Romero said the wallet, launched earlier this year, has accelerated faster than any prior product. “We think it’s the closest we’ve been to product-market fit in five years,” he added. The new strategy inverts Farcaster’s original approach: rather than adding a wallet to a stagnant social layer, the team will layer social features onto a tool users already find useful.

The shift follows Farcaster’s acquisition of Clanker, an AI-driven token launchpad, signaling a deeper pivot toward onchain utilities. Community reaction has been mixed, as the protocol posted $1.84 million in fourth-quarter earnings, down 85% year-over-year.

ETF Proposal Bets on Bitcoin’s Night Owl Behavior

A boutique wealth manager is leaning into one of bitcoin’s quirkiest patterns with a newly proposed exchange-traded fund designed to hold BTC only while most of America is asleep. 

Nicholas Financial has filed with the SEC for the Nicholas Bitcoin and Treasuries AfterDark ETF, a product that would buy bitcoin at 4 p.m. ET—right as U.S. markets close—and sell it again before the opening bell at 9:30 a.m., rotating into short-term Treasuries during the day.

The strategy hinges on data showing bitcoin tends to post stronger returns outside regular U.S. trading hours.

BTC has been more likely to trade in the green overnight over the past year, while daytime sessions skew negative. Bloomberg’s Eric Balchunas said similar patterns appeared in 2024 and may reflect ETF flows and derivatives positioning.

If approved, the “AfterDark” fund would add a playful yet data-driven twist to bitcoin investing by treating time of day as a core part of its strategy.

Fun Bits: The Banana Meme Strikes Back

Crypto never misses a plot twist, but this week’s headline belonged to a fruit. After Binance admitted it had suspended an employee for allegedly using official accounts to hype a freshly minted token, the wonderfully named “year of the yellow fruit” went… up. Because of course it did.

According to Binance, the employee posted promotional images “less than a minute” after the token appeared onchain, which is either impressive reaction time or a dead giveaway. The exchange called it “abuse of their position for personal gain,” contacted authorities, and reminded everyone about its zero-tolerance policy.

Traders, meanwhile, saw the words “insider trading” and apparently read “buy now,” sending the tiny memecoin to a new high. In crypto, even the scandal pumps.

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