In this week’s edition:

• 📆 IRS delays crypto tax reporting rules to 2026.

• 🚨 Siqi Chen faces backlash for alleged ZERO token rug pull.

• ✈️ Do Kwon extradited to the U.S. to face fraud charges.

• 📈 Ethereum ETFs close 2024 with $2.7 billion in inflows.

• ⚖️ Celsius appeals $444M claim rejection against FTX.

• 💸 USD0 stablecoin briefly depegs after whale sell-off.

• 🔗 HYPE token staking launches with $9.4 billion staked.

• 💰 Tether adds $700M in Bitcoin to strategic reserves.

With AI Agents Now Trading Crypto, What Does Their Future Look Like?

The accidental success of ai16z has catapulted AI agents and their transformational promise into the spotlight. Shaw Walters, founder of Eliza Labs, shares his bold vision for how they can reshape finance, social media, and society at large.

In this episode, Shaw Walters, founder of Eliza Labs, takes us through his journey of launching ai16z, a decentralized AI-driven investment DAO, and the explosive growth of the Eliza open-source framework.

Shaw explains how AI agents are evolving beyond “reply bots” to serve as powerful tools for financial autonomy, community investment, and user empowerment. He shares the challenges of building trust between humans and AI, the possibilities of agents trading across multiple blockchains, and his vision of a world where financial freedom drives human progress.

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

IRS Postpones Crypto Cost-Basis Reporting Rules to 2026

The Internal Revenue Service (IRS) announced a one-year delay in implementing new cryptocurrency tax reporting rules, pushing the effective date to January 1, 2026. The decision gives brokers more time to adapt their systems to the updated requirements.

The rules, introduced in July 2024, mandate taxpayers to specify which cryptocurrency units they are selling. If no method is identified, the default First In, First Out (FIFO) method will apply, which prioritizes selling the earliest acquired assets. Tax experts, such as Shehan Chandrasekera from CoinTracker, warn this could unintentionally increase capital gains for investors, as older assets often have a lower cost basis.

“This delay avoids a scenario that could have been disastrous in the current bull market environment,” Chandrasekera explained on X.

Siqi Chen Faces Backlash Over Alleged Rug Pull With ‘Zero’ Token

Siqi Chen, CEO of finance platform Runway and creator of the MIRA token, has come under fire for his actions involving a test token called ZERO. The controversy follows the launch of the MIRA token on Christmas day, created to support pediatric brain tumor research after Chen’s four-year-old daughter, Mira, was diagnosed with a rare brain tumor. MIRA gained widespread attention and significant backing from the crypto community, with Chen’s holdings in the token reportedly reaching $14 million.

Amid the MIRA initiative, Chen launched ZERO on the Solana-based platform Pump.fun, describing it as a test token with the label: “This coin will go to zero… don’t buy it.” Despite the warning, investor interest quickly drove ZERO’s market cap to $6 million. Chen admitted to selling 40% of the supply, earning 444 SOL (approximately $90,000), which he claims to have used to buy back tokens before burning them.

“I take responsibility and [I] am committing to making every affected wallet whole out of my own personal funds,” Chen wrote on X. Critics, however, are skeptical, pointing to Chen’s repeated incidents involving similar tokens and questioning his claims of inexperience. The controversy has cast a shadow over his efforts with MIRA, despite its original philanthropic mission.

Terraform Labs Co-Founder Do Kwon Extradited to the U.S.

Montenegro has extradited Terraform Labs co-founder Do Kwon to the U.S., following months of legal proceedings and coordination with Interpol. Montenegro’s Ministry of Justice finalized the decision after rejecting Kwon’s appeal against extradition, citing the severity of his alleged crimes and the order of competing requests from South Korea and the U.S.

Kwon, who was arrested in Montenegro in March 2023 for traveling with forged documents, now faces criminal charges in the U.S., including conspiracy to commit fraud, money laundering, and electronic fraud. These charges stem from his involvement in the collapse of the TerraUSD stablecoin and Luna cryptocurrency, which caused billions in investor losses.

The extradition decision underscores the international collaboration involved in Kwon’s case, with Montenegro’s Special Police Unit and Interpol playing key roles in transferring him to U.S. custody. Kwon’s trial in the U.S. is expected to focus on the financial crimes linked to Terraform Labs.

Ethereum ETFs Close Out 2024 With $2.7 Billion Inflows

Ethereum ETFs ended 2024 with a remarkable $2.7 billion in net inflows, according to Farside Investors. The Fidelity Ethereum Fund led the market with $31.8 million in inflows on the final trading day, while the Grayscale Ethereum Mini Trust saw $9.8 million in additional investments.

Meanwhile, Ethereum has achieved a significant milestone in holder behavior. Onchain analytics firm IntoTheBlock reported that 75% of ether holders are now long-term investors, compared to bitcoin’s 62%. This marks a notable shift, as bitcoin’s long-term holder percentage declined over the year, likely influenced by record profit-taking volumes reaching $2.1 billion daily.

Celsius Appeals Rejection of $444 Million Claim Against FTX

Celsius Network, the bankrupt crypto lender, has filed an appeal challenging a court decision that disallowed its $444 million claim against bankrupt crypto exchange FTX. The appeal follows Judge John Dorsey’s December ruling, which dismissed Celsius’ amended claims for failing to meet procedural requirements.

Initially, Celsius sought $2 billion in damages, alleging that disparaging statements from FTX executives undermined confidence in its platform, hastening its collapse. The claim was later amended to focus on preferential transfers, demanding $444 million in repayments for funds allegedly given undue priority.

Whale Activity Briefly Depegs USD0 Stablecoin

On Wednesday, the decentralized stablecoin Usual USD, also known as USD0, experienced a temporary depegging, trading at $0.99 following a substantial sell-off by a single whale in the secondary market. Despite the disruption, USD0 swiftly regained its $1 peg within hours.

“This was our first major stress test of the USD0 peg, with more redemptions than the entire [total value locked] of GHO in a few hours — yet it was business as usual,” the protocol’s team shared on X.

USD0 is fully backed by short-term, liquid, risk-free assets such as U.S. Treasury Bills and repurchase agreements to ensure robust collateralization.

HYPE Token Staking Launches on HyperLiquid Mainnet

The Hyper Foundation has officially launched staking for its native token, HYPE, on the HyperLiquid decentralized exchange mainnet. Token holders can now delegate their HYPE to validators in exchange for staking rewards, a system designed to secure the network while rewarding community participation.

At launch, 357.6 million HYPE tokens, valued at approximately $9.4 billion, were staked, representing significant early adoption. The Hyper Foundation controlled 99.9% of the staked tokens through its validators, but this stake has since decreased to 88.8%, reflecting increased community participation.

“Staking is an important milestone for HyperLiquid because it allows the diverse community of HYPE stakers to collectively secure the network,” the foundation wrote on X. Plans for a delegation program to reward high-performing validators are underway, aiming to bolster network decentralization and security.

Tether Adds $700 Million in Bitcoin to Strategic Reserve

Tether, the issuer of the USDT stablecoin, has transferred 7,629 bitcoin (worth approximately $700 million) to its strategic reserve, according to onchain data from Arkham Intelligence. The transfer, originating from Bitfinex's hot wallet, marks Tether's largest bitcoin allocation since March 2024.

This move brings Tether’s total bitcoin holdings to over 83,000 BTC, valued at more than $7.6 billion. Since May 2023, the company has allocated up to 15% of its net profits to bitcoin as part of its diversification strategy.

Tether’s reserves primarily comprise U.S. Treasury bonds and cash equivalents, but the company has been expanding its investments into bitcoin, AI, and decentralized communications, reflecting its broader ambitions in emerging sectors.

😂 FUN BITS: Swiss Bitcoiners Try to Make Their Central Bank a Bitcoin Whale

Move over gold bars — Swiss Bitcoin enthusiasts have a plan to make their central bank go full crypto. In a move as bold as it is bananas, they’re pushing to rewrite Switzerland’s constitution to force the Swiss National Bank (SNB) to add Bitcoin to its reserves.

“Gold’s in the constitution, and Bitcoin is the best-performing asset of the last decade,” argued Yves Bennaïm, the mastermind behind this plot and founder of Bitcoin non-profit 2B4CH.

Because why stop at world-class watches when you can have world-class hodling?

The group has 18 months to gather 100,000 signatures to kick-start the process. If they succeed, Switzerland might someday vote on whether their central bankers should start stacking sats.

Of course, the SNB has been about as warm to Bitcoin as an Alpine glacier, citing the network's energy use and the volatility of its native token. But hey, if a constitutional change doesn’t convince them, maybe a “laser eyes” filter on their official portrait will!

Watch the Recap!