Tag: Business – Decrypt

The first rule of self-custodying crypto is that you do not tell anyone your seed phrase—a set of 12 or 24 words that unlocks the private key to the wallet, therefore enabling control of the digital assets inside.

South Korea’s National Tax Service (NTS) broke that rule in a very public fashion this week, publishing a photo of hand-written seed phrases in a press release and enabling an unidentified actor to make off with tokens valued at $4.8 million at face value, according to a local news report from Maeli Business Newspaper. But the highly illiquid tokens have since been returned.

The incident occurred after the NTS completed a search and seizure of high-value tax delinquents and subsequently photographed some of its haul to share in a press release. In that release, one individual’s lot, labeled as “Case 3,” included multiple Ledger hardware devices and their respective seed phrases, according to the report. 

“This is like advertising to open your wallet and take your money,” Professor Cho Jae-woo of Hansung University told the publication.

Upon publication of the release, an individual did just that, pulling contents from at least three wallets into an Ethereum address ending in “86c12” before transferring them again. 

On-chain data shows that three distinct addresses holding a total of 4 million Pre-Retogeum (PRTG)—valued at $4.8 million based on the token’s current price—were funded with a negligible amount of Ethereum to cover transaction fees before the user transferred their respective PRTG tokens to “86c12.”

The three addresses, which have not made any transactions since January 2023, held 40% of the total supply of the PRTG token—a defunct Ethereum-based token that boasts only 1,500 holders and 1,600 transfers all-time. 

While initial reports noted the token’s $4.8 million face value, if the thief tried to sell these tokens, they would have not been able to recoup anywhere near that amount given very limited liquidity. The token lists no trading pairs on decentralized exchanges, and is only listed on one centralized exchange—MEXC—where it registered 24-hour volumes of only $332. 

According to CoinGecko, the exchange’s liquidity for the PRTG-USDT trading pair is so small that only $59 in volume would send the price down 2%. For comparison, to move Bitcoin down 2% down on MEXC, a trader would need to sell around $2.6 million worth of the top crypto coin.

Perhaps that understanding is why on Friday morning, about 20 hours after initially moving the PRTG tokens, an address tied to the original “86c12” address transferred all the tokens back to their original wallets. 

The hiccup is just the latest in a string of apparent crypto blunders for officials in South Korea. Earlier this week, it was discovered that $1.4 million in BTC went missing four years ago thanks to police not adhering to proper crypto custody guidelines. 

Plus, South Korean regulators have come under fire after not finding an internal flaw in crypto exchange Bithumb’s system, which led to the firm erroneously distributing $43 billion worth of Bitcoin to users earlier this month rather than sending them small amounts of South Korean won.

Trump Media and Technology Group (DJT) is considering spinning off Truth Social—its free speech-focused social media platform championed by President Donald Trump—into its own public entity, the firm announced on Friday. 

The move would see Truth Social and other Trump Media businesses become SpinCo, which would then merge with Texas Ventures III. However, some assets and businesses would remain with the Trump Media, though the firm did not indicate which.

Shares of the new entity would be provided to DJT shareholders prior to the firm’s announced merger with TAE Technologies, a power fusion firm that is still in a pending merger with the Trump Media.

“The contemplated transaction is intended to create shareholder value through the creation of pure play companies, each with distinct strategies,” the firm’s announcement reads. 

The news did not immediately register any positive impacts for DJT shareholders though. Shares in the firm are down around 2.10% today as broader markets decline. It has now fallen around 40% in the last six months, recently changing hands around $10.73. 

While the comment above might suggest that Trump Media’s crypto initiatives would remain alongside Truth Social, details about its crypto-related plans were not immediately clear. A representative for the firm did not immediately respond to Decrypt’s request for comment. 

Last year the firm sought to “protect itself from discrimination from financial institutions” by adding $2 billion in Bitcoin and Bitcoin-related securities to its balance sheet. 

It also filed for a Bitcoin ETF last June and later a crypto blue chip ETF, which includes other tokens like Ethereum, Solana (SOL) and Ripple-linked XRP. 

The firm signaled its intent to bolster its crypto ETF offerings earlier this year, filing for a joint Truth Social-branded Bitcoin and Ethereum ETF, as well as one centered on the Crypto.com-linked token, CRO.

It is also working with Crypto.com on a digital token that would be airdropped to Trump Media shareholders as it seeks to adopt crypto rails across its business. The deadline for broker participants to provide information on shareholders passed earlier this month, though the token has not yet been distributed.

A report from the world’s oldest defense and security think tank has warned against banning blockchain-based privacy tools, arguing that blanket prohibition would merely result in bad actors using noncompliant services.

In a paper titled, ‘Privacy-Enhancing Technologies in the Crypto Industry,’ the London-based Royal United Services Institute (RUSI) highlighted a “need to balance compliance objectives” with the growing role of privacy-related protocols and platforms in the cryptocurrency sector.

It observed that growing demand for privacy solutions currently derives from four legitimate sources. They include individuals and entities wanting to avoid targeting by hackers, privacy concerns in the face of AI-related data mining by companies; privacy concerns of cryptocurrency businesses; and reducing the risk that high-net-worth and/or prominent individuals will be targeted by criminals or authoritarian governments.

Based on roundtable discussions convened by the UK Home Office and National Economic Crime Centre in July 2025, the report highlights several blockchain-based privacy technologies, including zero-knowledge proofs, confidential stablecoins and privacy pools.

While acknowledging that illicit actors are naturally attracted to privacy tools and “succeed by taking advantage of innovation,” the paper reports that roundtable participants—which included industry players as well as regulators and enforcement agencies—made the point “several times” that there was a “need to not ban” privacy solutions.

“The participants highlighted that banning the technology would result in illicit actors using unregulated services,” the report reads. “As a result, law enforcement would have fewer entities to reach out to and request information from, subsequently limiting options for further investigations.”

Instead, the roundtable participants agreed on the value of expanding collaboration between officials and providers, and of using privacy-enhancing technologies to aid law enforcement practices and “improve detection of illicit activity.”

Crypto privacy and compliance

The report’s author, RUSI Associate Fellow Allison Owen, told Decrypt that it’s important for policymakers and enforcement agencies to work together with developers to ensure that privacy solutions integrate compliance features.

“From the roundtable, it is clear that the participating companies that integrate PETs and compliance features are willing to engage with the public sector,” she said.

While accepting that there will always be individuals with bad intentions, Owen emphasized that this shouldn’t “cloud the possibility of responsible actors using the technology to benefit society.”

Indeed, the report focuses almost exclusively on the legitimate uses of privacy solutions, highlighting their utility in the context of increasingly frequent “$5 wrench attacks,” which in 2025 claimed record losses of $41 million.

It also discusses other drivers of usage, such as cryptocurrency firms wanting to keep crypto-based salaries confidential, as well as wanting to keep their business practices and fund flows private from competitors.

Based on such practices, the roundtable’s participants generally believed that privacy-enhancing mechanisms “will continue to grow,” with zero-knowledge proofs in particular being integrated increasingly into business practices by the end of this year.

However, despite this optimism Owen herself told Decrypt that “extensive” collaboration between developers and the public sector needs to happen before trust in crypto-related privacy solutions reaches a critical mass.

“Building trust through the integration of compliance features will ultimately expand the use of the technology,” she said. “The roundtable reflects a step forward in driving these discussions around how to balance compliance and user privacy.”

OpenAI has announced $110 billion in new investment at a $730 billion pre-money valuation, securing $30 billion each from Nvidia and SoftBank, with Amazon adding $50 billion to the pot. The ChatGPT maker has also revealed broader strategic alliances with Amazon and Nvidia.

ChatGPT now has over 900 million weekly active users and 50 million consumer subscribers, OpenAI said in a Friday blog post. The firm added that its Codex AI coding tool has seen its weekly user base more than triple to 1.6 million since the start of the year, suggesting a strong growth area as more people use AI for coding purposes.

The Amazon partnership focuses on accelerating AI adoption for enterprises and startups, while the expanded Nvidia collaboration includes dedicated inference and training capacity on next-gen hardware systems.

“We’re pushing the frontier across infrastructure, research, and products to make AI more capable, reliable, and broadly useful,” said OpenAI CEO Sam Altman, in a statement.

“SoftBank, Nvidia, and Amazon are long-term partners who share our ambition to turn real scientific progress into systems that deliver meaningful benefits for people at global scale,” he added. “Building AI that works for everyone will require deep collaboration across the stack, and we’re excited to do this together.”

OpenAI said that additional investors are expected in the round, with only the three backers and $110 million investment announced so far on Friday. The raise also boosts the OpenAI Foundation’s stake in the company to over $180 billion, expanding its philanthropic capacity in areas like health and AI resilience.

“Artificial intelligence is the most consequential technology of our time, and OpenAI is at the forefront,” said Nvidia founder and CEO Jensen Huang, in a statement. “We have been privileged to partner with OpenAI since its earliest days, as it delivered one breakthrough after another. Together, we will continue to push the frontier—building the infrastructure for the age of AI and scaling its benefits to serve industries and societies worldwide.”

In a separate joint statement, OpenAI and Microsoft said that the addition of new investors doesn’t impact their existing relationship.

“Microsoft and OpenAI continue to work closely across research, engineering, and product development, building on years of deep collaboration and shared success,” they wrote. “Microsoft maintains its exclusive license and access to intellectual property across OpenAI models and products. Collaborations like the partnership between OpenAI and Amazon were always contemplated under our agreements and Microsoft is excited to see what they build together.”

Lawmakers in Minnesota are considering a total ban on crypto ATMs, with legislation introduced earlier this week in response to a growing number of scams against the elderly.

Introduced on Monday by Rep. Erin Koegel, who serves as co-chair of the state’s House Finance and Policy Committee, HF 3642 would effectively ban all physical machines in Minnesota that allow users to purchase cryptocurrencies using cash.

The legislation marks renewed efforts to address risks associated with crypto ATMs, following a state framework passed in 2024 that imposed a $2,000 daily transaction limit for new customers, refund requirements, and a licensing framework for operators.

Although several states have implemented pauses or strict local bans on crypto ATMs, the measure in Minnesota would likely be the first of its kind in the nation. It would mirror sweeping bans taken up in multiple countries, such as one last year in New Zealand.

Law enforcement officials testified during a hearing on Thursday that older Minnesotans are continuing to lose tens of thousands dollars from scammers, who direct victims to send them crypto under false pretenses, often while impersonating the government or tech support.

At the hearing, a local detective recalled how one resident feared she would become homeless after sending Bitcoin to a scammer 10 times within six months. The official said she was losing 50% of her monthly income until she was found at a gas station appearing confused one day, and she required government assistance “due to her dire circumstances.”

There are around 430 crypto ATMs in Minnesota, which are clustered mostly around the state’s most populous city, Minneapolis, according to Coin ATM Radar. Across the country last year, victims reported $333 million in losses tied to crypto ATMs, according to the FBI.

CoinFlip General Counsel Larry Lipka said at the hearing that the ATM operator is aware of the prevalence of scams using its machine, but scammers have multiple tools at their disposal.

In a letter submitted to the committee, the police chief of one city in Minnesota wrote that “law enforcement has an extremely limited ability to recover funds once transferred,” representing one of several challenges from a public safety perspective.

Rep. Keith Allen noted during the hearing that millions of dollars have likely been siphoned from rural communities that “could have been doing a lot of good.”

As lawmakers in Minnesota weigh a total ban on crypto ATMs, state prosecutors in other areas are advocating for restrictions against associated companies, including Bitcoin Depot.

Earlier this week, the largest operator of Bitcoin ATMs in North America signaled that it would begin requiring customers to provide personal identification each time they make a transaction. The move presented a voluntary effort to refine its compliance procedures.

That decision followed a lawsuit brought by Massachusetts Attorney General Andrea Campbell earlier this month, which alleged that Bitcoin Depot knowingly facilitated crypto scams while “removing safeguards against fraud and misleading investors in order to line their own pockets.”

Bitcoin Depot has pushed back against the assertion, according to ICIJ, with a spokesperson asserting recently that the firm is built around compliance and consumer protection. The company continues to work with law enforcement to combat illicit activity, they added.

Police officers from the Gangnam Police Station in Seoul, South Korea didn’t adhere to crypto custody guidelines, leading to the loss of more than $1.4 million in Bitcoin at today’s prices, per a new report from local media outlet Dong-A Ilbo. Now two suspects have been arrested in relation to the swiped Bitcoin.

After confiscating 22 Bitcoin from a company that was hacked in 2021, police were supposed to securely custody the crypto in an offline or cold wallet that they controlled. Instead, they allowed the funds to sit in a wallet managed by a third-party and didn’t even have the seed phrase to access the funds, the report said.

“When seizing virtual assets, it is appropriate to transfer them to the investigative agency’s hard wallet and store them in a separately installed safe,” the seized asset guidelines from the National Police Agency recommended, according to the report.

Without control of the wallet, the police lost the funds in 2022 when the firm with the seed phrase borrowed Bitcoin from an individual identified as “Jeong,” who was also given the wallet’s secret phrase.

The funds were only discovered to be missing this year after a review by the Gwangju District Prosecutors’ Office found a different case of 320 Bitcoin that were missing—around $21 million worth.

Now in connection to the 22 BTC missing from the Gangnam Police Station, two individuals have been arrested by the Gyeonggi Northern Provincial Police Agency, which is conducting an investigation. 

“We are currently investigating the specific circumstances, including how the Bitcoin was leaked out,” a police official said, according to Chosun Daily.

While the investigation is ongoing, it is known that a member of the original hacking investigation team was “indicted on bribery charges” last year, and the third-party firm in question “reportedly offered bribes in exchange for ensuring the investigation proceeded in their favor,” Dong-A Ilbo’s report says. 

The ordeal follows increased scrutiny on South Korean financial regulators after they failed to find an internal system flaw which led to $43 billion in erroneous Bitcoin distributions on crypto exchange Bithumb earlier this month.  

Instead of sending 2,000 South Korean won (around $1.40) to users as part of a promotion, the exchange accidentally sent as much as 2,000 BTC—about $135 million at today’s prices—to hundreds of users.

Meta’s use of artificial intelligence to police its platforms is generating large volumes of low-quality reports that are draining resources and slowing child abuse investigations, according to a report by The Guardian.

The news comes as New Mexico law enforcement officials testified last week that AI-generated reports are overwhelming investigators and slowing child exploitation cases.

Officers with the Internet Crimes Against Children Task Force program specifically cited Meta’s automated systems, saying they generate thousands of unusable tips each month that are forwarded to law enforcement.

“We get a lot of tips from Meta that are just kind of junk,” Benjamin Zwiebel, a special agent with the ICAC taskforce in New Mexico, testified during the state’s trial against the company.

Another ICAC officer, speaking anonymously, told The Guardian the department’s cybertips doubled from 2024 to 2025. 

“It’s pretty overwhelming because we’re getting so many reports, but the quality of the reports is really lacking in terms of our ability to take serious action,” they said.

In a statement shared with Decrypt, a Meta spokesperson said the company has long cooperated with law enforcement and noted that the Department of Justice and the National Center for Missing & Exploited Children have praised its reporting process. 

“In 2024, we received over 9,000 emergency requests from U.S. authorities and resolved them within an average of 67 minutes and even more quickly for cases involving child safety and suicide,” the spokesperson said. 

“Consistent with applicable law, we also report apparent child sexual exploitation imagery to NCMEC and support them to prioritize reports, from helping build their case management tool to labeling cybertips so they know which are urgent,” they added.

ICAC officers, however, said some of the reports sent by Meta are not criminal in nature, while others lack credible evidence needed to pursue a case.

The increase follows the Report Act, which was signed into law in May 2024 and expanded reporting requirements to include planned or imminent abuse, child sex trafficking, and related exploitation, while requiring companies to preserve evidence longer. 

By the numbers

Meta remains the largest source of reports to NCMEC’s CyberTipline, accounting for about two-thirds of the 20.5 million tips received in 2024, down from 36.2 million in 2023. The decline has been attributed in part to changes in Meta’s reporting practices.

In its August 2025 integrity report, Meta said Facebook, Instagram, and Threads sent more than 2 million CyberTip reports to NCMEC in the second quarter of 2025. Of those, more than 528,000 involved inappropriate interactions with children, while more than 1.5 million involved the sharing or re-sharing of child sexual abuse material.

Despite those figures, JB Branch, a policy advocate at Public Citizen, said the increased reliance on AI has made the Report Act less efficient for investigators reviewing cases, arguing that while algorithms have long helped reduce moderators’ workload, human reviewers were the most effective filter.

“Part of the problem here is that a lot of these tech companies have laid off content moderators and replaced them with AI security features,” Branch told Decrypt. “As a result, there is an overabundance of false positives being selected out of an overabundance of caution.” 

In the past, Branch said, there were typically more human reviewers in the review chain who could identify and remove content that did not warrant escalation.

“Because these companies have removed human content moderators or reviewers from the chain, way more things are getting passed off because they want to err on the side of caution,” he said. “They’re basically dragging a broader net and capturing things that don’t even qualify, and they’re relying heavily on AI tools to do that.”

Investigators say the impact of faulty AI-generated tips is now being felt inside the task forces reviewing them.

“It is killing morale. We are drowning in tips, and we want to get out there and do this work,” an ICAC officer reportedly said. “We don’t have the personnel to sustain that. There’s no way that we can keep up with the flood that’s coming in.”

A bipartisan group of lawmakers introduced a bill Thursday that would exempt certain decentralized software developers from criminal liability.

With crypto’s stalled market structure bill poised to contain similar language, what does the bill’s introduction mean for the state of privacy-focused crypto legislation in Washington?

The new bill goes further than similar language currently being debated in market structure legislation—but should not be seen as an indication that the market structure bill’s language on developer protections is too weak, nor that the market structure bill itself is doomed, a source familiar with the thinking behind the new bill told Decrypt.

The new bill, dubbed the Promoting Innovation in Blockchain Development Act, would formally amend the language of a U.S. criminal statute that has been successfully used—by both the Joe Biden administration and the current Donald Trump administration—to prosecute crypto software developers.

The statue, U.S. code 1960, defines an illegal money transmitting business. Today’s legislation would amend the code to ensure it applies only to individuals who “exercise control over currency.” It was introduced in the House today by Reps. Scott Fitzgerald (R-WI), Ben Cline (R-VA), and Zoe Lofgren (D-CA).

Last year, an Ethereum software developer was found guilty by a Manhattan jury of violating code 1960 for developing a crypto privacy tool called Tornado Cash. The developer argued that because the software was decentralized, and he did not take custody of user funds, he should not be considered the operator of an illegal money transmitting business.

Some months later, the Trump Department of Justice secured guilty pleas under code 1960 from two Bitcoin software developers who created a similar platform called Samourai Wallet. The developers are both currently serving sentences in federal prison.

“This bill is critically important for engineers,” the DeFi Education Fund, an industry advocacy group, said today of the Promoting Innovation in Blockchain Development Act.

“It makes it clear that software developers who do not take custody of or control other people’s money can build neutral technology, here at home, without worrying about being criminally prosecuted as if they are a financial intermediary,” the group said.

The crypto market structure bill is likely to include language addressing code 1960—but not language that actually rewrites the statute itself. The language would, instead, order that “non-controlling developer[s]” not be treated as engaged in money transmitting under code 1960. 

Language in the bill surrounding decentralized finance, or DeFi, is currently in relative flux, however, as lawmakers and industry stakeholders attempt to salvage the legislation after months of delays. DeFi refers to the collection of financial applications that exist natively on blockchain networks, circumventing the need for third-party intermediaries such as banks.

DeFi language in the bill, though, while not finalized, is unlikely to be the hill the bill dies on, sources familiar with the matter told Decrypt. Industry leaders and the banking lobby are currently locked in another disagreement regarding stablecoin rewards, while Senate Democrats and the White House remain at an impasse on language regarding conflicts of interest and President Trump’s numerous crypto ventures.

Lawmakers have urged that the bill needs to see significant progress in the coming weeks, or it risks falling by the wayside as Congress grinds to a halt in the spring ahead of November’s midterms.

Jack Dorsey’s Block Inc said it will cut more than 4,000 jobs, over 40% of its workforce, as part of a broad restructuring unveiled alongside its fourth-quarter and full-year 2025 earnings.

Shares of the New York Stock Exchange-listed payments company jumped more than 23% in after-hours trading, Yahoo Finance data shows.

The scale of the layoffs places Block among the companies carrying out the largest workforce reductions in the fintech sector so far this year, as payments and financial technology firms grapple with slower growth, tighter capital conditions, and increased scrutiny of operating costs.

In a 8-K filing with the Securities and Exchange Commission on Thursday, Block said the workforce reduction is intended to better align its organizational structure with its “operating model and strategic priorities.”

Block said it expects to record between $450 million and $500 million in restructuring charges, largely related to severance, notice-period pay, employee benefits, and other cash costs, as well as non-cash expenses tied to the vesting of share-based awards. 

Most of the charges are expected to be recognized in the first quarter of fiscal 2026, with the restructuring largely completed by the end of the second quarter.

The company cautioned that the estimates are based on assumptions and that actual costs could differ materially.

As of the end of 2025, Block employed just over 10,200 full-time workers globally, according to its 10-K annual filing with the regulator, underscoring the scale of the cuts.

Cash App had 59 million monthly transacting users in the U.S. at year-end, bringing in $316 billion of customer inflows during 2025.

Block’s core business spans consumer and merchant payments through Cash App and Square, alongside a long-running push into Bitcoin products, including trading, self-custody, and merchant payments.

Block now reports its business across three revenue categories: commerce enablement, financial services, and its Bitcoin ecosystem, which together generated $10.4 billion in gross profit in 2025, per its annual filing.

Block said it would hold an earnings conference call and webcast later Thursday to discuss its results for the quarter and year ended December 31, 2025.

The Office of the Comptroller of the Currency on Wednesday proposed rules to implement the GENIUS Act, laying out how payment stablecoins would be issued and supervised under the agency’s jurisdiction.

In a notice of proposed rulemaking issued Wednesday, the OCC said it is launching a 60-day public comment period to determine how payment stablecoins are issued, backed, supervised, and potentially shut down under federal oversight.

Wednesday’s move aims to operationalize the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, the first federally established stablecoin framework that passed into law last July.

The law generally prohibits anyone other than a “permitted payment stablecoin issuer” from issuing a payment stablecoin in the U.S. and bars digital asset service providers from offering non-compliant stablecoins to U.S. users.

“The regulations effectively bring the industry into the traditional finance world with significant oversight and connectivity with the banking industry,”  Musheer Ahmed, founder and managing director of Finstep Asia, told Decrypt.

The U.S. market is expected to see a host of “regulated stablecoins from non-banks, payments, and crypto institutions” for “tokenized TradFi use cases.” 

The OCC’s draft covers reserve asset standards, mandatory redemption at par, liquidity and risk management controls, audits, supervisory examinations, custody requirements, and application pathways for new issuers. 

It also introduces a “capital and operational backstop” and amends existing capital adequacy and enforcement rules.

The agency said it “will have regulatory or enforcement authority over certain permitted payment stablecoin issuers,” including subsidiaries of national banks and federal savings associations, Federal qualified payment stablecoin issuers, and certain State qualified issuers. 

“In addition, the OCC will have regulatory authority over foreign payment stablecoin issuers,” the proposal says, an expansion that could pull offshore issuers seeking U.S. access into federal oversight.

Notably absent are Bank Secrecy Act and sanctions rules, which the OCC said will be addressed separately with the Treasury Department.

The new stablecoin regime is expected to kick in no later than January 2027, but could begin as soon as 120 days after regulators finalize implementing rules, shortening the transition window if rulemaking moves faster than the statutory 18-month deadline.

Last August, the banking groups wrote to Congress demanding closure of “several loopholes” in the GENIUS Act, warning that third-party yield offerings on stablecoins could still trigger major deposit flight.

OCC Chief Jonathan Gould has previously dismissed fears of a sudden deposit crisis, telling ABA conference attendees in October that any material deposit flight “would not happen in unnoticed fashion” and “would not happen overnight.”

To that end, Ahmed said regulated stablecoins could be “potentially safer than traditional banks” in stress events, noting banks operate on 10–20% capital ratios while stablecoin issuers are mandated to hold 100% reserves for 1:1 redemptions, making them “fairly solvent” if rules are maintained.

In an extreme market scenario, Ahmed said, “one could say that the lender of the last resort will be the U.S. Fed,” not by directly backstopping issuers, but by “supporting the underlying assets that form stablecoin reserves — largely US treasuries and cash equivalents.”