AI & Digital Assets

June 13, 2025: AI & Digital Assets

How Stablecoins Are Entering the Financial Mainstream

Philip Stafford, The Financial Times

Usage of the digital assets is growing rapidly, but concerns remain about supervision and their impact on other parts of the financial system

For Nkiru Uwaje, co-founder and chief operating officer of trade payments group Mansa, stablecoins are an integral part of her daily corporate life.

The tokens, a form of cryptocurrency that acts like cash, account for 90 percent of business activities at the group, which helps small businesses in Africa, Southeast Asia, and South America. Payments to customers and her young team are made using tether, the world’s largest stablecoin, and Mansa received its funding the same way.

Uwaje, a former executive at bank messaging group Swift, says stablecoins are far superior to the network of correspondent banks that handle most of the world’s cross-border transactions, which take longer, charge more, and occasionally make mistakes.

But for Mansa and its customers, they represent one thing above all: ready access to a proxy for US dollars. Stablecoins track the value of the currency one-for-one, but the money is transferred across the internet, outside the banking system. That makes them highly attractive in countries afflicted by high inflation, weak or volatile currencies, unstable banks, or capital controls. Read more

The AI Arms Race: Deepfake Generation vs. Detection

Kevin Townsend, Security Week

AI-generated voice deepfakes have crossed the uncanny valley, fueling a surge in fraud that outpaces traditional security measures. Detection technology is racing to keep up.

If deepfakes were a disease, this would be a pandemic. Artificial Intelligence (AI) now generates deepfake voice at a scale and quality that has bridged the uncanny valley.

Fraud is increasingly being fueled by voice deepfakes. An analysis by Pindrop (using a ‘liveness detection tool’) examined 130 million calls in Q4 2024 and found an increase of 173% in the use of synthetic voice compared to Q1. This growth is expected to continue with AI models like Respeecher (legitimately used in movies, video games and documentaries) able to change pitch, timbre, and accent in real time – effectively adding emotion to a mechanically produced voice. Synthesized voice has successfully crossed the so-called uncanny valley.

The ‘uncanny valley’ is the dip in human acceptance for new developments followed by a sharp rise as they improve. It was described in the 1970s by Japanese robotics engineer Masahiro Mori. Its effect is accentuated by movement in the subject — for Mori in robotics, but equally applicable to moving voice today. The improvement in deepfake synthesis has reached that stage where initial distrust is replaced by active and increasing acceptance. It is impossible for a human to detect a voice deepfake. Read more

Transforming Small Financial Institutions with AI

Saeid Kian, AI Business

AI can help deliver efficiency while maintaining the human touch

KPMG recently reported that financial institutions are increasingly leaning on AI to run their operations — 71% used it in 2024, citing ROI as the biggest gain. Most organizations are using the technology for financial reporting and are beginning to widen their scope to include treasury management, risk management, and tax.

However, the study’s results also show that financial institutions with smaller revenues vastly fall on the “beginner” side of maturity adoption — less progress in AI, genAI, and adoption in specific departments — rather than the “leader” — more advanced AI progress in the past six months — suggesting that smaller financial institutions like community banks and credit unions are struggling to master AI or go beyond surface-level use.

As AI agents enter mainstream consumption and tech companies deliver managed services for the financial sector, smaller banks begin to see more affordable solutions. This enables them to leverage the benefits of AI — from more efficiency to specialized applications and enhanced human touch. Read more

FSB Warns Crypto Nearing ‘Tipping Point’ as Ties to TradFi Deepen

Amin Haqshanas, CoinTelegraph

Outgoing FSB Chair Klaas Knot says stablecoins and ETFs are accelerating crypto’s integration into traditional finance, raising systemic risk concerns.

The Financial Stability Board (FSB) is sounding the alarm on growing risks from the crypto sector, warning that interlinkages with traditional finance are nearing a critical threshold.

Speaking in Madrid on Thursday, outgoing FSB Chair Klaas Knot said that while crypto does not yet pose a systemic risk to traditional finance, that status may not last much longer. “We may be approaching a tipping point here,” he said.

Knot noted that entry barriers for retail investors have “dropped significantly,” particularly with the introduction of crypto exchange-traded funds. Crypto ETFs allow investors to gain exposure to digital assets without managing private keys, using crypto wallets or navigating exchanges.

Knot added that another area of concern is the stablecoin market. He noted that issuers now hold large amounts of US Treasurys, which increases interlinkages between crypto and traditional finance. “That’s a segment that we clearly must monitor closely,” he added. Read more

June 6, 2025: AI & Digital Assets

Four Obstacles Banks Face in Getting a Return on AI

Penny Crosman, American Banker

As banks continue to invest in artificial intelligence software — at the end of last year, 40% of respondents in an American Banker survey said they planned to increase AI spending in 2025 — the question arises, are they seeing a return on this investment yet?

In a follow-up American Banker survey released in May, we asked bankers what gets in the way of realizing a positive return on their AI investments. They said the cost of modernizing their core systems and IT infrastructure, the higher pay needed to hire people with AI-related skills, rising data governance and management costs and increasing vendor prices.

Here’s a closer look at these four hurdles to AI benefits, and how bankers can overcome them.

The cost of modernizing core technology
For just about half (49%) of respondents, the cost of upgrading their core system is the primary impediment to getting a return on AI. Many banks have older core systems, in some cases decades old. These systems are written in programming languages like COBOL that young engineers don’t know. It’s not easy to feed data from them straight into AI models. And often these older systems operate in batch mode, so real-time data feeds are not possible. Read more

Crypto in the Capital: Atlanta’s Push for Growth, Trust, and Tech

The Emory Wheel

Atlanta is stepping into the national spotlight with a bold move in cryptocurrency policy.

Senate Bill 178, introduced by Senators Greg Dolezal, Brandon Beach, and Clint Dixon in February, proposes allowing the state treasurer to invest up to 5% of any state fund in Bitcoin.

This bill focuses solely on Bitcoin, excluding other digital currencies. If enacted, it could position Georgia as one of the early adopters that will hold Bitcoin as a reserve asset. New Hampshire became the first state to officially establish a crypto reserve.

Bill 178 outlines strict security measures for managing these investments. It mandates the use of a “qualified custodian” to hold the private keys associated with the state’s Bitcoin holdings. This is a really important step to think about, because private keys are literal keys to accessing crypto assets, and if lost can’t be recovered.

The custodians must be federal or state-chartered banks, trust companies, or special-purpose depository institutions. The legislation also specifies that private keys must be stored in encrypted environments, inaccessible via smartphones, and maintained in at least two geographically diverse secure data centers. Read more

Bipartisan Digital Assets Regulatory Framework Bill Proposed in Congress

Kim Riley, Financial Regulation News

Newly introduced bipartisan legislation on Capitol Hill would establish a federal regulatory framework for digital assets in the United States.

“Our bill brings long-overdue clarity to the digital asset ecosystem [and] prioritizes consumer protection and American innovation,” said U.S. House Financial Services Committee Chairman French Hill (R-AR), who on May 29 sponsored the Digital Asset Market Clarity (CLARITY) Act of 2025, H.R. 3633.

If enacted, H.R. 3633 would protect consumers by strengthening transparency and accountability for market participants, according to a bill summary provided by the sponsoring lawmakers.

For instance, developers would be required to provide accurate, relevant disclosures, including information relating to the digital asset project’s operation, ownership, and structure.

Additionally, customer-facing digital asset firms, like brokers and dealers, would be required to provide appropriate disclosures to customers; segregate customer funds from their own; and address conflicts of interest through registration, disclosure, and operational requirements, the summary says. Read more

Regulatory Clarity ‘Foundational’ for Crypto

Grace Noto, Banking Dive

Newly minted Gemini CFO Dan Chen emphasized the importance of clear regulatory frameworks as the Trump administration continues to woo the crypto industry.

As Vice President JD Vance noted Wednesday at the 2025 Bitcoin conference in Las Vegas, cryptocurrency “finally has a champion and an ally in the White House,” with the election of President Donald Trump.

Both the president and vice president are large proponents — and owners — of cryptocurrency, and the Trump administration has taken immediate steps to woo cryptocurrency exchanges and related businesses, appointing industry-friendly heads to regulators like the Securities and Exchange Commission and touting plans to create a national stockpile of digital assets, among other initiatives.

Though some have expressed concern over the policies and Trump’s potential conflicts of interest given his business interests in the industry, many are hoping the new spotlight on crypto will help to create more space for it next to traditional currencies — something that requires firm regulatory standards to be put in place. Regulatory clarity is “really foundational,” not just for the cryptocurrency space, but for businesses across any industry, said Dan Chen, CFO of crypto exchange Gemini Trust. Read more

May 30, 2025: AI & Digital Assets

House Republicans Include A 10-Year Ban on US States Regulating AI In ‘Big, Beautiful’ Bill

Matt Brown and Matt O’Brien, Associated Press

House Republicans surprised tech industry watchers and outraged state governments when they added a clause to Republicans’ signature “ big, beautiful ” tax bill that would ban states and localities from regulating artificial intelligence for a decade.

The brief but consequential provision, tucked into the House Energy and Commerce Committee’s sweeping markup, would be a major boon to the AI industry, which has lobbied for uniform and light touch regulation as tech firms develop a technology they promise will transform society.

However, while the clause would be far-reaching if enacted, it faces long odds in the U.S. Senate, where procedural rules may doom its inclusion in the GOP legislation.

“I don’t know whether it will pass the Byrd Rule,” said Sen. John Cornyn, R-Texas, referring to a provision that requires that all parts of a budget reconciliation bill, like the GOP plan, focus mainly on the budgetary matters rather than general policy aims.

“That sounds to me like a policy change. I’m not going to speculate what the parliamentarian is going to do but I think it is unlikely to make it,” Cornyn said. Read more

Financial Institutions Double Down on AI — But Will It Deliver?

Global Finance Magazine

Financial institutions are accelerating investments in artificial intelligence, with 2025 budgets projected to rise by 25% industry-wide, according to an HFS and Infosys study — representing 16% of total technology spending.

This surge — fueled by competitive pressure and promises of enhanced customer insights — has institutions like Bank of America allocating $4 billion to AI and other new tech initiatives. While early adopters report efficiency gains and cost reductions, the sector faces a pivotal challenge: The average expected ROI timeline of two years reflects both optimism and pressure to demonstrate quick wins. Success hinges on overcoming fragmented implementations and workforce skepticism that could dilute returns.

The allure of AI-driven efficiency
Within AI budgets, financial institutions are prioritizing data modernization (58% of AI budgets) and licensing generative AI software (53%) to unlock customer insights and streamline operations. These investments aim to address long-standing inefficiencies — from legacy system overhauls to real-time fraud detection. Bank of America’s seven-year AI journey demonstrates this principle. The bank reduced service costs and increased client satisfaction scores by centralizing data from 20 million Erica virtual assistant users.

Yet the focus remains narrow. Nearly two-thirds of institutions view AI primarily as a tool for “bottom-line productivity”, while only 12% have implemented enterprise-wide AI strategies. This myopia risks creating advanced capabilities in silos — a customer service chatbot here, a risk-modeling algorithm there — without cohesive integration. AI governance must be defined as part of enterprise strategy, not an afterthought. Read more

US Banks Tiptoe Toward Crypto, Awaiting More Green Lights from Regulators

Nupur Anand, Reuters

Summary

US banks initial steps toward crypto are likely to be tentative
Large lenders are hesitant to be the first to expand into crypto
More banks are keen to be fast followers after a few test cases
Banks seek more clarity around AML-crypto regulations

Big U.S. banks are holding internal discussions about expanding into cryptocurrencies as they get stronger endorsements from regulators, but initial steps will be tentative, centering on pilot programs, partnerships or limited crypto trading, according to four industry executives. Wall Street giants that had been largely blocked from many crypto activities by strict regulations are poised to grow quickly.

Yet the biggest lenders are still hesitant to be the first among rivals to expand too heavily into crypto in case they fall afoul of changing rules, said the four executives, who declined to be identified since they were discussing internal business plans. If a major firm expands without issues, others will likely be quick followers, running small-scale pilot projects and evaluating other business prospects, the executives said. Read more

Lagging In Illicit Stablecoin Freezing Helps Criminals Launder Funds

Linas Kmieliauskas, CyberNews

While blockchain investigators complain about slow responses from some centralized exchanges and stablecoin issuers when it comes to freezing illicit funds, a new report shows how this process works and how much it has already cost.

Anti-money laundering (AML) compliance solutions provider for the cryptoasset industry, AMLBot, claims that “a significant lag” between the initiation of a freeze and the actual enforcement has already allowed the transfer of more than $78 million in the Tether (USDT) stablecoin on the Tron (TRX) and Ethereum (ETH) blockchains.

According to the AML company, criminals familiar with the freezing process can exploit it, possibly even by developing money laundering tools that automate it during the freeze delay window.

For example, in a specific case presented in the report, it took 44 minutes to freeze USDT on Tron after the suspicious address was flagged.

“During this period, the wallet retained full access to $426,183 USDT, meaning any fast-acting operator could have moved the funds out before the freeze took effect. This isn’t a theoretical weakness. It’s happening in the wild, and bad actors are watching,” AMLBot warned. Read more

May 23, 2025: AI & Digital Assets

AI in Credit Unions: GAO Wants to Give the NCUA Additional Oversight

The Credit Union Connection

Even when it’s the only banking regulator that has not set detailed AI guidance

The Government Accountability Office’s (GAO’s) latest report—Artificial Intelligence: Use and Oversight in Financial Services (GAO-25-107197)—calls out the NCUA for limited oversight of artificial intelligence (AI) in credit unions. But before anyone rushes to hand the agency more authority (and more of your members’ money), is that the right move?

The report’s conclusions state:

The NCUA should have oversight over third parties to protect credit unions and their members from bad actors. That said, leaving credit union use of AI at the political whim of whichever part is in charge every few years would stifle innovation and give the agency oversight on what should be credit unions’ business decisions.
The GAO comes down on the NCUA because, “unlike the banking regulators, NCUA does not have detailed model risk management guidance that covers a broad variety of models, including AI models. Developing such guidance would strengthen NCUA’s ability to address risks to consumers and the safety and soundness of credit unions arising from the use of AI.”

The path forward isn’t as simple (or justified) as the GAO suggests.

What the GAO Got Right
There’s no question that AI in credit unions is accelerating. Tools that once felt experimental, like machine learning-powered underwriting or AI-powered member service chatbots, have been deployed in many credit unions. The GAO points out that the NCUA’s model risk management guidance is currently limited, primarily focused on interest rate risk, and does not fully address the growing variety of AI-driven tools. Read more

Senate Advances Crypto Regulation Bill with Bipartisan Support

Robert Jimison, The New York Times

Democrats who had sided with the rest of their party last week to block the measure over concerns that President Trump could benefit dropped their objections. They argued that regulating the industry was urgent.

The Senate on Monday revived a first-of-its-kind bill to regulate parts of the cryptocurrency industry, after a small number of Democrats who had joined the rest of their party in blocking the measure joined Republicans in allowing it to advance.

The vote was 66 to 32 to move forward with the legislation, which would create a regulatory framework for stablecoins, a type of cryptocurrency tied to the value of an existing asset, often the U.S. dollar. Sixteen Democrats joined the majority of Republicans in support, acting over the opposition of most others in their party, who were concerned that President Trump and his family were inappropriately profiting from crypto.

The vote was a victory for the cryptocurrency industry, which has made significant advances in Washington with the backing of Mr. Trump and a bipartisan group of lawmakers. It suggested that the measure would have enough support to pass the Senate and potentially make it to Mr. Trump’s desk in short order. A parallel effort in the House has faced similar backlash from Democrats, who earlier this month blocked a hearing on the legislation but are unlikely to have the votes to prevent it from passing.

In the Senate, a bloc of Democratic supporters had pressed in recent days to include stronger consumer protections and transparency requirements in the legislation, as well as provisions aimed at combating money laundering and terrorism financing. Read more

‘Major Wake-Up Call’: How $400M Coinbase Breach Exposes Crypto’s Dark Side

Oliver Knight, Coindesk

Coinbase said 69,461 customers were initially impacted by the breach, but fears remain over the threat of real-world robberies.

What to know:

Coinbase said it will reimburse impacted users with up to $400 million following last week’s data breach.
Security experts say the breach could have been prevented by imposing stricter background checks on staff and warning systems.
The breach draws comparisons to the Ledger incident in 2021, which led to a surge in real-world robberies.

Last week’s highly organized breach of cryptocurrency exchange Coinbase (COIN) left behind more questions than answers.

While some hailed Coinbase’s response as a “really great example” in dealing with a crisis, the breach has now caused a potentially massive privacy issue that mirrors the Ledger data breach in 2021 — which led to a spate of real-world robberies as criminals were able to get a hold of names and addresses of crypto holders. Coinbase has already acknowledged that its customers may have lost close to half a billion U.S. dollars as a result of its breach.

Cybercriminals accessed Coinbase user data by bribing and convincing Coinbase support employees to share that data, but this was entirely preventable, according to numerous experts that spoke to CoinDesk. Read more

With Bitcoin at Record High, Smaller Banks Face Urgent Crypto Decisions

PYMNTS.com

New rules for cryptocurrency could be around the corner in the U.S., and in many ways the industry is already preparing for its fully-mainstream debut.

There are few more telling signs of the shift the crypto landscape has undergone than the fact that JPMorgan Chase, as of Monday (May 19), now offers its clients access to bitcoin. “I don’t think you should smoke, but I defend your right to smoke,” JPMorgan CEO Jamie Dimon said, per reports. “I defend your right to buy bitcoin.”

For its part, the price of bitcoin on Wednesday (May 21) hit a new all-time high, rising to $109,500 as of reporting.

But while major financial institutions have the capacity to rapidly accelerate their adoption and integration of crypto technologies, as well as the heft and governance to handle the sector’s many risks, smaller community banks could find themselves lagging in emergent on-chain financial services, creating a widening competitive gap within the industry.

After all, prominent big banks, such as JPMorgan Chase, Bank of America and Citibank, have already embraced cryptocurrencies by heavily investing in blockchain technologies and infrastructure. But as the smaller players that make up traditional finance start to eye blockchain, there is the potential the landscape could become polarized based on institutional size and technological capability.

Should Smaller Banks Be Worried?
The question remains whether smaller banks should feel threatened by big banks’ aggressive cryptocurrency adoption. Credit unions (CUs), community banks and other regional lenders traditionally rely on personalized customer relationships, local market expertise and conventional banking products to support their business. Read more

May 16, 2025: AI & Digital Assets

Coinbase Faces $400M Bill After Insider Phishing Attack

Zoltan Vardai, CoinTelegraph

Coinbase rejected a $20 million ransom demand after insiders leaked user data in a phishing scheme. The exchange expects up to $400 million in reimbursement and remediation costs.

Coinbase, the world’s third-largest cryptocurrency exchange, was hit by a $20 million extortion attempt after cybercriminals recruited overseas support agents to leak user data, the company said. According to a May 15 blog post, Coinbase said a group of external actors bribed and coordinated with several customer support contractors to access internal systems and steal limited user account data.

“These insiders abused their access to customer support systems to steal the account data for a small subset of customers,” Coinbase said, adding that no passwords, private keys, funds or Coinbase Prime accounts were affected. Less than 1% of Coinbase’s monthly transacting users’ data was affected by the attack, the company said.

After stealing the data, the attackers attempted to extort $20 million worth of Bitcoin from Coinbase in exchange for not disclosing the breach. Coinbase refused the demand. Instead, the company offered a $20 million reward for information leading to the arrest and conviction of those responsible for the scheme. Scammers often masquerade as recognizable brands to inspire a false sense of trust in their victims. Read more

S.E.C. Investigating Whether Coinbase Misstated Its User Numbers

David Yaffe-Bellany and Matthew Goldstein, New York Times

The inquiry continued even after the commission dropped a lawsuit accusing Coinbase of illegally marketing digital currencies to the public.

Not long after President Trump took office, Coinbase, the largest U.S. cryptocurrency exchange, got some good news: The Securities and Exchange Commission was dropping a lawsuit that had accused the company of illegally marketing digital currencies to the public. But that case may not be the end of the company’s legal troubles.

The S.E.C. has also been investigating whether Coinbase misstated its user numbers in past disclosures — an inquiry that began during the Biden administration and has continued under Mr. Trump, according to four people familiar with it.

The investigation, which has not been previously reported, has focused on a metric that Coinbase included in securities filings and marketing materials, claiming that the company had more than 100 million “verified users,” said the people, who spoke on the condition of anonymity. The data point appeared in Coinbase’s original public offering document in 2021, but the company stopped citing it two years later.

Coinbase has been in touch with the S.E.C. over the course of this year, two people familiar with the inquiry said, and has hired the law firm Davis Polk & Wardwell to assist with its response. Read more

‘I Want More Regulation, And I Want It Now’

Cheyenne Ligon, CoinDesk

Kevin O’Leary predicted that a market structure bill will open the floodgates for institutional investors into crypto: “ … a trillion dollars will come in …”

Kevin O’Leary, chairman of O’Leary Ventures, said the crypto industry isn’t regulated enough — which is holding digital assets back from true institutional adoption.

Speaking at Consensus 2025 in Toronto on Thursday, O’Leary said crypto assets under management (AUM) have hit a wall, which he attributed to a lack of regulatory clarity that has prevented the majority of sovereign wealth funds, pension funds and institutional investors from investing meaningfully.

“I never thought I’d say this, but I want more regulation and I want it now,” O’Leary said. “The good news is there’s a new sheriff in town: Paul Atkins at the [U.S. Securities and Exchange Commission].” O’Leary said Atkins, who was sworn in as chairman of the SEC last month, has already telegraphed that he’s friendly to the crypto industry and will “regulate accordingly.” Read more

Alaskans Are Often Victimized in Online Crypto Scams, FBI Says

Chris Klint, Alaska Public Media

A graph of online crime losses reported by Alaskans to the FBI’s Internet Crime Complaint Center, or IC3, between 2015 and 2024.

Online scams involving cryptocurrency are often targeting Alaskans and particularly older residents of the state, according to new data from federal authorities.

The FBI released its 2024 Internet Crime Report late last month. It shows that Alaskans’ losses from online crime, as reported to the bureau’s Internet Crime Complaint Center, fell from $31.7 million in 2023 to $26.2 million last year – bucking a nationwide trend, as U.S. losses rose from $12.5 billion to $16.6 billion.

“In Alaska, approximately 45% (over $11.7 million) of reported losses were cryptocurrency related,” the FBI’s Anchorage office said in a statement discussing Alaska details from the report.

The report shows that about a third of last year’s statewide losses online, about $8.2 million, were suffered by people age 60 or older, who accounted for just 7% of all online crimes reported.

“The (center’s) accompanying state report indicates all age groups in Alaska were impacted by internet crimes; however, those over the age of 60 accounted for the highest reported losses, including the highest reported losses involving cryptocurrency transactions,” the office’s statement said. Read more

May 9, 2025: AI & Digital Assets

OCC: Banks Can Buy and Sell Their Customers’ Crypto Assets Held in Custody

Jessee Hamilton, CoinDesk

A new policy directive from the U.S. regulator of national banks says the institutions can also outsource crypto custody and execution to outside parties.

What to know:

The Office of the Comptroller of the Currency is further letting bankers off the crypto leash, clarifying through letters Wednesday that banks can buy and sell their customers’ crypto assets.
The banks can also use third-party servicers on crypto work, the OCC said.
This follows earlier OCC guidance — matched by the Federal Deposit Insurance Corp. and the Federal Reserve — that reversed a previous policy restricting bankers to getting signoffs from the regulator before they could move on crypto matters.

The U.S. Office of the Comptroller of the Currency, which regulates national banks, has continued its about-face to earlier resistance to cryptocurrency in banking, issuing interpretive letters that say the institutions can — at their customers’ behest — buy and sell crypto assets in custody.

The newly explained policy stance released by the OCC on Wednesday also clarified that the bankers can outsource crypto activities to third parties, including custody and executive services. As long as it all still checks the boxes of the watchdog’s safety-and-soundness requirements, the OCC is giving the banks more crypto freedom.

This week’s move follows the agency’s March reversal of a longstanding policy that demanded bankers check with their government supervisors before moving ahead with new crypto business. “These letters signal a shift in the OCC’s approach,” Katherine Kirkpatrick Bos, Starkware general counsel and a former chief legal officer at Cboe Digital, noted on social media site X. She said the agency now seems to be melding crypto into traditional banking. And the additional guidance that third-parties are okay “is a boon to regulated crypto native service providers.” Read more

$45 Million Stolen from Coinbase Users in the Last Week

Vince Quill, CoinTelegraph

Coinbase users are falling prey to social engineering scams, costing users tens of millions of dollars in losses, according to ZachXBT.

Onchain sleuth and security analyst ZachXBT claims to have identified an additional $45 million in funds stolen from Coinbase users through social engineering scams in the past seven days alone.

According to the onchain detective, the $45 million figure represents the latest financial losses in a string of social engineering scams targeting Coinbase users, which ZachXBT said is a problem unique among crypto exchanges:

“Over the past few months, I have reported on nine figures stolen from Coinbase users via similar social engineering scams. Interestingly, no other major exchange has the same problem.” Cointelegraph reached out to Coinbase but was unable to get a response by the time of publication.

The claims made by ZachXBT place the total amount lost by Coinbase users to social engineering scams at $330 million annually and reflect the growing number of sophisticated attack strategies employed by threat actors to defraud crypto holders. Read more

Associations Urge Regulators to Remove Barriers for Banks Engaged in Digital Assets

Dave Kovaleski, Financial Regulation News

A group of financial services trade associations are urging the President’s Working Group on Digital Asset Markets to remove barriers to financial institutions engaging in digital asset activities.

In a joint letter, the associations acknowledge the progress the Federal Reserve, the FDIC and the OCC have made in rescinding policies that have hindered the ability of banks to engage in digital asset activities. However, the associations recommend additional steps that can be taken to further advance bank innovation.

“The U.S. will not be able to achieve a leadership position in digital assets and financial technology under the status quo,” the letter to the working group states. “Banks are an essential component of the financial and payments systems and are governed by a comprehensive regulatory framework carefully crafted to mitigate the risks inherent to financial activities. It is therefore critical that the federal banking agencies take further steps to facilitate banks’ ability to engage in digital asset activities.”

The associations made three key recommendations in the letter:

Create consistent rules across agencies. The federal banking agencies should coordinate to issue joint rules and guidance when possible. If joint guidance isn’t possible, the agencies should at least align their policies to avoid conflicting requirements.
Regulate the activity, not the technology. The agencies should affirm that banks may engage in permissible banking activities regardless of the technology used. A tokenized asset is no different from the traditional form of that asset; therefore, the regulatory framework should be technology neutral. Read more

Musk’s xAI Joins TWG Global, Palantir for AI Push in Financial Sector

Jaspreet Singh, Reuters

Elon Musk’s artificial intelligence company xAI has partnered with Palantir Technologies (PLTR.O), and investment firm TWG Global, the companies said on Tuesday, as they look to tap growing AI demand in the financial services industry.

The data analytics firm and TWG, led by Guggenheim Partners founder Mark Walter and entertainment financier Thomas Tull, had in March announced a joint venture aimed at AI deployment in financial services and insurance sectors.

TWG will lead the implementation efforts by working with company executives to design and deploy AI-powered solutions, the companies said. The collaboration will integrate xAI’s models, which include its Grok family of large language models and its Colossus supercomputer, into business operations. The companies expect “many more partners” after the inclusion of xAI.

Enterprise clients are investing in AI technologies to enhance services and introduce new features in their products, resulting in new partnerships for capturing market share. In March, Nvidia and xAI joined a consortium backed by Microsoft, investment fund MGX and BlackRock to expand AI infrastructure in the U.S.

May 2, 2025: AI & Digital Assets

Stablecoin Regulation is Pending in Congress. Here Are Six Ways the Proposals Should be Improved.

Timothy Massad, Howell E. Jackson, and Dan Awrey, Atlantic Council

The US Congress may soon adopt legislation to regulate stablecoins—digital tokens pegged to the US dollar.

Although used today primarily to trade other crypto assets, stablecoins could become a widely used payment instrument, which would drive valuable innovation and competition. David Sacks, the Trump administration’s crypto “czar,” has predicted that stablecoins could also “ensure American dollar dominance internationally” and generate “trillions of dollars of demand for US Treasuries.” Stablecoin critics, in contrast, argue that legislation would legitimize a product that is widely used for money laundering and sanctions evasion while fueling crypto speculation and scams.

We have each advised or chaired executive branch agencies involved in digital asset policy and co-authored articles about why and how to regulate stablecoins. One of us testified before Congress in February about the pending legislation. We share concerns about the illicit use of stablecoins and the speculative nature of much of the crypto market. But stablecoin legislation is likely to be enacted this year: the Trump administration prioritized the issue in its digital assets executive order three days after the inauguration; Republican leaders in the Senate and House, together with Sacks, promised to pass stablecoin legislation within the administration’s first one hundred days; and bills have been passed out of both House and Senate committees. Therefore, the focus now should be on how best to regulate stablecoins, not whether to do so.

Stablecoins, moreover, already exist—the market capitalization is now over $230 billion and growing rapidly, almost all in dollar-pegged stablecoins. If the United States does not create a credible regulatory framework, the risks associated with stablecoins will only increase. In addition, the United States will lose the ability to set standards for liabilities denominated in its own currency because other jurisdictions are rapidly creating frameworks that permit dollar-based stablecoins.

The two bills under active consideration in Congress—the GENIUS Act in the Senate and the STABLE Act in the House—create some helpful guardrails to ensure that stablecoins are indeed stable. But the bills also contain significant flaws. Here are six ways that the bills must be improved to establish an effective stablecoin regulatory regime. Read more

Relaxed Regulatory Oversight Spurs Bank-Crypto Activity

Gabrielle Saulsbery, Banking Dive

Since January, federal bank regulators have done an about-face on crypto guidance, inspiring banks to explore the space.

Newly relaxed oversight on how banks deal in cryptocurrency has already inspired some activity between the two realms. Brian Foster, global head of wholesale at Coinbase, said his team has been “very busy meeting demand for banks, brokers and fintechs” now that federal banking regulators have walked back on the more skeptical bank-crypto guidance put forth under the Biden administration.

“Pretty much all of the large banks in the US are now doing something [to move forward with crypto] and we’re either behind the scenes with [or] live with pretty much all of them,” Foster said in an interview with Banking Dive. “Our [Request for Proposal] team is hard at work fielding all of these RFPs, so it’s definitely an all-out sprint,” Foster said.

Since January, federal bank regulators have done an about-face on crypto guidance. The Office of the Comptroller of the Currency, Federal Reserve and Federal Deposit Insurance Corp. have all withdrawn guidance that required banks to seek prior approval from regulators before dabbling in cryptocurrency. Regulators will instead monitor such activities through the normal supervisory process.

What’s changed, Foster said, isn’t banks’ intent to do something in crypto to meet customer demand. That’s “been there all along.” “What’s changing now is that the demand side has just been more pronounced as the market’s grown, coupled with the changing regulatory climate, which has just made the aperture for what’s possible a little bit wider and made the risk committees feel more comfortable,” Foster said. Read more

Banks Ought to Be Aware of the Risks Arising from AI Adoption

Samantha Barnes, International Banker

While financial institutions have been using artificial intelligence (AI) for many years, the introductions of generative artificial intelligence (GenAI) and large language models (LLMs) such as ChatGPT since late 2022 have ushered in a new and exciting era for the technology.

In turn, the uptake of AI-based applications and use cases within banks has never been more enthusiastic. Accompanying this frenzied adoption, however, are myriad risks of which banking sectors across the world ought to be aware.

Indeed, with the likes of big data, computational power, cloud computing and deep learning achieving giant developmental strides in recent years, powerful AI and machine learning (ML) applications are now on hand for banks to improve a variety of internal business operations, such as regulatory compliance, document summarisation, fraud detection and anti-money laundering (AML) capabilities, as well as client-facing solutions, such as virtual assistants and customer-personalisation tools.

However, as a December 2024 paper from the Bank for International Settlements (BIS) detailed, while the wider use of AI is likely to bring transformative benefits to the financial sector, it may also exacerbate existing risks. “The risks AI poses when used by financial institutions are largely the same risks financial authorities are typically concerned about,” according to the report. “These include micro-prudential risks, such as credit risk, insurance risk, model risk, operational risks, reputational risks; conduct or consumer protection risks; and macroprudential or financial stability risks.”

Similarly, a November 2024 report from the Financial Stability Board (FSB) observed that while AI offers benefits, such as improved operational efficiency, regulatory compliance, personalised financial products and advanced data analytics, it may also potentially amplify certain “financial sector vulnerabilities” and thereby pose risks to financial stability. Read more

US Treasury’s OFAC Can’t Restore Tornado Cash Sanctions, Judge Rules

Martin Young, Coin Telegraph

The US Treasury Department’s actions against Tornado Cash were unlawful, and it can’t sanction the crypto mixer again, a Texas federal court judge has ruled.

The US Treasury Department’s Office of Foreign Assets Control can’t restore or reimpose sanctions against the crypto mixing service Tornado Cash, a US federal court has ruled. Austin federal court judge Robert Pitman said in an April 28 judgment that OFAC’s sanctions on Tornado Cash were unlawful and that the agency was “permanently enjoined from enforcing” sanctions.

Tornado Cash users led by Joseph Van Loon had sued the Treasury, arguing that OFAC’s addition of the platform’s smart contract addresses to its Specially Designated Nationals and Blocked Persons (SDN) list was “not in accordance with law.” OFAC had sanctioned Tornado Cash in August 2022, accusing the protocol of helping launder crypto stolen by the North Korean hacking collective, the Lazarus Group.

The agency dropped the platform from the sanctions list on March 21 and argued that the matter was “moot” after a court ruled in favor of Tornado Cash in January. This latest amended ruling prevents OFAC from re-sanctioning Tornado Cash or putting it back on the blacklist. Initially, the court denied a motion for partial summary judgment and granted in favour of the Treasury. However, the Fifth Circuit reversed the decision and instructed the lower court to grant partial summary judgment to the plaintiffs, which led to the sanctions being revoked. Read more

Apr. 25 2025: AI & Digital Assets

Bad Bots Are Taking Over the Web. Banks Are Their Top Target

Penny Crosman, American Banker

Internet insecurity has reached a new milestone: More web traffic (51%) now comes from bots, small pieces of software that run automated tasks, rather than humans, according to a new report.

More than a third (37%) comes from so-called bad bots — bots designed to perform harmful activities, such as scraping sensitive data, spamming and launching denial-of-service attacks — for which banks are a top target. (“Good bots,” such as search engine crawlers that index content, account for 14% of web activity.)

About 40% of bot attacks on application programming interfaces in 2024 were directed at the financial sector, according to the 2025 Bad Bot Report from Imperva, a Thales company. Almost a third of those (31%) involved scraping sensitive or proprietary data from APIs, 26% were payment fraud bots that exploited vulnerabilities in checkout systems to trigger unauthorized transactions and 12% were account takeover attacks in which bots used stolen or brute-forced credentials to gain unauthorized access to user accounts, then commit a breach or theft from there.

For the report, researchers analyzed bot attack data for more than 4,500 customers, 53,000 customer accounts and more than 200,000 customer sites. So this report is not a complete representation of all internet activity, but experts say it matches what they are seeing in the field. Read more

Crypto Drainers Now Sold as Easy-To-Use Malware at IT Industry Fairs

Adrian Zmudzinski, CoinTelegraph

Crypto drainers have evolved into an accessible, professionalized software-as-a-service industry, enabling low-skill actors to steal cryptocurrency.

Crypto drainers, malware designed to steal cryptocurrency, have become easier to access as the ecosystem evolves into a software-as-a-service (SaaS) business model.

In an April 22 report, crypto forensics and compliance firm AMLBot revealed that many drainer operations have transitioned to a SaaS model known as drainer-as-a-service (DaaS). The report revealed that malware spreaders can rent a drainer for as little as 100 to 300 USDT

AMLBot CEO Slava Demchuk told Cointelegraph that “previously, entering the world of cryptocurrency scams required a fair amount of technical knowledge.” That is no longer the case. Under the DaaS model, “getting started isn’t significantly more difficult than with other types of cybercrime.”

Demchuk explained that would-be drainer users join online communities to learn from experienced scammers who provide guides and tutorials. This is how many criminals involved with traditional phishing campaigns transition to the crypto drainer space. Read more

SEC’s Crypto Custody Roundtable Begins Tomorrow, Here’s What You Should Know

Callan Quinn, Decrypt

As crypto custody rules face scrutiny, the SEC gathers industry voices to debate the future of safeguarding digital assets.

In brief

The session is the second in a four-part SEC roundtable series designed to address key regulatory issues in the crypto industry.
Senior SEC officials, legal scholars, and executives from top crypto firms will participate in discussions on custody compliance.
Industry participants have voiced concerns that existing SEC rules do not adequately reflect the operational realities of digital asset markets.

The U.S. Securities and Exchange Commission will convene its second crypto policy roundtable on Friday, focusing on crypto asset custody rules and regulatory gaps. The event is part of a four-part series launched by the SEC’s Crypto Task Force to gather input and discuss policy options around digital asset regulation.

Opening remarks will come from several senior SEC figures, including new Chairman Paul S. Atkins, who was sworn in earlier this week and has vowed to bring regulatory clarity to the crypto industry. The roundtable will feature two panels: one on “Custody Through Broker-Dealers and Beyond” and the second on “Investment Adviser and Investment Company Custody.” Read more

Coinbase Considers Applying for Federal Bank Charter

Gabrielle Saulsbery, Banking Dive

Regulatory willingness to work with crypto seems to have inspired Coinbase, and reportedly others, to engrain themselves deeper into the traditional financial sector.

Coinbase is considering applying for a federal bank charter, a company spokesperson confirmed, as cryptocurrency firms seek to capitalize on regulatory amiability. “This is something Coinbase is actively considering but has not made any formal decisions yet,” the spokesperson told Banking Dive, without elaboration.

Coinbase is one of four crypto companies identified by the Wall Street Journal Monday as currently planning to seek a bank charter, alongside crypto custodian BitGo and stablecoin issuers Circle and Paxos. Spokespeople for Paxos, Circle and BitGo declined to comment.

Just one crypto-native bank has a federal bank charter: Anchorage Digital scored a national trust charter from the Office of the Comptroller of the Currency in 2021. Paxos and a third firm, Protego, received conditional OCC charters that year, too, though the charters expired in 2023 before the firms were able to meet the charters’ conditions. Read more

Apr. 18, 2025: AI & Digital Assets

Limiting the Risky Side of AI in Financial Services

Greg Anderson, BAI

Banks should monitor ‘poisoned’ AI, set rules for employee use of this technology and regularly invest in security.

Artificial intelligence (AI) has permeated nearly every facet of our lives, from our phones to our internet searches and beyond. Banks and other financial institutions are no exception: By one count, 72% of these organizations have already adopted AI.

As leaders pursue any competitive edge they can, the majority (66%) are willing to accept most risks of AI. However, AI can pose very real threats. To truly make the most of AI investments, consider taking these steps to better secure your business.

Preventing ‘poisoned’ AI
Have you read the stories about Reddit users attempting to keep tourists out of their favorite local restaurants by positively reviewing other places so these dining options are more likely to show up in an AI summary? It seems harmless, but the same methodology can be used for far more nefarious purposes. These are called side-channel attacks, and AI models connected to or using any kind of large language model (LLM) are susceptible to them.

For example, a bad actor can publish a fake repository that looks nearly identical to a legitimate one, then “seed” mentions of it on Reddit and other sites where models are being trained to poison all code the AI will generate, giving the bad actor access to any of your sensitive systems and data that poisoned code is used on. Read more

Can Bitcoin Save America?: CoinDesk Spotlight with Senator Cynthia Lummis

Coindesk

Senator Cynthia Lummis joins “CoinDesk Spotlight” to discuss her enthusiasm for establishing a strategic bitcoin reserve and how it could alleviate the U.S. national debt. Plus, she details the potential of bitcoin’s decentralized nature and why bipartisan cooperation in Congress is crucial for regulatory developments in the digital assets industry. This content should not be construed or relied upon as investment advice. It is for entertainment and general information purposes.

As the U.S. Shrinks Back, the World Moves Forward on CDBCs

Tom Nawrocki, Payments Journal

Although the United States has shown little interest in establishing a central bank digital currency (CBDC) of its own, other nations around the world continue to advance their research and pilot programs.

The Bank for International Settlements (BIS), which has taken the lead in the development of CDBCs, announced six new blockchain-related projects last year.

However, the landscape isn’t yet fully cleared for CBDCs to take center stage. A report from Javelin Strategy & Research, CBDCs: Where Are We Now?, looks at the progress of key projects around the world, why the UK is emerging as a leader in the technology, and how these initiatives are likely to shape the future of global financial services.

The “Central Bank of Central Banks”
Established in 1830, the BIS is owned by a consortium of central banks around the world, with both the Federal Reserve Bank of New York and the U.S. Federal Reserve being members. It has been at the forefront of CBDC development, driving collaboration, research, and the testing of real-world applications.

“Being the central bank of central banks in some ways, they recognized the need for digital transformation in central banking early on,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research and author of the report. “They established the BIS Innovation Hub in 2019 focusing on CBDCs, tokenization, and digital payments. They’ve played a crucial role in research and experimentation with CBDCs and led collaborative projects worldwide, given their position.” Read more

California DFPI Proposes Digital Asset Licensing Rule

A.J. S. Dhaliwal, Mehul N. Madia, Maxwell Earp-Thomas of Sheppard, Mullin, Richter & Hampton LLP – Consumer Finance and Fintech Blog/National Law Review

On April 4, the California Department of Financial Protection and Innovation (DFPI) issued proposed regulations under the Digital Financial Assets Law (DFAL). The proposal provides clarification on DFAL’s licensing framework and identifies when digital asset activity may qualify for exemptions under California’s Money Transmission Act.

The proposal builds on legislation passed in 2023 and 2024—including Assembly Bill 39, Senate Bill 401, and Assembly Bill 1934—which established the DFAL and later pushed back its implementation deadline. Beginning July 1, 2026, companies engaging in covered digital financial asset business activity with or on behalf of California residents must be licensed by DFPI, have a pending application on file, or qualify for an exemption.

The proposed regulations aim to implement the Digital Financial Assets Law by clarifying licensing procedures, exemptions, and reporting obligations. The rule is intended to enhance transparency, improve oversight, and support the development of a safe, regulated digital asset market in California. Read more

Apr. 11, 2025: AI & Digital Assets

Are Stablecoins a Threat or an Opportunity for Banks?

Pymnts.com

Banks have always evolved to provide more effective systems to serve their customers. But while historically that evolution was relatively linear, as the financial world continues to digitize, banks are faced with a growing array of options to meet customer needs.

Stablecoins — cryptocurrencies pegged to fiat currencies such as the U.S. dollar — have moved from niche assets to instruments that could redefine how money moves, where it is stored and who controls it. For traditional banks, stablecoins represent a dual-edged proposition: both a disruptive force and a potential avenue for innovation. With the news that Tether is considering offering a U.S.-only stablecoin, the central question is whether banks will be disintermediated, or whether they can co-opt the technology to evolve their roles in a changing financial landscape.

The U.S. Securities and Exchange Commission’s (SEC) Division of Corporate Finance also earlier determined that stablecoins are not securities and do not need to be registered, and the shifting domestic regulatory landscape has opened the door for financial service stakeholders to dip their toes into the crypto space with the Office of the Comptroller of the Currency (OCC) reclarifying certain crypto banking permissions last month.

The potential for banks to act as custodians, compliance partners or even validators in blockchain networks could open up avenues for growth that align with their core strengths. In today’s changing landscape, inertia is increasingly no longer an option.

The Deposit Drain Dilemma
At the heart of the issue is the role of bank deposits in the financial system. Banks rely on customer deposits to fund loans and support economic activity at the local level. Stablecoins, if adopted widely, could potentially threaten to siphon off those deposits. Users might prefer holding stablecoins in digital wallets over parking money in checking or savings accounts. This potential migration of capital could starve traditional banks of their primary funding source, challenging their ability to lend and compete. Read more

DOJ Ends Crypto Enforcement Team; Shifts Focus to Terrorism and Fraud

MacKenzie Sigalos, CNBC

Key Points

The U.S. Justice Department closed the National Cryptocurrency Enforcement Team.
U.S. attorney’s offices will now take the lead on digital asset cases, focusing primarily on crimes involving terrorism.
This is the latest in a sweeping set of pro-crypto moves under President Donald Trump aimed at rolling back what his administration views as regulatory overreach by the Biden administration.

The U.S. Justice Department abruptly shut down its National Cryptocurrency Enforcement Team, signaling a major shift in how the federal government will handle crypto-related crimes going forward, according to a memo sent Monday night by Deputy Attorney General Todd Blanche.

In it, Blanche outlines a decentralized approach in which U.S. attorney’s offices will now take the lead on digital asset cases, focusing primarily on crimes involving terrorism.

Going forward, the document said efforts would now focus on “prosecuting individuals who victimize digital asset investors, or those who use digital assets in furtherance of criminal offenses such as terrorism, narcotics and human trafficking, organized crime, hacking, and cartel and gang financing.”

The disbandment of the unit is the latest in a series of sweeping regulatory reversals under President Donald Trump, who made crypto-friendly policies a centerpiece of his 2024 campaign. Read more

CSBS Flags Key Risks in Draft Stablecoin Legislation

James G. Gatto, Alexander Lazar, & Maxwell Earp-Thomas; Sheppard, Mullin, Richter & Hampton LLP Law of the Ledger/National Law Review

On April 1, the Conference of State Bank Supervisors (CSBS) submitted a letter to the House Financial Services Committee expressing concerns with an introduced draft of H.R. 2392—the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025 (the “Act”)—which purports to establish a comprehensive regulatory framework for payment stablecoins in the U.S.

In the letter, CSBS expresses support for the development of a national framework for payment stablecoin issuers (PSIs), while warning that the current draft would unnecessarily preempt state regulatory authority and introduce risks to consumer protection and financial stability.

CSBS contended that, as currently drafted, the Act would centralize excessive authority over the stablecoin industry in a single federal agency, likely the OCC, undermining the dual banking system. The letter also emphasized that states already regulate over $50 billion in stablecoin activity and called on Congress to retain the benefits of a cooperative federal-state oversight model.

The letter identified 5 key changes needed to preserve the United States’ longstanding cooperative federalism model for the banking system and mitigate related risk factors, including:

Limiting PSI activities to stablecoin issuance. The proposed draft of the Act allows PSIs to engage in non-stablecoin-related financial activities. The CSBS argues that this, in combination with the Act’s capital and liquidity restrictions, increases operational and liquidity risks that could destabilize the market.
Removing unnecessary preemption of state authority. As drafted, the Act would expand federal preemption to (i) the parent of a federal PSI, (ii) state authority over PSI subsidiaries of national banks, (iii) PSI subsidiaries of state-chartered banks, and (iv) other non-stablecoin activities approved by federal regulators. Read more

Strategy Reports Unrealized $5.91B Loss on Digital Assets

Maura Webber Sadovi, Yahoo Finance/CFO Dive

Dive Brief:

Strategy, a software and bitcoin treasury company formerly known as MicroStrategy, reported an unrealized $5.91 billion loss on digital assets for the quarter ended March 31, which it expects will result in a net loss for the quarter that will be partly offset by a $1.69 billion income tax benefit, according to a Monday business update on its bitcoin holdings and other matters contained in a securities filing.
The Tysons Corner, Virginia-based company’s unaudited report comes as bitcoin’s market value has fallen back to levels seen just after President Trump’s election, and as new generally accepted accounting standards for certain crypto assets including bitcoin went into effect late last year, requiring companies to account for the assets at fair value rather than treating them as an intangible asset.
“We have adopted ASU 2023-08 [the Financial Accounting Standard Board’s accounting standards update] as of January 1, 2025,” the company, one of the largest corporate holders of bitcoin, said in its filing. “The standard is now effective, and we have applied a cumulative-effect net increase to the opening balance of retained earnings as of January 1, 2025, of $12.745 billion. Due in particular to the volatility in the price of bitcoin, we expect the adoption of ASU 2023-08 to have a material impact on our financial results, increase the volatility of our financial results and affect the carrying value of our bitcoin on our balance sheet.”

Dive Insight:
Finance leaders that hold bitcoin are grappling with a number of moving parts as they close their books on the first quarter since new accounting standards for certain digital assets went into effect amid a bitcoin slump. Read more

Apr. 4, 2025: AI & Digital Assets

FDIC: Banks Can Engage in Crypto-Related Activities Without Prior Notice

Cooley

On March 28, 2025, the Federal Deposit Insurance Corporation (FDIC) clarified that FDIC-supervised institutions do not need to provide notice or obtain approval from the FDIC prior to engaging in crypto-related activities.

This guidance rescinds prior guidance issued in 2022, which required FDIC-supervised institutions to notify the FDIC before engaging in any crypto-related activities.

New guidance
Financial Institution Letter (FIL-7-2025) provides that FDIC-supervised institutions may engage in “permissible activities, including activities involving new and emerging technologies such as crypto-assets and digital assets” without notifying the FDIC in advance, provided such institutions “adequately manage the associated risks” and “conduct all activities in a safe and sound manner and consistent with all applicable laws and regulations.” The FDIC notes that associated risks may include market and liquidity risks, operational and cybersecurity risks, consumer protection requirements, and anti-money laundering requirements.

“Crypto-related activities” include, without limitation, “acting as crypto-asset custodians; maintaining stablecoin reserves; issuing crypto and other digital assets; acting as market makers or exchange or redemption agents; participating in blockchain- and distributed ledger-based settlement or payment systems, including performing node functions; as well as related activities such as finder activities and lending.”

Change from prior guidance
This latest guidance rescinds 2022 guidance requiring FDIC-supervised institutions to notify the FDIC prior to engaging in any crypto-related activities. That guidance provided that, following such notification, the FDIC would request “information necessary to allow the agency to assess the safety and soundness, consumer protection, and financial stability implications of such activities.” The FDIC implemented that procedure in response to what it described as “significant safety and soundness risks, as well as financial stability and consumer protection concerns” posed by crypto-related activities. Read more

Crypto Has a Regulatory Capture Problem in Washington — Or Does It?

Aaron Wood, CoinTelegraph

The crypto industry’s sway in Washington, DC, has made it more likely that the industry will get beneficial legislation, but it’s also creating problems.

Concerns of regulatory capture — a situation in which regulators or lawmakers are co-opted to serve the interests of a small constituency — have grown as crypto lobbying gains influence in Washington.

The risks of regulatory capture are twofold: First, the public interest is shut out from policy-making in favor of a single industry or company, and second, it can make regulators blind to or paralyzed by economic risks.

Now, not even three months into Trump’s presidency, American lawmakers and industry crypto observers have voiced concerns that this regulatory capture could not only negatively affect the country but curb competition within the crypto industry as well.

Regulatory capture in the battle for crypto policy
In a March 28 letter, prominent members of the US Senate Banking Committee and Committee on Finance addressed Acting Comptroller Rodney Hood and Michelle Bowman, chair of the Federal Reserve Board of Governor’s Committee on Supervision and Regulation. Read more

Stablecoins Keep Racking Up Milestones, but Can They Crack B2B Payments?

Pymnts.com

The allure of stablecoins is straightforward. They make payments simple by promising the efficiency of cryptocurrencies without the volatility.

There are few places where efficiency matters more than B2B payments. The global B2B payments market is valued at over $125 trillion annually. Yet, the sector remains plagued by inefficiencies that include high transaction fees, slow settlement times and cumbersome processes involving intermediaries.

These issues are particularly pronounced in cross-border transactions, where settlement can take days, and stacked fees can eat up chunks of each transaction. Stablecoins seem to observers like a natural fit for what ails B2B. With near-instant settlement, reduced costs and transparency through blockchain technology, stablecoins could address many of the pain points associated with traditional payment systems.

However, as stablecoins continue to rack up milestones unimaginable just a few years ago, the question remains, will they?

Embracing Blockchain for Business Payments
When it comes to the embrace of stablecoins, B2B payments present a different challenge than consumer-facing applications. Businesses demand not only efficiency but also compliance, integration with legacy systems, and certainty in regulatory frameworks. Read more

Investments in AI and Digital Asset Surge While Data and Legacy Tech Challenges Persist, Broadridge Digital Transformation Study Finds

Broadridge Financial Solutions/Stock Titan

Broadridge Financial Solutions has released its fifth annual Digital Transformation & Next-Gen Technology Study, revealing significant trends in financial services technology adoption. 80% of firms are making moderate-to-large investments in AI this year, with 72% specifically investing in GenAI, up from 40% in 2024.

The study highlights that 41% of executives feel their technology strategy isn’t moving fast enough, while 46% believe legacy tech is hampering resiliency. Firms plan to allocate 29% of their total IT spend to technology innovation over the next two years, a seven percentage point increase from last year.

Key findings include:

71% of firms are making major investments in blockchain and DLT, up from 59% in 2024
64% are making significant cryptocurrency investments, up from 51% in 2024
86% of firms are integrating cloud technology
58% identify data harmonization as important for maximizing ROI
40% admit to having data quality issues

Read more

Mar. 21, 2025: AI & Digital Assets

US Treasury Argues No Need for Final Court Judgment in Tornado Cash Case

Stephen Katte, Coin Telegraph

The US Treasury says because it dropped Tornado Cash from its sanctions list on March 21, the legal challenge against it should be considered moot.

The US Treasury Department says there is no need for a final court judgment in a lawsuit over its sanctioning of Tornado Cash after dropping the crypto mixer from the sanctions list. In August 2022, Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash after alleging the protocol helped launder crypto stolen by North Korean hacking crew the Lazarus Group, leading to a number of Tornado Cash users filing a lawsuit against the regulator.

After a court ruling in favor of Tornado Cash, the US Treasury dropped the mixer from its sanctions list on March 21, along with several dozen Tornado-affiliated smart contract addresses from the Specially Designated Nationals (SDN) list, and has now argued “this matter is now moot.”

“Because this court, like all federal courts, has a continuing obligation to satisfy itself that it possesses Article III jurisdiction over the case, briefing on mootness is warranted,” the US Treasury said. However, Coinbase chief legal officer Paul Grewal said the Treasury’s hope to have the case declared moot before an official judgment can be made isn’t the correct legal process.

“After grudgingly delisting TC, they now claim they’ve mooted any need for a final court judgment. But that’s not the law, and they know it,” he said. “Under the voluntary cessation exception, a defendant’s decision to end a challenged practice moots a case only if the defendant can show that the practice cannot ‘reasonably be expected to recur.’”

Grewal pointed to a 2024 Supreme Court ruling that found a legal complaint from Yonas Fikre, a US citizen who was put on the No Fly List, is not moot by taking him off the list because the ban could be reinstated again at a later date. Read more

Crypto for Advisors: What Is a Bitcoin Strategic Reserve?

Alex Tapscott, Coindesk

The U.S. advances plans for its Bitcoin Strategic Reserve as part of its goal of becoming a leader in digital assets. What’s the current state of the Reserve and why does it matter?

In today’s crypto for advisors, Alex Tapscott explains what the Bitcoin Strategic Reserve is and why it matters to investors. Then, Bryan Courchesne from DAIM answers questions investors have about setting up a personal strategic reserve in Ask an Expert.

Will Trump’s Bitcoin Reserve Move the Needle?
On March 7, President Trump signed an executive order creating both a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile, the latter comprised of tokens like ETH, SOL, XRP and ADA. The Strategic Bitcoin Reserve (SBR) and the Digital Asset Stockpile will be capitalized initially with crypto assets obtained by the Department of Treasury through criminal and civil asset forfeiture. Analysts estimate that they will capitalize the SBR with $6.9 billion in bitcoin currently in the government wallet.

The news disappointed some bitcoin bulls, who were annoyed by the inclusion of other crypto assets and by the relatively modest initial goals of the Reserve. Altcoin fans were initially euphoric following Trump’s tweet announcing the plan but soon became disillusioned as it became evident that the plan for the U.S. Digital Asset Stockpile was severely limited in scope — the government sits on only $400 million of non-BTC coins and has no intention of adding more.

So what should we make of all this?
The idea of a strategic reserve for critical assets or commodities is not new. The U.S. government maintains strategic stockpiles of gold and petroleum, and governments and central banks hold large balances of foreign currencies, for example. Read more

AI Trends in Financial Services

Adam Lieberman, Finastra/Finextra

In this first quarter of 2025, AI advancements are continuing apace. In the realm of financial services, use cases must adhere to restrictions and regulations around data usage, but there are a number of areas that are gaining significant traction and will continue to mature over the next year. Here are six trends that I see gaining traction and delivering value.

Increased usage of multimodal models
Recent advances in multimodal large language models are set to unlock a plethora of opportunities for financial services organizations in the year ahead. As the name suggests, multimodal models are trained to handle data and inputs from multiple sources, such as text, images, video and audio.

To date we’ve seen financial services organizations focusing more on the text capabilities of Gen AI – instructing models via text-based prompts to access and summarize written information stored in a variety of formats across multiple systems. Going forward, the increased usage of voice will provide additional methods of interaction with models.

Harnessing the capabilities of multimodal models, and their ability to process different formats of data simultaneously, will be hugely important. Financial services professionals will be able to orchestrate the creation of multimedia presentations and reports – distilling information stored in different formats in systems across the organization into timely and actionable insights.

A key use case for these models in financial services will be accessing and unlocking the potential of unstructured data that sits in business silos. For example, transcribing customer calls from audio to text, or extracting data from paper-based documents that have been scanned and digitized, to make the data more accessible. Read more

Crypto Clarity: OCC’s New Guidelines Pave the Way for Banking Innovation

Kelly A. Lenahan-Pfahlert, Ballard Spahr

On March 7, 2025, the Office of the Comptroller of the Currency (“OCC”) released Interpretive Letter 1183, marking a pivotal change in regulatory guidance for national banks and federal savings associations engaging in cryptocurrency activities. This recent directive, issued under Acting Comptroller Rodney Hood, rescinds the requirements set by Interpretive Letter 1179 from November 2021. The updated guidance reaffirms the permissibility of certain crypto-related activities while eliminating the need for prior supervisory non-objection.

Background
Interpretive Letter 1183 marks a significant regulatory update under Acting Comptroller Rodney Hood, who assumed his role earlier this year. This letter aims to standardize how banks engage with digital assets, removing the constraints imposed by previous guidance. The rescinded directive from former Acting Comptroller Michael Hsu required banks to seek supervisory approval before participating in crypto activities—a process that was often seen as a barrier to innovation and growth in the sector.

In contrast, the new guidance focuses on reducing regulatory burdens and fostering transparency, thereby encouraging responsible innovation within the banking industry. The OCC continues to support activities outlined in earlier interpretive letters, such as crypto asset custody (IL 1170), stablecoin reserves (IL 1172), and blockchain payment facilitation (IL 1174), initially introduced under former Comptroller Brian Brooks. Read more