Author: Stephanie Bedard-Chateauneuf

Citigroup Inc. (NYSE:C), one of the largest U.S. banks with approximately $2.5 trillion in assets under management, is reportedly preparing to enter the digital asset space with crypto custody services. This move would position the bank alongside major industry players like Coinbase Global Inc. (NASDAQ:COIN) in safeguarding digital assets for institutional clients. The initiative is bolstered by regulatory clarity under the Donald Trump administration, which has encouraged traditional financial institutions to explore blockchain-based offerings.

Stablecoin and ETF Custody in Focus

According to a Reuters report, Biswarup Chatterjee, Citigroup’s global head of partnerships and innovation for the services division, confirmed that the bank is evaluating the potential to provide custody services for stablecoins backed by high-quality reserves. This would ensure secure storage of the assets that underpin these digital tokens, a critical factor for institutional adoption.

Citigroup is also exploring custody services for cryptocurrency exchange-traded funds (ETFs), including those tracking Bitcoin and Ethereum. The strategy mirrors the role Coinbase currently plays as custodian for roughly 80% of U.S.-listed crypto ETFs. Notably, BlackRock Inc.’s (NYSE:BLK) iShares Bitcoin Trust (IBIT), the largest Bitcoin ETF, manages over $90 billion in assets, requiring an equivalent amount of digital currency to be held in secure custody.

If Citigroup enters this market, it could become a key custodian for a growing number of digital asset investment products, adding a significant layer of credibility for institutional investors still cautious about crypto.

Stablecoins for Faster Payments

Citigroup crypto custody ambitions are tied closely to the bank’s broader interest in stablecoins. The bank is assessing how stablecoins can accelerate payment processing compared to traditional banking rails, which often take multiple days to settle transactions.

In earlier reports, Citigroup was said to be considering launching its own stablecoin—similar to JPMorgan Chase & Co.’s (NYSE:JPM) JPM Coin and initiatives from Bank of America Corp. (NYSE:BAC). The bank already offers tokenized U.S. dollar payments, enabling instant transfers between accounts worldwide via blockchain.

Chatterjee explained that upcoming services could allow clients to send stablecoins between accounts or instantly convert them into fiat currency for real-time payments. This could significantly improve cross-border transaction efficiency and reduce reliance on outdated settlement systems.

Compliance and Security Considerations

Citigroup has emphasized that compliance and operational security will be top priorities in any crypto custody offering. Before accepting assets, the bank intends to verify their legitimacy and ensure they have not been involved in illicit activity. Cybersecurity measures will also be strengthened to protect against theft and unauthorized access, a critical step in building trust with institutional clients.

This focus mirrors recent moves by other banking giants. Ripple Labs’ partnership with BNY Mellon (NYSE:BK) will see the latter custody the dollar reserves for Ripple’s RLUSD stablecoin, highlighting how custody services are becoming an integral part of stablecoin ecosystems.

TradFi’s Expanding Role in Digital Assets

Citigroup’s exploration of crypto custody services underscores a broader shift in traditional finance (TradFi). Major institutions like JPMorgan and PNC Financial Services Group Inc. (NYSE:PNC) have already partnered with Coinbase to offer crypto services, while JPMorgan is also planning crypto-backed loans.

For Citigroup, entering the crypto custody space is both a competitive and strategic move. By providing secure storage for stablecoins and crypto ETFs, the bank could establish itself as a trusted intermediary for digital assets—bridging the gap between blockchain innovation and mainstream finance.

Bottom Line

Citigroup crypto custody plans signal a major step toward mainstream adoption of blockchain-based financial products. By combining its global banking infrastructure with cutting-edge digital asset services, Citigroup aims to compete with established crypto custodians while offering faster, blockchain-enabled payment solutions. However, success will depend on navigating regulatory requirements, ensuring robust security, and convincing cautious institutions to embrace digital asset integration.

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South Korean cryptocurrency mogul Do Kwon has pleaded guilty to fraud charges linked to the $40-billion collapse of his crypto empire. The 33-year-old co-founder of Terraform Labs entered the plea Tuesday in Manhattan federal court, signaling the start of a high-profile legal chapter for the embattled entrepreneur.

The charges stem from Kwon’s role in promoting TerraUSD, a so-called “stablecoin,” and its floating counterpart, Luna. The May 2022 crash wiped out nearly $40 billion in investor assets, sparking outrage across global markets. Kwon’s plea includes one count of conspiring to commit commodities fraud, securities fraud, and wire fraud, as well as a second count of wire fraud.

Terms of Kwon’s Guilty Plea

Under a plea agreement with federal prosecutors, Kwon faces a maximum prison term of 12 years, a significant reduction from the 25 years recommended under federal sentencing guidelines. Sentencing is scheduled for December 11. In addition to incarceration, Kwon agreed to forfeit more than $19 million, which authorities said reflects proceeds obtained through deceptive practices.

“This plea demonstrates Kwon’s acknowledgment of responsibility for misleading the Terra community,” said his lawyer, Sean Hecker. The legal resolution also includes relinquishing Kwon’s interest in Terraform Labs and its cryptocurrency holdings, further marking the collapse of his once-promising enterprise.

The Collapse of Terraform and TerraUSD

Terraform Labs, co-founded by Kwon in 2018, had promoted TerraUSD as a “stable” cryptocurrency pegged to the U.S. dollar to minimize volatility. In reality, TerraUSD’s value collapsed, dragging down its sister currency Luna and erasing billions in market value for investors worldwide.

U.S. Attorney Jay Clayton described Kwon’s actions as “one of the largest frauds in history,” noting that the case exploited both technological hype and investment euphoria in the cryptocurrency space. The case serves as a cautionary tale for investors in high-risk crypto assets, highlighting the importance of transparency and regulatory oversight.

Global Impact and Extradition

Kwon’s legal troubles intensified after his arrest on March 23, 2023, in Europe while traveling under a false passport. He was subsequently extradited from Montenegro to the United States on December 31, where he has been held pending trial. The global nature of the Terraform collapse underscores the widespread vulnerabilities in unregulated cryptocurrency markets, affecting retail and institutional investors alike.

Investor Takeaways

The Do Kwon fraud case illustrates the risks inherent in digital assets, especially those marketed as “stable” or low-risk investments. Investors should exercise caution, conduct thorough due diligence, and monitor legal developments for potential ripple effects on the broader crypto market.

While Kwon’s plea resolves certain aspects of the criminal case, the financial fallout continues. Thousands of investors lost billions, and questions about the accountability of other crypto platforms remain unresolved. For those tracking cryptocurrency equities, such high-profile fraud cases reinforce the necessity of regulatory compliance and risk assessment.

Looking Ahead

As Kwon awaits sentencing, the case may set a precedent for how U.S. authorities handle international crypto fraud. Investors and regulators alike are watching closely, knowing that the outcome could influence the future of stablecoins and institutional participation in digital currencies.

The Do Kwon fraud plea represents a landmark moment in cryptocurrency enforcement, emphasizing that even global crypto figures are not beyond the reach of U.S. law.

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Crypto exchange Bullish (NYSE:BLSH) stunned investors as its IPO more than doubled on debut. The company, backed by Peter Thiel and led by former NYSE President Tom Farley, priced the Bullish IPO at $37 per share. Trading opened at $90 and spiked to around $102.44 before a temporary halt, reflecting overwhelming demand.

Institutional Interest Drives Bullish IPO

Farley emphasized that the institutional wave in crypto is underway. “The last leg of growth in crypto was basically all retail,” he told CNBC, “the institutional wave has begun, and it’s here.” With strong reception from investors, the Bullish IPO marks a pivotal moment for institutional adoption of cryptocurrency trading platforms.

Bullish is structured to blend decentralized finance protocols with the security of a centralized exchange, appealing specifically to professional traders. The company’s Cayman Islands headquarters have not deterred major U.S. institutional interest.

Bullish Platform Growth and Market Reach

Since launching in 2021, Bullish has processed over $1.25 trillion in trading volume. Beyond trading, the company owns CoinDesk, a leading crypto news and analytics platform, giving it a significant foothold in market intelligence and media influence within the crypto ecosystem.

The Bullish IPO comes amid a growing wave of cryptocurrency companies going public in the U.S., often after earlier moves in Canada or private markets. For example, Circle (NYSE:CIRCLE) raised over $1 billion in June, and Galaxy Digital transitioned to Nasdaq (NASDAQ:GLXY) from Toronto. Other crypto ventures, including BitGo and Gemini, are preparing for U.S. listings, signaling sustained investor appetite.

Bullish IPO Valuation and Investor Sentiment

The IPO’s pricing at $37 per share valued the company at $5.4 billion pre-trading. Analysts initially expected a range of $32–$33, with earlier indications between $28–$31. Opening at $90 represents a massive 143% jump, reflecting investor confidence in the platform’s long-term prospects.

Industry observers note that Bullish’s focus on institutional traders differentiates it from competitors that primarily target retail investors. By emphasizing security, compliance, and advanced trading features, Bullish positions itself as a key player in the evolving crypto ecosystem.

Implications for Crypto Investors

The success of the Bullish IPO underscores a larger trend: mainstream investors are increasingly treating cryptocurrency platforms as serious, regulated investment vehicles. For those holding or considering stakes in crypto-related equities, BLSH’s debut may signal strong growth potential.

However, the market remains sensitive to regulatory developments and shifts in sentiment. As Farley highlighted, the institutional wave is just beginning. Investors should monitor adoption trends, trading volumes, and any changes in U.S. financial policy that could affect crypto exchanges.

Looking Ahead

Bullish’s NYSE debut demonstrates the evolving dynamics of crypto finance and the appetite for institutional-grade platforms. With a strong start in the public markets, Bullish is poised to play a pivotal role in bridging decentralized finance and traditional investment frameworks.

The Bullish IPO success story highlights the broader maturation of crypto markets, signaling that institutional investors are increasingly confident in this high-growth sector.

Additionally, investors should consider market volatility, regulatory trends, and adoption rates when evaluating crypto exchange stocks like BLSH for potential inclusion in diversified portfolios.

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July’s U.S. Consumer Price Index (CPI) data has stirred up strong debate among crypto analysts, with many warning that the report could trigger a massive sell-off in the cryptocurrency markets. The mixed inflation signals from the July CPI readings are making investors anxious about the Federal Reserve’s next move and its impact on crypto assets like Bitcoin (BTC).

July CPI Data: Mixed Signals Create Uncertainty

The headline CPI in July rose 2.7% year-over-year, slightly below the anticipated 2.8% increase forecasted by economists. This “cooler” inflation figure gave crypto bulls hope for a potential Federal Reserve interest rate cut in September, which generally boosts risk assets including Bitcoin.

However, the core CPI, which excludes volatile food and energy prices and is closely monitored by the Fed, increased by 3.1%, slightly surpassing the 3.0% estimate. This suggests that underlying inflationary pressures remain persistent and could complicate the Fed’s decision-making process.

This split inflation data leaves investors in a quandary. While lower headline CPI might support looser monetary policy, the elevated core CPI warns of sticky inflation that may force the Fed to maintain or even raise rates longer than expected.

How CPI Influences Crypto Markets

Interest rates and inflation data are critical drivers for cryptocurrencies, which tend to perform well in environments of low rates and moderate inflation. Lower interest rates reduce the opportunity cost of holding non-yielding assets like Bitcoin, thereby attracting more investment.

Crypto Key Opinion Leader Fefe Demeny commented, “If CPI comes in cooler, a rate cut is confirmed for September,” underscoring the potential positive impact of low inflation data on crypto prices.

Conversely, crypto analyst Benjamin Cowen described a CPI reading near 2.9% as “somewhat neutral” but warned that any higher reading could spark a market sell-off.

Potential for Bitcoin Correction if CPI Surprises

Derivatives exchange Bitunix’s analysts warn that a hotter-than-expected CPI could push Bitcoin prices below $117,000, triggering a deeper correction phase. This would reflect investor fears that the Fed might postpone rate cuts or even hike rates, hurting risk assets.

Despite these concerns, Bitcoin showed resilience. Data from Bitfinex indicates that Bitcoin bounced back from an August low near $112,000 to a trading floor around $115,800, buoyed by $769 million of inflows into Bitcoin ETFs over three days. This suggests strong institutional support and confidence in the market’s long-term outlook.

Market Activity Around CPI Release

Before the CPI data release, Bitcoin (BTC) was trading around $118,468.96, down roughly 1.76% over the prior 24 hours, with trading volumes declining nearly 12%. Following the report, Bitcoin experienced a modest 1% price uptick, climbing to $119,110.83, according to Kraken exchange data.

This price movement indicates that while the market is sensitive to inflation data, investors are cautiously optimistic. Around 70% of short-term Bitcoin holders remain profitable, which slows down the urge to take profits and limits extreme volatility.

What’s Next for Crypto Investors?

The July CPI data underscores the fragile balance in the market between inflation fears and hopes for easing monetary policy. Investors should be prepared for potential volatility in cryptocurrencies as markets digest future economic data and Fed signals.

With the Federal Reserve’s September meeting approaching, crypto markets will likely remain highly reactive to any new inflation figures and policy announcements. Traders and investors should monitor CPI updates closely, as they will heavily influence the trajectory of Bitcoin (BTC) and other digital assets in the coming months.

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Operation Chokepoint became widely known during the Biden administration as a regulatory effort aimed at restricting the cryptocurrency industry. This initiative sought to isolate crypto firms by cutting their access to the banking system, severely limiting their ability to operate. Donald Trump, recognizing the damaging effects, promised to shut down Operation Chokepoint and has since taken concrete steps to do so.

What Was Operation Chokepoint?

Operation Chokepoint was an orchestrated move by government regulators to pressure banks into cutting ties with crypto businesses. In 2023, venture capitalist Nic Carter revealed that this was a coordinated effort to marginalize the crypto industry in the U.S. Regulators effectively urged banks to refuse services to crypto firms, which significantly hindered their operations.

Founders such as Tyler Winklevoss, Roman Storm, and Jesse Powell have confirmed that they and their companies were affected. Elon Musk also disclosed that about 30 tech founders were secretly debanked as part of this operation.

Banks that refused to comply with these regulatory pressures, like Silvergate, Signature, and Silicon Valley Bank, found themselves targeted. Silvergate, once a key crypto-friendly bank, voluntarily liquidated despite being solvent because regulators no longer allowed it to serve crypto clients.

Nic Carter emphasized that the shutdown of Silvergate was not due to financial instability but was a direct result of Operation Chokepoint. He highlighted that regulators had the power to “capriciously” end the business of firms under their watch, illustrating the risks of politicized oversight.

Interestingly, Operation Chokepoint’s reach extended beyond crypto. Donald Trump revealed in an interview that major banks like JPMorgan and Bank of America had rejected his deposits, making him personally aware of these politicized banking practices.

Donald Trump’s Move to End Operation Chokepoint

As president, Donald Trump took action to reverse the effects of Operation Chokepoint. He signed an executive order that mandates fair and equal banking access for all Americans, explicitly condemning Operation Chokepoint as an example of undue regulatory influence leading to unlawful banking restrictions.

The order directs federal banking regulators to remove references to “reputation risk” or similar concepts from their regulatory guidance. This move aims to prevent regulators from using vague criteria to justify politically motivated debanking.

Regulators must implement these changes within 180 days of the order, reinforcing the administration’s commitment to restoring a fair banking environment.

Prior to this, the Federal Reserve had already announced the end of reputational risk oversight, signaling alignment with Trump’s executive order.

Why Operation Chokepoint Matters to Crypto and Beyond

Operation Chokepoint serves as a cautionary tale about how regulatory overreach can stifle innovation and unfairly target emerging industries like crypto. By cutting off banking access, regulators created barriers to growth and contributed to instability within the crypto ecosystem.

Donald Trump’s executive order not only restores banking fairness for crypto companies but also protects all sectors from politicized debanking.

The crypto industry now stands on stronger footing with renewed access to banking services, allowing firms to operate more freely and innovate without fear of arbitrary shutdowns.

Looking Ahead

With Operation Chokepoint officially ended, the crypto industry and other affected sectors can expect more equitable treatment from banks and regulators. This development may lead to increased investment, innovation, and broader adoption of cryptocurrencies and blockchain technologies.

This development may lead to increased investment, innovation, and broader adoption of cryptocurrencies and blockchain technologies. It also sets a precedent for safeguarding financial services from political interference, fostering a healthier economic environment.

Moving forward, stakeholders across the financial and tech industries will be watching closely to ensure these regulatory reforms are fully implemented and sustained. The end of Operation Chokepoint could mark a turning point, encouraging more startups and established firms alike to pursue innovation with greater confidence and stability.

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