Why Sony Launched Soneium and Banned Memecoins
The Friday episode features Sota Watanabe on the controversies surrounding the launch of Sony's L2. Plus, the weekly news recap.
In this week’s edition:
💰 U.S. approves $9B Bitcoin restitution for Bitfinex after 2016 hack
🔗 XRP jumps 13% following U.S. crypto reserve rumors, which are likely untrue
📜 Trump plans pro-crypto policies with new SEC leadership
🌍 Tether completes relocation to Bitcoin-friendly El Salvador
⚖️ SEC appeals Ripple ruling on XRP retail sales exemption
✅ Coinbase wins court order for SEC to explain crypto rule delays
💸 BitMEX fined $100M for AML and KYC violations
📊 Chainlink whale exploits staking limits, moves $6M in LINK
🪙 Jupiter announces $575M airdrop ahead of “Jupuary” event
📱 Ethereum Foundation revamps social media strategy after criticism
🚨 Pump.fun faces lawsuit over alleged investor harm and risky behavior
🦖 TikTok ban rumors spark a 160x rally in pink dino memecoin MOMO
Why Sony Launched Soneium, an Ethereum L2, and Blacklisted Some Memecoins
This week, Sony launched Soneium, an Ethereum layer 2 aimed at supporting creators, fans, and developers—but its decision to blacklist certain memecoins sparked debate. Director Sota Watanabe explains.
This week, Sony launched the mainnet for Soneium, its Ethereum Layer 2 blockchain built on the OP Stack from Optimism. Soneium is designed to support creators, developers, and fans through tools like Sony’s NFT-based Fan Marketing Platform and Soneium Spark.
However, Soneium’s launch has sparked controversy. Its decision to blacklist some memecoins—over intellectual property concerns—has raised questions about the balance between decentralization and protecting creators’ rights. Even Ethereum co-founder Vitalik Buterin weighed in, highlighting the tradeoffs businesses face in Web3.
In this episode, Sota Watanabe, director of Soneium, delves into the memecoin controversy, and explains the vision for the platform, their commitment to IP protection, and what’s next for Soneium in entertainment and finance.
Plus, at the end of the episode, Laura speaks to Ari Gore, head of communications at Zengo Wallet, about protecting your private keys and your cryptocurrencies from natural disasters.
Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.
Weekly News Recap
U.S. Approves $9 Billion Bitcoin Restitution to Bitfinex After 2016 Hack
The U.S. Department of Justice has announced plans to return over 90,000 bitcoin, valued at over $9 billion, to crypto exchange Bitfinex. These funds are part of the nearly 120,000 BTC stolen in a 2016 hack that was one of the largest in crypto history.
In a court filing submitted on Tuesday, prosecutors identified Bitfinex as the rightful owner of the recovered bitcoin, which represents the coins left in the hackers’ wallets. The remainder, approximately 25,000 BTC, was laundered through complex methods and will require additional legal proceedings for recovery.
The recovered funds were seized from Ilya Lichtenstein and Heather Morgan, who were convicted in 2023 of conspiracy to launder the stolen assets. Lichtenstein received a five-year sentence, while Morgan was sentenced to 18 months.
Bitfinex has stated that 80% of the recovered funds will be used to repurchase and burn its LEO tokens, a debt token created to offset customer losses after the hack.
XRP Surges Amid Reports of U.S. Crypto Reserve Proposal
A report by the New York Post, citing anonymous sources, has ignited a wave of speculation about the possibility of an America-first crypto reserve under the Trump administration. According to the report, Trump is “receptive” to the proposed reserve, which was reportedly discussed in recent meetings between Trump and U.S. crypto founders, and could see U.S.-founded digital assets prioritized, including XRP, Solana, and USDC. This potential policy shift has sparked significant excitement, and some criticism, within the cryptocurrency community.
Co-founder of crypto research firm Reflexivity Research Will Clemente, commented: “Sorry, but in my opinion the reserve should be Bitcoin only and maybe to a lesser extent stablecoins (backed by treasuries), for the sake of the United States’ future. Seems like this was brought into Trump’s mind by some of the people that have been in his ear.”
Following the report, XRP’s price surged by 13.4%, hitting a seven-year high of $3.40. Trading volumes spiked across major exchanges, with Coinbase reporting $1.9 billion in XRP activity, accounting for 28.7% of its total volume, and Binance seeing $3.7 billion in trades.
However, Unchained discovered that the market-driving speculation might be unfounded. Sources suggested that Ripple Labs, the primary contributor to XRP’s blockchain, could have fueled the rumors to align with ongoing regulatory shifts. Ripple representatives had reportedly met with Trump recently, despite his past criticism of the company, according to two sources with knowledge of the meeting.
Adding to the intrigue, Ripple’s co-founder Chris Larsen’s political donations to PACs supporting Kamala Harris surfaced, with Axios quoting Trump allegedly saying, “you weren’t with me, and maybe you were with Kamala Harris,” during a meeting with the company.
Trump Administration Poised to Overhaul Crypto Policies With New SEC Leadership
Regardless of whether an altcoin reserve is in the works or not, crypto is clearly top of mind for Trump. According to a report by the Washington Post, Trump plans to issue executive orders addressing crypto industry concerns in his first week, including reversing controversial measures that restricted banking access for crypto firms. These actions were dubbed “Operation Chokepoint 2.0” by critics during the Biden administration.
The Trump administration is also expected to tackle the accounting policy requiring banks to classify digital assets as liabilities, which many believe stifled institutional crypto adoption.
At the Securities and Exchange Commission (SEC), Republican commissioners Hester Peirce and Mark Uyeda will assume majority control and are reportedly planning to begin rule-making processes to clarify when cryptocurrencies qualify as securities. They are also expected to review pending enforcement actions and may freeze non-fraud-related cases.
Tether Finalizes Move to El Salvador, Citing Favorable Crypto Environment
Tether, the company behind the world’s largest stablecoin USDT, is completing its relocation to El Salvador after receiving approval as a licensed digital asset service provider and stablecoin issuer. This marks the first time Tether will establish a physical headquarters, with Reuters reporting that the firm plans to hire 100 Salvadorans over the next few years.
CEO Paolo Ardoino and Tether’s leadership team are also moving their residences to the Bitcoin-friendly nation, according to the report. Ardoino highlighted El Salvador’s supportive policies and a growing crypto-savvy community as key reasons for the move.
On the Bits + Bips podcast, Ram Ahluwalia called the relocation a “massive failure” of U.S. stablecoin policy, noting, “These are profits that could have been earned by American businesses, but regulatory decisions pushed them offshore.”
SEC Appeals XRP Ruling, Challenges Retail Sales Exemption
The SEC has filed an appeal with the Second Circuit Court of Appeals, seeking to overturn a 2023 district court ruling that Ripple’s XRP token was not a security when sold to retail investors. The SEC claims the U.S. District Court for the Southern District of New York misapplied securities law and Supreme Court precedents, including the Howey Test.
The SEC’s argument centers on the district court’s distinction between XRP sales to institutional investors, which were deemed securities, and sales to retail investors, which the court ruled did not meet the same criteria. The agency asserts retail investors also expected profits based on Ripple’s public efforts to increase demand for XRP.
Ripple’s chief legal officer, Stuart Alderoty, dismissed the SEC’s appeal as a “rehash of failed arguments.” The case, stemming from the SEC’s 2020 allegations that Ripple raised $1.3 billion through unregistered securities sales, remains pivotal for the regulatory future of digital assets.
Coinbase Scores Another Legal Victory as Court Demands SEC Clarify Crypto Rules
Following its appeal in the XRP ruling, the SEC faces further scrutiny after a federal appellate court ordered the agency to provide a clearer explanation of its refusal to create specific cryptocurrency regulations. The U.S. Court of Appeals for the Third Circuit ruled in favor of Coinbase on Monday, stating the SEC’s handling of the petition was “arbitrary and capricious.”
Coinbase had filed the petition in 2022, seeking guidance on how securities laws apply to digital assets. While the court stopped short of mandating new crypto-specific rules, it directed the SEC to justify its position on crypto assets more thoroughly. Judge Stephanos Bibas emphasized the need for a well-reasoned explanation, cautioning the SEC against issuing another insufficient response.
Coinbase’s chief legal officer, Paul Grewal, welcomed the decision, calling it a significant step toward regulatory clarity.
BitMEX Ordered to Pay Additional $100 Million Over AML Violations
Crypto exchange BitMEX has been fined an additional $100 million by the U.S. District Court for the Southern District of New York for violating anti-money laundering (AML) and know-your-customer (KYC) rules under the Bank Secrecy Act (BSA). The judgment follows earlier penalties, including a $110 million settlement reached last year after BitMEX admitted to the violations.
The court found that BitMEX had failed to establish effective AML and KYC systems from 2015 to 2020, allowing illicit activity and U.S. user access without appropriate regulatory compliance. Prosecutors argued the exchange generated $1.3 billion in global revenue while evading U.S. laws.
BitMEX parent company HDR Global Trading Inc. now faces a two-year probationary period. The penalties come amid broader enforcement actions, including previous charges against BitMEX founders and executives for related violations by agencies such as the CFTC and FinCEN.
Chainlink Whale Exploits Staking Limits, Moves Millions in LINK to Binance
A prominent trader, pseudonymously known as “Oldwhite” on the OpenSea platform, has drawn attention for circumventing Chainlink’s staking restrictions and recently moving millions in LINK tokens to Binance. Chainlink, a blockchain oracle network, originally capped staking at 7,000 tokens per wallet to encourage broad participation when it launched its staking program in 2022.
The trader bypassed this limit by deploying over 100 wallet addresses, staking a total of more than 1 million LINK tokens — worth over $20 million at current prices. This strategy, referred to as “Sybil” manipulation, enabled the user to dominate the staking pool, which Chainlink had aimed to democratize.
Onchain data examined by Unchained reveals that between November and January, “Oldwhite” consolidated rewards from 113 wallets into a single address. As of Dec. 29, the address sent 280,164 LINK, valued at $6 million, to Binance, a move likely signaling intent to sell.
Jupiter Prepares $575 Million JUP Token Airdrop
Jupiter, a decentralized exchange aggregator on the Solana blockchain, has announced details of its highly anticipated “Jupuary” airdrop. Set to take place next week, the event will distribute 700 million JUP tokens, valued at $575 million, to the community. This marks the protocol’s second annual airdrop, following last year’s event, which rewarded 955,000 wallets.
The allocation includes 440 million tokens for users, 60 million for stakers, and 200 million for growth initiatives aimed at expanding Jupiter’s ecosystem. According to Jupiter contributor Kash Dhanda, approximately two million wallets are eligible for this year’s rewards. “The ~2 million wallets that do receive the airdrop will be more likely to be real cats… and help us accelerate towards a decentralized future,” Dhanda explained in a research post.
The rewards are tier-based, favoring active participants. For instance, top-tier “expert traders” can receive up to 300,000 JUP, worth around $250,000, while lower-tier participants may get as few as 20 JUP. Jupiter also launched a rewards checker tool, allowing users to verify eligibility ahead of the drop.
Ethereum Foundation Revamps Social Media Strategy Amid Criticism
The Ethereum Foundation (EF) has unveiled a revamped approach to its social media presence following community criticism over its lack of marketing. The foundation announced the introduction of a new account, @EthereumFndn, to share updates on grants, projects, and treasury movements, while the @Ethereum handle will now be used more actively for general updates.
This shift comes after years of sparse activity on the @Ethereum account, which posted just 14 original tweets since mid-2021. The announcement, shared on X (formerly Twitter), marks the EF’s effort to address concerns that its minimal social engagement hindered Ethereum’s growth and narrative.
“This is the beginning of a new approach… we plan to iterate and expand over time,” wrote the foundation.
Community members, including Ethereum builder Joseph Schiarizzi, expressed optimism, saying the change could help highlight the ecosystem’s achievements. The foundation also extended its social strategy to platforms such as Bluesky and Lens.
Pump.fun Faces Legal Threat Over Alleged Investor Harm and Controversial Practices
New York-based Burwick Law has announced plans to pursue legal action against Solana-based meme coin platform Pump.fun, citing claims of investor harm and unethical activities promoted on the platform. The law firm is calling for affected users to step forward and support the case to seek restitution.
Pump.fun, responsible for creating over six million tokens since its January 2024 launch, has faced criticism for fostering speculative trading and risky behavior. The platform controversially suspended its livestreaming feature for allegedly encouraging acts such as staged suicides and animal abuse to promote tokens.
Despite its dominance, accounting for 70% of recent transactions on the Solana network, data from Dune analyst Adam Tehc reveals only 0.4% of its users have profited over $10,000.
Fun Bits: TikTok Ban Drama Turns Pink Dino Memecoin Into a Superstar
As the U.S. mulls kicking TikTok off the app store, crypto did what crypto does best: turn global drama into a memecoin frenzy. The unlikely star? A pink dinosaur named MOMO. Yes, really.
MOMO, a Solana-based token, was chilling in obscurity until TikTok “refugees” flocked to China’s Instagram-like app, RedNote, where users embraced the dino as a kind of digital mascot. The default username on RedNote is “momo.” Fast forward a couple of days, and memecoin MOMO’s value shot up 160x because… why not?
With a market cap under $5 million and trading volume barely $40 million, MOMO isn’t exactly taking on bitcoin. But hey, who needs fundamentals when you have a cute mascot and social media chaos? If TikTok gets banned, MOMO might just moon again — because nothing screams freedom like onchain dino memes.
