President Donald Trump Addressed the Digital Assets Summit in Manhattan, as SEC Dropped Ripple Lawsuit and Fed Maintained Rates

Takeaways

• President Donald Trump Addressed the Digital Asset Summit in Manhattan: The President praised the industry and expressed optimism for its future: “ Together, we will make America the undisputed Bitcoin superpower and the crypto capital of the world.”
• The SEC has dropped its lawsuit against Ripple after a four-year legal battle: The case had been one of the most high-profile cases against a crypto firm. Ripple’s victory has been hailed by the community as a positive signal for digital assets.
• Global crypto funds recorded their worst-ever five-week outflow streak, reaching $6.4 billion: US investors led withdrawals, with Bitcoin and Ethereum-based products posting losses.
• The SEC, under Mark Uyeda, is reconsidering Gensler-era crypto custody rules and broader regulatory measures: A more collaborative approach has replaced aggressive enforcement, with industry engagement now prioritized.
• OKX has suspended its DEX aggregator services following reports that Lazarus Group used them to launder Bybit hack proceeds: EU regulators are also reported to be scrutinizing OKX’s DeFi services under MiCA rules.
• Offchain Labs launches Onchain Labs to support DApp growth on Arbitrum: The move places an emphasis on fair launches and community alignment on the Arbitrum network.

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President Donald Trump Addresses Digital Asset Summit

In a recorded address to attendees of the Digital Asset Summit in Manhattan, the President reaffirmed his support for the crypto industry, describing it to be “as big as you can get.” He restated his administration’s efforts in fostering a more crypto-friendly environment, and said that certain regulatory measures taken against crypto had gone “far beyond regulation”.

The President’s remarks were well received by attendees of the convention, and have helped reiterate the Trump administration’s commitment to collaborating with the industry. Since taking office in January, the new administration has signed two executive orders relating to the industry, and has formed the highly discussed strategic bitcoin reserve he touted during the campaign.

SEC Drops Lawsuit Against Ripple, Ending Four-Year Legal Battle

The SEC’s case against Ripple, which began in 2020 when the regulatory body accused the firm of selling its XRP token as an unregistered security, has finally come to an end this week. Ripple CEO Brad Garlinghouse announced the news on X on Wednesday, signing off the announcement with, “The future is bright. Let’s build.”

The case against Ripple was one of the largest against a crypto entity ever brought about by the SEC. According to Garlinghouse, Mary Jo White, former Chair of the SEC, publicly stated that the agency had been “dead wrong” in pursuing Ripple in this way. The price of Ripple’s XRP rallied more than 10% on Wednesday following the news.

The announcement comes at a time of reinvention for the SEC, with Mark Uyeda taking the reins as acting chair of the regulatory body after the resignation of Gary Gensler in January. The Trump administration has been quick to advocate for reform to the SEC after years of a regulation-by-enforcement approach.

Global Crypto Funds Face Record $6.4 Billion Outflow Streak

Global crypto investment funds saw net outflows of $1.7 billion last week, bringing the total five-week outflow streak to a record $6.4 billion. The sell-off has now lasted 17 consecutive days, as factors including President Donald Trump’s newly imposed tariffs continue to cause market uncertainty.

The assets under management (AUM) at these funds have dropped by $48 billion from their peak, now standing at $133.6 billion. The largest outflows came from US investors, which accounted for $1.16 billion of last week’s withdrawals. Funds in Germany, Brazil, Australia, and Hong Kong, however, reported modest inflows.

Bitcoin-based products saw the largest outflows, with just under $1 billion withdrawn last week, bringing the total five-week outflow to $5.4 billion. Despite the bearish sentiment, some analysts have suggested that the pace of outflows has slowed, indicating this period of forced selling may be nearing its end.

In its latest policy update, the Federal Reserve resisted calls for lower interest rates, opting to maintain the federal funds rate at its current range of 4.25% to 4.50%. This decision mirrors the stance taken in January, following a series of three rate cuts totaling a full percentage point in late 2024, before the current Trump administration.

The price of bitcoin pushed higher following the news, settling at around $86,000 by mid-day Thursday.

SEC’s Uyeda Hints at Possible Revisions to Crypto Custody Rule

The SEC may reportedly revise or withdraw a controversial crypto custody proposal introduced under former Chair Gary Gensler, according to acting chair Mark Uyeda. Speaking at an investment conference early this week, Uyeda cited “significant concerns” from industry stakeholders over the proposal’s broad scope.

In 2022, Gary Gensler had created a proposal to expand custody rules, requiring investment advisers to store crypto assets with federal or state-chartered banks. However, with Uyeda now leading the SEC under the Trump administration, the agency has taken a more collaborative stance toward crypto regulation.

The SEC has rolled back other key regulatory measures from the Gensler era, including the revocation of Staff Accounting Bulletin (SAB) 121, which forced banks to record crypto assets as liabilities. The SEC’s newly formed crypto task force, led by Commissioner Hester Peirce, is set to hold its first roundtable this Friday to discuss regulatory classification of digital assets.

OKX Suspends DEX Aggregator Amid Lazarus-Linked Misuse

Crypto exchange OKX has temporarily suspended its decentralized exchange (DEX) aggregator services after discovering that North Korea’s Lazarus Group used the platform to launder funds from the recent $1.5 billion Bybit hack. The decision follows reports that European regulators were examining OKX’s DeFi services for potential violations of the EU’s recently implemented Markets in Crypto Assets (MiCA) regulations.

In a statement on Monday, OKX said it proactively halted the service after consulting with regulators, adding the suspension would allow for security upgrades to prevent further exploitation. “Recently, we detected a coordinated effort by Lazarus Group to misuse our DeFi services,” the exchange said.

Despite the suspension, OKX confirmed its wallet services will remain operational, though it will pause new wallet creation in select regions. The move comes as EU authorities intensify oversight of crypto platforms, particularly those offering decentralized trading and self-custody services.

Arbitrum Devs Launch ‘Onchain Labs’ Incubator Program to Expand DApp Ecosystem

Offchain Labs, the creators of the Ethereum layer-2 network Arbitrum, have partnered with the Arbitrum Foundation to launch Onchain Labs, an incubator-style program designed to support the expansion of Arbitrum's DApp. The initiative aims to foster “innovative and experimental” projects, helping developers bring new applications to the network.

Arbitrum has become a popular ecosystem within crypto. Onchain Labs will focus on building the application layer for the network. Beyond the creation of new applications, the program will also support projects which aim for fair launches to benefit the community. Offchain Labs has stressed the importance of avoiding the industry’s trend toward zero-sum launches.

The rise of layer-2 solutions like Arbitrum is reshaping Ethereum, but concerns about ecosystem fragmentation and reduced interoperability have emerged. Additionally, cheaper layer 2s are affecting Ethereum's revenue, leading to concerns about its long-term market prospects.

-The Gemini Team