Coindesk

Countries targeted by U.S. government sanctions have surged in illicit crypto activity, receiving nearly $16 billion in digital assets last year — about 39% of illicit token transactions — according to a report from Chainalysis released on Wednesday.

2024 was a year in which those nations — especially Iran — surged over individuals in sanctions-related activity, noted the report from the crypto-analytics firm.

“As Western restrictions tighten, sanctioned nations are turning to cryptocurrencies and alternative financial systems to sustain trade and access capital,” according to the report, which cited Russian and Iranian financial transactions with trade partners such as China and India, using payment mechanisms that don’t rely on U.S. dollars.

“While cryptocurrency use in sanctioned jurisdictions may be associated with illicit state-controlled finance, it also represents an important financial lifeline for ordinary citizens facing economic hardship under restrictive regimes,” the report said.

The U.S. Treasury’s Office of Foreign Assets Control, or OFAC, is the government arm that sets sanctions, and last year it issued 13 that included crypto addresses. That was down from the previous year, but still high. Now that President Donald Trump has taken over the executive branch and installed Scott Bessent atop the Treasury, the pro-crypto administration may take a different approach to digital assets.

Crypto-mixing platform Tornado Cash had been famously targeted by U.S. authorities in 2023, but the popular service was still able to handle hundreds of millions of dollars in crypto transactions a month in 2024, the report said, though it hasn’t returned to its pre-sanction level.

Such services are criticized for their use in the laundering of stolen funds or in evading sanctions, and they’re difficult to shutter because they operate via smart contracts on a decentralized blockchain. Users pushing stolen funds accounted for an increase in Tornado Cash’s usage in 2024, amounting to more than 24% of its total inflows, according to Chainalysis.

Tornado Cash has come to represent the industry’s legal fight with the U.S. government over user anonymity and whether developers should be liable for what they create, and a U.S. federal appeals court rejected the original sanctions in November.

Chainalysis devoted close attention to Iran in its latest report.

“Iran’s government maintains extensive control over the country’s financial system, including cryptocurrency infrastructure,” the document noted. “For many Iranians, cryptocurrency represents an alternative financial system, and the increasing use of Iranian crypto exchanges suggests that more individuals and institutions are resorting to crypto to safeguard wealth and circumvent financial restrictions.”

Read More: U.S. Senate’s Warren Warns National Security Chiefs About Iranian Crypto Mining

By Francisco Rodrigues (All times ET unless indicated otherwise)

Cryptocurrency investors seem to be adopting a “wait-and-see” approach to the plethora of conflicting headlines appearing. As a result, the BTC Volatility Index (DVOL) on popular options exchange Deribit has been dropping since Jan. 20, falling from a high of 72 to around 50.8.

The drop signals bitcoin’s maturation as an asset, according to Tracy Jin, COO of cryptocurrency trading platform MEXC. “Rather than reacting sharply to short-term market shocks, BTC is showing signs of stabilization, increasingly resembling the dynamics of commodity markets and traditional safe-haven assets,” Jin said.

While FTX creditor payouts have started rolling out, the Libra token debacle just keeps intensifying. The co-creator of the token, Hayden Davis, bragged about buying access to Argentine President Javier Milei’s inner circle ahead of the memecoin’s launch, according to messages reviewed by CoinDesk.

Meanwhile, Strategy, the largest corporate holder of bitcoin, is set to raise an additional $2 billion by selling zero-coupon convertible notes. The funds raised will mostly be used to accumulate more BTC.

As Brevan Howard Digital’s CEO and CIO — that’s just one person — stressed at Consensus Hong Kong, the cryptocurrency ecosystem has evolved since the collapse of FTX, but 24/7 risk management is still a necessity.

On the macro front, traders are focusing on minutes from the Federal Reserve’s January interest rate meeting. Indications of the potential impact of increased tariffs are a particular point of focus, given President Donald Trump’s comments on tariffs “in the neighborhood of 25% for automobiles, semiconductors, and pharmaceutical products.”

Recent U.S.-Russia talks in Riyadh have led to the appointing of teams to negotiate an end to the war in Ukraine and commitments to “normalize the operation” of their diplomatic missions. Still, excluding representatives from Ukraine and Europe remains a point of contention. Stay alert!

What to Watch

Crypto:

Feb. 19, 9:30 a.m.: Shares of bitcoin-focused financial services company Fold Holdings (FLD) start trading on Nasdaq.

Feb. 19: High-performance blockchain Monad’s public testnet starts up.

Feb. 19, 11:00 a.m.: The first official State of Sei (SEI) livestream.

Feb. 19, 1:00 p.m.: Hedera (HBAR) mainnet upgrade to v0.58.

Feb. 21: TON (The Open Network) becomes the exclusive blockchain infrastructure for messaging platform Telegram’s Mini App ecosystem.

Feb. 24: At epoch 115968, testing of Ethereum’s Pecta upgrade on the Holesky testnet starts.

Macro

Feb. 19, 2:00 p.m.: The Fed releases minutes of the Jan. 28-29 FOMC Meeting.

Feb. 20, 8:30 a.m.: Statistics Canada reports January’s producer price inflation data.

PPI MoM Est. 0.8% vs. Prev. 0.2%

PPI YoY Prev. 4.1%

Feb. 20, 8:30 a.m.: The U.S. Department of Labor releases the Unemployment Insurance Weekly Claims report for the week ended Feb. 15.

Initial Jobless Claims Est. 215K vs. Prev. 213K

Feb. 20, 5:00 p.m.: Fed Governor Adriana D. Kugler giving a speech titled “Navigating Inflation Waves While Riding on the Phillips Curve” in Washington. Livestream link.

Feb. 20, 6:30 p.m.: Japan’s Ministry of Internal Affairs & Communications reports January’s consumer price inflation data.

Core Inflation Rate YoY Est. 3.1% vs. Prev. 3%

Inflation Rate YoY Prev. 3.6%

Inflation Rate MoM Prev. 0.6%

Earnings

Feb. 20: Block (XYZ), post-market, $0.88

Feb. 24: Riot Platforms (RIOT), post-market, $-0.18

Feb. 25: ​​Bitdeer Technologies Group (BTDR), pre-market, $-0.53

Feb. 25: Cipher Mining (CIFR), pre-market, $-0.09

Feb. 26: MARA Holdings (MARA), post-market, $-0.13

Token Events

Governance

Compound DAO is discussing evolving Compound Sandbox into Compound V4 to introduce streamlined governance, dynamic market parameters, enhance the liquidation mechanism, and improve cross-chain reward distribution.

Aave DAO is discussing expanding the AAVE governance token integration on the platform by adding AAVE collateral option to Base.

Uniswap DAO is discussing funding liquidity incentives for Uniswap V4 on the Unichain network to attract liquidity providers and traders to the protocol.

Unlocks

Feb. 21: Fast Token (FTN) to unlock 4.66% of circulating supply worth $78.6 million.

Feb. 28: Optimism (OP) to unlock 1.92% of circulating supply worth $34.23 million.

Token Launches

Feb. 20: Pi Network (PI) to be listed on MEXC, OKX, Bitget, Gate.io, CoinW, DigiFinex and others.

Conferences:

CoinDesk’s Consensus to take place in Hong Kong on Feb. 18-20 and in Toronto on May 14-16. Use code DAYBOOK and save 15% on passes.

Day 2 of 3: Consensus Hong Kong

Feb. 23-March 2: ETHDenver 2025 (Denver)

Feb. 24: RWA London Summit 2025

Feb. 25: HederaCon 2025 (Denver)

March 2-3: Crypto Expo Europe (Bucharest, Romania)

March 8: Bitcoin Alive (Sydney, Australia)

Token Talk

By Oliver Knight

Sonic, the recently rebranded token that used to be called Fantom, has risen by 37% in the past week. The surge has been attributed to an increase in on-chain activity and a boost in general sentiment following the rebrand.

The memecoin sector is reeling from the controversy over Argentine President Javier Milei and the Libra token. The market cap of the sector is down 4.4% in 24 hours to $72.9 billion as traders begin to pull liquidity and question the legitimacy of a market many view as an endless cycle of “pump and dumps.”

More than $35 billion worth of value has exited decentralized finance (DeFi) protocols since mid-December. Part of the slump is tied to dwindling asset prices, but there has also been a disproportionate amount of outflows from Solana-based liquid staking protocols this week, DefiLlama data shows.

Derivatives Positioning

BTC’s CME futures premium has compressed to an annualized 6%, according to data tracked by Paradigm. That’s a sign of bullish expectations becoming tempered amid continued sideways price movement.

LTC, TRX and HYPE lead growth in perpetual futures open interest.

BTC and ETH options due for settlement after February continue to exhibit bullish sentiment, although the premium for calls has reduced to some extent.

Block flows have been mixed with puts bought in the February expiry.

Market Movements:

BTC is up 1.34% from 4 p.m. ET Tuesday to $96,356.41 (24hrs: +0.79%)

ETH is up 3.25% at $2,735.66 (24hrs: +1.54%)

CoinDesk 20 is down 2.80% to 3,195.66 (24hrs: +1.12%)

Ether CESR Composite Staking Rate is down 13 bps to 3.05%

BTC funding rate is at 0.0205% (7.4657% annualized) on Binance

DXY is up 0.14% at 107.20

Gold is up 0.31% at $2,944.53/oz

Silver is up 0.59% to $33.05/oz

Nikkei 225 closed -0.27% at 39,164.61

Hang Seng closed -0.14% at 22,944.24

FTSE is down 0.28% at 8,742.27

Euro Stoxx 50 is down 0.48 at 5,507.77

DJIA closed Tuesday unchanged at 44,556.34

S&P 500 closed +0.24% at 6,129.58

Nasdaq closed +0.07% at 20,041.26

S&P/TSX Composite Index closed +0.65% at 25,648.84

S&P 40 Latin America closed +0.28% at 2,497.37

U.S. 10-year Treasury rate was up 1 bps at 4.56%

E-mini S&P 500 futures are down 0.1% to 6,140.5

E-mini Nasdaq-100 futures are down 0.1% at 22,219

E-mini Dow Jones Industrial Average Index futures are down 0.16% to 44,571

Bitcoin Stats:

BTC Dominance: 61.08 (-0.32%)

Ethereum to bitcoin ratio: 0.02836 (1.54%)

Hashrate (seven-day moving average): 784 EH/s

Hashprice (spot): $53.61

Total Fees: 4.7 BTC / $452,182

CME Futures Open Interest: 172,530 BTC

BTC priced in gold:32.6 oz

BTC vs gold market cap: 9.26%

Technical Analysis

The SOL-BTC ratio has dropped out of a multiweek consolidation range.

The technical breakdown suggests the possibility of a continued underperformance by the Solana blockchain’s token.

Crypto Equities

MicroStrategy (MSTR): closed on Tuesday at $333.97 (-1.11%), up 0.87% at $336.88 in pre-market.

Coinbase Global (COIN): closed at $264.63 (-3.53%), up 1.27% at $268.

Galaxy Digital Holdings (GLXY): closed at C$26.31 (-4.58%).

MARA Holdings (MARA): closed at $16.05 (-5.03%), up 1.56% at $16.30.

Riot Platforms (RIOT): closed at $11.56 (-5.79%), up 1.12% at $11.69.

Core Scientific (CORZ): closed at $12.39 (-0.96%), down 1.05% at $12.26.

CleanSpark (CLSK): closed at $10.08 (-4.00%), up 1.39% at $10.22.

CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $22.84 (-2.39%), up 0.31% at $22.91.

Semler Scientific (SMLR): closed at $50.72 (+2.11%), up 2.09% at $51.78.

Exodus Movement (EXOD): closed at $46.55 (-6.90%), up 5% at $49.00.

ETF Flows

Spot BTC ETFs:

Daily net flow: -$60.7 million

Cumulative net flows: $40.06 billion

Total BTC holdings ~ 1.163 million.

Spot ETH ETFs

Daily net flow: $4.6 million

Cumulative net flows: $3.16 billion

Total ETH holdings ~ 3.784 million.

Source: Farside Investors

Overnight Flows

Chart of the Day

The U.S. dollar-backed stablecoin Agora Dollar (AUSD), which debuted on Solana at the end of January, has surpassed $100 million in market capitalization.

The next stop could be $1 billion, according to Artemis.

While You Were Sleeping

Wintermute Looking to Expand in U.S., Open Office in New York (Bloomberg): At Consensus Hong Kong, Wintermute Trading CEO Evgeny Gaevoy announced plans to offer over-the-counter products in the U.S. and expressed optimism about forthcoming regulatory changes.

Crypto Has Moved Past FTX, but Still Needs 24/7 Risk Management, Brevan Howard’s CIO Believes (CoinDesk): Three experts from traditional finance speaking at Consensus Hong Kong acknowledged crypto’s technological advances since the FTX collapse while emphasizing the need for round-the-clock risk management.

Private Jets, Political Cash Among $1B in Sam Bankman-Fried’s Forfeited Assets: Court (CoinDesk): As initial FTX bankruptcy repayments began, a U.S. federal court issued its final order of forfeiture against the convicted CEO of the now-defunct exchange, seizing around $1 billion in assets.

Donald Trump’s Late-Night Posts Send Currency Traders to Asian Markets (Financial Times): The president’s late-night and weekend announcements have disrupted regular trading patterns, prompting some U.S. and European FX traders to hedge in Asian markets.

U.K. Inflation Reaches 10-Month High, Complicating Bank of England’s Rate Path (The Wall Street Journal): The U.K.’s annual inflation rate hit 3% in January, up 0.5 percentage points from December, making it tougher for the central bank to cut rates.

BOJ Policymaker Calls for More Rate Hikes, Warns of Inflation Risk (Reuters): Hajime Takata said persistent inflationary pressures and rising wages suggest the need for further interest-rate increases. Analysts see the short-term interest rate jumping to 0.75% in July.

In the Ether

HONG KONG – Decentralized finance (DeFi) platform MANTRA said it secured a Virtual Asset Service Provider (VASP) license from Dubai’s Virtual Assets Regulatory Authority (VARA).

The license allows the platform to operate as a virtual asset exchange and offer broker-dealer and investment management services in the region. It positions MANTRA, which focuses on the Middle Eastern region, for global expansion while reinforcing its focus on tokenizing real-world assets (RWAs), the firm said.

The firm’s Chief Executive Officer John Patrick Mullin described Dubai as a leader in crypto regulation, noting that the approval is a “crucial step” in the platform’s strategy to bridge decentralized and traditional finance. With the license, MANTRA can offer regulatory-compliant financial products tailored to institutional investors, benefiting from Dubai’s progressive stance on Web3 and digital assets.

The company plans to roll out DeFi products designed to meet both regional and international regulatory standards. “Regulatory compliance is fundamental to the trust we build with users,” Mullin said. “This license reflects our long-term vision of driving responsible growth in the digital asset space.”

Last month, the platform entered an agreement with United Arab Emirates-based property conglomerate DAMAC Group to bring at least $1 billion of the firm’s assets to blockchain rails.

In 2024, it added Google as a primary validator and infrastructure for its blockchain and collaborated with the tech giant on an accelerator program for RWAs to encourage more development and innovation.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

HONG KONG – Investors in Europe can now get direct exposure to the CoinDesk 20, an index representing the largest crypto assets, thanks to a new exchange-traded product (ETP) from WisdomTree launched at Consensus Hong Kong.

“The launch of the first CoinDesk 20 ETP with WisdomTree is a defining moment for digital asset investing in Europe,” Alan Campbell, President of CoinDesk Indices, said in a release. “The CoinDesk 20 provides institutional investors with a streamlined way to access the largest digital assets beyond Bitcoin.”

WisdomTree’s Physical CoinDesk 20 ETP (WCRP) offers exposure to the digital assets listed on the CoinDesk 20, in a similar way to other ETPs that offer exposure to traditional finance’s S&P 500 or the NASDAQ.

WCRP is listed on Deutsche Börse Xetra, the Swiss Stock Exchange SIX, and Euronext exchanges in Paris and Amsterdam.

Additionally, WCRP generates a staking yield, allowing investors to benefit from rewards earned by helping secure the underlying blockchain networks.

The CoinDesk 20 Index, launched in January 2024, has quickly become a key benchmark for digital asset investors, with over $14 billion in trading volume in its first year.

U.S. president Donald Trump shared an XRP-related article on social media platform Truth Social on Tuesday, stoking excitement and speculation among the XRP community.

The article, published by CoinDesk in January, revealed how Ripple CEO Brad Garlinghouse experienced an uptick in U.S. deals and hiring efforts following Trump’s election victory in November.

The post generated 6.3K likes and 268 replies, the majority of which uttered phrases like “XRP to the moon” and discussed how XRP should become the currency that underpins a potential U.S. crypto reserve.

The XRP token remained fairly muted at $2.53 after the post, although trading volume is up by 26% in 24 hours to $5.5 billion, according to CoinMarketCap.

The post comes as the Elon Musk-led Department of Government Efficiency (DOGE) put the Securities and Exchange Commission (SEC) in its crosshairs on Monday — which could end in a positive result for Ripple as it is facing an appeal from the regulator in relation to an alleged unregistered securities offering in 2020.

There is also an expectation that an XRP exchanged traded fund (ETF) will be approved this year after the SEC acknowledged a filing by the New York Stock Exchange and Grayscale last week.

HONG KONG — World Liberty Financial, the Donald Trump-backed crypto project, owes much of its early success to Justin Sun, the Chinese-born crypto billionaire who became an official advisor to the project after purchasing $30 million worth of its token, WLFI, said World Liberty co-founder Zak Folkman.

Folkman remarked that, “the goal of the project is being able to create progress to actually merge traditional financial institutions with decentralized finance,” in a panel at CoinDesk’s Consensus Hong Kong conference.

For several weeks, the Trump-endorsed WLFI faced lackluster sales, failing to reach its $30 million fundraising target. The token was restricted from trading and only available to non-U.S. investors and accredited U.S. investors.

The project’s fortunes changed, however, when Sun stepped in. “This guy,” Folkman said with a gesture towards Sun, “saw that regardless of the outcome, this project is a monumental move forward for the entire crypto community.”

When Trump announced World Liberty Financial alongside his sons in October, they said it would be a lending platform based on Aave — a popular Ethereum-based decentralized finance protocol. The platform has yet to launch, but according to Folkman, World Liberty is now developing “a whole range of products and applications” — not just a single tool.

Today, World Liberty Financial is known for WLFI, the governance token that it put up for sale mere days after the project was unveiled.

“When we were launching this project, it was a very heated time,” Folkman told the panel. “There was a lot of scrutiny on our project due to who was involved.”

After Sun’s 10-figure endorsement, “everything kind of snowballed from there,” said Folkman. World Liberty not only oversold its fundraising target, but it eventually set a new one. Should it meet its new goal — which it seems poised to do soon — Folkman noted that WLFI will become the fourth-largest initial coin offering (ICO) of all time.

Folkman claims WLFI’s success came despite “no VC backing and no special treatment to anybody who purchased the token.”

Sun, however, was elevated to an official World Liberty investor after his WLFI purchase. World Liberty also bought $10 million worth of TRX tokens — the native token of Sun’s TRON blockchain — and WBTC, a Sun-linked bitcoin derivative.

Earlier in Feb., Blockworks reported that World Liberty has been shopping a deal to crypto teams: If a company purchases WLFI tokens and pays an additional fee, World Liberty will add that company’s tokens to its portfolio — a powerful marketing instrument for up-and-coming crypto tokens.

“I’ve seen that going around,” Folkman said of the report. “The person who was going out and purporting to represent us was not connected with our company.”

The latest frenzy that started with U.S. President Donald Trump’s TRUMP memecoin launch and saw traders making and losing millions within minutes, might have finally come crashing down with the LIBRA token fiasco.

LIBRA, a Solana-based project that President of Argentina Javier Milei tweeted about on Feb. 14, saw its market cap rise as high as $4.5 billion and then fall more than 80% within a couple of hours as insiders cashed out, leaving many bag holders with massive losses.

The story became an international and political incident over the weekend when in the last couple of days, Milei deleted his original tweet, denied his endorsement and accused the political opposition of mischief. This eventually led to talks of his impeachment and created uncertainty in the Argentinian stock market. Then came an explosive twist to the story.

On Tuesday, CoinDesk broke the news that a key player behind the LIBRA token had bragged about buying access to Argentine President Javier Milei’s inner circle months before the memecoin’s scandalous launch and crash.

Although these kinds of kerfuffle for a memecoin are not unusual, how this happened and what followed after the apparent “rug pull” highlighted the risk of unchecked crypto trading and the potential for a reputational hit for the memecoin sector as a whole.

“The LIBRA episode represents what is a potential point of oversaturation for the memecoin space,” said Toronto-based crypto platform FRNT Financial. “At this point, the novelty of new projects, after TRUMP and MELANIA, and now LIBRA, has largely worn off.”

“Additionally, the reputational consequences for these assets may be significant. Having said that, it appears that this episode is likely to continue playing out as new details emerge. At this point, memecoins are synonymous with ‘pump and dump’ schemes,” FRNT contended.

This incident, along with other memecoin-related events that led to many retail traders losing money, may nudge the community to make more of an effort to police itself.

“The entire $LIBRA memecoin fiasco over the weekend should serve as a reminder that all of us in the DeFi community have a responsibility to make this space safer for users,” said Chris Chung, founder of Solana-based swap platform Titan.

How the ‘fiasco’ happened

The whole Milei and LIBRA episode played out within the span of a few days, starting on Feb. 14.

As explained by Galaxy Research’s Alex Thorn, the token launched on that fateful day on a Solana-based DeX Meteora, with Milei’s initial post (now deleted) on social media platform X saying that the aim of the token was to help the growth of the Argentinian economy — a big endorsement for a memecoin. 

Once the token price reached its peak of $4.4 billion within hours, the insiders started dumping their holdings immediately, making nearly $100 million, according to onchain analysts.

The next day, Milei deleted his original post, sending a shockwave within the memecoin community, that saw many similar tokens, such as TRUMP, MILANIA, and others, sell out fast. Meanwhile, Solana, the blockchain the token was built on, also saw its native token, SOL, fall.

In his new post, Milei claimed he wasn’t aware of the details of the project and accused the political opposition of mischief, making the situation a game of politics. By that time, the token had erased around $4.5 billion of retail capital in seven hours. Currently, the market cap sits around just above half a million, according to CoinMarketCap data.

The same day, names of a few key opinion leaders (KOL) came up, including Barstool’s Dave Portnoy, Threadguy, Hayden Davis and Faze Banks, who were involved in one way or another with the project. Portnoy said he was an early investor and was refunded his money, further spreading the controversy that insiders benefitted from the LIBRA fiasco. Davis, meanwhile, revealed that he was behind both the LIBRA and MELANIA memecoins and said the Argentinian token incident was “not a rug pull,” rather “It’s just a plan gone miserably wrong.”

The next day, the Argentinian opposition threatened Milei with impeachment over the incident. On Feb. 17, Ben Chow, co-founder of DeX Meteora, where LIBRA had launched, resigned over the controversy. Chow was also a co-founder of Solana-based trading aggregator Jupiter. The same day Argentina’s stock market collapsed almost 6% on a report of a probe on Milei.

Read more: LIBRA Apparent Rug Pull Is Latest ‘Sordid Episode’ Emerging From Solana’s Memecoin Complex: Galaxy

On Feb. 18, CoinDesk broke the news that Davis claimed in text messages that he could “control” Milei because of payments he had been making to Karina Milei, a powerful figure in Milei’s government, and the president’s sister.

‘Setback for crypto’

What will happen to Milei and all the involved parties is still unknown. However, if FTX’s spectacular blowout is anything to go by, there might still be a lot more to untangle in this story.

What it does highlight is that the memecoin drama that has become a game of split-second profit and losses, in this cycle, might be at a crossroads. As institutional investors are betting big on bitcoin and ether with the launch of exchange-traded funds, making those assets more TradFi friendly and stable, the memecoin sector has stuck out as the ugly duckling of the crypto space, and this incident may sour retail participation.

“Overall, this entire story is a real setback for the crypto space,” Chung said. “If we want to attract new retail users, this is not the way to do it.”

The crypto ecosystem has come a long way since the implosion of Sam Bankman Fried’s FTX destroyed billions in investor wealth in 2023. However, the industry as a whole needs to more to become bullet proof, said TradFi experts at the “Views From Wall Street to Crypto” event held at Consensus Hong Kong on Wednesday.

“You have traditional players who have come into the space now, especially for us, most of our trading happens of exchange settlement, where you actually keep your assets on custodians while you are able to trade on exchanges,” Gautam Sharma, CEO and CIO of Brevan Howard said. “So the technology has come far ahead in terms of the last 18 months since then, [but] there’s more work to do.”

Sharma stressed the need for 24/7 risk management, including market, counterparty, and credit risks.

Counterparty risk refers to the possibility of one party involved in a transaction failing to meet its obligation, resulting in a loss to the other party. This type of risk is higher in crypto than in traditional finance, given the absence of intermediaries such as banks or clearing houses that ensure trust and settlements, and it is a cause of concern for both directional and non-directional arbitration players.

“When we do arbitrage, the counterparty risk is the most important one,” Fabio Frontini, founder of Abraxas Capital Management, said, adding that credit risk is also very important.

Frontini stressed the importance of simulating stress testing scenarios, referring to the perpetual futures market where users can lose the margin when stopped out on a trade, which is not the case in traditional markets. “It [stress testing] can be very rewarding, when done properly,” Frontini added.

Mike Kuehnel, CEO of the market-making firm Flow Traders, highlighted the need to make innovation transparent to win over investor confidence and ensure “availability of data and moving liquidity without fragmentation around it.”

“Getting the best price and giving you the possibility to transact whenever you want to is a key ingredient,” Kuehnel added.

Liquidity, or the ability of the market to absorb large orders at stable prices, emerged as a significant concern following the collapse of FTX and its sister concern, Alameda. While the order book depth has surely improved for major coins, fragmentation or distribution of liquidity across multiple DeFi platforms, blockchains and networks, remains a concern.

HONG KONG – Quant-driven digital assets trading firm TDX Strategies has teamed up with CoinDesk Indices for its latest offering: structured products linked to the CoinDesk 20 Index (CD 20), the company announced at Consensus Hong Kong.

The collaboration will provide investors with a sophisticated solution to prioritize both growth and risk management while navigating the burgeoning digital assets market, said TDX Chief Executive Officer Dick Lo.

“Our new offering allows investors to gain diversified exposure and participate in the growth of the digital asset market while maintaining a balanced risk profile. This sets a new standard in digital asset investment solutions,” Lo said.

“By integrating the CoinDesk 20 Index into our existing product suite, TDX Strategies continues to redefine the structured product landscape in the digital asset ecosystem,” Lo added.

Structured products are pre-packaged investment strategies that combine financial assets with derivatives to create a customized financial instrument, providing tailored exposure per investors’ specific needs and objectives.

TDX’s new offering will essentially provide a pre-packaged strategy tied to the CoinDesk 20 Index. The firm’s present product suit includes bespoke strategy, directional exposure and yield enhancement.

The CoinDesk 20 Index, designed for scalability, tracks the performance of top digital assets utilizing a market cap-weighted methodology that provides a diversified exposure beyond bitcoin and ether.

Since its debut in January 2024, the index has gained notable traction among institutions, generating a trading volume of roughly $13 billion.

“The CoinDesk 20 has been embraced by leading market-making firms, unlocking the digital asset opportunity in one step. With substantial institutional interest driving trading volumes of approximately $13 billion since its January 2024 launch, we’re pleased that TDX Strategies will provide access through structured products,” said Alan Campbell, President of CoinDesk Indices.

HONG KONG – Australian digital assets market maker Zerocap has partnered with CoinDesk Indices to offer Australia’s first options-based structured products on the CoinDesk 20 Index (CD20), the company said at Consensus Hong Kong.

The partnership introduces sophisticated and tailored investment strategies usually found in traditional markets, a significant advancement for the cryptocurrency industry.

It will allow institutions and other sophisticated market participants to take risk-managed diversified exposure to digital assets that go beyond just bitcoin and ether while offering additional features like downside protection, volatility management and yield enhancement.

The new offering demonstrates the increasing demand for scalable and diversified institutional-grade cryptocurrency products following the debut of spot ETFs in the U.S. last year.

The CoinDesk 20 Index, which has surged 456% over the past five years, provides a diversified alternative to the standard 70/30 bitcoin-ether portfolio split by broadening exposure to other leading crypto assets.

“This partnership with CoinDesk Indices brings sophisticated, structured options to the crypto market for the first time, offering our clients enhanced ways to invest in digital assets with tailored risk and diversification benefits,” said Mark Hiriart, head of sales at Zerocap.

Alan Campbell, President of CoinDesk Indices, said the CD 20 Index caters to the growing demand for diversified digital assets exposure and Zerocap’s decision to debut structured products tied to the same is a significant step forward in serving global clientele.