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Coinbase Chief Warns Congress: Crypto Bill Could Surrender Tech Race to China
The Digital Dollar’s Delicate Moment: How a U.S. Policy Debate Could Cede the Future to China
A quiet but seismic shift is unfolding in the world of digital currency—one that pits the innovation of America’s private sector against the strategic ambition of the Chinese state. At the center of the storm is the GENIUS Act, a landmark U.S. law designed to regulate stablecoins. Now, a brewing debate in the Senate over a single, seemingly technical provision—whether platforms can offer rewards or interest on stablecoin holdings—has escalated into a full-scale warning from the highest levels of crypto industry leadership.
The warning is stark: misstep here, and Washington could inadvertently hand China a decisive edge in the defining financial race of the 21st century.
The Warning From Wall Street's Digital Frontier
The alarm was sounded clearly by Faryar Shirzad, Chief Policy Officer of Coinbase. In a pointed public statement, he framed the Senate’s upcoming negotiations as a pivotal moment for American financial sovereignty. The core of his argument hinges on competition. The GENIUS Act, as passed, wisely prohibited stablecoin issuers from paying direct interest but allowed platforms and third parties to innovate with user rewards. This created a competitive, market-driven model for dollar digital currency.
Now, that model is under threat. Shirzad warns that bank lobbyists are actively pressuring lawmakers to strip these reward mechanisms from the law. Their goal, according to industry observers, is to protect a traditional banking model where banks profit heavily from the spread between the interest they earn (like on Federal Reserve reserves) and the near-zero interest they often pay to everyday savers.
If this issue is mishandled in Senate negotiations, Shirzad cautions, it could hand our global rivals a big assist… at the worst possible time.
The Dragon's Move: China Charges Ahead with Digital Yuan 2.0
The timing of this U.S. policy debate could not be more critical, or more perilous. As American lawmakers contemplate restricting innovation, China’s central bank is actively supercharging its own digital currency.
This week, the People’s Bank of China (PBOC) unveiled a transformative upgrade to the digital yuan (e-CNY). Starting January 1, 2026, commercial banks will be permitted to pay interest on balances held in digital yuan wallets. This is not a minor tweak; it is a fundamental evolution.
Deputy Governor Lu Lei declared this moves the e-CNY from the digital cash era into the digital deposit currency era. In practical terms, it transforms China’s CBDC from a simple digital payment tool into a full-fledged, interest-bearing savings vehicle—one integrated directly into the core of the national banking system. It gains the classic functions of money: a store of value, a unit of account, and a powerful instrument for cross-border payment.
Suddenly, the global proposition changes. Why would an international user or corporation hold a static, non-yielding digital dollar when China offers a state-backed, interest-bearing digital alternative?
The Battle Lines Are Drawn: Innovation vs. Incumbency
The conflict in Washington is a classic clash between disruptive innovation and entrenched power.
On one side stands a coalition of banks seeking to maintain their traditional, highly profitable deposit-taking model. Crypto policy commentator Max Avery summarized their position starkly: banks currently enjoy a massive subsidy from near-zero-interest consumer deposits, while earning significant returns elsewhere. Yield-bearing stablecoins directly threaten that lucrative spread by offering users a fair share of the returns generated by their assets.
On the other side stand companies like Coinbase and a broad swath of the crypto industry, arguing that crippling U.S. stablecoins is a catastrophic strategic error. Coinbase CEO Brian Armstrong has drawn a red line, calling the banking lobby’s efforts unethical and vowing fierce opposition. He argues banks are short-sighted, predicting they will eventually want to offer yield on stablecoins themselves once they understand the new market reality.
Armstrong’s surprise is palpable: I can’t believe they are being this blatant about lobbying to kill a competitive product to protect their oligopoly.
The Stakes: More Than Crypto, It's Currency Itself
This is far more than a niche policy debate about cryptocurrency rewards. This is a battle for the future structure of global finance.
1- The U.S. Path: A potentially neutered digital dollar, limited by law from competing on features, could see its global adoption stagnate. Stablecoins—the most successful application of blockchain technology to date—could be hamstrung just as they begin to revolutionize cross-border trade and payments.
2- The Chinese Path: A state-managed digital currency, now with interest-bearing features, strategically deployed to deepen financial control at home and expand influence abroad through digital infrastructure deals and trade partnerships.
The outcome will answer a fundamental question: Will the next generation of digital money be shaped by open-market innovation and private competition, or by state-led design and strategic control?
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2026-01-16 · 19 days ago0 067Ethereum’s Recent Activity Boom Tied to Dusting Attacks, Says Researcher
Ethereum’s Network Explosion Raises New Security Questions
Ethereum has recently witnessed an unprecedented surge in on-chain activity, with transaction counts and active addresses reaching record-breaking levels. At first glance, this spike appears to signal renewed adoption, rising user confidence, and growing interest across decentralized finance and Web3 applications. However, new research suggests the story behind these numbers may be far more concerning.
According to blockchain security researcher Andrey Sergeenkov, a significant portion of Ethereum’s recent growth could be artificially inflated by malicious activity, specifically a large-scale wave of address poisoning attacks. These attacks appear to be exploiting Ethereum’s newly reduced transaction fees, turning network efficiency into an unexpected vulnerability.
Record Metrics That Sparked Suspicion
In recent weeks, Ethereum’s network metrics have painted a striking picture. Active address retention reportedly surged to nearly eight million in a single month, while daily transaction counts climbed to almost 2.9 million, marking an all-time high. Even more notable was the week beginning January 12, which saw roughly 2.7 million new addresses interacting with the network—an increase of around 170% compared to typical levels.
While such numbers might normally be interpreted as bullish signals, Sergeenkov warns that they may not reflect genuine user growth. Instead, he believes much of this activity is linked to automated spam behavior driven by address poisoning campaigns operating at an unprecedented scale.
How Lower Gas Fees Changed the Economics of Attacks
The timing of this surge is not coincidental. In early December, Ethereum implemented the Fusaka network upgrade, which significantly reduced transaction costs. In the weeks following the upgrade, average network fees dropped by more than 60%.
While lower fees are generally positive for users and developers, they also reduced the cost of malicious activity. Sergeenkov argues that address poisoning has become far more attractive for attackers because it is now cheap enough to execute mass transactions across millions of wallets without significant capital.
In his view, the ability to scale network infrastructure must be matched by equal attention to user security. Without proper safeguards, efficiency gains can unintentionally empower bad actors.
Understanding Address Poisoning on Ethereum
Address poisoning is a subtle but highly effective scam technique. It involves sending tiny transactions—often worth less than a dollar—from wallet addresses that closely resemble legitimate ones. These transactions appear in a victim’s transaction history, increasing the risk that the user will later copy and reuse the fraudulent address by mistake.
The attack typically begins with scammers sending small amounts of stablecoins to what are known as dust distributor wallets. These wallets then fan out microscopic transactions to massive numbers of addresses, embedding deceptive entries into transaction histories across the network.
Sergeenkov identified these distributor wallets by analyzing wallets that received very small stablecoin amounts as their first-ever transaction, then filtering for addresses that went on to send transactions to more than 10,000 recipients. This pattern strongly suggests automated poisoning behavior rather than organic usage.
Millions Targeted and Hundreds of Thousands Lost
The scale of these attacks is staggering. Some of the most active dust distributor addresses were found to have sent transactions to over 400,000 different recipients. Collectively, these campaigns have already resulted in losses exceeding $740,000, affecting at least 116 confirmed victims.
While this figure may seem modest relative to Ethereum’s total market size, the real concern lies in the trajectory. As long as transaction fees remain low and user awareness remains limited, the potential for further losses continues to grow.
These attacks do not rely on smart contract exploits or protocol flaws. Instead, they exploit human behavior, making them particularly difficult to prevent through technical upgrades alone.
What This Means for Ethereum Users and the Market
The findings highlight a critical challenge for Ethereum as it scales. Rising activity metrics alone are no longer a reliable indicator of healthy network growth. Without deeper analysis, spam-driven transactions can distort perceptions of adoption and usage.
For everyday users, this serves as a reminder to verify wallet addresses carefully and avoid copying addresses directly from transaction histories without double-checking them. For platforms and exchanges, it reinforces the importance of strong security education and clear transaction interfaces.
The Role of Secure Trading Platforms Like BYDFi
As blockchain threats evolve, the choice of trading and asset management platforms becomes increasingly important. Platforms like BYDFi play a key role in protecting users by offering secure environments, clear transaction workflows, and educational resources that help traders avoid common on-chain scams.
BYDFi’s focus on user safety, transparent asset handling, and risk awareness makes it a valuable option for traders navigating increasingly complex blockchain ecosystems. While no platform can eliminate on-chain risks entirely, using reputable exchanges with strong security standards can significantly reduce exposure to threats like address poisoning.
Looking Ahead: Security Must Match Scalability
Ethereum’s continued growth is undeniable, but this episode underscores an important reality. Network scalability and lower fees must go hand in hand with enhanced user protections. Without parallel investment in security awareness and tooling, efficiency improvements can unintentionally amplify malicious behavior.
As researchers continue to monitor on-chain patterns, one thing is clear: the future of Ethereum depends not only on faster and cheaper transactions, but also on ensuring that users can interact with the network safely and confidently in an increasingly hostile digital environment.
2026-01-26 · 9 days ago0 066Impersonation-Based Crypto Scams Rise 1,400% in 2025
Impersonation Scams Explode in 2025, Signaling a Dangerous Shift in Crypto Crime
The cryptocurrency industry faced a disturbing escalation in fraud during 2025, as impersonation scams surged at an unprecedented pace. According to blockchain intelligence firm Chainalysis, reported cases of impersonation-based crypto scams jumped by nearly 1,400% year over year, marking one of the most alarming security trends the industry has ever seen.
This dramatic rise highlights how fraudsters are evolving faster than many users’ defenses, exploiting trust, urgency, and increasingly sophisticated technology to drain victims’ wallets.
How Impersonation Became the Weapon of Choice
Impersonation scams revolve around deception at its core. Criminals pose as trusted entities such as crypto exchanges, customer support agents, well-known companies, or even government bodies. By mimicking legitimate communication styles, branding, and tone, scammers convince victims to hand over sensitive information, private keys, or direct access to their funds.
Chainalysis noted that these scams are rarely standalone operations. Instead, impersonation tactics are often woven into broader fraud schemes, including fake investment opportunities and so-called pig butchering scams. Victims may be groomed over time, slowly gaining confidence in the scammer before being persuaded to make a catastrophic financial decision.
Bigger Losses, Fewer Warnings
Beyond the spike in the number of incidents, the financial damage caused by impersonation scams has intensified. Chainalysis revealed that the average amount stolen per impersonation scam increased by more than 600%, a trend the firm described as deeply concerning.
One of the most high-profile cases in 2025 involved scammers pretending to represent the crypto exchange Coinbase. By exploiting the platform’s reputation, fraudsters were able to steal close to $16 million from unsuspecting users. The case eventually led to criminal charges in Brooklyn, although legal proceedings are still ongoing.
These incidents underscore a harsh reality: as scams become more believable, victims often realize something is wrong only after their assets are gone.
AI and the Industrialization of Crypto Fraud
Artificial intelligence has emerged as a powerful accelerant for modern crypto scams. Chainalysis described this shift as the industrialization of fraud, where scammers rely on advanced tools, automation, and AI-driven messaging systems to scale their operations.
Data from the report showed that scams incorporating AI were 4.5 times more profitable than traditional schemes. These operations generated higher daily revenues, processed more transactions, and reached more victims simultaneously. AI-generated messages, voice cloning, and realistic fake support chats have made scams harder to distinguish from legitimate communications.
The growing volume of AI-assisted fraud suggests that scams are not only becoming more efficient but also more psychologically persuasive, blurring the line between real and fake interactions.
Why Law Enforcement Alone Isn’t Enough
While 2025 saw an uptick in law enforcement action against crypto-related fraud, Chainalysis emphasized that arrests and prosecutions alone cannot solve the problem. The scale and global nature of impersonation scams demand a broader, more proactive approach.
Experts argue that prevention must take priority, with greater investment in real-time fraud detection systems, improved identification of money mule networks, and stronger cross-border cooperation between authorities. Without coordinated international efforts, scammers will continue to exploit regulatory gaps and low-capacity jurisdictions.
As the industry moves into 2026, Chainalysis expects scam techniques to merge even further, combining social engineering, impersonation, AI, and technical exploits into unified attack strategies.
Staying Safe in an Era of Digital Deception
Security specialists agree that users must fundamentally change how they approach online interactions. In the crypto world, blind trust has become a liability. Any unsolicited message, no matter how professional or familiar it appears, should be treated with skepticism.
Legitimate companies do not request private keys, recovery phrases, or passwords under any circumstances. Verifying communication through official channels, avoiding emotional or urgent requests, and assuming that scams can come from anywhere are now essential habits rather than optional precautions.
As impersonation scams continue to evolve, awareness remains the strongest line of defense. In an environment where fraud is increasingly automated and industrialized, vigilance is no longer just recommended — it is necessary for survival in the crypto economy.
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2026-01-19 · 16 days ago0 066SEC Launches Crypto 2.0 Task Force: Here’s What’s Changing
A New Era Dawns: Inside the SEC's Crypto 2.0 Revolution
The winds of change are sweeping through the halls of the U.S. Securities and Exchange Commission. Gone are the days of what many in the digital asset space viewed as regulatory ambiguity and adversarial enforcement. In its place, a new, collaborative spirit is taking root, heralded by the launch of a dedicated Crypto Task Force. This isn't just a policy tweak; it’s being called a fundamental reset — Crypto 2.0.
The Catalyst: A Political and Philosophical Sea Change
The shift is inextricably linked to a broader political transformation. With the arrival of the first U.S. president to actively champion cryptocurrency, the regulatory landscape entered uncharted territory. The most tangible symbol of this new direction was the immediate departure of former SEC Chair Gary Gensler, a figure synonymous with stringent crypto enforcement, and the installation of a new, more industry-amenable leadership.
Acting Chairman Mark Uyeda moved with striking speed, announcing the formation of the SEC Crypto Task Force on January 21, 2025. To lead this critical mission, he turned to a familiar and celebrated voice within crypto circles: Commissioner Hester Peirce, long known as “Crypto Mom” for her dissents against the agency’s aggressive legal actions. Her appointment sent a clear, unmistakable signal: the era of regulation by enforcement is giving way to an era of regulation by dialogue and clarity.
Meet the Architects of Clarity
The task force, under Peirce’s stewardship, has a mandate that reads like an industry wish list: to draw clear regulatory lines, create feasible registration pathways, design sensible disclosure processes, and apply enforcement resources judiciously. This mission is further empowered by the expected influence of Paul Atkins, the nominee for SEC Chairman, whose philosophy champions market-driven innovation balanced with essential consumer protection.
Together, they represent a dynamic new leadership team poised to bridge the chasm between cutting-edge technology and traditional finance. Peirce has already extended an open invitation, calling on builders, enthusiasts, and skeptics to engage in the process of shaping the final rules.
Action Speaks Louder: The Crypto 2.0 Agenda in Motion
This task force is not a passive study group. It hit the ground running, demonstrating its intent through decisive early action. In a move that reverberated across financial institutions, the controversial Staff Accounting Bulletin 121 (SAB 121) was swiftly repealed. This rule, which forced companies to list customer crypto holdings as liabilities on their balance sheets, had long been criticized for stifling institutional crypto custody. Commissioner Peirce’s simple farewell on X said it all: Bye, bye SAB 121! It’s not been fun.
But this was just the opening act. The real blueprint emerged in Commissioner Peirce’s “Journey Begins” statement, outlining a ambitious 10-point plan that will define the coming months. This plan moves beyond theory to tackle the most contentious, real-world issues head-on:
1- The Eternal Question: Security or Not? At the heart of the confusion is determining which digital assets are securities. The task force is undertaking a rigorous examination to fit various crypto assets into existing laws, aiming to finally calm the turbulent seas of legal uncertainty.
2- A Path for Token Offerings In a groundbreaking potential shift, the commission is considering temporary rules for initial coin offerings (ICOs). These rules could offer relief—both looking forward and backward—for token issuers who provide specific disclosures and cooperate on fraud matters, potentially allowing their tokens to be traded freely as non-securities.
3- Building Practical Guardrails The agenda is intensely practical. It promises to craft workable custody solutions for investment advisers, deliver clarity on the regulatory status of crypto lending and staking programs, and establish a straightforward process for evaluating the flood of crypto ETF applications.
4- Fostering Innovation Looking to the future, the task force will explore how blockchain technology can integrate with traditional securities clearing and transfer systems. It even proposes a cross-border sandbox to support global blockchain experimentation, acknowledging the inherently international nature of the technology.
Beyond the Headlines: What This Transformation Truly Means
The creation of this task force is more than a new committee; it is a profound cultural shift within a key financial regulator. The message to the crypto industry is transitioning from comply or face consequences to engage and help us build. This collaborative approach aims to spark responsible innovation within the United States, rather than forcing it to flee overseas.
While the task force emphasizes this is not a free-for-all, the commitment to providing clear frameworks and realistic registration pathways represents the clearest light at the end of the tunnel the U.S. crypto industry has seen in years. The journey to untangle the current regulatory mess will be long, but for the first time, the builders and innovators in crypto have a dedicated team inside the SEC ready to listen and construct a path forward. The era of Crypto 2.0 has officially begun.
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2026-01-16 · 19 days ago0 066
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