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The Ethereum Foundation is a paradox. Despite its commitment to decentralization, it operates as a centralized entity, with a director, a treasury, paid developers, and an inner circle. These structures, while necessary for coordination, create tensions with Ethereum's decentralized ethos.
The Foundation Today
It is not widely known, but the current foundation was constructed in a less than ideal way. The previous director, Ming, was ousted in a coordinated effort by a group of people who have never been publicly identified or held accountable for it. I spoke with Ming days before her removal and she assured me she had no intent of leaving. I was later given information about who was responsible for her removal, but was not given much insight as to why. I have heard that Ming was a bit of a micromanager, and that she had an intensity that rubbed some people the wrong way. I’m sure there’s truth to that, but these stories are often window dressing for deeper truths.
I can infer some good-faith reasons based on the way the org has been run over the past seven years. A very important role of the organization is to protect against internal power struggles as well as external capture. These are noble goals and ones they seem to have accomplished effectively.
Another major focus seems to have been minimizing the public footprint of the organization and constructing it in such a way that it would not draw the ire of governments who might hold them accountable if the political winds shifted against them. But as political winds shift, and the marketplace provides alternatives, the organization itself must adapt, both in form and function. Ethereum was in its birth a visionary project, not simply technological in nature. It pointed towards a possibility of previously unimaginable futures through the empowerment of the individual to do what had previously taken billions of dollars, thousands of people, or millions of man hours to accomplish.
The Ethereum Foundation, in its current incarnation, designed to minimize threats both internal and external, has lost that vision.
Lead with Vision
Ethereum’s next phase demands more than just technical research and coordinating conferences. It requires visionary leadership — someone who understands not just the technology but its broader social, philosophical, and political implications. This leader must inspire a new generation of builders, connect technology with human needs, and navigate the complexities of the political landscape without compromising Ethereum’s ethos. Read more: Sam Kessler - Ethereum's Vitalik Buterin Goes On Offense Amid Major Leadership Shake-up
The Ethereum whitepaper was not just a technical document; it was a beacon that allowed like-minded people to come together under a shared vision. In the face of chaos, uncertainty, and frequent conflicts, it served as a guiding light. What ensured our collective success was not the absence of challenges but the clarity of the mountaintop we were striving toward. This common vision allowed us to stay aligned even when disagreements and setbacks arose.
It was an idea whose time had come—a blueprint that transcended the individuals behind it and inspired a community to persevere, innovate, and ultimately bring that vision to life. Without it, the project could have easily unraveled under the weight of its ambition.
Be Transparent, Focus More on the Community
Transparency is equally critical. Over the past few years, the Foundation has retreated into the shadows, leaving the community feeling disconnected. But ethereum would have been nothing without its community, and it will be nothing if it loses it. A community must be managed, curated, and cared for. It requires the onboarding of new people, with new energy, and new ideas, bound by a common vision. This also includes the teams who build on ethereum.
Seize the Moment
From a legal perspective, Ethereum must embrace the opportunity to engage with lawmakers. The current American political climate is uniquely favorable, and inaction now risks losing momentum. America has elected a President who not only owns ether, but has himself launched a lending protocol on top of it. As of now, we are inhabiting a political landscape which was unthinkable even a year ago, when Democrats surprised so many of us by openly declaring war on crypto, and the future seemed uncertain. There has never been a better time than now to ensure that the promise of crypto is realized.
While maintaining political neutrality, the Foundation can create or promote frameworks that encourage compliance and innovation. Without these frameworks, the crypto space has been plagued by speculative ventures—ICOs, DAOs, NFTs—that skirt regulations rather than working within them to build sustainable use cases.
Lead by Example
The Ethereum Foundation should also consider utilizing its own technology to coordinate its operations and demonstrate the transformative potential of decentralized systems. By adopting Ethereum-based tools and protocols, the Foundation could potentially manage governance, treasury disbursements, decision-making processes, and community engagement.
This approach would not only demonstrate Ethereum’s capabilities but also reinforce trust within the community by embodying the principles of decentralization and transparency that the project champions. Additionally, leveraging Ethereum’s ecosystem for coordination could serve as a real-world case study, inspiring developers and organizations to explore similar solutions. By integrating its technology into its own operations, the Foundation would highlight the real-world utility of the platform while setting a precedent for how decentralized systems can effectively manage complex organizations.
Be Accountable, Build the Future
Finally, financial accountability must become a priority.
With $100 million spent annually, the Foundation should deliver measurable outcomes. Despite significant investment in technical research, user experience in crypto remains stagnant. Improving UX, UI, key management, and other security and usability problems isn’t insurmountable but has been severely neglected. This oversight reflects a blind spot which must be addressed before wider adoption is possible.
Ethereum began as more than just a technological project—it was a visionary movement for empowering individuals to achieve what once required massive resources. That vision is at risk of being lost. To reignite it, the Foundation must embrace transparency, invest in leadership, engage the community, and step into the legal and political spotlight.
Ethereum’s story is one of triumph over chaos, and a testament to the power of collective vision. To ensure its future, the Ethereum Foundation must transform itself from a reactive institution into a proactive visionary force. For ethereum. For the community. For the greater good. For the future.
With Love,
Texture
President Trump has followed through on one of his key campaign promises — at least for those in the crypto community — pardoning the sentence of Silk Road founder Ross Ulbricht.
"I just called the mother of Ross William Ulbricht to let her know that in honor of her and the Libertarian Movement, which supported me so strongly, it was my pleasure to have just signed a full and unconditional pardon of her son, Ross," Trump wrote on a Truth Social post.
The move assures an imminent release for Ulbricht, who in 2015 was convicted of engaging in a continuing criminal enterprise and distributing narcotics, along with a host of related crimes, via his operation of the darknet Silk Road marketplace. He was sentenced to life in prison without the possibility of parole.
Ulbricht's case has become a cause célèbre for many in the crypto community who note he did not himself sell drugs or other illegal items but instead operated a platform where others were allowed to transact.
Then-candidate Trump promised a "Day One" commutation of Ulbricht's sentence last May while addressing the Libertarian Party convention
The price of bitcoin (BTC) rose in the minutes following the news, possibly as the pardon, along with a flurry of executive orders over the past hours, signals the president's intention to follow through on campaign promises.
Another one of those promises was a far friendlier crypto regulatory stance, including the possibility of the creation of a strategic bitcoin reserve.
Cryptocurrencies in the emerging artificial intelligence (AI) agents sector soared on Tuesday while bitcoin (BTC) stalled below its Monday record highs as traders await for the first crypto-specific actions from the Donald Trump administration.
AI16Z and AI Rig Complex's ARC rallied over 30% through the day, while GRIFFAIN, ZEREBRO also booked double-digit advances. Part of the rally might have to do with Tuesday afternoon news about President Trump preparing to announce up to $500 billion in private sector AI infrastructure investment with firms such as OpenAI, Oracle and Softbank involved. Trump also rescinded on Monday Joe Biden's 2023 executive order on AI risks on consumers, rolling back efforts to regulate the fast-growing sector.
The crypto AI agent sector garnered significant mindshare among traders, growing into a multibillion dollar asset class since October when the first AI tokens emerged. These agents, represented by a crypto token, are autonomous programs developed to perform specific tasks such as posting on social media, provide market insights, create memecoins or make transactions on-chain to execute trades.
"Conviction got tested on ai/crypto, but after Altman gave the blessing, Trump just did the same with the AI infra build-out headline," Will Clemente, founder of Reflexivity Research, said in an X post. "As long as BTC doesn't fall back below 100 [thousand dollars], think this sector is where the hot ball of money goes."
Market awaits for Trump catalysts
The broader crypto market is in a wait-and-see mode, with most large-cap tokens in the CoinDesk 20 Index posting modest gains. Bitcoin was up 3% over the past 24 hours at $106,000, slightly below its Monday top, boosted by MicroStrategy (MSTR) adding another 11,000 BTC for $1.1 billion to its treasury. The largest corporate holder of the asset now holds over $49 billion worth of BTC.
Ethereum's ether (ETH) still wobbles near its 4-year weakest price against BTC as community backlash mounts on the Ethereum Foundation, the development organization behind the blockchain, for losing market share in value and blockchain activity to competitors.
"In light of a strong BTC rally into an absurdly frothy weekend of memecoin madness and huge expectations with regard to Trump’s crypto policies, we favor a soft derisking after a very strong two-month period," K33 Research analysts said in a Tuesday report. "We expect crypto specific executive orders to drive volatility, with the most plausible early executive orders being a SAB 121 repeal and a pardoning of Ross Ulbricht,"
Bitcoin's weekend surge ran into a resistance at the $110,000 level, but the dips to $100,000 were bought up quickly, noted Joel Kruger, market strategist at LMAX Group.
"There was speculation of selling on the failure of President Trump to make any mention of crypto during the inauguration," Kruger said in an emailed note. "Such concerns appear to be vastly overstated, especially with so much commitment coming from President Trump towards the space in recent months, including the latest launch of his memecoins, activity at World Liberty Financial, and ongoing talk of a strategic bitcoin reserve."
"Whatever the case, the outlook remains exceptionally bright, with Monday setbacks well supported into the dip," he added.
Wingbits, a decentralized physical infrastructure (DePIN) startup focused on the aviation industry, has raised $5.6 million in funding.
DePIN, the model of using hardware secured by a decentralized network, could be seen as a blockchain equivalent of the cloud computing services offered by Big Tech giants like Amazon and Google.
The investment round, which takes Wingbits' total backing to $9.2 million, was led by Borderless Capital and Bullish Capital. The latter's parent company, Bullish Group, is also the owner of CoinDesk.
Wingbits' aim is to offer rewards-based flight tracking using cryptographically-secured Automatic Dependent Surveillance–Broadcast (ADS-B) receivers.
"Flight tracking has long relied on a global network of volunteers who install home antennas to collect flight data," Wingbits said in an emailed announcement on Tuesday.
"Companies sell this data to airports, airlines and other organisations to support their global operations, generating hundreds of millions in revenue, while volunteers themselves receive nothing in return."
Read More: Helium's Frank Mong: Building Out DePIN's First Big Success Story
It's been a rough year for the Ethereum Foundation, the grant-giving nonprofit that helps support Ethereum, the best-known blockchain behind Bitcoin. As Ethereum loses market cap and mindshare to competitors, the foundation has been beset by scandal. Vitalik Buterin, Ethereum's co-founder and chief figurehead, has laid out a new plan to right the ship.
"We are indeed currently in the process of large changes to EF leadership structure, which has been ongoing for close to a year," Buterin said in an X post. "Some of this has already been executed on and made public, and some is still in progress."
In his X post outlining the changes, Buterin listed a series of goals, including improving the "technical expertise within EF leadership" and improving "two-way communications and ties between EF leadership and the ecosystem actors" that it supports.
According to Buterin, the changes won't be designed to centralize, corporatize or politicize the foundation. The organization won't suddenly "[s]tart aggressively lobbying regulators and powerful political figures," he said, nor would it "[b]ecome an arena for vested interests [...] or even more of a 'main character' within Ethereum."
The shake-up comes as Ethereum's reputation among builders has soured in recent months. Members of the broader crypto community are flocking to fast and cheap competitors like Solana, which has been quicker to accommodate the recent memecoin fervor.
Some say Ethereum has lagged because it lacks an organizing vision — something the foundation, while not "in charge" of Ethereum, might have helped remedy.
Over the past 12 months, the foundation has been mired in controversy. It has weathered accusations of being ineffectual, yet also too powerful. Conflict-of-interest scandals haven't helped, either: Payments from private companies to foundation employees recently sparked wide backlash and forced the organization to update its policies.
Some have blamed Aya Miyaguchi, the foundation's executive director since 2018, for the foundation's woes. Amid a pressure campaign for Miyaguchi's removal, Buterin has stepped in as the Ethereum Foundation's sole decision-maker. "The person deciding the new EF leadership team is me," he stated on X. "One of the goals of the ongoing reform is to give the EF a 'proper board', but until that happens it's me."
Miyaguchi, however, has not been ousted from the foundation. Buterin lambasted some of her critics on X, accusing them of using her as a "scapegoat." In multiple tweets, Buterin highlighted certain particularly inflammatory social media comments — including death threats and explicit calls for more bullying of Miyaguchi — and called them "pure evil."
"If you 'keep the pressure on', then you are creating an environment that is actively toxic to top talent," Buterin wrote. "Some of Ethereum's best devs have been messaging me recently, expressing their disgust with the social media environment that people like you are creating. YOU ARE MAKING MY JOB HARDER."
Gary Gensler only officially stepped down as chairman of the U.S. Securities and Exchange Commission (SEC) yesterday, but the federal agency’s approach to crypto is already getting an overhaul.
Acting Chair Mark Uyeda announced Tuesday that the agency has created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.” The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Both the tone and content of the SEC’s Tuesday announcement indicate a radical shift in the agency’s approach to crypto regulation under the new Trump administration.
“To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way,” the statement said. “Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud. The SEC can do better.”
The SEC’s new crypto task force will also coordinate with the Commodity Futures Trading Commission (CFTC) – which, under the leadership of former Chair Gensler and former CFTC Chairman Rostin Behnam, has been locked in competition with the SEC over which agency should be the primary regulator of the crypto industry.
“This undertaking will take time, patience, and much hard work. It will succeed only if the Task Force has input from a wide range of investors, industry participants, academics, and other interested parties. We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation,” said Commissioner Peirce in a statement.
The SEC previously published staff guidance in 2019, though it has not been referenced or discussed much in the past five years.
The European Securities and Markets Authority has urged national authorities in the European Union (EU) to ensure that exchanges are no longer making non-compliant stablecoins available for trading within the next two months.
The regulator has requested that the 27 member states in the EU ensure crypto asset service providers (CASPs) are compliant when it comes to its stablecoin rules "no later than the end of Q1 2025," ESMA said in a statement on Friday.
"In practice, this means that CASPs operating a trading platform for crypto-assets are expected to stop making all crypto-assets that would qualify as ARTs and EMTs but for which the issuer is not authorised in the EU (“non-MiCA compliant ARTs and EMTs” ) available for trading," ESMA said. ARTs are asset referenced tokens and EMTs are electronic money tokens.
The move would affect stablecoins which are not compliant with EU laws like Tether's USDT if it were offered to EU clients. Large issuers have already taken steps to try and comply with MiCA. Tether announced in November it was discontinuing its euro stablecoin, EURT. The company has not managed to obtain an e-money license to operate in the EU. Circle obtained an e-money license in July.
Exchanges like Gemini and Coinbase, who are registered in the EU, would have to delist un-authorized stablecoins, according to ESMA's statement. Coinbase previously announced it would delist any such tokens by last December.
"Given our commitment to compliance, we restricted the provision of services to Retail, Exchange, and Prime Vault customers of Coinbase Europe Limited, Coinbase Germany GmbH, and Coinbase Custody International Limited in connection with stablecoins that do not meet the MiCA requirements beginning on December 13, 2024,“ a spokesperson from Coinbase told CoinDesk on Tuesday.
The exchange "will assess re-enabling services for stablecoins that achieve MiCA compliance on a later date," the spokesperson said.
CoinDesk reached out to Gemini for a comment.
Read more: EU's Restrictive Stablecoin Rules Take Effect Soon and Issuers Are Running Out of Time
Crypto issuers surely seem to think anything is possible now that Donald Trump is in office.
Exchange-traded fund issuer Rex Shares and crypto asset manager Osprey Funds on Tuesday filed for numerous crypto-focused exchange-traded funds (ETF), including a Trump ETF, according to a filing with the Securities and Exchange Commission (SEC) on Tuesday.
The ETF would track the price of TRUMP, the memecoin launched by the President himself on Friday, a few days before his inauguration. The coin amassed nearly $17 billion in trading volume over the past 24 hours while dropping nearly 25% over the same period.
First Lady Melania Trump also launched her own token called MELANIA, which currently trades at roughly $4. Both tokens are memecoins and therefore have no intrinsic value. Traders simply bet on the tokens' price rising or falling.
An ETF tracking the price of it would therefore offer no value to buyers.
“This to me seems like issuers pushing the envelope with a new SEC administration while at the same time trying a novel structure for providing exposure to digital assets in an ETF wrapper,” said James Seyffart, an ETF analyst at Bloomberg Intelligence.
The issuers also filed documents to launch an ETF tracking the price of Dogecoin (DOGE), another memecoin. In one of his first executive orders, Trump established a "Department of Government Efficiency" by renaming the U.S. Digital Service. While the entity is supposedly tasked with streamlining certain government agencies and departments, its website at press time just featured a picture of the dogecoin mascot.
The SEC under former Chair Gary Gensler was careful when approving ETFs tracking cryptocurrencies. It took issuers years to receive the green light to launch a spot bitcoin (BTC) ETF as well as a spot ethereum (ETH) ETF. It's unclear how quickly these latest applications, which also include ETFs tracking BONK (another memecoin), XRP (associated with the company Ripple) and SOL (a layer 1 blockchain), might be approved.
Bloomberg Intelligence Senior ETF Analyst Eric Balchunas called the Trump ETF application “surreal.”
Smart Valor, a crypto exchange and AI-led investment company, is exploring a possible sale of all or part of its business.
The Zug, Switzerland-based company is conducting a strategic review after receiving a number of inquiries from large global exchanges, crypto platforms and traditional finance (TradFi) institutions including banks and trading platforms, CEO and co-founder Olga Feldmeier told CoinDesk in an interview.
The European Union's Markets in Crypto Asset (MiCA) rules came into force on Dec. 30, and Smart Valor could be a target for companies that don't have regulatory approval in Europe. While neither Switzerland nor Lichtenstein, where Smart Valor's retail crypto exchange is regulated, are members of the bloc, they belong to the European Economic Area (EEA) and can adopt MiCA. Liechtenstein's law to do so comes into force Feb. 1.
“Our ultimate goal is to find the best strategy for growing stakeholder value while leveraging the resurgence of the crypto market and the benefits of enhanced regulation," Feldmeier said in an email.
The firm has mandated investment banking firm Imperii Partners to explore potential opportunities, she said. The Swiss company could be an attractive acquisition for large exchanges, borrow and lend platforms, wealth management firms and retail brokerages.
Advisers are running an auction with bids due by Jan. 24, two people familiar with the matter said. Several companies are expected to bid for the regulated exchange business, with a few more completing due diligence that could also join the auction, said the people, who spoke of condition of anonymity as the matter is private.
At least one publicly listed company is also expected to join the bidding, one person said.
Smart Valor was founded in 2017 and services both retail clients and banks. It has three units: The licensed retail crypto exchange, a business that sells exchange technology to banks and an artificial intelligence-driven investment platform called Elann.AI.
A data room was set up before Christmas for would-be suitors to conduct due diligence, according to the people familiar.
The company conducted an oversubscribed initial public offering in 2022 and its stock was listed on the Nasdaq First North Growth Market in Stockholm, becoming one of the first publicly listed crypto companies in the region. The shares were delisted in May 2024.
Circle, the crypto company behind the $48 billion USDC stablecoin, said Tuesday it has acquired tokenized real-world asset (RWA) issuer Hashnote.
The companies closed the deal this morning, a Circle spokesperson told CoinDesk and was announced in Davos, Switzerland during the annual World Economic Forum meeting. The companies didn't reveal pricing details.
Circle aims to integrate USYC with USDC, Circle’s flagship stablecoin, enabling convertibility between cash and yield-bearing collateral on blockchains, the press release said. Hashnote issues the $1.3 billion USYC token, which saw massive growth last year to become the largest tokenized U.S. Treasury product on the market, according to rwa.xyz data.
Circle’s CEO, Jeremy Allaire, said this marks a significant step toward aligning traditional financial structures with the speed and transparency of blockchain-based markets.
"This is a huge unlock for a market that is increasingly being driven by institutional adoption, and where participants increasingly expect market structures that are common in TradFi,” Allaire said.
Circle shared plans a year ago to go public, and the crypto industry widely expects the public share offering to happen later this year.
Tokenization and stablecoins
The acquisition underscores the synergies between two of the hottest trends in crypto: stablecoins and tokenization. Circle's main stablecoin competitor Tether launched a tokenization platform last year.
Stablecoins, a $200 billion asset class of cryptocurrencies with prices pegged predominantly to the U.S. dollar, are a crucial piece of infrastructure in tokenization efforts. They are used as a bridge between fiat money and digital assets and widely used for settling transactions on blockchain rails.
Tokenized RWAs like treasury bills and money market funds are quickly gaining traction among sophisticated investors and asset managers as collateral for trading. Unlike in traditional markets, blockchain-based assets promise transparency, accessibility and around-the-clock settlements. Treasury-backed tokens also allow investors to earn a yield while posted as collateral or margin for trades, enhancing returns compared to trades collateralized with fiat money or stablecoins.
For example, Singapore-based hedge fund QCP Capital earlier in January executed a bitcoin (BTC) basis trade using BUIDL, the money market fund token issued by BlackRock and Securitize.
USDC on Canton
Circle also announced that it struck a deal with Cumberland, a DRW-affiliated crypto trading firm and market maker, to provide liquidity and facilitate settlements for USDC and USYC. The partnership aims to expand USYC as a form of collateral on exchanges and custodial platforms.
Additionally, Circle laid out plans to deploy USDC on the Canton Network, a blockchain used by traditional financial institutions for real-world asset transactions. The integration with Canton would allow for constant liquidity between cash and collateral and allows seamless transfers between decentralized and traditional markets.