State of Crypto: Trump’s Second First Week

Donald Trump is officially the 47th President of the United States, and the U.S. government is going in some different directions from the last administration. You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions. The narrative U.S. President Donald Trump was sworn into office on Monday and quickly signed a flurry of executive orders. While it took him a few days to get to crypto-specific items, we've seen a number of actions from his administration already — not to mention the broader Republican Party. Why it matters These agencies and Congressional bodies' initial actions set the tone for what we can expect as the new Congress and administration really get going this year. Breaking it down There'll be time to go more into detail on some of these later, but for now: White House/Administration Donald Trump signed a highly-anticipated executive order on crypto. Among its provisions are items that: Create a working group composed of Cabinet officials, White House advisers and others tasked with identifying regulations that address crypto and recommending whether they be changed. AI and crypto czar David Sacks will chair this working group. Task the working group with evaluating a digital asset stockpile. Ban any central bank digital currency, with a somewhat broad definition of a CBDC. Revoke former President Joe Biden's executive order on crypto, which mostly just directed his Departments to craft reports about various aspects of crypto and consumer protections. Trump also announced that Sacks would co-chair his President's Council of Advisors on Science and Technology. The U.S. Securities and Exchange Commission, now operating under Acting Chair Mark Uyeda, formed a crypto-focused task force headed up by Commissioner Hester Peirce. Trump previously named Paul Atkins as his pick to serve as the agency's chair, once he's confirmed by the Senate. One of the SEC's first moves was to rescind Staff Accounting Bulletin 121, which directed publicly traded companies holding crypto for their clients to mark those holdings on their own balance sheets. SAB 121 was strongly opposed by the crypto industry, which argued that it made it more difficult for banks to provide certain crypto services. The Commodity Futures Trading Commission is now operating under Acting Chair Caroline Pham. Pham named CFTC Senior Policy Advisor Harry Jung as the regulator's lead for crypto industry engagement. Trump has not yet named a nominee to take over as permanent chair. Trump pardoned Silk Road creator Ross Ulbricht, saying on Truth Social that he did so "in honor of [Ulbricht's mother] and the Libertarian Movement, which supported me so strongly." Ulbricht was convicted on criminal enterprise, narcotics distribution and various conspiracy charges and sentenced to double life in prison and 40 years with no parole. Trump announced he would rename the existing U.S. Digital Service as his Department of Government Efficiency, the entity headed up by Elon Musk (Vivek Ramaswamy, who was previously a co-head, has now left to run for Ohio governor). Initially, the entity's website just had the Dogecoin logo on it. Companies are also filing for dogecoin exchange-traded funds now. Trump spoke with El Salvador President Nayib Bukele shortly after signing his crypto executive order, though an official readout of the call did not mention crypto in any form. Senate The Senate Banking Committee has confirmed the creation of a subcommittee focused on digital assets, led by Sen. Cynthia Lummis (R-Wyo.). The subcommittee's other members include freshmen Bernie Moreno (R-Ohio), who unseated former Sen. Sherrod Brown (D-Ohio) with $40 million worth of support from crypto political action committee Fairshake, Ruben Gallego (D-Ariz.), who received $10 million worth of support and Dave McCormick (R-Pa.), among others. The Banking Committee is also holding a hearing on Feb. 5, though the specific time and witness list have yet to be announced. Sen. Ted Cruz (R-Texas) introduced a joint Congressional Review Act resolution alongside House Rep. Mike Carey (R-Ohio) to overturn the IRS' recent crypto broker rule. The rule, finalized late last month, defines the term "broker" for IRS tax reporting purposes, but has already drawn a lawsuit from the Blockchain Association. The industry lobbyists argue the final rule "puts unlawful compliance burdens on software developers." Sen. Elizabeth Warren (D-Mass.), the new lead Democrat on the Senate Banking Committee, is also asking the U.S. Office of Government Ethics to look into the TRUMP token. She sent an open letter co-signed by Massachusetts Representative Jake Auchincloss. House of Representatives The House Oversight Committee sent out a letter announcing it would investigate whether banks de-banked crypto companies at the government's behest. The House Financial Services Committee has already scheduled two hearings on crypto next month. The first, on Feb. 6, 2025, will focus on the aforementioned debanking. The second, set for Feb. 11, is titled "A Golden Age of Digital Assets: Charting a Path Forward." The leading Democrat on the House Oversight Committee, Rep. Gerry Connelly, asked the panel's leading Republican, Rep. James Comer, to probe Trump's issuance of the TRUMP coin and his ties to World Liberty Financial. Tuesday 16:00 UTC (9:00 a.m. MT) The 10th Circuit Court of Appeals heard arguments in Custodia Bank's ongoing case against the Federal Reserve. (Sam Curry) Some security researchers discovered they could track and control certain Subaru cars (i.e. ones connected to the internet). The vulnerability has been patched, per the writer of this. (Bloomberg) Walgreens spent $200 million replacing refrigerator doors with screens whose vendor is now in a legal fight with the pharmacy/convenience store chain. If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social. You can also join the group conversation on Telegram. See ya’ll next week!

Donald Trump is officially the 47th President of the United States, and the U.S. government is going in some different directions from the last administration.

You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

The narrative

U.S. President Donald Trump was sworn into office on Monday and quickly signed a flurry of executive orders. While it took him a few days to get to crypto-specific items, we’ve seen a number of actions from his administration already — not to mention the broader Republican Party.

Why it matters

These agencies and Congressional bodies’ initial actions set the tone for what we can expect as the new Congress and administration really get going this year.

Breaking it down

There’ll be time to go more into detail on some of these later, but for now:

White House/Administration

Donald Trump signed a highly-anticipated executive order on crypto. Among its provisions are items that:

Create a working group composed of Cabinet officials, White House advisers and others tasked with identifying regulations that address crypto and recommending whether they be changed. AI and crypto czar David Sacks will chair this working group.
Task the working group with evaluating a digital asset stockpile.
Ban any central bank digital currency, with a somewhat broad definition of a CBDC.
Revoke former President Joe Biden’s executive order on crypto, which mostly just directed his Departments to craft reports about various aspects of crypto and consumer protections.

Trump also announced that Sacks would co-chair his President’s Council of Advisors on Science and Technology.

The U.S. Securities and Exchange Commission, now operating under Acting Chair Mark Uyeda, formed a crypto-focused task force headed up by Commissioner Hester Peirce. Trump previously named Paul Atkins as his pick to serve as the agency’s chair, once he’s confirmed by the Senate.

One of the SEC’s first moves was to rescind Staff Accounting Bulletin 121, which directed publicly traded companies holding crypto for their clients to mark those holdings on their own balance sheets. SAB 121 was strongly opposed by the crypto industry, which argued that it made it more difficult for banks to provide certain crypto services.

The Commodity Futures Trading Commission is now operating under Acting Chair Caroline Pham. Pham named CFTC Senior Policy Advisor Harry Jung as the regulator’s lead for crypto industry engagement. Trump has not yet named a nominee to take over as permanent chair.

Trump pardoned Silk Road creator Ross Ulbricht, saying on Truth Social that he did so “in honor of [Ulbricht’s mother] and the Libertarian Movement, which supported me so strongly.” Ulbricht was convicted on criminal enterprise, narcotics distribution and various conspiracy charges and sentenced to double life in prison and 40 years with no parole.

Trump announced he would rename the existing U.S. Digital Service as his Department of Government Efficiency, the entity headed up by Elon Musk (Vivek Ramaswamy, who was previously a co-head, has now left to run for Ohio governor). Initially, the entity’s website just had the Dogecoin logo on it. Companies are also filing for dogecoin exchange-traded funds now.

Trump spoke with El Salvador President Nayib Bukele shortly after signing his crypto executive order, though an official readout of the call did not mention crypto in any form.

Senate

The Senate Banking Committee has confirmed the creation of a subcommittee focused on digital assets, led by Sen. Cynthia Lummis (R-Wyo.). The subcommittee’s other members include freshmen Bernie Moreno (R-Ohio), who unseated former Sen. Sherrod Brown (D-Ohio) with $40 million worth of support from crypto political action committee Fairshake, Ruben Gallego (D-Ariz.), who received $10 million worth of support and Dave McCormick (R-Pa.), among others.

The Banking Committee is also holding a hearing on Feb. 5, though the specific time and witness list have yet to be announced.

Sen. Ted Cruz (R-Texas) introduced a joint Congressional Review Act resolution alongside House Rep. Mike Carey (R-Ohio) to overturn the IRS’ recent crypto broker rule. The rule, finalized late last month, defines the term “broker” for IRS tax reporting purposes, but has already drawn a lawsuit from the Blockchain Association. The industry lobbyists argue the final rule “puts unlawful compliance burdens on software developers.”

Sen. Elizabeth Warren (D-Mass.), the new lead Democrat on the Senate Banking Committee, is also asking the U.S. Office of Government Ethics to look into the TRUMP token. She sent an open letter co-signed by Massachusetts Representative Jake Auchincloss.

House of Representatives

The House Oversight Committee sent out a letter announcing it would investigate whether banks de-banked crypto companies at the government’s behest.

The House Financial Services Committee has already scheduled two hearings on crypto next month. The first, on Feb. 6, 2025, will focus on the aforementioned debanking. The second, set for Feb. 11, is titled “A Golden Age of Digital Assets: Charting a Path Forward.”

The leading Democrat on the House Oversight Committee, Rep. Gerry Connelly, asked the panel’s leading Republican, Rep. James Comer, to probe Trump’s issuance of the TRUMP coin and his ties to World Liberty Financial.

Tuesday

16:00 UTC (9:00 a.m. MT) The 10th Circuit Court of Appeals heard arguments in Custodia Bank’s ongoing case against the Federal Reserve.

(Sam Curry) Some security researchers discovered they could track and control certain Subaru cars (i.e. ones connected to the internet). The vulnerability has been patched, per the writer of this.
(Bloomberg) Walgreens spent $200 million replacing refrigerator doors with screens whose vendor is now in a legal fight with the pharmacy/convenience store chain.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See ya’ll next week!

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The Download: how people fall for pig butchering schemes, and saving glaciers

This is today’s edition of The Download, our weekday newsletter that provides a daily dose of what’s going on in the world of technology. Inside a romance scam compound—and how people get tricked into being there Gavesh’s journey had started, seemingly innocently, with a job ad on Facebook promising work he desperately needed.Instead, he found himself trafficked into a business commonly known as “pig butchering”—a form of fraud in which scammers form romantic or other close relationships with targets online and extract money from them. The Chinese crime syndicates behind the scams have netted billions of dollars, and they have used violence and coercion to force their workers, many of them people trafficked like Gavesh, to carry out the frauds from large compounds, several of which operate openly in the quasi-lawless borderlands of Myanmar. We spoke to Gavesh and five other workers from inside the scam industry, as well as anti-trafficking experts and technology specialists. Their testimony reveals how global companies, including American social media and dating apps and international cryptocurrency and messaging platforms, have given the fraud business the means to become industrialized.
By the same token, it is Big Tech that may hold the key to breaking up the scam syndicates—if only these companies can be persuaded or compelled to act. Read the full story. —Peter Guest & Emily Fishbein
How to save a glacier There’s a lot we don’t understand about how glaciers move and how soon some of the most significant ones could collapse into the sea. That could be a problem, since melting glaciers could lead to multiple feet of sea-level rise this century, potentially displacing millions of people who live and work along the coasts. A new group is aiming not only to further our understanding of glaciers but also to look into options to save them if things move toward a worst-case scenario, as my colleague James Temple outlined in his latest story. One idea: refreezing glaciers in place. The whole thing can sound like science fiction. But once you consider how huge the stakes are, I think it gets easier to understand why some scientists say we should at least be exploring these radical interventions. Read the full story. —Casey Crownhart This article is from The Spark, MIT Technology Review’s weekly climate newsletter. To receive it in your inbox every Wednesday, sign up here.

MIT Technology Review Narrated: How tracking animal movement may save the planet Researchers have long dreamed of creating an Internet of Animals. And they’re getting closer to monitoring 100,000 creatures—and revealing hidden facets of our shared world. This is our latest story to be turned into a MIT Technology Review Narrated podcast, which we’re publishing each week on Spotify and Apple Podcasts. Just navigate to MIT Technology Review Narrated on either platform, and follow us to get all our new content as it’s released. The must-reads I’ve combed the internet to find you today’s most fun/important/scary/fascinating stories about technology. 1 Donald Trump has announced 25% tariffs on imported cars and partsThe measures are likely to make new cars significantly more expensive for Americans. (NYT $)+ Moving car manufacturing operations to the US won’t be easy. (WP $)+ It’s not just big businesses that will suffer, either. (The Atlantic $)+ How Trump’s tariffs could drive up the cost of batteries, EVs, and more. (MIT Technology Review) 2 China is developing an AI system to increase its online censorship A leaked dataset demonstrates how LLMs could rapidly filter undesirable material. (TechCrunch)
3 Trump may reduce tariffs on China to encourage a TikTok dealThe Chinese-owned company has until April 5 to find a new US owner. (Insider $)+ The national security concerns surrounding it haven’t gone away, though. (NYT $) 4 OpenAI’s new image generator can ape Studio Ghibli’s distinctive styleWhich raises the question of whether the model was trained on Ghibli’s images. (TechCrunch)+ The tool’s popularity means its rollout to non-paying users has been delayed. (The Verge)+ The AI lab waging a guerrilla war over exploitative AI. (MIT Technology Review)
5 DOGE planned to dismantle USAID from the beginningNew court filings reveal the department’s ambitions to infiltrate the system. (Wired $)+ Can AI help DOGE slash government budgets? It’s complex. (MIT Technology Review) 6 Wildfires are getting worse in the southwest of the USWhile federal fire spending is concentrated mainly in the west, the risk is rising in South Carolina and Texas too. (WP $)+ North and South Carolina were recovering from Hurricane Helene when the fires struck. (The Guardian)+ How AI can help spot wildfires. (MIT Technology Review) 7 A quantum computer has generated—and verified—truly random numbersWhich is good news for cryptographers. (Bloomberg $)+ Cybersecurity analysts are increasingly worried about the so-called Q-Day. (Wired $)+ Amazon’s first quantum computing chip makes its debut. (MIT Technology Review) 8 What’s next for weight-loss drugs 💉Competition is heating up, but will patients be the ones to benefit? (New Scientist $)+ Drugs like Ozempic now make up 5% of prescriptions in the US. (MIT Technology Review) 9 At least we’ve still got memesPoking fun at the Trump administration’s decisions is a form of online resistance. (New Yorker $) 10 Can you truly be friends with a chatbot?People are starting to find out. (Vox)+ The AI relationship revolution is already here. (MIT Technology Review)
Quote of the day “I can’t imagine any professional I know committing this egregious a lapse in judgement.” —A government technology leader tells Fast Company why top Trump officials’ decision to use unclassified messaging app Signal to discuss war plans is so surprising.
The big story Why one developer won’t quit fighting to connect the US’s grids September 2024 Michael Skelly hasn’t learned to take no for an answer. For much of the last 15 years, the energy entrepreneur has worked to develop long-haul transmission lines to carry wind power across the Great Plains, Midwest, and Southwest. But so far, he has little to show for the effort. Skelly has long argued that building such lines and linking together the nation’s grids would accelerate the shift from coal- and natural-gas-fueled power plants to the renewables needed to cut the pollution driving climate change. But his previous business shut down in 2019, after halting two of its projects and selling off interests in three more. Skelly contends he was early, not wrong, and that the market and policymakers are increasingly coming around to his perspective. After all, the US Department of Energy just blessed his latest company’s proposed line with hundreds of millions in grants. Read the full story. —James Temple We can still have nice things A place for comfort, fun and distraction to brighten up your day. (Got any ideas? Drop me a line or skeet ’em at me.) + Severance’s Adam Scott sure has interesting taste in music. + While we’re not 100% sure if Millie is definitely the world’s oldest cat, one thing we know for sure is that she lives a life of luxury.+ Hiking trails are covered in beautiful wildflowers right now; just make sure you tread carefully.+ This is a really charming look at how girls live in America right now.

Scaling Hashrate Simplified: The Mining Model That Delivered for BitMine

IntroductionBitMine Immersion Technologies (OTCQX: BMNR), a growing player in the Bitcoin mining industry, faced a very common industry opportunity & challenge: how to bring hashrate online in the best way possible. The complexities of sourcing energy, power infrastructure, site development, running operations, ASIC procurement, software optimization, and hashrate management require a holistic approach and entail many operational risks.An experienced capital allocator, BitMine was familiar with these risks owing to deep experience in similar markets prior to founding the company. However, they were open to support. Enter Soluna and Luxor, two industry leaders partnering to provide a complementary solution. Soluna provided power, infrastructure, and operational expertise. Luxor delivered financing, hedging, procurement, software optimization via LuxOS, and monetization of hashrate via Luxor Pool. Together, they formed a game-changing partnership that addressed BitMine’s needs, setting a new standard for turnkey mining solutions.This case study explores how the collaboration between BitMine, Soluna, and Luxor streamlined deployment, mitigated risk, and unlocked new growth opportunities.BitMine’s Opportunity: Bringing Hashrate Online With Low Operational RiskBitMine had a clear vision: to scale its mining operations efficiently while minimizing risk. However, they knew the pitfalls associated with deployments. This creates vulnerabilities, especially when deals are structured poorly, for example:Power Pricing Pitfalls: Many miners enter long-term hosting agreements with fluctuating rates, or worse, hidden pass-through costs that explode when energy prices spike. Some hosting providers lock clients into contracts that shift all the risk onto the miner.Overpaying for Equipment: Without direct industry relationships, miners may buy hardware at retail prices or from intermediaries with significant mark ups. This happened during the 2021 bull run when desperate new entrants paid $10,000–$15,000 per ASIC, only to watch prices crash to $3,000 during the next bear market.Inefficient Machine Deployment: Delays, customs, DOAs – there are a lot of things that can go wrong in the procurement phase. After the machines have arrived, firmware adjustments, cooling, and heat can affect downtime, all resulting in significantly less hashrate and associated declines in returns. If uptime and efficiency are poor, larger sites can underperform smaller, well-optimized sites.Cash Flow Mismatches: Mining revenue is volatile, fluctuating with network difficulty and Bitcoin price action. Some miners finance their operations with loans assuming steady returns, only to get caught in a bear market where mining rewards drop, electricity bills stay fixed, and debt payments become unmanageable.This is why partnerships with experienced service providers who understand the nuances of power markets, hardware procurement, optimization, and financial hedging are critical. Those who fail to manage these risks effectively often end up selling distressed assets at the bottom of the cycle, exiting the industry with heavy losses, while more sophisticated players continue to scale.The Solution: A Turnkey Approach with Soluna & LuxorRecognizing BitMine’s needs, Soluna and Luxor combined their strengths to offer a comprehensive and predictable end-to-end solution. Soluna: Reliable Infrastructure & Stable PowerBitMine expanded its relationship with Soluna from ~3 MWs at the Project Sophie data center to adding an additional ~10MW at the new Project Dorothy facility. With Soluna currently providing 13MW hosting capacity, this eliminated uncertainty related to fluctuating energy prices and power interruptions, ensuring BitMine had a dedicated, stable source of power.Luxor: Financial, Operational, and Strategic ExpertiseLuxor played a critical role in enabling BitMine’s expansion by leveraging all aspects of its business:Hashrate Forward Contract: Luxor structured a hedging strategy that secured BitMine’s profitability by locking in a fixed hashprice for a 12-month term.Capital & Equipment Financing: Luxor facilitated financing for ASIC machine procurement through a forward hashrate sale, ensuring BitMine could scale without facing capital constraints.Logistics Support: Luxor managed the entire shipping & logistics process to minimize downtime.Fleet Optimization & Management: Luxor firmware was deployed across BitMine’s fleet, unlocking dynamic mining strategies through LuxOS to maximize revenue and efficiency.Why This Model Stands OutThis partnership redefined the traditional mining setup by integrating infrastructure, software & financial services, and operations management into a turnkey solution. By reducing risk across deployment, price volatility, and operational uncertainty, BitMine was able to scale confidently and predictably while focusing on its core business activities.Results: Unlocking More Hashrate, More ASICs, and More EfficiencyThe collaboration between BitMine, Soluna, and Luxor delivered tangible results:Tripled BitMine’s deployed ASIC capacity, significantly boosting its hashrate.Secured long-term power stability, mitigating energy price fluctuations.Locked in hashprice terms, reducing financial exposure to market volatility.Streamlined deployment process, cutting down hardware lead times and ensuring rapid scaling.Enhanced operational efficiency, leveraging LuxOS firmware and running around 10% more efficiently than other miners, leading to improved profitability and lower downtime.This approach provided BitMine with greater financial stability, operational certainty, and a faster growth trajectory, proving the effectiveness of a fully integrated mining solution.Conclusion: The Future of Integrated Mining SolutionsThis partnership between BitMine, Soluna, and Luxor showcases the value of turnkey mining solutions. Each party benefited:BitMine: Gained a complete, risk-mitigated mining solution with price certainty, reliable power, and operational efficiency.Soluna: Secured a long-term customer for its power capacity, reinforcing its role as a leader in sustainable Bitcoin mining.Luxor: Demonstrated the power of its full-service model, proving that its comprehensive approach can drive long-term success for mining companies.As mining economics continue to evolve, integrated win-win-win solutions like this will become increasingly essential. Soluna and Luxor plan to replicate and scale this model, bringing more miners into a stable, profitable framework.For mining companies looking for a reliable, end-to-end solution, this case study validates the effectiveness of strategic partnerships in an industry where efficiency and risk management are critical.Can We Help You?Given the success of this collaboration, Soluna and Luxor are exploring ways to expand this model. If you’re a miner looking for a scalable, turnkey solution, get in touch to learn how this approach can work for you.About BitMine Immersion Technologies, Inc.BitMine is a technology company focused on Bitcoin mining using immersion technology, an advanced cooling technique where computers are submerged in specialized oil circulated to keep units operating at optimal ambient temperature. Immersion technology is more environmentally friendly than conventional mining methodologies while lowering operating expenses and increasing yield. BitMine’s operations are located in low-cost energy regions in Trinidad, Pecos, Texas, and Murray, Kentucky.About Soluna Holdings, Inc. (SLNH)Soluna is on a mission to make renewable energy a global superpower, using computing as a catalyst. The company designs, develops, and operates digital infrastructure that transforms surplus renewable energy into global computing resources. Soluna’s pioneering data centers are strategically co-located with wind, solar, or hydroelectric power plants to support high-performance computing applications, including Bitcoin Mining, Generative AI, and other compute-intensive applications. Soluna’s proprietary software MaestroOS(™) helps energize a greener grid while delivering cost-effective and sustainable computing solutions and superior returns. To learn more, visit solunacomputing.com. Follow us on X (formerly Twitter) at @SolunaHoldings. About Luxor Technology CorporationLuxor Technology Corporation is a Bitcoin mining software and services company that offers a suite of products catered toward the mining and compute power industry. Luxor’s suite of software and services includes an open auction ASIC Marketplace, a Bitcoin mining pool, a Hashrate Derivatives Desk, an Antimer ASIC Firmware, and a Bitcoin mining data platform.If you are interested in contacting the Luxor Derivatives Desk, please email [email protected].DisclaimerThis content is for informational purposes only, you should not construe any such information or other material as legal, investment, financial, or other advice.