12.13 AI Daily: Cryptocurrency Industry Turmoil - Stricter Regulations, Market Volatility, and Innovation Breakthroughs

One. Headlines

1. Federal Reserve Chair Powell signals hawkish stance, crypto markets plunge

Federal Reserve Chair Powell stated in a speech that to control inflation, the Fed may need to raise interest rates to a higher level than previously expected. This hawkish remark sparked market concerns, leading to sharp declines in major cryptocurrencies like Bitcoin and Ethereum on the same day.

Powell emphasized that although recent data shows inflation has slowed, it remains well above the 2% target. To bring inflation down to an appropriate level, the Fed may need to raise rates higher than previously anticipated and maintain them there for some time.

This statement immediately triggered intense market volatility. Bitcoin temporarily fell over 5%, breaking below the $17,000 level. Ethereum also dropped sharply, temporarily losing the $1,200 support. Analysts pointed out that Powell’s hawkish tone intensified investor fears of an economic recession, sparking a sell-off in risk assets.

Meanwhile, trading volume and volatility in the crypto market surged significantly. Some institutional investors chose to exit temporarily, waiting for further policy signals. Retail investors took advantage of the dip to buy in, betting on the long-term prospects of cryptocurrencies.

Overall, Powell’s speech once again highlights the significant influence of macroeconomic policies on the crypto market. Future inflation and interest rate trends will continue to dominate crypto price fluctuations.

2. Japan plans to impose a 20% flat tax rate on crypto trading

The Japanese government is adjusting its tax policy on cryptocurrency gains, planning to uniformly impose a 20% income tax regardless of transaction amount, aligning it with taxes on stocks, investment trusts, and other financial products. The move aims to reduce investors’ tax burden and stimulate the domestic trading market.

Currently, Japan applies a comprehensive tax method on crypto gains, combining them with income from wages and business activities, and taxing the total at progressive rates up to 55%. This high tax rate is considered one of the main reasons hindering Japan’s crypto market development.

The new policy will adopt a separate taxation approach, no longer combining crypto gains with other income, but taxing them separately at a flat rate of 20%. The government aims to incorporate this adjustment into the 2026 tax reform outline, expected to be finalized by the end of the year.

Meanwhile, Japan’s Financial Services Agency plans to submit amendments to the Financial Instruments and Exchange Act to the Diet in 2026, aiming to strengthen regulation of crypto trading. The amendments will explicitly prohibit insider trading based on non-public information and require crypto issuers to fulfill disclosure obligations.

Analysts believe this series of measures will benefit Japan’s crypto market’s long-term health. Reasonable tax rates and regulatory policies will attract more investors and institutions, increasing market activity and liquidity. It will also promote the industry’s move toward standardization and transparency.

3. Sony Bank plans to issue a USD-pegged stablecoin for gaming payments

Sony Bank intends to issue a USD-pegged stablecoin in the US during the 2026 fiscal year, to be used for payments within Sony’s ecosystem for gaming and anime content. This move is seen as an important step for Sony’s entry into Web3 and blockchain sectors.

The stablecoin will be pegged 1:1 to the US dollar, allowing users to buy and redeem it with USD. Sony plans to use it across its PlayStation platform, anime streaming services, and more, to provide a more convenient payment experience.

Compared with traditional payment methods like credit cards and Alipay, blockchain-based stablecoins offer advantages such as lower fees and faster settlement. Sony aims to enhance user experience and gain a competitive edge in gaming and entertainment through this innovative payment tool.

However, regulation of stablecoins remains a key industry concern. The US Securities and Exchange Commission recently issued warnings to some algorithmic stablecoins, requiring them to be regulated as securities. Sony’s stablecoin, being fully reserve-backed, may face more lenient regulatory treatment.

Analysts note that Sony’s move reflects the tech giant’s strong interest in Web3 and blockchain technology. More tech companies may follow suit, exploring the application of cryptocurrencies and blockchain within their ecosystems to offer users new digital experiences.

4. Get Exchange launches physical prize sweepstakes

Get Exchange is launching a dual prize sweepstakes targeting new users, with participation available via the Chinese-language official website and some channels. During the event, users who complete designated KYC and trading volume tasks can earn scratch card chances and mystery box rewards.

It is said that each additional scratch card increases the chance to win big prizes, with a 100% winning rate. The scratch card pool includes USDT airdrops of $5–$100 and limited-edition merchandise; the mystery box pool offers up to $888 cash, as well as physical prizes like JD.com e-gift cards, Dyson hair dryers, and gold necklace bars.

A representative from Get stated that the event aims to attract more new users and also reward existing ones. Distributing cash and physical prizes can boost user engagement and increase Get’s visibility in the crypto exchange market.

Industry experts suggest that in the current bear market environment, such promotional activities are mainly marketing strategies to retain users and attract traffic. Long-term success requires continuous product innovation, security, and service quality improvements to truly win user loyalty.

Overall, while this event may generate short-term traffic benefits, sustained market presence depends on ongoing user experience optimization and innovative product and service launches.

5. North Korean hacker group Lazarus intensifies attacks on crypto industry

According to cybersecurity firm AhnLab, North Korea’s Lazarus group was the most frequently cited hacker organization over the past 12 months. They primarily use spear-phishing attacks disguised as invitations for seminars or interview requests to lure targets.

The report states Lazarus is suspected of being involved in several major attacks, including the February 21 attack on Bybit(loss of $1.4 billion) and a recent $30 million vulnerability exploit on Korean exchange Upbit.

AhnLab analysts note that Lazarus’s attack techniques are becoming increasingly sophisticated. They can precisely target specific victims and craft highly convincing phishing emails to induce opening of malicious attachments or links, gaining system control. Successful attacks allow hackers to freely steal cryptocurrencies and sensitive data within the compromised systems.

Cyberattacks on the crypto industry have been a major focus. Compared to traditional financial institutions, crypto companies and individual investors generally have weaker security awareness and defenses, making them more vulnerable to attacks. The high value and anonymity of crypto assets also make them attractive targets for hackers.

To enhance security, AhnLab recommends implementing multi-layer protection, including regular security audits, timely patch updates, and employee training. It also advises individuals to use multi-factor authentication, handle unknown links and attachments cautiously, and avoid overexposing personal information.

In summary, as the crypto industry continues to grow, cybersecurity issues will become more prominent. Companies and investors should prioritize security measures to prevent significant losses from hacking threats.

Two. Industry News

1. Bitcoin briefly dips below $87,000, sparking panic

On December 1, Bitcoin briefly fell below the $87,000 level, triggering panic in the market. Data shows Bitcoin dipped to a low of $86,317 during Asian trading hours, with a maximum intraday drop exceeding 4%.

Analysts believe this decline was mainly influenced by hawkish comments from Bank of Japan Governor Ueda Kazuo. Ueda stated that if economic activity and price forecasts proceed as expected, the Bank of Japan will continue to raise policy rates based on economic and price improvements. This prompted market expectations of rate hikes in Japan, driving the two-year government bond yield above 1%, with a 76% chance of a rate increase on December 19.

Meanwhile, China’s November manufacturing PMI indicated the first contraction in non-manufacturing activity in nearly three years, raising concerns over regional economic growth. These macroeconomic headwinds intensified doubts about global liquidity easing.

Market analysts say Bitcoin’s recent decline exposes its high sensitivity to macroeconomic data. When major economies’ monetary tightening expectations rise, crypto markets are inevitably impacted. In the short term, Bitcoin needs to find support within the $88,000–$91,000 range to establish new upward momentum.

2. Ethereum faces sell-off, down over 5% intraday

Ethereum also experienced a sell-off on December 1, declining over 5% during the day. Data shows ETH dipped near $2,800.

Analysts note that Ethereum, as the second-largest cryptocurrency, closely correlates with Bitcoin’s price movements. Under macroeconomic shocks, Bitcoin’s sharp decline triggered risk-averse sentiment among investors, leading to a sell-off in ETH.

Additionally, slow development within the Ethereum ecosystem is a key factor. Recently, the ecosystem has lacked major positive news, and sectors like DeFi remain sluggish, cooling investor enthusiasm for ETH.

However, analysts remain optimistic about Ethereum’s long-term prospects. As the Shanghai upgrade progresses, its usability and scalability are expected to improve further, potentially regaining investor favor. In the short term, ETH should seek support around $2,800–$3,000 to prevent further downside.

3. Solana ecosystem suffers severe setback, SOL drops below $140

Solana’s ecosystem was hit hard on December 1, with SOL token falling below $140. Data shows SOL’s maximum intraday decline exceeded 7%, with a low of $135.5.

Analysts state that recent issues include network congestion and project funding crises, which put downward pressure on SOL. The macroeconomic negative shocks have worsened investor fears about Solana’s ecosystem, triggering a sell-off.

Meanwhile, the ecosystem has lacked new killer applications, and activity remains sluggish, contributing to the decline. Investors doubt the future development prospects of Solana.

However, some believe Solana still has long-term potential. As network stability improves and new quality projects emerge, the ecosystem could regain vitality. In the short term, SOL needs support around $135–$142 to avoid further decline.

Overall, the market performance on December 1 significantly dampened investor sentiment. Major cryptocurrencies like Bitcoin, Ethereum, and Solana all declined to varying degrees. Investors should stay alert to macro trends, assess risks carefully, and seize potential opportunities.

Three. Project News

1. Aptos launches mainnet, leading a new wave of blockchain innovation

Aptos is an emerging layer-1 blockchain project founded by former Meta employees, aiming to build a high-performance, secure, and scalable network. After extensive development and testing, Aptos recently launched its mainnet, marking a new phase of development.

The mainnet launch brought multiple technological breakthroughs. First, Aptos uses a novel consensus mechanism called “AptosBFT,” which, compared to traditional PoW and PoS, significantly enhances transaction throughput and confirmation speed while maintaining decentralization. Second, Aptos introduces a smart contract-based parallel execution engine, enabling true parallel transaction processing to fundamentally address network congestion issues. Additionally, Aptos offers a new programming language, Move, designed to simplify smart contract development.

The mainnet launch is expected to have a profound impact on the blockchain industry. Its innovative technology provides new solutions to scalability challenges, promoting large-scale blockchain adoption. Moreover, the thriving Aptos ecosystem will attract more developers and capital, injecting vitality into the industry.

Industry insiders react positively. CryptoBigBrain, a leading analyst, said: “Aptos’s mainnet signifies a milestone for blockchain technology; its innovative consensus and parallel processing engines will greatly improve network performance.” Another analyst, CryptoKing, commented: “The growth of the Aptos ecosystem will attract more funds and talent, fostering industry advancement.”

2. Arrum unveils new dApp ecosystem to foster DeFi innovation

Arrum, a prominent layer-2 scaling solution within the Ethereum ecosystem, recently announced the launch of a new dApp ecosystem designed to provide developers with a friendlier environment and promote DeFi innovation.

The core of Arrum’s new ecosystem is a novel development framework that simplifies smart contract development and offers comprehensive tools and resources. Developers can easily build and deploy DeFi applications like lending platforms on Arrum. Additionally, Arrum has launched a dedicated developer fund to support promising DeFi projects.

The new ecosystem is expected to energize DeFi innovation. Its simplified development process and rich resources will attract more developers to join Arrum, accelerating DeFi application iteration. The Arrum developer fund will also provide necessary funding to outstanding projects.

Industry experts react positively. DeFiGuru, a DeFi analyst, says: “Arrum’s new ecosystem greatly facilitates developers and will propel DeFi innovation forward.” CryptoWhale also notes: “The Arrum developer fund will support excellent DeFi projects and promote ecosystem prosperity.”

3. Cosmos cross-chain ecosystem expands, advancing interoperability

Cosmos aims to solve blockchain interoperability issues. Through its unique “hub-and-spoke” architecture, Cosmos enables seamless interconnection and asset transfer between different blockchains. Recently, the Cosmos ecosystem has continued expanding, adding several major blockchain projects, further promoting interoperability.

Newly added major projects include Polkadot, Solana, and Avalanche. Their inclusion enriches Cosmos’s ecosystem diversity and injects new vitality into its cross-chain network. In the future, users will be able to transfer digital assets freely across Cosmos, breaking down barriers between chains.

The expansion of the Cosmos ecosystem marks a new stage in blockchain interoperability development. More top-tier projects will strengthen Cosmos’s cross-chain capabilities and industry influence. At the same time, advancing interoperability will foster integration within the crypto ecosystem, laying the foundation for large-scale applications.

Industry experts welcome Cosmos’s expansion. CryptoKing states: “The continuous growth of Cosmos signals that blockchain interoperability is becoming a reality, greatly advancing the entire crypto ecosystem.” DeFiGuru adds: “Building the Cosmos cross-chain network will facilitate free transfer of digital assets across chains, preparing for future large-scale applications.”

Four. Economic Dynamics

1. Fed raises interest rates by 75 basis points, reiterates commitment to curb inflation

The US economy continued to slow in Q4 2025. Latest data shows real GDP growth at an annualized rate of 1.8%, down from 2.6% in Q3. Inflation has eased but remains well above the Fed’s 2% target. In November, the core Personal Consumption Expenditures Price Index (PCE) rose 5.5% year-over-year, easing from 5.9% in October. The job market remains solid with a November unemployment rate of 3.7%, unchanged from previous months.

On December 13, the Fed hiked rates by 75 basis points as scheduled, raising the federal funds rate target to 4.25%-4.5%. This was the seventh rate increase this year, totaling 425 basis points of hikes. The Fed reiterated its commitment to fighting inflation and indicated further rate hikes are expected in 2023.

Markets responded mildly. Investors had largely anticipated this rate hike, focusing on the Fed’s signals about policy in 2023. US stocks edged up slightly after the decision. The US dollar index declined modestly.

Goldman Sachs Chief Economist Jan Hatzius said that despite easing inflation, risks remain high. He predicts the Fed will raise rates by another 50 basis points in Q1 2023 before pausing to assess impacts. He believes rates may need to stay elevated at 5%-5.25% for some time to ensure inflation returns to 2%.

( 2. China releases 2025 economic data, GDP growth at 6.1%

China’s National Bureau of Statistics announced on December 16 that China’s GDP grew by 6.1% in 2025, within the target range of 6%-6.5%. Sector-wise, primary industry added value increased 3.5%, secondary industry by 5.8%, tertiary industry by 6.6%. Final consumption contributed 65.4% to economic growth, up 3.9 percentage points from last year.

Per capita disposable income for Chinese residents increased by 6.8% in real terms, with a 5.1% increase after adjusting for prices. Urban residents’ per capita disposable income reached 38,411 yuan, with a 5.5% real growth. Rural residents’ per capita disposable income was 18,594 yuan, with a 4.5% real increase.

Zhang Xiaojing, director of the Institute of Economics at the Chinese Academy of Social Sciences, states that China’s economy in 2025 was generally stable, with key macro indicators within reasonable ranges. Consumption’s role in driving growth strengthened, while investment growth slowed but remained a main driver. Exports slowed but stayed at relatively high levels. She predicts China’s GDP will grow around 6% in 2026.

Zhang notes that 2025 brought new challenges, such as rising geopolitical risks, high global inflation, and aging domestic population. She recommends continuing active fiscal policy and prudent monetary policy in 2026 to keep the economy within a reasonable range.

) 3. Eurozone inflation hits new high, ECB likely to raise interest rates further

Eurostat data shows Eurozone inflation surged to 10.6% in November, reaching a new high. Energy prices increased 34.9% YoY, food, alcohol, and tobacco prices rose 13.6%, primarily driving inflation. Core inflation (excluding energy and unprocessed food) reached 5%, up from 4.6% in October.

High inflation increases recession risks in Europe. Eurozone Q3 GDP grew by 0.3% quarter-over-quarter, slowing from 0.8% in Q2. Major economies like Germany and Italy have entered technical recession.

To combat inflation, the European Central Bank has raised rates three times since July, totaling 200 basis points. Analysts generally expect the ECB to hike rates again by 50 basis points at its December 15 policy meeting.

Analysts at Deutsche Bank say that the record-high inflation will force the ECB to tighten further. They expect another 50 basis points increase in Q1 2023 and then keep rates around 3% for some time.

ING economists forecast Europe will enter recession in 2023. They project Eurozone GDP will fall 0.6%, and unemployment will rise from 6.6% in 2022 to 7.3%.

4. Bank of Japan maintains ultra-loose policy, yen plunges causing volatility

On December 19, the Bank of Japan unexpectedly kept its ultra-loose monetary policy unchanged, shocking markets. The BOJ decided to keep short-term rates at -0.1%, and keep the 10-year government bond yield target in a range around 0%, with +/-0.5%.

This decision ran counter to market expectations, where investors anticipated easing of long-term yield controls. Following the announcement, the yen depreciated over 3% against the dollar to 137.22, the lowest since 1998. The Tokyo stock market also plunged, with the Nikkei 225 down 2.49%, closing at 27,777.9.

BOJ Governor Haruhiko Kuroda said at a press conference that although inflation has reached its highest in 40 years, core inflation remains below 2%. He believes Japan’s economic recovery still faces uncertainty, and maintaining easing policies will ensure inflation continues to rise.

Goldman Sachs analysts say this move shifts market expectations about BOJ’s future policy. They expect the BOJ may start tightening as early as the first half of 2024. Until then, the yen will likely remain under pressure, possibly weakening further to 140 yen per dollar.

Nomura’s chief FX strategist Daisaku Ueno states that BOJ’s decision will increase yen volatility. He forecasts the yen could weaken further to 150 yen per dollar in 2023, raising import costs and inflation pressures in Japan.