10.12 AI Daily Crypto Assets regulation tightening, market Fluctuation intensifying

1. Headlines

1. Announce compensation for depegging events such as USDE, optimize risk control.

The announcement states that a comprehensive review of the USDE, BNSOL, and WBETH de-pegging events has been completed. The announcement reveals that compensation will be provided to all affected contract, leveraged, and borrowing users within 72 hours, with the compensation amount calculated based on the difference between the market price at 08:00 on October 11, 2025, and the liquidation price.

This incident was caused by the severe fluctuations in the cryptocurrency market, leading to a temporary decoupling of some assets from the US dollar. It was stated that risk control will be further strengthened, including adjustments to the price index weights of BNSOL, WBETH, and USDE, the addition of a minimum price limit for the USDE index, and an increase in the frequency of risk control parameter reviews.

Analysts point out that this incident highlights the high risk nature of the cryptocurrency market, while also reflecting the exchange's ability to respond under extreme market conditions. Industry insiders call for regulatory bodies to strengthen the review of stablecoins, increase transparency, and protect investor rights. Meanwhile, exchanges also need to improve their risk control mechanisms to enhance their resilience to risks.

2. The probability of the Federal Reserve lowering interest rates by 25 basis points in October is 98.3%, and Powell will deliver an important speech.

According to CME's “FedWatch” data, the probability of the Federal Reserve keeping interest rates unchanged in October is only 1.7%, while the probability of a 25 basis point rate cut is as high as 98.3%. This means that the likelihood of the Federal Reserve cutting rates this month is extremely high.

Federal Reserve Chairman Powell will speak at an event hosted by the National Association for Business Economics this Tuesday, and the market will pay close attention to his comments on the economic outlook and monetary policy. Analysts believe that Powell's remarks may set the tone for the subsequent interest rate hike path.

Since last year, the Federal Reserve has raised interest rates multiple times to combat inflation. However, the latest data shows that inflationary pressures have eased, creating conditions for the Federal Reserve to further slow down the pace of interest rate hikes. Nevertheless, the labor market remains tight, posing challenges for the Federal Reserve's policy-making.

Industry insiders point out that the Federal Reserve needs to seek a balance between promoting employment and controlling inflation, with limited room for maneuver. It is expected that the Federal Reserve will continue to raise interest rates gradually until inflation falls to around the target range of 2%.

3. On-chain analyst exposes the identity of BTC to ETH whale, suspected to be former Forex CEO

On-chain analysts disclosed today that a whale suspected of selling $4.23 billion worth of BTC to switch to ETH is likely former Forex CEO Garrett Jin. Analysts found that the address used an ENS domain to publicly expose its identity, sparking heated discussions in the crypto community.

CZ stated on social media that he is unsure of the authenticity of this matter and hopes someone can help cross-verify it. Another analyst, MLM, believes that the claim has a high degree of credibility but raised several questions, including why Garrett would publicly reveal his identity and how a “worker” could possess billions of dollars in BTC.

In this regard, industry insiders analyze that the behavior of whales changing positions often indicates a significant adjustment in investment strategies, which may have a certain impact on the market. At the same time, there are also voices questioning how the accuracy of on-chain analysis can be guaranteed and whether there is a possibility of misleading.

Overall, this incident has once again sparked discussions in the crypto community about “decentralization” and “anonymity.” In the future, relevant regulations may be further refined to balance transparency and privacy protection.

4. Nobel Peace Prize winners call for Bitcoin as a tool of resistance, sparking heated discussions.

Maria Corina Machado, the 2025 Nobel Peace Prize laureate, called in her acceptance speech for Bitcoin to serve as an important tool for democratic resistance in Venezuela, combating hyperinflation, bypassing financial restrictions, and ultimately stabilizing the national economy in future democratic governments.

Machado's remarks have sparked heated discussions in the crypto community. Supporters believe that this highlights the advantages of Bitcoin such as decentralization and resistance to censorship, which helps to maintain people's financial freedom. However, there are also critical voices pointing out that Bitcoin's price volatility is too large, raising doubts about its function as a currency.

Analysts say that Machado's call reflects the potential application value of cryptocurrency in special environments. However, in the long run, for Bitcoin to truly play a role, it still needs to improve its popularity,完善监管, and reach a consensus across various sectors of society.

At the same time, this matter has also sparked reflections on the relationship between “cryptocurrency and democratic freedom.” Some argue that the decentralized nature of cryptocurrency is beneficial for upholding freedom of speech, but it may also be abused; therefore, it is necessary to establish corresponding governance mechanisms to prevent cryptocurrency from becoming a tool for illegal activities.

5. Industry leaders urge crypto entrepreneurs to give back to the community and support long-term innovation.

At the recently concluded TOKEN2049 conference, several cryptocurrency investors and entrepreneurs called for industry beneficiaries to give back more to the community, support the construction of public goods, and create a good environment for long-term innovators.

Some well-known investors have indicated that there is currently a “short-sighted” phenomenon in the industry, with too much focus on short-term gains rather than long-term value creation. They believe that the development of the industry relies on sustained investment in infrastructure and public goods.

At the same time, some entrepreneurs have reported that the current financing environment is not optimistic. Exchanges have become winners due to their favorable revenue models, making it difficult for startups to attract top talent. They urge exchanges to provide more support for long-term entrepreneurial projects.

Analysts point out that the cryptocurrency industry is at a critical development stage and requires the joint efforts of all stakeholders. Only through continuous innovation and ecosystem building can the industry truly mature. At the same time, it is necessary to improve relevant policies to create a favorable environment for innovators.

Overall, the TOKEN2049 conference once again reflects the industry's expectations for the long-term development of cryptocurrency. Only by adhering to innovation and mutual assistance can cryptocurrency ultimately gain widespread recognition and application.

2. Industry News

1. The cryptocurrency market is experiencing a severe sell-off, with Bitcoin dropping below the $110,000 mark.

Bitcoin fell more than 10% in the past 24 hours, dropping below the $110,000 mark and reaching a low of around $108,000. Analysts pointed out that this round of selling is mainly due to market concerns over U.S. inflation and interest rate hike expectations, as well as escalating geopolitical tensions. Exchange data shows that during the sell-off, approximately $20 billion worth of cryptocurrency positions were forcibly liquidated, setting a new historical record.

Multiple institutions believe that although Bitcoin may continue to face pressure in the short term, its long-term outlook remains optimistic. Goldman Sachs analysts stated that as a new type of asset, Bitcoin's hedging properties will become more prominent against the backdrop of rising inflation and geopolitical risks. In addition, the continuous influx of institutional investors will also provide strong support for Bitcoin.

2. Ethereum falls below 3800 USD, the decentralized application ecosystem may be impacted.

Ethereum performed poorly in this round of sell-off, dropping more than 6% within 24 hours and once falling below the $3800 mark. Analysts point out that as the core of the public chain ecosystem, the price drop of Ethereum may adversely affect the entire decentralized application (DApp) ecosystem.

Amanda Glawe, a member of the Ethereum Foundation, stated on social media that many DApp projects in the Ethereum ecosystem rely on token sales and venture capital to maintain operations. If the price of Ethereum remains sluggish, these projects will face a funding shortage dilemma. However, she also stressed that the long-term development prospects of the Ethereum ecosystem remain bright, and as long as there is persistent promotion of technological innovation and application expansion, it will surely be able to weather the current difficult period.

3. The performance of altcoins is diverging, with the gaming and metaverse sectors rising against the market trend.

In this round of market decline, the performance of altcoins has shown a clear divergence. Some popular sectors represented by gaming and the metaverse have seen an逆市上涨, such as Shiba Inu (SHIB), ApeCoin (APE), and Decentraland (MANA). Analysts believe that these tokens have attracted investment mainly because the industries they represent have broad prospects and possess certain anti-inflation properties.

At the same time, some altcoins have been sold off, with declines exceeding 20%. Industry observers point out that most of these altcoins lack real application scenarios and are merely speculative tools, making them the first to suffer when market risk appetite decreases. They urge investors to carefully evaluate the true value of projects when investing in altcoins to avoid blindly following trends.

4. Institutional funds withdraw, cryptocurrency ETFs face large redemptions

Against the backdrop of significant fluctuations in the cryptocurrency market, the sentiment of institutional investors has also wavered. Data shows that in the past week, several cryptocurrency ETFs experienced large redemptions, with the Ethereum ETF seeing redemptions as high as $175 million. Analysts indicate that this reflects institutional investors lowering their exposure to cryptocurrency to avoid potential downside risks.

However, some analysts hold an optimistic view on this. Analysts at the cryptocurrency research firm Delphi Digital stated that the short-term fluctuations of institutional funds are a normal market behavior and do not indicate that institutional investors have lost confidence in the long-term prospects of cryptocurrencies. He believes that as long as the cryptocurrency ecosystem continues to develop healthily, institutional funds will eventually flow back in.

5. Regulatory policies tighten as the US SEC speaks out again on the Hinman test.

The chairman of the U.S. Securities and Exchange Commission, Gary Gensler, recently commented again on the Hinman test. He stated that while the Hinman test provides some guidance for determining whether a token is considered a security, it is not a decisive standard. The SEC will make judgments based on specific circumstances, taking various factors into consideration.

Gensler's speech is seen as a signal that the SEC will further intensify its regulation of cryptocurrencies. Analysts point out that the uncertainty of regulatory policies will put certain pressure on the cryptocurrency market, and project teams need to strengthen compliance awareness to avoid crossing legal boundaries. Meanwhile, there are also views that reasonable regulation is beneficial for the long-term healthy development of the cryptocurrency market.

Overall, the cryptocurrency market on October 12 was thrilling. The dramatic price fluctuations not only tested investors' psychological endurance but also sparked heated discussions among industry insiders about future development prospects. Regardless, the cryptocurrency ecosystem is undergoing a significant trial, and only projects and tokens that truly possess value will survive in the end.

3. Project News

( 1. The Sui blockchain ecosystem continues to make strides, with the Move language project leading a new wave of innovation.

Sui is a brand new blockchain ecosystem created by former Meta employees, aimed at addressing the scalability and user experience issues currently faced by blockchains. Sui uses the Move programming language, which has excellent parallel execution capabilities, allowing for high throughput and low latency.

Recently, the Sui ecosystem has been continuously making efforts and launched multiple innovative projects. Among them, Cetus is a decentralized derivatives trading platform that leverages Sui's high-performance characteristics to provide users with a smooth trading experience. It is also a decentralized lending protocol that allows users to lend or borrow assets. In addition, Sui has also incubated DeFi projects like Navi and Scallop.

The rapid development of the Sui ecosystem has attracted widespread attention in the industry. Analysts believe that the high-performance characteristics of the Move language are expected to drive innovation in areas such as DeFi, bringing users an unprecedented experience. At the same time, the Sui ecosystem has also attracted a large number of developers, likely further expanding the scale of the ecosystem.

However, some analysts have pointed out that the currently investable assets in the Sui ecosystem are relatively few, which may limit its development space in the short term. But in the long run, as long as the ecosystem continues to incubate high-quality projects, it will certainly bring new vitality to the industry.

) 2. The Aptos blockchain mainnet is online, adding a heavyweight player to the Move language ecosystem.

As another blockchain project based on the Move language, Aptos has recently made significant progress. The Aptos mainnet officially launched in October, marking the project created by former Meta employees entering the operational phase.

Aptos focuses on high performance, high security, and upgradability, with a block generation speed of thousands of transactions per second and support for real-time upgrades. Meanwhile, Aptos also introduces a brand new account model and resource model, aimed at enhancing the user experience.

After the mainnet launch, the Aptos ecosystem has attracted several well-known projects. Among them, Liquidswap is a decentralized exchange based on AMM, while Cetus is a derivatives trading platform. In addition, the Aptos Foundation has also launched a developer incentive program to encourage more developers to join.

Analysts believe that the emergence of Aptos will further promote the development of the Move language ecosystem. With outstanding performance, Aptos is expected to become a popular infrastructure in areas such as DeFi and GameFi. However, the Aptos ecosystem is still in its early stages, and its development direction and user acceptance will require time to test.

3. Movement has become the last “gem” of the Move language ecosystem, sparking industry expectations.

In addition to Sui and Aptos, Movement is another highly anticipated project in the Move language ecosystem. As the last project in the Move language ecosystem that has yet to issue tokens, Movement has been eagerly awaited by the industry.

Movement is positioned as a blockchain supporting smart contracts, characterized by high performance and strong scalability. Similar to Sui and Aptos, Movement also uses the Move language, aiming to provide a better developer experience.

Although Movement has not yet launched its token, it has attracted the attention of several well-known investment institutions. Several organizations, including laboratories and Coinbase Ventures, have invested in Movement.

Analysts believe that the launch of Movement will further enrich the Move language ecosystem. With its outstanding performance, Movement is expected to become a popular infrastructure in fields such as DeFi and GameFi. At the same time, the addition of Movement will also enhance the competition within the Move language ecosystem, providing users with more choices.

However, some analysts point out that the Move language ecosystem is still in its early stages, and the competitive landscape among major projects awaits the test of time. At that time, who can better meet user needs and attract developers will determine their position in the ecosystem.

Overall, the Move language ecosystem is becoming a new hotspot in the blockchain field. The continuous innovation and development of projects like Sui, Aptos, and Movement will undoubtedly bring new vitality and opportunities to the industry.

4. Economic Dynamics

1. The probability of the Federal Reserve cutting interest rates by 25 basis points in October is as high as 98.3%.

Economic Background: The U.S. economy has experienced sustained inflationary pressures and a rate hike cycle over the past year. The latest data shows that the Core Personal Consumption Expenditures Price Index ### PCE ### rose 4.9% year-on-year in August, slightly lower than July's 5%, but still well above the Federal Reserve's target level of 2%. The job market remains robust, with an unemployment rate of 3.7% in August. Despite signs of an economic slowdown, the continued tightening of the labor market may drive up wages, thereby exacerbating inflationary pressures.

Important events: The Federal Reserve raised interest rates by 75 basis points again in September, bringing the federal funds rate target range to 3%-3.25%, the highest level since the 1980s. Powell reiterated that rate hikes will continue until inflation shows clear signs of cooling. The market expects the Federal Reserve to raise rates by another 75 basis points in November.

Market Reaction: According to CME Group's FedWatch tool, the market currently expects the Federal Reserve to choose a moderate rate hike of 25 basis points in October, with a probability as high as 98.3%. Investors anticipate that the Federal Reserve will end the current rate hike cycle by the end of the year and begin to gradually cut rates in 2023. This expectation has driven a recent rebound in the stock market, with investors betting that the economy will slow down next year, thereby alleviating inflationary pressures.

Expert Analysis: Goldman Sachs chief economist Jan Hatzius stated that the Federal Reserve may pause interest rate hikes in November to assess the impact of previous policy tightening. He expects the Federal Reserve to start lowering rates in the first half of 2023. UBS economists, on the other hand, believe that the Federal Reserve may pause interest rate hikes in December and begin to lower rates in the second quarter of 2023. Overall, most economists expect the Federal Reserve to end the rate hike cycle and start lowering rates in the first half of next year.

( 2. Hong Kong Financial Secretary: The people of the Greater Bay Area have a strong interest in diversified asset allocation.

Economic Background: As an international financial center, Hong Kong's economic development is closely related to the trends of the global financial market. Since the beginning of this year, international gold prices have broken historical highs, and some digital asset prices have also seen significant fluctuations, reflecting that the global market is intensifying the allocation of assets other than the US dollar to avoid risks. The vigorous development of the Guangdong-Hong Kong-Macao Greater Bay Area provides new investment opportunities for global investors.

Important event: The Financial Secretary of Hong Kong, Chan Mo-po, pointed out in his latest essay that there are unclear factors in the global economic and market outlook every year, making people feel increasingly concerned about the risks that the international market may face in the coming year. He emphasized that the people of the Guangdong-Hong Kong-Macau Greater Bay Area have a strong interest in diversified asset allocation, which is one of the main driving forces for Hong Kong to move towards becoming the world's largest cross-border asset management center.

Market reaction: Chan Mau-po's remarks reflect the Hong Kong government's awareness of the importance of diversifying investments, especially against the backdrop of increasing global economic uncertainty. Investors are seeking new investment channels and tools to diversify risks, and the development of the Greater Bay Area provides them with new options. It is foreseeable that in the future, the Greater Bay Area will attract more domestic and foreign capital inflows.

Expert Opinion: The Chief Investment Officer of Deutsche Bank Greater China, Huang Tianyou, stated that the development of the Greater Bay Area offers investors a diverse range of investment opportunities, including stocks, bonds, real estate, and alternative investments. He advised investors to closely monitor the policy benefits in the Greater Bay Area and to moderately allocate assets in the region according to their own risk preferences. Julian Winstanley, Head of UBS Wealth Management Asia Pacific, believes that the development of the Greater Bay Area will propel Hong Kong to become a leading asset management hub.

) 3. The Indian tax authorities are investigating over 400 trading users for suspected tax evasion.

Economic Background: India is one of the most populous countries in the world, and cryptocurrency trading activities are becoming increasingly active in the country. However, there has been uncertainty regarding the Indian government's regulatory policies on cryptocurrencies. In the fiscal year 2022-23, India levied a 1% withholding tax on cryptocurrency transfers and imposed a 30% income tax on trading profits, with the highest tax rate reaching 42.7%.

Important event: According to reports, the Central Board of Direct Taxes of India has requested city tax departments to report on the progress of investigations against over 400 high-net-worth trading users by October 17. These users are suspected of tax evasion during the fiscal years 2022-23 and 2024-25.

Market Reaction: Once the news breaks, the trading activity of Indian cryptocurrency exchanges may be affected. Investors have concerns about the regulatory policies of the Indian government, which could hinder the development of the country's cryptocurrency market. Some investors may choose to move their funds to other countries and regions.

Expert analysis: Anoush Bhasin, a partner at Nishith Desai Associates, stated that the Indian government's approach to taxing cryptocurrencies is reasonable, as it is an emerging asset class. However, he also pointed out that the government needs to establish a clearer regulatory framework to promote the healthy development of the industry. Naimish Sanghvi, founder of Crypto Kanoon, believes that the Indian government should adopt a more open and inclusive attitude rather than excessive regulation. He suggests that the government engage in more dialogue and consultations with industry participants.

5. Regulation & Policy

1. The U.S. federal government shutdown crisis continues, and the cryptocurrency regulatory process may be hindered.

The U.S. federal government has been facing a shutdown crisis since October 1, with this deadlock lasting nearly two weeks. The inability of Congress to reach an agreement on the budget for the fiscal year 2026 has led to a suspension of some government functions. As regulatory agencies, the daily operations of the U.S. Securities and Exchange Commission ###SEC### and the Commodity Futures Trading Commission (CFTC) have also been affected.

Policy Background: The U.S. government shutdown crisis stems from the divergence between the two parties over the budget proposal for the fiscal year 2026. The Republican Party demands spending cuts, while the Democratic Party advocates for maintaining current spending levels. Due to the inability to reach an agreement, Congress failed to pass a new appropriations bill before the end of the fiscal year on September 30, resulting in a suspension of some government functions. The SEC and CFTC, as independent agencies, receive their operating funds from congressional appropriations, and therefore are also affected.

Policy content: During the shutdown, the SEC and CFTC will maintain limited operations. According to the agency's emergency plan, only a few employees will continue to work, mainly responsible for maintaining critical systems and addressing emergencies. Most employees will be on temporary leave and will be unable to carry out daily regulatory work. This means that the approval of new regulatory rules, enforcement investigations, corporate reviews, and other tasks will be forced to be put on hold.

Market Reaction: The cryptocurrency industry has responded differently to the government shutdown crisis. Some believe that a temporary easing of regulatory pressure may be beneficial for industry development. However, others are concerned that a regulatory vacuum could foster violations and harm investors' interests. Overall, the market hopes that the government can resolve its differences quickly and restore normal regulatory order.

Expert analysis: Cryptocurrency legal expert Jared Polis stated: “The government shutdown crisis will undoubtedly hinder the regulatory process. The daily work of regulatory agencies is obstructed, which will delay the introduction of relevant rules. But in the long run, cryptocurrency regulation is an inevitable trend, and the impact of the shutdown crisis may only be temporary.”

( 2. The Financial Conduct Authority of the United Kingdom has released a consultation document on the regulatory framework for crypto assets.

The Financial Conduct Authority ) FCA ### published a consultation document on October 12 regarding the regulatory framework for crypto assets, publicly seeking opinions on how to regulate crypto assets in the future. This is the first time the UK has proposed specific recommendations for the regulation of crypto assets, marking a significant advancement in the regulatory process.

Policy Background: In recent years, crypto assets have become increasingly popular in the UK, but the regulatory framework still seems to lag behind. To protect consumer rights and promote the orderly development of the industry, the UK government has decided to establish a comprehensive regulatory system for crypto assets. The FCA, as the financial regulatory body, has been tasked with drafting the relevant regulatory framework.

Policy Content: The consultation document proposed several regulatory recommendations, including:

1. Incorporate cryptocurrency assets into the existing financial regulatory framework, under the unified supervision of the FCA;
2. Require cryptocurrency exchanges and issuers to comply with regulations such as anti-money laundering and consumer protection;
3. Implement regulations for advertising and marketing activities related to cryptocurrency assets;
4. Establish a compensation mechanism for cryptocurrency asset investors, etc. The consultation document will be open for public comment until January 2026.

Market Reaction: The response to the regulatory framework consultation document in the cryptocurrency asset industry has been mixed. Some companies welcome regulation, believing it will benefit the long-term development of the industry. However, others worry that excessive regulation could stifle innovation. Overall, the industry hopes that regulation can balance risks and innovation.

Expert Opinion: Richard Brown, director of the UK Centre for Crypto Asset Research, stated: “This consultation paper is an important step in the regulation of crypto assets in the UK. It lays the groundwork for future regulation, but there are still many details to be improved. We need to continue to broadly solicit opinions on specific regulatory measures to develop a feasible regulatory framework.”

( 3. The Monetary Authority of Singapore plans to implement new regulations for cryptocurrency exchanges.

The Monetary Authority of Singapore ) MAS ### announced on October 12 that it plans to implement new regulatory rules for cryptocurrency exchanges to enhance investor protection. This is another significant move by Singapore in the field of cryptocurrency regulation following the enactment of the Payment Services Act last year.

Policy Background: Singapore is one of the global centers for cryptocurrency trading and innovation. To regulate industry development, Singapore passed the Payment Services Act in 2019, requiring cryptocurrency service providers to obtain a license. However, with the rapid development of the industry, the existing regulatory framework is no longer sufficient and needs to be further strengthened.

Policy content: MAS plans to implement the following new regulations for cryptocurrency exchanges:

1. The exchange must open accounts with banks to ensure the safety of customer funds;
2. Prohibit exchanges from issuing their own tokens or providing pricing for tokens;
3. Strengthen compliance requirements for anti-money laundering and combating the financing of terrorism.
4. Standardize the risk management, auditing, and corporate governance of exchanges. The new regulations will come into effect on January 1, 2026.

Market reaction: Cryptocurrency exchanges in Singapore have had mixed reactions to the new regulations. Some exchanges believe that the new rules will increase compliance costs but will be beneficial for the long-term development of the industry. Other exchanges are concerned that excessive regulation may impact innovation. Overall, the industry hopes that the new regulations can strike a balance between protecting investors and promoting innovation.

Expert Analysis: Professor Dorothy Lim from the National University of Singapore's FinTech program stated: “These new regulations aim to enhance investor protection and improve industry transparency, which is very necessary. However, during the implementation process, regulators need to maintain good communication with the industry to avoid undue hindrance to innovation.”