BB DAILY 01-02-2025: Do Kwon pleads not guilty as Ethereum ETFs hit record inflows, IRS delays crypto tax rules, and T3 freezes $100M in criminal assets
Terraform Labs founder appears in US court, spot ETH ETFs double monthly inflows, tax rule postponement gives brokers time to adapt, and T3 combats crypto-related crimes.
Because Bitcoin
January 2, 2025
Terraform Labs co-founder Do Kwon pleads not guilty in US court after extradition from Montenegro
Terraform Labs co-founder Do Kwon appeared before a US magistrate in Manhattan on January 2, 2025, pleading not guilty to nine charges, including securities fraud, wire fraud, and money laundering. This marks the first US court appearance for Kwon after his extradition from Montenegro, where authorities deemed the US the appropriate jurisdiction. A status conference is scheduled for January 8 to discuss evidence and pretrial motions. Kwon’s legal troubles stem from his alleged role in the collapse of the Terra ecosystem, with the saga intensifying after Montenegro approved his extradition in late December.
Ethereum ETFs see record $2.08 billion inflows in December, driven by BlackRock and Fidelity funds
Spot Ethereum ETFs in the US recorded $2.08 billion in net inflows in December, nearly double November’s $1 billion, setting a new monthly record. BlackRock’s ETHA led with $1.4 billion, followed by Fidelity’s FETH with $752 million, while Grayscale’s ETHE faced $274 million in outflows. December’s surge coincided with renewed interest in DeFi and AI applications within the Ethereum ecosystem and a mid-month rally above $4,000. The cumulative net assets of Ethereum ETFs reached $12.12 billion, representing over 3% of ether’s market cap.
In contrast, spot Bitcoin ETFs saw $4.5 billion in December inflows, lower than November’s $6.4 billion peak, ending the year with $105.4 billion in net assets, or 5.7% of Bitcoin’s market cap. Bitcoin’s price peaked at $108,135 on December 17 before stabilizing at $95,556.
IRS delays new crypto tax reporting rules to 2026, giving brokers time to adapt
The IRS announced a one-year postponement of new tax reporting requirements for cryptocurrencies, now effective January 1, 2026. The rules, finalized in July, mandate the First-In, First-Out (FIFO) method for determining cost basis unless taxpayers specify otherwise. Brokers on centralized platforms were unprepared to support specific identification methods, which could have led to increased capital gains for investors forced to sell assets under FIFO.
The delay allows brokers to implement necessary systems to accommodate alternate accounting methods. Separately, the Blockchain Association and others have filed a lawsuit challenging an IRS rule requiring DeFi brokers to report users’ personal data by 2027.
Tether, TRON, and TRM Labs freeze over $100M in criminal assets through T3 Financial Crime Unit
The T3 Financial Crime Unit (T3 FCU), a partnership between Tether, TRON, and TRM Labs, has frozen more than $100 million in criminal assets globally since its launch in August 2024. Collaborating with law enforcement worldwide, T3 FCU has disrupted money laundering, fraud, terrorism financing, and other financial crimes by analyzing billions of USDT transactions on TRON.
Justin Sun, TRON founder, and Paolo Ardoino, Tether CEO, emphasized the unit’s success as a model for public-private collaboration in blockchain security. T3 aims to further secure the growing crypto ecosystem by ensuring bad actors cannot exploit digital assets like USDT.
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