6.2 AI Daily Crypto Assets Regulation Tightens, Industry Development Faces New Challenges

1. Headlines

1. Vitalik Buterin announced that Ethereum will scale 10 times within a year.

Ethereum co-founder Vitalik Buterin revealed at the ETHGlobal Prague conference that Ethereum plans to scale Layer 1 by about 10x within a year to solve the current problem of network congestion and high gas fees. Buterin stressed that the scaling process will proceed cautiously, without sacrificing decentralization, and to "take a breather" before the next leap.

This expansion plan includes several upgrades, such as protocol layer optimization, stateless nodes, decentralized historical data storage network, and adjustments to the Gas pricing mechanism. Among them, stateless nodes and decentralized storage networks are expected to significantly reduce the operating costs of full nodes, attract more nodes to join, and improve the decentralization of the network.

Analysts believe that Ethereum's scaling will greatly improve user experience and inject new momentum into the development of applications such as DeFi and NFTs. However, it is also necessary to be wary of potential centralization risks to ensure the network's long-term sustainability. In addition, scaling will intensify competition with other second-layer scaling solutions, and how the future landscape evolves is worth paying attention to.

2. The SEC of the United States questions the compliance of ETH and SOL ETFs.

The U.S. Securities and Exchange Commission ( SEC ) recently expressed significant concerns regarding whether the exchange-traded funds ( ETF ) proposed by REX Shares and Osprey Funds, based on staked Ethereum ( ETH ) and Solana ( SOL ), comply with federal securities laws.

SEC staff highlighted unresolved issues, including whether ETH and SOL are securities, whether the pledge model constitutes an illegal issuance of securities, and whether the ETF complies with the Investment Company Act. The SEC also questioned the extent to which ETH and SOL are diversified, and whether ETFs can effectively assess and manage the associated risks.

This matter has sparked widespread attention and discussion within the industry. Supporters believe that cryptocurrency ETFs help institutional investors participate and promote industry development. However, critics worry that the SEC's overly strict regulations may stifle innovation and hinder the development of cryptocurrency products in the United States.

Analysis indicates that the SEC's concerns reflect the regulatory body's cautious attitude towards cryptocurrencies, and also highlight the inadequacies of the existing legal framework in addressing emerging assets. Whether cryptocurrency ETFs can be approved in the future will have a profound impact on the entire industry.

3. The large transfers by cryptocurrency whales have sparked market speculation.

According to reports, a cryptocurrency whale address recently transferred 44 million XRP to an exchange, worth about 110 million USD, sparking widespread speculation in the market.

Some analyses suggest that this may be institutional investors or wealth management companies reallocating assets for their clients. There are also views that this is an internal transfer made by the exchange to meet liquidity demands.

However, there are also speculations that this may be due to a large holder preparing to sell XRP, leading to a drop in the coin's price. After all, there have been multiple precedents of large holders selling after making transfers in the past.

In fact, there have always been doubts about "whale manipulation" in the cryptocurrency market. The actions of large holders often have a significant impact on the market, causing drastic fluctuations. Therefore, regulatory agencies have been strengthening anti-money laundering and investor protection measures.

Analysts say that the speculation triggered by whale transfers reflects the uncertainty and lack of transparency in the cryptocurrency market. Only by strengthening regulation and increasing transparency can investor confidence be gained, promoting the long-term healthy development of the industry.

4. South Korea lifts the ban on institutional crypto trading, attracting industry attention.

The Financial Services Commission of Korea ( FSC ) recently announced that starting from June 1, eligible non-profit organizations and registered cryptocurrency trading platforms may sell their held cryptocurrency assets. The FSC plans to further allow listed companies and registered professional investors to engage in cryptocurrency trading in the second half of 2025.

This move is seen as South Korea easing restrictions on cryptocurrency trading for institutional investors, which has attracted widespread attention in the industry. Supporters believe this will drive institutional capital into the cryptocurrency market and inject new momentum into the industry's development.

However, some people are concerned that excessive relaxation of regulations may bring risks. After all, the cryptocurrency market still has illegal activities such as manipulation and money laundering, which require prudent regulation. Some investors question whether all institutional investors have sufficient risk awareness and professional capability.

Analysts say that South Korea's move reflects the increasing acceptance of cryptocurrencies by mainstream financial institutions, but it also highlights the importance of regulation. Only under prudent regulation can the true potential of cryptocurrencies be unleashed, achieving long-term healthy development of the industry.

5. The new Ethereum mechanism EIP-7702 has been maliciously abused, raising security concerns.

The EIP-7702 feature of the Ethereum Pectra upgrade, which includes account abstraction improvements, has recently been maliciously abused, raising security concerns. According to warnings, over 80% of EIP-7702 authorizations have been used for automated attacks, resulting in user wallets being emptied.

EIP-7702 was proposed by Vitalik Buterin, aiming to enhance user experience, such as batch processing transactions and sponsoring Gas fees. However, this feature has been abused to empty user addresses, being cheaper and more labor-saving.

Security experts have pointed out that EIP-7702 has design flaws that allow attackers to easily gain authorization and abuse it. They commented, "This is both ridiculous and cruel, as the same piece of malicious bytecode occupies most of the authorization."

Analysis suggests that this incident highlights the need for Ethereum to pay attention to security while pursuing innovation. New features must undergo stricter reviews and testing before launch to prevent misuse for illegal activities.

At the same time, it also reflects the importance of user security awareness. Users should carefully assess risks when using new features and must not authorize blindly. Only through the joint efforts of developers and users can a truly safe and reliable cryptocurrency ecosystem be built.

2. Industry News

( 1. Bitcoin stabilizes after a short-term pullback, and the market is focused on the prospects of a Federal Reserve interest rate hike.

The price of Bitcoin has slightly decreased by 1.2% in the past 24 hours, with the latest quote at $105,800. Analysts believe that Bitcoin has recently faced some profit-taking pressure, but the overall upward momentum remains.

On the macro level, the market's expectations for the Federal Reserve's interest rate hike in June have warmed up. Federal Reserve Governor Christopher Waller's latest statement supports continuing interest rate hikes to curb inflation. This has intensified investors' cautious sentiment towards risk assets and is also the main reason for Bitcoin's recent volatility.

However, the long-term bullish pattern of Bitcoin has not changed. On-chain data shows that the outflow of Bitcoin from exchanges continues to exceed the inflow, reflecting that investors still have a willingness to hold. In addition, Bitcoin's volatility indicator BVOL is at a low level, suggesting that market sentiment is relatively stable.

Analysts generally believe that Bitcoin may fluctuate and consolidate within the range of $100,000 to $110,000 in the short term. However, as long as the Federal Reserve's interest rate hike pace is not too aggressive, Bitcoin is still expected to break its historical high within this year. Investors need to closely monitor the Federal Reserve's policy direction and cautiously manage risks.

) 2. Ethereum has been attacked on-chain, and security risks have caused market concerns

Ethereum has suffered an on-chain attack, resulting in a large amount of user funds being stolen. According to warnings, approximately 80% of EIP-7702 delegated authorizations have been locked in malicious scripts, causing users to incur significant losses.

The incident originated from a vulnerability in the latest Ethereum upgrade EIP-7702 that was exploited by hackers. This upgrade aimed to improve Ethereum's scalability and reduce transaction fees, but it created opportunities for automated attacks for attackers.

As soon as the news broke, the price of Ethereum briefly dropped over 3% to around $2,650. The market has serious doubts about the security of Ethereum. Analysts point out that if the vulnerabilities are not fixed in time and confidence is not rebuilt, Ethereum may face greater selling pressure.

However, the Ethereum development team has reacted quickly and plans to roll out a new hard fork upgrade in the coming weeks to address the issue. If the upgrade goes well, it is expected to help restore market confidence.

Overall, this incident once again highlights the importance of blockchain security. Investors need to closely monitor the subsequent repair progress, while also raising their risk awareness and investing cautiously.

3. The Solana ecosystem continues to heat up, with SOL price surpassing 190 dollars.

The Solana ecosystem continues to heat up, with the SOL price breaking through $190, reaching a historic high. Data shows that over the past week, the SOL price has accumulated a rise of more than 25%.

The main reason for the rise in the price of SOL is the continued activity within the Solana ecosystem. According to Solana data, the Solana ecosystem currently has over 400 projects, including several popular sectors such as DeFi, NFT, and GameFi. In addition, the Solana Foundation recently announced a series of new investment plans to further promote ecosystem development.

Analysts believe that the continued rise of the Solana ecosystem is mainly due to its outstanding performance and lower transaction fees. Compared to established public chains like Ethereum, Solana has significant advantages in transaction speed and scalability.

However, some analysts express concerns about the high centralization of Solana. Most of Solana's nodes are operated by internal validators, resulting in a lower degree of decentralization. In addition, the Solana ecosystem lacks truly "killer applications", and there is still uncertainty in its ecological development.

Overall, the continuous warming of the Solana ecosystem is worth paying attention to, but investors should also be wary of potential risks and view the long-term development prospects of SOL rationally.

3. Project News

1. The Aptos Move Security and General Purpose Library Co-construction Plan has officially launched.

The official Chinese community of Aptos, Movemaker, is collaborating with the Move Chinese developer community, alcove, to jointly launch the "Aptos Move Security and General Purpose Library" open-source co-construction plan. This plan aims to build the first standardized smart contract library for the Aptos ecosystem, creating the "golden standard component library" for the Aptos development ecosystem.

Although the Move language has inherent advantages such as modularity and resource safety, there are common issues in the Aptos ecosystem, including redundant development of basic functionalities, insufficient security audits, and low collaboration efficiency. This plan will focus on key areas such as access control, module upgrades, general DeFi modules, and utility functions, leveraging the strong typing characteristics of Move to provide developers with a reliable, reusable, and audited public foundational module library.

The program has secured an initial funding of $200,000 and sincerely invites ecological project parties, independent developers, and security audit teams to participate in co-construction. Movemaker and alcove will be responsible for coordinating resources from all parties and promoting the standardization process. This program is expected to address the shortcomings in the infrastructure development of the Aptos ecosystem and inject new momentum for ecological development.

Industry insiders say that unified standards are beneficial for improving development efficiency, reducing security risks, and promoting ecological collaboration. As the Aptos ecosystem gradually matures, standardized infrastructure may become a key part of ecological development.

2. Current Status and Future Prospects of the Sui Ecosystem Development

Sui is an emerging public blockchain based on the Move language, incubated by Mysten Labs, and launched its testnet in May 2022. Sui attracted a lot of attention during the TOKEN2049 conference, with its token SUI experiencing a significant price surge.

As a representative project of the Move ecosystem, Sui has advantages such as high throughput and low transaction fees. Currently, the Sui ecosystem has given birth to popular projects like Cetus and Navi, but the overall tradable assets are still relatively limited. To further promote ecosystem development, Sui has launched the SuiPlay gaming exhibition area and initiated an incubation plan to cultivate more star projects.

At the same time, the addition of Grayscale Trust and Native USDC will further enhance the strength of the Sui ecosystem. However, the Sui ecosystem still faces challenges such as user education and application expansion.

Industry insiders believe that the Sui ecosystem has broad prospects but has a long way to go. Sui needs to continuously introduce high-quality projects, enrich ecological application scenarios, and strengthen user operations in order to truly unlock its potential. The competition in the Move ecosystem will be a key focus direction in the future.

3. There are differences in the direction of the Aptos Foundation's efforts.

Aptos is another public chain based on the Move language, founded by former Meta employees. The Aptos token APTOS has performed well recently, rising by as much as 14%.

However, the development direction of the Aptos ecosystem has sparked differences within the community. Some users and community members lack a clear understanding of the operational strategies and key areas of focus of the Aptos Foundation, calling for improved communication from the foundation.

The Aptos Foundation needs to clarify its focus, whether to concentrate on traditional sectors such as DeFi and NFT, or to target emerging fields like the metaverse and AI. At the same time, the foundation also needs to increase its ecological support efforts to attract more quality projects.

Analysts point out that the strategic positioning of the Aptos ecosystem in its early development stage will directly affect its future development direction. The foundation needs to carefully consider industry development trends, establish a clear roadmap, and maintain good communication with the community in order to consolidate development synergy.

4. Movement: The Rising Star in the Move Ecosystem

Movement is the only public chain project in the Move ecosystem that has not yet issued tokens, founded by former Diem engineers, and has garnered significant attention. The Movement team plans to build a high-performance, secure, and reliable public chain.

Compared to Sui and Aptos, Movement is currently in a relatively backward position, but its technical prowess should not be underestimated. The Movement team has a wealth of blockchain experience and is expected to make a difference in terms of performance, security, and more.

However, it is not easy for Movement to stand out in the competition. It needs to launch its mainnet as soon as possible, attract high-quality projects, and increase marketing efforts to raise its profile. Only by forming a certain scale of ecology can it secure a place in the Move ecological competition.

Industry insiders say that the development of Movement is worth continuing to watch. If Movement can make breakthroughs in technological innovation and ecological construction, it will bring new vitality to the Move ecosystem.

5. Virtuals Ecosystem: The Leader in the AI Track on Base Chain

Virtuals Protocol is one of the main projects within the Base ecosystem, with its token VIRTUAL recently performing impressively, boasting a market cap of over $3 billion. The Virtuals ecosystem focuses on the AI sector, including multiple AI projects such as GAME, Luna, and VaderAI.

The core of the Virtuals ecosystem is the AI Agent, which aims to provide users with personalized AI assistant services. The ecosystem combines AI technology and crypto-economic models to provide users with a new value experience.

The rise of the Virtuals ecosystem reflects the development potential of the AI track in the cryptocurrency field. With the continuous advancement of AI technology, AI may become the next windfall in the cryptocurrency industry. The Virtuals ecosystem provides valuable experience for other public chains.

However, the AI track is still in its early stages and there are many uncertainties. The Virtuals ecosystem needs continuous innovation, improved user experience, and to attract more high-quality projects to maintain its leading position.

Industry insiders believe that the development of the Virtuals ecosystem deserves continued attention. If this ecosystem can successfully lead the development of the AI track, it will bring new opportunities to the entire cryptocurrency industry.

6. EIP-7702 raises security concerns for Ethereum, issuing a warning

The latest Pectra upgrade of Ethereum has introduced the EIP-7702 feature, aimed at enhancing user experience. However, it has been discovered that EIP-7702 is being maliciously exploited, with over 80% of authorizations used for automated attacks, resulting in users' wallets being emptied.

EIP-7702 allows wallets to temporarily possess smart contract capabilities, including batch processing transactions and sponsoring Gas fees. However, this feature has also been exploited by theft gangs, who use malicious bytecode to empty users' wallets.

Warning, EIP-7702 has serious security risks, users should use it with caution. Wallet service providers should also strengthen security measures to prevent user funds from being lost.

The Ethereum community reacted strongly to this event. Some believe that the design of EIP-7702 has flaws that need further improvement; others call for enhanced user education to raise security awareness.

Analysts say that this event again highlights the importance of blockchain security. Ethereum needs to promptly fix vulnerabilities, enhance system security, and strengthen collaboration with wallet service providers to jointly maintain network security. Only by ensuring that the system is secure enough can it attract more users to join.

4. Economic Dynamics

1. Federal Reserve Governor Waller releases dovish signals

Economic background: The U.S. economy maintains moderate growth in the first quarter of 2025, but inflation remains high and the unemployment rate rises slightly. The annualized quarterly GDP growth is 1.3%, below the expected 1.8%. The inflation rate in April is 5.4%, well above the Federal Reserve's target of 2%. The unemployment rate rises from 3.5% to 3.7%.

Important Events: Fed Governor Christopher Waller sent a dovish signal in his speech at the Bank of Korea's international conference. He said tariffs would push up unemployment, with downside risks to the economy and job market, and upside risks to inflation. Waller said "the good news is that a rate cut is still possible later this year".

Market reaction: Waller's speech sparked market expectations for a Fed rate cut in September, with U.S. stocks closing higher and the S&P 500 index rising by 0.6%. The dollar index fell by 0.3%, reflecting expectations of a weaker dollar. Bond yields declined, with the 10-year Treasury yield down 5 basis points to 3.65%.

Expert analysis: Goldman Sachs chief economist Jan Hatzius stated: "Waller's comments reflect the Federal Reserve's ongoing concerns about the economic slowdown and persistent inflationary pressures. If the economy continues to soften, the Federal Reserve may initiate a rate-cutting cycle before the end of the year."

2. Japan's revised GDP data shows economic contraction in the first quarter.

Economic Background: Japan's economy fell into recession in the first quarter of 2025, mainly due to weak exports and capital spending. Weak industrial production and retail sales data in April reflect sluggish domestic demand. The inflation rate hovers around 2%, lower than that of other major economies.

Important events: The Japanese government has announced the revised GDP data for the first quarter, showing an annualized contraction of 0.8%, slightly larger than the initial estimate of 0.7%. Exports and capital expenditure decreased at annual rates of 3.8% and 2.1%, respectively, which dragged down economic performance.

Market Reaction: The Nikkei 225 index fell by 0.9%, and the yen weakened slightly against the dollar. Investor confidence in the Japanese economy has been undermined, with expectations that the Bank of Japan will maintain its ultra-loose monetary policy. Bond yields rose slightly, with the 10-year government bond yield increasing by 2 basis points to 0.42%.

Expert Opinion: Robert Subramanian, chief economist of Mizuho Financial Group in Japan, stated: "The Japanese economy is facing multiple downward pressures, including weak global demand, trade tensions, and insufficient domestic corporate investment willingness. The government and the central bank need to take further fiscal and monetary policy stimulus measures."

3. EU and UK trade talks hit a deadlock again

Economic Background: Since the "Brexit" in 2020, the EU and the UK have been engaged in difficult negotiations regarding their future trade relationship. The two economies are highly interconnected, and trade disputes could severely impact their bilateral economy. The EU economy is expected to grow slightly by 0.2% in the first quarter of 2025, while the UK economy is projected to contract slightly by 0.1%.

Important Event: The latest round of trade negotiations between the EU and the UK has once again stalled, with both sides struggling to reach a consensus on core issues such as fishing rights and the freedom of labor movement. The UK government has threatened to unilaterally withdraw from the negotiations if the EU does not make significant concessions.

Market reaction: European stock markets fell accordingly, with the UK FTSE 100 index down 1.2% and the Eurozone STOXX 600 index down 0.8%. The British pound fell 0.6% against the dollar, reflecting increased risks of a "no-deal Brexit". European sovereign bond yields declined, indicating a rise in safe-haven demand.

Expert Analysis: David Folkerts-Landau, Chief European Economist at Deutsche Bank, stated: "Both the UK and the EU are unwilling to make concessions, and a stalemate in trade negotiations is inevitable. Once the UK truly exits the negotiations, both the UK and EU economies will suffer a heavy blow, and the pound and euro are likely to depreciate significantly."

5. Regulation & Policy

1. The Monetary Authority of Singapore has issued the final policy document: unlicensed cryptocurrency service providers must cease providing services to overseas clients by the end of June.

The Monetary Authority of Singapore (MAS) issued the final policy document on May 30, 2025, specifying that all cryptocurrency service providers (DTSP) registered or operating in Singapore must cease providing cryptocurrency services to overseas clients by June 30, 2025, if they have not obtained a DTSP license.

Policy Background: Singapore, as one of the global financial centers, has always been at the forefront of cryptocurrency regulation. In order to maintain the robustness of the financial system and protect investors' interests, the MAS began implementing a regulatory licensing system for cryptocurrency service providers in 2019. This policy aims to further strengthen regulation and ensure that all cryptocurrency businesses operating in Singapore are subject to appropriate oversight.

Policy content: According to the final policy document, all DTSPs registered or operating in Singapore must stop providing cryptocurrency services to overseas customers by June 30, 2025, if they have not obtained a license issued by MAS. MAS emphasizes that there will be no transition period, and violators will face legal penalties. In addition, the policy also specifies the requirements and review standards for license applications.

Market Reaction: Industry insiders generally believe that this policy is beneficial for strengthening the regulation of Singapore's cryptocurrency industry, enhancing market transparency and investor protection levels. However, there are also concerns that overly stringent regulations may hinder innovation and development in the industry. Some unlicensed cryptocurrency companies have stated that they will consider adjusting their business strategies or seeking to operate in other jurisdictions.

Expert Opinion: Professor Zhang Wei from the National University of Singapore's FinTech program stated: "This policy reflects the Singapore government's cautious attitude towards cryptocurrency regulation. By requiring all service providers to operate with a license, it can effectively prevent illegal activities such as money laundering and tax evasion, thereby maintaining financial order. However, it is also necessary to balance the relationship between regulation and innovation, providing appropriate development space for compliant enterprises."

2. Germany's cryptocurrency regulatory legal framework further improved: MiCA regulation comes into effect

As one of the countries within the EU with a relatively well-established financial regulatory system, Germany has always been at the forefront in addressing the legal challenges posed by cryptocurrencies. Since 2020, Germany has officially included cryptocurrencies under the supervision of the Banking Act. Subsequently, relevant laws such as the Anti-Money Laundering Act and tax laws have also gradually brought crypto assets under their regulatory scope. With the official implementation of the EU Regulation No. 2023/1114 on the Markets in Crypto-Assets (MiCA) in 2024, the regulatory framework for cryptocurrencies has become further specified and systematized.

Policy Background: Cryptocurrencies, as emerging financial instruments, pose challenges to traditional regulation due to their characteristics such as decentralization and anonymity. In response to this new situation, the German government has taken timely action by amending existing laws and introducing new regulations to gradually establish a legal framework for cryptocurrency regulation. The enactment of the MiCA regulation further improves this framework, making it more comprehensive and unified.

Policy Content: The MiCA regulation imposes clear regulatory requirements on entities such as cryptocurrency issuers, exchanges, and custodial service providers, including aspects like capital reserves, anti-money laundering compliance, and investor protection. At the same time, the regulation also stipulates classification standards for cryptocurrency assets and specific regulatory measures. As a unified regulation across the European Union, the MiCA regulation provides a basic framework and guidance for cryptocurrency regulation in member states.

Market Reaction: German cryptocurrency companies generally welcome the introduction of the MiCA regulations. They believe that a unified regulatory framework is beneficial for the long-term healthy development of the industry, can enhance investor confidence, and attract more funds into the sector. However, some companies are concerned that overly strict regulations may increase compliance costs and affect innovation.

Expert Opinion: Dr. Caroline Schmidt, Director of the Frankfurt School of Finance & Management, stated: "The coming into effect of the MiCA regulation marks a new stage in the EU's cryptocurrency regulation. This unified legal framework not only helps maintain financial stability but also promotes the orderly development of the cryptocurrency industry. However, it is also important to note that regulation should not be overly rigid; it must keep pace with the times and leave room for new technologies and business models."