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North Carolina Speaker of the House Destin Hall has filed a bill that proposes authorizing the State Treasurer to invest in “qualifying digital assets,” joining over a dozen other U.S. states that are pursuing similar bills.

The bill, HB92, intends to allow the treasurer to diversify the state’s portfolio by investing in crypto assets such as bitcoin. However, such crypto assets have been described as "exchange-traded products" with a minimum average market capitalization of $750 billion over the preceding 12 months, a criterion that currently only bitcoin meets.

The proposed legislation — co-sponsored by Representatives Stephen Ross, Mark Brody and Mike Schietzelt — also stipulates that the crypto investment must not exceed 10% of the balance of the fund. 

“Investing in digital assets like Bitcoin not only has the potential to generate positive yields for our state investment fund but also positions North Carolina as a leader in technological adoption and innovation,” Hall said in a statement on Monday.

In a separate X post, Hall wrote that the “North Carolina Digital Assets Investments Act” aligns with U.S. President Donald Trump’s vision for “a national bitcoin stockpile” and ensures that “North Carolina leads at the state level.”

Over a dozen other U.S. states have also introduced similar acts. Representatives from states including Texas, Pennsylvania, Ohio and Oklahoma have recently pushed to build bitcoin reserves in their respective states.

Bitcoin has become an investment project among lawmakers in US states, especially after pro-crypto Trump took office in January. The world’s largest crypto gained 1.1% in the past 24 hours to trade at $98,351 at the time of writing, according to The Block’s price page.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

WazirX hack victims will receive 85% of their portfolio value as recorded on Jul.18 as the exchange completed its asset rebalancing on Tuesday, with the first round of distributions slated in April.

As of Tuesday, users can see both the U.S. dollar and Indian rupee values of assets that were lost in a $230 million hack in July 2024. Upside from unstolen tokens belonging to individuals have been distributed across all users, allowing for a higher amount to be returned to users.

Creditors now have until Feb.19 to accept the rebalancing under the current scheme, with a majority vote of 75% required for the plan to move forward.

Part of the refund plan is to launch a decentralized exchange (DEX), issue recovery tokens that can be traded, and perform a periodic buyback of recovery tokens using platform profits and new revenue streams over the next three years.

However, if the scheme is not approved, the restructuring plan fails and the process moves towards liquidation under section 301 of the Singapore Companies Act — potentially leading to a fire sale of assets and creditors receiving less compensation as assets are sold off at possibly lower values.

WazirX was hit by a security breach in one of its multisig wallets last July, causing over $100 million in shiba inu and $52 million in ether, among other assets, to be drained from the exchange.

The stolen funds accounted for over 45% of the total reserves cited by the exchange in a June 2024 report, leading to a restructuring process to clear liabilities. North Korean hacking unit Lazarus is believed to be behind the attack, as CoinDesk previously reported.

Binance and the U.S. Securities and Exchange Commission have jointly requested the court to pause their legal case for 60 days.

The court filing, submitted Monday, stated that the request to stay the case was made with consideration of the SEC’s new task force for developing a clear regulatory framework for cryptocurrencies.

“The work of this task force may impact and facilitate the potential resolution of this case,” the document said. “Accordingly, the SEC proposed a brief stay to Defendants, and the Defendants agreed that a stay is appropriate.”

The defendants in the case are Binance, its co-founder Changpeng Zhao, BAM Trading Services and BAM Management US Holdings.

The filing also noted that at the end of the 60-day period, the parties plan to submit a joint status report that decides whether an extension of the stay is warranted.

Originally filed in June 2023, the SEC’s complaint against Binance and affiliated entities included 13 charges based on its claim that the exchange operated unregistered exchanges, broker-dealers and clearing agencies for financial securities.

In June 2024, a federal judge partially dismissed the charges regarding Binance’s BUSD, Simple Earn programs and the secondary sales of BNB, but still upheld a large part of the SEC’s claims.

The agency, under the leadership of former chair Gary Gensler, also filed lawsuits against other major crypto players, including Ripple, Coinbase and Kraken, with charges of a similar nature to the Binance case.

The SEC’s claims against the crypto platforms have been criticized by industry members and experts who claim that it failed to deliver clear instructions on what offerings or services of cryptocurrencies may violate federal securities laws.

SEC Crypto 2.0

Gensler, who faced heavy criticism from the crypto sector for his “regulation by enforcement” approach against major players, stepped down last month following crypto proponent Donald Trump’s reelection as U.S. President.

Gensler’s departure from the agency has been touted as a major positive shift for crypto regulations. 

Trump has since named pro-crypto SEC Commissioner Mark T. Uyeda as the acting chair of the SEC, and appointed former regulator Paul Atkins to assume the role of SEC chairman. Atkins, who also shares a friendly view toward crypto, has yet to be confirmed by the Senate.

Under new leadership, the SEC was also said to be scaling down its crypto enforcement unit. The Wall Street Journal reported that the SEC reassigned chief litigation counsel Jorge Tenreiro, who has overseen several crypto lawsuits, to the agency’s IT department.

SEC Commissioner Hester Peirce, the leader of the SEC’s crypto task force, said in a statement last week that the team will work to provide clarity on which crypto assets are financial securities, and prioritize classifying some tokens as “non-securities.”

“To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively,” the SEC said in the crypto task force announcement, titled SEC Crypto 2.0. “The Task Force’s focus will be to help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Ether has underperformed year-to-date, declining over 20%, but fundamentals are improving and total value locked (TVL) on the Ethereum blockchain has risen dramatically, Wall Street bank Citi C said in a research report Monday.

"While user activity has been volatile in recent weeks, the fundamental backdrop is not all that murky," analysts led by Alex Saunders wrote.

Citi noted that TVL on the Ethereum network has risen sharply, while ether exchange-traded funds (ETFs) are still seeing inflows, and search interest is rising.

Following the U.S. election in November, ether ETF flows turned positive, the report noted, with total inflows of $3.2 billion since their July launch.

Stronger user growth on layer-2s and rival blockchain's such as Solana has raised questions about Ethereum's competitive advantage, the report said.

President Trump's World Liberty Financial holds more than $200 million of ether, and this could be viewed as "additional motivation for ensuring the U.S. strengthens its support for the crypto industry," the bank said.

"Relative ETH and altcoin performance may serve as a gauge for how optimistic the industry is regarding follow-through on regulatory clarity in the U.S.," the report added.

Citi noted that weakness in ether has coincided with an increase in bitcoin dominance, which is now at multi-year highs above 60%.

Read more: Ethereum Faces 'Intense' Competition From Other Networks: JPMorgan

According to Bitwise Asset Management, individual holders control most of Bitcoin’s total supply. 69.4% of the 21 million BTC in circulation belong to private investors.

Given this concentration of ownership among individuals, large institutions and governments seeking to acquire Bitcoin may face challenges.

Institutions Face Scarcity as Bitcoin Supply Declines

In a recent X post, Bitwise outlined Bitcoin’s total supply distribution. Apart from individual holders, approximately 7.5% of Bitcoin is considered lost. Funds and exchange-traded products (ETPs) control 6.1%.

The wallet associated with Satoshi Nakamoto, Bitcoin’s pseudonymous creator, holds 4.6%. Moreover, governments and businesses collectively own just 5.8% of Bitcoin.

The asset manager highlighted that if companies and governments wish to acquire Bitcoin, they will primarily need to purchase it from individuals willing to sell.

Hunter Horsley, CEO of Bitwise, also pointed out that despite consistent buying from corporates and ETFs, Bitcoin’s price has still faced downward pressure. He also stressed that the bulk of Bitcoin’s value remains in the hands of individual holders.

Is a Bitcoin Supply Shock Coming?

Meanwhile, only 5.7% of Bitcoin remains to be mined. In addition, OTC (Over-the-Counter) markets are running low on Bitcoin. A crypto analyst highlighted that just 140,000 BTC remains in the OTC market.

The analyst explained ETFs collectively purchased 50,000 BTC last month. Yet, price movements remained subdued. This suggested that institutions source Bitcoin from OTC markets rather than exchanges to avoid triggering price surges.

Nonetheless, this strategy may no longer be viable with OTC supply depleting.

He added that if MicroStrategy (now Strategy) continues its aggressive acquisitions or ETFs maintain their January-level accumulation, OTC Bitcoin could be depleted. A similar scenario would unfold if the US and the states began buying Bitcoin as part of their reserves.

Strategy has maintained a consistent Bitcoin acquisition plan. On February 10, the firm purchased 7,633 BTC for approximately $742.4 million. This marked its fifth Bitcoin purchase in 2025 alone. According to Saylor Tracker, the firm now holds 478,740 BTC, valued at $47.12 billion.

Institutions such as BlackRock are also adding pressure to supply. The asset manager reportedly acquired $1 billion worth of BTC in January. In fact, it bought 227 BTC today, according to Arkham Intelligence.

Nevertheless, as supply tightens, institutions may soon be forced to buy directly from exchanges, potentially driving Bitcoin’s price significantly higher.

This supply shock threat looms as Bitcoin adoption accelerates. In a previous report, BlackRock noted that cryptocurrency reached 300 million users faster than the internet and mobile phones.

Brian Armstrong, CEO of Coinbase, also weighed in on the adoption timeline comparison.

He added that the comparison depends on how one defines the official starting points for Bitcoin, the internet, and mobile phones. However, Armstrong acknowledged that the overall trend is still accurate despite these variables.

Lawmakers and industry leaders are calling for a regulatory overhaul of the cryptocurrency sector under President Donald Trump’s administration to ensure the US maintains an edge over global competitors.

On Feb. 11, the Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee of the House Financial Services Committee will hold a hearing titled “A golden age of digital assets: charting a path forward.”

Witnesses will include senior executives specializing in cryptocurrencies such as Jose Fernandez da Ponte from PayPal, Jonathan Jachym from Kraken crypto exchange and Timothy Massad from Harvard University.