WEEKLY: $1.2B Outflow from ETFs, USDC Integration in Samsung, and ZachXBT's Investigation

Following a period of relative calm, crypto funds registered a massive outflow of capital, while Bitcoin came under pressure due to weak spot demand and profit-taking by large holders.

Against this backdrop, the industry showcased several major events at once: from an undercover investigation targeting a Chinese money-laundering syndicate to the large-scale integration of stablecoins into the Samsung ecosystem. At the same time, the regulatory landscape in the US gave an unexpected signal in favor of user privacy.

Bitcoin Under Pressure

The primary cryptocurrency is holding around $83,000 amidst heightened volatility and weak spot demand. CryptoQuant analysts recorded a decrease in open interest for derivatives, as well as a massive wave of profit-taking – BTC holders realized over $1.03 billion in profit in just a single day.

An additional factor contributing to market nervousness was the actions of the US government, which moved 833.6 BTC and 40,285 BNB worth over $100 million in total, directing a portion of the Bitcoins to Coinbase Prime, sparking rumors of a potential sale. Meanwhile, large investors continue to accumulate assets: according to Santiment, whales acquired 86,702 BTC over the last three weeks, and daily outflows from exchanges hit a seven-month high.

Record Outflow from ETFs

It was an extremely tough week for US spot crypto funds, which collectively lost more than $1.2 billion. US spot Bitcoin ETFs recorded a net outflow of $681.1 million over five business days, completely erasing previous modest capital inflows.

Ethereum ETFs demonstrated a similarly negative dynamic, losing $542.07 million. Certain altcoin funds also faced a general sell-off, notably Solana ETFs, whereas NEAR ETFs stood out as a rare exception, attracting $35.99 million during the week.

ZachXBT’s Undercover Operation

Renowned on-chain sleuth ZachXBT conducted a large-scale investigation, posing as a client to infiltrate a Chinese criminal syndicate. According to his data, this group laundered over $1 billion originating from cryptocurrency exploits closely linked to the North Korean hacking group Lazarus Group.

To gather evidence and trace the transfer chains of stolen assets, the researcher spent $349,700 of his own funds, consciously losing about a 5% fee on each transaction. The gathered information has already been handed over to facilitate the blacklisting of associated addresses and bring the perpetrators to justice.

USDC in Samsung Smartphones

Samsung Corporation announced plans to integrate the USDC stablecoin directly into the Samsung Wallet application for Galaxy lineup users in the US. The initial phase includes support for USDC transfers to compatible crypto wallets worldwide.

In addition to direct digital asset transfers, users will be able to send funds to bank accounts in over 60 countries with automatic conversion into local fiat currency. This move could significantly simplify cross-border transfers for millions of smartphone owners.

Issues with Ledger Wallets

Ledger has launched an investigation following reports of potential hardware wallet compromises involving devices purchased through CryptoBilis, an official reseller in Southeast Asia. Users reported unauthorized drains of funds from newly set up devices.

According to on-chain researchers, cumulative losses across the Bitcoin, Ethereum, and TRON networks have already exceeded $86 million. The manufacturer advised temporarily halting sales and shipments through this distributor until the technical causes of the incident are determined.

A Victory for Financial Privacy

The US Treasury and regulator FinCEN officially withdrew two controversial proposed rules that called for strict oversight of unhosted crypto wallet transactions and operations via crypto mixers. The regulatory initiatives had drawn widespread criticism from privacy advocates.

Coin Center experts hailed the decision as a major victory for user financial privacy, as the withdrawn regulations would have forced services to collect excessive personal data and laid the groundwork for broad surveillance of private wallets.

Tether to Launch Kazakhstan’s Stablecoin

Tether, the issuer of the USDT stablecoin, signed a memorandum of understanding with the National Bank of Kazakhstan and the administration of the city of Alatau. The parties agreed to jointly explore the prospects of issuing a digital tenge in the form of a stablecoin.

The partnership also envisions launching pilot projects for Real World Asset (RWA) tokenization built on Tether's new Hadron platform, highlighting growing interest from state entities in institutional DeFi.

Kursoff's Take

Crypto users should prepare for local volatility as the market absorbs massive fund outflows; however, the industry's focus is steadily shifting toward mainstream stablecoin adoption and enhanced security.