A Pakistani cryptocurrency trader, Mohammed Arsalan, was kidnapped in a scheme that involved local law enforcement officers and released after paying his captors $340,000 in crypto.

Investigation into the case led to seven arrests so far, according to a recent report by local English-language news outlet Dawn. Per the report, a suspected policeman is still at large and an officer of the Pakistani Counter-Terrorism Department was among the arrested.

The kidnappers reportedly forced the 30-year-old trader to pay $340,000 from his Binance account balance. After multiple contacts with the kidnappers pretending to be looking to buy U.S. dollars from the victim, five men in civilian clothes forcibly abducted the trader after gagging him in a police vehicle on Dec. 25.

The news follows November reports that a Ukrainian man was coerced into transferring 250,000 worth of stablecoin USDT after a group of criminals got hold of him. Also in November, police started investigating the high-profile abduction of Dean Skurka, CEO of Toronto-based crypto firm WonderFi Technologies, who was abducted and released after the payment of a $720,000 ransom.

Jeremiah O’Connor, chief technology officer and co-founder at crypto cybersecurity firm Trugard, told Decrypt that the news “underscores a troubling, though not unprecedented, trend of kidnapping and extortion targeting individuals for their digital assets.” Byron Boston, former Dallas police officer and CEO of crypto firm Crypto Track, agreed and notedthat “cryptocurrency-related kidnappings are increasingly common.”

O’Connor’s recommendations include minimizing public exposure, using multi-signature wallets and time-locked transactions, and practicing general situational awareness.

“The rise in crypto-related extortion and kidnappings calls for stronger international collaboration among law enforcement agencies, improved regulatory frameworks, and enhanced education on operational security for those engaged in the crypto space,” he added.

The people involved in the crime were habitual offenders who had previously committed similar crimes, according to the local report. An inspector reassured reporters that the law enforcement officers connected to the kidnapping would see no leniency.

Boston noted that “the involvement of corrupt law enforcement officials in kidnappings further complicates investigations.” He explained that “criminals with access to sensitive information or investigative methods can undermine efforts to trace and recover stolen funds.”

Arsalan expressed his anger in a Dec. 31 Facebook post. He wrote that he is “ashamed to be a citizen of this country.” He ended the message by saying: “Don’t bother me by calling or messaging me. I am very depressed, mentally dead.”

Edited by Stacy Elliott.

American banks seeking to offer customers services built on public blockchain networks appear to have been discouraged from doing so by the Federal Deposit Insurance Corporation, documents released Friday revealed. 

The disclosure came courtesy of a trove of newly unredacted crypto-related correspondences between the FDIC and member banks. San Francisco-based cryptocurrency exchange Coinbase obtained the documents via the Freedom of Information Act, or FOIA. Last month, Coinbase secured heavily redacted versions of 23 such letters. 

Thanks to a court order, the contents of those letters—and two new ones—were revealed today in their (near) entirety. 

One of those letters, sent in March 2022 from the FDIC’s New York office to a member bank, detailed how the federal agency had learned that the bank planned to roll out a “Bank Digital Deposit” program built to run on a public blockchain. The name of that public blockchain remains redacted. 

In the letter, the FDIC appears to take issue with the bank opting to use a public blockchain instead of a private, permissioned network. Blockchains like Ethereum and Solana are decentralized and permissionless, meaning that activity on them is fully public and cannot be overridden by third-party human administrators. By contrast, private blockchain networks, like those used by nation states to issue central bank digital currencies, place limits on who can use them and for what purpose.

The FDIC is apparently not a fan of member banks launching products on anything-goes, fully transparent networks. The regulator instructed the New York bank in the March 2022 letter to submit to a new, detailed review process before launching any products on public blockchains. 

Other letters disclosed Friday show the FDIC ordering member banks to halt the implementation of services related to the buying and selling of Bitcoin. Sections of the same letters unredacted last month showed the FDIC instructing member banks to “pause all crypto asset-related activity.”  

Coinbase Chief Legal Officer Paul Grewal touted today’s revelations as further proof of an alleged Biden administration initiative waged against the crypto industry via banking regulations that’s become known as “Operation Chokepoint 2.0” (borrowing the name from the Obama era scheme that targeted firearms dealers and payday lenders).

“They show a coordinated effort to stop a wide variety of crypto activity,” Grewal said on X (formerly Twitter) of Friday’s FDIC letters.

Another year is done, and crypto is somehow at a defining crossroads—again. After surviving an all-out regulatory crusade in the United States and weathering the final dregs of the last bear market, the digital assets industry appears ascendent once more. By all accounts, 2025 looks poised to be crypto’s greatest year yet. 

But how, exactly, the industry opts to navigate this moment of opportunity is far from set in stone. Regulatory moves, technical updates, and market trends could all still break a thousand different ways. 

Fret not, dear reader. Decrypt is here to predict the unpredictable. Here are some key questions that experts say are likely to define the coming year—and what their answers could mean for you.

First up: How much political capital will Donald Trump be willing to spend on crypto?

In November, the president-elect’s victory sent crypto markets soaring. It seems pretty clear that the days of the U.S. government doggedly attacking the industry’s key players are through—and that alone is a huge development.

But will the Trump Administration be willing to actively pursue policies that industry experts say are crucial to ensuring crypto’s long-term success?

“The end of the hostility is going to in and of itself be a boon,” Kristin Smith, the CEO of the Blockchain Association, a prominent crypto lobbying group, told Decrypt. “But we need more than that.”

Even though Trump made countless promises about the industry on the campaign trail, such commitments to particular constituencies routinely get lost in the shuffle once a president takes office and gets inundated by competing concerns—all of which will be urgent.

“There’s going to be a lot of priorities across the Trump Administration,” Smith said. “If we don’t have somebody there who’s able to execute on those, that’s going to be a problem.”

One positive indicator to Smith that digital assets policy could meaningfully advance in 2025 is the fact that, in an historic first, the Trump White House has appointed a dedicated AI and crypto czar. Venture capitalist David Sacks accepted the position in early December.

A White House crypto advisor will “ensure that things get done” by coordinating the Administration’s digital assets vision across the White House, executive agencies, and Congress, Smith said.

That sort of focus could have a massive and immediate impact on crypto’s strength, reach, and influence. 

Take the repeal of SAB 121, a U.S. Securities and Exchange Commission (SEC) rule that discourages American banks from custodying crypto assets. In May, bipartisan majorities in both chambers of Congress voted to nullify the rule, but President Joe Biden shortly thereafter vetoed the effort.

If Congress was merely urged to pass the same bill again, and Trump signed it into law, that single move could usher in a whole new chapter for crypto in the United States, Smith maintained. 

“It really opens up a whole new market,” she said.

Even though Bitcoin and Ethereum spot ETFs are currently trading on Wall Street, an abundance of yellow tape and crypto-related anxieties have kept the majority of American investors and businesses on the sidelines. 

Allowing mainstream banks to hold crypto themselves—and passing a basic market structure bill that formally legalizes the industry—would unlock untold amounts of still queasy TradFi capital for the digital assets industry, Smith said. Such basic steps would give “comfort to a broader set of investors and market participants that crypto is a safe place to be, that they can come and invest here, and that developers can build new businesses here.”

The difference between TradFi dipping its toes into crypto, and diving in headfirst, would be seismic. The industry might get some taste of that difference in 2025.

Edited by Andrew Hayward