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Circle and Aleo Launch USDCx: A Privacy-Enhanced Stablecoin on Aleo Testnet

By
Paul Ugbede Godwin
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0

Circle, the issuer of the popular USDC stablecoin, partnered with the Aleo Network Foundation to announce the launch of USDCx, a privacy-focused, USDC-backed stablecoin, on Aleo’s testnet.

This development leverages Circle’s newly introduced xReserve infrastructure, marking the second deployment on this platform following a similar integration on the Canton blockchain last week.

This is a collaborative effort with Aleo and Circle, a Layer-1 blockchain specializing in zero-knowledge (ZK) cryptography for confidential transactions.

USDCx addresses a major barrier to mainstream stablecoin adoption: the public visibility of transaction data on most blockchains, which exposes sensitive financial details like wallet balances and payment histories.

Banking-Level Privacy: Powered by Aleo’s ZK proofs specifically zkSNARKs, USDCx encrypts transaction amounts, sender/receiver identities, and histories by default. Users can selectively disclose data for compliance, audits, or regulatory requests, ensuring “confidential yet compliant” flows without full anonymity.

Each USDCx token is 1:1 backed by native USDC held in Circle’s xReserve vaults. It supports seamless cross-chain transfers via Circle’s Cross-Chain Transfer Protocol (CCTP) and Gateway systems, unifying liquidity across networks without risky third-party bridges.

As a smart contract-enabled asset on Aleo, USDCx supports programmable payments, such as automated payroll or conditional transfers, while maintaining privacy. Unlike standard USDC, USDCx loses its privacy features when bridged to non-Aleo chains, emphasizing its design for Aleo’s privacy-native environment.

Live on Aleo Testnet as of December 9, 2025, for developers and early testers to experiment with private stablecoin applications. Mainnet rollout is expected by late January 2026, pending further testing and regulatory alignment.

This is Circle’s new service enabling blockchains to mint their own USDC-backed tokens. It builds on Circle’s broader stablecoin ecosystem, including the upcoming Arc Layer-1 network dedicated to stablecoins.

Public blockchains’ transparency has deterred banks and enterprises from using stablecoins for high-value or sensitive operations, like cross-border payroll or treasury settlements. USDCx flips this by offering “HTTPS for finance”—secure, private defaults akin to how encryption revolutionized the web.

Firms like Request Finance and Toku, which handle global salary payments in crypto, see USDCx as a way to encrypt flows without public exposure. Platforms betting on events (e.g., elections or sports) want to hide trading histories to protect user identities.

With USDC’s market cap exceeding $78 billion nearly double from a year ago, USDCx could accelerate tokenized assets in finance. BlackRock’s CEO Larry Fink recently noted that “every asset can be tokenized,” and privacy tools like this remove a key friction point.

Aleo, backed by investors like a16z, SoftBank, and Coinbase Ventures with $28M raised in 2021, positions itself as the go-to for privacy-preserving DeFi and payments. Circle’s Chief Commercial Officer, Kash Razzaghi, highlighted how USDCx “pairs high-quality reserve assets with on-chain visibility and privacy to strengthen the foundation that businesses rely on as they scale stablecoin use globally.”

Aleo’s COO, Leena Im, added that this shift mirrors the internet’s evolution from HTTP to HTTPS, making privacy the new default. The announcement sparked immediate discussion on X with over 168,000 views on Aleo’s official post within hours.

Users praised it as a “breakthrough” for privacy in crypto, with one noting, “imagine buying coffee and the barista instantly knows your entire net worth—that’s the current state of crypto. Privacy is necessary for real adoption.”

Others highlighted its potential for institutional inflows, questioning if it will “drive more institutions to adopt crypto for privacy transactions.” This launch aligns with regulatory tailwinds, like the U.S. GENIUS Act, which clarifies rules for dollar-pegged stablecoins.

As privacy becomes a core narrative in the 2025-2026 cycle, USDCx could position Circle and Aleo at the forefront of compliant, scalable blockchain finance. For developers, Aleo’s docs detail how to integrate USDCx—check them out to build on testnet today.

U.S. Federal Prosecutors Recommend 12 Year Sentencing for Do Kwon 

By
Paul Ugbede Godwin
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0

The South Korean co-founder of Terraform Labs— Do Kwon, is the central figure behind the 2022 collapse of the TerraUSD (UST) algorithmic stablecoin and its sister token LUNA.

The event wiped out approximately $40 billion in market value, affecting millions of investors worldwide and triggering a broader “Crypto Winter” that contributed to the downfall of platforms like FTX.

Kwon was accused of misleading investors by promoting UST as a stable, fully backed asset despite internal knowledge of its vulnerabilities.

U.S. federal prosecutors in the Southern District of New York filed a recommendation urging U.S. District Judge Paul Engelmayer to impose a 12-year prison sentence on Kwon for conspiracy to commit wire fraud and securities fraud.

This stems from Kwon’s guilty plea in August 2025 to two felony counts related to defrauding investors between 2018 and 2022. Under the plea agreement, the maximum possible sentence is 25 years, but prosecutors capped their recommendation at 12 years to reflect his cooperation, including the forfeiture of over $19 million in assets and related properties.

Prosecutors described the fraud as “colossal in scope,” arguing that the losses exceeded those from high-profile cases like Sam Bankman-Fried’s FTX ($8 billion), Alex Mashinsky’s Celsius, and OneCoin combined.

They emphasized Kwon’s role in the rapid depegging of UST, which caused cascading market failures and necessitated a lengthy term for deterrence in the crypto sector. No restitution is being sought due to the complexity of calculating global investor losses.

Defense Response and Sentencing Hearing

Kwon’s legal team is countering with a request for a five-year sentence, citing: Nearly three years already spent in detention in Montenegro under “harsh conditions” while fighting extradition— arrested in March 2023 for using a forged passport.

His agreement to forfeit significant assets as partial amends. Potential for double jeopardy, as South Korean prosecutors are seeking a 40-year sentence for similar charges, with extradition likely after any U.S. term.

Judge Engelmayer requested clarification from both sides on Kwon’s foreign charges, including minimum and maximum penalties in South Korea and Montenegro, to inform sentencing. U.S. authorities have indicated they may support Kwon serving the latter half of his sentence in South Korea if he complies with plea terms.

The sentencing hearing is scheduled for December 11, 2025, in Manhattan federal court. Legal observers expect a focus on proportionality, given comparisons to other crypto fraud sentences like Bankman-Fried’s 25-year term, later reportedly reduced.

The U.S. prosecutors’ push for a 12-year sentence on Do Kwon, following his August 2025 guilty plea to wire fraud and conspiracy charges, underscores a hardening stance on crypto-related fraud.

This recommendation caps the plea deal’s maximum at 12 years versus a potential 25, reflecting partial credit for Kwon’s cooperation, including the forfeiture of $19.3 million in assets.

However, U.S. District Judge Paul Engelmayer’s December 8 order demanding clarifications—on Kwon’s 17 months in Montenegrin detention, South Korean charges up to 40 years, victim impact statements, and potential supervised release—highlights unresolved tensions in sentencing.

Legal experts anticipate a final term of 15-20 years, given Engelmayer’s history in financial fraud cases, potentially adjusted for time served abroad. This could set a benchmark for plea bargains in white-collar crypto crimes, where cooperation mitigates but does not erase severe penalties.

A pivotal challenge is cross-border enforcement. Prosecutors have signaled support for Kwon serving the latter half of his U.S. term in South Korea post-compliance, raising questions about extradition treaties, double jeopardy avoidance, and custody credits excluding Montenegrin time for forgery charges.

Failure to coordinate could lead to prolonged appeals or fragmented justice, testing U.S.-South Korean judicial alignment. Kwon’s defense argues for just five years, citing “harsh” pre-trial detention and asset forfeitures as sufficient amends, but this faces steep odds against the fraud’s scale.

This case underscores growing regulatory scrutiny on crypto founders, with potential implications for international prisoner transfers and cross-border enforcement.

WisdomTree Launches Europe’s First Fully Staked Ethereum ETP, as USDC Achieves Native Interoperability between Hyperliquid’s HyperCore and HyperEVM

By
Paul Ugbede Godwin
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0

WisdomTree, a prominent asset manager, announced the launch of the WisdomTree Physical Lido Staked Ether ETP (ticker: LIST) on December 4, 2025.

This marks the first exchange-traded product (ETP) in Europe to hold 100% stETH—a liquid staking token issued by the Lido protocol—providing investors with direct exposure to staked Ethereum (ETH) and its associated staking rewards without the need for traditional unstaked buffers used in creations and redemptions.

Exclusively backed by stETH, which represents staked ETH on the Ethereum network via Lido. stETH allows staking without lock-up periods, enabling liquidity while earning yields through a rebasing mechanism that accrues rewards directly to token balances.

Initial assets under management is approximately $50 million at launch. Fees: Management expense ratio of 0.50% 50 basis points. Listed on major European exchanges, making it accessible to institutional and retail investors through familiar channels.

Yield Mechanism: Tracks the spot price of stETH plus staking rewards, capitalizing on Ethereum’s Proof-of-Stake transition to a yield-bearing network.

This launch underscores Europe’s progressive regulatory framework for physically backed crypto ETPs, including those with staked assets, which facilitates seamless integration into institutional workflows.

Lido, the protocol powering stETH, dominates Ethereum staking with about 25% market share roughly 8.5 million ETH across 650+ node operators, offering deep liquidity (~$10 billion in DeFi collateral) and robust security.

As Dovile Silenskyte, Director of Digital Assets Research at WisdomTree, noted: “Lido Staked Ether sits at the centre of Ethereum’s transition to a yield-bearing network. It allows holders to earn staking rewards without locking up capital, creating liquidity and efficiency that extends across decentralised finance.”

The product arrives amid growing institutional interest in Ethereum staking. In the U.S., issuers like VanEck have filed for staked ETH ETFs, and BlackRock is exploring staking options for its ETHA trust.

Globally, staking products date back to 2019, but regulated, fully staked ETPs like LIST represent a milestone in bridging DeFi with traditional finance. As disclosed by WisdomTree, investors should be aware of: Price divergence between stETH and ETH during market volatility.

Smart contract risks inherent to the Lido protocol. General cryptocurrency market fluctuations. This ETP is positioned for experienced investors seeking yield-enhanced Ethereum exposure.

By providing regulated access to staking rewards currently 3-5% APY, these products could drive fresh inflows into Ethereum, mirroring the post-ETF rally in spot ETH earlier in 2025. Analysts project ETH could retest $4,900 its prior all-time high or even target $8,000 if approvals materialize, fueled by technical patterns like the “W” bottom formation.

WisdomTree’s LIST debuted with ~$50 million AUM, a modest start but indicative of pent-up demand; similar U.S. products could scale to billions, compressing stETH-ETH premiums and enhancing overall liquidity.

Lido’s stETH underpins both products, controlling 25-33% of staked ETH ~8.5 million ETH, $38 billion TVL. The filings triggered a 7% surge in LDO Lido’s governance token, reflecting speculation on increased protocol usage.

This could solidify Lido’s market share but risks over-reliance, as Ethereum developers have floated caps on liquid staking to prevent centralization. Staked products outpace plain ETH ETFs/ETPs by accruing rewards, making them more attractive amid Ethereum’s post-Merge evolution.

Europe’s LIST avoids “unstaked buffers” for efficient redemptions, setting a blueprint that could pressure issuers like BlackRock exploring staking for its $11.5 billion ETHA to adapt.

Institutions gain tax-efficient, compliant exposure to staking without running validators or navigating lock-ups—stETH’s rebasing mechanism auto-accrues yields while maintaining liquidity ~$10 billion in DeFi collateral.

LIST’s listing on exchanges like Xetra and Euronext democratizes this for European retail and pros, while VanEck’s ETF could do the same in the U.S., lowering barriers via familiar wrappers.

As Lido’s Kean Gilbert noted, stETH is already “the most widely used path” for institutions; these products formalize it.

USDC Achieves Native Interoperability between Hyperliquid’s HyperCore and HyperEVM

Hyperliquid announced that USDC has achieved native interoperability between HyperCore its high-performance trading engine and HyperEVM its EVM-compatible smart contract layer.

This integration enables secure, natively minted cross-chain USDC deposits directly to HyperCore via Circle’s CCTP (Cross-Chain Transfer Protocol), abstracting away the minting process on HyperEVM.

Users can now perform one-click USDC deposits from CCTP-enabled chains starting with Arbitrum, with more coming soon straight to HyperCore, without relying solely on the existing Arbitrum bridge.

Transfers between HyperCore and HyperEVM are now seamless, though some HyperCore-to-HyperEVM moves might temporarily fail if HyperEVM liquidity is low—funds stay safe on HyperCore in those cases, and you can fall back to the Arbitrum route.

No immediate changes needed: Deposits and withdrawals continue to work via the Arbitrum bridge or HyperEVM. The Arbitrum bridge will eventually be deprecated as native minting takes over, but Hyperliquid is prioritizing a gradual, secure rollout to give users and builders time to adapt.

This reduces bridge risks, simplifies UX, and unlocks deeper liquidity for trading, DeFi apps, and yield products on Hyperliquid. Circle’s involvement including CCTP V2 positions USDC as the go-to stablecoin here, with over $4B already bridged to the ecosystem.

Early adopters like Liminal are already enabling USDC-backed yield minting across both layers. Hyperliquid’s official post sums it up well: “This is a major milestone in allowing secure, natively minted cross chain USDC deposits directly to HyperCore.”

This builds on CCTP V2’s burn-and-mint mechanism, enabling seamless, one-click USDC deposits from supported chains like Arbitrum directly to HyperCore—without wrappers, bridges, or multi-step processes.

While the transition is gradual Arbitrum bridge remains active as a fallback, the long-term vision is full deprecation of external dependencies, positioning Hyperliquid as a self-sovereign DeFi powerhouse.

Users can now transfer native USDC from 20+ CCTP-supported chains, Ethereum, Base, Solana straight to HyperCore in a single transaction, abstracting the HyperEVM minting step. This cuts deposit times from minutes/hours via bridges to seconds, with sub-second finality on Hyperliquid’s architecture.

HyperCore-to-HyperEVM transfers might fail temporarily due to low HyperEVM liquidity, but funds stay secure in HyperCore—no losses, just route via Arbitrum as backup. This minimizes UX disruptions while building confidence.

Over $5.3B in USDC is already locked in Hyperliquid’s ecosystem, enabling instant use as collateral for perps/spot trading like $398B in Q3 2025 perp volumes or yield products like HLP vaults 38% APR. It unlocks delta-neutral strategies and tokenized positions without bridge risks.

Lowers barriers for retail and institutions; e.g., BitGo’s custodial integration now pairs with native USDC for secure TradFi inflows. CCTP’s single-transaction flow from source chains to HyperCore simplifies dApp development—e.g., auto-deposits into lending pools or swaps without custom bridge logic.

Builders are urged to migrate to HyperEVM USDC flows now, with Circle providing SDKs and toolkits. Hooks in CCTP V2 allow atomic post-mint actions, auto-lend USDC on HyperEVM, fostering innovative DeFi primitives like cross-chain rebalancing or tokenized perps.

This unifies HyperCore’s deep liquidity ~$1.77B+ DeFi TVL with HyperEVM’s smart contracts. Circle’s new incentives for HyperEVM/HIP-3 builders like grants, points programs and potential validator role signal long-term support. Partners like Across Protocol, Wormhole, and ValantisLabs are already integrating, accelerating multi-chain apps.

If you’re trading or building on Hyperliquid, test a small CCTP deposit to get ahead of the migration.

Global AI Leaders Earn Failing Marks On Catastrophic-Risk Management As Watchdog Warns Of Widening Safety Gap

By
Samuel Nwite
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2

A new international assessment has delivered a stark verdict on the state of AI risk management, warning that the companies building the world’s most powerful systems are not prepared to control them.

The study, conducted by AI-safety specialists at the nonprofit Future of Life Institute, found that the eight most influential players in the sector “lack the concrete safeguards, independent oversight and credible long-term risk-management strategies that such powerful systems demand.”

The AI Safety Index evaluated leading U.S., Chinese, and European firms across a range of risk categories, with a particular focus on catastrophic harm, existential threats, and the long-term control problem surrounding artificial general intelligence. U.S. companies ranked the highest overall, led by Anthropic. OpenAI and Google DeepMind followed. Chinese firms were clustered at the bottom of the table, with Alibaba Cloud placed just ahead of DeepSeek. Yet the broader picture was grim for everyone. No company achieved better than a D on existential-risk preparedness, and Alibaba Cloud, DeepSeek, Meta, xAI, and Z.ai all received an F.

The warning at the heart of the report argues that the industry’s pursuit of ever-larger and more capable systems is not being matched by an equivalent investment in safety architecture.

“Existential safety remains the sector’s core structural failure,” the report stated, adding that the gap between escalating AGI ambitions and the absence of credible control plans is increasingly alarming.”

The authors wrote that “none has demonstrated a credible plan for preventing catastrophic misuse or loss of control,” even as companies race to build superhuman systems.

The report urges developers to release more details on their internal safety evaluations and to strengthen guardrails that address near-term harms, including risks such as AI-induced delusions known as “AI psychosis.” That recommendation ties into a broader conversation playing out across governments and research institutions about the need for clearer, more enforceable standards as frontier AI models grow in power.

In an interview accompanying the report, UC Berkeley computer scientist Stuart Russell delivered one of the most pointed rebukes yet from a veteran of the field.

“AI CEOs claim they know how to build superhuman AI, yet none can show how they’ll prevent us from losing control – after which humanity’s survival is no longer in our hands,” he said.

Russell argued that if companies insist on developing systems that could meaningfully exceed human capability, then the burden of proof must rise to match that risk.

“I’m looking for proof that they can reduce the annual risk of control loss to one in a hundred million, in line with nuclear reactor requirements,” he said. “Instead, they admit the risk could be one in 10, one in five, even one in three, and they can neither justify nor improve those numbers.”

Companies named in the index responded by stressing their existing safety programmes. A representative for OpenAI said the firm was working with external specialists to “build strong safeguards into our systems, and rigorously test our models.” Google said its Frontier Safety Framework includes protocols for detecting and mitigating severe risks in advanced models, with the company pledging to evolve that framework as capabilities grow.

“As our models become more advanced, we continue to innovate on safety and governance at pace with capabilities,” a spokesperson said.

The findings land at a moment when governments, regulators, and the research community are locked in an unresolved debate about how fast the world is moving toward AGI, and how close today’s frontier systems are to thresholds that would require nuclear-grade governance.

National security agencies have begun to warn about the potential misuse of next-generation models in cyberwarfare and biological threats. At the same time, companies continue to roll out faster, more powerful models to keep up with competitors, a pace some researchers say has made cautious development nearly impossible.

The Index suggests that, in the absence of binding regulation, the incentives inside the industry still tilt decisively toward capability over caution. The report’s authors said that this imbalance, combined with the absence of independent oversight with real enforcement power, leaves the world exposed to both near-term and long-term risks.

The result is an industry caught between two accelerating forces: an economic race to build the most capable systems on earth, and a widening regulatory gap that struggles to catch up. The report warns that unless that gap narrows, the next wave of AI breakthroughs could arrive with fewer guardrails than the moment demands.

EU opens Sweeping Antitrust Probe into Google’s AI Data Practices

By
Samuel Nwite
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0

Google is facing fresh regulatory heat in Europe after the European Commission on Tuesday launched a formal antitrust investigation into the company’s use of online content to train and power its artificial intelligence services.

The probe marks one of the bloc’s most significant moves yet to scrutinize how a dominant American tech platform gathers and deploys data in the emerging AI economy.

The Commission said it is examining whether Google violated EU competition rules by drawing on content from web publishers and creators on YouTube in ways that could distort competition, impose unfair terms on content owners, or give the company an artificial advantage over rival AI developers. Regulators want to know whether Google is using material it does not adequately compensate for, and whether publishers have any meaningful ability to refuse without jeopardizing their visibility on Google Search.

Teresa Ribera, the EU’s commissioner for competition, framed the inquiry as part of a wider effort to ensure that Europe’s shift toward AI does not erode core market principles.

“AI is bringing remarkable innovation and many benefits for people and businesses across Europe, but this progress cannot come at the expense of the principles at the heart of our societies,” Ribera said.

She added that regulators are investigating whether Google has applied unfair terms to publishers and creators while disadvantaging other AI model developers in a way that breaches EU rules.

The initial focus rests heavily on Google’s AI Overviews and AI Mode — both of which can ingest and summarize publisher content as they respond to user queries. EU officials said they will assess how much of this material is derived from news sites, independent creators, and video uploads, whether it is properly licensed or compensated, and whether Google has used its dominance in search to force smaller publishers into arrangements that deprive them of leverage.

A Google spokesperson pushed back sharply. “This complaint risks stifling innovation in a market that is more competitive than ever,” the company told CNBC in its first response.

The spokesperson added that Google would continue working with news organizations and creative industries “as they transition to the AI era,” arguing that Europeans should not be denied access to new technologies.

The probe puts Google under even deeper scrutiny just months after the EU fined the company nearly 3 billion euros for allegedly distorting competition in the ad tech sector. Google’s global head of regulatory affairs, Lee-Anne Mulholland, said in September that the decision was “wrong” and confirmed the company would appeal. She insisted the firm does not act anti-competitively, pointing to a growing field of ad tech rivals offering alternative services.

Those earlier penalties were part of a broader effort by Brussels to limit the power of large digital platforms — an effort that has gained urgency with the rapid rise of AI. Regulators across the bloc have warned that the economic and informational clout of companies like Google, Meta, Apple, and Amazon risks becoming even more entrenched as generative AI systems are trained on vast troves of digital content.

For the EU, the fear is that control of those datasets and the models built on them could shape everything from advertising markets to news distribution.

The latest probe is occurring against a backdrop of escalating conflicts between the EU and U.S. tech leaders. Just days ago, the Commission fined Elon Musk’s platform X 120 million euros for failures tied to ad transparency requirements and what regulators described as “deceptive design” around its verification system. Musk reacted by calling for the European Union to be abolished altogether, prompting criticism and counterattacks from Republican officials in Washington.

The bloc also opened an antitrust investigation into Meta last week, targeting the company’s new policy giving AI developers access to WhatsApp metadata. Regulators said that the arrangement may break EU competition rules by granting preferential access to Meta’s ecosystem.

The Commission’s pressure campaign signals an increasingly assertive posture toward AI-related activity. European officials are not only enforcing existing antitrust frameworks but also preparing for the next regulatory phase under the Digital Markets Act and the AI Act — both intended to blunt the structural advantages big platforms hold in data access, distribution, and algorithmic scale.

Google now sits at the center of this storm. The company is trying to push aggressively into generative AI after OpenAI’s rapid rise and the escalating competition from Anthropic, Meta, and a swarm of new enterprise model developers. Training world-class models requires staggering volumes of data, and that has placed companies like Google in a difficult position: they depend on publisher content to remain competitive, but those publishers increasingly depend on regulators to counterbalance Google’s dominance.

The new investigation will test whether Google’s AI products are built on an unfair foundation or whether they simply represent the natural progression of a competitive market. For publishers and creators, it poses a larger question about survival in a landscape where their work fuels AI systems that can summarize, repackage, and potentially displace their original content.

However, Google now faces one of the most consequential regulatory tests of its AI strategy — a test that may significantly shape how its models are trained.

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