17th October

You can read the last “This week in crypto” here.

In a bold move, Kraken announced it has purchased Small Exchange, a CFTC‑licensed US derivatives platform, for $100 million. The deal gives Kraken a regulated footprint to offer futures, options and even event contracts under US law. This step helps integrate its crypto business more deeply into traditional financial markets.

The acquisition signals a shift. Rather than just offering spot trading, Kraken now aims to compete in structured products and derivatives, especially in the US jurisdiction, where regulatory certainty is prized. It may also shorten the path for more sophisticated offerings such as prediction markets and institutional derivatives.

This move comes as other crypto firms are likewise eyeing regulated derivatives access. Kraken's platform's ability to clear, match, and manage risk directly under US oversight makes it more compelling to institutions currently on the sidelines.

But integration and compliance challenges lie ahead. Kraken must map its risk, margin and settlement systems to US standards. Maintaining trust while scaling derivatives operations will be a test. Still, it is one of the boldest plays by a crypto firm into regulated financial infrastructure in recent memory.

The Financial Stability Board, serving as the G20’s risk watchdog, released a report warning of major inconsistencies in crypto rules across jurisdictions. It flagged that while crypto markets have doubled, much of that expansion remains underregulated or fragmented.

In particular, the FSB emphasised that stablecoins pose systemic risks because many countries lack clear legal frameworks for them. In the absence of uniform rules, providers can exploit regulatory loopholes by domiciling operations in lenient jurisdictions.

The report also called for faster and more coordinated efforts to harmonise rules across borders. The FSB warns that crypto shocks in one region could spill into global finance without alignment.

For the crypto sector, this is a reminder that as adoption grows, pressure will mount on governments to pass laws and enforce them consistently. Firms will need to anticipate cross‑border compliance risk more than ever.

Laos has announced a sweeping ban on cryptocurrency mining due to mounting energy shortages and the need to stabilise its national grid. Power infrastructure officials cited that mining farms were straining supply during peak hours, exacerbating rolling blackouts in rural areas. The ban is immediate and applies to both existing and proposed mining operations.

Local data suggests many mining companies had taken advantage of low electricity costs in Laos, especially hydropower, and built large-scale farms. The government decision reflects tension: how to foster technology growth while ensuring energy availability for everyday consumers and industry. Authorities intend to reassess mining activity after grid infrastructure upgrades.

Mining operators are now activating exit strategies. Some plan to relocate to neighbouring countries where power remains cheaper or more stable. Others will evaluate whether to pivot into alternative blockchain infrastructure services, such as node hosting or staking support. The ban marks a sharp policy shift in a previously seen as mining-friendly region.

This development underlines how energy stability remains a central constraint for blockchain scaling. As more countries reevaluate the trade-offs between mining and grid reliability, we may see similar bans or more rigorous regulations in resource-scarce nations. Laos’ move will be closely watched by industry participants globally.

In one of the largest enforcement actions to date, the US Department of Justice announced it had seized $15 billion worth of crypto assets tied to illicit networks, including darknet markets, ransomware groups, and sanctioned entities. The assets span multiple chains and include Bitcoin, Ethereum, and various altcoins.

This seizure is notable in both size and execution. The DOJ coordinated across agencies and international law enforcement to trace, freeze, and transfer assets. It signals that global authorities are becoming more adept at targeting illicit flows on‑chain. The move is likely intended not just as punishment, but as deterrence toward actors who use crypto for illicit finance.

For the crypto market, such large seizures may impact liquidity and price dynamics - especially if assets are auctioned off. But beyond price, these operations may also increase trust in the system by showing that bad actors can be traced and prosecuted, reducing perceived impunity.

That said, concerns remain about privacy, due process, and potential overreach. Critics argue that even public seizure actions must balance transparency and civil liberties. As enforcement capacity improves, crypto users and firms will need to understand evolving risk landscapes - not just for transactions but for asset custody and governance.

This week in crypto has been a study in contrasts: regulatory and enforcement power pushes in the US, cautionary energy policies in Laos, expansion strategies by exchanges, and resurfacing international consistency gaps.

Kraken’s move into derivatives, the FSB’s warning on fragmented rules, the Laos mining ban and the DOJ’s massive crypto seizure each reflect tensions as digital finance continues maturing. Markets are no longer sheltered from politics, regulation, or infrastructure constraints.

How well crypto firms, governments, and users adapt to these pressures will likely shape the next chapters.

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