This week, the cryptocurrency market has witnessed many important developments, from the major controversies in the Pi Network ecosystem to Trump's cryptocurrency summit and revelations about the role of Bit in the Dark Web.
Below is a summary of the key events that have occurred this week, which will continue to shape this industry.
Pi Network Criticized for Mainnet Migration
Pi Network has been controversial and has been criticized by the Pioneers community, becoming a prominent topic in the cryptocurrency space this week. This happened amidst widespread issues as Pioneers were unable to transfer their Pi coins to the mainnet before the migration deadline.
"The whole process is a joke. ~80% of my balance is shown as unverified, even though all my security rounds have completed KYC. There are no additional actions listed to address this issue. Furthermore, no one has responded to me about the support ticket I opened a few weeks ago. What's going on?" a user commented.
Many users, frustrated by the extended lock-up period, have turned to selling their accounts, raising concerns about the integrity of the ecosystem. The failure to meet the migration deadline has increased concerns about the potential for price drops when unrestricted trading begins.
Adding to the concerns, the KYC (Know Your Customer) verification issue is causing difficulties for the Pi Network community. Pioneers who are unable to verify their identity risk losing access to their Pi coins, creating uncertainty ahead of Pi Day.
These situations have led to growing dissatisfaction among users, who are questioning the transparency of the project. Meanwhile, concerns about centralization have escalated, with reports indicating that Pi Network's core team holds 82.8 billion Pi coins. This revelation has sparked debates about whether the network is truly decentralized or controlled by a few individuals.
Dark Web Drug Markets Trade Millions in Bit
Another prominent topic in the cryptocurrency space this week was the reappearance of an ancient and long-dormant Bit wallet. This cryptocurrency wallet, associated with drug trafficking on the Silk Road dark web, suddenly reappeared, transferring $77.5 million worth of Bit (BTC) after nine years.
"Nucleus Marketplace was a darknet drug market, and it is believed that the founder was either arrested by law enforcement or absconded with the funds when the market shut down in 2016. The BTC held in their wallet has remained untouched until today," Arkham revealed.
This fund transfer has raised questions about the potential for further illegal financial activity. It also raises questions about whether the authorities are monitoring these funds.
This transaction serves as a reminder of the controversial past of cryptocurrencies and their continued use in underground markets.
SEC May Reclassify XRP as a Commodity
This week, there were rumors that the SEC (U.S. Securities and Exchange Commission) may reclassify XRP as a commodity instead of a security. This development follows Ripple's recent legal victories, in which Ripple successfully argued that the sale of XRP on secondary markets did not constitute a securities transaction.
"This speculation has gained attention after Vermont state regulators announced they had dropped their lawsuit against Coinbase, citing the SEC's new Crypto Task Force. This could set a significant precedent for Ripple," a user on X shared.
If true, this move could significantly impact Ripple's long-running legal battle with the SEC and redefine how cryptocurrencies are regulated. Specifically, if the SEC classifies XRP as a commodity, it would place it under the jurisdiction of the CFTC (Commodity Futures Trading Commission) instead of the SEC, potentially leading to a more favorable regulatory environment for Ripple and its investors.
Such a milestone could pave the way for an XRP ETF in the U.S. However, there has been no official confirmation, and the cryptocurrency community remains divided on the potential impacts.
Some believe this would provide clarity and reduce the necessary regulatory burden. Others warn that the reclassification could lead to additional oversight and compliance requirements.
Meanwhile, many see parallels between Ethereum (ETH) and XRP, arguing that XRP deserves a commodity status or classification as well.
Trump's Cryptocurrency Summit Disappoints
Also this week, U.S. President Donald Trump hosted a highly anticipated cryptocurrency summit at the White House. The event aimed to solidify the Trump administration's position as an ally of the digital asset industry.
However, the event failed to meet expectations, lacking clear policy proposals and specific commitments. Instead of providing specific regulatory guidance, the summit primarily consisted of general statements about innovation in the U.S., economic growth, and opposition to excessive government control over cryptocurrencies.
"That conference was the most embarrassing thing I've ever witnessed," lamented famous NFT trader Clemente in a tweet.
Additionally, the conference failed to address key issues such as stablecoin regulations, central bank digital currencies (CBDCs), and the future of Bitcoin and Ethereum in the US. Critics argue that if Trump truly wants to attract crypto investors, he must put forth a comprehensive policy framework instead of relying on vague promises.
Binance and Coinbase Traffic Declines by Nearly 30%
Meanwhile, amid the market downturn, Binance and Coinbase, two of the largest centralized exchanges (CEXs), have seen a nearly 30% decline in traffic. Spot and derivative trading volumes have also declined, reflecting the concerns of retail investors.
This decline is due to reduced trading activity, increasing investor uncertainty, and waning retail investor interest in cryptocurrencies. The drop in traffic indicates that fewer users are engaging with crypto trading platforms as market sentiment remains negative.
Many analysts believe this trend is driven by lower volatility, reduced speculative activity, and regulatory concerns. President Trump's tariffs, particularly in the US and Europe, have exacerbated these concerns.
Additionally, the lack of major price-driving catalysts, such as inflows from Bitcoin ETFs (exchange-traded funds) or institutional adoption, has led many traders to sit on the sidelines. BeInCrypto reported that the US Bitcoin ETF holdings have dropped below Satoshi's BTC holdings as outflows continue.
Another contributing factor to the decline in traffic is the increasing competition from decentralized exchanges (DEXs) and alternative trading platforms that offer lower fees and less regulatory constraints.
