Daily Crypto Roundup: Major Political Donations, Record Inflows, and Security Concerns

The cryptocurrency market sees major developments as Ripple co-founder Chris Larsen donates $10M in XRP to Kamala Harris’s campaign, while US crypto investment products hit a remarkable $2.2B in weekly inflows. Meanwhile, regulatory challenges emerge with the Federal Reserve’s stance on Bitcoin, ESMA’s call for stricter crypto controls, and a significant data breach at Transak affecting over 92,000 users.

Political Landscape Shifts as Ripple Co-founder Makes Major Campaign Contribution

In a significant move bridging crypto and politics, Ripple co-founder Chris Larsen has donated $10 million in XRP to Kamala Harris’s presidential campaign. The donation comes as Harris continues to build momentum following President Biden’s withdrawal from the race. Larsen expressed his support on X.com, stating that Harris “will ensure that American technology dominates the world.”

Ripple CEO Brad Garlinghouse responded with a measured stance, emphasizing that support for crypto innovation transcends party lines.

US Crypto Investment Products See Record $2.2B Weekly Inflows

Investment in U.S. cryptocurrency products has reached its highest level since July, with weekly inflows hitting $2.2 billion. CoinShares’ head of research, James Butterfill, attributes this surge to growing expectations of a Republican victory in the upcoming elections, noting that Republicans are “generally viewed as more supportive of digital assets.”

While the U.S. led with $2.3 billion in inflows, other regions showed mixed results:

• Canada: -$19.9 million
• Sweden: -$18.2 million
• Australia: +$1.4 million

Federal Reserve Takes Stance on Bitcoin

The Federal Reserve Bank of Minneapolis has released a controversial working paper suggesting that Bitcoin and similar assets may need to be taxed or banned for governments to maintain deficits. The paper argues that Bitcoin creates a “balanced budget trap,” challenging traditional government fiscal policies.

Legal and Regulatory Developments

Chainalysis Faces $650M Lawsuit

Blockchain analytics firm Chainalysis is defending against a $650 million defamation lawsuit filed by Exceptional Media, the company behind YieldNodes. The dispute centers on Chainalysis’s characterization of YieldNodes as an “investment scam.”

European Regulatory Framework Updates

ESMA has called for amendments to MiCA regulations, pushing for stronger AML compliance and additional oversight of crypto service providers. Meanwhile, Cyprus and Ireland are racing to align their regulatory frameworks with EU requirements.

Security Breach Alert: Transak Reports Major Data Compromise

A significant security breach at crypto on-ramp firm Transak has affected over 92,000 users. The breach, resulting from a phishing attack, exposed sensitive user information including passport details and selfies. The company has assured users that no financial data was compromised.

International Developments

UAE Advances DAO Framework

Ras Al Khaimah is establishing itself as a DAO hub with new legal frameworks, continuing the UAE’s push to lead in blockchain innovation.

Italian Tax Policy Shift

Italy has announced a significant increase in Bitcoin capital gains tax from 26% to 42%, potentially impacting investor sentiment in the region.