TRM Weekly Roundup | February 20, 2025
This week, Ari Redbord , Angela Ang , and Isabella Chase give us the low-down on these top stories from around the world and across the cryptoverse:
🇰🇷 Korea charts path for institutional crypto trading
South Korea is moving toward institutional crypto adoption with a newly unveiled roadmap from the Financial Services Commission/Korea Financial Intelligence Unit (FSC and KFIU respectively). The plan will unfold in two phases starting in 2025, beginning with corporate crypto transactions for liquidation purposes, followed by a pilot program allowing select institutions to trade crypto under strict regulatory conditions. About 3,500 companies — including listed companies, but excluding financial institutions — are expected to qualify for the second phase. They will be required to use independent custodians and implement enhanced AML measures and public disclosures. The FSC will conduct a mid to long-term review on whether to open up institutional trading to other companies after "closely analyzing the virtual asset market situation" and the results of the pilot.
This marks a shift from Korea’s long-standing restrictions on institutional trading, first introduced in response to the 2017 crypto boom. At the time, the government had considered that institutional transactions posed greater risks of money laundering and unsustainable market growth. Noting that the rule could "hinder change and innovation," the government reconsidered its stance "in response to changes in virtual asset conditions."
The Virtual Asset Committee, which launched in late 2023, has prioritized reviewing these restrictions and is now focused on developing the second phase of the Virtual Asset User Protection Act, which would cover stablecoins and corporate crypto transactions.
🇦🇷 The $LIBRA affair: Tracking the memecoin that launched a scandal in Argentina
On February 14, 2025, Argentine President Javier Milei promoted the launch of the $LIBRA cryptocurrency token on the Solana blockchain, describing it as a private initiative to support small Argentine businesses and startups. However, within hours, $LIBRA’s value collapsed by approximately 89%, leading to significant financial losses for investors. Milei quickly deleted his initial endorsement and issued a follow-up statement disavowing any association with the project. The rapid rise and fall of $LIBRA sparked speculation about potential market manipulation, insider trading, or a pump-and-dump scheme, drawing comparisons to the $TRUMP token launched by then-President-elect Donald Trump on Solana just a month earlier.
According to TRM Labs, $LIBRA saw significant inflows shortly after Milei’s post, pushing its market capitalization to approximately USD 4.5 billion before the crash. Blockchain analysis revealed suspicious trading patterns, including one address receiving one million $LIBRA tokens just twenty minutes before Milei’s tweet. That address then deposited the tokens into a liquidity pool on Meteora, a Solana-based DeFi platform, and distributed them to multiple wallets that also contributed to the liquidity pool. Soon after, wallets potentially linked to the $LIBRA team began withdrawing funds, draining liquidity and driving down the token’s price. Ultimately, USD 7.8 million worth of SOL was withdrawn from the Meteora Pool, routed through two suspected team wallets, and consolidated at a final destination, where approximately USD 90 million worth of Solana and USDC now remain.
The rapid collapse of $LIBRA has led to an official investigation by Federal Judge María Servini, who is examining allegations of fraud and breach of public duty against Milei. The Argentine Anti-Corruption Office has also launched its own inquiry, and opposition lawmakers have called for impeachment proceedings, arguing that the president leveraged his position to promote a potentially fraudulent scheme. TRM Labs continues to track the movement of funds associated with the $LIBRA launch, leveraging its real-time monitoring and forensic tools to provide transparency into suspicious activity. With $LIBRA’s collapse now under legal scrutiny, blockchain intelligence will be key in determining whether illicit actors exploited the token’s launch for financial gain and identifying those responsible for the losses.
Read TRM’s deep dive into $LIBRA here.
🇮🇹 Italy’s central bank warns of widening gap between EU and US crypto regulation
According to reporting by Cointelegraph, Italy’s central bank governor, Fabio Panetta, warned last week about the growing risks in the cryptocurrency sector and highlighted the widening regulatory gap between the European Union and the United States. Speaking at the 31st Assiom Forex Congress on February 15, 2025, he emphasized the need for stronger safeguards against financial crime, cybersecurity threats, and liquidity risks.
Panetta explained that the Banca d’Italia and Italy’s securities regulator, Consob, are working closely with crypto service providers to establish protections against financial and cybersecurity threats. He stressed that without proper oversight, the industry poses significant risks, particularly in the areas of money laundering and financial stability.
A key point of his speech was the divergence between EU and US approaches to crypto regulation. The European Union has implemented the Markets in Crypto Assets Regulation (MiCA), which provides a unified framework for crypto oversight across member states. In contrast, the United States continues to regulate the sector on a case-by-case basis, with agencies such as the SEC and CFTC applying different standards depending on how a digital asset is classified. Panetta warned that this inconsistency could create opportunities for regulatory arbitrage, allowing crypto firms to exploit gaps between jurisdictions and potentially undermining financial system integrity.
🇬🇧 UK poised to criminalize AI-generated child exploitation materials
The United Kingdom is poised to introduce pioneering legislation under a forthcoming Crime and Policing Bill, specifically targeting the misuse of artificial intelligence (AI) in generating child sexual abuse material (CSAM).
This legislative initiative introduces several key offenses including:
These measures are a response to the alarming rise in AI-generated CSAM, with reports increasing nearly fivefold in 2024, as noted by the Internet Watch Foundation. The UK government emphasizes the necessity of updating laws to address the evolving landscape of online child exploitation, ensuring robust protection for children against both traditional and technologically facilitated abuse.
Additionally, the UK government has announced plans to criminalize the creation and sharing of non-consensual sexually explicit “deepfakes” — AI-generated media that realistically depict individuals without their consent — further strengthening the legal framework against emerging forms of digital sexual exploitation.
At TRM, we have — for years — been focused on mapping out CSAM networks and mitigating the use of crypto for laundering funds associated with child exploitation. Leveraging cutting edge AI-powered blockchain intelligence is more important than ever in the age of deepfakes and other AI crime.
For more, check out TRM’s “Rise of AI-Enabled Crime” report and stay tuned.
🚔 FBI launches “Operation Level Up” to combat crypto investment fraud
In January 2024, the Federal Bureau of Investigation (FBI) launched Operation Level Up, a first-of-its-kind initiative to combat cryptocurrency investment fraud, specifically targeting pig butchering scams — one of the most widespread and financially devastating forms of crypto fraud today. TRM is proud to support Level Up.
Pig butchering scams exploit social engineering tactics, where criminals spend weeks or months grooming victims online and posing as financial advisors or romantic partners, before coercing them into fraudulent crypto investment schemes. Once the funds are deposited, they vanish into a network of money launderers.
According to TRM’s 2025 Crypto Crime Report, pig butchering scammers stole at least USD 2.5 billion in 2024 — but the real number is likely far higher due to underreporting. Reports say as little as 10-15% of victims report the crime.
Pig butchering has also been directly linked to transnational organized crime and human trafficking. Many of these fraud rings are operated from scam compounds in Southeast Asia, where victims are forcibly trafficked, held against their will, and coerced into executing scams under threat of violence. This connection between crypto crime, human trafficking, and forced labor has made pig butchering not just a financial crime issue, but a humanitarian crisis.
The FBI’s victim-first approach to tackling crypto fraud has led to groundbreaking results:
Through Operation Level Up, the FBI is not just investigating criminals — it’s reaching out to victims in real-time, intervening before more money is lost. This shift toward proactive, intelligence-driven fraud disruption is reshaping how law enforcement fights crypto-enabled financial crime.
While Operation Level Up is already producing results, the fight is far from over. Pig butchering scams remain one of the biggest financial threats in crypto, and as criminals evolve their tactics — using AI-generated deepfakes, social media impersonation, and synthetic identities — law enforcement and blockchain intelligence firms must stay ahead.
This is why collaboration between the public and private sectors is critical. Every fraud detection system, every crypto exchange compliance measure, every law enforcement takedown helps disrupt these scams. And, as real-time blockchain analytics continues to improve, the industry has a real chance to turn the tide against pig butchering.
If you or someone you know has been targeted by a crypto scam, report it to the FBI and TRM’s Chainabuse .
🇦🇺 Australia takes aim at remittance providers and crypto exchanges for AML/CFT lapses
This week, AUSTRAC announced that it had just wrapped up a "year-long blitz" targeting non-reporting and under reporting of suspicious matters and transactions. It has taken action against 13 remittance and digital currency exchange (DCE) providers, with more than 50 "still in its sights."
In its 2024 priorities, AUSTRAC had identified DCEs and payment platforms as sectors for "increased regulatory focus." Its national risk assessment for money laundering had also identified crypto ATMs (Australia has the world's third highest number) and the corridor between DCEs and remittance providers were emerging trends of concern.
In December, AUSTRAC established a task force to ensure that crypto ATM providers registered with the agency "meet minimum standards and have robust practices in place to identify and minimize the risk that their machines will be used to move money associated with scams, fraud, or other proceeds of crime."
Global Head of Policy and Government Affairs at TRM Labs
7moAnother big week in the #cryptoverse!