Bitcoin plummeted to $72,000, and 140,000 investors across the network were liquidated, seemingly signaling an early cryptocurrency winter. Meanwhile, China's Supreme People's Court issued a statement explicitly stating that it will "strictly crack down on money laundering crimes in accordance with the law and resolutely safeguard national financial security."
The "Measures for the Management of Customer Due Diligence and Preservation of Customer Identity Information and Transaction Records by Financial Institutions," which officially came into effect in China on January 1, 2026, requires all financial institutions to preserve customer identity information and transaction records in accordance with the principles of security, accuracy, completeness, and confidentiality.
This regulatory update reflects that China's new definition of money laundering has surpassed traditional understanding. The era of "self-laundering money is not a crime" is over. Even if the perpetrator "launders" the proceeds of crime by buying a house, car, or other means, it will still be considered money laundering.
01 Market Downturn
The global cryptocurrency market is experiencing a period of severe volatility. In just 24 hours, more than 140,000 investors were forced to liquidate their accounts due to the sharp drop in cryptocurrency prices, with a total liquidation amount of $860 million.
As of February 4, Bitcoin had fallen to its lowest level since US President Donald Trump won the election in November 2024, at $72,646, a drop of nearly 4%. Market confidence is crumbling, with some even predicting an 82% probability that Bitcoin will fall to $65,000 this year.
As Bitcoin prices continue to weaken, its safe-haven status as "digital gold" is being questioned by the market.
This market downturn quickly spread throughout the entire cryptocurrency industry, affecting everything from trading platforms to mining companies. Coinbase's stock price fell by about 8%, and Robinhood's by about 10%.
Mining stocks were hit harder, with Cipher Mining down about 21%, Iren down 18%, and Hut 8 down about 14%. This downturn was not limited to the digital asset sector but also affected traditional financial markets.
02 Regulatory Iron Fist
Amid market turmoil, global anti-money laundering regulations are undergoing profound changes. In August 2024, the Supreme People's Court and the Supreme People's Procuratorate of China jointly issued an interpretation on several issues concerning the application of law in handling criminal cases of money laundering, marking a new stage in China's crackdown on money laundering crimes.
This document, known as the (2024 Interpretation), is the first to explicitly include money laundering using virtual assets within the scope of criminal prosecution. This directly responds to the Financial Action Task Force's assessment recommendations regarding China and fills a significant gap in international anti-money laundering standards.
With increasingly sophisticated and chain-like crime patterns, virtual currencies are becoming a new channel for money laundering and transferring funds from upstream crimes. The updated regulations reflect the Chinese government's proactive approach to addressing this challenge.
Wang Jing, a first-level inspector of the Anti-Money Laundering Bureau of the People's Bank of China, emphasized at a recent forum that China is deeply recognizing the important significance of anti-money laundering work in improving national governance and preventing and resolving major risks.
03 Project Fundamentals
When regulatory and market price pressures increase simultaneously, cryptocurrency projects like Walrus need to rely on solid fundamentals and technological innovation to withstand market volatility. @Walrus 🦭/acc
Walrus is a decentralized data storage network built on the Sui Network, focusing on the storage of large-scale media content such as video, images, and audio. As of January 16, 2026, Walrus had a market capitalization of approximately $188 million, a circulating supply of 1.25 billion tokens, and a current price of approximately $0.1505.
Similar to most cryptocurrencies, Walrus's price is significantly influenced by market sentiment and speculative funds in the short term. Fluctuations in social media and investor sentiment can easily trigger rapid price changes. #walrus
However, the Walrus project is seeking breakthroughs through technological innovation. According to publicly available information, Walrus plans to launch the "XL Blobs" core upgrade in the first quarter of 2026, aiming to solve two major pain points in the storage field: how to store terabyte-scale large files, and how to achieve millisecond-level data retrieval.
The project has already achieved 120 nodes, and the decentralization of the network is gradually improving. Node deployers receive 90% of the transaction fees, an incentive design that keeps participants engaged in the ecosystem long-term.
04. Survival through Compliance
Faced with an increasingly stringent anti-money laundering regulatory environment, cryptocurrency projects like Walrus are seeking to achieve compliance and survival through various means.
In terms of deflation mechanisms, Walrus adopts a dual-drive model of "transaction-based destruction + application-based burning" to form a hard deflation closed loop.
The monthly destruction volume in 2026 exceeded 180,000 units, an 80% increase compared to the first quarter of 2025. Despite the complexity of the mechanism, this has played a positive role in gradually easing market supply pressure.
Regarding compliance filings, Walrus has completed its Reg A+ compliance filing with the U.S. SEC. Traditional financial institutions such as Fidelity and Grayscale are also increasing their holdings or establishing trust positions.
In terms of trading infrastructure, Walrus is listed on more than 60 mainstream exchanges and supports 50x leverage trading. These measures lower the barrier to entry for ordinary users, but also increase the risk of market volatility.
05. Risks and opportunities coexist.
For Walrus and its investors, the current environment presents both challenges and opportunities. Changes in U.S. interest rate decisions, the overall economic situation, and financial regulatory policies will all influence Walrus's market performance.
In the short term, the cryptocurrency market is generally under pressure. Data as of January 16 shows that market sentiment is in a neutral range, with the Fear & Greed Index at 49, indicating that the market has not been affected by extreme panic or greed.
According to neutral forecasts from professional institutions, the price of Walrus in 2026 may fluctuate between $0.1507 and $0.18461. Optimistic forecasts suggest a price as high as $0.21852 if the market performs well and user numbers grow.
In the long-term outlook, the price of Walrus could reach $0.36154 by 2029; and by 2031, it could be between $0.24122 and $0.4676. These projections are based on the assumption that the project's ecosystem will grow steadily and continue to receive market attention.
From an investment perspective, conservative investors may allocate 1-2% of their crypto portfolio to WAL. Aggressive traders should watch the recent low of $0.1154 as support and the psychological resistance level of $0.20.
Walrus, a project in the decentralized storage sector, recently stated in its technology roadmap that it will launch the XL Blobs upgrade in the first quarter of 2026, addressing two major industry pain points: terabyte-scale large file storage and millisecond-level data read speeds. Its price has already increased by 8.74% in the past week.
Under the dual pressures of regulation and the market, the Walrus ecosystem is undergoing an unprecedented test. Whether it will survive the shakeout or simply drift along will be determined by its technological implementation, community building, and compliance progress. $WAL
