The crypto market is experiencing a comprehensive pump, with AI and PayFi becoming new hotspots. The Movement event has sparked reflection within the industry.

This week, the crypto market experienced a broad rise, with the Ethereum ecosystem and AI sector leading the way, both rising over 20%. However, the Movement project faced a price crash due to issues with the market-making protocol, involving suspicions of manipulation by multiple parties, sparking industry reflections on ethics and regulation. Meanwhile, the AI and payment finance (PayFi) sectors are accelerating their development, with a public chain promoting the MCP standard, and several exchanges laying out payment ecosystems, indicating that the crypto market is facing a new round of reshuffling and opportunities.

The Movement incident exposed issues of inadequate regulation of market-making mechanisms and the lack of transparency in the legal framework. The project raised over $40 million, and on the second day after its launch, 66 million tokens ( worth $38 million ) were sold off, leading to a drastic fall in coin prices. The incident involved the market-making agreement between Rentech and the Movement Foundation, which has been accused of incentivizing price manipulation. Rentech simultaneously played multiple roles and is suspected of self-trading. The contract terms included incentive mechanisms that were criticized for "encouraging artificial price inflation followed by sell-offs." Currently, the project has commissioned a third-party agency to investigate, and several executives are under review, severely challenging the project's credibility and governance.

The AI field continues to heat up, and 2024 is set to be a breakthrough year for financing AI companies. Nearly one-third of global venture capital is flowing into AI-related fields, with financing exceeding $100 billion, a year-on-year increase of over 80%. A certain public chain has launched MCP and a series of AI support programs, providing developers with a standardized and secure AI integration framework. Several unissued coin AI projects have received significant funding, such as 0G and Sentient.

In the PayFi sector, several exchanges have launched encryption payment services. One exchange has introduced OKX Pay, which focuses on stablecoin payments, while another has partnered with Bhutan to launch a national-level crypto tourism payment system. Huma Finance, which has made early moves in this space, is also receiving attention and is expected to issue coin in Q2.

In terms of policy regulation, New Hampshire passed the Strategic Bitcoin Reserve Act, authorizing state treasurers to purchase Bitcoin, with up to 5% of funds to be invested. The U.S. Senate voted 48:49 against the Stablecoin Innovation and Security Act (GENIUS Act), which was originally intended to establish the first regulatory framework for stablecoins in the U.S. The failure of the bill resulted in the U.S. stablecoin market maintaining existing state-level regulations, lacking a unified federal framework.