2023 just went from a boring year in crypto with lots of contraction and court cases to one that could ultimately mark a turning point, Brady writes.

The big picture: On Thursday a court poked a hole in the mainstream view that all cryptocurrencies are securities.

• It's the year's most important development — but it's just part of what's happened since January — a period that's primarily been defined by shutdowns, lawsuits, arrests and regulatory enforcement actions.

Zoom out: Hours before the Ripple ruling hit Thursday, one of the year's biggest surprises came when Alex Mashinsky, founder and former CEO of Celsius, a crypto lender, was arrested by U.S. authorities.

• There's been lots of legal actions against bad actors in this industry, but most of them have been against people clearly acting with criminal intention (such as thieves and con artists).
• The intrigue: Mashinsky is only the second arrest by U.S. authorities of a CEO of a company that was ostensibly a legitimate business (the other was FTX founder Sam Bankman-Fried).

Elsewhere, Do Kwon, founder of Terraform Labs, which made the algorithmic stablecoin terra usd (UST) that unraveled in May 2021, is also under arrest in Europe (and wanted everywhere). His co-founder and co-workers are also facing charges in South Korea.

• The largest exchange, Binance — and its CEO Changpeng "CZ" Zhao — are facing a slew of lawsuits, while everyone expects criminal charges to come one day.

And of course, there's that less severe but still weighty suit against Coinbase, the largest exchange in the U.S.

What we're watching: There could be lots of cases underway against crypto founders that we don't know about yet.

• Weirdly, two of 2022's most reviled, the founders of the arbitrage trading firm Three Arrows Capital, are living the good life and launching a new company.

State of play: Bitcoin's price collapsed with the rest of the market from November 2021 through the end of 2022, but all year long it has been quietly regaining ground.

• For all the negativity coming out of 2021's boom, it's clear that the oldest cryptocurrency project has more adherents now than it had going into the boom.
• It also doesn't hurt that some of the biggest names in finance (BlackRock, Fidelity) are vying to launch exchange-traded products around the orange coin.

Ethereum has gathered strength too, with more users placing their bets on supporting its new consensus mechanism, proof-of-stake.

Yes but: Crypto companies are still shedding a lot of jobs. Circle announced cuts last week following giving up on its plan to go public (for now).

• Coinbase started the year walking back its ambitious growth plan.
• Former employees are starting to realize that they came to work in the midst of irrational exuberance.

And the giant who previously claimed to be financially strong amid crypto winter, Binance, announced cutting 1,000 of its 8,000 people Friday.

Quick take: The SEC has only had a setback with the Ripple ruling. Don't look for it to shift gears.

• In fact, look for it to take more actions, perhaps against more tiny projects — to discourage new entrepreneurs, or against more stablecoins, to undermine trading itself.
• Obviously, Congress could end all this uncertainty by simply passing a law, forcing the agency to stand down. But aside from some lobbying and political contributions, that's mostly out of the industry's control.

💭 Our thought bubble: Crypto entrepreneurs could turn it all around though — without political intervention. All they need to do is invent something that lots of people really want to use.

When the whole market goes green, experienced traders get excited for what's known as Altcoin Season, Brady writes.

Be smart: Bitcoin is how crypto types gradually build wealth. Trading random tokens is how traders make money.

• Yes, bitcoin is volatile, but it's not nearly so volatile as the lower tier, more thinly traded coins in the market.

Crucially, if bitcoin price is increasing, you can virtually guarantee that some random cryptocurrency is appreciating faster (at least over some short period of time). That's why it's called Altcoin Season: It's the time to try to guess which token will beat the standard set by bitcoin.

Threat level: Altcoins do rise faster than bitcoin in good times. They also fall faster. And they don't necessarily wait until the market goes bad to fall.

Paradigm, the investment firm known for throwing money behind many of the industry's mainstays, hired Alex Grieve as its government relations lead, Crystal writes.

Why it matters: The shop appears to be continuing its effort to shape U.S. crypto policy, as Congress considers multiple bills aimed at ironing out rules around stablecoins and market structure.

Zoom out: Grieve's hiring shows that some roles in the industry remain in demand.

• Paradigm, led by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang, formed an eight-member crypto policy council late last year including former House Speaker Paul Ryan (R-Wis.) and former U.S. Rep. Steve Israel (D-NY).

What he's saying: "I’m thrilled to be joining Paradigm at this critical juncture in crypto policy. Given the Ripple decision last week, and the legislative momentum on Capitol Hill, it is clear the industry's efforts are paying off,” Grieve tells Axios.

Flashback: Grieve was most recently at public affairs and regulatory advisory firm Tiger Hill Partners, helping build the firm's crypto competency.

• He previously worked as part of the government relations team of the Depository Trust and Clearing Corporation (DTCC) — market infrastructure that clears and settles U.S. equity market trading.

Of note: Paradigm has invested in crypto's biggest names, Coinbase, protocol juggernauts like Compound, as well as NFT marketplace OpenSea and upstarts like Blur and others.

• A few months ago there was a bit of controversy when the shop's interest in AI coincided with all mention of crypto disappearing from its website; Paradigm said it was a mistake, and now the site shows its commitment with scrolling banners of the word.

👻 Aave launched its GHO stablecoin on the Ethereum blockchain. (The Defiant)

📏 The Financial Stability Board (FSB) has put out a global regulatory framework for crypto. (CoinDesk)

💀 The Multichain disaster has sunk the Geist money market on the Fantom blockchain. (Twitter)

📏 A new algorithmic stablecoin based on ether raised $6 million (Axios)

Sorry about the man-feet imagery, Brady writes.

Driving the news: This photo comes courtesy of the Ethereum Community Conference (ETH-CC), which is underway starting today in Paris.

• It's one of the largest gatherings in crypto and in the Ethereum world, alongside the developers conference, EDCON.

Kevin Owocki is an Ethereum diehard, the leader of the Gitcoin project, which aims to improve the funding model for technology projects.

• Be smart: "Touching grass" is the idea that people who work on the internet need to get out into the real analog world sometimes because the internet can be very distorting.

Quick take: Touching grass is good. Flip-flops, however, are bad.