The $40 billion company, which uses the XRP cryptocurrency for cross-border payments, announced the shift, along with new developer funding programmes, in a Thursday blog post.

“As the ecosystem matures, the focus is shifting toward expanding access to funding through more distributed and independent pathways so builders have multiple avenues to scale,” Ripple said in the post.

Historically, much of the XRP Ledger ecosystem funding flowed through Ripple-supported initiatives. The company said its goal is to create a healthier ecosystem where builders can access funding through multiple channels.

The development comes as Ripple tries to shake the impression that it exerts too much influence and control over the XRP Ledger.

While Ripple and the XRP Ledger are distinct, the two have been close for much of their existence.

After launching the XRP Ledger in 2012, many of its creators went on to found Ripple or join the firm as executives.

Ripple is also the biggest owner of XRP. The firm said it held $57 billion worth of the cryptocurrency — around two-third of all tokens in circulation — as of March 2025, the last time it reported its holdings publicly.

Ripple is also a major XRP Ledger developer.

New funding routes

In its blog post, Ripple outlined several routes it hopes will help diversify developer funding.

The firm said it will launch a new FinTech Builder Programme designed to support startups building financial applications on the XRP Ledger, including for stablecoin payments, credit infrastructure, tokenisation, and regulated financial services.

In June, the XRP Ledger also got its own decentralised autonomous organisation called XAO DAO. Its stated goal is to boost community voices and foster a culture of rapid experimentation through microgrant funding.

The XRPL Commons, a non-profit that supports XRP Ledger development, and XRP Asia, an initiative to support XRP developers across the Asia-Pacific region, will continue to support development.

Ripple’s many university partnerships, and venture capital partners Dragonfly Capital, Pantera, and Franklin Templeton, among others, will also play key funding roles, the firm said.

“The goal is to ensure that no single organisation becomes the sole gatekeeper for ecosystem support,” Ripple said.

Bleeding deposits

Despite hosting the $84 billion XRP token, the XRP Ledger has struggled to grow its DeFi ecosystem.

Since July, deposits to XRP Ledger protocols have declined from a peak of $120 million to just $49 million.

In October, Ripple chief technical officer David Schwartz stepped down. During Schwartz’s 14 years at the firm he played a key role in several XRP Ledger DeFi updates, including the launch of a native automated market maker and the introduction of programmable tokens.

There are developments that could turn the blockchain’s fortunes around, however.

Ripple developers have discussed plans to introduce XRP staking, a feature that could boost the blockchain’s DeFi ecosystem.

Ripple is also building the infrastructure for a lending market on the XRP Ledger. The hope is that financial institutions will use the lending market to borrow funds from retail investors.

The feature entered voting on January 28, and requires an 80% supermajority among XRP Ledger validators to pass.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The Lightning Network has been promoted by Bitcoin maxis like Twitter co-founder Jack Dorsey, who last year integrated the layer 2 into his payments platform, Cash App.

Bitcoiners argue that Lightning will help the big orange coin become — in the words of Dorsey — “everyday money”: skirting transactions around the main chain cuts costs and increases speed, allowing people to use Bitcoin for daily purchases.

And the data would have you believe that it is working. Bitcoin brokerage River this month posted figures showing that transactions on the second-layer solution in November hit $1.1 billion, much to the delight of Bitcoiners on Crypto Twitter. In the same period in 2024, volume stood at $286.5 million.

Bitcoin's Lightning Network exceeds $1B in monthly transaction volume. pic.twitter.com/USmosCQ1gM

— River (@River) February 19, 2026

Though the picture appears to be more complicated, experts told DL News.

What’s it really for?

Despite in the past being pushed for smaller transactions, Lightning, which debuted in 2018, isn’t just being used for microtransactions like tipping or buying a cup of coffee.

“We are seeing larger transactions go through right on a regular basis,” Jesse Shrader, co-founder of Bitcoin infrastructure firm Amboss, said.

He added that his company had seen Lightning transactions surge by 300% since January, and the average size of a Bitcoin transaction now stands at 74,000 sats — worth $50 at today’s price of $67,714 per coin.

Lightning made headlines this month when American crypto exchange Kraken helped facilitate a $1 million transaction on the network.

“By dramatically reducing settlement times, the Lightning Network unlocks Bitcoin’s potential at global scale, and we’re proud to help bring that future into reality,” Kraken’s head of onchain, Calvin Leyon, said of the transaction.

Indeed, exchanges using Lightning to move money may be the reason why transaction volume has spiked.

“The average transaction value on the Lightning Network has actually increased and it goes to show that it’s not so much peer-to-peer payments for coffee or whatever — it’s more like a settlement between exchanges or between businesses,” Spencer Yang, a managing partner of crypto investment firm, BlockSpaceForce, told DL News.

He added that Jack Dorsey integrating Lightning into Square’s payment terminals could also be playing a part.

Payments company Block, the parent company of Square, last year debuted a new Bitcoin payments system, allowing merchants to accept the cryptocurrency over the Lightning Network.

It isn’t clear how many merchants are using the Lightning network to accept payments. Block did not respond to questions from DL News.

Bobby Shell, VP of marketing at Lightning infrastructure company Voltage, told DL News that nearly 29% of Bitcoin transfers pass through the layer 2, with Coinbase routing around 15% of its transactions on the network.

“This isn’t a niche anymore,” he said.

Privacy and price matters

But transaction volume may also be surging due to rising costs on other blockchains, Shrader said.

“Tether on Tron is probably one of the best examples,” he noted.

The cost of sending USDT on the Tron network has risen in recent years to nearly $4 per transaction. The network was once the go-to for small-dollar transactions because of its low costs. Cheaper blockchains, though, now exist.

Using Lightning, in comparison, can cost less than a fraction of a cent.

But another reason transaction volume has shot up may be down to its privacy-centric nature: Sending coins via Lightning is harder to trace compared to a standard Bitcoin network transaction.

“But at the end of the day, lightning is incredibly private,” said Shrader. “From a practical and a data analytics perspective, there’s not a lot that you can do to track it.”

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

As of February 20, the Singapore-based Bitcoin miner holds zero Bitcoin on its balance sheet after it sold reserves of 943 Bitcoin, worth almost $62 million at current prices.

“Our decision to sell Bitcoin should not be a concern for the broader market,” Bitdeer said in a Monday X post.

“We are currently evaluating multiple non-binding powered land acquisition opportunities, and we believe it is prudent to prepare liquidity now.”

The move comes as many firms struggle to stay profitable by mining Bitcoin.

Rising energy costs and increased competition have squeezed all but the most efficient miners out of the market. Many of the largest firms have bought out their less successful competitors in recent years.

At the same time, Bitcoin’s recent plunge to a 15-month low has put even more pressure on miner profitability.

Bitcoin miners usually sell a portion of the Bitcoin they mine to cover their costs. So as the top cryptocurrency’s price declines, miners must sell more than they did before.

AI Pivot?

Bitdeer is the largest publicly traded Bitcoin miner by hashrate, commanding hardware that produces 63.20 exahashs per second.

An exahash is a unit of measurement for computing power in Bitcoin mining, representing one quintillion hashes per second.

The firm operates data facilities in the US, Bhutan, and Norway. It has a market capitalisation of almost $1.5 billion.

In recent months, many miners — Bitdeer included — have pivoted to providing more profitable artificial intelligence and high-performance computing services.

Last week, Bitdeer announced a $300 million convertible notes offering and a $43.5 million equity placement, both aimed at funding data center expansion and AI services.

Bitdeer has since reassured investors that Bitcoin will remain a key part of its business.

“Our hash rate will continue to grow, and we will continue to mine more Bitcoin for the interest of our shareholders,” the firm said.

At the start of the year, Bitdeer held roughly 2,000 Bitcoin, which declined to 1,530 Bitcoin at the end of January.

Bitdeer’s Bitcoin liquidation is unusual compared to other mining firms.

Marathon, the second-biggest Bitcoin miner, held 52,850 Bitcoin, worth around $3.4 billion, per an October update.

CleanSpark, the fourth-biggest miner, held over 13,513 Bitcoin as of January 31.

Bitdeer shares, which trade under the ticker BTDR, haven’t moved in pre-market trading. The firm’s market capitalisation is down 72% from its October all-time high.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Hunter Beast, a Bitcoin developer, made that case during a panel at the ETHDenver conference on February 19 alongside Isabel Foxen Duke, host of the Bitcoin Rails podcast, and Alex Pruden, CEO of Project 11, a company focused on securing blockchains against the quantum threat.

“We are not prepared right now for all that this will affect,” Beast said. “It is a vast, multidimensional problem in ways that are really subtle until you dive into it and really come to understand it.”

Bitcoin, like much of the world’s digital infrastructure, will eventually need to upgrade its cryptography to new algorithms that cannot be cracked by quantum computers.

Yet indecision among the top cryptocurrency’s developers, coupled with recent quantum computing breakthroughs, has brought what was once considered a distant threat much closer to reality.

The turning point came in December 2024, when Google unveiled its Willow quantum computing chip, which showed the technology was much closer to being used in real-world applications.

“That architecture cannot scale to the point where it could break Bitcoin, but it showed the path,” Project 11’s Pruden said on the panel.

Then, earlier this month, researchers in Sydney, Australia, released a paper demonstrating that some forms of encrypted data, including Bitcoin wallets, could be cracked by a much less powerful quantum computer than previously assumed.

“The bar to clear keeps dropping, while at the same time, results like Google’s show that progress is happening, and at some point those two lines are going to cross,” Pruden said.

‘Spooks’

It’s not just tech giants like Google and Microsoft that race to accelerate quantum computing, according to Beast.

“The major players here are spooks — they’re the NSA and the PLA,” he said, referring to the National Security Agency, an intelligence agency of the US Department of War, and the People’s Liberation Army, the military wing of the Chinese Communist Party.

The reason? Quantum computers are not cheap, Beast said.

They cost billions of dollars to build and millions to run, and they are not just useful for stealing Bitcoin, either.

They are much more useful to governments because they can also break RSA, a widely used form of digital encryption. In other words, whichever nation develops a powerful enough quantum computer first could potentially gain access to other nations’ encrypted data.

“If you’re not going to have something capable of doing this, it’s kind of pointless to build,” Pruden said.

Yet the fact that quantum computers cannot currently be used for any meaningful real-world application has made it difficult to convince some Bitcoin developers that they will eventually pose a threat.

Some of the most influential names in Bitcoin development argue that a cryptographically relevant quantum computer is still decades away, while others dismiss the threat entirely.

“Quantum isn’t a real threat. Bitcoin has much bigger problems to address,” Luke Dashjr, a Bitcoin Core developer, said in December.

Those sceptics could be right if quantum computer development hits some unforeseen roadblock. But for Beast, it’s not worth the risk.

“I don’t think we should bet the future of Bitcoin on discounting future progress,” he said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

A February 18 investigation published by security researchers who go by vmfunc, MDL, and Dziurwa found publicly accessible code that appears to send data collected by Persona, the KYC provider, to The Financial Crimes Enforcement Network — or FinCEN — a bureau of the US Department of the Treasury that safeguards the financial system from illicit use.

“The same company that takes your passport photo when you sign up for ChatGPT also operates a government platform that files Suspicious Activity Reports with FinCEN and tags them with intelligence programme codenames,” the investigation’s authors said.

“So you uploaded a selfie to use a chatbot? Congratulations! It’s now being compared against a database of every politician, head of state, and their extended family tree on earth.”

‘Unanswered questions’

Multiple IT specialists and security experts confirmed to DL News that the investigation and its findings appear legitimate.

“It appears the research is credible and you can verify that the government domains cited do exist, and are highly likely hosted on dedicated infrastructure by Persona,” Tanuki42, a pseudonymous security researcher who contributes at SEAL911 and zeroShadow, the blockchain incident response groups, told DL News.

“That said, there are still a lot of unanswered questions around motives, what this platform is used for, and who it is used by.”

Persona CEO Rick Song has since responded to the allegations publicly on X. He accused the investigation’s authors of not reaching out to him before publishing their findings.

In emails between vmfunc and Song posted by Song on his X account, the Persona CEO said his firm does not work with any federal agency today. He has yet to directly address the findings of the investigation.

“I am genuinely disappointed in how all of this has been handled,” Song said on Thursday in a since-deleted X post. “What has really been frustrating for me is that I also admire vmfunc’s work and their clear talent.”

Vmfunc, also known in online circles as Celeste, is widely regarded as credible because of their track record of technical investigations that other security experts have repeatedly validated.

OpenAI and Persona did not immediately respond to DL News’ requests for comment.

Surveillance fears

The allegations come as both crypto users and the broader public grow increasingly concerned about the mass surveillance and privacy-eroding capabilities of enforced identification checks.

The fear is that companies like Persona, working with government agencies, could use identification data collected from customers to create a vast Orwellian surveillance network that uses opaque criteria to place users on watchlists without their knowledge, consent, or public oversight.

In recent years, more and more platforms have started requiring users to hand over personally identifiable information, often in the name of preventing crime or protecting vulnerable groups.

Yet critics say the checks do more harm than good.

Many of the biggest companies that provide KYC services have been found to misuse and mishandle data.

Even when companies aren’t misbehaving, the huge swaths of data they hold make them lucrative targets for hackers. Several more platforms have in recent years suffered data breaches, leaking millions of users’ personal data.

The issue is close to the hearts of crypto advocates.

Many early Bitcoin contributors were self-styled cypherpunks, privacy activists advocating for cryptography and privacy-preserving technologies to protect the public against government and corporate surveillance.

Persistent monitoring

When a user is prompted to verify their identity with OpenAI, their KYC data — usually a photo of their passport, a selfie, and a short video of their face — is sent to Persona for verification.

That data is then automatically screened against global sanctions and warning lists, undergoes facial similarity scoring, and is checked against records of people linked to terrorism, cybercrime and other financial crimes.

That’s all standard stuff.

But at the same time, the same information is sent directly to government agencies, according to Vmfunc, MDL, and Dziurwa.

The investigation found code that gives operators the ability to file suspicious activity reports straight to FinCEN; file equivalent reports to Canada’s financial intelligence unit; tag data with intelligence programme codenames; screen associated crypto addresses through Chainalysis, a blockchain security platform; and conduct over 250 more verification checks.

According to the investigation, the Chainalysis integration assesses cryptocurrency addresses for risk, analyses the other addresses they’ve interacted with, checks the value of the funds they contain, and tries to identify their owners.

“There’s also a native crypto address watchlist system layered on top,” the investigation’s authors said. “This isn’t a one-shot lookup but a persistent monitor. Your wallet goes on the list once and gets polled indefinitely against Chainalysis’ cluster graph.”

Chainalysis did not immediately respond to DL News’ request for comment.

The problem is that it isn’t clear what criteria need to be met to trigger the crypto address screening, the watchlist system, or any of the other actions. It’s also unclear if OpenAI users are specifically warned that their data could be used in this way when undergoing KYC checks.

According to the investigation, the code that runs these functions has been in place since November 2023.

As for how long data that is forwarded to the government agencies is kept for? That’s not clear either.

“What is the actual biometric retention period?” the investigation’s authors said. ”OpenAI says ‘up to a year.’ the code says three years max. Government IDs retained ‘permanently.’ Which is it?"

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Yet so far, that hasn’t happened.

Now, quantum researchers are warning that time’s running out for developers to seriously engage with what by many accounts will be Bitcoin’s biggest ever upgrade.

“The time to start thinking about this is now. An even better time would have been yesterday,” Scott Aaronson, a quantum computing researcher and scientific advisor at StarkWare, told DL News.

There are several reasons why Bitcoin hasn’t been upgraded yet, depending on who you ask.

Some say the biggest issue is coordinating the dozens of individual contributors who work to develop the top cryptocurrency.

Others argue it all comes down to timing.

Three to five years

Yet whatever the reason, one thing is clear: The clock is ticking.

Cryptographically relevant quantum computers could be a reality in just three to five years, Hayk Tepanyan, founder of BlueQubit, a quantum computing software developer, told DL News.

Tepanyan said he based his prediction on recent milestones achieved by companies at the forefront of quantum computer development.

A 2024 roadmap from Quantinuum predicted the company will achieve fully fault-tolerant quantum computing by 2030.

“I take all of these roadmaps with a huge grain of salt, because we don’t actually have principles that let us say how long this is going to take,” Aaronson said.

“But what gives me pause is that over the last couple of years Quantinuum and Google have actually been hitting their milestones.”

In November, the US Department of War mandated that its systems must be ready to upgrade to quantum-resistant encryption no later than December 31, 2030.

While such estimates are already alarming, the reality is the technology could progress even faster if new techniques are discovered, potentially blindsiding those who thought they had more time to work on a post-quantum upgrade for Bitcoin.

“You might think this quantum computer with 200,000 physical qubits is not enough for running Shor’s algorithm,” Aaronson said. “But someone else might have some incredible, clever encoding that they haven’t told you about, by which they could fit Shor’s algorithm into that number of physical qubits.”

Shor’s algorithm is a quantum algorithm that can theoretically be used to break the digital signatures that underpin Bitcoin transactions.

Threading the needle

For Bitcoin’s developers, the most difficult work has already been done. Several quantum resistant algorithms already exist.

In August 2024, the US National Institute of Standards and Technology officially finalised three post-quantum cryptography standards for federal use, with a fourth on the way.

We’ve seen before that NIST algorithms can break.

Chris Tam

The major hurdle, quantum researchers say, is timing.

Upgrade Bitcoin too early, and the new cryptography, which was believed to be quantum resistant, could turn out to be just as vulnerable as what it replaced.

While the NIST algorithms are understood to be quantum resistant, it’s impossible to know for sure.

“We’ve seen before that NIST algorithms can break,” Chris Tam, head of quantum innovation at BTQ, a company focused on developing post-quantum cryptography, told DL News.

In 2022, one submission to the NIST post-quantum signature competition in 2016 was broken using a consumer-grade laptop in just 53 hours, Tam said.

Yet upgrade too late, and billions of dollars worth of Bitcoin — including Bitcoin creator Satoshi Nakamoto’s $75 billion stash — will be snatched away by whoever develops the technology the fastest, obliterating confidence in the top cryptocurrency and likely destroying its value among investors.

“It’s going to be a tricky balance,” Tepanyan said. “You want to give enough time to look at the algorithms so you don’t rush and upgrade to something that’s also vulnerable to attacks.”

According to Tepanyan, Rivest-Shamir-Adleman, or RSA, the cryptographic algorithm used to secure digital communications, among other things, took eight to ten years to enter mainstream use after it was introduced in 1977.

“The current post-quantum cryptography proposals are kind of getting there,” Tepanyan said.

Coordination issues

To be sure, some Bitcoin contributors are endeavouring to make Bitcoin quantum resistant.

In February, Bitcoin developers Hunter Beast and Ethan Heilman introduced a new transaction output that defends against the easiest forms of quantum attack. But it only applies to future transactions, and doesn’t do anything to protect the some $160 billion worth of Bitcoin in vulnerable wallets.

In December, Blockstream researchers Mikhail Kudinov and Jonas Nick proposed that Bitcoin could be upgraded to rely on hash-based signatures, one of the post-quantum cryptography standards formalised by NIST.

“What hash-based signatures have going for them is that they’re some of the oldest forms of math, in that they are as old and as well understood as elliptic curves,” Tam said.

Yet overall, progress has been slow. A big hurdle is that many developers don’t agree on how soon an upgrade should be prioritised, or what the best approach is.

Quantum isn’t a real threat. Bitcoin has much bigger problems to address.

Luke Dashjr

Many of the most influential people in Bitcoin development — such as Adam Back, CEO of Blockstream, and best known for inventing the proof-of-work system used in Bitcoin mining — argue that the threat is still decades away.

Some prominent developers have even denied the threat altogether.

“Quantum isn’t a real threat. Bitcoin has much bigger problems to address,” Luke Dashjr, a Bitcoin Core developer, said in December.

Bitcoin’s development is decentralised, meaning the network is maintained by a collective of contributors and has no central authoritative body. Because of this, large upgrades need to reach a consensus among contributors to have any hope of making it to production.

History shows that’s easier said than done.

Between 2015 and 2017 Bitcoin developers clashed over whether or not to increase the amount of data Bitcoin blocks can handle. The disagreement was so contentious it resulted in the network splitting in two, creating the Bitcoin Cash blockchain in August 2017.

More recently, disputes over whether non-financial Bitcoin transactions should be allowed on the network have also split opinions.

Unknown unknowns

Still, many Bitcoin developers are confident that, as things stand, there is no rush to make Bitcoin quantum resistant.

But according to researchers, the situation can potentially change overnight.

I wouldn’t be so sure about everyone playing super nice and publishing all their results.

Hayk Tepanyan

For the most part, the development of quantum computing hardware is predictable, and its progress can be extrapolated into the future with decent accuracy.

But hardware is only half of the equation. The more unpredictable element, researchers say, is the algorithms that can be fed into quantum computers to get them to do work.

“Where things get tricky is trying to predict the algorithmic innovations,” Tepanyan said.

“We could actually wake up one day, and there’s this paper or this result from this academic group or company or governmental National Lab that cuts the resource requirements by like 100x.”

To add to the uncertainty, the closer scientists get to creating powerful quantum computers or discovering new algorithms, the less they are willing to share about their progress. Because of this secrecy, it will become increasingly difficult to know how close researchers are to creating a cryptographically relevant quantum computer.

“When you’re getting to very important milestones, and breaking Bitcoin would be a huge milestone, I wouldn’t be so sure about everyone playing super nice and publishing all their results,” Tepanyan said.

For Aaronson, the situation is similar to the development of nuclear weapons almost 100 years ago.

“In 1939 scientists were still publishing in journals whatever they figured out about nuclear fission. But then by 1940, when they’re calculating exactly how much uranium 235 would you need for a chain reaction? At that point, they realised they shouldn’t publish anymore.”

There are already signs quantum development is going dark.

Back in the 1990s, Tepanyan said, researchers would freely publish and share their designs for creating qubits, the basic unit of information used is quantum computers. Now quantum computers have gotten closer to reality, and the potential benefits — and profits — are more tangible, that doesn’t happen anymore.

And it’s not just big companies like Google and Microsoft that Bitcoin developers need to be concerned about. Nation states and government labs are almost certainly looking into quantum computing, too.

“It’s even harder to predict how they are going to behave,” Tepanyan said.

Correction, February 21: A previous version of this article stated that a NIST standardised post-quantum computing algorithm was broken in 2022. The algorithm in question was only submitted to the NIST post-quantum computing competition, and the article has been updated to reflect that.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

On Monday the agency gave the loan issuer, which accepts Bitcoin as collateral, a preliminary rating of BBB- for its Issuer Trust 2026-1.

That’s one grade above what is generally considered non-investment grade junk bond territory.

Still, BBB- is so far the best rating achieved by a crypto firm on its debt. It’s five intermediate grades higher than DeFi lender Sky and Michael Saylor’s Strategy, which both received B- ratings last year.

Ledn’s rating comes as more and more crypto firms look to bolster their credentials as Wall Street investors eye the industry on the back of landmark regulation in the US.

With industry mainstays like stablecoin issuer Circle and exchange Gemini conducting huge initial public offerings last year — and more expected in 2026 — crypto-native firms are out to prove they can hold their own against the titans of the traditional financial system.

Ledn did not immediately respond to a request for comment.

What is Ledn?

Ledn, a Cayman Islands-based firm launched in 2018, offers retail investors US dollar-denominated loans against their Bitcoin holdings.

All loans are overcollateralised, meaning that borrowers must lock up Bitcoin of a higher US dollar value than the amount they are able to borrow.

The firm’s loans are proving popular. In October, Ledn announced it had surpassed $1 billion in Bitcoin-backed loans for 2025, bringing its total loan originations since inception to over $2.8 billion.

Ledn’s Issuer Trust 2026-1 combines these Bitcoin-backed loans into an investment product. Simply put, the firm bundles many individual Bitcoin loans together into a trust, then sells shares in it to big institutional investors who earn interest generated on the loans.

The trust is split into two tranches: Class A, which accounts for $160 million and received a BBB- rating, and Class B, which holds $28 million and received a B- rating.

Ledn isn’t the first crypto project to commission a debt rating from S&P Global.

In August, DeFi lender Sky received a B- rating from the credit rating agency, putting the protocol’s USDS and DAI stablecoins on par with government bonds from the Democratic Republic of the Congo.

Strategy, the Bitcoin treasury company chaired by Michael Saylor, also received a reaffirmed B- rating in October.

Why BBB- rating?

Several strengths factored into Ledn’s BBB- rating.

Positives included the firm’s conservative initial loan-to-value ratios, which provide a buffer against Bitcoin price volatility.

The ratings agency also noted Ledn’s strong track record. Over seven years, the firm has successfully liquidated Bitcoin collateral on 7,493 loans and has never experienced a loss.

Yet multiple weaknesses also weighed on the rating.

Bitcoin’s high volatility is a core concern. Sharp price drops coupled with low liquidity in the market could create a situation where Ledn is unable to liquidate the Bitcoin backing borrower loans fast enough, resulting in losses for the trust’s investors.

Additionally, the relative newness of Bitcoin-backed lending, coupled with the trust’s dependence on Bitcoin, caps the rating below higher grades like A or AA, where more traditional loans, such as mortgages, might score.

Finally, because Ledn’s customers are primarily in the US and other developed countries, the general financial health of consumers can help gauge risk.

“Monitoring the interplay between consumer resilience and BTC’s price volatility is essential to understanding the stability of the borrower pool and the likelihood of systemic deleveraging,” S&P Global’s report said.

Update, February 11: Updated the first bullet point to represent that the rating is preliminary and specifically for Ledn-issued debt.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Yet hastily upgrading the $1.3 trillion network to become quantum-proof could do more harm than good.

That’s the case for CoinShares, a digital assets manager that oversees $10 billion in crypto, as stated in a Friday blog post.

Popular proposals to shore up Bitcoin’s quantum resistance, which include upgrading its cryptography or burning vulnerable coins, warrant extreme caution, Christopher Bendiksen, Bitcoin research lead at CoinShares, said.

“Introducing new address formats before the cryptography underpinning them is fully understood and proven is extremely risky and not advisable,” he said.

“We have to keep in mind that before practical quantum computers exist, we cannot know whether quantum resistant cryptography provably works.”

In recent months, concerns surrounding Bitcoin’s theoretical quantum vulnerability have reached a fever pitch.

Coinbase, BlackRock, and Jefferies have all warned that Bitcoin’s security is entering uncharted waters following several major advances in quantum computing last year.

Pierre-Luc Dallaire-Demers, a scientist-in-residence at the University of Calgary, previously told DL News that he believes quantum computers are approximately five years away from breaking the cryptography that secures some Bitcoin wallets.

What’s the risk?

As quantum computers become more powerful, older Bitcoin wallets that use outdated cryptography will be the first to fall.

This is a problem because such wallets hold about 8% of all Bitcoin in existence, including the $75 billion stash of Bitcoin creator Satoshi Nakamoto.

When one of these older wallets sends a transaction, it reveals a vulnerable public key. A quantum computer could use that key to break the wallet’s encryption and steal the Bitcoin inside it.

It’s not just Bitcoin that’s at risk, either.

Much of the internet, including websites, messaging services, and financial transactions, relies on encrypted communications that are also theoretically vulnerable to quantum attack.

A November memo from the US Department of War mandated that its systems be upgraded to quantum-resistant encryption no later than December 31, 2030.

Conservative estimates

Still, CoinShares’ outlook on quantum computing is more conservative.

To break Bitcoin’s encryption within a practical amount of time — less than a year — quantum computers need to become 10 to 100,000 times more powerful, Bendiksen said, adding that such long-term attacks are at least 10 years away.

More worrisome short-term attacks that aim to steal funds when a wallet initiates a transaction, and therefore need to break the encryption within approximately 10 minutes, won’t be possible for several decades, he said.

To be sure, CoinShare believes quantum computers threaten Bitcoin — just not as soon as others.

“Bitcoin’s quantum vulnerability is not an immediate crisis but a foreseeable engineering consideration, with ample time for adaptation,” Bendiksen said.

“For the perceivable future, market implications appear limited.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The transactions, executed at 10:04 pm on Friday and 3:06 am on Saturday morning, London time, saw a wallet tagged as “Team allocation” on Arkham Intelligence send $81 million worth of TRUMP to a Fireblocks custody wallet, and almost $24 million to another unmarked wallet.

Fireblocks is a crypto custody platform that also sells assets on behalf of its customers. The unmarked wallet has previously sent a test transaction to Coinbase, the crypto exchange.

It’s not clear why the tokens were sent to these wallets. The team behind the Trump memecoin did not immediately respond to a request for comment.

The transactions come as scrutiny of the president’s crypto dealings mounts, and as US lawmakers work to pass the Clarity Act, a broad crypto market-structure bill.

Many Democrats say they can’t support the bill, which stands to give the crypto industry a much-needed boost, because it purportedly allows Trump to continue profiting off crypto.

Token unlocks

Since its launch just over one year ago, Trump’s memecoin has cratered in value.

It’s down a whopping 94% from its all-time high of $73, and has fallen a further 14% over the past week amid a crypto market rout that saw Bitcoin shed 12% and trade at its lowest value since April 2025.

The recent activity marks the biggest single transfer of the token since it launched.

When the Trump memecoin launched, its developers released only 20% of the total one billion tokens to the market.

The remaining 80% was kept by Trump and his collaborators in reserve and is subject to a release schedule over the following two years.

The first tranches of tokens — worth around $313 million at the time — were unlocked on April 17, exactly three months after the memecoin’s launch.

So far, $2.1 billion worth of TRUMP tokens have been unlocked for trading, according to DefiLlama.

It’s not clear what portion of the unlocked tokens the team behind the memecoin have cashed out. Once funds are sent to custody platforms like Fireblocks or crypto exchanges, token movements can no longer be traced.

Wallets tied to the Trump memecoin have previously sent $96 million in USDC, the dollar-pegged stablecoin, and $8.5 million in TRUMP to Fireblocks.

Trump’s memecoin team

On the Trump memecoin’s website, the token’s creators and a firm called CIC Digital LLC are pegged to receive the 800 million reserve tokens.

Trump wholly owns CIC Digital, according to his 2024 financial disclosure.

CIC Digital jointly owns Fight Fight Fight with another firm called Celebration Cards LLC, which is registered in Wyoming by Andrew Pierce, a corporate paralegal for Wyoming LLC Attorney.

Pierce’s firm specialises in setting up anonymous shell companies and asset protection planning, according to its website.

Bill Zanker, a Trump confidante who co-authored a book with the president in 2007, is listed as the primary contact for Fight Fight Fight in registration documents.

Although Pierce and Zanker appear to be involved with Trump’s memecoin, it’s not clear if they will receive any tokens themselves.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

“They are afraid of the videos from protestors uploaded to the internet, so they turned off all street lights,” he shared on January 14 with the Persian-speaking Sentinel community, where he has been a long-time member.

“People are walking with smartphone lights. Nothing is good at all. They break North Korea records in censorship.”

That was roughly a week after violent protests erupted in the country after the collapse of the rial, Iran’s national currency.

Since then, Darius has been rotating through a range of internet routing tools, including Sentinel’s decentralised virtual private network, to continue circumventing the government’s strict communication blackout.

One option he has relied on is OpenVPN, a widely used tool that masks a user’s IP address. Another is Shadowsocks, which operates over the SOCKS5 protocol and disguises internet traffic as random data.

Darius has also used V2Ray, a tool that piggybacks on the security certificates of legitimate websites to conceal a user’s identity.

In exclusive messages shared with DL News, he explains what life has been like for a citizenry living in near total darkness under a violent regime.

“We are living in hell without internet, without money, without media, without any supporting [sic],” Darius, whose name has been changed to protect their identity, wrote on January 14.

“We need support. People can’t fight with empty hands. They kill us with shotgun and AK-47 [sic].”

Digital iron curtain

In response to ongoing protests that began in December and have spread far beyond the country’s capital, Tehran, the government executed one of its harshest communications blackouts in the regime’s nearly 50-year history on January 8.

The reason is two-fold, according to Adam Burns, co-founder of the Internet Society of Australia.

“It’s standard comms intelligence of just shutting it down primarily to prevent protests at an organisational level and publicity at an international level,” he told DL News.

“It’s risk management, really.”

During that time, decentralised networks and obfuscation tools have proven vital lifelines for the population.

Reports suggest that as much as 90% of the Iranian population has already used some form of circumvention tool to reach the wider world since last August.

These types of networks are typically more resilient than centralised ones with a single database or point of failure.

To destroy a decentralised network, a government must take down each self-hosted node individually — or execute a complete blackout across the entire country.

‘It’s this circular cat and mouse game.‘

Adam Burns, co-founder of the Internet Society of Australia.

Other tools, such as Starlink, a physically distributed satellite network operated by Elon Musk’s company SpaceX, have also been critical for citizens.

Because systems like Starlink lack a single local chokepoint, their distributed infrastructure can offer vital connectivity even under heavy censorship.

Throttling the internet to this extent, however, can cost countries billions in economic losses, according to reports.

“By providing decentralised, resilient access that withstands even aggressive censorship efforts, we’ve helped keep information flowing — allowing brave individuals inside Iran to document and share evidence of the violence, mass arrests, killings, and other human rights abuses occurring under the cover of this blackout,” Aleksandr Litreev, CEO of Sentinel, told DL News.

To be sure, it is unlikely that any type of network will be able to function during a complete blackout.

Still, during the blackout period, resourceful individuals in the country, such as Darius, have experienced brief windows of connectivity as the regime attempts to balance censorship of critics with economic priorities.

“It’s this circular cat and mouse game,” Burns said.

Darius uses his suite of tools to disguise his web requests so they appear like any other, heading toward a large Iranian e-commerce site that the government has kept online for economic reasons.

That encrypted data is then tunnelled to an external server with access to the wider internet.

It isn’t foolproof or permanent, but it has allowed Darius to send a few Telegram messages during brief windows of connectivity.

“If the patterns give the appearance of an unauthenticated connection, it will be immediately disconnected,” Darius wrote on January 23.

Iranian chaos

For the past four weeks, Iran has been living in a state of chaos.

On December 28, Iranian citizens gathered in Tehran’s Grand Bazaar to protest the government’s handling of the currency collapse.

At the end of 2025, the Iranian rial hit a historic low of 1.4 million rials per US dollar, due in part to heavy sanctions imposed by world leaders and the Iranian leadership’s financial mismanagement.

The US has targeted Iran with sanctions to deter the country from developing a nuclear weapons programme and end its support of terrorist organisations, such as Hezbollah and the Houthis.

“It is exactly like you have a shitcoin that is listed only in an isolated exchange and the price falls every day, and finally you have to pay for the first essential needs such as milk, meat, etc., the same worthless coin,” Darius writes.

“The situation can be even worse when you have to pay more to buy the same goods the next day.”

Iran operates as a theocratic republic, with the vast majority of its power in the hands of its supreme leader, cleric Ali Khamenei.

While Iran has an elected president and parliament, their power is limited. While citizens have long criticised the regime, it has been the collapsing rial that has changed the dynamic.

“Generally speaking, people don’t revolt for high-minded ideals like democracy and universal suffrage — they revolt over things that affect everyday life,” Tallha Abdulrazaq, researcher at the University of Exeter’s Strategy & Security Institute, told DL News.

“Never underestimate just how willing people are to live under authoritarian conditions so long as their basic needs are met and they see hope for the future.”

30,000 victims

Following the blackout on January 8, the Islamic Revolutionary Guard Corps and Basij paramilitary forces began clearing the streets of protesters using live ammunition.

Due to the blackout, verifying the death toll has been a challenge for those on the ground as well as various human rights organisations.

Iran Human Rights reported at least 3,428 deaths. Iran International, a Persian-language news outlet based in London, counted at least 12,000 killed, citing internal documents from the Supreme National Security Council and the Presidential Office,

Two senior officials of Iran’s Ministry of Health told Time Magazine that from January 8 to January 9, as many as 30,000 people could have been killed.

Abdulrazaq agreed that the figure is difficult to verify but suggested it is closer to lower estimates.

“They do have the capabilities to round people up and kill them,” he told DL News.

“But, as you can imagine, that is a manpower intensive exercise so the number is probably in the low thousands at worst.”

As for toppling the regime, Abdulrazaq suggests that it won’t happen without international intervention.

“The Iranian government may have not invested in public services, but they have invested in their security apparatus and so, without foreign support through arming the protesters and effectively triggering a civil war, I don’t see how these protests will overthrow Iran,” he said.

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.

In its 2025 fourth-quarter financial report, the cooperative that governs Polkadot reported spending $7.4 million while adding assets worth around $11.5 million, giving it a profit of some $4.1 million.

“The Polkadot Treasury has grown more conservative and focused on essential operations and development,” Tommi Enenkel, Polkadot’s ecosystem developer and co-author of the report, said.

Enenkel attributed the positive quarter to “the Gavin effect,” referencing Polkadot’s creator Gavin Wood, who returned as CEO of Parity Technologies, the for-profit Polkadot developer, in August 2025.

“It shows the positive effect a voice of reason with the support of big bags has,” Enenkel said.

It’s the first time Polkadot has generated a quarterly profit since it started reporting its finances publicly in 2023.

It’s also a stark turnaround from the first half of 2024, when Polkadot spent a whopping $87 million. At the time, the project laid out $37 million on advertising and paid influencers $5 million to promote the blockchain on social media as part of a large marketing push.

Amid the splurge, Polkadot spent $180,000 to slap its logo on “an entire fleet of Europe-based private jets” for six months in a bid to promote the blockchain to “an elite target group.”

Treasury diversification

Of the $7.4 million Polkadot spent between October and December last year, $2.5 million — the largest outlay — went on development.

After that, outreach accounted for $1.7 million, $870,000 of which Polkadot spent on advertising.

The remainder of the expenditure went towards operations, business development initiatives, economic incentives, research, and talent and education.

At the same time, Polkadot gained 4.1 million of newly-issued DOT tokens.

In addition to cutting down on spending, the report also showed Polkadot diversifying more of its treasury away from the blockchain’s native DOT token.

Stablecoins now account for 18% — or $10.5 million — of Polkadot’s reserves, up from just under $1.7 million in the first half of 2024.

DOT decline

While Polkadot’s cost cutting has helped stabilise the project, it’s not the whole picture.

The blockchain’s balance sheet has declined in US dollar terms because the value of the DOT token has plummeted some 37% over the past three months.

Polkadot holds almost 32 million DOT tokens, accounting for 77% of its reserves.

“The USD equivalent value has diminished significantly in Q4 due to the declining DOTUSD rate. A risk that is more and more being mitigated by diversification into stables,” Enenkel said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

But it won’t be easy for the New York-based blockchain security firm.

Certik has come under fire from critics in recent years for auditing code for a platform linked to cybercriminals, its handling of an exploit it discovered at crypto exchange Kraken, and the hacking of its X account.

Ronghui Gu, the firm’s CEO and co-founder, is unfazed and announced the plans on Thursday in an interview with Acumen Media.

“Taking CertiK public is a natural next step as we continue scaling our products and technology,” Gu said in a statement.

“We remain focused on strengthening the trust, security, and transparency that regulators, institutions, and users expect from the Web3 ecosystem.”

IPO boom

CertiK’s announcement comes as more crypto firms look to go public amid institutional investors’ growing interest in the industry.

Last year, USDC issuer Circle’s IPO raised a whopping $1 billion from investors keen to own a slice of the burgeoning stablecoin industry.

Several more IPOs from Bullish, Gemini, Galaxy Digital, Figure, and Exodus also raised handsome sums by tapping into the demand for crypto companies.

2026 looks set to be another blockbuster year.

On Thursday, crypto custodian BitGo kicked off the year by raising $213 million from investors in its IPO.

Crypto titans Kraken, Ledger, Consensys and Aminoca Brands are all lining up their own public offerings for later in the year.

CertiK is no stranger to raising large sums of money.

The firm has collected $296 million in funding since its 2018 founding, landing a $2 billion valuation by early 2022. Investors include crypto exchange Binance, the SoftBank Vision Fund 2, Tiger Global, Sequoia Capital, and Goldman Sachs, among others.

On January 6, CertiK announced a strategic partnership with YZi Labs, the family office of Binance founder Changpeng Zhao.

“Recently Binance also made a follow up multi-eight figures investment into CertiK and became our largest investor,” Gu said in the interview.

Whether other investors will be as keen as Binance to invest in CertiK remains to be seen.

CertiK controversies

The firm has been caught up in several controversies in recent years, damaging its reputation.

In 2024, CertiK’s X account was compromised after one of its employees fell victim to a phishing attack, the firm told DL News.

Later that year, CertiK was roundly criticised after it announced its employees had discovered and exploited a $3 million bug in crypto exchange Kraken.

CertiK maintained that the incident was a “whitehat” operation designed to test Kraken’s security. It’s unclear why a business built on securing code for crypto appeared to break industry standards during the investigation and testing of the exploit.

In 2025, Certik apologised after working on a Cambodian marketplace linked to illicit activity.

The firm audited the code of a stablecoin launched by Huione Guarantee, a marketplace used by cybercriminals to launder stolen funds, buy and sell hacking tools and personal data, and whose vendors sold shock collars and stun batons for use by those running forced labour scamming compounds across Southeast Asia.

CertiK did not respond to a request for comment.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Over the past week, layer 1 blockchain Optimism and DeFi lender Morpho have both set their Discord servers to read-only mode, stopping users from posting.

The reason? The messaging platform, once a key tool in galvanising crypto communities, had become overrun with bad actors.

“Discord is actually full of scammers,” Merlin Egalite, a Morpho co-founder, said on X. “People would get phished while actually searching for answers despite heavy monitoring, safeguards, etc.”

Dozens more developers have come out in support of Morpho and Optimism dropping Discord, sharing their own issues with scammers on the messaging platform.

A key tool

At one point, Discord was a key tool in any crypto project’s arsenal.

Servers, which are like open forums where users can post messages and chat across different channels, have become invaluable hubs for communities to gather, share information, and receive support from developers.

Yet Discord’s ease-of-use and popularity proved a double-edged sword. Criminals have swarmed servers, targeting users with elaborate scams that often involve impersonating project founders and other influential figures.

Discord has taken steps to combat the scamming epidemic. The platform expanded its definition of deceptive practices and introduced new features and tools to keep users safe.

Yet for many, it’s not enough. Now, the downsides are outweighing the benefits.

“Discord makes it impossible to protect your users from getting scammed,” 0xngmi, the pseudonymous founder of DefiLlama, said on X. “Even if you ban scammers instantly they still DM users directly to scam them.”

0xngmi said DefiLlama has also been moving away from Discord to other communication channels, such as live support chat and email. DefiLlama is the sister company under the LLama Corp umbrella.

It’s not the only one to do so.

A Morpho spokesperson told DL News that it has shifted to a help page and an intercom system to eliminate the risk of users being scammed.

Less retail, more institutions

Scammers aren’t the only reason crypto projects are looking at Discord alternatives.

“We’re come to realise that Optimism needs to take a different approach to best support our current enterprise strategy,” Lavande, Optimism’s pseudonymous head of governance, said in a Discord post addressing the closure of its Discord.

In crypto’s early days, using Discord made sense because it was where many users already were. But in recent years, DeFi use has shifted sharply towards institutional investors such as trading desks, hedge funds and family offices.

These users typically have a background in the traditional financial world, where communication is handled through more conventional channels such as email, phone, or other forms of direct messaging.

“Most of our enterprise, developer and delegate interactions occur via private channels,” Lavande said.

But as crypto projects increasingly shift away from Discord to other communication platforms, they risk leaving some users behind.

“There’s some users that really want to use Discord, so if you drop Discord they will just not send feedback at all instead of using another channel,” 0xngmi said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

That represents the highest growth rate since 2021, when Beijing officially incorporated blockchain development into its economic strategy as part of its 14th five-year plan.

Since then, cities across the country have created special blockchain zones where local governments fund and support startups. While most of these firms work with private blockchain networks, Beijing is finding a myriad of uses for the technology, focusing mainly on finance and public sector projects.

The 2021 plan included a range of blockchain sector development initiatives for 29 cities and provinces, many in South China.

This has manifested itself in a flurry of activity. Almost a third of the blockchain startups registered last year are based in South China had the most newly registered companies, accounting for 32.5%.

The number of blockchain-related firms in China has steadily increased year by year over the past decade, Hexun Finance wrote.

The growth rate has accelerated since 2019, the year when Chinese President Xi Jinping called on the government and business leaders to prioritise blockchain technology development.

More usage scenarios

Chinese investment chiefs say the blockchain industry could almost double in size by 2027, reaching a total value of $1.4 billion.

Many of China’s leading blockchain companies were founded between 2017 and 2019, several years before their overseas competitors, Wu Hai, CEO of the China Internet Investment Fund, said last year.

Chinese firms have begun using blockchain technology in the food industry, supply chain financing, and the legal sphere. Wu claimed blockchain will also play a role in China’s AI expansion.

China’s banks are also using blockchain in the world of traditional finance and central bank digital currencies. In December, the state-owned Huaxia Bank issued over $637 million worth of bonds to digital yuan-paying investors.

Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.,

Natalia Milchakova, senior analyst at the brokerage Freedom Finance Global, told the Russian media outlet Deita that the digital ruble will become a “serious competitor” to Russian traditional financial payment systems like the MIR card.

“The launch of the digital ruble will slow the growth of the Russian bank card market by 7% to 9% per year,” she said.

Last year, Russian firms issued around 475 million cards, representing a year-on-year growth rate of 17%. But with the central bank poised to roll out the digital ruble nationwide in September, experts say blockchain-powered alternatives may eventually eclipse traditional financial solutions like credit cards.

Mandated usage

The MIR card was launched in 2014 by the central bank-run National Payment Card System to safeguard against Western sanctions. Adoption was initially slow. That changed in 2017 after a mandate required public sector firms to pay employees’ wages using MIR cards.

Banks must provide all pensioners, civil servants, public sector employees, and welfare recipients with MIR cards.

The National Payment Card System said last year that in the decade since its inception, MIR card transaction volumes have exceeded $1.2 trillion, with more than 86 billion total transactions.

MIR now holds an 80% share of the payments market, bolstered by the departure of Visa and Mastercard, Milchakova said. The firms exited Russia after the outbreak of the war in Ukraine in 2022.

“Even if foreign players return, they will no longer be able to retake a leading position in the Russian market,” Milchakova said.

Blockchain competition

Milchakova added that other fintech solutions, which use QR codes and biometric technology, will also intensify competition in the space.

These solutions may already account for up to 25% of daily transactions at Russian point-of-sale terminals, she said.

“Government and fintech solutions will have the greatest impact on the cashless payments market in the medium term,” Milchakova said.

Her comments appear to align somewhat with the central bank’s own forecasts for the digital ruble.

In late December, Alla Bakina, the head of the central bank’s national payment program, told the Russian news agency TASS that the digital ruble is set to corner 5% of the Russian payments market by 2032.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.

Only customers who purchased Ledger.com using Global-e as a Merchant of Record are potentially impacted, a Ledger spokesperson told DL News.

“Ledger was not the only brand whose customer data was affected,” the spokesperson said. “The unauthorised party gained access to a Global-e cloud-based information system containing shopper order data from several brands.”

Ledger did not respond to a question about how many of its customers were impacted by the breach.

Global-e did not immediately respond to a request for comment.

The incident comes as scams targeting crypto users remain a perennial issue.

In 2025, bad actors stole almost $84 million through phishing attacks, according to crypto security firm ScamSniffer.

These attacks involve scammers using fake emails, texts, or calls to trick customers into revealing sensitive information, clicking links that install crypto-stealing malware, or inadvertently sending them their crypto.

The Global-e data breach could worsen the situation. The leaked data includes Ledger customers’ contact information, a valuable resource for scammers targeting crypto users through email-based phishing attacks.

Not the first time

Ledger’s crypto hardware wallets are designed to help users keep their crypto assets secure by adding a layer of security.

Yet for many, purchasing a hardware wallet from the firm has exposed them to phishing attacks due to multiple data breaches.

In 2020, the firm revealed that data linked to around 272,000 of its customers had been stolen through a breach of its e-commerce and marketing database.

Later that year, Shopify, one of Ledger’s e-commerce service providers, revealed that a rogue employee had leaked data from around 292,000 Ledger customers.

These previous leaks included not just customer names and emails, but also addresses and phone numbers.

Leaks of crypto users’ addresses have led to so-called wrench attacks — where criminals locate, kidnap, and extort known customers to get them to hand over the password-like private keys that grant access to their crypto.

Ledger co-founder attacked

Last year, David Balland, one of Ledger’s co-founders, was targeted by such an attack.

Balland and his wife were kidnapped from their home and held for ransom in a wrench attack that took place in France in January.

Criminals held the pair for around 24 hours before French authorities freed them.

During the attack, the assailants severed one of Balland’s fingers and sent it to his associates in an attempt to lure ransom payments, French newspaper Le Monde reported.

In June, French police arrested a French-Moroccan national, alleged to be the ringleader of the group who carried out the attack, as well as several other kidnapping plots in France.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Hackers from the Democratic People’s Republic of Korea managed to steal more than $2 billion in crypto this year.

That’s a staggering 51% year-over-year uptick, according to a new report from blockchain surveillance firm Chainalysis.

The haul pushes North Korea’s cumulative proceeds from crypto theft to $6.7 billion since it began targeting the industry in 2016.

This year was marked by a shift in North Korea’s criminal strategy, which has led to 74% fewer attacks – but much larger thefts.

“When North Korean hackers strike, they target large services and aim for maximum impact,” Chainalysis wrote in its year-end report.

Instead of external hacks, DPRK operatives are embedding IT workers inside crypto companies to gain privileged access and execute massive heists.

Fewer attacks, bigger hauls

North Korea’s strategy has changed — now it’s go big or go home.

The average North Korean hack now steals amounts that dwarf what typical cybercriminals manage.

Here’s how extreme it’s gotten. The biggest North Korean hack in 2025 was 1,000 times larger than the typical crypto hack, according to Chainalysis. It’s the difference between a bank robbery that bags $1,000 and one that bags $1 million.

For example, the Bybit hack alone — which North Korean operatives executed in February — netted a staggering $1.5 billion. That single theft amounted to three-quarters of North Korea’s entire $2 billion haul for the year.

And while other hackers are pulling off dozens of small thefts from DeFi protocols and individual wallets, hackers from North Korea are focused on infiltrating major exchanges and custodial platforms, where the big money really sits.

In 2025, North Korean actors were responsible for 76% of all major exchange and platform hacks — the highest share ever recorded.

And the problem is far worse than most realise.

“North Korea is much worse than everybody thinks,” Pablo Sabbatella, a member of the cyber investigation organisation SEAL, told DL News in November.

“Between 30% and 40% of job applications received by crypto companies are North Korean operatives trying to infiltrate these organisations.”

Flipping the playbook

According to Chainalysis, North Korean operatives are now inverting the IT worker model entirely.

Instead of applying for jobs, they’re impersonating recruiters for prominent crypto and AI firms, orchestrating fake hiring processes designed to harvest credentials, source code, and VPN access from victims’ current employers.

These recruiters reach individuals worldwide through freelance platforms like Upwork and Freelancer.

The modus operandi is elementary.

An individual either loans his verified account credentials or simply allows a North Korean hacker to use his identity remotely. In exchange, the collaborator gets 20% of earnings, while the operative keeps 80%.

“At the executive level, a similar social-engineering playbook appears in the form of bogus outreach from purported strategic investors or acquirers,” Chainalysis wrote.

For Chris Wong, a former FBI agent and North Korea expert now at crypto intelligence firm TRM Labs, the situation goes beyond a simple cybersecurity challenge.

“North Korea’s crypto theft activity is a sanctions, national security, and financial crime issue, and countering it requires real-time intelligence, operational disruption, and sustained cross-border coordination,” Wong said in comments shared with DL News.

Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got a tip? Email him at psolimano@dlnews.com.

Crypto market maker Keyrock made that argument in a December 16 report that explored the impact of fast-growing platforms like Kalshi and Polymarket.

The report looked at Kalshi’s ‘Inflation in 2025’ market, which lets users place bets on where the 12-month percent change in the Consumer Price Index will fall.

“Rather than a lagging statistical update, Kalshi represents a real-time consensus on future inflation, giving traders an informational edge to anticipate macro turns before they are captured in official forecasts,” the report said.

Traders get ahead

With prediction markets offering potentially market moving insights, traders are incorporating their forecasts into their models.

“Prediction markets are already becoming a valuable data signal,” Nass Diba, co-founder of Worm, a Solana-based prediction market, said in the Keyrock report. “Hedge funds monitor these markets to get ahead of sentiment shifts.”

The Keyrock report compared Kalshi’s prediction market data to Nowcast, the Federal Reserve Bank of Cleveland’s inflation estimate index.

It found that ahead of the April 10 CPI release, Kalshi’s implied inflation forecast climbed from roughly 3.05% to 3.58%, signalling that traders were already positioning for firmer inflation.

Nowcast, by comparison, remained anchored near 3.9% until the data hit, then abruptly dropped to 1.5% once the model absorbed the new inputs.

“This demonstrates how prediction markets synthesise dispersed information faster than backward-fitted models, making them valuable for institutional desks trading TIPS breakevens, inflation swaps, or front-end rates,” the report said.

Accurate forecasts?

It’s not the first reported instance of prediction markets providing more accurate forecasts of future events than conventional sources.

During the 2024 US presidential election, Polymarket gained mainstream notoriety when bettors gave Republican candidate Donald Trump higher odds than most other sources to win the US presidency.

A historical analysis conducted by data scientist Alex McCullough showed Polymarket previously predicted the outcome of world events one month out with 90% accuracy.

Other studies have found prediction markets to be less accurate. A study conducted by researchers at Vanderbilt University found Polymarket got only 67% of markets right, while Kalshi hit 78%, and PredictIt scored 93% accuracy.

Still, prediction markets’ ability to reflect the opinions of crowds, coupled with their broad range of sometimes contentious and "disrespectful" bets, have made them popular with both retail bettors and professional traders alike.

Since early 2024, monthly notional volume has surged from under $100 million to over $13 billion, a 130x increase that places them among the fastest growing sectors in the world, according to the Keyrock report.

Some researchers say analyses of Polymarket have overestimated the platform’s trading volume, however.

The prediction market model of binary yes-no outcomes can also be a double-edged sword.

It works well when there are tens of thousands of bettors putting millions of dollars on the line. But when liquidity dries up it’s a different story.

“Traditional models assume continuous price movements, not discrete yes-or-no outcomes,” Duncan Hennes, managing director at accounting giant KPMG, said in the report.

“When paired with thinner liquidity, this leads to wider spreads, sharper volatility, and more complex margin dynamics.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Quantum computers exploit quantum mechanical phenomena to solve complex problems exponentially faster than classical computers.

They are seen as one of the biggest threats to blockchain technology because their superior computing power could be used to crack the cryptography that keeps blockchains like Bitcoin secure.

In a revised paper published on December 5, Blockstream researchers Mikhail Kudinov and Jonas Nick examined several ways the $1.8 trillion Bitcoin blockchain could be upgraded to make it quantum proof.

The pair argue that hash-based signatures are a compelling post-quantum solution because their security relies solely on hash function assumptions similar to those already underpinning Bitcoin’s design.

“These schemes have undergone extensive cryptanalysis during the NIST post-quantum standardisation process, adding confidence in their robustness,” Kudinov said in an email to the Bitcoin developer mailing list, presenting his and Nick’s work.

NIST is the National Institute of Standards and Technology, a US government agency best known for its widely adopted cybersecurity frameworks.

Researchers have long disagreed on if and when quantum computers will threaten Bitcoin’s cryptography. But recent developments in the field have reignited debate.

In February, Microsoft announced a new quantum computing chip that it says solves the scaling issues that have persistently plagued the field.

Then in October, Google released new research which it claims brings quantum computing much closer to being used in real-world applications such as medicine and materials science — or swiping Bitcoin from holders’ wallets.

At the current rate of development, quantum computers could start threatening Bitcoin within five to 10 years, Pierre-Luc Dallaire-Demers, a scientist-in-residence at the University of Calgary, previously told DL News.

Vitalik Buterin, co-founder of the second-biggest blockchain Ethereum, sees the technology progressing even quicker. He warned last month that quantum computers could break Ethereum’s underlying security model before the next US presidential election in 2028.

What are hash-based signatures?

Hash-based signatures rely on hash functions, mathematical algorithms that are considered to be quantum-resistant because they aren’t easily cracked by quantum algorithms, unlike the public-key cryptography used for Bitcoin.

Hash functions can counter the brute-force searches made possible by quantum computers by simply increasing their output size, making the search space too large and keeping them secure for applications like digital signatures.

How exactly developers could implement hash-based signatures, however, is subject to ongoing debate.

Considerations such as keeping validation costs low, whether to standardise multiple hash-based signature implementations, and whether or not the entire network’s history should be necessary to validate transactions all need deciding.

The recent quantum proofing discussions follow a May proposal from Tadge Dryja, a co-inventor of the Bitcoin Lightning Network, to add a feature that will protect Bitcoin held in users’ wallets if a quantum computer-armed actor attempts to break their cryptography.

Older Pay-To-Public-Key Bitcoin wallets created before 2012 that rely on less secure cryptography will be the first to fall to quantum computers.

These vulnerable wallets, which include Bitcoin creator Satoshi Nakamoto’s $98 billion stash, contain approximately $600 billion worth of Bitcoin, per an estimate from Project Eleven, a startup aiming to secure Bitcoin against quantum computers.

“It would be nice to have a way to not deal with this issue until after [quantum computing] shows up,” Dryja said at the time.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Coinbase currently offers between 2% and 3.5% annually in so-called rewards to eligible customers who hold USDC, the dollar-pegged stablecoin, on the exchange.

In emails sent to customers on Thursday and seen by DL News, the exchange said that after December 15, only Coinbase One customers will earn the 3.5% rate, while non-paying customers will forgo rewards.

Coinbase’s USDC rewards programme is funded by the exchange and designed to incentivise customers to hold USDC on Coinbase.

The programme is similar to those offered by other exchanges, trading platforms, and neobanks, in which customers’ idle cash deposits are automatically invested in low-risk financial products such as short-term government bonds and money market funds.

Circle, the issuer behind USDC, holds US government bonds that back its stablecoin.

Coinbase says on its website that it does not use or lend customers’ USDC without their instruction.

A Coinbase spokesperson told DL News that the firm regularly assesses the USDC rewards rate and always aims to offer its best rates at any given time.

Falling rates

It’s not clear what motivated the change.

Last November, Coinbase ended its rewards programme entirely for customers in EU countries due to new requirements introduced by the bloc’s Markets in Crypto-Assets Regulation.

As recently as September, Coinbase reopened the rewards programme to new regions, with CEO Brian Armstrong promoting a 4.1% reward rate for non-paying Canadian customers.

Although Coinbase says its USDC rewards are not generated directly from investing customer deposits, falling interest rates may still affect them.

On Wednesday, the US Federal Reserve cut the federal funds rate by 0.25%. It’s the third reduction of the year, and brings the federal funds target range down to 3.50-3.75%

As interest rates fell over the past year, Coinbase also lowered its USDC rewards across multiple regions.

The exchange cut UK customer rewards by 0.25% twice before today in January and October, while US customer rewards fell to 4% in October before today’s reduction to 3.5%.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The US Justice Department on Tuesday announced that Evan Tangeman, 22, of Newport Beach, California, was the latest to admit his part in a social engineering scheme that stole 4,100 Bitcoins—priced at the time of the crime at $263 million but now worth over $383 million. The scheme ran from October 2023 to May 2025.

Dubbed the “Social Engineering Enterprise” by US feds, a group of online gamers became friends before working together to commit cybercrimes, the indictment read. They then hacked databases to steal crypto users’ information and con them into providing user logins and private keys.

“Members and associates of the SE Enterprise served different roles and held different responsibilities,” the indictment said.

“The roles included database hackers, organizers, target identifiers, callers, money launderers, and residential burglars targeting hardware virtual currency wallets.”

The indictment added that after gaining the trust of crypto investors, the criminal group was able to pretend they were legitimate digital asset exchange employees and get login information or private keys.

Stolen crypto was laundered by defendants—including Tangeman—and spent on bottle service parties, private jet rentals, security guards, luxury handbags and watches, and properties in Los Angeles, the Hamptons, and Miami, according to the feds.

The indictment added that the defendants would spend up to $500,000 a night on parties and give away designer handbags worth tens of thousands of dollars.

A total of nine defendants have pleaded guilty, the Justice Department said.

The Justice Department first announced the investigation last year, naming defendants Malone Lam and Jeandiel Serrano as key players in the criminal group.

Feds at the time alleged that the two defendants used crypto mixing services—applications that obfuscate the movement of digital funds—to hide their tracks.

Crypto sleuth ZachXBT last year said that stolen funds were switched between other cryptocurrencies, including the privacy coin Monero.

The Justice Department did not immediately respond to DL News’ request for comment.

Social engineering scams are becoming more common in the crypto sphere. Such crimes involve manipulating targets to hand over login information or click on compromising links.

Top hackers such as state-sponsored Lazarus Group—the culprits behind industry’s biggest hack of the Bybit exchange in February—also used social engineering techniques to steal billions of dollars.

Mathew is a Latin America-based correspondent at DL News. Got a tip? Email him at mdisalvo@dlnews.com.

A new study by researchers Joshua Clinton and TzuFeng Huang at Vanderbilt University suggests that booming prediction markets aren’t nearly as accurate at predicting the future as their proponents claim.

Researchers examined 2,500 markets with $2.5 billion in volume across leading platforms such as Polymarket, Kalshi, and New Zealand-based PredictIt.

They defined the accuracy of a market by how closely a market’s odds lined up with what ended up happening — the better the match, the more accurate the market.

The conclusion?

Polymarket got only 67% of markets right, while Kalshi hit 78%, and PredictIt scored 93% accuracy.

Despite being the largest exchange, Polymarket “has the least” amount of accuracy, researchers wrote. Kalshi followed, and then PredictIt.

Other examples of inaccuracy the researchers identified as well, included, for instance, contracts for “Dem wins by 6% to 7%” and “GOP wins by 6% to 7%” — mutually exclusive outcomes — occasionally moved in the same direction simultaneously.

Prediction markets are exchanges where people buy and sell contracts that pay $1 if a future event occurs, with the contract’s price reflecting the market’s implied probability of that outcome.

They work by allowing traders to bet based on their information, beliefs, or analysis, theoretically aggregating diverse knowledge into a single price.

Proponents argue that because real money is at stake, prices should incorporate all available information and therefore offer a more accurate, real-time forecast of an outcome’s viability.

Booming prediction markets

Prediction markets have stormed onto the scene.

Kalshi announced on Tuesday that it has raised $1 billion at an $11 billion valuation — a massive leap for a company that launched barely four years ago.

The same day, the firm struck a deal with CNN and a day later with CNBC, putting real-time prediction data across their channels starting in 2026.

Polymarket, meanwhile, reached a $9 billion valuation in October. Just two weeks later, Bloomberg reported that the company was looking for funding at a $15 billion valuation.

All of this comes as the stakes get even higher.

Kalshi CEO Tarek Mansour recently said that his company’s long-term vision is to “financialise everything and create a tradable asset out of any difference in opinion.”

Concerns abound, however.

If prediction markets struggle to price presidential elections efficiently — among the most information-rich events in the world — the prospect of financialising everything raises questions about what happens when markets expand to topics with even less available information.

Kalshi vs. Vanderbilt

Not everyone accepts the findings.

Jack Such, who leads media relations for Kalshi, told DL News that the study’s methodology “completely misunderstands prediction markets, and shouldn’t be taken seriously.”

The researchers’ methodology included analysing every political prediction market traded on Kalshi, PredictIt, and Polymarket during the final five weeks of the 2024 US election.

They measure accuracy using industry-standard forecasting metrics such as log-loss and Brier scores, which penalise markets that are confidently wrong and reward well-calibrated probabilities.

Such argues that accuracy should be measured by calibration: whether markets at 20% odds resolve “yes” 20% of the time, at 70% resolve “yes” 70% of the time, and so on.

“When measuring calibration, the true way to measure accuracy, Kalshi, is almost perfectly accurate,” said Such, pointing to the company’s open source data as a source of truth.

But the researchers say the critique misses the point entirely.

“Although many jumped on this ‘accuracy’ point, I think the point of our paper was not really about accuracy at all,” Clinton told DL News.

The real finding, Clinton reckons, is that similar markets — like the presidential winner-take-all market — were “not only consistently priced differently, but also that the changes in daily closing prices were largely unrelated.”

This suggests that market activity was based on “within-market pricing dynamics rather than a reaction of traders to new political information,” Clinton said. “A lot of the volatility was due to within-market actions and reactions.”

In other words, traders weren’t reacting to political reality.

They were reacting to each other.

The whale problem

Polymarket’s accuracy woes boil down to the firm’s basic structure.

Since the platform allows near-unlimited stakes with minimal friction, it attracts large, aggressive, and risk-seeking speculators — a “different class of traders” from PredictIt or Kalshi, according to the researchers.

Because the platform doesn’t cap positions, one player can move entire markets, producing prices that reflect individual beliefs rather than collective wisdom.

The researchers say Polymarket’s design — near-unlimited stakes, crypto-based access, and a high concentration of large traders — makes it more susceptible to outsized influence by single actors.

Polymarket did not reply to a request for comment from DL News.

Take the 2024 “French Whale.”

The trader, identified as Théo, placed $42 million in outstanding election bets across four different accounts, all riding on a Republican win. On just one bet, he stood to make $47 million if Trump won.

If he lost? Say bye-bye to $26 million.

At one point, Théo held more than 20% of all “yes” shares, expecting Trump to win the election.

For comparison, the largest Harris shareholder held only 7% of the company’s shares.

Negative correlations

Even for the same outcome, Polymarket’s daily price movements barely correlated with Kalshi or PredictIt.

When new political information emerged, Polymarket often didn’t react or reacted in contradictory ways.

Worse, 58% of Polymarket’s national presidential markets showed negative serial correlation. A price spike one day was typically reversed the next.

That’s a textbook signal of noise trading and overreaction, not informed forecasting, researchers said.

Inefficiency actually increased in the final two weeks before Election Day — when information was most abundant, and prices should have converged.

In the end, Polymarket and Kalshi “encourages herd behavior driven by visibility and hype rather than news,” the study concluded.

Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got a tip? Email him at psolimano@dlnews.com.

Sony Bank is developing a plan to launch a US dollar stablecoin, according to Japanese outlet Nikkei.

The proposed stablecoin would be the default currency for buying PlayStation games, anime, and other digital goods inside Sony’s entertainment market.

That ambition fits into a larger corporate land grab for stablecoins, both within and outside Japan.

In Japan, the country’s three mega banks, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group, are set to launch a yen stablecoin pilot backed by the country’s top financial regulator in November.

Sony Bank plans to launch its stablecoin as early as fiscal 2026 and has already applied for a national banking charter in the US through Connectia Trust, its US trust subsidiary.

The goal is to replace card payments and their considerably higher fees with stablecoins, which are seen as a cheaper alternative, according to the report.

The stakes are high for Sony as the company already runs a busy digital storefront that serves close to 120 million monthly active users on the PlayStation Network alone.

Layer that onto a global gaming market predicted to generate $424 billion in revenue by 2032, about triple the current projected earnings for this year, and Sony appears to be making a significant move.

As researchers at the Federal Reserve have noted, payment channels for business sectors like gaming that require frequent microtransactions are just as important as the content that generates revenue.

Sony’s stablecoin play is also part of the growing trend toward stablecoins as merchant settlement currencies.

There’s already an expanding roster of banks and fintech firms experimenting with their own branded stablecoins.

In November, Visa launched a stablecoin pilot for gig workers, creators, and freelancers.

Zelle and Western Union have also floated plans to integrate stablecoins into their operations. Western Union CEO Devin McGranahan said the move isn’t about speculation but giving users “more choice and control in how they manage and move their money.”

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.

In a November 17 blog post, Binance claimed data from Chainalysis and TRM Labs, another blockchain security firm, showed that only 0.018% to 0.023% of trading volume across the top seven biggest crypto exchanges — including itself — was directly linked to illicit crypto wallets.

“Both analytics firms’ data suggest that Binance, the world’s largest digital-asset exchange, consistently outperforms the market in minimising exposure to illicit funds – despite handling far greater trading volumes than any other platform,” Binance said in the post.

But that may not be the full picture.

According to Chainalysis, Binance’s analysis did not appear to include all categories of illicit activity that Chainalysis tracks, such as funds coming from ransomware or stolen in hacks, and was only based on direct exposure only, Chainalysis said in a November 28 X post.

“In other words, if an illicit entity sends funds to a personal wallet, and then that wallet sends funds to Binance, it is not included in this analysis,” Chainalysis said.

Such wallet hopping strategies are widely used by crypto criminals attempting to cover their tracks, although security researchers can often still trace the movement of funds.

Hacks are one of the largest sources of illicit crypto funds, with criminals stealing nearly $2.2 billion through the method last year, according to Chainalysis.

Binance did not immediately respond to a request for comment.

The exchange said it updated its blog post on November 19 to clarify that it conducted the analysis itself using Chainalysis and TRM Labs’ datasets, and to specify how direct illicit exposure was calculated based on Chainalysis data.

Tough on crypto crime

Chainalysis’ clarification comes as Binance attempts to signal to both regulators and the broader crypto industry that it is tough on crypto crime.

In 2023, Binance admitted it engaged in anti-money laundering, unlicensed money transmitting, and sanctions violations, resulting in a $4.3 billion penalty.

Changpeng Zhao, the firm’s CEO at the time, stepped down and was sentenced to four months in prison for failing to maintain an effective anti-money laundering programme, although he received a presidential pardon in October.

The same month, victims of the October 7 attacks conducted by Hamas accused the exchange of aiding terrorists in a new lawsuit.

Binance has repeatedly said that it cannot comment on any ongoing litigation, and that it complies fully with internationally recognised sanctions laws.

Ari Redbord, global head of policy at TRM Labs, the other firm whose data Binance used in its analysis, told DL News the 0.018% figure cited in Binance’s release reflects a point-in-time analysis that his firm conducted on Binance’s activity for June 2025, and only covers direct exposure for a limited number of categories.

“The number did not come from a public TRM report — it came from a custom dataset provided directly to Binance,” Redbord said. “We would defer to Binance on any interpretation, comparisons, or framing around that statistic.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Upbit confirmed the incident on Thursday and said it suffered an unauthorised withdrawal of Solana-based cryptocurrencies, including stablecoins, from its coffers.

“To prevent any damage to member assets, the entire amount will be covered by Upbit’s holdings,” Oh Kyung-seok, CEO of Dunamu, said in a statement.

Upbit has also paused deposits and withdrawals and frozen $8.2 million in Solaire, one of the tokens syphoned during the breach.

$10 billion acquisition

The hack lands at a singularly awkward moment for Upbit and its new owner-to-be.

Naver Financial, a subsidiary of Korean internet giant Naver, agreed to a $10.3 billion stock-swap deal to acquire all of Dunamu’s equity, according to regulatory filings.

Stock-swap deals allow companies to merge without the acquirer needing to pay cash. Instead, it issues its own shares to the other company’s shareholders. Naver is issuing 2.54 of its own shares per Dumanu share.

The merger is expected to catapult Naver’s fintech arm to a market value of $13.6 billion.

Record-breaking hacks

The breach at Upbit is also the latest entry in what has already become a record-setting year for losses from crypto hacks and exploits, as attackers continue to target exchanges and DeFi protocols.

Losses from these incidents have exceeded $2.4 billion, including the massive $1.5 billion hack of the Bybit crypto exchange that happened in February.

Even long-standing DeFi protocols like Balancer, which have undergone numerous security audits from several blockchain security firms, haven’t been spared.

In November, an attacker syphoned $128 million from Balancer.

Upbit isn’t a first-time victim.

In 2019, suspected North Korean hackers stole $42 million in Ethereum from the crypto exchange.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.

Wu Hai, CEO of the China Internet Investment Fund, made that prediction on Sunday, arguing that the integration with artificial intelligence projects will help the Middle Kingdom’s blockchain sector surge by 71% from its 2024 $816 million high.

While that’s about a tenth of the estimated US blockchain market in in the same year, Wu seemed confident that the sector is about to experience explosive growth.

“Our investment drives are helping the blockchain industry solidify its basic software and hardware foundations,” the CIIF chief told China’s Cailian Press. “We are looking to promote high-quality development.”

The bullishness comes years after Beijing cracked down on the crypto industry and as the US market has been supercharged by President Donald Trump’s pro-crypto policies.

Two-pronged blockchain strategy

Wu said that blockchain investors were following a two-pronged strategy.

The first involves building key infrastructure and application platforms. And a second focuses on integrated application and “value scenarios.”

These scenarios include blockchain adoption drives in the government space, as well as finance, culture, and tourism.

AI-powered technical support service platforms are also set to adopt blockchain technology.

‘Significant results’

Wu said that Chinese blockchain investment, financing, and industrial development have already yielded “significant results in integration and application.”

This was particularly true of the enterprise services and financial services sectors, he said.

And Wu noted that many of China’s blockchain companies were founded between 2017 and 2019, several years before their overseas competitors.

Wu added that last year saw investment flow into Chinese blockchain-powered services, financial companies, and agricultural projects.

But he indicated that over 90% of investors still back early-stage projects.

Xi’s blockchain drive

In 2019, President Xi Jinping called on the public and private sectors to “increase investment and accelerate blockchain development.”

Two years later, top Beijing policymakers included a comprehensive blockchain strategy in the country’s 14th Five-Year Plan.

However, China’s crypto purges have forced most businesses to focus on private blockchain network-powered solutions.

As a result, many of the country’s most prominent blockchain players are most active in sectors like central and local government, as well as administration.

But in recent years, telecom providers have launched blockchain-powered 5G projects.

China’s judiciary uses blockchain for a fast-growing range of purposes, such as storing and verifying electronic evidence.

The CIIF is worth $15 billion. It was co-launched by the Chinese web regulator, the Cyberspace Administration, in conjunction with the Ministry of Finance.

The parties launched the fund in 2017 with the express aim of “supporting investments in the domestic internet industry.”

Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.

More than half a dozen of this new breed of financial apps have launched over the past year, banking on clearer regulations and the technological savvy of younger generations to fuel their success.

“The majority of investors today are digital natives,” Zac Prince, managing director of GalaxyOne, Galaxy’s crypto neobank, told DL News. “They’re comfortable with app-based banking and want a single, modern platform that removes friction and gives them full visibility.”

The popularity of these new blockchain-powered apps comes at a key moment for the crypto industry. Having long been watched with suspicion by traditional finance and regulators, new pro-industry policies have paved the way for crypto to tap into traditional finance, and vice-versa.

Crypto neobanks have everything to play for. If they can carve out even a modest slice of the traditional banking market, the rewards will be huge.

The global banking industry is massive, with revenues hitting a record $5.5 trillion last year. The sector is estimated to be worth $3.9 trillion in 2025, according to a report from global management consulting firm McKinsey.

What are neobanks?

Neobank is the nom de guerre of a new breed of digital-only financial apps that burst onto the scene over the past decade.

Chime, Revolut and Monzo challenged traditional banks by ditching brick-and-mortar branches, enabling them to cut costs and offer higher interest rates than incumbents.

Neobanks have thrived. Revolut is now one of the most valuable fintech firms in Europe, having achieved a $75 billion valuation at a secondary share sale to employees and investors in September.

Crypto neobanks are the latest evolution in the trend. They aim to leverage blockchain technology in their products to offer fast, low-cost international payments, easy crypto investing, and double-digit interest rates on deposits.

To be sure, they are facing fierce competition. Older challenger banks are also tapping into similar services while crypto-native firms roll out their own banking services.

Tapping DeFi yields

For many crypto neobanks, the focus is on offering customers better returns than they can find in the traditional banking system.

“Interest rates are crazy low,” Vijit Katta, CEO and co-founder of Tria, a crypto neobank, told DL News. “Unless you go for financial products which are risky, you won’t be able to get more than like, 10% ever.”

Tria plans to tap into yields offered by decentralised finance protocols, which can go toe-to-toe with the best rates offered by other neobanks.

NuBank, the biggest neobank, has drawn in hundreds of thousands of customers in Colombia by offering a 13% annual effective interest rate on its savings account.

Tria is hoping to offer even higher yields.

“We want to bring delta neutral strategies with proven track records,” Katta said. “These strategies can easily have anywhere between 15% to 25% month-over-month.”

Such double-digit yields might draw in more customers. But there’s more risk involved.

On October 10 the crypto market was struck by a $19 billion leverage wipeout.

As crypto prices cratered, Binance, the biggest exchange, automatically closed thousands of users’ trades which were involved in such delta neutral strategies. This resulted in them unexpectedly losing millions of dollars.

There’s also the risk of faults in the code that underpins many DeFi protocols. This week, users of liquidity protocol Balancer lost $128 million after a hacker exploited a code bug.

Regulatory clarity

Regulatory clarity in the US is one of the primary drivers behind crypto neobanks’ bullishness.

In July, US President Donald Trump signed The Genius Act, the landmark crypto regulation in the US that defines clear rules for stablecoins, into law.

This, neobank developers say, has set a standard for other countries to follow, giving the upstart lenders a newfound confidence to deploy their products.

“The boundaries were very unclear, and therefore the fees and compliance that these players had to charge customers became more substantial,” Ying Zhong Ng, head of product at UR, a crypto neobank launched by Mantle, told DL News. “Now I know what my true costs are, and the playing field I can operate in.”

The regulatory clarity has emboldened existing payments providers to work with crypto neobanks, opening up a new customer base for them.

Visa has recently changed its internal regulations, helping align blockchain technology and existing payments rails, Katta said.

“What we are doing right now was definitely not possible, say, two years ago,” Katta told DL News. “The technical complexities that Visa has allowed has changed the game in terms of how a self-custodial neobank can operate.”

Other factors fuelling the rise of crypto neobanks include new on- and off-ramps between crypto and the traditional financial system that are cheaper and easier to use than they were before, UR’s Ng said.

Meeting customers

Then there’s customer demand. According to Ng, more people are realising that crypto has use cases beyond speculation.

“People send money to their friends or family at home through stablecoins. Or as freelancers they receive payments in USDT, USDC — that’s actually quite common,” Ng said.

The context into which neobanks are launching is important too.

Users are much more familiar with using financial apps than they were five years ago, according to Evin McMullen, the co-founder and CEO of the Billions Network, which works with Tria to provide private know-your-customer checks using zero-knowledge technology.

“The switching cost to take on these new technologies from a user perspective is much lower,” she told DL News. “It’s easier to use them because they’re designed more intuitively to the experiences you already have.”

Tim Craig is DL News’ Edinburgh-based DeFi correspondent. Reach out to him with tips at tim@dlnews.com.

The move falls under Ripple’s University Blockchain Research Initiative, which provides technical resources and financial support for academic research in blockchain technology.

XRP co-creator and Ripple chief technology officer David Schwartz will join the group, which includes academics from Trinity College Dublin, Nanyang Technological University, Hanyang University, and the University of Luxembourg.

“For blockchain to truly evolve, we need a constant exchange of ideas between those building the technology and those studying its future,” Schwartz said in a statement.

“We’re deepening that collaboration, bringing together academic researchers and Ripple engineers to explore new applications for XRP and its native chain that can ultimately move this growing ecosystem forward.”

The move comes amid an American crypto industry boom on the back of President Donald Trump shepherding in more favourable regulations.

Wall Street institutions are piling into digital assets, creating their own stablecoins, tokenising debt, and upgrading internal systems with blockchain technology.

The increased interest in the financial sector is spilling over into academia. More universities have started running blockchain courses and conducting research in recent years, a trend Ripple is eager to leverage.

Schwartz is set to step down as CTO at the end of the year, but has said he will remain involved with Ripple.

University of San Francisco

In addition to Ripple’s new advisory council, the firm is also collaborating with the University of San Francisco.

The university’s Center for Law, Tech, and Social Good will explore how blockchain legislation can support innovation, with the goal of publishing public-facing research and policy recommendations.

At the same time, the Department of Computer Science will run an XRP Ledger validator, software that processes transactions on the blockchain.

To fund these efforts, and those at other partner universities, Ripple said it has distributed $1.5 million worth of grants this year.

The firm’s other research initiative partners include the University of Michigan, University of Wyoming, UC Berkeley, University of São Paulo, and Duke University.

Ripple said it has supported more than 60 universities worldwide and committed over $80 million in research funding since 2018.

Crypto and academia

Ripple isn’t the only blockchain organisation cosying up to academia.

Last week, Tron DAO, a group that helps run the Tron blockchain, announced new collaborations with blockchain organisations at Columbia University and Harvard University.

Input Output, the company that designed and built the Cardano blockchain, also has strong academic-industry ties.

The firm has collaborated with the University of Edinburgh since 2015, pursuing research and development on Plutus, the native smart contract language for Cardano, and zero-knowledge proofs.

The Cardano foundation, a nonprofit that supports the Cardano blockchain, has also partnered with the University of Zurich to sponsor a PhD position in Blockchain Analytics.

Tim Craig is DL News’ Edinburgh-based DeFi correspondent. Reach out to him with tips at tim@dlnews.com.

Agents buying and selling goods and services using a payment protocol developed by Coinbase grew more than 30,000% and 368%, respectively, over the past seven days, according to x402scan.com. The number of transactions grew more than 4,300% to 957,000.

The protocol, x402, has received support from Cloudflare and Google. It allows agents to make payments instantly with near-zero fees using any blockchain.

Agents are the AI-powered bots that could eventually handle everything from online shopping to money management. And the crypto industry has attempted to position blockchain technology as the ideal tool for empowering the so-called “agentic economy.”

Last month, the Ethereum Foundation announced dAI, a team that’s been tasked with boosting Ethereum as a settlement and coordination layer for agents. DAI and Metamask developer Consensys have since published a finalised version of a protocol that allows agents to find, vet, and work with one another without centralised intermediaries.

In May, Coinbase announced x402. The protocol is built atop HTTP, another protocol that undergirds the world wide web.

Agents that attempt to make purchases online often receive the HTTP 402 code, which signals that a payment is required. X402 allows agents to make those payments using cryptocurrency without signing up for accounts or subscriptions.

In September, Google said it would integrate x402 into its own agentic payment protocol, AP2. Later that month, Cloudflare announced NET Dollar, a US dollar-backed stablecoin that would leverage x402.

On Saturday, crypto data provider CoinGecko began tracking crypto assets associated with x402-using agents.

To be sure, even as x402 transactions boom, their value remains relatively miniscule.

While there have been almost one million x402-enabled transactions over the past week, those transactions were worth just $1.1 million. Fewer than 100 transactions were worth more than $100 over the past seven days.

But that’s by design.

“The web as we know it was never designed for small, programmatic payments. Every online service today relies on subscriptions, accounts, and login management,” Gregor Frick, a partner at crypto venture firm Renaud Partners, wrote on X.

X402, on the other hand, “allows you to pay automatically, per request, directly over HTTP: no subscriptions, no logins, no accounts. Think of it as a pay-per-use layer for the internet itself.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

That threat edged closer on Wednesday after Google released new research which it claims brings quantum computing much closer to being used in real-world applications such as medicine and materials science — or swiping Bitcoin straight from holders’ wallets.

“Google just keeps delivering milestones on schedule and that’s how the threat for Bitcoin will become increasingly more real,” Pierre-Luc Dallaire-Demers, a quantum computing researcher and founder of Pauli Group, a firm working on post-quantum cryptography for blockchains, told DL News.

Four to five years

Dallaire-Demers said the breakthrough is consistent with his previous prediction that quantum computers will be able to crack the encryption behind Bitcoin within four to five years.

Bitcoin uses a cryptographic algorithm for the digital signatures that mark transactions. The security of this system relies on the difficulty in unravelling the outputs of that algorithm.

In the future, quantum computers could become powerful enough to do so, giving bad actors the ability to transfer Bitcoin out of vulnerable wallets at will.

The impact of quantum computers capable of cracking advanced cryptography would be immense.

About 25% of all Bitcoin in circulation — around $554 billion at current prices — is vulnerable to a quantum attack, according to a 2024 note from Deloitte, a consulting and risk management firm.

And it’s not just cryptocurrencies that are at risk.

Much of the internet, including websites, messaging services, and financial transactions, relies on encrypted communications that are also theoretically vulnerable to quantum attack.

Impossible to know

Other experts are more conservative in their estimates of how much time Bitcoin in its current form has left.

Paulo Viana, a quantum computing researcher, told DL News he believes quantum computers could pose a threat in around eight years’ time.

But the few extra years of safety don’t make the threat any less unsettling.

“Considering how complicated it is to transition to a quantum resistant option, eight years seems to be concerning at least,” he said.

As Quantum computers become more powerful, the Bitcoin network won’t fall all at once.

The first part to fall to quantum computers will be older Pay-To-Public-Key wallets created before 2012, which use a weaker form of encryption.

For most users, avoiding this risk is as easy as transferring funds to a modern wallet, which hides the user’s public key behind a hash that quantum computers cannot break until a transaction is made.

Satoshi’s $122bn stash

But wallets belonging to Bitcoin creator Satoshi Nakamoto — containing some 1.1 million Bitcoin worth $122 billion — are of the older, more vulnerable type.

Nakamoto hasn’t been heard from for 14 years, making it appear unlikely that the pseudonymous developer will return to safeguard his stash any time soon.

The biggest issue, Viana said, is that it will be impossible to know when quantum computers start cracking Bitcoin’s encryption.

To those observing activity on the blockchain, such an unauthorised transaction would appear no different from an old Bitcoin wallet performing a routine transfer, something that happens frequently.

“We are safe for now, but this could lead to a market crash if people don’t start to focus on solving this problem,” Viana said.

Tim Craig is DL News’ Edinburgh-based DeFi correspondent. Reach out to him with tips at tim@dlnews.com.

Released on Thursday, the Ledger Nano Gen5 features many of the same features as the company’s suite of hardware wallets, including an e-ink screen, secure signing, and tap-to-unlock support via a near-field communication protocol.

At $179 retail, the device also comes with Ledger’s security key, a physical device roughly the size of a credit card that can be used in lieu of a seed phrase to unlock the wallet.

Susan Kare, the original designer of the Apple Macintosh’s iconography, also designed an exclusive series of small clip-on badges to personalise the hardware wallet.

Out with the old

Launched in 2016, Ledger has emerged as one of the industry’s largest hardware wallet providers with more than 8 million devices sold to over 160 different countries.

Over 20% of the market’s cryptocurrencies are secured by a Ledger device, according to the company.

The latest release comes four months after the Paris-based company announced it would stop offering security and software updates to its Ledger Nano S device, which was launched in 2016.

Charles Guillemet, Ledger’s chief technology officer, said in June that the device’s limited memory at a time when crypto was growing rapidly was a significant constraint.

“Like all consumer tech, there comes a point where developing updates is no longer feasible, in which case we will inform people well in advance of any cessation of updates,” Ariel Wengroff, the executive vice president of marketing and communications at Ledger, told DL News.

Wengroff declined to comment on how long Ledger would offer support for the Ledger Nano Gen 5, nor whether other products would be deprecated.

Ledger goes multi-sig

The device launch coincides with renewed focus on Ledger’s growing enterprise business.

Led by Sebastien Badault, Ledger Enterprise launched five years ago to provide treasury management services for hedge funds, decentralised autonomous organisations, and more traditional financial institutions.

“A lot of family offices or bigger companies said, ‘we love your products. It’s really great, but we cannot have one person holding the keys because there are multiple owners, and we cannot have one single point of failure,’” Badault told DL News.

These days, with crypto riding high on the back of pro-industry legislation passing in the US, institutional demand for crypto products has been much higher, Badault said.

On Thursday, Ledger revealed the launch of a multi-signature product to meet this new demand. Multi-sig crypto wallets enable multiple users to manage a pool of cryptocurrencies jointly.

Ledger Multisig is built using the open-source architecture from the smart contract wallet provider Safe.

It also lets users see the entire address of a transaction before signing it, a feature the company calls Clear Signing.

“This was the main issue with Bybit for example or with Swissborg,” Wengroff told DL News, referring to monumental hacks that hit key crypto projects this year.

“They blind signed transactions and lost millions to billions of dollars.”

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.

“The Solana Mobile Saga has reached the end of its support lifecycle,” the firm said in a post on its website. “Compatibility with new software or services cannot be guaranteed.”

The lack of support means that devices will no longer receive updates, making them more vulnerable to security threats and potentially causing apps to stop working over time.

“Customer support for Saga-specific issues will be limited to general inquiries only,” the post said.

Solana Labs did not respond to a request for comment.

Launched in May 2023, the Saga aimed to integrate blockchain technology and make the Web3 ecosystem more accessible to everyday users. It was also built in reaction to the restrictive app store policies of companies like Apple and Google.

The phone was built by OSOM, a California-based hardware company, in collaboration with Solana Mobile, a subsidiary of Solana Labs.

Short lifecycle

The news comes as a blow to those who bought the Solana Saga.

Its two-year lifecycle is unusually short compared to other mobile phone manufacturers.

Apple provides a minimum of five years of security updates for its devices, while Google has promised seven years of software updates for its newer phones.

It’s not clear why Solana Mobile decided to end support so soon. The firm is currently developing a new phone, called the Solana Seeker, which launched on August 4.

Over the last decade, more than a dozen bespoke crypto phones have hit the market. But none have gained meaningful traction.

Solana’s Saga originally sold for $1,000 before being reduced to $599 after slow initial sales. Customers eventually scooped up about 20,000 phones, which was well short of the device’s 50,000 unit goal.

Memecoin airdrops

Most users won’t remember the Saga for its attempt to make the crypto economy more accessible, but instead for its role in the Solana memecoin mania that swept the blockchain in late 2023 and early 2024.

When Solana Saga phones were sent to customers, they came with pre-loaded crypto wallets. Many Solana memecoin developers chose to airdrop tokens to these wallets, partly as a marketing stunt, and partly to reward them for buying the phones and supporting Solana.

Initially, these gifted memecoins were worth a few hundred dollars and essentially acted as a further discount to the Saga’s price, if not compensating users outright.

But as memecoin trading reached a fever pitch in early 2024, the airdropped tokens soared in value. At one point, they were worth many multiples of the retail value of the phone.

Even as support for the Saga ends, unopened phones are still being sold for up to three times their retail price on online marketplaces.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Ronin’s weekly revenue from transaction fees is up more than 4,000% from its 2023 all-time low. It surged 20% just last week, an indication of growing user activity on the network, according to the project’s data dashboard on Dune.

Angry Dynomites, a crypto game with a market layer, has driven the bump by attracting significant attention from users since its mainnet launch on July 29.

The stakes are high for Ronin. Its TVL, a measure of investor funds in the blockchain, has crashed to $72 million, a 95% decline since its peak in 2022. The slump followed a devastating $600 million hack in March 2022.

Ronin’s popular mobile game Axie Infinity has also lost most of its shine. There were fewer than 200,000 daily players in the last 30 days, compared to 2.7 million daily users during its peak in February 2022. That decline has come amid a slump in the broader crypto gaming market.

But Angry Dynomites might improve Ronin’s fortunes.

Players can mine resource-themed tokens while playing the game. They can either use those tokens for worldbuilding or trade them in the game’s in-built decentralised exchange to level up.

Even before the mainnet launch, the game was already generating frenzied user activity. During the testnet phase, it attracted about 400,000 users who completed more than 1 million onchain trades.

That’s about 10% of the weekly trading volume on World of Dypians, the most popular crypto game, according to DappRadar.

GameFi slump

Ronin’s success with Angry Dynomites seems to have gone against the grain of the usual incentive-style launch of crypto games with token airdrops that often fizzle out.

Instead, the game uses in-game rewards as tradable tokens in a compounding system that appears to be keeping engagement on the platform sticky.

Still, crypto’s GameFi sector is in decline despite concerted efforts to use blockchain technology to tap into the $185 billion market for online gaming.

GameFi volume is down almost 60% in the last six months, even as other market segments like DeFi and memecoins experience a significant increase in trading activity, according to DappRadar.

In March, Arbitrum DAO’s leadership came under fire from frustrated delegates following a controversial $200 million investment into crypto gaming.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.

So-called trustless or decentralised VPNs that tap into blockchain technology are benefitting too, despite stiff competition from more mainstream products.

“Traffic does seem to be increasing, and users from the UK are increasing,” Harry Halpin, CEO of Nym Technologies, the firm behind NymVPN, told DL News.

Spokespeople from two other trustless VPNs told DL News they’ve also seen an uptick in signups and traffic since the UK’s new rules came into effect on July 25.

What are VPN?

VPNs are software that encrypt users’ internet traffic, making their browsing history and location harder to trace. They allow users to access websites blocked in the UK and dodge identity checks.

Their increased use comes as UK residents push back against the Online Safety Act.

The act is meant to protect children by blocking access to websites that contain material harmful to them, such as porn sites. Web users can remove the blocks by providing sites documents such as bank statements or passports to verifying their age and identity.

But critics say the rules are being applied too broadly and that even adults are struggling to access legal content.

Others argue that the blocks do little to protect children as they are easily circumvented using VPNs, and the mandatory age and identity checks threaten users’ privacy.

No control

Trustless or decentralised VPNs advertise themselves as a more private and secure alternative to commercial VPNs.

“Most commercial VPN providers are centralised,” Halpin said. “Centralised VPN providers can actually directly see all of your internet traffic, even if they claim to use encryption.”

Several commercial VPN companies that say they don’t log user activity have been caught doing so.

This is a problem, Halpin said, because it means those VPNs can easily hand over their users’ data to authorities should they request it, or lose the data in a hack.

Decentralised VPNs, on the other hand, operate similarly to blockchains in that they are made up of a network of distributed nodes. Proponents claim this means they cannot collect or log users’ data, even if they wanted to.

“There is no central point of control,” Freqnik, a pseudonymous core developer at Meile dVPN, told DL News. “Decentralised VPNs reduce the trust barrier.”

Many decentralised or trustless VPNs leverage blockchain technology.

Meile dVPN uses Sentinel, a decentralised blockchain marketplace where anyone can buy and sell internet bandwidth.

Others, like NymVPN, let users pay for their services with privacy-preserving crypto like Monero and Zcash.

Downsides

Yet there are downsides to the enhanced privacy.

“With great freedom comes great responsibility,” Freqnik said. “Any decentralised network, whether it be blockchain or peer-to-peer connections, is prone to bad actors.”

Meile says it solves this issue by assigning nodes on its network a score based on the quality of service they provide.

Some users also worry that decentralised VPNs won’t be as performant as their centralised counterparts.

According to Halpin, the extra level of anonymity NymVPN provides does slow it down. He said the speed is enough for instant messages and cryptocurrency transactions, and that Nym also offers a faster, less anonymous version of its VPN.

For privacy diehards, these downsides likely aren’t an issue. But for more casual users it might be a hard sell.

After all, commercial VPNs do just as good a job of helping users bypass website blocks, the main reason users are flocking to the software.

“From what we can tell, centralised VPNs seem to be benefiting the most,” Freqnik said.

“Decentralised VPNs are still under the radar.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Beginning in 2026, Chase customers will be able to directly link their bank accounts to the US-based crypto exchange.

The bank will also enable customers to cash out points from its reward programme into Circle’s USDC stablecoin, and use Chase credit cards to fund their Coinbase accounts.

Wary banks

Calling the deal “a huge adoption unlock,” analysts at Bernstein said Coinbase will acquire new customers and access their savings activities.

The banking industry has long been wary of crypto. Analysts have previously noted that banks see digital assets as hindered by regulatory uncertainty, compliance risks, and reputational concerns.

Some banks even prevent their customers from investing in crypto due to the prevalence of scams that plague the industry.

By creating an open, two-way channel between its customers’ accounts and Coinbase, Chase is making a complete turnaround.

And it’s not the only sign things are changing. In June, Bank of America CEO Brian Moynihan signalled his firm is looking at creating a crypto stablecoin once key legislation passes.

In July, Citibank CEO Jane Fraser told analysts on a post-earnings conference call the bank may also issue its own stablecoin for digital payments.

Going mainstream

The partnership will expose JPMorgan Chase’s more than 80 million customers to crypto, many for the first time.

“This has a massive impact on how the public views crypto and will play a major role helping the industry go mainstream,” Carlos Guzmán, an analyst at GSR, a crypto market maker, told DL News.

Still, the move may be more symbolic than a significant source of new customers for the crypto exchange, Adam Morgan McCarthy, a research analyst at Kaiko, told DL News.

“I don’t know how many users will actively engage with this, but just having it there and Coinbase working with Chase like this is important,” he said.

Others analysts are more cautious about what the development signals.

“We should view it as tactical rather than transformative,” Will Beeson, founder of stablecoin infrastructure firm Multiliquid, told DL News. “The structural shift will come when banks themselves embed digital asset capabilities natively.”

Changing attitudes

Still, the tie-up emphasises just how quickly attitudes towards crypto are changing, McCarthy said. In the UK, his Chase bank account was blocked from sending money to crypto exchanges as recently as 18 months ago.

Moreover, JPMorgan Chase CEO Jamie Dimon has long voiced his scepticism on crypto.

In 2022, he called digital assets “decentralised Ponzi schemes.” Earlier this year, he said Bitcoin “has no intrinsic value,” and warned about crypto’s use among sex traffickers and money launderers.

Yet Dimon said in March JPMorgan will allow its clients to buy Bitcoin. And in July, the bank said it’s exploring letting clients lend against their crypto holdings.

“The shift parallels Larry Fink’s, who also went from being crypto skeptic to having BlackRock become one of the most crypto-involved asset managers,” Guzmán said.

In recent months, crypto has taken centre stage in President Donald Trump’s administration.

Under Trump, the Securities and Exchange Commission has dropped several cases against crypto firms. The administration has also championed new crypto legislation, such as the recent GENIUS Act that provides rules for stablecoins.

The increased regulatory clarity has pushed more firms, especially those on Wall Street, to explore crypto integrations, taking advantage of the speed and efficiency boosts the technology provides.

Just the start

There’s a good chance there will be more partnerships between crypto exchanges and banks, McCarthy said. But he also cautioned that not all US banks will be receptive to the idea.

As a traditionally conservative industry, some may not yet be technically equipped to incorporate blockchain technology.

“There’s still some archaic features to contend with that might limit scope for some banks,” McCarthy said.

Guzmán said that although Coinbase is a leader, other crypto exchanges, like Kraken, also have similar crypto-as-a-service offerings for banks. He believes many more competitors will eventually enter the space.

“It’s too early to crown a winner here,” he said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

“We want to inform you that Abra Earn international services are currently paused, effective immediately,” a July email shared with DL News said.

“This decision is part of our broader risk management efforts and is also influenced by external circumstances outside of our control.”

It’s not clear what “external circumstances” the firm is referring to. Abra, which paid out millions in 2024 to settle alleged US regulatory violations, has not publicly announced the withdrawal pause.

Unsecured lending

The situation highlights the uncertainty involved in using platforms like Abra, which offer customers lucrative yields on their crypto assets, generated through a combination of decentralised finance activities and often unsecured lending.

Several similar platforms, including Celsius, BlockFi, and Finblox blew up in 2022 after borrowers defaulted on loans, costing customers billions of dollars in losses.

Reports that customers were not receiving scheduled payments and couldn’t withdraw their funds started appearing online in early June.

In recent Trustpilot reviews, those impacted reported the firm’s customer service representatives have cut them off, and ignored their requests to know why they can no longer access their funds.

Confused users

In the replies to the Trustpilot reviews, the official Abra account confused users with stock responses, and offered little help or guidance.

“We appreciate you taking the time to leave this review. Your feedback means a lot to us and we truly value input from users like you. We will strongly consider your comments and [are] always eager to learn how we can improve Abra for you,” one response said.

Meanwhile, Abra CEO Bill Barhydt has continued to promote the firm.

He has appeared on podcasts, given interviews, and posts multiple times a day on social media. In the replies to his posts, Abra customers regularly plead with Barhydt to answer their messages and return their funds, to no avail.

Barhydt told DL News the withdrawal issues are due to Abra transitioning customers to a new version of its app.

When asked if Abra had announced the transition publicly, Barhydt said the firm was contacting users directly, not through the press.

$82 million in refunds

Launched in 2014, Abra styles itself as a crypto services and wealth management platform targeting institutions and high net worth individuals.

It boasts of managing $700 million for customers, and says it is an Securities and Exchange Commission-registered advisor and offers “fiduciary-grade compliance.”

The reports that users can’t withdraw their funds come just over a year after Abra reached a settlement with 25 US states over claims it had operated its business without the required licenses to handle crypto activities.

Abra was required to refund $82 million to US customers after halting services in the country in 2023. The states involved in the settlement all agreed to forgo fines in order for customers to be fully repaid.

The SEC declined a request for comment.

Fraud allegations

The state filings cast a spotlight on Abra’s business practices.

In June 2023, the Texas State Securities Board accused Abra of securities fraud, alleging that the firm misled investors through sales of crypto yield products, according to state records. The board also said Abra had been insolvent or nearly insolvent at the time of the case.

“To be clear, the fraud allegations are untrue and designed to create fear,” the platform said in a July 2023 email sent to its customers and viewed by DL News.

In November 2023, the UK’s Financial Conduct Authority warned that Abra was not authorised to offer its services in the country and advised against dealing with the firm.

And a 2024 settlement with the state of Georgia’s Banking and Finance Department ordered that Barhydt be personally liable to return funds to US customers.

No answer

It’s not clear why the pause only impacts Abra’s international customers.

Alan, a customer from Guatemala, told DL News he can’t access $1,200 he deposited to the platform.

“A few months back I noticed that the ‘Borrow’ tab on the app, which was supposed to have your money and earn interest over time, had a 0.0% yield,” he said.

Alan said he chalked up the situation to a visual bug in the app. But after checking back multiple times, the app still said he wasn’t earning any yield.

Since then, the ability to withdraw crypto has been paused without notice, he said.

“I already wrote to support multiple times and I’ve had no answer so far.”

Update, July 30: Added comments from Abra CEO Bill Barhydt.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Those initiatives represent the foundation’s most considerable expense last year, according to its financial insights report for 2024 released on Thursday, which offered a rare glimpse into the organisation’s finances.

Its total spend notched just over $29 million.

“The focus is on maintaining a sustainable balance between costs and income while maximising impact for the broader ecosystem,” Frederik Gregaard, CEO of the Cardano Foundation, said in a statement.

The report comes eight years after Ethereum co-founder Charles Hoskinson founded and launched Cardano. Despite Hoskinson’s star power and a cult-like following, the blockchain has struggled to achieve the same level of adoption as its peers.

Users have deposited around $300 million into decentralised finance apps on the blockchain, a fraction of the several billion in deposits achieved by competitors Solana and Tron.

The number of transactions Cardano handles sits at around 90,000 a day, down from highs of around 460,000 in early 2022, per Cexplorer data.

Eclectic adoption

It’s against that backdrop that the foundation spent $15 million to expand the real-world utility of Cardano.

That’s a lot of cash, but it’s not uncommon for blockchains to spend that much money to encourage usage.

Rival blockchain Polkadot spent almost $87 million in the first half of 2024, half of which went to marketing efforts, like paying influencers to promote the blockchain.

The initiatives the Cardano Foundation’s money went to were pretty eclectic, however.

Among the uses were the development of blockchain-based ballistic identification systems, digital identity solutions, real estate platforms, and even tracking solutions for NASA, according to the report.

Money also went toward several enterprise and institutional partnerships, including ones with Barcelona FC, Amnesty International, Swisscom, Syngenta Foundation, and the United Nations Development Programme.

Some funds also went to more conventional uses, such as supporting Cardano developers through the creation of several new developer tools.

Cardano’s adoption efforts contrast with most blockchain usage, which is financial in nature.

For example, on Ethereum, the crypto lending, stablecoin transfers, and swapping account for the vast majority of activity.

Long runway

The amount the Cardano Foundation spent in 2024 is small compared to its total holdings.

As of December 31, 2024, the foundation held almost $660 million worth of assets, comprising approximately 77% of ADA, the native token of the Cardano blockchain, 15% of Bitcoin, and 8% of cash, cash equivalents, and financial assets.

The foundation for the first time reported its finances using Reeve, an on-chain accounting tool.

According to Reeve, the foundation reported a $1.3 million net profit for 2024.

The majority of these profits came from sales of cryptocurrencies that the foundation holds.

It sold around $36 million worth of ADA and around $5.5 million worth of Bitcoin.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

When locating World Orb stations in Germany, the company’s website indicates that the “Orbs will return soon.”

Orbs are the silver, basketball-sized spheres that scan users’ irises to verify their identity and join the company’s identification network. There were dozens of stations throughout the country as early as April.

World, formerly known as Worldcoin, is updating the stations and has plans to launch a flagship store in Munich, a company spokesperson told DL News.

They declined to share when exactly World would relaunch Orb verification in Germany. The WorldApp, the company’s crypto wallet, has not been paused.

Founded in 2019, World’s identification venture is premised on the idea that in the near future, it will be more challenging to determine who is a bot online due to the rise of artificial intelligence technology — like ChatGPT developed by OpenAI.

The bet has attracted some of Silicon Valley’s most notable venture capitalists.

In May, World raised $135 million in a WLD token sale to earlier investors a16z crypto and Bain Capital Crypto.

Today its World Chain boasts a total value locked of just over $53 million, according to DefiLlama data.

Orbs and WorldID

Orbs play a critical role in Altman’s iris-scanning venture.

They convert the iris scan into a string of letters and numbers, known as an iris code. Instead of a phone number, email address, or passport, the iris code becomes the basis of users’ WorldID.

Tools for Humanity, the company developing World, hopes that WorldID will become as ubiquitous as Google’s sign-in feature.

In exchange for scanning their eyes, users can receive the project’s native cryptocurrency, the WLD token. Users can also earn WLD tokens for referring other users to get scanned.

This process takes place at various physical stations and kiosks, including those located in malls, convenience stores, and art galleries.

The operators of the Orb stations are third-party companies that earn WLD rewards for scanning individuals. Those third-party companies must undergo a due diligence process before they can become operators.

An operator contract obtained by DL News indicates that operators cannot state that they work for World or Tools for Humanity.

These operators were at the front lines of a long-running scheme in Berlin last Spring.

Organised groups paid refugees and the unsheltered cash to scan their eyes at different Orb stations throughout the city in exchange for the WLD rewards they earned for scanning.

At least one group in Berlin that enlisted these recruits may have earned nearly $700,000 worth of tokens in March and April, when the token was at its peak, according to a DL News analysis.

GDPR gripes

The overhaul comes amid an ongoing legal battle between World and the Bavarian State Office for Data Protection, which is responsible for ensuring the company complies with Europe’s strict data privacy rules, known as GDPR.

The agency began investigating the company in 2022 due to concerns about its handling of sensitive biometric data.

In December 2024, the agency declared that World had violated data privacy rules and ordered it to delete the iris codes it had collected, according to the agency’s 132-page enforcement order.

The agency also reprimanded the company for storing plain-text iris codes in a database from July 24, 2023, to May 14, 2024.

World stated that it had deleted these iris codes when it introduced its secure multiparty computation system in May 2024. A World representative told DL News they do not know how many iris codes were deleted.

Authorities in Spain and Portugal suspended the company from operating in those countries in 2024 after they received complaints that minors were being scanned.

World quietly relaunched operations in Portugal this year.

World refuted the BayLDA’s judgment and filed an appeal in a Bavarian court in Ansbach in December 2024.

World does not need to stop operations during the appeals process.

‘Harrison Ford story’

Since then, the company has undergone numerous changes to key components of its operations, including its legal structure and data processing activities, Michael Will, president of the BayLDA, told DL News.

Instead of deleting user iris codes, World began storing and encrypting this data across several servers in May, including those at UC Berkeley and the University of Erlangen-Nuremberg, as well as with the Ethereum client provider Nethermind.

The objective? To make it impossible to identify any one person using the iris codes.

“Like in a Harrison Ford story, as long as no one has all the puzzle pieces of this former picture, you do not have personal information,” Will told DL News. “As long as this is really enforceable and really guaranteed, we have anonymisation.”

Will said he and his team will call upon external support from scientists to evaluate this process.

A World representative told DL News the company will update its terms of service and privacy policy to reflect these changes to its data processing in Europe “shortly.”

Meanwhile, the court procedure is ongoing.

Will expects the first hearing to take place in approximately one year.

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Got a tip? Email at liam@dlnews.com.

On Wednesday, the controversial memecoin generator, which has earned more than $780 million in fees, announced its initial coin offering, or ICO, after weeks of speculation about a possible token generation that could happen either via an airdrop or a public sale.

“Our plan is to Kill Facebook, TikTok, and Twitch. On Solana,” Pump.fun said on X.

The ICO announcement highlights how token sales are poised to make a return in 2025 after slowly fading after their 2017 and 2018 heydays when some 2,000 projects raked in over $13 billion through ICOs.

They fell out of fashion as about a tenth of the money raised was lost to scams, according to Statis Group. Dozens of enforcement actions followed.

Pump.fun’s ICO

Pump.fun’s token sale will happen on July 12, with 330 billion tokens out of the 1 trillion total supply available to investors. Each token will be sold at $0.004, putting the targeted raise over $1 billion.

Institutional purchasers will be allocated 180 billion tokens, while the remaining 150 million will go to public sale purchasers.

Investors from the UK and the US are not allowed to participate in the ICO, according to the announcement.

“We’re building Pump.fun to replace existing social platforms with one that gives instead of takes,” the memecoin generator said on X.

Many aren’t buying the narrative.

Some detractors reacted to the announcement by saying that Pump.fun extracts far more than it gives, and turns low-effort joke coins into fee machines while investors are left in the lurch holding worthless tokens that crater in short order.

“Remember the word after Pump is Dump,” Adam Cochran, a crypto influencer, chimed in on X.

Pump.fun’s ICO comes at a time when the once raucous gold rush for memecoins is at a low ebb. Since peaking at $127 billion in December, the market segment has since slumped to $56 billion.

The decline has happened amid mounting controversy over failed memecoins and platforms like Pump.fun that allow them to be created en masse.

But dwindling fervour for memecoins isn’t Pump.fun’s only headache.

The platform has lost its shine in recent weeks to a new rival.

LetsBonk, another memecoin generator, has become the new power player in the sector. LetsBonk now hosts twice as many token launches each day compared to Pump.fun, according to data from this Dune dashboard by the crypto analyst who goes by Adam_Tehc.

LetsBonk give-back model has also helped the platform’s rise as it reinvests half of its fee earnings to buy Bonk, a $1.5 billion Solana-based memecoin. The platform has spent more than $7 million worth of Solana to buy Bonk, according to details from its website.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.

The platform said it planned to shutter its services on July 7 due to changing market dynamics, according to emails shared with DL News.

“What’s most painful is that there has been no justice,” Risto, a Finblox customer who deposited $10,000 into the platform, told DL News. “The team behind Finblox has faced zero accountability.”

Risto declined to share their last name due to privacy concerns.

Finblox customers who previously spoke to DL News accused the platform’s founders Peter Hoang and Dmitriy Paunin of fraud, moving jurisdictions to dodge regulators, and running a Ponzi scheme by attempting to raise new funds through a token sale to pay back previous depositors.

Hoang and Paunin previously told DL News the Ponzi scheme claims were “incorrect” and denied all allegations.

Crash out

Risto isn’t the only Finblox customer who says he feels left out to dry.

Launched in 2021, Finblox drew in customers by offering lucrative yields on cryptocurrencies. Its business model was similar to that of other so-called CeFi lenders, such as Celsius, Genesis, and BlockFi, which gained popularity in late 2021 and early 2022.

The platform crashed out after issuing uncollateralised loans to Three Arrows Capital, a crypto hedge fund run by Su Zhu and Kyle Davies that perished in June 2022. Genesis and BlockFi collapsed for similar reasons.

When Three Arrows Capital defaulted on its debts, Finblox couldn’t make good on customer deposits.

It’s not clear how much Finblox lost in the Three Arrow Capital default.

A version of the Finblox website from April 2022, accessed through internet archives, shows the platform advertising that deposits on the platform were insured up to $45 million.

With many Finblox customers claiming the platform didn’t refund them, it follows that the amount of deposits may have exceeded $45 million.

With few options left, Finblox converted customer funds into FBX, a token it had created itself.

Around 60 customers previously banded together on Telegram, the messaging app, to complain that the conversion wasn’t properly communicated and that they didn’t agree to it.

“Peter promised me the return of my money,” a Finblox customer called John, who lost $87,000, told DL News. “I am a father of a three-year-old girl and the money was to buy a property. Not all the money was mine and I had to repay in full to a family member.”

Hoang told DL News the conversion had “a clear, voluntary opt-in and opt-out mechanism for all of the affected users.”

DL News also asked Hoang about the promises he allegedly made to customers. He denied making such promises.

As for the FBX token customers were left with?

After a brief surge in June 2023, it has steadily bled value. It’s now down 99% from its all-time high and trades at $0.0000003.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The controversial token generator, that has made almost $780 million, in fees since its launch in January 2024 accounted for less than half of all new memecoins on the Solana blockchain in the last 24 hours.

It’s a notable break from Pump.fun’s dominance of the Solana memecoin market, which was as high as 90%, in terms of tokens created daily, just two months ago

Instead, LetsBonk has become the new power player with more launches, and seemingly more momentum.

LetsBonk accounted for 18,620 token launches in the last 24 hours, according to a Dune dashboard by the analyst who goes by Adam_Tehc. That’s more than twice the number managed on Pump.fun, and the first time another platform has outpaced Pump.fun in a single day.

The results aren’t just about the number of tokens launched in a single day.

LetsBonk tokens were more successful than their Pump.fun counterparts in another key metric: the number of memecoins that graduated.

On token generators like Pump.fun and LetsBonk, a newly launched memecoin graduates when it raises enough Solana 2coins on its bonding curve to be listed on a decentralised exchange like Raydium. In the memecoin world, graduating could mean visibility to traders and possibly virality.

Competition among these token launchpads has grown even fiercer as Solana’s memecoin mania has cooled. Memecoins peaked as a crypto market segment at $127 billion in December but have since slumped to $56 billion.

What’s driving the rise of LetsBonk?

The platform reinvests half of the fees earned to buy Bonk, a $1.7 billion Solana-based memecoin. Data from the platform’s website shows $5.3 million worth of Solana has been used to buy back Bonk.

Meanwhile, Pump.fun routinely sells off the Solana coins earned from fees without any investment in its community.

The stakes for Pump.fun couldn’t be higher, especially amid reports of a $1 billion initial coin offering, or ICO. Pump.fun hasn’t publicly confirmed the ICO.

Despite losing its position as the largest token launcher on Solana, Pump.fun remains the most popular memecoin generator.

The platform attracted almost three times as many users as LetsBonk in the last 24 hours.

Deciding how that system works and who controls it is far less straightforward.

Ethereum co-founder Vitalik Buterin argues that the answer isn’t a single global solution like World, formerly Worldcoin, but a more fragmented, ‘pluralistic’ model that gives users choice and protects against overreach.

In a new blog post, Buterin unpacks the rising popularity of the ‘one-per-person identity’ systems, where each user holds a single verifiable ID designed to prove they are human without revealing sensitive personal details.

World, which uses biometric scans combined with zero-knowledge proofs to issue World IDs, is the most prominent example, boasting over 26 million users globally.

While these systems promise greater privacy and protection against bots or manipulation, Buterin warns that enforcing a one-ID-per-person model carries its own risks, particularly for online freedom.

“In the real world, pseudonymity generally requires having multiple accounts,” he writes, pointing to the growing concern that universal ID systems could make it harder for people to maintain separate digital personas or participate anonymously online.

“If it’s common knowledge that everyone has only one identity, you can be coerced into revealing it.”

Buterin’s preferred alternative is what he calls pluralistic identity. It’s an ecosystem of overlapping, competing identity systems rather than a single dominant one.

These can be explicit, like social-graph-based IDs where trust comes from your community, or implicit, like the current patchwork of passports, social logins, and other credentials.

This messier approach makes it harder for any government, company, or protocol to monopolise identity or force users into a single traceable profile.

It also better accommodates edge cases, such as people without formal IDs or those unable to participate in biometric schemes.

This comes at a time when projects like World are aggressively expanding, having recently launched in six major US cities and unveiled partnerships with platforms like Visa and Tinder-owner Match Group.

The company pitches its biometric IDs as a way to fight fraud and bots in the age of AI, but regulators in several countries have raised concerns over privacy and surveillance.

Buterin acknowledges that identity solutions are essential for things like fair governance, reducing spam, and providing access to basic online services. But he argues the industry should avoid the temptation to chase neat, universal solutions at the expense of user control and diversity.

“The ideal outcome,” he writes, “is if one-per-person identity systems today merge with social-graph-based identity… at which point there would be enough adoption to safely grow a globally distributed social graph.”

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com

That’s according to TRM Labs, a blockchain forensics company, in a report on Friday.

The losses mark the worst start to any year in crypto’s history and mark a 10% jump from the previous record in 2022.

The vast majority of this year’s figure comes from the $1.4 billion stolen from crypto exchange Bybit by hackers linked to North Korea in February.

Indeed, hacks targeting backend systems to access wallet keys and passwords made up 80% of all crypto thefts over the last six months, according to TRM Labs.

Bleak picture for crypto

In April, crypto exchange Bitget lost $100 million to an infrastructure attack that exposed the private keys of some of its wallets.

The TRM Labs report stated that such attacks were, on average, ten times larger than other attack vectors, including phishing and protocol exploits.

Even excluding the Bybit megahack, the picture seems bleak for crypto security.

Monthly tallies from DefiLlama show that five out of the first six months of the year recorded more than $100 million in losses from hacks and exploits.

Ari Redbord, vice president and global head of policy at TRM Labs, described the situation as emblematic of “persistent and widespread risks” in a note shared with DL News.

Increasingly, these adversaries aren’t lone hackers chasing huge scores, either.

Nation-state groups strike

North Korean hacking syndicates remain the most prolific crypto bandits, and they use the stolen funds to bankroll Pyongyang’s nuclear weapons programme.

Elsewhere in the world, Gonjeshke Darande, a cyber sabotage group with links to Israel, claimed responsibility for hacking Nobitex, a major Iranian cryptocurrency exchange.

The group made off with $90 million from the exchange.

The Israeli group said the exchange funnelled crypto funds to help Tehran finance its nuclear weapons programme and bypass international sanctions.

Unlike North Korean syndicates like the Lazarus Group, the Nobitex hackers didn’t attempt to launder the syphoned funds. Onchain data show they sent the funds to unspendable vanity addresses, which the hackers didn’t have access to.

The incident occurred amid the recent missile attacks between the two countries

DeFi spirals

DeFi protocols suffered significant losses in the first half of the year, too.

Attacks against DeFi projects often target protocol logic by manipulating oracles or exploiting maths errors in smart contracts.

Cetus, the largest decentralised exchange on Sui, suffered a $220 million exploit in May. The protocol successfully recovered $163 million by counter-hacking the attacker.

Other projects weren’t as lucky.

Protocols like zkLend and Conic Finance recently shut down after failing to recover from devastating fund losses due to malicious exploits.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.

The front-end exploit was traced to malicious code embedded in a homepage image, triggering a security investigation and warnings for users not to connect their wallets.

“Do not connect your wallet,” the company warned in its initial post on X.

The surprise homepage prompt quickly raised alarms, and wallet providers like MetaMask and Phantom reportedly flagged the site as suspicious.

CoinMarketCap later confirmed that the pop-up originated from a corrupted homepage doodle image that triggered a rogue API call.

The company said it removed the malicious code, identified the root cause, and deployed “comprehensive measures” to prevent further issues.

“We can confirm all systems are now fully operational,” it said in its latest update.

It’s not the first time the Binance-owned platform has faced security issues.

In 2021, more than three million email addresses linked to CoinMarketCap accounts appeared on hacking forums.

While the company said its servers weren’t breached, it acknowledged a correlation with its subscriber base.

The incident also taps into a growing fear among crypto users: their own mistakes.

A recent Kraken survey found that nearly half of respondents worry more about making a security error themselves than falling victim to hackers.

Crypto market movers

• Bitcoin has lost 1.1% in value over the past 24 hours and is trading at $103,560.
• Ethereum is down 3.8% in the same period to $2,425.

What we’re reading

• Joe Lubin just became Ethereum’s top champion. Just don’t call him ‘Mr. Saylor of ETH’ ― DL News
• Tron Is Now More Expensive Than Ethereum. Will That Hurt Justin Sun’s New Company? ― Unchained
• Top 7 public companies holding SOL — Milk Road
• Stablecoins will be ‘once in a generation’ shift if Genius Act becomes law, crypto leaders say ― DL News

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com

The attack began at around 5:30 a.m. UK time. Onchain records show millions of dollars worth of assets on Bitcoin, Ethereum, and several other blockchains were siphoned out of the exchange’s crypto wallets over several hours.

The suspicious outflows were quickly identified by several crypto security investigators, who posted about the situation on social media.

At 8:00 a.m., Gonjeshke Darande, a hacker group whose name translates to Predatory Sparrows and is widely believed to be linked to Israeli military intelligence, said in an X post that it was behind the theft.

After the IRGC’s “Bank Sepah” comes the turn of Nobitex
WARNING!

In 24 hours, we will release Nobitex's source code and internal information from their internal network.
Any assets that remain there after that point will be at risk!

The Nobitex exchange is at the heart of the… pic.twitter.com/GFyBCPCFIE

— Gonjeshke Darande (@GonjeshkeDarand) June 18, 2025

“The Nobitex exchange is at the heart of the regime’s efforts to finance terror worldwide, as well as being the regime’s favorite sanctions violation tool,” the group said.

“Nobitex takes full responsibility for this incident,” the exchange said in an X post.

“All potential user losses will be fully covered through our insurance fund and internal reserves. Users will not experience any financial loss.”

The Nobitex website and mobile app have since been taken offline.

Conflict escalates

The theft comes as the conflict between Israel and Iran intensifies.

On June 13, Israel launched missiles at dozens of targets in Iran with the stated aim of stopping the expansion of the state’s nuclear programme. Iran responded by launching ballistic missiles and drones at military sites, intelligence sites, and residential areas in Israel.

The Nobitex hack isn’t the first instance of cyber warfare in the current round of hostilities. On June 17 the same hacker group said they were behind a nationwide IT failure at the US-sanctioned Sepah bank.

Source code access

This has been the worst year for crypto thefts after state sponsored North Korean hackers stole an unprecedented $1.4 billion from crypto exchange Bybit in February.

Security researchers have also linked North Korean hackers to several other recent crypto exchange hacks, including those at Indian exchange WazirX and Japanese exchange DMM Bitcoin.

Hackers often rely on social engineering and phishing techniques to carry out attacks on crypto exchanges.

It’s not clear how Gonjeshke Darande was able to gain access to Nobitex’s systems. But it appears the hack didn’t just target the exchange’s crypto wallets.

The hacker group also claims to have access to Nobitex’s source code and internal information, and has threatened to release it in 24 hours.

Israel has a history of utilising cyber warfare against Iran.

In 2010, security researchers uncovered a malicious computer worm called Stuxnet, which is believed to be responsible for causing substantial damage to Iran’s nuclear programme.

Although neither the US nor Israel has admitted responsibility, multiple independent news organisations claim Stuxnet was a cyberweapon built jointly by the two allies.

Tim Craig is DL News’ Edinburgh-based DeFi correspondent. Reach out to him with tips at tim@dlnews.com.

That’s according to a survey by Kraken, a crypto exchange. It reported that almost half of cryptocurrency holders are more afraid of making personal security mistakes than of falling victim to criminals.

“Most retail users never touch contract code, but they paste wallet addresses every day, so user experience, not malware, feels like the real danger,” Deddy Lavid, co-founder and CEO of Cyvers, a blockchain security company, told DL News.

“The industry still treats basic transfers like high-wire acts: one typo, and funds are gone forever,” Lavid said. “In practice, human-factor mistakes now drain a crucial part of stolen funds, making bad interface design a large attack surface.”

And the statistics seemingly back up the anxiety. While 20% of respondents said they’d been the victims of scams or hacks, and more than a third think they will be, self-sabotage is the fear that truly haunts them, the survey revealed.

$25 million

More than two-thirds of respondents said they’d made at least one classic blunder like forgetting passwords, misplacing seed phrases, or even sending cryptocurrencies to the wrong blockchain.

Last year, a trader who goes by qklpj.eth mistakenly sent $25 million to the wrong blockchain address. Luckily for the trader, they were able to negotiate with the blockchain project involved to recover the lost funds. Not everyone is as fortunate.

And this fear dampens greater enthusiasm for cryptocurrencies among the retail crowd. Half of the respondents surveyed said the fear of screwing up has prevented them from investing more in cryptocurrencies.

And that’s perhaps the fault line at the heart of cryptocurrency self-custody: balancing empowerment with the almost paralysing responsibility that comes with being the system administrator of your own wealth.

Culture of self-custody

Crypto has a culture of self-custody built around a mistrust of centralised systems.

“Not your keys, not your coins” is gospel for some proponents. But that gospel comes with high stakes. Lose your keys, lose your assets. No chargebacks or bank support on which to fall back.

Crypto security researchers say one solution is for wallet makers to simplify the transaction process with human-readable previews.

They also say wallets need to create a short window for users to undo transactions, especially large transfers, if they notice any error, similar to the way banks and credit card providers operate.

The goal, according to blockchain security experts, shouldn’t only be about building firewalls to keep hackers out. It should also be about helping users not to accidentally light the house on fire from the inside.

Kraken surveyed almost 800 crypto users.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.

This was the idea under discussion by dozens of builders, technologists, and artists during an event held on Tuesday in connection with Berlin Blockchain Week 2025.

The attendees at Funding the Commons made the case for blockchain technology as a tool for social good, rather than profit-taking.

Moreover, the gathering’s lefty vibe was bracing given the steady alignment of many in the space with the right-wing politics espoused by the world’s most powerful crypto bro — Donald Trump.

“I’m a socialist maxi, rather than a blockchain maxi or crypto maxi,” Joshua Dávila, the founder of The Blockchain Socialist podcast and co-founder of a crypto cooperative called Breadchain, told DL News.

“I’m interested in crypto stuff as it provides tools that we otherwise would not have access to in the past that I think shift certain power dynamics.”

In other words: Out with rug pulls and celebrity token launches.

And definitely out with multi-figure memecoins named after roosters, flatulence, and Lamborghinis.

Redistribution of wealth

Instead, blockchain ventures should support cooperatives, provide humanitarian aid to sanctioned locales, and redistribute the wealth of one memecoin trader to the many, Dávila and his comrades say.

Sprawled out on wooden pallets at the Engelnest coworking space on a cloudy summer day, they gathered to share how cryptocurrencies are critical for delivering aid in Gaza.

Or why spinning up an onchain payroll system in war-torn countries is the real killer app, not memecoins.

The crypto industry has never been a monolith, but every faction has needed its own hefty dose of starry-eyed hopium.

‘We say, ‘Bitcoin is cypherpunk,’ but was it meant to be just that?’

Fatemeh Fannizadeh

Perhaps none more so than the blockchain socialists of Berlin.

Memecoins, or cryptocurrencies that serve no purpose beyond their ties to an internet meme or celebrity, are worth more than $65 billion, according to CoinGecko.

A report by Solidus Labs in May revealed that 98% of tokens deployed on Pump.fun, a Solana-based project that lets anyone launch a memecoin in just a few clicks, were fraudulent.

Despite the clear danger, the hope of quick riches keeps this speculative corner of the industry alive, much to the chagrin of Dávila.

“Why would I work when I can potentially make 10x my money?” he said. “It’s a real question.”

Overnight riches

Not only are they competing against the lure of overnight crypto riches, but they also oppose some of the most powerful figures in the industry.

Brian Armstrong, the billionaire CEO of Coinbase, wrote in January that “the world is waking up to the dangers of Marxism and socialism” and added that it “harms the people it claims to protect the most.”

Satoshi looms large

When Vitalik Buterin, the co-founder of Ethereum, quipped “make communism great again” in February, the vitriol was swift.

“Fuck communism and fuck communists,” Viktor Bunin, Coinbase’s protocol specialist, fired back.

It’s worth remembering that Satoshi Nakamoto, the pseudonymous creator of Bitcoin, envisioned a world in which money and the state had finally been severed.

The libertarian convictions are literally baked into the very code of the $2.1 trillion cryptocurrency.

Sitting atop a tower of pallets and large outdoor cushions on the sidelines of the event’s various workshops, Fatemeh Fannizadeh, an independent crypto lawyer, said the industry is facing yet another crisis of faith.

“Has cypherpunk ever been the end goal? We say, ‘Bitcoin is cypherpunk,’ but was it meant to be just that?” she told DL News.

Fun playground

Even the memecoins are less fun, said Fannizadeh.

She was fascinated by the communities that formed around the early playful memes like Dogecoin, but there has been a marked shift this year.

“It was a fun playground and then some not-so-fun people came and did some not-so-fun things in there,” she told DL News.

“I don’t want to go play in there anymore. It’s not cute anymore.”

The contradiction between crypto’s urge to leave Wall Street and large banks behind and its endless cycle of profiteering is important to these blockchain enthusiasts.

After all, BlackRock, the world’s largest investment bank, is the second-largest holder of Bitcoin after Satoshi, and the US president has teased a stockpile of bright orange “coins” for the government’s safekeeping.

Investment opportunity

Dávila says musing over the early days of Bitcoin isn’t helpful.

“I’m not the biggest fan of Bitcoin, per se,” he said, wearing a red shirt sporting the communist hammer and sickle over a message: “built on Ethereum.”

“Maybe it’s interesting as an investment opportunity. But as far as the political stuff goes, it’s not so important to me.”

Dávila’s Breadchain is one example of using cryptocurrency for more philanthropic purposes.

To join the cooperative, you need to buy the BREAD token. The token is pegged to the dollar and generates yield from the DeFi project Maker.

Instead of users accruing that yield, however, it’s collected by the co-op, and its members decide each month how that money should be used.

Bailed out of jail

Grayson Earle, a digital artist from New York and early member of the Occupy Wall Street movement, said his crypto mining project, founded in 2017, is another example.

Called Bail Bloc, it let users download software onto their computers that mined the private cryptocurrency Monero.

The tokens mined were automatically sent to Earle and his team, who used the money to bail people out of jail, including immigrants detained by US Immigration and Customs Enforcement during Trump’s first term.

‘It was more about wrenching open a space to have a conversation around the prison industrial complex.’

Grayson Earle

He said that after five weeks, the project generated more than $3,000. It shut down after roughly three years when mining cryptocurrencies became harder and more expensive and yielded less profit.

But the money wasn’t the main point.

“It was more about wrenching open a space to have a conversation around the prison industrial complex,” Earle told DL News.

He wrestles with his place in an industry he hardly recognises.

In the early days of the Occupy movement in 2011, when thousands poured into Zuccotti Park in New York’s Financial District to protest economic inequality in the wake of the global financial crash, Earle said Bitcoin was top of mind.

“I remember people talking about it during Occupy,” he said. “This is the answer. Like, ‘Hey, you don’t like banks, here’s something that you can do.’”

Now, things are much different.

“It’s always been embroiled with this gross form of capital accumulation that I thought we were kind of protesting against to begin with,” said Earle.

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.

In a blog post on Thursday, Coinbase revealed a security breach that affected 1% of its monthly transacting users.

The company did not elaborate on the exact number of affected users.

The breach wasn’t a case of using sophisticated code to hack Coinbase; instead, it was a good old-fashioned bribe.

Login details

The bad actors ensnared a group of overseas customer support staff with cash offers in exchange for customer information, including personal identifying information like names, addresses, phone numbers, and partial authentication data.

However, the breach did not expose login details or private keys needed to access funds directly from user accounts.

Still, criminals can use the leaked details to launch social engineering attacks designed to trick unsuspecting victims into surrendering access to their funds.

CEO Brian Armstrong released a video statement on X in response to the incident. Armstrong said the company received a $20 million ransom note in exchange for not leaking the exposed database of customer information.

Armstrong said the company refused the ransom.

Arrest and conviction

“We are putting out a $20 million reward for any information leading to the arrest and conviction of these attackers,” Armstrong said.

The Coinbase CEO seemed to cast the incident as a criminal conspiracy, as he dubbed the attackers “extortionists” and their conspirators among the support staff as “bad actors” who have since been fired.

But crypto influencer Adam Cochran was among those with other theories, saying the incident was more of a technical failure that highlighted serious oversights in Coinbase’s employee vetting and data access controls.

Some critics also said the incident highlighted the need to do away with know-your-customer, or KYC rules, which require banks and other financial firms to vet clients and weed out suspected criminals.

For others, the timing of the Coinbase incident is unnerving.

Crypto users, already on edge after a string of violent robberies, abductions, and home invasions targeting cryptocurrency owners, could now face the added risk of having sensitive information floating in the hands of bad actors.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.

The cause? A bug with Cloudflare, the service provider creator RTFKT used to host the images for the two collections.

RTFKT is a digital fashion company known for creating virtual sneakers and NFTs. It was acquired by sportswear giant Nike in 2021.

The problem began when Cloudflare moved RTFKT to its free plan before the end of its contract, triggering a bug that cut off the images tied to the NFTs, Samuel Cardillo, RTFKT’s head of technology, said on X.

“Nobody likes to see their content lost, especially due to a mistake made by a cloud provider, and especially when it’s 30,000 plus NFT images,” Phil Mataras, CEO of decentralised cloud network ar.io, which is working with RTFKT to upload the files to its cloud network, told DL News.

Not the first time

The situation was quickly remedied, and the NFT images are back after an hours-long absence.

But it’s something NFT collectors continue to fear.

While NFTs are able to live forever on blockchains, the images associated with them are often just stored on centralised servers. If something happens to the servers, or those who created the NFTs stop paying the hosting fees, the NFT images disappear, defeating the whole purpose of the digital collectibles.

CloneX and Animus aren’t the first time the pictures associated with NFTs have disappeared, but they’re certainly the most high profile case.

The situation is also similar to that at Rally, a once-popular creator platform where influencers, celebrities, and artists issued tokens and NFTs which came with fan perks like exclusive access to music.

Rally shut down in 2023, telling users that the NFTs on the platform would no longer be accessible.

In late 2021, RTFKT launched CloneX, a collection of 20,000 NFT avatars in collaboration with Japanese artist Takashi Murakami.

CloneX NFTs soared in value during the bull market in late 2021 and early 2022. The cheapest NFTs in the collection sold for over $63,000 each at their peak, while rarer examples frequently fetched over a million dollars.

But CloneX, along with much of the NFT market, has been trapped in a drawn-out bear market in recent years.

Animus, a follow up to CloneX, launched in 2022 to limited success.

In December, RTFKT announced it planned to wind down operations. CloneX NFTs now sell for around $300 each.

A more permanent solution

Not all NFTs could potentially disappear like the ones created by RTFKT briefly did.

Some, like the 2017 pixel-art collection CryptoPunks, have all the image data stored with the NFTs onchain. This is possible because the CryptoPunks images consist of small amounts of data — they’re just a 24 by 24 grid of pixels using a limited palette of colours.

NFTs with more detailed images are usually stored on centralised servers, or via decentralised file storage systems like Arweave, which RTFKT chose to move the CloneX and Animus NFT images to after the Cloudflare debacle.

“We acted quickly to prioritise this as the community was frantic,” ar.io’s Mataras said.

Arweave is designed to store data permanently with a one-time payment, using a decentralised network and open ledger system to store data.

“Once uploaded, these images will stay put, forever,” Mataras said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Nine firms bagged new cash injections between April 4 and April 10, pushing the total raised by crypto projects so far in 2025 to almost $7.7 billion, according to DefiLlama.

It could be just the start — Robert Le, an analyst at Pitchbook told DL News last week that he’s forecasting a $18 billion bonanza for crypto venture capital investments.

Here are the nine crypto projects that topped up their coffers over the past seven days.

Félix Pago, $75 million

Remittance startup Félix Pago bagged $75 million last week in a Series B round led by QED Investors. Monashees, Switch Ventures, Castle Island, and HTwenty Capital also backed the raise, Bloomberg reported.

The company’s platform uses blockchain and artificial intelligence to enable US-based Latino workers to send money back to their families in Latin American countries.

It will use the cash injection to expand its operations across more countries in Latin America

“We want to move from only offering remittances to becoming a complete platform to use that money,” Manuel Godoy, the company’s co-founder and CEO told Bloomberg.

Blackbird Labs, $50 million

Blackbird Labs bagged $50 million in a Series B round this week from backers like a16z crypto, Spark Capital, Union Square Ventures, and Amex Ventures, American Express’ venture capital arm, Fortune reported.

Founder and CEO Ben Leventhal was previously among the co-founders of reservation startup Resy, which was acquired by American Express in 2015.

With Blackbird Labs, Leventhal leverages crypto fundamentals like onchain history and tokenisation to create restaurant loyalty and discovery programmes.

Ultra, $12 million

Web3 gaming startup Ultra secured $12 million in a funding round this week to bolster production of its onchain platform for gamers and developers. NOIA Capital led the raise.

The company recently hired Gus van Rijckevorsel as its new CEO, co-founder of the Circle Strategy consulting firm.

 “Right now, no one in the gaming industry is happy so why isn’t anyone doing anything about it?” van Rijckevorsel said in a statement. “We’re here to change that and build a powerhouse that developers, publishers, and players can’t ignore.”

CAP Labs, $11 million

Franklin Templeton and Triton Capital led the seed round for stablecoin infrastructure project Cap Labs this week.FLow Traders, Nomura’s Laser Digital, GSR, IMC Trading, Nonce Classic also backed the raise, according to Blommingbit.

CAP Labs looks to make complex or out-of-reach trading strategies like arbitrage more accessible to retail investors.

CAP Labs plans to launch in Q2 of 2025.

Codex, $15.8 million

Regular crypto VC investor Dragonfly Capital led Codex’s $15.8 million seed round this week.

Other investors included Coinbase Ventures, Wintermute Ventures, Circle Ventures, Selini Capital and Cumberland DRW.

The project is developing a stablecoin-specific blockchain meant to reduce the friction in using the tokens.

P2P.me, $2 million

P2P.me secured $2 million in a seed round led led by Coinbase Ventures, and Multicoin Capital.

The retail-focused startup’s app is built on Coinbase’s layer-2 network Base and has a simple pitch: swap between USDC and fiat currencies using a QR code with no middlemen, CoinDesk reported.

DecentralGPT, $3 million

DecentralGPT secured a $3 million combined angel and Series A funding round this week to expand its alternative to large-language model products like ChatGPT or Claude.

AGICrypto Capital led the raise which also saw participation from Cherry Capital, BTR Capital, DePINX and Aethir, according to DecentralGPT.

Sats Terminal, $1.7 million

Coinbase Ventures and Draper Associates led Sats Terminal’s $1.7 million pre-seed round. The round also saw participation from angel investors, including Pantera Capital’s Franklin Bi, Boosty Labs co-founder Viktor Ihnatiuk, and Paul Taylor, according to Sats Terminal.

The project will use the raise to boost Bitcoin decentralised finance solutions, according to The Block.

“Our mission is to reinvent how users interact with Bitcoin DeFi, solving the fragmentation of liquidity plaguing the ecosystem and the lack of reliable infrastructure,” Sats Terminal said in a post announcing the raise.

StakeStone, $1 million

StakeStone has reportedly secured about $1 million through a public token sale on Binance’s BNB Chain by selling 50 million STO tokens.

The project is developing a cross-chain liquidity and staking protocol. It began its public token sale on April 3, originally selling each STO token for $0.02.. The token has since swung as high as $0.08 and hit a low of $0.053 on April 7.

Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com.

The trader bought CryptoPunk 3100 for $16 million in March last year. The sale became the third-highest price paid for a CryptoPunk in the collection’s history.

CryptoPunks are a collection of 10,000 unique, pixel art pictures created by the development studio Larva Labs. Each image is linked to a non-fungible token, or NFT.

This particular CryptoPunk is highly coveted because it is one of only nine with the rare alien trait. For NFTs, rarity is often correlated to higher prices in a given collection.

The sale comes as prices of high-value NFTs return to earth after Bitcoin soared above $100,000 late last year.

At the time, CryptoPunks sold for a minimum of $158,000. Now, the cheapest examples from the collection only sell for around $65,000 — a 58% drop.

The identity of the latest buyer remains unknown.

Subjective value

It’s hard to estimate the value of rare CryptoPunks like 3100.

Sales are infrequent, and, just like in the art world, value is highly subjective.

When CryptoPunk 3100 was previously bought in March 2024, it wasn’t the only alien CryptoPunk sale that happened around that time.

The same month, alien CryptoPunk 7804 sold for $16.5 million, while another alien, 635, sold for $12.5 million in April.

The recent sale of 3100 may impact the perceived value of other alien CryptoPunks. At just over $6 million, it’s the lowest price paid for an alien CryptoPunk since the collection exploded in popularity in early 2021.

Before the sale, NFT Valuations, a site that uses AI to price rare NFTs, estimated the value of CryptoPunk 3100 at around $8 million.

“Hard to say who made the better move, the seller who walked away with $6 million, or the buyer,” said one NFT collector on X.

CryptoPunks legacy

The CryptoPunks NFTs were launched in June 2017 by the Larva Labs studio on Ethereum.

The collection soared in popularity during the NFT craze of 2021, with the cheapest examples from the collection selling for upwards of $415,000 each at the peak.

In March 2022, Yuga Labs, the creator of the Bored Ape Yacht Club NFTs, announced it had acquired the CryptoPunks rights from Larva Labs for an undisclosed sum.

CryptoPunks are viewed as a sign of status in the crypto industry, particularly among the Ethereum community.

Many celebrities and crypto influencers own CryptoPunks, including rapper Jay-Z, billionaire Mark Cuban, and Reddit co-founder Alexis Ohanian.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The open source game involves players using so-called Aavegotchis, which are like digital customisable versions of the Japanese Tamagotchi toys, to earn valuable tokens.

The Aavegotchi community, including the game’s founder Daniel Mathieu, say they are unhappy with Polygon’s lack of support for crypto games.

“Polygon has not shipped any significant updates or features to PoS to enable better ecosystem coherence or discovery for gaming,” Mathieu, who proposed the migration to Base, said in an X post.

A whopping 93% of the game’s community voted in favour of the move.

It’s another vote of confidence in Base, which under Coinbase’s stewardship has grown into the biggest Ethereum layer 2 with $3.6 billion in deposits, and the sixth biggest blockchain overall, since its 2023 launch.

But for Polygon, it’s yet another setback as the blockchain struggles to stay relevant in an increasingly competitive industry.

Polygon’s DeFi deposits, which peaked at $12 billion in 2021, have shrunk 14 times to just $850 million as it loses ground to newer competitors like Base and Arbitrum.

A spokesperson for Polygon told DL News that it respected Aavegotchi’s decision, and that the gaming venture may have received a $500,000 to $1 million grant from Base prior to announcing the migration.

DL News could not confirm the grant or its details. Mathieu did not immediately respond to a request for comment.

Aavegotchi is a somewhat niche game, but it’s loved by many DeFi diehards because of its connection to top DeFi lender Aave. Aside from riffing on Aave’s branding, the game counts the lending protocol’s founder Stani Kulechov among its advisors.

Mass migration

Base wasn’t the only blockchain Aavegotchi considered for its migration. Mathieu also looked at moving the game to the Arbitrum or Ronin blockchains.

He said he ultimately decided on Base due to the Aavegotchi team’s close relationship with the Base team, and the blockchain’s strong ties to Coinbase and crypto social media platform Farcaster.

Now the Aavegotchi community has endorsed the move, work can begin on the migration.

The plan is to permanently lock the Aavegotchi smart contracts on Polygon, then clone all contracts and assets and deploy them on Base, a process that should take four to six weeks.

Mathieu said much of the migration work has already been done due to a previous plan to move the game to its own dedicated layer 3 blockchain.

It’s not the first falling out between Aave’s community and Polygon.

In December, two major Aave DAO delegates told DL News they would vote to shutter the lending protocol’s Polygon version over a proposal to invest $1 billion in idle crypto on the Polygon-Ethereum bridge with a competitor.

Polygon Labs CEO Marc Boiron told DL News at the time that the proposal was in a preliminary stage and many months from becoming a reality, and characterised the Aave delegates’ proposed response as “anti-competitive.”

Aave currently accounts for around 38% of all DeFi deposits on the Polygon blockchain.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The unlikely buyer says it wants to give 23andMe’s customers’ control of their DNA data using blockchain technology, and eventually allow them to monetise it.

“We are talking to some partners who would syndicate on the deal,” Eleanor Davies, head of DeSci at the Sei Foundation, told DL News in an interview. “It’s not a publicity stunt.”

DeSci

Decentralised science, or DeSci, is a movement that aims to build public infrastructure for funding, creating, and reviewing scientific pursuits using blockchain technology.

On March 28, 23andMe received permission from a US Bankruptcy Court to sell the genetic data for 15 million customers to potential bidders, igniting fears over how the data might be used under new ownership.

California Attorney General Rob Bonta issued a consumer alert, citing the potential data privacy concerns surrounding 23andMe’s sale.

Insurance and health companies are reportedly among the potential buyers, Phil Mataras, founder of decentralised cloud network AR.IO, told DL News.

“With the health insurance situation in the US as punitive as it is, this could be disastrous for some 23andMe customers,” Mataras said.

Security measures

The company says its security measures surrounding the genetic data will remain in place after its sale. But its privacy policy says those measures can be changed at any time.

To be sure, users can request that 23andMe delete their genetic data. However, it’s likely that many customers, especially those who first used the firm’s services when it launched 17 years ago, aren’t aware their data is at risk.

The Sei Foundation is a nonprofit tasked with developing the Sei blockchain.

‘We aim to go above and beyond in terms of protecting users’ data privacy.’

Eleanor Davies, The SEI Foundation

It launched in August 2023, positioning itself as a faster, more performant alternative to top smart contract network Ethereum.

However, adoption has been slow. Users have so far deposited $410 million into apps on the blockchain, making it the 17th biggest blockchain project.

Profit motive

If the Sei Foundation manages to acquire 23andMe, it may have a difficult path.

The business failed under its current model because of the one-and-done nature of its flagship product — the DNA ancestry test. After taking the test once, there’s no reason for customers to take it again.

Davies herself doesn’t have a scientific background, but rather experience in advising on healthcare and biotechnology investments.

She said the Sei Foundation has assembled a large team of funders and advisers with experience in data management, healthcare, and the pharmaceuticals industry to aid the Sei Foundation’s decentralised science initiative.

The plan is to monetise 23andMe’s existing genetic database — with customer consent — while keeping the DNA testing part of the business running.

She described a system that could look like an exchange or marketplace with confidential transfers, where users could pick and choose who to let use their genetic information.

For example, customers could allow their genetic data to contribute to scientific research on only rare diseases.

Security concerns

How exactly the Sei blockchain fits into this plan isn’t clear.

Davies said she couldn’t share specifics but added that the genetic data itself would be stored offchain using enterprise level data storage.

“We aim to go above and beyond in terms of protecting users’ data privacy,” she said.

Security and privacy are big concerns for many of 23andMe’s customers. In October 2023, hackers stole 7 million customers’ data. The stolen information included people’s names, addresses and genetic data and was sold online.

In response, some impacted users filed a class action lawsuit against the company.

The Sei Foundation said it would use the Sei blockchain in how data is accessed, who accesses it, and the incentive mechanisms surrounding the monetisation of genetic data.

Doing so could return control of customers’ data back to them. But it might also create new problems.

Non-custodial crypto wallets are vulnerable. If a user loses the password-like codes that allow access to the wallet, the contents could be lost forever.

“[We] want to make it as frictionless as possible for users to be able to decide how their data is used,” Davies said. “It wouldn’t have a crypto front end.”

$65m war chest

When asked where the money for the purchase of 23andMe would come from, Davies pointed to the Sei Foundation’s $65 million DeSci venture fund called Sapien Capital.

Whether this on its own will be enough to put in a competitive bid for 23andMe isn’t clear.

The firm’s market capitalisation hovers around $13 million, but it has $277 million in assets and $214 million in liabilities, court documents show.

The number of interested parties could spark a bidding war.

Ryan Sitton, the CEO of data firm Pinnacle, another prospective buyer, has offered shareholders $100 million for the company.

Anne Wojcicki, a co-founder of 23andMe and its former CEO, has also expressed renewed interest in buying the company after failing twice before.

Davies declined to name which other investors the Sei Foundation is in talks with to syndicate on a potential deal.

Offers to purchase 23andMe are due on May 7, and a final hearing on the sale will be held in June.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

They’re called access control attacks, and they accounted for a whopping 83% of theft over the first quarter, according to blockchain security firm Hacken, which broke down the findings in its latest Web3 security report.

The attacks, where hackers target infrastructure such as Amazon Web Services, came into focus as North Koreans used them to steal $1.4 billion from crypto exchange Bybit in February.

Stunned experts

The event stunned security experts — who say it was the largest financial heist ever and a national security emergency.

The attack highlighted the evolving sophistication of malicious actors able to thwart even advanced security remedies, like multi-signature wallets.

“We see these exploits often due to poor operational security practices within projects,” Yehor Rudytsia, an onchain security researcher at Hacken, told DL News.

Hackers use their access to a firm’s infrastructure to compromise its crypto wallets, stealing billions of dollars worth of assets in seconds.

Access control hacks targeting multi-signature wallets have quickly become the biggest cause of theft in the crypto industry.

It’s an alarming development — such wallets are designed to be more secure as they require multiple parties to greenlight transactions.

Compromised infrastructure

However, that extra security is null when hackers utilise compromised infrastructure to trick users into accepting malicious transactions that swipe crypto straight from wallets.

The $2 billion stolen since the start of 2025 marks a 96% increase in the amount stolen compared to the same period in the previous year.

The ByBit hack accounted for a large chunk of that number.

Smart contract vulnerabilities, which have previously been responsible for some of crypto’s biggest hacks, only accounted for 1.5% of all losses over the past quarter.

Unsafe wallets

Hacken found that for the past three consecutive quarters, the largest hacks were all caused by compromised multi-signature wallets involving Safe Wallet.

Safe Wallet is the most popular multi-signature wallet provider.

In October, DeFi protocol Radiant Capital lost $55 million after hackers targeted its Safe Wallet to authorise a malicious withdrawal.

In July, North Korean hackers used social engineering to gain control of one of Indian crypto exchange WazirX’s Safe Wallets, stealing $235 million.

“While this may give the impression that multi-sig wallets are a weak point, the reality is quite the opposite,” Hacken said in its report.

“This is a wake-up call to harden its design, implementation, and surrounding infrastructure.”

In the case of the Bybit hack, North Korean hackers compromised the web hosting behind Safe Wallet’s website.

They injected code designed to switch out a routine Bybit transaction for a malicious one sent by the hackers. The malicious transaction transferred control of Bybit’s wallet to the hackers.

In the aftermath, several crypto security researchers advised projects to update their infrastructure and alert users when a transaction has been swapped out for a malicious one.

One solution is to implement different transaction signatures that allow users to clearly see and verify the transaction details they are approving.

This would reduce the risk of blind-signing malicious transactions, Hacken said in its report.

Laundering techniques

With such large amounts of crypto stolen, bad actors are experimenting with new ways to obfuscate where the stolen funds came from in order to eventually convert it into cash.

One emerging trend is hackers using leverage trading on decentralised perpetual futures exchanges to launder funds.

They do so by using stolen crypto to open large leveraged bets, then hedge those trades with corresponding opposite bets elsewhere using clean capital.

When the leveraged position gets liquidated, the stolen funds are effectively ‘lost.’

Meanwhile, the profit from the hedge remains with the clean capital, making the funds appear legitimate, Rudytsia said.

Another method involves mimicking terrible traders by intentionally losing funds to trading bots.

“By embedding the funds within what looks like normal DeFi arbitrage, attackers may bypass traditional detection models used by exchanges and compliance systems,” the report said.

Such advanced laundering methods are becoming necessary for bad actors, Rudytsia said, due to improved blockchain analytics tools, and anti-money laundering features such as Railgun’s Private Proofs of Innocence.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Cryptonomy, which is in the process of rebranding to Nomy Finance, says it has made $194 million for investors by investing in early-stage crypto projects.

Yet there is no evidence that it ever made any such deals.

The platform, which appears to have copied its logo from a popular DeFi project, touts executives on its website who don’t appear to exist.

And it has doctored photographs of employee meet-ups from other crypto projects and passed them off as its own.

Locked out

Five investors who spoke with DL News say they deposited hundreds of thousands of dollars worth of crypto with Cryptonomy and locked up their funds in fixed-term contracts to earn a return.

But when the contracts expired and they tried to withdraw their deposits, they say the platform locked up their funds again without their permission.

“I am 100% shocked that a government entity isn’t investigating them,” one investor who deposited $50,000 worth of crypto told DL News.

“I have reported them to three agencies and I’m not stopping.”

Cryptonomy did not respond to multiple requests for comment.

‘You should avoid dealing with this firm and beware of scams.’

UK FCA

Not much is known about Cryptonomy or the people who run it.

The platform’s website previously linked to a UK Companies House registration for a company called Cryptonomy Finance Ltd., which listed a London address that also houses a WeWork.

Cryptonomy claims to be a “fully regulated” financial entity that provides insurance and regulatory disclosures upon request to verified users.

On January 29, the UK Financial Conduct Authority warned that Cryptonomy was not authorised by the regulator.

“You should avoid dealing with this firm and beware of scams,” the agency stated.

Australian financial regulators also cited Cryptonomy Finance on its investor alert list.

The Cryptonomy website and email services are hosted in Russia, according to a forensics investigation conducted on Hybrid Analysis, a malware analysis service.

A web hosting check conducted on SecurityTrails, a cyber forensics platform, found that Cryptonomy’s mail servers are hosted by Scalaxy B.V., a Russian web hosting provider.

Scamlytics, a web security platform, lists web traffic coming from Scalaxy B.V. as a potential fraud risk.

Five investors

It isn’t clear how much money Cryptonomy has accepted from depositors, nor how much it is withholding from them.

The five customers who spoke to DL News invested a combined $568,000 worth of crypto.

Those investors spoke to DL News on condition of anonymity because they feared repercussions from Cryptonomy for speaking out.

Cryptonomy, which pitches “your investments, your freedom” on its site, has threatened to block access to accounts after customers complained publicly that they couldn’t withdraw funds.

“My Cryptonomy account has not been blocked yet, and I would prefer to keep it that way, just in case there is a glimmer of hope that I can get any money back,” one investor, who asked to stay anonymous, said.

Those investors are joined by almost 200 more who took to consumer review site Trustpilot to share similar stories.

Poor reviews

A November review from a user called Shalonda Joye said that Cryptonomy had locked up her family’s funds when she tried to withdraw them to pay for her cancer treatment.

Trustpilot has since added a disclaimer to Cryptonomy’s review page, informing users that the organisation is breaching its terms by displaying content in a way that could be misleading.

“This could look like showing an inaccurate star rating in sales materials, displaying reviews they’re not permitted to use on their site, and more,” Trustpilot said.

Investors told DL News in interviews that Cryptonomy has repeatedly threatened them with legal action if they complain about the situation.

A crypto influencer called DCA Crypto, who said he advertised for Cryptonomy, stopped after hearing reports that investors couldn’t withdraw their funds. He said on YouTube that he was threatened.

DCA Crypto did not respond to a request for comment.

Cryptonomy has repeatedly accused investors seeking their funds of not being real customers, and orchestrating “coordinated spam” attacks against the platform, according to comments made on Trustpilot.

‘The chat keeps telling me it will be expected next month. The next month comes and nothing happens.’

Cryptonomy investor

All the investors who spoke to DL News said they found out about the platform via paid video promotions from crypto influencers.

“I first heard about Cryptonomy through a crypto YouTube influencer Thinking Crypto,” one investor said. “I’ve watched him for years and considered him a stand-up guy.”

Thinking Crypto did not respond to a request for comment.

Despite the endorsements, many investors were still wary. One said he tested the water with a small deposit first.

“The contract completed on time and I was able to withdraw my initial deposit,” the investor said. “That made me feel comfortable.”

100% return

Cryptonomy offers what it calls crypto staking. Investors are invited to lock up their assets for fixed periods ranging from one to twelve months.

The Cryptonomy website advertises that if investors deposit one Bitcoin they will receive over two back after a year of staking — a more than 100% return.

However, there’s no indication that deposited assets are actually staked. Many of the assets Cryptonomy accepts, like Dogecoin and Monero, cannot be staked on their respective blockchains.

Onchain records show assets invested with Cryptonomy end up at Kucoin, a Seychelles-based crypto exchange.

Kucoin told DL News that for any suspicious cases, it will assist and cooperate with law enforcement agencies if asked.

Nevertheless, the investor who was emboldened by his initial success deposited a greater sum for a term of one year.

Things started to go wrong when that contract expired and he tried to withdraw.

Cryptonomy kept automatically extending the contract, preventing him from withdrawing his funds. He contacted the customer support chat, to no avail.

“The chat keeps telling me it will be expected next month,” he said in an interview. “Every time. The next month comes and nothing happens.”

No records

Cryptonomy’s website is filled with red flags.

For starters, the company’s logo is very similar to that of Compound’s, the well-known DeFi lender. Records show Compound started using the logo in 2020. The earliest evidence of Cryptonomy using the logo is in 2022.

The company’s website lists two executives: Chief Community Officer Nitika Friedlander and Chief Product Officer Pratik Foster.

Yet there are no records of either Friedlander and Foster on LinkedIn, X, or other sites, which is odd for executives with a fiduciary duty to thousands of customers.

What’s more, the Cryptonomy website is filled with stock promotional photos of unnamed people edited to include the Cryptonomy logo and branding.

In one, Cryptonomy doctored a picture taken at a BNB Chain developer meet-up by replacing the branding with its own. The picture has been taken down.

As Cryptonomy comes under fire from customers, it appears to be morphing into something new.

In February, Cryptonomy changed the name on its X account to Nomy Finance, which uses a similar logo to Cryptonomy.

Cryptonomy’s group chat on Telegram, the messaging app, blocks users attempting to join it from a UK IP address.

Even so, the newly named platform is already drawing scrutiny.

Hybrid Analysis, the malware analysis service, reports the Nomy Finance website as malicious and gives it a threat score of 75 out of 100.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Both industry reps and pundits railed against its overt political themes that seemed to ridicule gender identities and attack news organisations.

“The ad was infantile and should be considered a marketing mistake,” Mateusz Kara, CEO of crypto payment company Ari10, told DL News.

Solana Foundation representatives did not respond to a request for comment, but some have posted on X since the ad was taken down.

“Very few people in the ecosystem actually touched this,” Solana Foundation’s VP of Technology, Matt Sorg, said, adding: “Despite it being posted on the main channel, it’s not like it represents the ecosystem being excited about the message.”

Dan Elbert, executive director of the Solana Foundation, chipped in, tweeting: “Solana is for everyone. On good days, on bad days and on weird, stupid days.”

The marketing snafu is the latest setback for Solana.

Once hailed as an “Ethereum Killer,” it has been overtaken by Ripple-linked XRP as the world’s third biggest cryptocurrency.

It has found itself at the centre of several scandals linked to memecoins that were launched on the Solana blockchain.

Good thing the internet never forgets pic.twitter.com/uWfvKbLLXc

— $0.02timmy (@0x002timmy) March 18, 2025

‘Technologies, not gender’

The video opens with what appears to be a therapy session for a weary looking man named America. Across from him is a smirking therapist, clipboard in hand, and clad in a visible air of superiority.

America ,as a patient expresses his frustration at his dwindling role in global technological advancements.

Rather than engaging with concern, the therapist responds by urging America to focus on gender discourse.

“I want to invent technologies, not gender,” said the video’s titular character.

The ad’s execution lands as a ham-fisted non-sequitur rather than an edgy piece of marketing.

Crypto stakeholders who reacted to the video expressed shock and dismay that a major blockchain project like Solana would espouse such controversial messaging.

“Blockchain advertising should be about technological change, not cultural change,” Kara said.

For Zach Burks, CEO of NFT platform Mintology, the now-deleted advert is a symptom of the brewing culture within crypto despite claims by purists that the technology should be neutral.

“The MAGA hype for crypto is real, so Solana was simply trying to position itself in the American sphere as a US crypto company in order to appeal to Trump and the MAGA fanbase,” Burks told DL News.

If Burks is right, the plan seems to have backfired.

Rather than appeal to crypto participants who might hold such views, the video has been universally panned, at least judging from comments on social media.

Crypto influencer Adam Cochran, who has 10,300 subscribers on YouTube, was among those who criticised the ad.

“They rolled it back because it hurt their business, not because they thought it was wrong,” he posted on X.

“This is who they chose to be. They showed you exactly who they are. They don’t get to hide that and say ‘oops, my bad.’”

FTX recovery

The whole episode is another hit to Solana’s redemption arc from the lows of the post-FTX fallout of 2022. Sam Bankman-Fried, the jailed former CEO of FTX, was a major backer of Solana.

Since Bankman-Fried’s crypto empire collapsed, Solana has improved its network stability.

Part of that growth was thanks to it becoming the main arena for the memecoin craze that reached a peak of $137 billion in market value earlier in the year.

The memecoin market has since plummeted and, with it, a major chunk of Solana’s network revenue. Solana proponents are now scrambling to come up with new business lines to spur growth.

“If Solana wants to sustain its momentum, it needs to focus on real utility,” Anthony Georgiades, general partner at venture capital firm Innovating Capital, told DL News before the advert controversy.

Some market observers say the gaffe will do little to dampen Solana’s appeal.

“I doubt this controversial ad will alienate investors from Solana’s blockchain, but I also don’t see the deeper point in generating such a narrative ― pitting the LGBT community against the technological revolution,” Kara said.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? please contact him at osato@dlnews.com.

This week, Nigerians who tried to access Binance web3 questions, a platform to earn crypto giveaways, were hit with a notice that the service was no longer available.

“It’s a pity that for a crypto-loving country like Nigeria, our access to the industry is becoming severely limited as the days go by,” Chike Nnadi, a Nigerian crypto trader based in Lagos, told DL News.

Free crypto

Nnadi, a student of the University of Lagos, said airdrop grinding on Binance web3 quests was a major pastime among young crypto-savvy Nigerians.

Binance web3 quests allow users to earn free crypto giveaways for completing simple social tasks, such as following a project’s X account or referring friends.

Participants could earn up to $50 daily for completing the tasks.

“Imagine being able to earn such an amount of money in a county where most people are living below the poverty line and now to have that opportunity taken away, it’s frustrating,” Nnadi said.

Screenshots

Binance has over 380,000 active users in Nigeria. This week, several Nigerian crypto users contacted DL News with screenshots showing their inability to access the company’s crypto giveaway platform.

Nigerian crypto analyst Rume Ophi told DL News that crypto is still highly restricted in the country and is affecting adoption in Africa’s most-populous nation.

The access ban is the latest restriction by Binance on Nigerian users.

Last year, the exchange barred Nigerians from accessing its peer-to-peer trading platform and delisted a digital version of the naira, the country’s fiat currency.

Those actions came amid a bitter legal fight between Binance and Nigeria’s government after officials blamed the exchange for the devaluation of the naira.

Detention

The conflict resulted in the arrest and detention of two Binance executives.

Tigran Gambaryan, Binance’s US-based head of financial compliance and a former US special agent, spent eight months in detention before charges were dropped and he released.

Nigeria’s government also filed money laundering and tax evasion charges against Binance.

In February, the government approached the courts to levy an $81 billion fine against Binance for economic losses incurred by the state due to the company’s illegal operations in the country.

On Monday, Justice Inyang Ekwo adjourned the proceedings to April for a ruling over whether the matter would go to trial.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? please contact him at osato@dlnews.com.

But some in crypto are worried the development will accelerate the inevitable: that quantum computers will someday be able to break the encryption that underpins much of the $3.3 trillion industry.

Don’t fret just yet, says Pierre-Luc Dallaire-Demers, a scientist-in-residence at the University of Calgary.

“I don’t think it changes the timelines for Bitcoin, it’s still 2029 to 2031,” he told DL News, referring to the consensus that quantum computers will threaten older Bitcoin wallets — the most vulnerable cryptography in use — in around five years.

Majorana 1

Microsoft’s new chip, Majorana 1, is named after the Majorana fermion, a type of matter that the chip exploits to produce so-called qubits, units of information that power quantum computers.

What makes Majorana fermions special is that they don’t encounter errors as much as existing quantum computing methods using superconductors, making them theoretically much easier to scale.

“Over a long time, Majoranas may overtake superconducting qubits, but probably not before 10 years or so,” Dallaire-Demers said. “The results in the experimental paper suggest that they still have some engineering to do.”

Superfast computers that exploit quantum mechanical phenomena have long posed a theoretical threat to cryptography.

Most crypto projects have plans in place to make themselves quantum proof. Still, a sudden breakthrough could still catch developers off guard.

$107 billion problem

Not all blockchain cryptography is created equal.

Pay-To-Public-Key, or P2PK, Bitcoin wallets that tie funds directly to a user’s public key and require a private key “password” to spend, will be the first to fall to quantum computers.

Satoshi Nakamoto, the pseudonymous creator of Bitcoin, holds more than 1.1 million coins — valued at about $107 billion — in these older P2PK wallets.

For most users, avoiding the quantum computer threat is as simple as transferring coins to a newer wallet that doesn’t use P2PK — a fairly simple task.

But Nakamoto hasn’t touched his wallets since 2010. It’s not known if the Bitcoin creator has chosen not to access the wallets, or, as some believe, has taken the Bitcoin fortune to his grave.

“As QC gets threatening, the Bitcoin community might want to look into freezing Satoshi’s coins,” Emin Gün Sirer, founder of the Avalanche blockchain, said in an X post.

Breaking into Nakamoto’s wallets is by far one of the easiest applications for the large quantum computers of the future, Dallaire-Demers said.

Further in the future, quantum computers will likely get powerful enough to tackle more advanced cryptography, such as Rivest-Shamir-Adleman encryption, or RSA.

RSA is used in some blockchains like Hedera Hashgraph and Arweave. But it’s more widely used to secure data transmission on the internet, such as in emails.

While Microsoft’s Majorana 1 chip likely won’t develop fast enough to compete in the race to crack Nakamoto’s wallets, it “may become a serious contender for breaking RSA in 2035,” Dallaire-Demers said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The firm’s 2025 crypto crime report found the revenue generated by sellers of AI scam services grew 1,900% since 2021.

“The potential of AI technology to exponentially scale crypto scams will further add to the challenges associated with combating these crimes,” Jacqueline Burns Koven, Head of Cyber Threat Intelligence at Chainalysis, told DL News.

Last year, those sellers made $18 million hawking AI software that helps scammers impersonate others or generate realistic content that tricks victims into making fraudulent investments, she said.

The findings come on the back of several warnings from the industry.

In its own 2025 crypto crime report, blockchain intelligence firm TRM Labs predicts financial groomers and other scammers will heavily expand their use of AI over the coming year.

At the same time, excitement over AI’s potential to revolutionise the crypto industry in other ways is reaching a fever pitch.

Buzzy cryptocurrencies linked to AI are collectively worth over $28 billion. Investors have poured hundreds of millions into projects tapping both AI and blockchain technologies.

The illicit AI market

Chainalysis identified illicit marketplaces like Huione Guarantee as behind the proliferation of AI scam software.

The platform hosts dozens of software vendors that sell generative AI technology to facilitate scams.

In one listing Chainalysis featured in its report, a vendor advertised AI “face-changing services” for $200 worth of crypto.

Earlier this month, Dawid Moczadło, co-founder of AI security startup Vidoc, posted a video on X of an interview with a candidate who appears to be using such face-changing software.

WTF, people are using real-time AI to alter their faces during interviews

this is a REAL recording from a meeting I had with the developer today!!

1. all of his answers were from ChatGPT—I could smell the GPT-4 bullet point-style responses
2. HE WAS USING SOFTWARE TO CHANGE HIS… pic.twitter.com/wXoIqKhzzj

— Dawid Moczadło (@kannthu1) February 4, 2025

“That’s a [North Korean] IT worker,” Taylor Monahan, the lead security researcher at crypto wallet MetaMask, said in response to the post. “Make sure you haven’t hired any already. Like, 50% of your applicants are them.”

More than 4,000 North Koreans have been directed to worm their way into jobs in the tech in the West by concealing their identities, according to the United Nations Security Council.

Aside from fraudulently earning wages, workers also use their positions as employees to spread malware on internal systems and steal funds.

In an escalating game of cat-and-mouse, many North Korean workers now use the kinds of AI scamming software sold on Huione to mask their identities in an attempt to avoid suspicion.

Chainalysis also tracked onchain records that tie crypto wallets purchasing scam software to pig butchering scams — a kind of ruse where a victim is tricked into sending funds — usually in the form of cryptocurrency — by gaining their trust.

In January, a French woman was conned out of $850,000 over several months by scammers using AI software to impersonate celebrity actor Brad Pitt.

In one case highlighted by Chainalysis, a wallet received proceeds from a pig butchering scam just three days after purchasing AI software from a Huione vendor.

The narrow timeframe shows how quickly scammers can execute against their victims using the software, Chainalysis said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Tsotchke, which is run by a team of pseudonymous developers, says it uses “spin-based quantum computing” to create quantum-enhanced artificial intelligence.

Yet several experts who work at the intersection of cryptography and quantum computing say they don’t believe that the code the project has released does what its creators say.

“The benchmarks they present are extremely ambitious and difficult to believe,” Paulo Viana, a quantum computing scientist and co-founder at Quant Bond, which conducts quantum algorithm experiments, said on X.

“Quantum computing researchers usually celebrate small incremental improvements, as even small advancements can raise significant milestones,” he said. But Tsotchke takes things further by claiming “groundbreaking improvements across multiple metrics.”

The project’s lead developer, who also goes by the pseudonym Tsotchke, regularly hits back at critics and naysayers on X.

The developer has brushed off detractors as unqualified to comment on the project while claiming to teach mathematical physics at an unnamed university.

In one incident, screenshots of private conversations viewed by DL News also show the Tsotchke account threatening critics.

“Disrespect me again and you’re gone,” one message read.

The project’s token has swelled to a $20 million market value. Over 7,000 wallets are invested in the token, according to data compiled by GeckoTerminal.

Tsotchke declined to reveal their identity: “It’s my choice to remain pseudonymous. It is simply because I am a private person,” they told DL News.

AI gold rush

With the growing popularity of large language models like ChatGPT, artificial intelligence is driving a surge in crypto projects claiming to merge AI with blockchain — and the buzzy innovation, quantum computing.

As with previous crypto trends, there are plenty of projects looking to profit from the hype and increased investor appetite.

Virtuals Protocol, which lets users create and co-own AI agents, soared to a $4.6 billion market value at the start of the year. Another, called ElizaOS, says it’s the first venture capital DAO led by AI agents. It traded with a market value as high as a $2.6 billion.

Tsotchke, which it claims is paving the way for “transformative advances” in machine learning and artificial intelligence, launched its own token on December 4 via the popular memecoin platform pump.fun.

Investors quickly piled in, and pushed it to a market value of $54 million within the month. It has since retraced, and trades at around $20 million.

‘Unprecedented’

Tsotchke makes several bold claims about the technology it says it is developing.

It says it can produce the quantum phenomena which underpin quantum computing without using the specialised hardware used by multi-billion dollar firms like Intel, Diraq, and Hitachi.

Ian Smith, CEO of Quantum EVM, a firm creating a quantum safe blockchain that’s compatible with Ethereum, told DL News he doesn’t find the claims plausible.

“Tsotchke claims to have achieved electron spin quantum computing inside any existing hardware capable of running software written in C,” he said, referring to the programming language.

Tsotchke also says its quantum-based neural network enables “unprecedented processing capabilities” compared to conventional AI, which relies on large language models.

Using quantum systems directly as neural networks is something other quantum researchers have been unable to crack for years, Pierre-Luc Dallaire-Demers, a scientist-in-residence at the University of Calgary, told DL News.

“Fundamentally, it may not be impossible,” Dallaire-Demers said. “But they don’t give any clue that they are targeting the actual critical problems to the approach.”

Random number generator

The only proof onlookers have to verify Tsotchke’s claims is the code posted to the project’s Github, a web-based platform that allows users to store, track, and collaborate on software projects.

Kaushal Kumar Singh, Lead Blockchain Developer at the Quantum Resistant Ledger, reviewed the project’s code and told DL News he didn’t find anything related to blockchain or post-quantum cryptography.

“I noticed a small library that serves as a random number generator based on quantum mechanics principles emulated on a digital computer,” he said.

Quantum EVM’s Smith said he came to the same conclusion after looking at Tsotchke’s code.

“If they removed ‘quantum’ from their branding and just said it was an advanced random number generator, it would be moderately accurate,” he said.

When asked about the criticism, Tsotchke’s lead developer told DL News no serious physicists have ever had any serious criticism about anything he has done.

Who is behind Tsotchke?

The Tsotchke website lists the project’s lead researcher as having 15 years of experience in quantum computing.

“With this much experience, they should be a well-known figure in academia,” Quant Bond’s Viana said.

There are no publications, patents, citations, or named researchers to support the project’s work.

“This absence of credible references — which is the bedrock of scientific research — is highly problematic and affects their credibility,” Viana said.

The account which posted the project’s code to the Tsotchke GitHub is tied to an email address with the handle t_umbach. The email address domain is the same one used by Concordia University, located in Montreal, Canada.

DL News did not receive a reply to an email sent to the address.

Concordia University declined to comment on potential students or employees who could be linked to the address.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Like Worldcoin, which recently shortened its name to World, Humanity Protocol uses biometrics to generate unique identities for its users, which are stored on its blockchain.

The idea is to verify users’ identities without creating a vulnerable centralised point of control. This, Humanity Protocol founder Terence Kwok told DL News, is vitally important as technology increasingly blurs the lines between humans and artificial intelligence.

Just two years after launching, Humanity Protocol has created two million user IDs.

That’s a lot less than World’s 10 million users. And Humanity Protocol’s $1.1 billion valuation is less than half six-year-old World’s $3 billion.

Yet Kwok, who’s based in Hong Kong, is no stranger to raising big sums for ambitious projects.

In 2012 he founded Tink Labs, raising $200 million from inventors including Japan’s SoftBank for a business that supplied smartphones to hotels.

By 2019, that business had collapsed, vaporising investor capital.

That fact hasn’t put off Humanity Protocol investors, who have now contributed a combined $50 million to the venture.

Crypto investing heavyweights Pantera Capital and Jump Crypto led the latest round. It follows a $30 million seed round led by Kingsway Capital last May.

“We are excited about all the ways that blockchain enables a future AI-driven world, and Humanity Protocol is leading the way,” Cosmo Jiang, General Partner at Pantera Capital, said of the raise.

Biometric ‘ick factor’

Both World and Humanity Protocol use biometrics to verify users are human, and to create their unique onchain identities.

But biometrics aren’t well-liked by the public or governments. Critics have called World’s iris scanning orbs dystopian, while regulators in Spain, Portugal, and other jurisdictions have accused the project of signing up minors without parental consent and mishandling users’ data.

Even World co-founder Sam Altman has acknowledged the orbs have a “clear ick factor” about them. Executives at World have vowed to address these issues. Now it’s facing competition that is trying to make biometrics more palatable to the public.

Instead of scanning eyeballs, Humanity Protocol has opted for scanning the veins in users’ palms, which, like human irises, are unique to each person.

“It just seems way less intrusive and dystopian than scanning somebody’s eyeball,” Kwok told DL News.

Because palm scanning is less intrusive, Kwok said, it opens up more opportunities for its use, such as for payments or access control for buildings.

Even if Humanity Protocol follows all the rules in how it collects and handles users’ data, it may not be enough.

In May, Hong Kong authorities argued that because those operating World’s iris scanners were already in a position to verify the humanness of volunteers, the images World collects of people’s faces and irises are “unnecessary and excessive,” and violated the city’s data protection principles.

Kwok’s previous failure

Humanity Protocol is a big change from Kwok’s previous startup.

Tink Labs, which was once one of Hong Kong’s best-funded start-ups, planted itself in the hospitality industry.

It supplied internet connected smartphones to hotels worldwide, including Shangri-La Hotels, InterContinental Hotel Group and Hyatt Hotels, among others.

The pitch was simple: The devices were intended to improve the guest experience, lower operational costs, sell extra services, and gather data on customer preferences.

But just three years after raising $200 million from investors in 2016, Tink Labs collapsed.

Kwok said he blames the failure on a combination of growing too fast and global Covid-19 lockdowns that poleaxed the hospitality industry worldwide.

Former employees told The Financial Times at the time that the problems at the firm started well before Covid. The firm tripled its losses in 2017, the last year accounts were made publicly available.

“Listen to your investors for advice, but not all of their advice,” Kwok said when asked what lessons he had learned from his time running Tink Labs.

He also said that at Humanity Protocol, he was focusing on putting together a leaner team with a more specialised skill set and emphasising growing at the right pace.

Rapid Growth

Kwok said Humanity Protocol was taking its time testing the devices it uses to scam palms, and doesn’t anticipate a full scale rollout for another couple of months.

Kwok said the growth had been “largely organic” but acknowledged some users were signing up in the hopes of receiving valuable tokens in the future.

“People expect that there’s some sort of airdrop rewards or something down the road, right? I think that that’s the brutally honest answer,” he said.

Rival World offers WLD tokens to every volunteer who signs up to the project and has their irises scanned. Despite a slew of controversies and legal issues, World has so far attracted more than 10 million users through this approach.

Humanity Protocol is hoping to avoid the mistakes World made as it begins rolling out its palm scanners over the coming months.

“Sometimes it’s good to be the second guy coming on board,” Kwok said. “You definitely learn.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The Solana Winternitz Vault, designed by cryptography researcher Dean Little, uses a sophisticated signature system that creates a new cryptographic key for every transaction.

This reduces the risk of key compromise, which could become a vulnerability in the age of quantum computing.

The vault relies on Winternitz One-Time Signatures, a hash-based method designed to withstand quantum attacks.

During each transaction, funds are split into transfer and refund accounts, ensuring leftover funds remain secure and inaccessible to attackers.

However, the vault is not a default feature, meaning users must opt in and navigate technical steps to benefit from its added security.

The urgency of addressing quantum threats has grown with breakthroughs like Google’s Willow quantum chip, which has sparked concerns about the vulnerability of existing cryptographic systems.

Some experts believe cryptocurrencies still have time to adapt to quantum computing advancements.

However, quantum physicist Pierre-Luc Dallaire-Demers cautions, “We are about five years away from commercial quantum computers being able to break the elliptic curve keys that secure Bitcoin wallets.”

Little noted that a quantum attack might go unnoticed at first, as users could attribute wallet compromises to poor operational security or unrelated vulnerabilities before recognising the larger quantum threat.

“There is a non-zero chance of a quantum 0-day attack occurring in our lifetimes, failing to prepare could leave cryptocurrencies exposed,” he said.

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.

Buzzy cryptocurrencies linked to AI ballooned 160% and are now worth almost $55 billion in 2024. At the same time, investors have poured hundreds of millions into projects tapping both AI and blockchain technologies.

Market watchers have reason to be bullish: Researchers estimate that the combo will add another $20 trillion to the global economy by 2030.

We asked industry experts what they expect from the intersection of AI and crypto in 2025.

Mark Beylin, investor, Boost VC

The crypto space is quickly becoming the battleground where open source artificial general intelligence will be developed, and this will only accelerate into 2025.

We’ll witness a tightening feedback loop driven by more attention, capital, and talent gravitating to the space, vying to participate in our generation’s most important invention.

The adversarial crypto environment will be the perfect breeding ground for a new era of hardened models which are battle tested to withstand attack vectors that aim to subvert the intentions of their developers.

Improved open source tooling will only further accelerate this trend, helping anyone deploy their own bots to fight in the grand arena.

While some agents will earn from their ability to exploit large protocols, others will simply find more efficient methods to extract value from human market participants who can’t possibly move as quickly or know as much as they do.

Even human-operated bots will struggle against a new swath of strategies which aren’t based on a-priori knowledge, but instead have risen to the top via an accelerated natural selection process whereby the best programmes have learned how to learn faster than any human could possibly imagine.

David Gogel, VP strategy & operations, dYdX Foundation

AI thrives on data, and blockchain provides verifiable, decentralised, and transparent infrastructure.

Together, they enable revolutionary use cases like AI-powered smart contracts, decentralised data marketplaces, AI-powered trading strategies and decentralised autonomous organisations, or DAOs, that adapt in real-time using AI-driven insights.

These technologies promise systems that are not only intelligent and autonomous, but also inherently trustworthy.

In 2024, we saw AI tokens surge in popularity on trading venues like dYdX, with projects at the forefront of decentralised compute and AI capturing market attention.

The success of AI agents like Terminal of Truths, which autonomously executed tasks and launched a cryptocurrency, demonstrates how far this intersection has already come in 2024.

Looking ahead, 2025 will see AI tokens and applications grow further, fueled by innovations in on-chain AI integrations and AI modelling.

Patrick Friedrich, founder, onicai

2025 will be the year when autonomous agents take off, and web3 will provide the infrastructure layer to coordinate and control them.

Large language models, or LLMs, will become significantly more efficient which enables running better and better models on decentralised networks, edge devices, embedded systems, as well as user devices like laptops and smartphones.

This will go hand in hand with specialised LLMs tailored to specific domains and unlock an even bigger wave of accessibility and utility across more industries than we’ve seen.

Web3 tooling for creating, running, and managing AI agents will empower users with the necessary ownership and control to transform AI from a service into a personal assistant.

This includes autonomous agents that independently complete tasks on behalf of their owner and thus become a form of user extension in both digital and physical spaces.

Calanthia Mei, co-founder, Masa

Memecoins are evolving into something far more powerful with the rise of AI agents.

These aren’t just for big players — even teenage crypto traders are building AI-powered memecoins to tokenise their work and participate in the cultural frenzy.

The growing demand for AI agents comes with an urgent need for robust data infrastructures to provide high-quality, relevant data and avoid bottlenecks from API rate limits.

If AI agents are projected to hit $47.1 billion by 2030, the data infrastructure layer behind them will be worth even more.

Ron Bodkin, founder and CEO, ChainML

The recent surge of memecoins tied to AI agents signals increasing demand and massive growth potential for the development of advanced AI in 2025, with our team expecting to see a major push towards agentic platforms.

There will almost certainly be volatility — this is crypto, after all.

But this trend indicates that there is overwhelming demand for more advanced AI agents that can handle increasingly complex tasks and workflows, which will, in turn, drive further innovation across the sector.

Additionally, 2025 will see the introduction of oversight and regulation of AI, particularly with Trump appointing David Sacks as his new crypto and AI czar.

What shape this oversight will take remains to be seen, but it is clear that AI will be a focus for the incoming administration.

We are hopeful that any policies implemented will seek to empower consumers without hampering advancements in the industry.”

Yannik Schrade, CEO and co-founder, Arcium

The biggest rug in history won’t be a token — it’ll be overlooking privacy.

Everything blockchain promises — freedom, autonomy, equitable economies, community-driven governance — will mean nothing without it.

Privacy should not be treated as an add-on, feature, or entirely separate application. Instead, it needed to be a foundational layer of the blockchain tech stack.

The next big technological revolution will happen at the intersection of AI and crypto.

However, there are two roads: a dystopian and a utopian one. To build a future where AI and human intelligence coexist in harmony, privacy and confidentiality must be integrated at its core.

The insights above have been edited for clarity.

Eric Johansson and Liam Kelly cover crypto funding trends for DL News. Got a tip? Email them at eric@dlnews.com and liam@dlnews.com.

Blockchain security experts shouted it from rooftops last year: Infrastructure attacks targeting private keys and smart contract ownership would cause major damage to crypto projects in 2024.

Private keys control access to crypto wallets and should be stored securely. If not, hackers can use them to steal funds from a victim’s wallet.

Some companies didn’t heed those warnings and failed to secure their private keys, leaving the door open for North Korean cybercriminals to steal $1.34 billion in crypto, according to blockchain forensics company Chainalysis.

According to Luciano Ciattaglia, vice president of services at blockchain security auditor Hacken, companies affected by private key leakage made “avoidable mistakes.”

“Victims often used third-party private key management platforms that lacked proper security practices such as encryption or distributed storage,” Ciattaglia told DL News.

This year’s biggest hacks were all due to access control vulnerabilities including private key leakage.

In a year where investors lost $2.3 billion to crypto theft, private key leakage and other infrastructure attacks account for 81% of that total, according to blockchain security firm Cyvers.

Here are the five biggest crypto hacks of 2024.

DMM Bitcoin $308 million in May

Japanese crypto exchange DMM Bitcoin was the hardest hit this year.

The platform lost 4,502.9 Bitcoin worth $308 million in May.

Six months after the hack, the details are still unclear, but security researchers suspect North Korean hackers accessed the platform’s private keys.

They based their claim on the similarities between the laundering techniques used by the hackers to that of the dreaded North Korean cybercrime syndicate Lazarus Group.

DMM Bitcoin was unable to recover from the hack. The platform shuttered earlier this month and transferred its assets to trading platform SVI VC Trade.

PlayDapp: $290 million

PlayDapp, a South Korean blockchain gaming app, managed to avert disaster despite suffering a massive hack in February.

The saga began when a hacker hijacked control of PlayDapp’s smart contract for minting tokens and created 200 million PLA tokens.

At the time, the tokens were worth $26 million.

PlayDapp acted swiftly by contacting exchanges to freeze the tokens which prevented the attacker from cashing out.

Undaunted, the hacker minted 1.6 billion PLA tokens worth $264 million days later but they were unable to sell them.

PlayDapp has since migrated to a new token contract.

WazirX: $235 million

At first glance, WazirX was a secure platform.

India’s largest crypto exchange used a multisig wallet with four out of six signers, address whitelisting configured to an offsite interface, and signing keys domiciled in a hardware wallet.

Still, the platform lost almost half of its assets in one fell swoop.

Hackers breached one of the platform’s multisig wallets in July and stole $235 million in various cryptocurrencies including Ether and the Shiba Inu memecoin.

The hackers used complex attack vectors to trick WazirX wallet administrators into ceding access control over to the bad actors.

They used this access control to bypass other security measures and syphon funds from the platform’s wallet.

Police in India arrested a suspect allegedly connected to the hack in November.

Radiant Capital: $62.5 million

Cybercriminals attacked cross-chain DeFi lending protocol Radiant Capital twice this year, in January and October.

In January, an attacker manipulated the protocol’s smart contract to steal $4.5 million from versions of Radiant Capital deployed on Arbitrum and BNB Chain.

Then in October, the platform lost $58 million in an attack where hackers compromised the protocol developer’s private keys to steal funds.

That second attack has been linked to North Korean cybercriminals.

The attacker posed as a former team member and sent a malware-laced digital file to the project’s developer.

The malware gave the hackers access to Radiant Capital’s computers where private keys were stored.

Munchables $62.5 million

External actors aren’t the only threats to crypto projects; sometimes, the bad guys are within.

That was the case in March for Munchables, a non-fungible token project on the Blast blockchain.

The Munchables team had a bad actor in its midst.

The hacker, suspected to be from North Korea, used their access to introduce a vulnerability in the project’s smart contract.

That allowed the attacker to steal $62.5 million in Ether from the Munchables project in March.

However, the attacker returned the private keys needed to recover $60.5 million to the team.

Looking ahead

The uptick in private key leakage attacks this year contributed to investors suffering greater losses in 2024 than the previous year.

At $2.3 billion, crypto thefts in 2024 exceeded last year’s total by 40% — but is lower than the $3.8 billion record of 2022.

Crypto crime fighters say new and more dangerous attack vectors are looming.

Cyvers said in its report that that advances in quantum computing and artificial intelligence could drive more complex attacks next year.

Other security experts are also converging on that possibility.

“Next year, crypto investors might see more risks from AI-driven attacks, which are likely to make phishing scams more convincing and help attackers find vulnerabilities in smart contracts faster,” Ciattaglia said.

The Hacken executive said these sophisticated threats will require crypto developers to upgrade their operational security protocols.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.

And yet Sam Altman’s crypto-powered, online identity venture is growing faster than ever — just not in Europe.

In the past few weeks, the venture shortened its name to World and nearly doubled the number of kiosks where people get paid in WLD coins to scan their eyeballs. World has 9 million registered users.

Hemmed in by the European Union’s strict data privacy rules, the venture’s locations for scanning users’ biometric information have rolled out just 16 new kiosks in the past three months, according to company data.

By contrast, the venture’s locations in Latin America have surged more than 70% to over 430 stations. Mexico alone hosts more than 149 Worldcoin kiosks, nearly six times as many as the entire EU.

Worldcoin reboot

The shift from Europe to the developing world underscores Worldcoin’s recent reboot.

Meanwhile, WLD has jumped 38% since the end of the third quarter as the crypto market staged a broad-based rally.

With operations on hold in Europe, parts of North America, and Africa, Latin America remains one of last available markets for the eye-scanning venture.

‘The early days of Worldcoin iris scanning was absolutely not cute.’

Fatemeh Fannizadeh, Anoma Foundation

World’s problems in Europe stem from its damn-the-torpedos approach to growth.

Though the venture is predicated on scanning people’s irises and collecting unique biometric data, it didn’t seek regulatory approval from health officials or data privacy agencies prior to its global rollout in July 2023.

“The early days of Worldcoin iris scanning was absolutely not cute,” Fatemeh Fannizadeh, general counsel for the Anoma Foundation, told DL News.

“[It was] going to regions where the need for small amount of money was high, where people would more easily part with their sensitive biometric data.”

Blowback

That spurred action in nations ranging from Singapore and Hong Kong to the UK, Spain, and Portugal. In the latter, the data regulator, the CNPD, slapped World for collecting data from minors.

“The report from CNPD is the first time we are hearing from them regarding many of these matters, including reports of underage sign-ups in Portugal,” Jannick Preiwisch, the Worldcoin Foundation’s data protection officer, said in an email to DL News.

Even though crypto culture champions privacy, World is under investigation for whether it violated one of the most stringent data privacy regimes on the planet — the EU’s General Data Protection Regulation, or GDPR.

For more than two years in Germany, the Bavarian State Office for Data Protection, or BayLDA, has been investigating whether World infringed on consumers’ rights to data privacy.

World could be prohibited from operating in the 27-nation bloc until it becomes compliant, Michael Will, the agency’s president, told DL News.

Committed to compliance

Being blocked from accessing 448 million potential users would be a serious blow to World’s ambitions of a total of 1 billion users.

A World spokesperson told DL News that the firm complies with GDPR and remains committed to compliance with applicable laws.

World was co-founded by OpenAI’s Altman, Alex Blania, a German entrepreneur, and Max Novendstern in 2019. It has raised a whopping $250 million in investment capital from Andreessen Horowitz and Coinbase Ventures, among other backers.

World has embarked on an audacious business gamble: It aims to provide billions of online users with indisputable proof they are human and not bots or artificial intelligence programmes.

In theory, this distinction will become invaluable as the internet is subsumed by AI programmes that can pose as human beings.

If that all sounds like the plot of a “Black Mirror” episode, the orbs only solidify the idea. Even Altman says the spheres has “a clear ick factor.”

‘It’s often a conscious decision to rapidly expand despite regulatory uncertainty or to operate in a grey area and deal with it later.’

Reuben Yap, Firo

World uses silver and white basketball-sized spheres to scan irises and convert the data into a string of letters and numbers called an iris code.

This code generates a World ID, a digital passport that World hopes will become as ubiquitous as Google’s sign-in feature. Users also get World’s native WLD cryptocurrency.

But the novelty of World’s business model ran into the reality of consumer health and privacy protections. World no longer operates in the UK, India, Hong Kong, and Kenya, among other nations.

A Worldcoin Foundation spokesperson told DL News that Kenyan authorities had dropped their investigation into the company, which began in August 2023.

“It’s often a conscious decision to rapidly expand despite regulatory uncertainty or to operate in a grey area and deal with it later,” Reuben Yap, co-founder of privacy protocol Firo and former partner at Malaysian law firm Reddi & Co Advocates, told DL News.

“Crypto is not alone in pursuing this, companies like Airbnb and Uber also took similar risks. They wouldn’t have grown to their size if they checked with regulators first.”

Sternest test

It’s in Bavaria, of all places, where the company is facing its sternest test. Even as its probe continues, the BayLDA has directed World to check user IDs to ensure it isn’t scanning minors.

A spokesperson for the BayLDA told DL News in December that it can’t provide any additional updates.

In the last year, World has been roiled by other controversies.

In September, a DL News investigation reported that criminal groups paid cash to homeless individuals, refugees, and drug addicts to have their eyes scanned at kiosks in Berlin and then kick back portions of the crypto they received in exchange.

At least one group may have raked in nearly $700,000 worth of WLD tokens in March and April. A Worldcoin Foundation spokesperson told DL News that it has fraud prevention measures and investigates claims regarding potential fraudulent behaviour.

In September, Singapore’s Deputy Prime Minister Gan Kim Yong warned the public against selling or trading their World IDs for cash.

Yong said seven individuals were investigated for allegedly violating the city-state’s Payment Services Act 2019. A World spokesperson said these individuals are not affiliated with the company.

Despite WLD’s recent runup, the token’s underperformance for the year may be hurting the company’s growth prospects, one person familiar told DL News in September.

A Worldcoin Foundation spokesperson said the company has reached almost 20 million World App users and it became the number one app in Malaysia.

At a time when Bitcoin and numerous other cryptocurrencies are hitting all-time highs, WLD is more than 75% lower than its peak in March, according to CoinGecko.

Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.

Update: Includes comments from Worldcoin Foundation spokesperson clarifying company’s status in Kenya and growth metrics.

Correction: Updated on December 18 to correct which countries Worldcoin operates in.

That was Haliey Welch’s parting words on a now-deleted X Spaces monitored by DL News on Thursday to angry investors seeking redress over her memecoin, which crashed more than 90% shortly after its launch.

Welch shot to online stardom with her “Hawk Tuah” meme. On Thursday, she joined the cast of internet celebrities who have tried to leverage their online clout to launch a memecoin.

Despite the ephemeral nature of cryptocurrencies launched by celebrities, investors piled into Welch’s memecoin, HAWK, which has more than 16,000 holders.

HAWK, launched on Solana, quickly soared to $500 million in market value.

However, the project turned sour for investors as the token’s value crashed below $50 million, less than 30 minutes after its launch, leaving many investors with huge losses.

HAWK’s market value has slumped to $30 million as of reporting time.

Onchain data seen by DL News reveals a pattern of suspicious transactions that bear the hallmarks of a pump-and-dump scheme.

But Haliey Welch and her team deny any wrongdoing.

There has been a wild amount of fud circulating, let us explain:

The main piece going around @X is the 96% cluster seen on @bubblemaps which shows $HAWK tokens being sent by the deployer address (xxxx), to the related addresses, according to the tokenomics that was published.…

— overHere (@overHere_gg) December 5, 2024

Flawed launch

Welch partnered with web3 launchpad overHere to launch the HAWK rather than use a memecoin generator such as Pump.fun that reduces token centralisation risks.

Token centralisation happens on viral cryptocurrency launches. It’s when a cluster of connected wallets capture a large proportion of the token.

Token centralisation almost always leads to large-scale dumping and that’s what happened to HAWK.

The team revealed the HAWK’s contract address before the launch. That allowed savvy traders to programme bots to snipe the memecoin’s launch.

Sniping in crypto involves using bots to front-run human traders to buy a large token supply at cheaper prices.

Welch’s team said they tried to prevent sniping by seeding the token with high fees on Meteora, a Solana-based liquidity protocol.

Still, it did little to prevent massive trading activity by bots.

HAWK was so heavily sniped that 97% of the supply released during the launch was captured by clustered wallets whose buying activity drove the its market value to $500 million in short order.

When these wallets dumped their holdings shortly after, the effect was catastrophic for ordinary traders. HAWK’s market value plummeted instantly to $50 million and continued falling.

Insider activity

Before launching HAWK to the public on Thursday, the team sold 17% of the token supply to a group of investors.

HAWK’s tokenomics lists that portion of the supply as a “strategic allocation.”

Those tokens weren’t vested. Instead, they were unlocked fully upon the memecoin’s launch.

Onchain data from Dexscreener seen by DL News show wallets that have sold a significant amount of the token. Those wallets do not have any buying activity for the HAWK token likely indicating that they belong to insiders who received special allocations.

The activity can be seen by reviewing transactions by wallets in the “Top Traders” column on Dexscreener for the token.

Welch’s allocation, however, is locked for one year.

Still, that’s not the only suspicious insider activity.

The high fees collected during HAWK’s launch on Meteora went directly to the token creator’s wallet. The fees amounted to $2 million.

Welch and the HAWK team claim the creator wallet isn’t controlled by a single entity but rather a Cayman Island-based foundation.

As the dust settles, Welch’s worries may extend beyond disgruntled investors voicing their displeasure on social media as law firms are circling the matter with interest.

Welch may also face heat from the US Securities and Exchange Commission, which has previously gone after other celebrities including Kim Kardashian and Lindsay Lohan.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.

That isn’t deterring the Silicon Valley-based company from deepening its exposure to memecoins just as the segment is exploding with controversy.

On Monday, Robinhood offered up a new one to its 24 million customers — dogwifhat.

Up 60%

Inspired by a meme of a Shiba Inu dog named Archi sporting a pink knitted beanie, dogwifhat has soared in value in the wake of Donald Trump’s victory at the polls on November 5.

The coin is up almost 60% in the last two weeks or so, and has multiplied in value 20 times this year.

Even though memecoins have virtually no utility beyond rampant speculation, mainstream platforms such as Robinhood appear to be quite keen on offering up even more to retail investors.

Robinhood will undoubtedly be joined by other investment players keen on exploiting the lax regulatory climate to come as Trump and his fellow Republicans take control of Washington in January.

“We expect this move by Robinhood to be just the beginning of a series of corporate moves to take advantage of the growing interest in crypto assets,” Ed Hindi, chief investment officer at Swiss-based crypto hedge fund Tyr Capital, told DL News.

But controversy comes with the territory.

Animal cruelty

This week, critics lambasted memecoins as irresponsible assets that are monetising extreme and criminal online content.

Solana memecoin generator Pump.fun, for instance, enables users to create tokens easily without requiring any coding knowledge or upfront capital.

To make their tokens go viral, some memecoin creators performed shocking stunts on Pump.fun livestream, including child abuse, animal cruelty, and pornography.

‘Let’s build real applications using blockchain.’

Changpeng Zhao

Taking a dim view of the trend, Changpeng Zhao, the co-founder and former CEO of Binance, said memecoins had become “weird.”

“Let’s build real applications using blockchain,” Zhao pleaded on X.

Pump.fun has deactivated its live-streaming feature in the wake of the backlash.

“To ensure the absolute safety of our users, we will be pausing the live streaming functionality on the site for an indefinite time period until the moderation infrastructure is ready to deal with the heightened levels of activity,” Pump.fun said in a statement on Monday.

Memecoins, of course, have long been used to promote jokes that have gone viral, and are rapidly becoming a staple of pop culture. Yet in this latest bull cycle they are increasingly being used to platform offensive content.

This year, meme tokens promoting several forms of bigotry proliferated on Solana.

At the time, trading platforms responded by overhauling their content moderation policies to block such tokens. But several of those offensive memecoins still exist today.

I don’t think memecoins are dead, but they are certainly undergoing an existential crisis.’

Alice Shikova, SPACE ID

Alice Shikova, marketing lead at digital identity platform SPACE ID, said the Pump.fun scandal showcased the “dark side of crypto.”

" I don’t think memecoins are dead, but they are certainly undergoing an existential crisis,” Shikova told DL News.

“It’s our job as a crypto community to help this sector return to its harmless fun roots, where investors can bet on memes of cats and dogs rather than watching disturbing videos or putting their own safety on the line,” Shikova said.

Canine mascot

In any event, dogwifhat has been at the heart of the meme token frenzy this year, especially on Solana.

Launched last November, dogwifhat is the fifth most-valuable memecoin with a market value of $3 billion, according to CoinGecko.

Dogecoin is the most valuable, ahead of Shiba Inu, Pepe, and Bonk.

Pepe is the only one among the lot that isn’t a so-called dog coin ― a meme token with a canine mascot.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.

Phillip Banks, the digital artist who created the character used for the memecoin, said he plans to issue takedown requests for “for-profit related things” over the coming days.

“Just putting it out there, Chill Guy has been copyrighted, like, legally,” Banks said in a November 21 X post.

It’s not clear if Banks’ copyright applies to the image of the Chill Guy character, the name Chill Guy, or both.

In any case, pursuing legal action may be difficult.

In crypto, creating new tokens is permissionless. Anyone can do so without going through an approval process of revealing one’s identity.

The identity of the Chill Guy memecoin creator, who only goes by the pseudonym “mrowl,” is unknown, meaning Banks will have to find out who made the token to get any potential takedown request to stick.

Failing that, Banks could still petition known entities, such as decentralised crypto exchanges, to avoid the token, crippling traders’ ability to buy and sell it.

In 2021, decentralised exchange Uniswap restricted access through its website to a small number of tokens that potentially violated US securities laws, although those tokens could still be traded by interacting with the Ethereum blockchain directly.

Later that year, Pepe the Frog creator Matt Furie succeeded in getting NFT marketplace OpenSea to take down the project Sad Frogs District, which Furie claimed rips off the Pepe character.

Takedown requests may also discourage centralised exchanges like Coinbase or Binance from listing Chill Guy. Popular memecoin Pnut surged in value after top crypto exchange Binance listed it for trading.

Banks did not immediately respond to a request for comment.

Who is Chill Guy?

Banks created the Chill Guy character in October 2023.

“His whole deal is he’s a chill guy that lowkey doesn’t give a fuck,” Banks said of his creation at the time.

Over a year later, Chill Guy reappeared when users on social media site TikTok began referencing the character in videos and creating memes embodying his carefree personality.

As Chill Guy went viral on TikTok, someone used memecoin platform pump.fun to launch a Solana token named after the character on November 15.

Within days, Chill Guy soared to a $500 million market value as traders piled in, according to data from GeckoTerminal.

It has since dropped to around $347 million following Banks’ X posts.

Banks said on X that he doesn’t really care about brands or TikTok users using Chill Guy in posts, asking only that they credit him.

But he said he plans to take action against those profiting from Chill Guy in the form of “unauthorised merchandise and shitcoins.”

Copyright issues

While some attempts at copyright takedown in crypto have been successful, such as Pepe creator Furie’s action against OpenSea, others have failed.

Last October, supermarket chain Trader Joe’s sued a decentralised crypto exchange of the same name, claiming that its creators had infringed on its intellectual property and degraded its “wholesome and high-quality brand.”

In February, the judge presiding over the case agreed with the exchange’s request to dismiss it “for failure to state a claim upon which relief can be granted.”

Basically, Trader Joe’s couldn’t identify exactly who it was suing.

“These are decentralised crypto operators,” intellectual property lawyer Jonathon Hance told DL News at the time. “They use aliases, they don’t necessarily have a corporate headquarters, some of them are not even clear on who their employees or founders are, and they certainly don’t like to tell you where they keep their assets.”

Not so chill after all.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The boy launched a token called Gen Z Quant — or Quant — on the popular memecoin platform pump.fun in the early hours of Wednesday morning.

Quant is short for quantitative trader, a common job on Wall Street. It became a meme because being a “quant” is prestigious and well-paid, and the joke is that the work seems so complicated and arcane that no one really knows what it entails.

As Quant rallied, the boy — while livestreaming to hundreds of people — sold a large portion of the token he had set aside, netting him $30,000 while crashing its price.

“No way, thanks for the 20 bandos” he said after selling his tokens, raising his middle fingers to the camera.

Kid makes a coin then dumps on people for $30k while live-streaming 😭pic.twitter.com/LoanyydtYX

— TTI (@TikTokInvestors) November 20, 2024

Onlookers quickly slammed the move as a “rug pull.”

A rug pull is where the creator of a token or project sells their stash, usually in a single transaction, crashing the token’s price for a quick profit at the expense of other investors. Rug pulls are not necessarily illegal, but widely condemned in crypto circles.

Some of those burned by the move began posting his and his family’s identities, prompting a barrage of online vitriol. DL News chose not to reveal the minor’s name to avoid contributing to further harassment.

Screenshots viewed by DL News show traders harassing members of the boy’s family on social media site Instagram.

The boy and his family members have since made their social media profiles private. They couldn’t be reached for comment.

The dark side of memecoins

The Quant token debacle is the latest episode to highlight the dark side of memecoin trading, where some are all too willing to throw themselves into the maw in an attempt to get rich quickly.

In May, one memecoin creator livestreamed himself doing increasingly reckless stunts, which culminated in setting himself on fire, to promote a token of his creation.

In another incident, a memecoin creator took drugs, faked his own death, and hung out with a stripper on stream to draw attention to his token.

Some onlookers predict the Quant token creator’s success and virality could encourage others.

“This is the first coin that’ll bring the kids to the chain. Don’t underestimate it,” pseudonymous memecoin trader muzzyvermillion said on X.

A clip of the boy posted on the TikTokInvestors X account went viral.

$82 million

Interest in memecoins moves fast, and unsuccessful tokens are often abandoned when the price crashes.

But instead of abandoning Quant, traders rallied and pushed its value to a high of $82 million.

Since its launch, Quant has registered $288 million worth of trading volume, making it the top traded token onchain over the past 24 hours, according GeckoTerminal data.

The token’s market value has since dropped to around $63 million. At its peak, the Quant creator’s stash, had he held onto it, would have been worth around $3 million.

Still, it’s likely that in the attention economy of memecoins, the incident was the main driver of the rally.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The prices of arguably the most popular NFT collection ever have more than doubled in recent weeks amid a broad-based rally.

The cheapest CryptoPunks now trade for around $112,000, according to NFT Price Floor data. This gives the collection a market value of at least $1.6 billion, although rare examples from the collection trade hands for many times more than the cheapest ones.

The price jump shows that there are still plenty of NFT collectors around despite the asset class being trapped in a multi-year bear market, Nicolas Lallement, co-founder of NFT data platform NFT Price Floor, told DL News.

“[They] were waiting for the right entry, trying to catch the bottom, and now, fearing to be sidelined, are pulling the trigger,” he said.

NFTs, or non-fungible tokens, are a type of crypto asset. Because they are non-fungible — a technical term meaning each token is unique — they are often used to represent art, music or collectibles.

The surge may only just be beginning.

According to Lallement, traders may be positioning themselves ahead of a potential “violent repricing.”

If it is the start of a renewed interest in NFTs, the market still has a long way to go before it retraces the heady prices of the previous bull market.

At the collection’s November 2021 peak, CryptoPunks traded hands at a $417,000 floor price. Even with the recent jump, CryptoPunks are still 73% off that all-time high.

High volume

Demand for NFTs soared in late 2021 after Bitcoin surged some 1,140% the year before.

Many who made money in the rally piled into NFTs to flaunt their wealth. But as the market crashed in 2022, so did almost all NFT collections.

Now Bitcoin has soared to all-time highs, some of the newly-created wealth could be flowing into NFTs again.

“The last week has been the highest volume we’ve seen in years,” Punks OTC, a pseudonymous NFT trader who runs a popular over-the-counter NFT trading desk, told DL News.

Over the past week, there have been 189 CryptoPunks sales totalling $23 million, a 166% increase from the week before.

Many NFT collections like CryptoPunks only have a limited supply, usually of around 10,000 tokens. Because they are relatively illiquid, it only takes small changes in demand to create large price swings.

Punks OTC also noted that the CryptoPunks community on social media is growing more rapidly than at any time since 2021.

Trickle-down effect

Although CryptoPunks are the biggest gainers, they’re not the only NFTs rallying.

The price rise has created “a clear trickle-down effect into other collections,” according to Lallement, who said that CryptoPunks “often act as a leading indicator for blue-chip NFTs.”

Bluechip is a stock-market term for the most reliable and valuable companies on the market. In crypto, traders use the word to describe tokens or NFTs they consider to have established value.

Lallement gave the example of the generative art collection Chromie Squiggles, which has seen its floor price almost double since November 11.

Other collections regarded as blue-chips, like Pudgy Penguins and Milady Maker, are up 89% and 103% respectively over the past two weeks.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The planned platform, which will operate separately from the bank, has tapped TradeWeb, an electronic trading firm, as a strategic partner, according to the statement.

“It’s in the best interest of the market to have something that is industry-owned,” Mathew McDermott, Goldman’s global head of Digital Assets, told Bloomberg in an interview.

Private blockchains

Goldman Sachs’ existing digital assets platform uses a private blockchain that requires the bank’s permission to send transactions. It’s different from public blockchains like Ethereum and Solana that don’t require such permissions.

Other Wall Street players, such as JPMorgan Chase, are already using private blockchains in their own digital asset platforms.

But such ventures have struggled to grow because other firms are reluctant to use systems created and controlled by their competitors.

By launching its platform as a separate entity, Goldman Sachs is hoping to assuage this concern and expand the use of private blockchains in areas such as the tokenisation of funds and issuing collateral for financial transactions.

Blockchains on Wall Street

In late November 2022, Goldman Sachs first launched a digital assets platform to issue and settle trades of blockchain versions of financial assets, like bonds.

Because the platform ran solely on a private blockchain, it went largely unnoticed by the crypto mainstream, which has just suffered the $8 billion bankruptcy of Sam Bankman-Fried’s FTX exchange.

Now, with more and more Wall Street firms taking blockchain and its associated technologies seriously, Goldman Sachs is seizing the opportunity in the market.

Still, private blockchains aren’t the first choice for financial institutions as they have less liquidity, Lamine Brahimi, co-founder and managing partner of tokenisation platform Taurus, previously told DL News.

SEC rule

“When they have the choice, financial institutions are rolling out production on public blockchains,” he said. “When they don’t have the choice, they do it on a permissioned one.”

Banks operating exclusively in the US must confine themselves to private blockchains due to a 2022 Securities and Exchange Commission rule known as SAB-121.

It created accounting obligations for companies to safeguard crypto assets for platform users that cannot be met on public blockchains.

The rule is a roadblock for many US firms looking to issue and trade traditional financial assets on public blockchains.

Still, many are hopeful the situation could change under President-elect Donald Trump’s coming administration.

Trump has frequently signalled he plans to take a more lenient approach to crypto.

Many of his rumoured picks for top roles like chair of the SEC have expressed the desire to create a set of bespoke crypto rules to ease the regulatory burden on US crypto firms.

Early stages

Plans for Goldman Sachs’ spin-out firm are in the early stages, and there’s nothing stopping the new venture from expanding to public blockchains in the future, should the regulatory winds shift.

The firm said it also plans to continue researching financial applications of blockchain technology in-house with its current team.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Decentralised marketplaces like Akash, Render and Hyperbolic that match buyers and sellers of processing power have provided a place for people to rent out their hardware.

“A lot of people who are unable to use their compute are reselling their contracts,” Greg Osuri, founder of Akash, a decentralised graphics processing units marketplace, told DL News.

“The price is going lower and lower. It really doesn’t matter, because it is volume for us — the more we can do, the better.”

Decentralised GPU marketplaces are still small, but they’re growing fast. Active leases on Akash grew 69% over the past month, while the total amount users spent renting GPUs increased tenfold since the start of the year.

Investors bullish on such marketplaces have pushed Render’s RENDER token up to a $1.9 billion market value, while Akash’s AKT token sits at a $600 million valuation.

The AI industry is predicted to hit a $3.7 trillion market value by 2034. Hardware rental marketplaces are poised to tap into that growth.

AI buzz

Crypto has benefitted from the AI hype. Investors have already ploughed over $400 million into projects innovating at the intersection of AI and crypto in 2024, according to DefiLlama data. Venture capitalists have promised to invest even more.

The combination of AI and crypto could add $20 trillion to the world economy by 2030, according to Bitwise estimates.

Some Bitcoin miners have used the buzz to diversify their revenue streams and hedge against the cryptocurrency’s price volatility by leasing their data centre space to AI firms. Many outside of crypto have done the same.

However, the skyrocketing supply has outstripped demand. The result is that the cost of renting the hardware has dropped by 30% over the last two months, per analysis by AI research and analysis company SemiAnalysis.

While 2023 estimates suggested that hardware owners could cash in between $4 to $8 per hour by renting out their hardware, the price is now as low as $1 per hour, according to Osuri.

“There’s too much supply,” Osuri said. “I don’t think the rest of the market is pricing it right.”

That’s where marketplaces like Akash, Render and Hyperbolic come in. They give hardware owners a chance to recoup some of their costs by renting out their processing power to the highest bidder.

“You might as well take a loss instead of getting nothing,” Osuri said.

Surplus GPUs

For many crypto enthusiasts, decentralised GPU markets present an additional tangible use case for blockchains. Most allow users to pay for GPU rentals using crypto stablecoins.

Proponents say the decentralised nature of such markets can help solve coordination issues and increase market efficiency, greasing the wheels of AI advancement.

The GPU markets may also be contributing to falling prices as more people who normally wouldn’t rent out their GPUs can now do so.

“By enabling any data centre or individual to contribute to our platform, we’ve created an abundant supply, driving down costs for our users,” Jasper Zhang, CEO at Hyperbolic, told DL News.

Early stages

Decentralised GPU markets look promising, but the AI industry is developing fast, and they quickly could become obsolete.

Both Microsoft and xAI, Elon Musk’s AI firm, are investing in new, bigger data centres, opting to build their own dedicated power sources instead of taking a decentralised approach.

Taking this step does have significant advantages. As AI training becomes more complex, the power needed increases to the point where having a dedicated power plant will no longer be a nice-to-have — it will be a requirement.

Additionally, co-located GPUs are much better at training AI, because of the decreased latency from having hardware located in the same physical location.

It’s something that both Osuri and Zhang acknowledge.

“Decentralised compute is still in its nascent stages, and mainstream adoption by enterprises like Microsoft and xAI will take time,” Zhang said.

But for now, decentralised GPU markets are rolling in digital green.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

In this fifth iteration dubbed “The Purge,” Buterin examines ways to streamline Ethereum’s infrastructure by reducing the data burden on network nodes.

The Purge would limit how much historical data each node must store, moving older data to a peer-to-peer network for easier access.

Another core idea would be to reduce the burden of inactive accounts and contracts by expiring them.

“Reducing complexity and bloat over time” is necessary to sustain Ethereum, Buterin said in his post, as the protocol matures and looks toward long-term viability.

Futures of Ethereum

Over the past two weeks, Buterin has outlined a broader vision for Ethereum’s future with a series of proposals addressing some of the blockchain’s most persistent challenges.

“The Merge” upgrade, which went live in September 2022, focused on moving Ethereum to a proof-of-stake consensus for stability and solo-staker accessibility, with goals like better resistance to 51% attacks.

“The Surge” aims to increase transaction throughput by integrating layer 2 scaling, with a vision of achieving 100,000+ transactions per second.

“The Scourge” focuses on the issue of centralisation risks within Ethereum’s staking and block construction processes. This proposal suggests reducing dependencies on large stakers to prevent transaction censorship and high-value extraction from users.

Lastly, “The Verge” addresses the feasibility of running a fully verifying node by exploring stateless client technology and computationally affordable verification. This would potentially allow even mobile and wearable devices to participate in Ethereum’s consensus.

Through these proposals, Buterin is exploring multiple paths to ensure Ethereum’s scalability, security, and accessibility while addressing the challenges that come with growth.

Each “future” presents possible upgrades but will depend on extensive research and community feedback.

Crypto market movers

• Bitcoin is up 0.1% over the past 24 hours to trade at $67,130.
• Ethereum is up 0.3% to trade at $2,477.

What we’re reading

• Bitcoin falls as Tether CEO calls criminal probe report ‘old noise’ — DL News
• What Needs to Happen for Altcoins to Finally Pump: Report — Unchained
• From Smuggling Gold Out of Africa to Bridging Bitcoin and Cardano — CoinDesk
• Hacker returns $19m in stolen crypto to US government just one day after breach — DL News

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.

Recent departures include Shiva Rajaraman, the former COO, and Jeremy Fine, former head of business and corporate development. Justin Jow, former vice president of finance, left in the winter.

Rajaraman, Jow, and Fine were part of OpenSea’s leadership team, or the group of executives who report directly to Devin Finzer, co-founder and CEO of the startup, according to company documents.

The three former executives have moved on to Uber, Scale AI, and OpenAI, respectively.

Karen Kreuzkamp, OpenSea’s top lawyer, left in August for a position at Tools for Humanity, the company behind OpenAI CEO Sam Altman’s crypto project Worldcoin.

And “0age,” one of OpenSea’s key engineers, recently announced that he jumped ship to Uniswap Labs.

“He’s an amazing protocol developer,” a former employee told DL News, in reference to 0age, who is pseudonymous.

Exec exodus

The recent exodus of executives follows a round of departures last November. OpenSea’s general counsel, vice president of operations, head of HR, and head of communications each left the company shortly after the startup laid off more than half of its staff that month.

Now, the only members with more than a yearlong tenure on OpenSea’s leadership team beyond Finzer are Nadav Hollander, the CTO; and Lorens Huculak, co-head of OpenSea Pro, the marketplace’s platform for experienced NFT traders.

None of the recently departed executives immediately responded to a request for comment, and OpenSea did not return a request for comment.

The departures come as the company faces a moribund NFT market, intense competition from other NFT marketplaces, and regulatory scrutiny.

Total NFT sales reached $304 million in August, an almost 95% decline from the market’s height in January 2022, according to CryptoSlam.

Meanwhile, competitors like Blur and Magic Eden have eaten into OpenSea’s share of the shrinking market. Once the go-to locale to buy and sell NFTs, OpenSea ranks only fourth in 30-day trading volume, according to NFT Pulse.

Legal matters

To make matters worse, the company is facing an investigation from the US Securities and Exchange Commission.

In August, Finzer announced that his company had received a Wells notice, or formal communication from the SEC that an entity is subject to potential litigation.

The agency was probing whether NFTs on its platform were unregistered securities, Finzer said.

“We’re shocked the SEC would make such a sweeping move against creators and artists,” he wrote on X. “But we’re ready to stand up and fight.”

On the heels of the Wells notice announcement, OpenSea users lodged a lawsuit against the NFT marketplace in September.

The plaintiffs are represented by Adam Moskowitz, a lawyer behind some of the largest class-action lawsuits in crypto.

“Conjuring from thin air a purported class action lawsuit based on our disclosure of an SEC Wells notice won’t make the allegations in the complaint true,” an OpenSea spokesperson previously said in a statement to DL News.

Correction: A previous version of this story incorrectly reported that Justin Jow left OpenSea in the last three months. He departed the company in February.

Ben Weiss is DL News’ Dubai Correspondent. Got a tip? Email at bweiss@dlnews.com.

“Absurd,” said Kraken founder Jesse Powell.

“Unamerican,” tweeted Tyler Winklevoss, the CEO of Gemini.

Devin Finzer, the co-founder and CEO of OpenSea, also weighed in.

“We’re shocked the SEC would make such a sweeping move against creators and artists,” he wrote in response to an SEC letter warning of a potential enforcement action.

Jokes spread online depicting the Mona Lisa, Pokemon cards, and digital sports tickets as the SEC’s next potential targets. They mocked the idea that images and artwork could be construed as securities, and subject to federal laws.

But OpenSea, one of the largest global marketplaces for NFTs, has taken actions that suggest it has been aware for years that some NFT collections listed on its site are more than just art, according to three former employees of OpenSea, as well as company documents seen by DL News.

Delisted and disabled

OpenSea has regularly delisted or disabled non-fungible tokens, or NFTs, that may behave like financial instruments. It has targeted “anything which promised returns, had a token, or could be construed as a security in any way,” a person familiar with the practice told DL News.

The company issued a vocabulary guide directing employees to avoid using financial terms such as “broker,” “shares,” “trading” or “exchange,” in their communications, according to one company document.

While crypto leaders may scoff at the idea that NFTs are securities and ridicule Gensler and the SEC, OpenSea’s longstanding efforts to weed out problematic collections complicates the narrative. Aware of potential problems, the company acted.

A spokesperson for OpenSea declined to comment on questions sent by DL News for this article.

OpenSea’s tangle with the SEC comes as the venture struggles to recapture the mojo that drove the NFT space to such giddy heights in 2021. OpenSea’s revenue multiplied more than 18 times between the second and third quarter that year, to $167 million, according to an internal document.

Now, as the popularity of Bored Ape Yacht Club and other NFTs wane, OpenSea’s monthly volume has plunged about 55% in the last 12 months, to $36 million, according to Dune Analytics.

Through it all, OpenSea has laboured to screen the many NFT collections that have been listed on its platform.

Disabled turtles

In October 2021, OpenSea disabled trading of a collection called DAO Turtles after finding the pixelated images of the shelled amphibians violated its terms of service, according to social media posts by DAO Turtles.

That meant visitors to OpenSea could still see the NFTs, but they couldn’t buy or sell them.

OpenSea told DAO Turtles’ team that NFT collections could not use the platform to carry out financial services such as ”listing, or buying securities” and similar instruments, or fundraising, according to a screenshot of an email.

While OpenSea did not provide any details on precisely why DAO Turtles raised a red flag, the NFTs were more than images on a blockchain.

Owners could collect royalties from future releases, and receive an associated cryptocurrency called Turtleshells, according to an archived version of the project’s website.

Not just art

Other collections OpenSea delisted or disabled on its site for violating the prohibition on financial assets include Steady Stack, and Yaypegs, said a former employee.

The teams behind DAO Turtles and Yaypegs did not respond to requests for comment. A representative for Steady Stack could not confirm why the collection was delisted.

Non-fungible tokens don’t just represent art. Many stand in for physical objects, virtual real estate, and more.

Regulators have been building cases that NFTs can be securities or regulated financial instruments. In May 2023, former OpenSea employee Nate Chastain was convicted in the first-ever NFT insider trading case.

“We have a strong responsibility to our community, and we take any breach of trust incredibly seriously,” wrote Finzer after Chastain resigned.

And archived versions of OpenSea’s website show that it hosted three collections that the SEC later slapped with securities-related charges.

The collections — Impact Theory, Stoner Cats, and Flyfish Club — settled with the SEC without admitting or denying allegations.

Terms of service

From the get-go, OpenSea addressed the financial capabilities of NFTs in its terms of service.

“WE ARE NOT A BROKER, FINANCIAL INSTITUTION, OR CREDITOR,” reads the earliest archived copy of its terms of service from August 2018, which was printed in all caps to hammer the point home.

Two years later, in October 2020, OpenSea added clauses that prohibited users from “any financial activities subject to registration or licensing, including but not limited to creating, listing, or buying securities, commodities, options, real estate, or debt instruments.”

‘Can you use an NFT to make a securities offering? Absolutely.’

Philip Moustakis, securities lawyer

The marketplace also barred any assets “that are redeemable for financial instruments or that give owners rights to participate in an ICO or any securities offering.”

ICO is an acronym for an initial coin offering, a token distribution practice the SEC targeted around 2018.

In 2022, the SEC began to send OpenSea information requests, The Verge reported in August. As part of that process, the company received a Wells notice, which is a notification the agency sends to the target of a potential enforcement action. Finzer said in August that OpenSea received the notice “recently.”

Securities offering

If the SEC sues OpenSea, it would have to show that certain NFT collections the company listed are unregistered securities, said Philip Moustakis, a New York-based securities lawyer at Seward & Kissel.

“Can you use an NFT to make a securities offering? Absolutely,” he told DL News.

Moustakis added that it’s not about the technology, but rather the offering, or the initial sale of objects, which can be pieces of paper, computer code, or even citrus groves.

Generally, the SEC follows legal guidance that an asset is a security if purchasers have a “reasonable expectation of profit from others.”

On September 19, users sued OpenSea for allegedly offering NFTs that behaved like financial instruments.

“NFTs are treated like securities by OpenSea despite being unregistered with the SEC,” said the complaint, which is being managed by Adam Moskowitz, a lawyer behind some of the largest class-action lawsuits in crypto.

OpenSea rejected the claim.

“Conjuring from thin air a purported class action lawsuit based on our disclosure of an SEC Wells notice won’t make the allegations in the complaint true,” said an OpenSea spokesperson. “We refute these allegations and look forward to defending against this baseless lawsuit.”

‘Whack-a-mole’

It fell to OpenSea’s Trust and Safety compliance team to police the huge volume of content hitting the site day in and day out. The NFT marketplace’s legal and moderation teams were “dedicated beyond belief” and used computer programmes to sift through the flood of content hitting the site, said one former staffer.

“But if you’re ingesting every NFT on many blockchains, it’s just whack-a-mole,” they said.

In the third quarter of 2023, OpenSea delisted more than 20,000 collections that directed users to websites that were likely steal users’ crypto, according to an internal document.

‘If you’re ingesting every NFT on many blockchains, it’s just whack-a-mole.’

Former OpenSea employee

The platform also dealt with users attempting to list collections that purported to give purchasers membership to “an exclusive wealth club,” one person said.

And it wasn’t always easy to parse whether a user was buying an NFT for the art or for its promised rewards, said another ex-staffer.

(The three former employees asked not to be named because they were not authorised to speak publicly about OpenSea’s internal policies.)

NFT issuers were not happy when they got flagged.

“We engaged constantly with people who were mad about their collections not being able to trade because we’d delisted them for potential financial elements,” another former employee said.

Employees in an all-hands meeting were instructed to watch what words they use when talking to each other or the public about NFTs, according to an internal document.

Instead of “profit,” employees were instructed to say “appreciation” or “value change.”

‘Fun ride’

DAO Turtles did promise to “bring value” to its holders, according to its site, and OpenSea took action.

When users could no longer buy or sell DAO Turtles NFTs on the platform, the collection cratered.

“Our project has been frozen on OpenSea quite early on, which killed our momentum completely,” wrote the DAO Turtles team in a May 2022 message on Discord.

Almost one year later, DAO Turtles released a video game based on its moribund NFT collection.

“This brings our story to an end,” wrote the team at the time. “It was a fun ride.”

Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.

Despite millions in venture funding, crypto versions of big-budget AAA games have failed to materialise.

But Aleksander Larsen, co-founder of Axie Infinity creator Sky Mavis, still believes. Indeed, he said crypto games’ brightest days are yet to come.

“The potential for blockchain games is actually to be a provider of jobs for hundreds of millions of people around the world,” Larsen said in an interview with DL News. “It will create GDP for the world in a way that we have never even thought about.”

“That is actually not dystopian to me,” he said.

Larsen’s unabashed promotion may raise an eyebrow, but not too long ago Axie Infinity was a phenomenon.

In 2021, it was the most popular game in crypto and its token soared to a $10 billion market value as Bitcoin hit all-time highs.

But the game soon lost its appeal. Many players fled as the game’s AXS token fell 96%. Some critics even compared the way the game worked to a Pyramid scheme.

While the mania is over, it’s not forgotten. Many players, Larsen said, are still nostalgic for those heady days where they could make thousands of dollars a month playing the game.

“They love the connection that they had with their guild mates,” he said.

It’s this comradery and community building, Larsen said, that could drive crypto games to new heights.

But there’s also a darker side to the hyper financial world of crypto gaming that the industry may find difficult to reconcile.

Define ‘Fun’

A common criticism of blockchain games is that they aren’t fun in the same way more conventional games are.

Players have said Axie Infinity was boring and stressful, and admit they only played it because they could make money doing so.

Larsen argues that the definition of fun is broader.

“I think games are entertaining,” he said. “I’m a competitive gamer. When I play games, I want to win. I want to crush someone. I’m not smiling when I’m playing a game. To me, it’s not necessarily fun — It’s entertaining.”

But in Axie Infinity, winning or losing isn’t just about one’s prestige in the game — it determines how much money players make.

Axie isn’t the first time video games and finance have intersected.

Players earning in-game currency and selling it to other players for cash are an enduring phenomenon in popular multiplayer role-playing games, despite the practice usually being against the rules.

However, in those games, participating in their shadow economies is optional. Most players don’t view their in-game items as having an explicit dollar value.

But in Axie Infinity, the financialisation is ingrained.

It’s this feature that has created the most issues, but also potentially allows the game to create jobs and wealth as Larsen envisions.

Luring new players

At its peak, Axie Infinity boasted some 2.7 million monthly active users. That’s dropped to just 325,000 over the past 30 days.

Sky Mavis is exploring new ways to get more people playing. “We always look for distribution platforms — how can we get users who are not into blockchain through different channels,” Larsen said.

Telegram, and the tap-to-earn games on its associated TON blockchain, are of great interest. These simple mobile games centre around players taping their screens to progress. One game, called Catizen, claims to have over 3.3 million daily players.

But there are reasons to be sceptical. Such tap-based games lack depth. Many players are only there because of the promise of a token airdrop.

Larsen wants to make better use of the opportunity.

He said Sky Mavis is in the process of launching its first games inside Telegram using its in-house crypto wallet called Ronin.

“It’s actually not about the games themselves,” he said. “It’s about the access to the users on the network.”

Saddled with debt

But even with a good distribution network, Axie Infinity needs to be compelling.

At the heart of the game’s previous success was its ability to make players rich.

Players earn valuable tokens through the game. But to participate, they need those tokens to create Axies, the cute Pokemon-like creatures key to Axie Infinity’s gameplay.

As more people saw the money they could make playing the game, demand for Axies — and the tokens needed to create them — exploded.

By mid-2021, rich western players, tired of grinding the game themselves, were outsourcing the job to those in developing countries like the Philippines, a practice known as providing scholarships.

Many players in the Philippines profited from such scholarships, often earning more than they could through conventional jobs.

There’s also the argument that games like Axie Infinity could help offset future labour surpluses caused by increased automation.

“We’re not going to need all the jobs that we have,” Larsen said. “They’re going to have to find other things to do. That could be in the digital space.”

But not everyone is convinced. Many have criticised the inherent power dynamics of scholarships, and even called the practice “digital colonialism.”

“It’s very easy for them to attack from a Western perspective,” Larsen said. “Maybe human beings want to evolve and do the things that they want to do, rather than us setting the parameters for what’s okay for them to do.”

A volatile economy

There’s also the issue of Axie Infinity’s volatile economy.

When it crashed in early 2022, the once-valuable Axies became almost worthless. Many Filipino players were saddled with the debt taken out to play the game, with no way to pay it off.

Larsen said Sky Mavis has taken steps to help Filipino players get more educated with the game and its underlying technology.

But several issues remain.

Axie Infinity wasn’t sustainable. The game relied on continual new demand for the tokens earned by players.

The money earned by scholars in the Philippines was fueled by demand from richer western players hoping they could make even more money investing in the game.

Larsen said Sky Mavis is exploring more sustainable crypto game economies. It’s also launched several spin-off games.

“We’re just in a very, very early inning,” Larsen said. “It’s wrong to judge the games on where they are today without looking forward to what they will become.”

A newer version of the game, Axie Infinity: Origins, doesn’t involve crypto.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Dubbed Seeker, the new iteration’s revenue is almost five times the level of Solana’s debut crypto phone, Saga. The Seeker isn’t expected to hit the market until the summer of 2025.

So, what is driving the demand? New markets.

“More than half of our order volume is coming from Asia-Pacific countries, a region in which we previously could not sell phones,” Emmett Hollyer, general manager of Solana Mobile, told DL News ahead of this week’s Token2049 conference in Singapore.

Launching a new mobile phone, even one without crypto components, is a daunting task. It’s one of the most regulated industries in the world and already dominated by Apple and Samsung.

Not only that, but Solana Mobile’s first attempt fell far short of expectations. In 2023, the firm sold 20,000 units in total, far fewer than its 50,000 unit goal.

So far, the firm’s second attempt is doing much better.

Seeker already has more than 140,000 preorders. It’s not just new markets driving this growth, either, said Hollyer.

SOL, the blockchain’s native cryptocurrency, has climbed 27% this year, which is twice better than Ether.

The new phone, Hollyer said, comes with a few key changes thanks to user feedback.

What’s new with Seeker?

The phone is lighter, the screen is brighter, its battery lasts longer, and it’s cheaper than the Saga. When Saga was first launched, it cost $1,000. Four months later, the price was slashed by 40%.

“All those things come together on Seeker and are available at a lower price point of $500 and available in more markets,” said Hollyer.

The new phone’s crypto components weren’t forgotten in the upgrade either.

The Seed Vault, where users store their crypto seed phrases, has become a slick crypto mobile wallet.

One new feature, for instance, lets users double-tap their screen to sign historically clunky crypto transactions.

Solana Seeker device comes with a soulbound NFT that will unlock various rewards programs for owners. Credit: Solana Mobile.

Hollyer told DL News that the phone, like its predecessor, will also be a “rewards magnet” for buyers.

Users who bought the Saga phone were also airdropped the dog-themed memecoin BONK. At one point, the amount of BONK included in the phone covered the costs of the phone.

The Seeker will come with memecoins, too, but today, it’s not nearly enough to cover the device’s costs. Twoloot, which tracks the prices of memecoins included with the phone, shows that users can expect a $250 payout.

Bootstrapping beyond memecoins

Instead, Hollyer said two specific sectors, in particular, will drive rewards for the device: Decentralised physical infrastructure networks — or DePINs — and token launching platforms.

Crypto’s DePIN sector offers a way to reward users for providing real-world data or sharing computing power for a network.

“Talking to our users, they see their phone as an underutilised asset,” said Hollyer. “You know there’s constantly data that you’re picking up, that you’re sharing, and so finding ways to use your phone to more directly participate in DePIN networks is something we expect to come forward with Seeker.”

Token launching platforms — like the massively successful Pump.fun and similar venues — have at times generated more revenue than entire blockchains.

On the Google and Apple app stores, however, creators would need to pay 30% of that revenue to the app stores.

That’s not the case for the Solana store.

“Given that our store is crypto-friendly and has zero fees,” he told DL News. “That’s going to be another huge one.”

Liam Kelly is a DeFi Correspondent for DL News. Got a tip? Email him at liam@dlnews.com.

Several projects on the Telegram-linked blockchain, including Hamster Kombat, Blum, and Catizen, are primed to reward their teeming users with more than $1 billion worth of tokens this month.

While the excitement is palpable, concerns are mounting over the recent arrest of Telegram founder Pavel Durov in France and the network’s ability to handle the strain of airdrop claimants who will number in the hundreds of millions. An airdrop is when users of a crypto network are given tokens for being users.

Still, the TON team is confident the network’s infrastructure is up to the task, even if minor hiccups occur.

“It would not be realistic to expect no issues to arise when we are discussing potentially onboarding hundreds of millions of people,” TON Society co-founder Jack Booth told DL News. “Nothing like this has ever been attempted before, and we’re proud to be making history.”

Booth also dismissed fears that Durov’s arrest, which spooked investors, would affect the airdrops.

Network outage

During the DOGS airdrop last month, TON’s network went offline for two hours.

DOGS is a TON-based memecoin project that distributed $550 million worth of its tokens to users. The project attracted 53 million players.

Despite the network outage, Booth said the airdrop was a success, citing the 17 million wallets that claimed tokens.

Booth told DL News that TON achieved in two weeks what it took major blockchains much longer: onboarding millions of users.

“TON now counts itself as part of an extremely rare class of blockchains, where too much usage has led to problems,” Booth said. “With every problem exposed and resolved, TON blockchain and the infrastructure supporting it continues to grow stronger.”

Many of the forthcoming projects boast even greater numbers. Here are three highly anticipated TON airdrops.

Hamster Kombat

Hamster Kombat launched in March and peaked at 300 million global users, though an indeterminate number could be bots.

It’s a clicker mini-game where users embody a Hamster avatar to be groomed into a virtual crypto exchange CEO.

Users level up their avatars by tapping to earn coins and completing daily tasks. There’s also a mining level where users can upgrade the speed at which they acquire in-game tokens.

Hamster Kombat plans to airdrop its HMSTR token on September 26, but users have reason to be cautious.

That’s because the airdrop was originally billed to hit the market in July.

Catizen

Catizen is a cat-themed clicker game on TON.

The goal is to breed cats to earn tokens, a pitch the project claims has attracted 34 million users. About 800,000 of them are paying customers.

After postponing an earlier distribution, Catizen will airdrop its CATI tokens to users on September 20.

That delay was due to player backlash over the project’s $100,000 donation to animal rights group PETA.

Blum

Blum is one of the few TON clicker games that isn’t animal-themed.

It’s a vertical scrolling game, and players level up by collecting pixelated flower petals to increase their in-game score.

Players also complete daily tasks to improve their scores and can invite friends by sharing their codes.

The project claims to be backed by two former Binance employees and has amassed over 60 million users.

Blum’s airdrop is also scheduled for September 20 and has secured backing from Binance.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.

Such non-custodial wallets allow users to store their crypto without relying on centralised platforms such as exchanges or banks.

The Spend card can be used across Mastercard’s 100 million-plus global network of merchants, and it integrates with both Apple Pay and Google Pay.

For crypto users, the Spend card provides a fast, cost-effective, and globally accepted way to convert and spend crypto directly from their wallets, bypassing the need for traditional intermediaries, the release said.

Mercuryo noted that Spend is a multi-chain card, compatible with various blockchains including Ethereum, Solana, Injective, Near, ZKsync, Polkadot, TON, and more.

This flexibility allows users to spend crypto assets across different chains.

Users can maintain separate balances for their wallet and Spend card, providing more control over their funds.

The cards also avoid extra costs and wait times, according to the release.

On Wednesday, the X accounts of Donald Trump’s daughter and daughter-in-law — Tiffany and Lara Trump — were compromised and started shilling a Solana-based token.

The hacked accounts posted now-deleted tweets promoting a project called “World Liberty”, a purported DeFi lending protocol.

“We want to take power away from centralised banks and give it back to the people,” read one of the posts.

Average American

The provided link led to a website claiming to be “empowering the average American digitally,” complete with images of Donald Trump, the former US president and the Republican Party’s nominee in the 2024 election.

The site was created on September 3 and is registered to a private domain hosting service in the Caribbean nation of Saint Kitts and Nevis called Njalla Okta. CNBC reported that the site was set up by a co-founder of The Pirate Bay, a dark web marketplace.

The suspicious token is up 20% since its debut, according to CoinGecko.

This incident follows a report from CoinDesk revealing new details about the long-awaited Trump crypto project. Initially referred to as “The Defiant Ones”, the project now appears to have been rebranded as “World Liberty Financial.”

CoinDesk also reported that the white paper for the Trump project bore a “striking resemblance” to one from a recently hacked DeFi app called Dough Finance, which lost $2 million in a breach in July.

Several members of Dough Finance are listed in the white paper as working on the Trump crypto project.

Regaining control

Despite the hack, the Trump family regained control of their accounts within minutes. “X was amazing,” Eric Trump, Lara’s husband, posted in response.

Other projects have struggled for weeks to resolve similar issues, with scammers frequently taking advantage of compromised accounts to promote fake crypto schemes. DeFi Kingdoms, the web game, had to wait 10 days to get back into its account.

please stop buying these fake scam tokens! buy our real scam token, which is coming soon pic.twitter.com/Z4YrR1rcjJ

— Molly White (@molly0xFFF) August 8, 2024

The irony of Trump’s crypto project issuing warnings about scams was not lost on social media.

“Please don’t fall for the fake scam! Wait for the launch of the real scam!” quipped crypto researcher Molly White on X.

Despite once calling cryptocurrency a “scam” himself, Donald Trump has made a sharp U-turn in recent months and emerged as a vocal advocate for the industry in the US.

“The rules will be written by people who love your industry, not hate your industry,” Trump said in a July speech at Bitcoin 2024 in Nashville.

Trump NFTs

Last week, Trump released his fourth collection of Trump-themed NFTs and continues to promote a range of crypto-related products, including Bitcoin-themed shoes.

This shift appears to be resonating with some voters.

A recent poll conducted by Fairleigh Dickinson University shows Trump leading Vice President Kamala Harris by 12 points among likely voters who own cryptocurrency, with Trump receiving 50% of the support compared to Harris’ 38%.

Trump’s newfound enthusiasm for crypto seems to have influenced his family as well.

Last month, when Eric Trump teased the family’s crypto project on X he said he had “truly fallen in love with Crypto/DeFi.”

Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.

The CEO of Hero Games and an early investor in Game Science — the studio behind the new web2 blockbuster Black Myth: Wukong — said he had seen a lot of game industry entrepreneurs pivoting to web3 after it came out.

But he remains sceptical of web3′s value.

“I would never invest in those people,” he said in an interview with Chinese angel investment company Zhen Fund on Monday.

“They don’t love games, so how can they make good games? It’s a very simple truth,” he added.

Wu’s comments did not go down well with those working in web3 gaming.

Silly notion

“It’s a really silly notion that web3 entrepreneurs don’t love games,” Gabby Dizon, the founder of Yield Guild Games, told DL News.

“There are plenty of both new and longtime game developers that are looking for innovation in the game industry by adding web3 elements,”

Based on the Chinese classic Journey to the West, Black Myth: Wukong, has broken records since its launch on August 20.

With 2.4 million users, it’s the second ranked game on Steam by concurrent players, after PUBG: Battlegrounds. Black Myth: Wukong is already outpacing blockbusters such as Counter-Strike 2, Dota 2, and Elden Ring.

It’s so hot right now that you can even play the game in nightclubs in Shanghai.

And more than 1.1 million gamers tried to reserve physical copies on Chinese ecommerce site JD.com.

Heralded as China’s “first AAA game,” Black Myth: Wukong is viewed as a watershed moment for the nation’s gaming industry, which has historically been dominated by mobile titles.

Shrinking cadre

Yet he might be part of a shrinking cadre of gaming investors who think so.

Despite web3 gaming’s underperformance, investors poured $1.1 billion into the sector in the second quarter, a 314% increase from the previous quarter and the best performance since the third quarter of 2022, according to a July report by DappRadar.

Notable investors have continued to show confidence in the space. A16z raised $600 million for a gaming fund dedicated to supporting game studios, while Bitkraft Ventures launched a $275 million fund for early-stage investments in gaming and interactive media.

The influx of capital into web3 doesn’t guarantee that gamers will follow.

Dizon points to games like Parallel that he says are enjoyed both by people who are playing the game free-to-play and by web3 gamers that are looking for asset ownership to enhance their game experience.

Blockchain games account for 28% of all dApp activity and attract around 2.8 million active wallets per day. That said, wallet activity does not necessarily equate with the actual playing of a game.

The influx of capital into web3 doesn’t guarantee that gamers will follow.

Traditional game developers remain split on the value of incorporating blockchain into gaming. Some of its harshest critics include Microsoft Gaming CEO Phil Spencer, who has been vocal in his opposition to NFTs and blockchain in games.

In 2022, Spencer criticised play-to-earn models as exploitative, warning that they risk turning players into a workforce for others to profit from.

Under his leadership, Mojang Studios—owned by Microsoft—updated its Minecraft community guidelines that year to explicitly ban NFTs and blockchain elements in the game.

Still, other developers have embraced the technology. Square Enix has signaled openness to blockchain experiments, while Nexon recently announced a web3 game based on its successful MapleStory franchise.

But the success of Black Myth: Wukong remains something web3 game developers can only dream of.

Correction: Due to an editing error, the headline in this story incorrectly reported Dan Wu was the CEO of the company behind Black Myth: Wukong. He was an investor.

Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.

Crypto luminaries reacted to the news OpenSea had become the latest target of the US Securities and Exchange Commission and its hard-charging chair with a mixture of outrage and befuddlement.

“This is obviously absurd on its face,” tweeted Kraken co-founder Jesse Powell.

“Gensler screws up again,” billionaire investor Mark Cuban posted on X.

“Congrats and welcome to the club,” quipped Coinbase CEO Brian Armstrong. “I’m long Wells notice companies.”

NFTs are securities?

After a quiet summer in the SEC’s three-year crackdown on crypto, OpenSea, the second biggest NFT marketplace, said Wednesday that it had received a notification — known as a Wells notice — it was the target of an investigation.

The issue, OpenSea CEO Devin Finzer said on X, is that the agency is probing whether NFTs sold on the site should be registered as securities.

The move would be consistent with Gensler’s longstanding contention that most cryptocurrencies are regulated under the same 90-year-old laws that govern stocks, bonds, and other securities.

While the SEC has accused Coinbase, Kraken, and Binance, among other ventures, of offering unregistered securities it now appears poised to designate NFTs the same way.

Congrats and welcome to the club!

I’m long wells notice companies. https://t.co/cye8T5AlyS

— Brian Armstrong (@brian_armstrong) August 28, 2024

The disclosure by OpenSea is just the latest dose of bad news as NFTs struggle to shake off a bear market. Volume on OpenSea has plunged 82% this year, to 240.6 ETH, according to DefiLlama data.

OpenSea, which was valued at $13 billion following a fundraising round in 2022, has lost its top position in the marketplace to archrival Blur, according to DefiLlama data.

‘Artworks and collectibles aren’t securities, whether painted on canvas or coded on a blockchain.’

Katie Haun, Haun Ventures

No surprise, crypto supporters were agog at the notion nonfungible tokens, which tend to be digital images, should be regulated the same way as securities.

Katie Haun, the founder and CEO of Haun Ventures, also picked up in that thread.

“Artworks and collectibles aren’t securities, whether painted on canvas or coded on a blockchain,” said Haun on X. Her firm is an investor in OpenSea.

As it happens, museums and fine art auction houses such as Sotheby’s and Christie’s have continued to utilise NFTs even as their popularity has cratered.

Anthony Scaramucci, the hedge fund manager and crypto investor, expressed astonishment at the development.

“Gary Gensler, are digital US Open tickets now a security?” he tweeted referring to the pro tennis tournament underway in New York.

The @SECGov is now trying to claim that NFTs are securities. What's next? Baseball cards? Comic books? @GaryGensler's bad faith and un-American war on crypto is expanding. Digital web3 creators and artists are now in the crosshairs. https://t.co/boCbFI0O3p

— Tyler Winklevoss (@tyler) August 28, 2024

Tyler Winklevoss, the co-founder and CEO of Gemini, said the news was the latest sign the SEC’s “war on crypto is expanding.”

“Digital web3 creators and artists are now in the crosshairs,” he said.

‘They’re not dumb.’

For his part, Kraken’s Powell speculated the SEC was just trying to monkeywrench the industry and cared little for the merits of its actions.

“They aren’t that dumb. The point isn’t to win,” Powell complained. “The Point is to distract, waste resources, spread fear, uncertainty and doubt and slow us down.”

A spokesperson for the SEC said the agency would not comment on the “existence or nonexistence of a possible investigation.”

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.

Lee, who goes by S.Y., eventually sold the startup, Radish, for $440 million in 2021, and quickly co-founded a new project: a blockchain to store and track the use of intellectual property.

Now, Lee has finally caught Andreessen Horowitz’s eye. The VC’s blockchain-focused arm, a16z crypto, has led three rounds of investment in Lee’s company, PIP Labs, including an $80 million round Lee announced on Wednesday.

“They’re tripling down, which is pretty rare from what I know,” the PIP Labs CEO and co-founder said.

‘Economic covenant’

PIP Labs is the main developer of the Story blockchain, which is a rebrand of an earlier name, Story Protocol.

Like many crypto projects, there will also be a corresponding nonprofit called Story Foundation, Lee said.

Other investors in the Series B raise include Polychain Capital, the well-known crypto VC; Scott Trowbridge, senior vice president and board member at Stability AI; and Cozomo de’ Medici, the NFT collector.

Lee declined to disclose his company’s most recent valuation or how much a16z committed in the fundraise. He added that $80 million was for equity in PIP Labs, not future tokens.

“The economic covenant underlying the internet — content creators providing supply and content distributors providing demand — is being upended by the proliferation of AI,” Chris Dixon, founder and managing partner at a16z crypto, said in a statement. “PIP Labs is building the necessary infrastructure for a new covenant.”

The $80 million round is the second raise in less than a year for PIP Labs and one of the summer’s biggest deals in crypto, per Crunchbase’s Web3 tracker.

The fundraise comes amid a recent deceleration in the number of crypto venture deals. The second quarter saw an almost 13% decrease in deal count from the first, according to a recent report from Pitchbook.

$140 million

Story is one of a number of projects to use blockchains to store, document, and transfer intellectual property rights.

Even the European Union has explored how distributed ledgers can help businesses protect their IP.

In September, PIP Labs announced that it had raised more than $54 million in a round led by a16z with participation from angel investor Balaji Srinivasan, Paris Hilton’s venture firm 11:11 media, and former Microsoft executive Charlie Songhurst.

Lee said that September’s announcement combined $30 million in seed funding and $24 million from a Series A raise.

He said that, after the announcement, there was additional funding of $6 million, which brings the total PIP Labs raised over its three rounds to $140 million.

Since September, co-founder Jason Zhao has said that his startup will launch its blockchain later this year.

The forthcoming chain is compatible with code written for Ethereum, one of the most popular blockchains for crypto developers.

Data-devouring cows

Lee envisions Story to be a potential solution to the rise of generative artificial intelligence.

For tech giants like OpenAI, the success of their language models depends on terabytes and terabytes of data.

However, there’s only so much quality text, photos, and videos floating around on the internet.

“They’re already running out of great data,” Lee said. “They’re really running out of great IP.”

A recent study from the research group Epoch AI claimed that tech giants will exhaust the supply of publicly available text for AI language models somewhere between 2026 and 2032.

A pitch deck for PIP Labs that Lee sent to DL News likened the state of play to a herd of cows that progressively deplete grasslands until those lands become barren.

“Who will have an incentive to create content if the data feeding the cows has no sustainable business model supporting its production?” read the deck.

That’s where Story comes in, Lee said. The blockchain will incentivize creators to register their IP on the decentralised database, since they can control what royalties they receive and track who remixes their data.

“It’s going to take time,” he said, “but I think it’s a very long-term vision that we want to build out.”

Ben Weiss is a Dubai Correspondent at DL News. Got a tip? Email him at bweiss@dlnews.com.

Enter Donald Trump’s latest sneaker collection — an eye-popping pair of shoes that scream crypto chic louder than a blockchain bro at a Bitcoin conference.

In a hue that might be Bitcoin orange but could equally be inspired by the shade of Trump’s spray tan, these $499 high-tops are already reselling for thousands on eBay.

Complete with a US flag, the Bitcoin logo and the words “Trump crypto president” on the side, they are so gaudy that I want them desperately.

If only for the absurdity and potential for social experiments.

Instant magnet

Wearing crypto merch in public has a strange effect. It turns you into an instant magnet for punters who flock to regale you with their tales of trades past.

I know this because I used to have a Bitcoin T-shirt when I lived in London several years ago. Random crypto nerds would strike up conversations when I wore it.

I was high-fived at an underground station in South London. A guy in a kebab shop — who was still buying Luna tokens even after Do Kwon became a fugitive — gave me a free Coke. A personal trainer at the gym, quite unprompted, lectured me for an hour about technical analysis.

Wearing that top was a not-so-secret handshake into the weird world of crypto enthusiasts. To everyone else it was, of course, a social repellent.

Trump is way late to the party. The internet is awash with bizarre crypto merchandise.

‘Diamond Hands bundle’

You can decorate your sofa with cushions printed with the logos of major blockchains. You can buy “physical Bitcoins.” There’s socks and posters, keychains, neon lights, phone cases, silk neckties, stickers and coasters.

For $700, you can buy something called the “Diamond Hands bundle” on Etsy, which is a collection of gold coins stamped to look like different tokens, complete with stands to display them in.

Or perhaps the $150 set of crypto tarot cards? A solid gold bitcoin necklace? A bust of Satoshi? Bedsheets?

And the t-shirts. So many t-shirts...

“Crypto is for virgins.”

“Crypto is freedom.”

“Block Chains Matter.”

“Bitcoin is hope.”

“Kiss me I bought Bitcoin in 2010.”

Even attempts to go mainstream with crypto fashion have had their moments.

Remember when NFTs were a thing? Some very unattractive Bored Ape trainers popped up in Skechers stores thanks to a Snoop Dogg collaboration. Now comes Trump.

Because nothing says the future of finance like overpriced, tacky kicks.

And yet I still want them.

Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.

To join the Mutant Cartel you have to do a little more — you have to take an oath, or more precisely purchase an “oath NFT.”

The floor price is 0.07 ETH, or $228, with get holders a seat at the Cartel’s table and status as a Made Mutant.

“They’ve doubled down on their commitment,” said Calum Morrison, the co-founder of Novel Labs, which runs Mutant Cartel.

Die-hards

Don’t remind Morrison and his fellow Bored Ape die-hards that the collection’s value has tumbled 94%, to 9.28 ETH, since its all-time high in May 2022.

It’s probably best not to mention that NFTs have been left behind in a bull market that has propelled Bitcoin 60% this year.

NFT die-hards such as Morrison and fellow Mutants still believe. He views non-fungible tokens as ideal for world-building, and says the NFT space blends the best of being a member of a football fan club and writing fan fiction.

“You have to enjoy being at the frontier of art and tech to even operate in the NFT space,” he said.

Yuga Labs, the studio that owns BAYC and its spinoff collections, still enjoy support from venture capital and web3 heavyweights such as a16z and Animoca Brands.

Members of the ApeCoin DAO, which is separate from Yuga Labs, are even voting on a proposal to create a Yuga-themed hotel in downtown Bangkok.

Hard reality

The plan, of course, may never come to fruition. And the hard reality is that NFT collections such as Yuga’s are struggling to recapture some of the pixie dust that electrified web3 a couple of years ago.

The days of high-profile endorsements from the likes of Snoop Dogg and Paris Hilton seem long ago. Yuga Labs’ vow to build a complex metaverse platformhas yet to yield a working model.

A meet-up of Bored Ape fans last year seemed to sum up the market’s woes when stage lights at ApeFest in Hong Kong caused some attendees to need medical treatment for eye pain.

Moreover, the promise of royalties on secondary sales of NFTs fizzled out.

“Secondary royalties as a revenue source for many creators and projects vanished with the arrival of Blur,” said Morrison, referring to an NFT marketplace that shunned the practice.

“Companies lacked the financial reserves to survive. The sudden loss of royalty revenue devastated many in the space.”

Even so, the diehards are still working to profit from Yuga brands in the real world, but that’s not going so well either.

Lack of consensus

A Bored Ape-themed cafe in Hong Kong that sold both burgers and Tether was shut down last year by police. It, like several other OTC crypto shops in Hong Kong, was linked to collapsed cryptocurrency exchange JPEX.

No surprise, there is a lack of consensus at ApeCoin DAO on the best ways to push the brand forward.

Members regularly submit proposals seeking funding for various Ape-related ventures but few garner enough support. One proposal requested $3.2 million to fund a comedy event company, Laughing Ape.

“WE WILL ACTUALLY BRING ABOUT MASS ADOPTION TO THE NORMIES who will use $APE for their everyday Laughing Ape purchases and perks,” the proposal claimed.

It failed.

‘Why would the average hotel customer want to stay in a room that appears to be an advertisement for Yuga’s NFT collections.’

Matt Borchert, ApeCoin DAO

Another proposal aimed to promote Yuga Labs IP via influencers on Instagram, TikTok, and YouTube, aiming to “create awareness within the normies and introduce them to the Bored Ape Yacht Club as the best club in the world.”

This proposal also failed to gain sufficient support.

The authenticity of these proposals is sometimes questioned. Several DAO members have suggested the hotel proposal might be a scam.

Despite the scepticism, many users still offer up ideas to take Yuga mainstream. Some users envision brick and mortar club houses owned by the community in major cities like New York, Miami, London and Hong Kong.

Need to be realistic

Yet there is perhaps an irony to it: holders are paying people to use their IP instead of the other way around.

And even then there’s a worry people just don’t want it. As one commentator noted on the Bangkok hotel proposal, the demand for Ape-themed items just isn’t there.

“Why would the average hotel customer want to stay in a room that appears to be an advertisement for Yuga’s NFT collections, of which the most common public perception is that they were a scam?” wrote ApeCoin DAO member Matt Borchert.

“It’s tough out there and we need to be realistic.”

Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.

“We’re aware that one of our multisig wallets has experienced a security breach,” WazirX’s X account said in a post at 8:48 am London time. “Our team is actively investigating the incident.”

Blockchain security firm Cyvers was among the first to spot the hack.

🚨ALERT🚨Hey @WazirXIndia, Our system has detected multiple suspicious transactions involving your Safe Multisig wallet on the #ETH network.

A total of $234.9M of your funds have been moved to a new address. Each transaction's caller is funded by @TornadoCash.

The suspicious… pic.twitter.com/4sajAwd4Hb

— 🚨 Cyvers Alerts 🚨 (@CyversAlerts) July 18, 2024

Suspicious transactions began moving funds out of one of WazirX’s Ethereum wallets at around 6:19 am.

In Just over an hour, almost $235 million in assets had been drained.

Among the loot was over $102 million worth of Shiba Inu, a dog-themed memecoin.

The hacker also stole $53 million worth of Ether and $11 million worth of Polygon’s MATIC token, along with smaller amounts of over a dozen more tokens.

Onchain records show the hacker is already selling portions of the stolen crypto.

WazirX held $503m worth of assets, according to the exchange’s June proof of reserves report. The $235 million loss accounts for 46% of its total assets.

WazirX has since suspended cash and cryptocurrency withdrawals.

The hack adds to the $684.3 million already stolen in similar incidents in 2024, according to DefiLlama.

While the amount stolen dropped 56% between 2022 and 2023 to $1.42 billion, security experts have warned that cybercriminals will return with the bull market.

Cracking the safe

WazirX used a Safe multisignature wallet — or multisig — to hold its user’s crypto.

Such wallets are typically viewed as more secure than regular wallets as they require multiple people to sign off of each transaction.

This time, the hacker found a way around this security measure.

“It seems that the signers of the affected account signed a transaction that changed the implementation contract address in the proxy,” Mikhail Mikheev, a software developer at Safe, said in a group on messaging app Telegram and confirmed to DL News.

In other words, after the hacker gained access to WazirX’s systems, they upgraded the code governing the wallet to get around its security features.

“To our knowledge, no other Safes are affected,” Mikheev said. “We’re currently cooperating with WazirX to investigate the issue further.”

Another exchange hack

The WazirX hack is not the first such incident in recent months.

In May, Japanese exchange DMM Bitcoin suffered an ‘unauthorised leak’ of more than $300 million.

Pseudonymous onchain sleuth ZachXBT said North Korea’s Lazarus Group may be behind the DMM Bitcoin hack due to “similarities in laundering techniques and off chain indicators.”

Ari Redbord, the global head of policy at TRM Labs, a blockchain intelligence company said the attack bore “the hallmarks of a prototypical [North Korean] hack.”

It’s not yet known whether Lazarus Group is also behind the WazirX hack.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The extension to its round attracted leading web3 VCs, including Galaxy Interactive, Crit Ventures, and Arc Community, as well as several angel investors.

Pixelverse is a gaming ecosystem that integrates third-party developers, intellectual properties, and its own projects, featuring a cyberpunk-themed game available on both Telegram and web browsers.

“Crypto is still intimidating for many users, so we are making it accessible to all through gaming mechanics,” said co-founder Kori Leon. “We are expanding into Pixelverse media and several product lines to ensure the long-term sustainability and profitability of our operations.”

Last month, Pixelverse announced the initial $5.5 million funding round, led by a group of venture capital funds in the gaming and web3 space, including Delphi Ventures, Merit Circle, and Mechanism Capital.

The round was also bankrolled by Bitscale Capital, Ghaf Capital, Big Brain Holdings, LiquidX, and Foresight Ventures.

Pixelverse extends beyond its Telegram game.

The ecosystem includes a web-based platform and game offering a broader range of activities and interactions for players, ensuring a seamless gaming experience across different devices.

On Tuesday, the Hong Kong Institute for Monetary and Financial Research, which is backed by Hong Kong’s central bank, released two reports suggesting the financial services industry is keen on the two crypto markets.

“The emerging technologies of DeFi and the metaverse, which are closely connected to the broader virtual asset and Web3 developments, will likely present various opportunities for the financial services industry in Hong Kong,” said Enoch Fung, the institute’s executive director.

Even though officials are warming to the idea of DeFi and web3, it looks like the two areas might also draw more regulatory scrutiny.

Crypto crackdown

This is because in the last year, Hong Kong’s Securities & Futures Commission has been attempting to tame the runaway fraud in the crypto industry.

In 2023, investors lost US$400 million to crypto fraud in Hong Kong, according to police officials. Rogue exchanges are responsible for much of the losses.

Now crypto exchanges must submit to a rigorous licensing process. While most complied, others chose to leave Hong Kong.

Meanwhile, regulators are also developing frameworks for stablecoins and over-the-counter crypto trading.

And earlier this month, Hong Kong lawmaker Johnny Ng announced a new web3 and virtual assets subcommittee within the Legislative Council.

Metaverse development

With all this regulatory action as the backdrop, the Hong Kong Institute for Monetary and Financial Research’s bullishness on DeFi and the metaverse seems more wishful than actual.

Drilling into the report’s results, we see that 85% of market participants are expecting metaverse development to impact the financial industry significantly.

And two-thirds of financial services industry respondents said their companies were already engaged with metaverse technology at some level.

And yet only 16% of the firms had actually implemented metaverse initiatives. And slightly more than a quarter were at the discussion stage.

What they do in the metaverse is also limited.

While financial institutions in Hong Kong have adopted various metaverse applications to enhance interactions with the public, customers, and employees, there is less enthusiasm for using the metaverse as an investment tool or a sales channel.

The report additionally flagged major hurdles including data privacy issues, limited platform functionalities, and a scarcity of expertise.

Limited user adoption and interest, high development and maintenance costs, and integration difficulties with existing operations were cited as significant obstacles.

Got a Hong Kong crypto story? Email callan@dlnews.com.

Their obsession with Korean pop music bands is driving an entertainment market expected to generate $20 billion in event-related revenue by 2031, according to a recent report by Allied Market Research.

Now there’s an all-out push to get K-pop’s legions onto web3, said Justin Kim, the head of Ava Labs’ Korean operation.

”Some of the K-pop girl groups and boy groups are launching with web3 features,” Kim told DL News in an interview this week.

He rattled off a list of projects ranging from collectibles and ticketing to DAOs that will allow fans to vote on things to do with their favourite K-pop groups.

Chaebol meet K-pop

Ava Labs is the outfit behind Avalanche, the layer 1 blockchain network with $681 million in deposits, according to DefiLlama. In addition to South Korea, Ava Labs is drumming up users across Asia and has offices in Japan, Vietnam, and India.

While South Korea has long been mad for crypto — one in every eight residents use cryptocurrency exchanges — Kim said it’s the nation’s old-line industrial conglomerates, or chaebol, that are the key to web3 expansion.

‘Retail adoption should happen with bigger companies because they already have locked-in users.’

Justin Kim, Ava Labs

SK Group, South Korea’s third biggest chaebol with $119 billion in annual revenue, started working with Ava Labs last year to offer NFT ticketing for K-pop concerts. The group makes semiconductors technology, batteries, and many other products.

“I think retail adoption should happen with bigger companies because they already have locked-in users,” Kim said. “The problem with smaller web3 teams is that they need to look for users.”

Ava Labs has also invested an undisclosed sum in Titan Content, a studio that mashes up K-pop, NFTs, and other web3 apps.

Titan is led by Han Se-min, who quit last November as the longtime head of SM Entertainment; it’s South Korea’s largest K-pop studio and manages superpopular groups like EXO and NCT.

Kim is betting web3 has much to offer the K-pop scene. One issue, for instance, is how talent management firms often fail to fairly compensate K-pop bands.

Finances not transparent

“One of the major problems with the K-pop industry is that the finances are not transparent,” Kim said. “Companies take all the benefits and the boy groups or girl groups never get paid.”

Such exploitation is an age old problem in the music business blockchain technology can address, he continued.

Using NFTs and crypto for K-pop merchandise will allow groups to record exactly how much money is being made from fans.

“You can see how many people bought it. There’s no way a company can get around this,” said Kim.

Ava Labs is also eyeing plays in South Korea’s thriving intellectual property market for online gaming.

In March, the project announced it was bringing one of Nexon’s flagship games, MapleStory, into the crypto space.

Ava Labs plans to use NFTs as in-game obects to make it easier for players to trade them.

Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.

Popular collections, such as Yuga Lab’s Bored Ape Yacht Club, now cost less than they did before NFT mania began three years ago.

Even CryptoPunks, the top NFT collection with a market value of about $874 million, appear trapped in a brutal bear market.

The market value of an NFT collection is typically calculated using lowest price someone is wiling to sell one of the NFTs for. This does not take into account rare NFTs that trade for many multiples of that price.

The situation won’t change until crypto traders feel rich again, Nicolas Lallement, co-founder of NFT data platform NFT Price Floor, told DL News.

He said that capital “will probably rotate to bluechip NFTs” if the launch of spot Ethereum exchange-traded funds sparks a rally later this year.

Bluechip is a stock-market term for the most reliable and valuable companies on the market.

In crypto, traders use the word to describe tokens or NFTs they consider to have established value.

In essence, Lallement is alluding to a repeat of the market conditions associated with the first NFT bull run.

Demand for NFTs soared in late 2021 after Bitcoin surged some 1,140% the year before.

With vast amounts of newly created capital sloshing around, many who made money piled into NFTs to flaunt their wealth.

“In the end, NFTs act as status symbols,” Lallement said.

Market dilution

There’s no guarantee that money from a market-wide rally will flow into NFTs specifically, let alone those that were previously popular.

“We now have NFTs on Bitcoin, Solana and Ethereum L2s, so the market is not concentrated just in Ethereum as it used to be,” Lallement said.

It’s not just newer NFTs that are diluting the market, either.

“Everyone is currently busy with memecoins and DeFi, especially now that celebrities are also partaking in this,” Mahan Fathi, CEO of NFT analytics site NFT Valuations, told DL News, adding that he doesn’t see a lot of liquidity flowing into NFTs.

Many traders previously used NFTs as vehicles for speculative trading.

The low liquidity of NFTs makes them extremely volatile, creating conditions for huge gains — or total losses.

Memecoins, cryptocurrencies with little use that trade solely on their popularity, have supplanted NFTs as assets of choice for traders looking for high-risk bets.

Memecoins based on presidential candidates, celebrities, and even comic artist Matt Furie’s Pepe the Frog character have gripped the market in recent months.

Pockets of activity

Despite the negative sentiment for NFTs, there are high-end collectors who are still allocating, Fathi said.

In February, a full set of Autoglyphs NFTs sold for $14.5 million. Autoglyphs are among the first generative art NFTs created on the Ethereum network.

Then in April, a rare alien CryptoPunk sold for $12.5 million. Alien Punks are highly coveted because only nine out of the 10,000 strong collection feature that trait.

Still, these sales are dwarfed by those from the previous NFT bull market. In February 2022, another alien CryptoPunk sold for a record-breaking $24 million.

There’s also the question of whether these sales have any bearing on the wider demand for NFTs.

Lallement says they do.

“I expect a trickle-down effect from these high-end NFTs to more affordable ones at some point,” he said.

Update, June 25: This story was updated to clarify how the market value of an NFT collection is typically calculated.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out to him with tips at tim@dlnews.com.

Pieces of the NFT collection now trade hands for less than 10 ETH — around $33,000 — for the first time since August 2021.

That’s a 90% decline from their all-time high of $350,000 in May 2022.

The fall comes amid a devastating rout of the popular NFTs that rode a wave of market mania in 2021 and 2022.

Launched in April 2021, Bored Ape Yacht Club is a set of 10,000 Ethereum NFTs depicting cartoon ape characters. They were initially sold for 0.08 Ether each, or around $150.

By August that year, Bored Apes had climbed to 9.5 Ether each, or $20,000.

The collection’s creator, Yuga Labs, expanded the franchise with two derivative collections, Mutant Ape Yacht Club and Bored Ape Kennel Club.

These collections have also suffered and are down 95% and 97% from their all-time highs respectively.

No demand

At its May 2022 peak, the Bored Ape franchise looked invincible.

Yuga Labs had just conducted its Otherside NFT mint, selling 55,000 so-called land NFTs for its planned metaverse for $561 million, the biggest NFT sale ever.

But in the months that followed Yuga Labs floundered.

Development for Otherside chugged along, but the once-feverish appetite for the metaverse disappeared.

In 2023, Yuga Labs released Dookey Dash — an endless runner style game much like Temple Run — but only for NFT holders. While this kept Bored Ape fans temporarily engaged it wasn’t enough.

At the same time, NFT marketplace Blur greased the wheels on NFT trading by offering token incentives to traders. Many Bored Ape fans blamed Blur for falling NFT prices because the token rewards incentivised traders to sell their NFTs at a loss.

Even as the crypto market rallied in 2024 on the back of spot Bitcoin exchange-traded fund approvals, most NFTs — Bored Apes included — failed to regain their lost ground.

In April, Yuga Labs CEO Greg Solano announced a round of layoffs, telling staff at the company that the Bored Apes Yacht Club collection had “lost its way” and was struggling under “labyrinthine corporate processes.”

An NFT bear market

Bored Ape Yacht Club’s poor performance is part of a broader NFT bear market.

At the height of the NFT bull market, Bitwise, an asset manager, launched a Blue-Chip NFT Index Fund that included Bored Apes, CryptoPunks, as well as several other high-value NFTs.

The fund has registered a 74% loss since its inception in December 2021.

Despite this, there are pockets of strength within the NFT market.

Milady Maker, a popular NFT collection launched in August 2021, trades close to its all-time high.

Tim Craig is a DeFi Correspondent at DL News. Got a tip? Email him at tim@dlnews.com.

And so what was supposed to be a leisurely walk around a simulated traditional Chinese country village in Decentraland kicked off with 10 minutes of troubleshooting my mic problems.

The prawn and I eventually opt to open Google Meets in the background so we can hear each other.

Our interview about the state of play in metaverse business is not off to an auspicious start.

The giant red prawn is not impressed with my attire. He sports blue and yellow wings and the Ethereum logo floating above his head like a green diamond in The Sims.

I, on the other hand, am drab and boring in the default wearables available for free on the Decentraland avatar editor.

Pink hair

I explain that I used to have pastel pink anime hair with space buns and a floating animal sidekick that followed me everywhere. It’s been a long time since I’ve used Decentraland. I have no idea which wallet they are in.

“I was going to suggest that you need a new outfit,” says the giant red prawn, before offering to send me some of his castoffs so I don’t look so lame in future.

Very little looks different in Decentraland compared to metaverse zeitgeist in 2021. The digital playground is still buggy and basic.

Still, I really tried to get it back then. I liked how people could build whatever they wanted, the ability to purchase an expensive land NFT notwithstanding. But it always felt so dead.

I played it for two hours in order to get some free nuggies. Then a bug crashed the site and I lost all my progress so I gave up.

Then Facebook changed its name to Meta in late 2021. Despite Meta’s adverts at train stations in London telling me the metaverse was the future, I found Mark Zuckerberg’s legless avatars creepy — I think everyone did.

Even as interest waned and the metaverse became something of a punch line for the folly of web3, it’s still chugging along.

The Sandbox, a digital domain operated by Animoca Brands, was valued at $1 billion in a $20 million fundraising deal last week. (Decentraland was valued at $1.2 billion in 2022.)

Surprising use cases are still popping up — in May, Visit Wales, the Welsh tourism body, announced it is building an immersive experience on the Spatial platform.

Even Second Life, a primordial metaverse founded in 2003 and long forgotten by the mainstream, is still going. In 2023, its parent company Linden Lab, said it had around 750,000 monthly active users.

I decided to drop back in because last week McDonald’s just launched its second metaverse experience. Why would the global fast food giant mess about with a marketing channel many consumers have forgotten about?

Last year, McDonald’s built a site called McNuggets Land in The Sandbox aimed at the Hong Kong market.

I played it for two hours in order to get some free nuggies (even though I’m vegetarian). Then a bug crashed the site and I lost all my progress so I gave up.

McDonald’s’ latest metaverse attempt is targeted at Singaporeans and I couldn’t access it from Hong Kong. So going to Decentraland to meet the giant red prawn who built it seemed close enough.

Prawns, dudes and angels

In real life, he is Clarence Chan, the founder of Bandwagon Labs, a digital marketing studio in Singapore that builds experiences for consumer brands in metaverse domains. Chan is so web3 that in 2022 he even got married in The Sandbox.

We stroll Decentraland with two of his team members, a punky-looking angel and a dude wearing shades. Chan tells me that brands are continuing to build metaverses to find fresh ways to connect with audiences.

“All brands already have their own social media presence,” he said.

But it’s a crowded market and one that is increasingly pay-to-play.

“It’s quite noisy in terms of social media,” the prawn, er, Chan said. “There’s so many other brands and events that are all jostling for the same space on a user’s timeline.”

In particular, Chan told me companies are increasingly keen to build their own metaverses on their own platforms.

McDonald’s metaverse, called My Happy Place, is built into its app and more than 100,000 people have visited it since its launch last week

Unlike most metaverse platforms, which can be slow to load and require a lot of computing power, it works on users’ phones.

McSpicy Hut

At this point in our conversation the giant red prawn gets stuck for a good 20 minutes on a Decentraland plot decorated with cut-outs of K-pop girls.

Adjusting, Chan shares his mobile phone screen so I can take a look at My Happy Place on the McDonald’s app. I watch as he completes a task to collect a “yummy treat,” which is basically a coupon for an actual item at a real McDonald’s.

Companies want more control over what happens in their metaverse experiences, and it’s easy to see why. Metaverse platforms suffer from many of the same issues as social media when it comes to content moderation and harassment. It’s not surprising that there’s no voice chat or message feature on My Happy Place.

The anything-goes attitude of many of these platforms is not something brands want to contend with — particularly family-friendly brands like McDonald’s.

“Brands are very cautious of the optics,” Chan said.

We return to Decentraland and stand in an empty lot. There’s a few trees and flowers about, a building rising up in the distance, its corners glitching slightly.

While I’m fascinated by these sorts of platforms, they make me uneasy. I already spend way too much time on my phone and computer.

Chan has heard this before. He’s had conversations with friends who say they’re happy for him that he’s working with high-profile brands like McDonald’s and CapitaLand, but they have concerns, particularly when it comes to children.

“I do agree that having good digital experiences comes, for some people, especially young people, at the expense of them really living life outside of it,” Chan said.

It’s a fine line to walk, juggling the idea of a free and open metaverse with the preferences of parents and brands.

For now, the metaverse keeps humming along even if the hype dissipated long ago.

Callan Quinn is DL News’ Hong Kong-based Asia Correspondent. Get in touch at callan@dlnews.com.

“We stepped in to save it from going offline,” Sam Williams, the founder of the Arweave blockchain and CEO at Forward Research, a venture firm supporting Arweave, told DL News.

When US regulators forced the closure of LBRY, they almost killed Odysee in the process.

“This has been a very long-term project for us,” Williams said. “It would have been a terrible end just to disappear from the internet like that.”

Williams declined to detail the terms of the acquisition.

Odysee is far larger than other crypto alternatives to social media giants like Farcaster and Bluesky.

“The goal is to topple the monopolies that currently exist in social media. We haven’t won until it replaces Twitter.”

Sam Williams, founder of Arweave and CEO at Forward Research

“They actually have a user base that doesn’t really care about crypto. They came to Odysee because they wanted something that maintained their rights, guaranteed their right to speech and to discuss with one another,” Williams said.

Arweave is one of several blockchains focused on data storage. While Ethereum can store the metadata or links to large files, such as videos, Arweave can host such data entirely onchain.

Welcome to the ‘permaweb’

Williams calls the Arweave ecosystem the “permaweb,” due to its ability to permanently store any content uploaded by its users.

That made Odysee a natural fit for Arweave, he said.

“This is one of the things that really caught our eye about it,” he said. “This is a system that is imbued with crypto values, if you will, and has attracted a mainstream audience. And now the job is just to grow that.”

Odysee has attracted scrutiny for its lax content moderation policy. However, crypto users and free-speech proponents see it as a solution to the growing power that major corporations have over online speech.

“Every time you attempt to speak at distance in the world, you have to use some company service,” Williams said, “unless you use something like Arweave.”

Williams likened Arweave to a content “data lake” that is “shared across every single application.”

TikTok had to slowly build its user base — a long and expensive process for an upstart taking on billion-dollar incumbents. A developer on Arweave could create an interface that would draw from the same pool of content as other Arweave-based social media applications and differentiate itself by choosing what to surface.

Last year, the blockchain introduced its “Universal Data License,” allowing users to set the terms of use for any content they upload.

Williams hopes this opportunity to better monetise content will draw creators and, in turn, users.

“The goal is to topple the monopolies that currently exist in social media. We haven’t won until it replaces Twitter.”

Aleks Gilbert is a DeFi Correspondent at DL News. Got a tip? Email him at aleks@dlnews.com.

On Tuesday, two individuals in Hong Kong filed a civil suit against the mysterious company and six affiliated enterprises. They also sued Felix Chiu, the owner of an over-the-counter crypto trading shop called Coingaroo that peddled crypto on JPEX.

The lawsuit, which seeks restitution of more than US$700,000, pulls back the curtain on the alleged inner workings of one of Hong Kong’s most closely watched crypto cases.

Tron wallets

While the owners of JPEX have yet to be identified, the anonymous holders of three Tron wallets linked to the exchange were also sued, and will be served court papers using tokenized documents.

“This case will really test the judiciary’s capability in handling cases in the web3 space,” said Joshua Chu, the lawyer and technology specialist representing the plaintiffs.

JPEX could not be reached for comment. Chiu did not immediately respond to a request for comments left with Coingaroo.

The case offers an in-depth look at how JPEX operated and allegedly swindled Hongkongers.

Influencers peddling crypto

Since 2021, JPEX has promoted itself in Hong Kong through billboards and social media influencers.

Many of those influencers, including Joseph Lam, Henry Choi and Clement Chan, are among the over 70 people arrested during the police investigation into JPEX.

One of the plaintiffs, Wing-yan Chan, attended some of Lam’s seminars and was a member of his private Telegram and WhatsApp messaging groups.

The documents claim Lam “repeatedly advocated for the credibility, stability and profitability of JPEX” and that Lam and other promoters gave away referral codes to attract users to the platform.

Chan alleged that Lam’s seminars, posts, and messages led her to believe JPEX was a licensed, genuine, and secure cryptocurrency exchange.

JPEX claimed that investments would be safe and profitable, guaranteeing an annual return of at least 19% on its native token, JPC, according to the lawsuit.

Chan alleged that Lam’s seminars, posts, and messages led her to believe JPEX was a licensed, genuine, and secure cryptocurrency exchange.

Lam did not immediately respond to requests for comment.

By the time the Securities and Futures Commission issued a warning against JPEX on September 13, 2023, Chan had deposited almost US$248,000 into JPEX.

The following day, JPEX increased charges for withdrawing money. Withdrawals were fixed at an amount of 1,000 USDT, or around $1,000, per transaction, with a 999 USDT charge. (USDT is the dollar-backed stablecoin issued by Tether.)

Transferred without consent

Using a blockchain explorer app, the plaintiffs found that even though the transactions and balances showed up on their JPEX accounts, nearly all of their money had been transferred without their consent.

The funds passed through two of the wallets named in the suit and then moved on to several others. Both of those wallets now contain only a few dollars in tokens, while the third named wallet has no recorded transactions, court papers said.

JPEX kept up the charade for two more months, the lawsuit said. It launched a “stakeholder dividends program” before announcing on November 11 that its trading system was undergoing optimisation and reconfiguration.

It never reopened, and users could not withdraw any assets.

Setting a precedent

Chu, the plaintiffs’ lawyer, said the case could produce “precedent-setting developments” in how Hong Kong gets to grips with litigating in cases involving cryptocurrency and blockchain technology.

He is encouraging more victims to come forward and is concerned that some have been told they should wait until criminal proceedings have concluded.

“A lot of people are getting incorrect advice,” he said.

Got a story about crypto scams in Hong Kong? Contact callan@dlnews.com.

Ahead of the decision, users on Polymarket, a prediction platform that lets users bet on the outcome of events, have started to dig into the minutiae of what “approval” really means.

Before exchange-traded funds can officially begin trading, issuers must get approval for both 19b-4 filings and S-1 filings.

Thursday’s decision is for only the 19b-4 filing.

It could be months before S-1 filings are approved and trading begins.

This nuance is leading Polymarket bettors to prepare for the largest betting market dispute since the $2.2 million “Will the missing Titan submarine be found by June 23″ market in June of last year.

The “Ethereum ETF approved by May 31″ market now has $10.8 million on the line, up around $3 million in the last 24 hours, with bettors giving the approval a 65% chance of happening.

The market will resolve to “Yes” if any spot Ethereum ETF receives approval by the SEC by the May 31 deadline, otherwise it resolves to “No”.

At first glance, bettors’ allegiances seem to lie in where they have placed their money.

The largest all-time bettor on Polymarket, JustKen, who holds around 121,000 “No” shares, said they believe it is actually quite clear that both the 19b-4 and S-1 are required for an ETF to be considered approved.

On the other hand, 0xsmolbear76, who holds around 261,000 “Yes” shares, said they think any credible source stating the ETF received approval should cause the market to resolve to “Yes.”

Polymarket hasn’t made any official statements on the market amid the confusion among bettors.

Earlier in the year, Polymarket raised $70 million from big names like billionaire Peter Thiel and Ethereum co-founder Vitalik Buterin.

The platform saw 1,773 active wallets generate $2.8 million in total volume on Wednesday.

The largest market is the 2024 US election market, which has seen over $132 million in bets, giving former President Donald Trump a 55% chance of winning.

Ryan Celaj is a data correspondent at DL News. Got a tip? Email him at ryan@dlnews.com.

Many expected that users who amassed large quantities of the FRIEND token during the platform’s V1 phase — where points earned converted to FRIEND — would sell their holdings and cause the price to plummet.

Although the token was extremely volatile on May 3, the day that it launched, it has since remained range bound between $1 and $2, recently trading at $1.98.

That may be because 2.96 million FRIEND tokens are locked in “clubs,” which function as group chat rooms, requiring users to pay for entry with FRIEND tokens.

The tokens are then paired with Ether in friend.tech’s native decentralised exchange.

Now the question is whether clubs can continue to grow, removing FRIEND from the open market.

Each club can choose from three different bonding curves for pricing, letting club creators determine how quickly the price of entry into a club increases.

Users generally join the clubs to speak with their favourite influencers or share “alpha,” information that can help traders to realise a profit.

The largest club, named “Hog McCrankerson,” costs users 892 FRIEND, or $1,780. The club has 647 holders, resulting in nearly 1% of the total supply locked in the “memeclub.”

The second-largest club, “Ansem’s Army,” the chat room for the popular influencer blknoiz06, has 0.35% of the total supply locked, around 326,000 FRIEND.

Fewer clubs coming onboard

Still, the question of how sustainable club activity has come into play. The day of friend.tech’s V2 launch saw 62,118 clubs created by 26,128 creators, but Sunday saw only 1,170 clubs from 339 creators.

Total traders saw a similar decline, falling 96% to 1,449 on Sunday from 33,597 on May 3.

Another significant sink for FRIEND has been providing liquidity for the FRIEND/WETH pair on friend.tech’s decentralised exchange. This pool has over $37 million in liquidity provided, with just under 9.1 million FRIEND.

Users who provide liquidity to this pool are earning about a 138% annual percentage rate, thanks to swap fees, club fees, and LP incentives.

Liquidity providers earn a 1.5% fee from every FRIEND, and Friend.tech club trade, in addition to a share of the 12 million FRIEND distributed over 12 months.

Most of the yield earned here comes from FRIEND incentives, around 66%, while LP swap fees account for 58% and club fees only 13%.

Ryan Celaj is a data correspondent at DL News. Got a tip? Email him at ryan@dlnews.com.

Now, projects are looking to capitalise on the trend, with some proving to be incredibly successful.

One of the latest is WorldPVP. The game is built on Base, an Ethereum layer 2 blockchain that was incubated by crypto exchange Coinbase.

WorldPVP adds a fun wrinkle to memecoin trading by letting 211 countries, each with its own tokens, compete over a week to see which one can reach the highest market cap.

This unique gameplay has attracted 6,793 traders and generated over $30 million in total trading volume.

The game’s mechanics are straightforward but strategically rich.

Each round culminates with the country boasting the highest market cap gaining access to a “nuclear missile.” With this missile, a country can nuke another country’s token, removing the liquidity.

The Ether from the nuked country’s liquidity pool is then divided, with half reinvested into the victorious country’s tokens and the remainder distributed to a randomly chosen country, adding to the unpredictability of the competition.

Additionally, a prize pool, funded by a 2.5% tax on all trades, is used to buy tokens from the winning country each week.

With the prize pool now at $180,000 and the highest market cap at $2.3 million for the USA, the influence of this pool on token prices could be notable, depending on the volume each week.

Leadership and communication are also crucial to the WorldPVP experience.

Each country’s president — the top token holder — plays a vital role by deciding which country to target with a nuclear strike if they emerge victorious in the weekly competition. This elevates top holders from merely investing in tokens to becoming central strategic figures within the game.

Presidents are easily recognizable by a crown icon next to their names in the platform’s token-gated chat rooms, where they actively engage in discussions that not only facilitate conversation but can also lead to forming alliances or stirring conflicts.

A recent example of strategic alliances formed within these chat rooms is the union between Kazakhstan and Spain.

The presidents of Kazakhstan and Spain formed an alliance called “Kazakhspan,” investing one Ether in $SPAIN to merge their “industrial and naval strengths.”

WorldPVP hasn’t just captured the attention of traders; it also received a grant from Base to continue to work on the project.

The first round is coming to an end in 37 hours with the USA leading with its $2.3 million market capitalisation. Second is China with a market capitalisation of $537,000.

As the first round draws to a close, the strategic elements of WorldPVP intensify.

Will the USA, with its leading market cap, choose to nuke China, its closest competitor? Or might another country make a last-minute surge to shift the balance? Only time will tell.

Ryan Celaj is a data correspondent at DL News. Got a tip? Email him at ryan@dlnews.com.

Overtime Markets is a decentralised sports betting platform that allows users to bet on sporting events with no know-your-customer, or KYC, requirements and competitive odds, using blockchain technology and Chainlink’s data feeds.

One bettor, cat42.eth, has netted $53,000 across 1,269 bets with an impressive 60.5% win rate. Meanwhile, another bettor, Dump_on_me, has a 22.1% win rate across 231 bets, resulting in a net loss of $105,000.

Users on Overtime Market have wagered over $27 million, but as the saying goes, “The house always wins.”

True to form, bettors on Overtime have collectively lost $1.6 million so far; however, the key difference with a sportsbook built on crypto rails is that users can be the house and earn a portion of bettors’ losses.

Users can provide liquidity to various markets on Arbitrum, Optimism, and Base. Each chain offers two options for liquidity providers: Single LP and Parlay LP.

The Single LP option allows users to bet on the outcome of a single event, while the Parlay LP option is designed for users who want to create a parlay — a type of bet that requires correctly predicting the outcomes of multiple events. Single bets are generally easier to win but offer lower payouts compared with parlays, which are more challenging but come with higher rewards.

Since its launch just over a year ago, users who provided liquidity to Overtime Markets’ Single LP on Arbitrum have seen a 106% gain on their deposits.

Last week alone, users gained nearly 11%. The highest payout week delivered a yield of nearly 23%, while the biggest drawdown week saw a loss of just under 6%.

The results on Optimism show users gaining 59% with Single LP and 33% with Parlay LP since inception. However, on Base, depositors have experienced losses, with the Single LP down 9% and the Parlay LP down 7%.

This underperformance on Base may be because of its smaller market size, which results in fewer bets. Consequently, one big loss or win can greatly distort the numbers. In contrast, Arbitrum, the largest market, boasts over $1.1 million in its LPs, providing more stability.

Users on the Arbitrum and Optimism markets also enjoy incentives for betting in the form of ARB and OP tokens. For example, users who bet on National Basketball Association playoff games are eligible for a portion of 20,000 ARB and 15,000 OP token rewards based on their total volume.

Those rewards help to give Overtime Markets an added edge for users compared with its Web2 counterparts.

Still, for serious bettors, Overtime Markets is limited in the size of bets it can offer because it is limited by the funds in its liquidity pools.

For example, for Friday’s NBA playoff game between the New York Knicks and Indiana Pacers, a user can place a bet with a maximum size of $18,235, while on a traditional sportsbook like Caesars a user can bet up to $1 million.

Ryan Celaj is a data correspondent at DL News. Got a tip? Email him at ryan@dlnews.com.

In just the last week, Fantasy.top has amassed $3.2 million in fees from more than 21,500 users.

Since its launch on May 1, the protocol has generated over $10.6 million in total fees, making it one of the top 20 fee-generating protocols on DefiLlama.

Social Finance, or SocialFi, is a newer trend in crypto that combines elements of social media with elements of decentralised finance. The main idea with SocialFi is that content creators can own their content and make more money for it than they would with traditional social media applications.

Fantasy.top, is the latest protocol to embrace the trend, and it seems to be paying off. In February, it raised $600,000 in pre-seed funding from investors, including Alliance DAO, Manifold Trading, Fabric Ventures, and prominent angel investors.

Other SocialFi projects have enjoyed similar success. Friend.tech, for instance, has generated $1.43 million in fees over the past week.

How it works

Fantasy.top is a social trading card game, where users select a team of five influencers, dubbed “heroes,” to compete in tournaments.

To become a hero, users need an account on X, previously known as Twitter. They must then contact the fantasy.top team on X for approval. Following those steps, heroes are added in batches.

Heroes are ranked using a system developed by the fantasy.top team that monitors X activity hourly and assigns a “Hero Score.” The more attention, likes, reposts, comments, and followers a hero accumulates, the higher their Hero Score becomes.

Players in the main tournaments are divided into five leagues based on skill level, with the opportunity to advance or drop between leagues depending on their performance. Higher leagues offer greater rewards compared with the lower ones.

To get started, users must purchase a pack of cards, which cost 0.43 Ether, or around $1,200. Players can expect to receive five cards in a pack, with the price of a pack varying based on a pricing mechanism. They can also purchase individual cards on the fantasy.top marketplace.

Players compete for rewards, including Ether, Blast points, Blast gold, Fan points, and more.

Blast, an Ethereum layer 2 blockchain, distributes Blast points and Blast gold with the expectation that they will later convert into tokens. Similarly, fantasy.top issues Fan points, which are also anticipated to convert into tokens in the future.

Heroes can earn additional rewards based on the trading of their cards. Fantasy.top charges a 3% fee on each trade, with half of that going to the fantasy.top treasury and the other half going to the Hero, or influencer.

Additionally, 10% of card pack sales are divided among heroes. Since the platform’s launch, fantasy.top heroes have received around 575 Ether in total rewards, or around $1.7 million.

Moreover, players can upgrade their cards by burning five identical cards, enhancing their heroes’ potential in tournaments. Cards are categorised from “uncommon,” with a multiplier of 1x, to “legendary,” with a multiplier of 2.5x. These multipliers are applied directly to the Hero Score, amplifying a hero’s performance based on the rarity of their cards.

The highest priced Hero is xbtGBH, with the value of one card at three Ether, worth around $9,000.

This structure gives heroes an incentive to enhance their card rankings by increasing their activity on X.

More activity not only boosts a hero’s visibility, but also enhances the desirability of their cards. As demand for the cards grows, so does the trading volume, directly increasing the earnings for heroes.

The next main tournament begins on Tuesday and includes a prize pool of 333,000 Blast gold.

Ryan Celaj is a data correspondent at DL News. Got a tip? Email him at ryan@dlnews.com.

Excitement was running high as PSG’s superstar forward Kylian Mbappé looked for a goal to send his club to the Champions League final on June 1.

By the 26th minute of the match, traders had bid up the PSG digital token 4%.

Then Dortmund’s Mats Hummels headed in the game’s only goal for victory and the token plunged more than 18%, according to CoinGecko.

Wild ride

The token’s rollercoaster ride might have been wild, but it made sense — losses on the pitch should translate into declines in the market.

And yet in Spain, holders of Sevilla FC’s sports coin surged 14% on Wednesday, and while holders are celebrating their good fortune they are also scratching their heads

Sevilla had no crucial matches, nor did it make any major trades or key coaching hires. At 12th place in La Liga with two games left in the season, there wasn’t much to cheer about.

So why is Sevilla’s sports coin flying high?

No one knows.

Welcome to the weird and wild world of sports coins, which blur the line between fan engagement, sports gambling, and pure crypto speculation.

Stocked with dozens of coins, this corner of crypto is worth around $3 billion in market value.

Many famous professional sports teams feature their own tokens — FC Barcelona, Manchester City, and Arsenal FC boast tickers — as do the national soccer teams from Spain, Brazil, and Argentina.

While the tokens demonstrate cross pollination between global brands and crypto, what truly differentiates the offerings are their utterly unpredictable behaviour.

When Lionel Messi led Argentina to its World Cup victory over France in December 2022 you would have expected the team’s token, ARG, to soar.

You’d be wrong — it actually slipped more than 3% the day of the game, according to CoinGecko data. And it went on to lose three-quarters of its value by the end of the year.

‘The potential price swings, up and down, can be larger and depend more on the market and not purely on sports events.’

Playmaker

Unlike conventional sports bets, numerous factors that have nothing to do with the outcomes of games affect the valuations of sports coins.

“The potential price swings, up and down, can be larger and depend more on the market and not purely on sports events,” Playmaker, a pseudonymous sports coin trader, told DL News.

The largest sports coin by far is PSG’s, which is worth more than $47 million.

Unsurprisingly, these offerings are often compared with memecoins, which drives Alexander Dreyfus nuts.

Not a memecoin!

He’s the CEO of Chiliz, a French crypto firm and the top issuer of the sports coins.

“It would be very insulting to the six years of work of developing the utility of the token,” he told DL News in a recent interview.

Utility? Well, as it happens, these coins do have a function — they let holders vote on their club’s jersey designs, the music played when the players take the pitch for matches, and even the Person of the Match.

Voting tokens

Chiliz developed an app called Socios to manage the voting. And clubs that sign on must adhere to the results — it’s written in their contracts.

Chiliz rolled out sports coins in 2018 as a novel way to connect fans and teams.

Christian Ott, the founder of analytics platform Rocketfan, which tracks sports coins around the market, said he’s participated in hundreds of these polls via the app.

Sports coins purchased on centralised exchanges such as Binance rather than through the app don’t have the same voting capabilities.

“If you’re buying it on an exchange, most probably you’re buying it to speculate,” he said.

Ott explained that the polls range across categories. Some votes ask fans to vote on a club’s social media posts or the awards given to players.

Ott’s favourites are the in-game polls. “You can watch TV, and you see your decision that you made in the app play out,” he said.

That hasn’t excluded him from speculating on these coins, though.

Alongside voting on club outcomes, he explained how he implements an indexing strategy — a way to minimise risk by trading a basket of assets — to play in sports coins.

“My strategy over the past two years has been to just have every single fan token,” he told DL News.

“I have a small quantity of every single fan token, and if one of them moves in a way that I think is not sustainable over the long run, then I allocate it to other fan tokens.”

This strategy helps even out the random spikes in token prices.

The token for the Italian club Lazio, for example, was down more than 7% on Wednesday. Its last match was five days ago, and the team doesn’t have any matches until this weekend.

Ott said the larger sports coins are more impacted by results than the smaller ones, which have less liquidity.

Possible explanations

Like Ott’s analytics platform, Playmaker has built an audience on X dishing out possible explanations for sports coins’ movements.

The crypto market writ large is at the top of the list.

“Bitcoin could fall sharply in price just before or during the match or event,” Playmaker, who started trading sports coins in 2021, told DL News.

Yet when PSG lost to Dortmund in the first leg of the Champions League on May 1, he tweeted that the sports coin dropped 15%.

“This time [it was] due to sporting events.” he said.

Liam Kelly is DL News’ Berlin correspondent. Contact him at liam@dlnews.com.