Cryptopolitan

US trade deficit data came in heavy for December. The Commerce Department said the monthly gap hit $70.3 billion. That was $17.3 billion higher than November. Economists surveyed by Dow Jones expected $55.5 billion.

The number beat that by a wide margin.

For the full year, the trade deficit reached $901.5 billion. That was down just 0.2 percent from 2024, a difference of $2.1 billion. It remained one of the largest totals on record.

Only 2022 was worse, when the gap hit $923.7 billion. The Trump administration had pushed to narrow the deficit, but the yearly imbalance barely changed.

Trade flows shift in December

Exports for 2025 totaled $3.43 trillion. That was up $199.8 billion from 2024. Imports came in at $4.33 trillion. That was an increase of $197.8 billion from the prior year. The difference between those two numbers produced the $901.5 billion deficit.

The United States ran its largest goods deficit with the European Union at $218.8 billion. China followed at $202.1 billion. Mexico came next at $196.9 billion. Those three partners accounted for the biggest country gaps.

In December, goods imports rose. The report showed higher purchases of computer accessories and motor vehicles. At the same time, exports declined. The drop mainly came from fewer outbound shipments of gold. The trade report listed gold as a key driver behind the export fall.

After adjusting for prices, the merchandise trade deficit widened to $97.1 billion in December. That was the largest real goods gap since July. Gold trade, unless used for industrial purposes such as jewelry production, is excluded from the government’s GDP calculation. That matters for how the trade numbers feed into growth data.

Economists are now updating fourth-quarter GDP estimates. The official GDP release is due Friday. Before the trade data, the Federal Reserve Bank of Atlanta’s GDPNow model estimated that net exports would add about 0.6 percentage points to fourth-quarter growth. The model currently shows overall growth at 3.6 percent.

Jobless claims data roll in

Labor market data also arrived with the trade numbers. For the week ending February 14, seasonally adjusted initial claims for unemployment insurance totaled 206,000. That was a drop of 23,000 from the prior week’s revised level. The previous week was revised up by 2,000, from 227,000 to 229,000.

The four-week moving average stood at 219,000. That was down 1,000 from the prior week’s revised average. That earlier average was revised up by 500, from 219,500 to 220,000.

The seasonally adjusted insured unemployment rate was 1.2 percent for the week ending February 7.

That was unchanged from the week before. The number of people receiving benefits on a seasonally adjusted basis was 1,869,000. That was an increase of 17,000 from the prior week’s revised level.

The prior level was revised down by 10,000, from 1,862,000 to 1,852,000. The four-week moving average for insured unemployment was 1,845,250, up 1,000. The previous average was revised down by 2,500, from 1,846,750 to 1,844,250.

On an unadjusted basis, initial claims under state programs totaled 207,694 for the week ending February 14. That was a decrease of 42,509, or 17.0 percent.

Seasonal factors had expected a drop of 19,669, or 7.9 percent. In the comparable week in 2025, there were 223,538 claims.

The unadjusted insured unemployment rate was 1.4 percent for the week ending February 7. That was unchanged. The unadjusted number of insured unemployed people was 2,207,430. That was up 4,919, or 0.2 percent.

Seasonal factors had expected a decrease of 14,819, or 0.7 percent. A year earlier, the rate was 1.4 percent, and the level was 2,191,941.

Total continued weeks claimed across all programs for the week ending January 31 came in at 2,239,250. That was down 9,081 from the previous week. In the comparable week in 2025, total continued claims were 2,219,025. No state triggered the Extended Benefits program during that week.

Initial claims filed by former federal civilian employees totaled 695 for the week ending February 7. That was up 80 from the prior week. Newly discharged veterans filed 444 initial claims, up 66.

Continued claims from former federal employees totaled 12,419 for the week ending January 31, down 606. Newly discharged veterans claiming benefits totaled 4,311, down 316.

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CME Group will allow 24/7 trading in its regulated crypto futures and options starting May 29, pending regulatory review, according to a press release by the company on Thursday.

The contracts listed on CME will move to nearly continuous trading on CME Globex, with only a minimum two-hour maintenance break over the weekend.

According to CME’s claims, so far this year, it has recorded an average daily volume of 407,200 contracts, up 46% from the same period last year, while average daily open interest stands at 335,400 contracts, up 7% year over year.

Futures alone account for 403,900 contracts in average daily volume, a 47% increase compared with last year. CME also reported $3 trillion in notional volume across its crypto futures and options in 2025.

CME moves crypto trading to a nonstop schedule

Tim McCourt, Global Head of Equities, FX and Alternative Products at CME Group, said, “Client demand for risk management in the digital asset market is at an all-time high, driving a record $3 trillion in notional volume across our Cryptocurrency futures and options in 2025.”

Tim added, “While not all markets lend themselves to operating 24/7, providing always-on access to our regulated, transparent Cryptocurrency products ensures clients can manage their exposure and trade with confidence at any time.”

Under the new structure, trades placed from Friday evening through Sunday evening will carry the next business day’s trade date. Clearing, settlement, and regulatory reporting for those transactions will also be processed on the following business day.

CME said crypto futures and options have continued to post record activity in 2026 as more traders use listed derivatives to manage price swings in bitcoin and related contracts.

Markets slide as bitcoin, oil and metals react

Meanwhile, today the Dow Jones Industrial Average fell 185 points, or 0.4%. The S&P 500 dropped 0.3%, and the Nasdaq Composite declined 0.4%, as traders assessed Walmart’s latest earnings and rising tensions between the United States and Iran under President Donald Trump.

Walmart shares rose 2% after fourth-quarter results beat analyst expectations, though its full-year earnings outlook came in below forecasts. Ed Yardeni, President of Yardeni Research, wrote in a note to clients, “Purely from a valuation standpoint, the Mag-7 isn’t as expensive as it was, but it’s not cheap either.

The group’s forward price-to-sales (P/S) ratio has fallen to 7.10, down from its November 3, 2025 peak of 8.33. But the P/S ratio remains higher than it has ever been outside of the past two years.”

Crude prices climbed as the standoff between the United States and Iran over Tehran’s nuclear program continued. West Texas Intermediate futures rose more than 1% to trade above $66 per barrel.

Bitcoin traded just above $67,000, down about 1.6% over the past 24 hours. Total global crypto market capitalization fell 1.6% to $2.38 trillion. Bitcoin remains nearly 50% below its October 2025 record above $126,000.

Options data from Deribit shows that a $40,000 bitcoin put option is now the second-largest strike by open interest ahead of next week’s February expiry, signaling strong positioning for downside protection.

In metals, spot gold gained 0.2% to $4,989.09 per ounce by 1227 GMT, while U.S. gold futures for April delivery held at $5,008.60. Spot silver rose 0.9% to $77.87 per ounce after climbing more than 5% the previous day. Spot platinum fell 0.6% to $2,059.55 per ounce, and palladium dropped 1.7% to $1,686.47 per ounce.

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Standard Chartered slashed its end-2026 price target for XRP by nearly 65%, reducing it from $8 to $2.80. This outcome comes after the crypto market lost almost $2 trillion since October, and XRP has been trading way below its previous high of $3.66.

According to the bank’s Global Head of Digital Assets Research, such a low target reflects short-term pressure in the crypto market. However, Standard Chartered still maintained its XRP forecast at $28 for 2030.

Standard Chartered lowers its price target for XRP as the crypto market weakens

Standard Chartered lowered its price target for XRP to $2.80 by the end of 2026, down from $8. While this sounds dramatic, the bank sees short-term pressures affecting many tokens at once as it also trimmed its expectations for Bitcoin, Ethereum, and Solana. 

Specifically, Standard Chartered reduced its target for Bitcoin from $150,000 to $100,000, Ethereum from $7,000 to $4,000, and Solana from $250 to $135. These changes indicate that the bank is cautious amid digital assets’ struggle to maintain their previous highs. 

Despite these near-term concerns, ongoing developments in stablecoins and tokenized real-world assets could trigger long-term support for XRP and Ethereum.

What’s more, the downgrade sparked divided opinions and debate among investors, as some see it as a wake-up call that the market may have bitten off more than it can chew. Alternatively, others view these predictions as overly ambitious, especially the prediction that XRP will reach $8 this year. 

XRP investors debate downgrade, with some calling it realistic, not fatal

People are trying to make sense of what Standard Chartered’s XRP revision really means for the token’s future. On the one hand, some say there may be little room for dramatic growth in the near term, as users have already captured the token’s gains. Some even describe the reduction as a “funeral” for earlier bullish expectations, which shows disappointment and caution.

At the same time, a number of investors consider the new $2.80 target more realistic, as they never expected XRP to reach $8 this year. To them, these revisions are simply a reflection of market conditions, not a sign of failure.

Furthermore, some noted that negative sentiment may be more about timing than the asset’s long-term potential, as posts predicting doom often appear just before prices rebound. In other words, this perspective highlights that short-term dips are part of normal market fluctuations.

Building on these differing views, traders noted that volatility creates opportunities and isn’t inherently bad.

For instance, price swings can benefit active traders who will profit from changes in direction, as long-term traders focus on the bigger picture. Thus, the current dip may stress some, but it also opens the door to renewed interest when the market stabilizes. 

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Russia’s monetary authority is behind a new proposal to punish those conducting unregulated operations with cryptocurrencies in the country.

The news coincides with a call for accelerated adoption of regulations legalizing transactions with digital assets issued by a major Russian bank.

The authorities in Moscow intend to approve the respective legislation by the summer, with some analysts predicting Russia will then block foreign exchanges.

Bank of Russia suggests measures to prevent unauthorized crypto activities

The Central Bank of Russia (CBR) considers it necessary to prosecute cryptocurrency operations carried out outside the legal framework.

Governor Elvira Nabiullina made that clear in statements on the matter, quoted by Russian media and local crypto news outlets on Wednesday.

Speaking during a forum devoted to financial cybersecurity, the head of the regulator highlighted the main motive for this stance:

“Fraudsters are taking advantage of the gray market … A systemic solution is, of course, regulating cryptocurrency with the introduction of liability for transactions outside the regulated segment.”

“Such changes are currently being prepared. We have made our proposals and are discussing them with the government,” the CBR Chair added, according to a report by the official TASS news agency.

Russians who sell cryptocurrency are often blacklisted with their bank transactions suspended, Nabiullina also pointed out.

The reason is simple – the money they receive in exchange is sometimes stemming from fraud and theft committed by scammers, she explained.

“Essentially, these cryptocurrency sellers become unwitting participants in fraudulent schemes,” the head of the monetary authority elaborated.

In less than three months, more than 1,800 such persons have contacted Russian law enforcement agencies with requests to have their access to banking services restored, Rossiyskaya Gazeta revealed on Thursday.

Many among them were people who sold crypto and found themselves added to a state-maintained database for suspicious transactions, the government-issued newspaper noted in report from the same “Cybersecurity in Finance” event held in the city of Yekaterinburg.

Leading Russian bank urges speedy cryptocurrency legalization

Meanwhile, the head of Russia’s second-largest bank used his participation in the conference to call on authorities to speed up the legalization of crypto transactions, particularly payments.

According to Andrey Kostin, CEO of VTB, formerly Vneshtorgbank, a significant number of clients, including major exporters, are now asking for payment options using cryptocurrency.

The chief executive of the majority state-owned institution emphasized this is unavoidable, suggesting regulations must be introduced as quickly as possible, as per a report by the Gazeta[.]ru portal.

The sanctioned Russian bank is among those that plan to enter the crypto market once it’s regulated. Last year, it announced plans to launch crypto trading via brokerage accounts.

Using decentralized digital money for international settlements has been a key driver behind Russia’s turn towards crypto legalization in 2026.

In October, the Ministry of Finance and the Central Bank agreed to legalize cryptocurrency payments in foreign trade to help Russian firms bypass fiat restrictions imposed by the West over the war in Ukraine.

Moscow now wants to replace an “experimental legal regime” for such transactions with a full-fledged legal framework for crypto activities, including investment and trading.

It will be based on the new regulatory concept proposed by the CBR in late December, which envisages recognizing cryptocurrencies and stablecoins as “monetary assets,” as reported by Cryptopolitan.

At the forum in Yekaterinburg, the Chairman of the parliamentary Financial Markets Committee Anatoly Aksakov also urged to quickly put the crypto market in order. He stated:

“We need to introduce the bill faster, because this is one of the areas where people lose a lot, and it is not regulated properly.”

Meanwhile, industry watchers warned that Russian regulators may cut access to global crypto trading platforms as soon as the country regulates its own market.

Interviewed by the business news outlet RBC this week, they believe that established foreign exchanges like Bybit or OKX may be blocked by the end of the year.

Nikita Zuborev, senior analyst at the crypto exchange aggregator Bestchange[.]ru, expects this to happen after Russia starts licensing domestic crypto service providers.

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Hackers have modified their operations in 2025, laundering crypto much faster after an exploit. The recent Global Ledger report revealed the evolving techniques of hackers and the biggest threats in the crypto space. 

Hackers changed their targets and laundering techniques in 2025, as revealed by the latest Global Ledger report on exploits. The Global Ledger report is based on 255 reported incidents with a total of $4.4B in losses. 

The exact estimation of hacks is traced by different methods, as Cryptopolitan reported a lower total of $3.4B. However, a common picture has emerged, where hackers target Web3 features and discover ways to exploit the AI agent environment.

The Swiss blockchain analytics company Global Ledger examined the details of multiple hacks, discovering the speed of moving and disguising funds. 

Hackers moved funds immediately after the exploits

The fastest movement of funds took around two seconds, according to Global Ledger. Despite this, around 50% of the funds remain unspent after the hack or wait for months to be moved. 

In 42% of exploits, hackers resorted to Tornado Cash for laundering. Overall, hackers moved funds twice as fast in the second half of 2025. In 76% of cases, they succeeded in moving, splitting or partially laundering funds even before the exploit was intercepted and reported. 

The victims also began reacting faster, compressing their reaction time by more than half in H2. The new reactions on freezing funds where possible and cooperating with exchanges led to a slowdown of exploits in the second half of 2025. 

Despite the fast movement of funds, hackers still took 10.6 days on average to launder funds in H2, up from around eight days in the first half of the year. The bad actors fragmented their haul, taking it into smaller chunks through more intermediaries and over a slightly longer time span.

The laundering techniques were well-known, but hackers used them more intensively in 2025.

Which protocols were the most targeted by hackers?

The past year saw a shift from using centralized exchanges for laundering to tapping the DeFi ecosystem. Over $732M was laundered through DeFi in the second half of 2025, up from $170M in the first half of the year. The volumes rose more than 4.3 times, making DeFi the second most-used laundering route after mixers. 

This also meant DeFi protocols were under siege, as they directly connect to a powerful laundering infrastructure.

“Ethereum remains the top target for attackers, accounting for $2.44 billion in losses (~60% of the global total) in 2025. If you are building on Ethereum with high liquidity, you are the default target for hackers. The data shows that while other chains like Solana or Bitcoin are growing in incident counts, the massive financial damage is still concentrated where the most liquidity lives,” Lex Fisun, CEO and co-founder of Global Ledger, told Cryptopolitan.

To prevent some of the losses, Fisun believes manual tracking of funds is not efficient. The fix may lie in instant labeling of the source of funds and the automated tracing of transactions. 

“To close the gap between a hack and response, DeFi protocols need real-time action. Here, implementing real-time on-chain monitoring that detects anomalies the moment they happen. Without internal detection and alerting, no ecosystem response can be fast enough,” commented Fisun.

Bridges were also key infrastructure for hacks, which could be monitored.

In 2025, bridges were more rarely attacked, but were widely used for chain-hopping to trade and disguise the origin of funds. | Source: Global Ledger

In 2025, nearly half of stolen funds, or $2.01B was laundered or routed through bridges, over three times the amount that went through mixers.

One of the reasons was to move funds to the Ethereum L1 chain, which is more liquid and accessible. Bridges still attract hackers for their liquidity, as well as for chain-hopping and disguising origins, added Fisun.

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Kalshi predictions are close in their accuracy to professional forecasts, according to a recent paper by the Federal Reserve. The release arrives after signs of manipulation on some markets, while other prediction pairs had high accuracy. 

Prediction markets on Kalshi may be as accurate as the opinions of professional forecasters, revealed a recent paper in the Finance and Economics Discussion Series of the US Federal Reserve. 

The paper is meant to raise a discussion, and is not conclusive, but it offers a glimpse of the accuracy of prediction pairs when left to the organic opinions of traders. 

The authors compared the market-implied forecasts of Kalshi with more traditional methods like surveys and market-implied forecasts. Kalshi was able to approximate the expectations based on macroeconomic analysis, financial news, and policy signals, offering a continuously updated distribution of risk in real time. 

Kalshi delivers real-time data with high accuracy

Since markets move on expectations and interpretation, Kalshi and prediction markets are tools to directly gauge sentiment. Surveys, while thorough and formal, can become outdated by the time of their release, and are at best a lagging indicator. Some market-based analysis may take into account outliers and relatively illiquid markets. 

“For the federal funds rate forecasts 150 days (3 FOMC meetings) ahead, Kalshi’s mean absolute error is very similar to that of professional forecasters. But unlike the survey—which provides a snapshot every six weeks of a modal path—Kalshi offers a continuously updating full distribution,” discovered the researchers.

Kalshi was also one of the first markets liquid enough to offer relevant, statistically normal information. While Polymarket was not mentioned in the survey, its market depth was similar for some of the key markets. 

For instance, on Polymarket, the market for Fed decisions has a volume of $138M, or $4M daily. On Kalshi, the market’s volume is around $10M, though it may be accurate at this level of activity. The Kalshi platform dominated the Super Bowl predictions and retains high-liquidity markets. 

Kalshi has the advantage of full regulatory approval

According to the paper authors, Kalshi and Interactive Brokers have the advantage of regulatory approval, while Polymarket is still in a legal gray area. The paper is based on Kalshi data, as it is seen to be the more mature market. 

Kalshi is regulated under the Commodities Futures Trading Commission (CFTC), while Polymarket is still seeking the framework to expand its US-based operations.

Polymarket has increased its activity based on niche and diverse markets, often handling low-volume predictions. In the past month, Polymarket volumes have been challenged by Kalshi and Opinion. Despite this, Polymarket draws in the highest number of active users based on wallet engagement.

Polymarket’s volumes have been challenged, but the platform still attracts the biggest number of on-chain users. | Source: Dune Analytics.

Some of the markets have been manipulated due to incentives like liquidity rewards or the launching of derivative trading pairs. Other attempts at scamming include the ongoing social media calls to copy-trade specific Polymarket wallets. 

Polymarket has also switched to short-term predictions, with significant volumes coming from its 15-minute and 5-minute BTC pairs. 

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Developers are now using AI agents to protect smart contracts that control billions in digital assets, following crypto hackers’ theft of over $3.4 billion from blockchain platforms in 2025. 

Rather than dozens of small thefts, 2025’s losses were concentrated in a few massive breaches, with just three major incidents accounting for nearly 70 % of the total value stolen. The most notable was the Bybit exchange hack, which alone siphoned off roughly $1.4 billion — one of the largest crypto thefts ever recorded

OpenAI is working with Paradigm and OtterSec to test whether AI agents can detect vulnerabilities in real blockchain spaces using its EVMbench.

AI agents review smart contracts to identify and fix security issues that lead to crypto losses

Any error in smart contract code today will affect real money belonging to big and small investors, as these automated programs manage more than $100 billion in open-source digital assets. 

And after hackers stole over $3.4 billion from crypto platforms in 2025, developers can now see just how vulnerable the system is when attackers exploit weak code. 

Relying on human audits isn’t an option anymore because live contracts face new and evolving attacks that weren’t present during the audit process. Plus, it takes a lot of time and costs a fortune as security teams must review smart contract code before deployment.

Instead of waiting for the next manual audit cycle that may come too late to stop an attack, developers are now turning to AI agents to continuously monitor live smart contracts.

It takes AI agents less time to detect hidden code irregularities than people do, who may need days or even weeks, so frameworks like the EVMbench by OpenAI make more sense for developers.

EVMbench uses AI agents in test environments to help developers understand how smart contracts may perform under real-world pressure before the actual deployment.

The agents will first detect hidden vulnerabilities in code, fix the issue without breaking the contract’s function, and then try to exploit the weakness to drain funds if the problem persists.

According to early results, AI agents are better at exploiting vulnerabilities than safely fixing them. People are now concerned that hackers could misuse AI-powered tools to exploit weaknesses in blockchain systems more efficiently than ever. 

AI agents can also create new security risks by helping hackers identify weaknesses in blockchain systems

Machines are learning to break into weak contracts faster than ever before because current AI agent systems now succeed in exploiting more than 70% of vulnerabilities compared to earlier AI models with a less than 20% success rate.

Attackers are now moving away from manual hacking methods and toward AI agents that scan large amounts of code and test different attack paths without direct human input.

And as this trend continues, experts now say AI agents will soon be able to move funds, approve transactions, and manage financial tasks automatically on behalf of users. 

American technologist Jeremy Allaire said that billions of AI agents will soon use stablecoins to send and receive payments across blockchain networks. Founder and former CEO of Binance, Changpeng Zhao (CZ), also said crypto could become the native payment layer for AI-driven systems in the future.

All these trends and predictions make AI agents more useful to both users and attackers, as they will soon interact with contracts directly in real financial environments where actual money is at stake.

Industry leaders have even raised concerns about user safety. Managing partner at Dragonfly, Haseeb Qureshi, warned that many users still worry about sending funds to the wrong address or approving a harmful transaction by mistake through crypto transactions.

To solve this problem, Qureshi proposed that AI-operated wallets could soon interact with the blockchain without users needing to understand the complex process involved.

In this way, AI agents can assist in reducing human errors in audits and in protecting smart contracts by continuously monitoring systems. However, they can also increase the rate at which attackers discover vulnerabilities in the system, enabling exploits to scale much faster.

This creates a security issue where AI systems developed to protect decentralized finance platforms could also be the most effective at attacking them if they fall into the wrong hands.

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WLFI is up 20% today because World Liberty Financial has said it plans to tokenize loan revenue tied to the Trump International Hotel & Resort now being built in the Maldives.

Traders reacted fast. The token is now linked to projected resort loan income, and that pushed WLFI higher during a week when the broader crypto market looked mixed.

World Liberty Financial lists President Donald Trump as “co-founder emeritus.” The company said it will tokenize revenue interests from loans connected to the Maldives resort.

Those tokens will fall under its branded real-world asset strategy. The announcement came Wednesday at the World Liberty Forum held at Mar-a-Lago in Palm Beach, Florida.

World Liberty outlines tokenized real-world asset plan

The forum brought out Goldman Sachs CEO David Solomon, Coinbase CEO Brian Armstrong, Eric Trump and Donald Trump Jr. also spoke.

John D’Agostino from Coinbase Institutional spoke about volatility. John said, “There are emotional break points. Uh 100,000 I think was an emotional break point on the upside where a lot of people who’ve been holding it since a,000 bucks 2,000 bucks said okay now I can kind of delever and take some risk off.

“Um I think any handle six handle, five handle, eight handle, nine handle, 10 handle is an emotional break point. uh in terms of the technicals, you know, that varies based on momentum,” John added.

His comments came as investors tried to make sense of price levels across the market while WLFI climbed.

Lawmakers debate stable coin rewards at the forum

Ohio Senator Bernie Moreno spoke at the event. Bernie said the Clarity Act could become law by April. He supports allowing rewards on stable coins. Bernie said, “What it means is that the cash that you hold, you’re going to have competition to pay you more interest. So, you’re going to be able to get more money for the money that you have in your wallet or the money that you have in some sort of account. So, this is very, very good for working Americans because ultimately this is about giving Americans more rewards for being able to have cash. uh on reserve, be able to get paid quicker, be able to transact faster, democratize the financial systems.”

Brian addressed concerns about blocking regulation. Brian said, “One of the big issues that did come up in the past was this idea of stable coins on rewards. Um I wouldn’t say we blocked it. In fact, nobody, I think, in the crypto space has been working harder on this over the last few years to try to get some legislation. Uh, what we did say was the current draft, we had some issues with it. I think that caused everyone to come back to the table.”

Brian then said:-

“And there’s now a path forward where we can get a win-win-win outcome here. Win for the crypto industry, a win for the banks, and a win for the American consumer uh to get President Trump’s crypto agenda through to the finish line uh so we can make America the crypto capital of the world.”

Eric and Donald Jr. also spoke about bringing crypto and traditional finance together. Critics from the Democratic Party have questioned whether the Trump family’s crypto involvement could create conflicts of interest.

The White House said the president’s crypto holdings are held in a trust managed by his children. Eric has dismissed those concerns in prior interviews.

Dragonfly raises $650 million as institutions back crypto

Dragonfly Capital announced it closed a $650 million fourth fund. Backers include JP Morgan and the Rockefeller Foundation. General manager Rob Haddock spoke about raising money during a risk-off period.

Rob said investors want managers who understand traditional market structure, crypto systems, and blockchain technology.

He said 2025 and 2026 could bring faster adoption across payments, stable coins, prediction markets, decentralized finance, and market structure reform.

Dragonfly has focused heavily on stable coins. It invests in issuers like Agora and Athena. It also backs Rain, which settles stable coins directly with Visa 365 days a year.

That channel grew from zero last April to over $4 billion annualized in direct settlement volume. The firm is also looking at tokenization, blockchain infrastructure, decentralized finance, centralized finance, and AI crypto crossover.

Gemini announced executive exits, including its COO, CFO, and CLO, after cutting roughly 25% of staff. The company said it will stop operating in the UK, EU, and Australia to focus on the United States. Galaxy shares have fallen about 22% month to date.

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Riot, a Bitcoin mining and digital infrastructure firm, soared 6% after activist investor Starboard Value called on the company in a letter to accelerate deal-making in artificial intelligence (AI) and high-performance computing (HPC). 

In this letter, Starboard Value noted that the mining firm could generate equity value of $9 billion to $21 billion through Texas-based AI and HPC data centers. Nonetheless, to achieve this significant milestone, the activist investor stressed the need for the company to embrace time as an important tool and to complete more crucial deals during this period, when Riot will intensify its focus on AI and HPC. 

Moreover, Starboard emphasized that, “With 1.4 gigawatts of gross capacity still available to be utilized, Riot has a great opportunity – but it needs to act with excellence and urgency.” They made these remarks while expressing optimism that “Riot could attract high-quality tenants for tier-3 data centers with terms similar or better than those announced by competitors towards the end of 2025.”

Starboard argues that Riot is well-positioned to meet rising demand for AI and HPC

Starboard Value’s letter to Riot executives mirrors a substantial shift among cryptocurrency miners, who are deploying significant computing power toward AI. More precisely, reports stated that this step corresponds to volatility in bitcoin mining profitability and exponential growth in demand for AI data centers.

These findings prompted Starboard to write a letter to Riot Platforms CEO Jason Les and Company Executive Chairman Benjamin Yi, with a copy sent to the Company’s Board of Directors, highlighting an increasing trend in the technology sector where players employing AI and high-performance computing (HPC) in their operations perceive crypto miners as very good candidates to scale up their data centers on the go.

The letter also noted that the mining company’s performance has fallen behind that of its rivals, which have executed big AI and HPC deals. To curb this situation, Starboard wrote to Peter Feld, the Managing Member of Starboard, stating that Riot must quickly take advantage of a great opportunity presented by rapidly surging AI and HPC demand in this fast-evolving environment.

This situation triggered reporters to reach out to Riot for comments. However, the company declined to respond. When they requested that Starboard comment on the matter, the activist investor argued that Riot is well-positioned to meet rising demand, citing its key Texas facilities in Rockdale and Corsicana. At this point, it is worth noting that Starboard possesses around 12.7 million shares in the Bitcoin mining and digital infrastructure firm.

Meanwhile, analysts found that these facilities, when combined, could supply approximately 1.7 gigawatts of power to support AI data center operations.

On the other hand, after noting down its observation and thought regarding the mining company’s focus on AI and HPC, Starboard, which claims to be a significant stockholder in the company, spoke highly of the Bitcoin mining and digital infrastructure firm’s latest deal with Advanced Micro Devices (AMD), a leading global semiconductor company. According to the activist investor, this agreement demonstrated a positive sign of Riot’s progress. However, they termed it a minor proof-of-concept deal.

Riot-AMD deal marks a significant accomplishment in the industry 

When reporters reached out to Riot to comment on its deal with AMD, the firm noted the agreement as a major one, anticipated to generate about $311 million in revenue over the first decade. Moreover, Riot stated that this deal is set to record approximately 80% EBITDA margins.

Les said the partnership with AMD positions Rockdale as a leading data center development opportunity and positions Riot for substantial long-term value creation.

Les also stated, “This partnership represents a validation of Riot’s infrastructure, development capabilities, the attractiveness of our sites, our readily available power capacity, and our ability to offer innovative solutions to meet the requirements of top-tier tenants.”

Starboard had projected that a Bitcoin mining and digital infrastructure company could potentially yield over $1.6 billion in annual EBITDA, assuming its power capacity monetization meets industry standards.

In the meantime, to stay competitive in the industry, companies like CleanSpark, MARA Holdings, Core Scientific, Hut 8, and TeraWulf have followed Riot’s led, illustrating heightened interest in AI and HPC.

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Coinbase will give Base more direct control over the main software that runs the network. Base, one of the largest Ethereum scaling solutions incubated by crypto exchange Coinbase, said it will transition away from Optimism’s core technology and adopt a new “unified Base stack” that consolidates previously distributed components. This includes the network’s sequencer and other infrastructure into a single Base-managed codebase.

According to the Base team, the network plans to increase its rate of protocol upgrades to as many as 6 hard forks per year, roughly double the rate under the Optimism-based setup.

Coinbase is moving Base to run on its own software system instead of relying on external technology.

Coinbase grew quickly in its early stages and provided developers with a stable platform to build apps by launching Base on the OP Stack, enabling faster scaling on ETH without starting from scratch.

As time went on, Base had to improve its performance, speed, and developer experience, so it began adding more tools and features from external teams such as Flashbots and Paradigm. 

In the end, upgrades and maintenance depended on teams working across separate software layers, making the system harder to manage. The network had to wait for shared release cycles before releasing major upgrades, such as hard forks, due to greater coordination with external partners.

Coinbase now wants Base to package its own software upgrades, release one official binary for node operators to run, and manage its future hard fork schedule without Optimism. To achieve this, the company will put all its external software parts into a single in-house system called base/base. 

Node operators who want to remain compatible with the network but still run Optimism-maintained clients will have to switch to Base-maintained clients. 

This ultimatum for operators shows just how serious Coinbase is about Base running and managing its own tech stack while still building on Ethereum. 

Base can now make faster upgrades by controlling its own technology system.

Coinbase wants Base to move at its own pace, so the network will handle six minor hard forks annually instead of the usual three. 

With this faster schedule, the team will be able to test new scaling features sooner and use multi-proof systems to release faster withdrawals. Base will also be able to confirm transactions more quickly using more advanced TEE and zero-knowledge (ZK) proofs.

While the company wants to give Base full control over how the network runs, it still wants to retain essential support from Optimism Enterprise during the transition. So, Coinbase will introduce Base-specific governance, independent security council signers, Base-level fee systems, and enhanced neutrality standards across the stack.

This will allow Base to upgrade, govern, and decentralize on its own software foundation over time.

Optimism now has less influence over Base because it has lost one of the network’s largest ecosystem partners. Base can finally act more quickly and independently because it has taken control of its upgrade cycle.

Investors reacted quickly when they realized that one of Optimism’s key Layer 2 partners was taking its own path, which led to a drop in the OP token. And if Base continues down this road, the weight of competition will force Optimism to advance its own network and its governance decisions. 

Developers on the network won’t have to wait months for network-wide changes to test new scaling methods, advanced cryptography systems, or faster withdrawals. It will also be easier for them to create reliable, innovative products because they can plan their applications around Base’s independent upgrade schedule. 

Users and end customers will also enjoy quicker and more secure transactions because multi-proof withdrawals will reduce wait times.

With this new flexibility, Base will be able to test new ways to reward node operators, developers, and users without waiting for Optimism. These experiments will attract more activity to the network’s ecosystem because Base will become more competitive compared to other Layer 2 networks. 

Base will soon be a major player in Ethereum scaling because the network now has the tools to innovate faster, govern itself, and respond to real-world delays, all while getting support from optimism in critical areas. 

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The entire crypto community spent months wondering why Bitcoin crashed in October last year. As such, everyone eagerly waited for major institutional investment managers to file their quarterly 13F reports with the SEC so they could reveal which funds were buying or selling Bitcoin ETFs around the time of the crash. 

But the answers they got might not be the answers they wanted.

From the last filings due on Valentine’s Day and formally reported yesterday due to Monday’s Presidents’ Day holiday, the spotlight immediately fell on Laurore LTD, a relatively unknown Hong Kong-based entity that showed up in BlackRock’s iShares Bitcoin Trust (IBIT) holder list with 8.79 million shares (around $436 million). 

It was Bitwise advisor Jeff Park, who flagged the filing yesterday, February 17, describing Laurore as “the biggest new entrant into IBIT” from “a brand new entity with no website. No press. No footprint.” 

The news triggered immediate speculation: was this mystery fund the hammer that smashed Bitcoin from $127,000 to $102,000 in 40 minutes back in October last year?

Q4 holdings show Laurore built its position after the crash

DeFi Development Corporation CIO, Parker White, noted that Laurore’s IBIT stake was built during the fourth quarter of 2025, which began on October 1 and ended December 31. 

However, Parker did observe that major options market makers “MASSIVELY increased their long vol exposure to IBIT via both CALL and PUT buying,” according to yesterday’s Q4 13F filings. 

In his post, Parker mentioned what he thought were “comical” position size increases by Jane Street, SIG, IMC, Citadel, and Marex, some of the largest options market makers in the world.

“690% increase in calls from JPM (likely tied to their structured product offerings), 102% increase from Barclays, etc.” Parker mentioned. 

The DeFi Development Corporation claimed that someone is massively short on the other side of these “massive CALL and PUT buying by the dealers.” 13F filings currently do not require funds to report short positions in options, only long positions. 

Parker ended the post not completely exonerating Laurore: “So then, with this much positioning, if the short positioning was concentrated with just a few funds (or maybe a single HK-based fund as I’ve predicted), then a blow up is completely inevitable.”

However, in a later post on the same day, Parker admitted: “I kinda don’t think they are the HK fund that blew up, but nonetheless, interesting,” referring to Laurore.

Chinese capital could be rerouting funds to US ETFs 

Park’s analysis focused more on finding out information about Laurore than the cause of the crash, though. He observed that the filer’s name was Zhang Hui, which he described as the “Chinese equivalent of John Smith”, a name so common it also serves as camouflage, thus drawing more raised eyebrows.

From the SEC filings, Laurore listed its address as Suites 2907-8, 29F, Two Exchange Square, 8 Connaught Place, Central, Hong Kong. This is one of the city’s most prestigious financial districts. 

Park also noted that the Ltd suffix potentially indicates a Cayman Islands or British Virgin Islands shell structure commonly used by wealthy users or institutions with restricted capital to access US securities markets.

Based on the similarities in the signatory name and address, Parker White believes that Laurore might be a subsidiary of Hao Advisors Management, although with some skepticism. He also claimed that the setup was done professionally, so it could not have been an amateur operation.

What makes Laurore interesting, however, is the capital flow associated with it. Since Chinese citizens cannot legally hold Bitcoin directly, Park suggested that the filing could represent “an early sign of institutional Chinese capital moving into Bitcoin through a regulated US ETF rather than through exchanges or gray-market channels.”

The theory makes sense since IBIT offers institutional-grade Bitcoin exposure with BlackRock’s $10 trillion valuation, full SEC oversight, and huge liquidity. This means a Cayman Islands-based organization holding IBIT shares through a Hong Kong address can still maintain plausible deniability.

13F filings rule out institutional conspiracy

The Valentine’s Day filing deadline failed to produce concrete evidence tying institutional players to the October incident. 

Nonetheless, Park’s main point about transparency is still true. Since registered investment advisors managing over $100 million are mandated to disclose all equity holdings per quarter, offshore entities like Laurore that choose US ETF exposure have to voluntarily subject themselves to the public scrutiny that comes with the territory.

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The Hyper Foundation has invested 1 million of its HYPE tokens into the creation of the Hyperliquid Policy Center. The center will focus on making sure that issues in the decentralized finance sector do not go unaddressed in the current crypto policy environment. 

The Hyperliquid policy center will be an independent nonprofit focused on advocating for updated decentralized finance policies that match current realities.

The Hyper Foundation commits almost $30 million to DeFi policy push

The Hyper Foundation has announced that it has committed 1 million HYPE tokens to fund the creation of the Hyperliquid Policy Center (HPC). Based on the current market price, this grant is worth nearly $30 million. The tokens are set to be unstaked later today.

The Hyperliquid Policy Center is an independent research and advocacy nonprofit that ensures that decentralized finance, or DeFi, has a clear and legal path to grow in the USA.

Jake Chervinsky will come on board as the founding CEO of the organization. Chervinsky is a well-known figure in the crypto legal world who previously served as the Chief Legal Officer at the venture firm Variant and held a senior leadership role at the Blockchain Association.

Last month, Hyperliquid processed over $256 billion in perpetual futures volume, but despite its massive growth, many of the products offered by the company, such as perpetual derivatives, currently operate offshore because U.S. financial laws were written for traditional, centralized systems.

Hyperliquid processed $256 billion over the last 30 days. Source: Defillama 

Hyperliquid believes its community needs direct representation in Washington to protect its interests and explain how decentralized markets actually work.

HYPE is currently trading at approximately $29.16, down significantly from its peak of $59.39 in late 2025.

In collaboration with Policy Counsel Brad Bourque, formerly of the law firm Sullivan & Cromwell LLP, and Policy Director Salah Ghazzal, who was previously the policy lead at Variant, the company hopes to provide expert support and technical research that will lead to the creation and implementation of modern rules.

The center is also actively hiring for several high-level roles, including a Chief of Staff, a Head of Communications, and a Head of Government Relations.

How can the HPC impact DeFi regulation?

To better establish a legal framework for on-chain perpetual contracts and properly close the gap between how these products are used globally and how they are viewed by U.S. regulators like the SEC and CFTC, the center will publish research that explains why decentralized protocols are different from traditional exchanges and how they can be regulated without destroying their unique benefits.

In 2025, crypto policy progressed significantly with the GENIUS Act, which focused on stablecoin regulation, becoming law in July. The CLARITY Act has stalled in Congress after months of significant progress. The HPC aims to build on this momentum to ensure that DeFi-specific issues are addressed.

Other groups, like the Blockchain Association, are making efforts to work with the current administration and Congress.

Former CFTC Commissioner Summer Mersinger took over as The Blockchain Association’s CEO. The company held a major policy summit in December 2025, which saw record attendance from both industry leaders and bipartisan members of Congress. They have been focused on challenging restrictive IRS reporting rules and pushing for a comprehensive market structure bill.

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Altcoin selling pressure reached an all-time high, as those assets suffered even deeper losses compared to BTC. Even worse, recovery may be months or years away, as there are rarely any signs of investors buying the dip. 

Altcoins are under overwhelming selling pressure, with no signs of buyers. The buy/sell quote volume ratio signals that selling is at an all-time peak, accelerating in the past weeks. 

Altcoin selling pressure increased exponentially, passing even the worst selling during the 2022-2023 crypto winter. | Source: Cryptoquant

While altcoins have offered relief rallies during previous market downturns, their higher volatility erased any real demand. 

Altcoins have historically sold off during BTC bear markets, but in 2026, the pace of selling is at its steepest, marking unprecedented records. 

The recent bear market may also cause the disappearance of another wave of projects, similar to other dead chains and coins. Even blue-chip tokens are seeing a sell-off, with only ETH showing signs of silent accumulation. 

Why are altcoin prices failing? 

Altcoins and tokens belong to projects that have had years to prove their utility. While some networks had success, others carried a minimal number of transactions. Despite the hype, those networks never carried an on-chain economy. 

Altcoin seasons were extremely brief, ending within days. Even the concept of blue-chip altcoins suffered, as most assets crashed deeply following the October 10 liquidation event. 

The altcoin season index stagnated around 30 points, only due to the underperformance of BTC. Most altcoins have erased the gains from their local peaks, and are unwinding in both dollar terms and against BTC. 

Altcoin liquidity spread to memes

Liquidity flowed to altcoins in expectation of eventual pumps. During previous cycles, even bearish altcoins outperformed. 

This time around, liquidity has spread to a much wider selection of tokens. The previous altcoin pumps were also unpredictable and required traders to wait for months. 

Meme tokens can deliver short-term rallies and do not require traders to lock funds for the long term. Some of the speculative and retail funds for altcoins moved back to the meme trenches. Other traders moved back to DEX swaps, as centralized exchanges carried a more limited selection of altcoins. 

Altcoin derivative trading also slowed down on centralized markets due to the more significant risk of liquidations. Some of the activity switched to perpetual futures DEXs. 

Additionally, some of the altcoin capital reverted to BTC, while others parked their gains in stablecoins and switched to DeFi for passive income.

Altcoin trading volumes also declined more rapidly during periods of corrections. In November, altcoins made up over 59% of Binance trading activity. By February, the share of altcoins had fallen to 33.6%, an almost 50% drop. 

The share of altcoin trading on Binance shrank in the past months, down to 33.6% of total volumes. | Source: Cryptoquant

The big question is whether there may be another altcoin market. For some, altcoins entered a bear market in 2022 and never really recovered. Only a handful of top assets with full DeFi ecosystems survived the previous crypto winter and remained as relevant projects. 

The recent volume shift showed BTC was seen as safer during periods of uncertainty and market stress. Аnother destination for available liquidity is the RWA markets, where tokenized metals replace some of the hot altcoins. 

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After recently legalizing crypto banks, Belarus is now promising its citizens an array of services that should let them earn, stake and spend cryptocurrencies like Bitcoin.

A top central bank executive spoke in detail about the coin-based products that may hit the market as early as this year, with the nation awaiting the birth of its first crypto banking institution in 2026.

Belarusian crypto banks to issue cards and loans backed by Bitcoin

Belarusians may soon be able to pay with cryptocurrency in brick-and-mortar stores and borrow fiat money using their digital assets as collateral.

That’s according to Alexander Egorov, first deputy chairman of the National Bank (NBRB), who pulled the curtain on some of the crypto banking services his compatriots may expect in the coming months.

Speaking to the government-run First Information Channel, the central bank official emphasized that Belarus is the world’s first country to officially introduce crypto banks to its national financial system.

If not a global leader in that respect, Belarus certainly became the first country in its region to legalize the operations of such institutions last month. It did that via a special decree signed by its long-term president, Alexander Lukashenko.

Unlike Switzerland or the U.S., where crypto banks are private entities under regulatory approval, Belarus is establishing a comprehensive crypto banking system under state control, explained Egorov.

This system should offer “tangible services” for everyone, the official BelTA news agency relayed his statements, noting that the first Belarusian crypto bank may open in 2026.

The deputy governor gave an example with crypto-secured loans, which offer crypto investors an opportunity to use fiat credit while preserving their digital-asset investment:

“Imagine this – you have Bitcoin, which is rising in value … You deposit the coins into a crypto bank as collateral. The bank issues you regular rubles. You use the money, repay the loan, and the bank returns your crypto.”

He also mentioned staking, calling it a next-gen depositing that will allow crypto owners to earn passive income while supporting blockchains and getting rewarded for keeping their coins with a bank.

Crypto cards are coming to Belarus, too, and Egorov described them as the most understandable and long-awaited product in the sector.

“It’s a regular bank card linked to your crypto bank account. You go to a store and pay for groceries. At the moment of payment, the bank instantly converts part of your cryptocurrency into Belarusian rubles,” he told the national broadcaster.

Self-employed Belarusians to legally earn cryptocurrency

A change that will affect hundreds of thousands of people in Belarus is the legalization of crypto remuneration for self-employed individuals.

“When previously, a designer or programmer completed an order for a foreign client who offered to pay with crypto … they couldn’t legally deposit the funds into their account and pay taxes. Now this barrier has been removed,” Egorov pointed out, also quoted by Sputnik Belarus.

The only legal requirement in such cases will be to channel these transactions through a licensed Belarusian crypto bank, the NBRB executive noted.

The banker is convinced that the model adopted by Belarus will eliminate risks that have ruined some foreign platforms, in his words.

The security of the banking services providers will be checked by specialists from the High-Tech Park (HTP) in Minsk, while the monetary authority will conduct traditional financial oversight.

The cryptocurrency banks themselves will verify clients and “X-ray” every transaction, Alexander Egorov added, stressing in conclusion:

“This is a bold step that transforms the theoretical potential of blockchain into real economic benefits for every citizen and business.”

Belarus, Russia’s closest ally, has seen a spike in crypto-related transactions over the past few years, amid Western sanctions limiting its residents’ access to fiat channels. The increase prompted Lukashenko to acknowledge the growing importance of crypto payments last fall.

The country has long established itself as a leader in cryptocurrency regulation in the post-Soviet space, after introducing rules for mining and trading “digital tokens” with another of his decrees enforced in 2018.

The Russian Federation has only recently taken the path of regulating such activities.

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The Federal Reserve will inject $16,021,000,000 into the U.S. financial system this week through scheduled bill purchases, adding short-term liquidity that traders see as supportive for stocks.

U.S. equities are grinding higher ahead of the latest Fed meeting minutes, with the S&P 500 up 0.2%, the Nasdaq Composite up 0.2%, and the Dow Jones Industrial Average higher by 86 points.

Nvidia jumped 2% after Meta said it plans to deploy millions of Nvidia chips in new data centers, while Bitcoin remains stuck around $67,000.

In the past month, BTC selling revealed the steepest capitulation since 2022. The Aggregate 30D Realized Cap turned sharply negative, showing the ongoing absorption of real losses. 

The BTC downturn from $90,000 to the $60,000 range was caused by the steepest capitulation since 2022. The market downturn showed multiple sources of selling pressure, coming from ETFs, strategic trader whales, as well as long-term holders.

This time around, the supply of stablecoins has remained flat, with no new minting and inflows of liquidity. 

In early February, signs of a market capitulation were already present, and the selling has only deepened. At the current price range, the question of a local market bottom is still uncertain. Previous deep capitulations could continue for a while before a price reversal. 

For BTC, even a price rally may not be enough to sustain a lasting recovery, as some holders may sell at or near their breakeven levels. 

The ongoing capitulation kept BTC stuck in a range above $67,000, as any attempts to break out above $70,000 led to selling. The capitulation may continue, as predictions see BTC sliding as low as $50,000. 

BTC realized cap declines as selling continues

The BTC realized market cap has been in decline since the October 2025 downturn. The metric is still a lagging indicator, which shifts more slowly. Some of the selling in the past months was still at a relatively high range. 

Currently, only 55% of the BTC supply is held in profit, down from over 99% in October 2025. The longer period of weakening prices has led to a mix of strategic selling, panic, and capitulation. 

The BTC supply in profit fell sharply from 99% in October, down to around 55%, putting pressure even on older wallets. | Source: Cryptoquant

A significant part of the selling may be due to forced liquidations, rather than deliberate shedding of positions. Despite this, some notable whales have started to divest, with ongoing BTC inflows into Binance in the past month. The other major source of price pressure may be a miner capitulation as pools now more actively sell off their rewards. 

The recent selling also keeps the BTC fear and greed index in the “extreme fear” territory at 12 points, with almost no recovery in the past few days. 

Is BTC facing a longer bear market?

The short-term price movements for BTC may include rallies to a higher price range. Sideways trading is also a possibility. 

There is no consensus for the end of the drawdown, and for some, the directionless trading may continue until the end of the year. 

BTC is now down by 45% from its price record, moving with continued losses for 135 days since the peak. Previous price cycles have shown that over 200 days are often spent in sideways trading, while rallies last only a few weeks or even days.

For now, silent accumulation may continue, but selling pressure remains, and a local bottom for BTC is expected at a later stage in the cycle.

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DeFi lending protocol Moonwell lost $1.78 million after an oracle pricing error in what is being described as one of the first major exploits directly linked to AI-generated Solidity code. Apparently, the error was caused by some code that was partially written by Anthropic’s Claude Opus 4.6 model.

Moonwell, a decentralized lending market operating on Base and Optimism, stated that it found a critical oracle configuration issue affecting its Coinbase Wrapped Ether (cbETH) Core Market on Base.

This caused cbETH to be valued at approximately $1.12 per token instead of its actual market price near $2,200, which is a 2,000x undervaluation that triggered instant liquidations.

🚨Claude Opus 4.6 wrote vulnerable code, leading to a smart contract exploit with $1.78M loss

cbETH asset's price was set to $1.12 instead of ~$2,200. The PRs of the project show commits were co-authored by Claude – Is this the first hack of vibe-coded Solidity code? pic.twitter.com/4p78ZZvd67

— pashov (@pashov) February 17, 2026

Claude co-authored code set cbETH price at $1.12 instead of $2,200

The vulnerability appeared on February 15, just after Moonwell activated governance proposal MIP-X43, which integrated Chainlink’s Oracle Extractable Value (OEV) wrapper contracts across Base and Optimism markets.

As such, instead of calculating the cbETH price in USD by multiplying the cbETH/ETH exchange rate by the ETH/USD price feed, the deployed code obtained only the cbETH/ETH exchange rate and treated that ratio as if it were already denominated in dollars.

With cbETH trading at lower prices because of Moonwell’s oracle, liquidators could repay around $1 worth of debt and get collateral worth thousands in return.

Moonwell’s risk manager was able to reduce the cbETH borrow cap to 0.01 within hours of the vulnerability, effectively freezing new borrowing activity and containing further damage.

However, liquidations had already been processed, so users were left with catastrophic losses.

The protocol also estimated total losses at $1.78 million, mostly affecting cbETH, WETH, and USDC positions. Some borrowers nearly lost all their collateral as well, while others exploited the incorrect pricing to borrow even more money than they should have been allowed to, thus creating more debt within the protocol.

Bithumb suffered similar value assignment error just days earlier

The Moonwell incident is very similar to an error made at the South Korean exchange Bithumb just days earlier, on February 6, where a wrong-unit assignment created tens of billions of dollars in ghost value.

Apparently, a Bithumb staff member entered “BTC” instead of “KRW” while distributing rewards for a Random Box promotion, thus rewarding users in Bitcoin instead of Korean won.

The project lost approximately 620,000 Bitcoin worth over $40 billion (nearly 3% of Bitcoin’s entire global supply).

Vibe coding debate intensifies

The Moonwell incident has re-sparked the debate over vibe coding. Advocates argue that AI makes coding more accessible, while critics warn that its code may contain vulnerabilities that human reviews would most likely miss.

Smart contract auditor Pashov emphasized that “behind the AI is a person who checks the finished work, and possibly an auditor. For this reason, blaming the neural network alone is incorrect, although the incident ‘raises concerns’ about vibe coding.”

Source: @pashov via X/Twitter.

Another blockchain security firm, SlowMist, shared its concerns about “oracle formula vulnerability” and the breakdown of human oversight that allowed the flawed code to reach production.

A study published just weeks before the Moonwell incident identified 69 vulnerabilities across 15 applications created using popular AI coding tools, including Cursor, Claude Code, Codes etc.

Even more interesting is that Anthropic’s own research from December 2025 revealed that Claude Opus 4.5 could exploit smart contract vulnerabilities worth $4.6 million by itself (in simulated environment). The research also established that premier AI models can now “independently identify vulnerabilities, create working exploit chains, and extract value with minimal human oversight.”

Nonetheless, Moonwell clarified that “no other markets on Base or OP Mainnet were affected. The issue is isolated to the cbETH Core Market on Base.”

The protocol also noted that this was not its first oracle incident, recalling a misreporting incident in November 2025.

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Tether emphasized that Tether Gold XAUT has risen to the top as the first publicly listed gold firm structure to offer shareholders the option to receive dividends in tokenized gold, marking what it describes as a major breakthrough in the gold industry.

The digital gold sector is currently experiencing explosive interest, with the token’s market capitalization nearing $2.55 billion and leading broader growth in tokenized real-world assets.

Following this announcement, Elemental Royalty Corporation highlighted the connection between tokenized gold ownership and standard royalty payments on the blockchain while assuring investors that they can choose to receive dividends in XAUT rather than cash.

On the other hand, Paolo Ardoino, Tether CEO, stressed that this advancement encourages the use of gold in modern finance via tokenization. Currently, XAUT is trading at $4,907.26, up 0.04% over the past 24 hours, according to CoinMarketCap.

Investors demonstrate interest in XAUT

The new product from Tether is expected to grant investors direct physical gold ownership by allocating funds to gold royalties. Reports expect these firms to pay about 12 cents in dividends to investors through quarterly payments.

The offer was a landmark in the industry because it represented the first time a publicly traded gold company had executed such a strategy. The product comes after Tether gained roughly a 33% stake in Elemental in 2025.

Gold-backed tokens are now the fastest-growing asset class, with the valuation of the overall tokenized gold market exceeding $5 billion.

XAUT plays a key part in this value, securing its position as a leader in this sector in terms of supply and volume. This is because several investors, who want to own gold independently, avoiding reliance on intermediaries or custodians, have illustrated heightened interest in the digital token 

Notably, even with this advancement, investors who prefer cash distributions can still receive dividends in cash. Even so, David Cole, the CEO of Elemental Royalty Corporation, viewed supporting Tether’s offering as a way of securing the firm’s future.

“By offering investors a dividend in Tether Gold, we set Elemental apart as a forward-looking and growth-focused investment,” he said. Meanwhile, despite the innovative move, Elemental’s stock price declined to $19.41, a 7.8% drop.

The company generates income by securing royalty interests in mining projects. According to its executive, this strategy is beneficial because it reduces risks associated with owning and operating mines while keeping opportunities for gain open.

Tether shifts its focus toward XAUT

Tether’s shift towards tokenizing gold, after building a legacy on USD-linked tokens, is tied to the recent surge in gold’s price. The market valuation of XAUT escalated to $2.5 billion from an initial record of  $714 million.

Towards the end of last year, the firm had successfully established about 375,000 XAUT. A report from accounting firm BDO Italia showed that this figure rose by 38% from three months earlier. On the other hand, data from CoinGecko showed that the market capitalization of USDT rose to an all-time high of $187 billion, a 7% increase.

These figures represent that XAUT’s total supply increased fivefold compared to USDT’s in the last quarter, suggesting that investors now prefer gold-backed assets.

Responding to this market behavior, Ardoino mentioned that, “XAUT was created to remove uncertainty during a time when trust in financial systems is declining.” Afterwards, he expressed concern over mounting government debt and continued inflationary pressures 

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Nvidia is deepening its roots in India, announcing a sweeping set of deals with cloud providers, venture capital firms, research institutions, and AI startups as the country positions itself as a major player in the global artificial intelligence race.

The announcements came Wednesday during India’s AI Impact Summit in New Delhi, a gathering of world leaders and top tech executives aimed at shaping the future of AI. Nvidia CEO Jensen Huang had been expected to attend but pulled out due to what the company described as “unforeseen circumstances.”

Nvidia said it is working with five venture capital firms, Peak XV, Z47, Elevation Capital, Nexus Venture Partners, and Accel India, to find and back AI startups at various stages of growth.

The company said more than 4,000 Indian AI startups have already joined its global Inception program, which helps young companies build products, grow, and reach customers.

The push aligns with India’s growing startup market, where venture investors have been pouring money into tech companies, drawn by a strong IPO market that has been delivering solid returns. As reported by Cryptopolitan, Nvidia is also a founding member of $2 billion India Deep Tech Alliance to mentor emerging AI firms across the country.

Yotta to build Asia’s largest AI hub in a $2 billion deal

In one of the biggest deals announced, Indian data center company Yotta Data Services said it will build one of Asia’s largest AI computing hubs using Nvidia’s latest Blackwell Ultra chips.

The project will cost more than $2 billion in total. As part of the deal, Nvidia will set up one of Asia-Pacific’s largest DGX Cloud clusters inside Yotta’s infrastructure under a four-year agreement worth over $1 billion. The facility, branded as Shakti Cloud, will run on more than 20,000 Nvidia Blackwell Ultra GPUs and is expected to go live by August.

It will be located at Yotta’s campus near New Delhi, with extra capacity coming from its site in Mumbai. Yotta is part of Indian billionaire Niranjan Hiranandani’s real estate group and already operates three data center campuses across India.

Nvidia also said it is working with other Indian cloud providers, including Larsen and Toubro and E2E Networks, to deliver AI computing infrastructure across the country.

The investments are part of a broader boom in AI spending in India.

Nvidia’s Nemotron models take aim at India’s language barrier

The stakes go well beyond business. The 2026 International AI Safety Report found that while more than half the population uses AI in some countries, adoption rates across much of Africa, Asia, and Latin America likely remain below 10%. India sits squarely in that gap.

Part of the problem is language. The world’s biggest AI chatbots do not work in all of India’s 22 official languages, let alone the hundreds of dialects spoken across the country. ChatGPT and Claude currently support around half of them. Google’s Gemini supports nine.

“Without tech that understands and speaks these languages, millions are excluded from the digital revolution, especially in education, governance, healthcare, and banking,” Professor Pushpak Bhattacharyya from IIT Mumbai told the BBC last summer.

India’s government has recognized the problem and is trying to fix it through its AI Mission, but progress has been slow. That’s where Nvidia emerges as a key driver.

The company is also helping Indian companies build AI systems using its Nemotron family of models, which organizations can use to develop chatbots, voice assistants, and AI agents. The models can be trained on India-specific data and support the country’s more than 22 officially recognized languages.

Several Indian companies are already using the technology.

BharatGen, backed by the Indian government, has built a 17-billion-parameter AI model. Gnani.ai is using it to build a speech model for Indian languages and has cut its inference costs by 15 times, now handling more than 10 million calls per day.

The National Payments Corporation of India is exploring using it to support its digital payment systems. Sarvam.ai has trained models across three sizes: 3 billion, 30 billion, and 100 billion parameters, covering 22 Indian languages.

As of September last year, India’s government had approved $18 billion worth of semiconductor projects as it works to build a domestic chip supply chain. Prime Minister Narendra Modi’s administration has set a goal of turning India into a global technology superpower.

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