Cointelegraph

A US Army soldier involved in the capture of Nicolás Maduro has been charged with making over $400,000 by allegedly betting on the removal of the former Venezuelan president on a prediction market platform. 

In a statement on Thursday, the US Department of Justice alleged that Master Sergeant Gannon Ken Van Dyke was involved in the planning and execution of “Operation Absolute Resolve” that led to the capture of Maduro at a residence in Caracas, Venezuela, in January. 

Van Dyke allegedly used this information to buy “yes” shares in related Polymarket contracts, including "Maduro out by January 31" and "Trump invokes War Powers against Venezuela by January 31,” according to the DOJ. 

Van Dyke is also facing action from the US Commodity Futures Trading Commission, with Chair Michael Selig criticizing Van Dyke for allegedly using sensitive information in a way that could have endangered US national security and “put the lives of American service members in harm’s way.”

Source: Mike Selig

While prediction markets have transformed how people bet on real-world events, they have also lowered the barrier for users to trade on confidential information — leading to regulatory scrutiny over insider trading and other misuse on the platforms. 

Some prediction markets have responded to those concerns by strengthening their security measures to catch insider traders on their platforms.

In a post to X, Polymarket said it identified the suspicious trades linked to “today’s arrest” and that it referred the matter to the DOJ and cooperated with its investigation.

“Insider trading has no place on Polymarket. Today's arrest is proof the system works.”

Van Dyke isn’t the first person in the military to be accused of using confidential information to profit on prediction market platforms.

In February, Israeli authorities arrested a military reservist for allegedly using classified information to profit from Polymarket contracts related to Israel's strike on Iran.

The DOJ noted that Van Dyke signed nondisclosure agreements promising to “never divulge, publish, or reveal by writing, words, conduct, or otherwise … any classified or sensitive information” relating to military operations.

The DOJ alleged that he was involved in the planned capture of Maduro since around Dec. 8 and that he created and funded a Polymarket account on Dec. 26. The bets were then placed between Dec. 27 and Jan. 2, the day before Operation Absolute Resolve took effect.

Van Dyke allegedly asked Polymarket to delete his account

Van Dyke allegedly profited $409,881 and sent most of his proceeds to a foreign crypto vault before depositing them into a newly created online brokerage account, the DOJ said.

The DOJ alleged that Van Dyke attempted to conceal his identity by asking Polymarket to delete his account, claiming that he had lost access to the email address linked to the account.

Van Dyke also allegedly changed the email linked to his crypto exchange account, the DOJ said.

The US Army soldier has been charged with unlawful use of confidential government information for personal gain, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction.

The wire fraud charge carries a maximum sentence of 20 years behind bars.

“Today’s announcement makes clear no one is above the law,” FBI Director Kash Patel said, adding that the agency “will do whatever it takes to defend the homeland and safeguard our nation’s secrets.”

Magazine: Should users be allowed to bet on war and death in prediction markets?

On Thursday, Bitcoin (BTC) continued to wrestle with the $78,000 level as bulls attempted to cement their newfound hold over the market. 

The convergence of an improving market structure, institutional investors’ fresh allocation to the spot ETFs and investors’ belief that the Senate will pass the CLARITY Act before the US mid-term elections provided the much-needed narrative catalyst the market had been waiting for. 

On the institutional side of the market, fresh capital helped place strengthening support in the $68,000 to $70,000 price range. Spot Bitcoin ETFs have seen a $2.03 billion inflow in April; Strategy purchased 34,000 BTC for $2.54 billion; and Morgan Stanley’s newly launched MSBT BTC ETF took in over $153 million in its first two weeks of trading. 

 Morgan Stanley spot Bitcoin ETF flows. Source: SoSoValue.com 

According to Bloomberg senior ETF analyst Eric Balchunas, the Bitcoin ETF flows are “back in the high life.” 

“Every single rolling period we track is now positive, haven’t seen that in months (IBIT’s $3B is in Top 1% of all ETFs).” 

Bitwise CIO Matt Hougan argued against Balchunas’ statement, replying with: 

“The institutional long-only flows never really stopped (they slowed, but did not stop). The outflows were driven by a sharp reversal of short-term basis and hot-money trades.” 

Can BTC top $80,000? 

While Bitcoin’s rally to $79,477 reflects a much-needed sentiment improvement in the crypto market, analysts seem to agree that consecutive daily candle closes above the $80,000 to $83,000 zone are needed to confirm a break of structure in the BTC chart. 

Chartered market technician Aksel Kibar posted the following chart and said,

“The channel is becoming better defined with several rejections at the upper boundary.” 

BTC/USD rallies into key resistance level. Source: Aksel Kibar / X

Fidelity director of global macro Jurrien Timmer took an alternative view, observing that BTC “the rally off the $60,033 low could still be described as a bear flag (not unlike the bear market rally last fall),” but Timmer suggested that the outcome may not follow the chart pattern.

“[...] but my sense is that Bitcoin continues to build a large base here in preparation for the next major up wave.” 

Bitcoin meets overhead resistance. Source: Jurrien Timmer / X 

Despite the descending channel resistance and bear flag continuation patterns being cited as downside signals by many analysts, crypto charting resource TRDR said orderbook data shows coin-margined buyers “stepping up bids above prior levels.” 

TRDR said, 

“Floor moving higher. All eyes on $80K.” 

BTC/USD perpetual futures order book chart. Source: TRDR.io

Momentum from Bitcoin’s recent rally could spill into the altcoin market, which could see gains of as much as 60% if Bitcoin continues to rise, according to a crypto analyst.

“I think this leg has enough room to continue to $86K, and altcoins to run 30-60% from here,” MN Trading Capital founder Michael van de Poppe said on Thursday. 

A move to $86,000, a level Bitcoin hasn’t seen since Jan. 28, would represent about a 10% increase from its current price of $77,890, according to CoinMarketCap data.

Bitcoin is up 11.25% over the past 30 days. Source: CoinMarketCap

Van de Poppe attributed his outlook for further upside to a “V-shaped recovery” in the Nasdaq. The Nasdaq Composite, a stock market index that includes most stocks listed on the Nasdaq exchange, is up 11.31% over the past 30 days, according to Google Finance.

It’s a long-held view among crypto market participants that Bitcoin would need to reach new all-time highs, followed by an Ether rally, before capital rotates further down the risk curve into other altcoins.

However, Bitcoin is still far from its all-time high of $126,100 that it reached in October. Altcoins also need to play catch-up, with total altcoin market capitalization down 28.09% since October, according to TradingView.

Van de Poppe said it is “crucial” that Bitcoin holds above $75,000, though broader markets are not convinced that level will hold.

Polymarket traders are assigning a 55% probability that Bitcoin drops below $75,000 by May 1. Meanwhile, Bitcoin analyst Willy Woo said in an X post that $80,000 "remains a key test level" for Bitcoin and pseudonymous crypto analyst Jelle said in an X post on Thursday that they are "still not sure that the bear market bottom is in."

Bitcoin may benefit from three “upside macro catalysts”

Bitwise’s head of research for Europe, Andre Dragosch, said in an X post on Wednesday that he’s tracking three key “upside macro catalysts” for Bitcoin.

“Bitcoin continues to price out recession risks — it is still undervalued by that count,” Dragosch said, describing the first potential macro upside catalyst. 

The total crypto market cap, excluding the top 10, has seen a slight 2.90% uptick over the past 30 days. Source: TradingView

Dragosch also flagged declining interest rates despite rising inflation, and the idea that Bitcoin could catch up to global money supply levels as concerns around quantum computing “continue to fade.”

Magazine: Prediction markets provide valuable intel, but can also incentivize insider trading. Here's how platforms are fighting back

The crypto-aligned Fellowship political action committee (PAC), led by stablecoin issuer Tether’s head of government affairs, reported spending more than $3 million on advertising related to US Senate races, with the majority going toward to support a Texas Republican candidate.

In a Tuesday filing with the US Federal Election Commission (FEC), Fellowship PAC disclosed that it had spent $1.75 million in support of Texas Attorney General Ken Paxton. The Republican is facing off against incumbent Senator John Cornyn in a May 26 runoff to determine who will become the party’s candidate for the 2026 US Senate race.

Fellowship PAC expenditure report on Ken Paxton. Source: FEC

In addition to Paxton, the PAC reported spending $350,000 on advertising for Mike Collins in Georgia’s Senate race, $350,000 on Barry Moore in Alabama’s Senate race, and $250,000 and $350,000 on Blake Miguez and Julia Letlow, respectively, for House and Senate races in Louisiana. All expenditures went through the Nxum Group, a marketing company co-founded by former White House crypto adviser and Tether US CEO Bo Hines.

Fellowship launched in September, claiming to have more than $100 million from undisclosed investors aligned with the crypto industry. Although the PAC has since reported $11 million in contributions to the FEC, no other filings or public records showed backers associated with crypto.

Crypto-backed PACs like Fellowship and Fairshake are expected to influence the results of the 2026 US midterm elections through spending on media and advertising to support candidates they consider “pro-crypto.” Fairshake and its affiliates reported spending more than $131 million in 2024, possibly influencing voters in key battleground states.

Paxton’s time as Texas Attorney General was plagued by corruption allegations, leading to his impeachment in the state’s House of Representatives in 2023 — he was later acquitted by the Texas Senate. Either Paxton or Cornyn will likely face off against Democratic candidate James Talarico in November’s US Senate election.

Kalshi suspends and fines Texas candidate over insider trading 

As US state primaries continue and the general election approaches, many prediction market users are betting on the outcomes of events related to big and small races, including some candidates themselves.

On Wednesday, prediction markets platform Kalshi announced financial penalties and bans on three candidates in Minnesota, Texas and Virginia after they were found to have placed bets on their respective races. The Texas candidate, Ezekiel Enriquez, “purchased less than $100 worth of contracts related to his own candidacy” for Texas’ 21st Congressional District, according to Kalshi.

“Under the terms of the settlement, Kalshi suspended Enriquez from direct or indirect access to Kalshi for a period of 5 years and imposed a financial penalty of $784.20,” said the company.

Magazine: How to fix suspected insider trading on Polymarket and Kalshi

Key takeaways:

The spot ETH ETFs recorded ten consecutive days of net inflows, totaling $633 million.

Weekly DApps revenue on the Ethereum network fell to $13 million, following a broader decline seen in Solana and BNB Chain.

Ether (ETH) struggled to trade above $2,400 on Thursday, but consistent inflows into Ethereum spot exchange-traded funds (ETFs) reflect the bulls’ attempt to regain momentum. Ether's price rallied alongside Bitcoin’s (BTC) recovery to $79,000, prompting traders to question whether ETH will attempt a run to $3,000.

Spot ETH ETF daily net flows, USD. Source: SoSoValue

On Wednesday, the ETH spot ETFs completed 10 consecutive days of net inflows, totaling $633 million. This shows that traders are gradually reclaiming confidence after ETH abruptly fell by 42% between Jan. 28 and Feb. 6. The cryptocurrency market crash reduced interest in decentralized applications (DApps), which proved especially burdensome for ETH investors.

Weekly DApps revenue by chain, USD. Source: DefiLlama

DApp revenues on the Ethereum network dropped to $13 million per week in April, nearly 50% lower than six months prior. However, the decline in decentralized exchange (DEX) volumes has also plagued other major competitors to a similar extent, including Solana, BNB Chain, and Hyperliquid. The aggregate weekly blockchain DApps revenue has fallen to $73 million, down from $130 million in October 2025.

Ethereum well-positioned to capture demand for DApps

Despite recent bullish momentum, ETH is down 22% year-to-date in 2026, while the broader cryptocurrency market capitalization is down 14%. Ether’s underperformance may be interpreted as a buying opportunity, especially as the Ethereum network remains the leader in total value locked (TVL) and its layer-2 solutions have gained significant market share in DEX volumes.

Regardless of the ETF inflows, the demand for bullish leveraged ETH positions has plummeted to its lowest level in four months.

ETH 2-month futures basis rate. Source: Laevitas

The annualized ETH monthly futures premium relative to regular spot markets (basis rate) dropped to 1% on Thursday, well below the 4% neutral threshold. Still, it is incorrect to assume that professional traders are bracing for downside solely due to a lack of confidence in derivatives markets. The uncertain macroeconomic environment might explain trader skepticism, especially after major tech companies' quarterly earnings disappointed investors.

IBM (IBM US) shares dropped nearly 10% on Thursday due to investor concerns regarding increased competition from the artificial intelligence sector, according to Yahoo Finance. In parallel, Morgan Stanley trimmed its price target on Oracle (ORCL US) due to uncertainty in the margin profile and buildout costs of the company’s expanding investment in AI computing data centers.

ETH vs. BNB, SOL, AVAX. Source: TradingView

Ether’s potential bullish momentum likely depends on reduced risk aversion toward cryptocurrencies, as its price chart relative to some competitors shows striking similarities. The recent spot Ether ETF inflows, while relevant, are not enough to justify a decoupling, especially as activity in the DApps sector has yet to show signs of improvement.

There is no indication that ETH is bound for $3,000, but the Ethereum network seems well-positioned to capture an eventual pickup in demand for decentralized computation.

Global crypto adoption declined in the first quarter as retail activity weakened under mounting macroeconomic and geopolitical pressures, underscoring the sector’s continued sensitivity to broader market conditions.

TRM Labs’ Q1 Global Crypto Adoption Index showed an 11% year-over-year drop in retail crypto volumes, to $979 billion. The decline marked a second consecutive quarterly contraction and the sharpest pullback since the 2022 bear market.

The downturn was largely driven by a stronger US dollar, higher interest rates and a broader risk-off environment, all of which weighed on retail participation, TRM said. The softer demand coincided with a 22% drop in the price of Bitcoin (BTC) during the quarter.

Bitcoin’s correction followed a late-2025 peak above $126,000, with prices trending lower through the first quarter alongside a broader decline in digital asset markets.

Bitcoin’s quarterly returns between Q4 2022 and Q1 2026. Source: TRM Labs

Emerging markets diverge from advanced economies

The report highlighted a growing regional divide in crypto adoption, with advanced economies such as the United States, South Korea, the United Kingdom and Germany posting the steepest declines in trading volume. In these markets, where crypto is largely used as a speculative asset, higher opportunity costs and weaker risk appetite pushed investors elsewhere. 

Part of that shift was tied to the outbreak of the Iran war in late February, which disrupted energy flows and heightened sensitivity to geopolitical developments across global markets.

By contrast, markets where crypto serves a more functional role, including payments and savings, showed greater resilience. Turkey stood out, with volumes rising 7% year over year, while activity across Latin America and South Asia remained broadly stable.

The study also flagged Venezuela as a major growth market for crypto adoption amid ongoing sanctions. Source: TRM Labs

“This divergence reflects a fundamental difference in demand: where domestic monetary policy is constrained or capital controls limit alternatives, crypto functions as a store of value and shadow dollar system,” TRM said.

Can DeFi survive an era in which an AI can find a dozen critical security bugs in a smart contract for just $1.22 in tokens?

Thats how much it cost Anthropic researchers on average to run previously exploited contracts through major LLM models. They discovered that more than half of the exploits in 2025 could have been found and autonomously carried out by AI agents.

AI tools are also able to quickly find security holes and weak points in infrastructure and governance too.

DeFis future is under a dark cloud right now, with more than a dozen platforms attacked since the start of April according to DeFiLlama, and $605 million drained.

The month began with the $285 million hack of Drift Protocol a combination of social engineering and malware followed in short order by Silo Finance (misconfigured oracle), Aethir (access control exploit), Rhea Finance (fake token contracts) and Volo Vault (compromised key) among other attacks.

The most devastating attack came on the weekend, when a hacker drained $290 million from KelpDAOs LayerZero-based reETH bridge. It caused ripples across the ecosystem, with more than 30 protocols pausing some functions. Aave was among the hardest hit with up to $200 million in bad debt, despite its own industry-leading security standards. The incident suggests that a DeFi platforms integrity may only be as good as the weakest protocol it interacts with.

Jefferies digital asset analyst Andrew Moss said that the KelpDAO attack threatened Wall Street’s recent embrace of the sector.

The potential loss of trust poses both near and longer-term risks regardless of who is to blame, analyst Andrew Moss wrote. Although we dont expect TradFi firms to throw in the crypto towel, the rollout or expansion of tokenization initiatives across banks, asset managers, fintechs and payments may decelerate temporarily.

Unfortunately, it doesnt look like the threat will abate any time soon. Polymarket is currently pricing in the chance of another $100 million crypto hack this year at 76%.

Polymarket odds on another major hack this year (Polymarket)

Was AI even involved in April’s DeFi hacks?

None of the attacks in April have been conclusively linked to AI-identified exploits with the biggest targeting infrastructure or governance rather than smart contracts but many are convinced there is a link.

“I think this is AI,” posted Bankless host Ryan Sean Adams after the Kelp DAO exploit. “AI giving hackers dark superpowers. Defense has to catch up now we’re out of time.”

Early NEAR contributor turned independent researcher Vadim also blamed AIs for a surge in exploits. He posted that smart contract bugs have been lying in plain sight all along, but the cost of finding them was too high until now.

Vadim warns of a dark future for DeFi (Vadim/X)

“AI collapsed the cost of code analysis. Finding exploits got 100x cheaper. Writing flawless code stayed just as expensive,” he wrote. 

“Use AI to find an exploit, test it on a fork, and if it works the risk of getting caught is near zero.

Quantstamp founder Richard Ma tells Magazine that AI discovering exploits is a “growing problem” for the sector.

“It’s been growing at a fast pace especially these last 6 months as AI tools for cyberattacks are getting more mature, he says. “The attackers have a lot to gain and they have dedicated teams.”

“AI is being used because AI is a lot more scalable. You can throw compute at it instead of manpower and reap outsized rewards as an attacker.”

Ma says that AI tools like Claude Code are used legitimately to identify bugs and exploits so that developers can fix code before release. But those same tools can be used to identify security holes in already deployed contracts.

“You can simply use normal versions of the LLMs to directly identify bugs,” he says. “There’s no guardrails on bug-finding.”

So why arent DeFi platforms using these tools to find the bugs in their own platforms?

They should, he says. “I’d advise caution using DeFi platforms now until they catch up.”

Research shows AI is very good at finding exploits

Researchers from Anthropic tested the major models in December last year on 405 smart contracts that had been previously exploited. The LLMs found $4.6 million worth of exploits. Worryingly, the amount of dollars the AIs were able to extract was growing exponentially.

Read also

Features Polkadots Indy 500 driver Conor Daly: My dad holds DOT, how mad is that?

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“Over the last year, frontier models’ exploit revenue on the 2025 problems doubled roughly every 1.3 months,” the researchers wrote, adding it cost just $1.22 in tokens on average for an AI to scan a contract exhaustively looking for vulnerabilities.

“More than half of the blockchain exploits carried out in 2025presumably by skilled human attackerscould have been executed autonomously by current AI agents.”

The models tested were less sophisticated and capable than Anthropics unreleased Mythos model. In testing, Mythos identified thousands of previously unknown zero day vulnerabilities, including a 27-year-old bug in OpenBSD and a 16-year-old bug in FFmpeg. Anthropic has given early access to more than 40 large organizations, including AWS, Apple, Google, Microsoft and others, so they can find critical bugs and patch them ahead of the tech becoming publicly available.

Anthropic has yet to give access to a single crypto project, although Coinbase is reportedly hammering on their door trying to join the program.

April has been the biggest month for DeFi exploits in a year. (DeFiLlama)

Specialized AI is even better at finding exploits

Separately, researchers from the University College London and the University of Sydney tested out the capabilities of the specialized A1 agentic system. It provides agents with six tools to help them understand smart contract behavior, and testing strategies on real blockchain states, among other things.

Their mid-2025 paper found the system had a 63% success rate across 23 tested real-world vulnerable contracts and was able to extract $9.33 million.

The real sting in the tail was their conclusion that it costs more to defend against AI exploits than it does to create them. 

“Our economic analysis reveals a troubling asymmetry: attackers achieve profitability at $6000 exploit values while defenders require $60,000 raising fundamental questions about whether AI agents inevitably favor exploitation over defense.” 

Read also

Features Polkadots Indy 500 driver Conor Daly: My dad holds DOT, how mad is that?

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KelpDAO was not a smart contract exploit

As it happens, it wasn’t the smart contracts that were exploited in the Kelp DAO attack but the RPC server sitting underneath LayerZero’s Decentralized Verifier Network. Ma says its  poor cybersecurity to have a system with a single point of failure.

“The DVN (decentralized verifier network) they used was like 1:1, so it was neither decentralized, nor a network. (It was) just like a single verifier on the bridge.”

Zengineer, a developer at TrueNorth, claims to have run an “AI-assisted security scan on KelpDAO and flagged their LayerZero DVN bridge config as an unresolved risk” 12 days before the hack. 

AI can help flag security issues outside of smart contract bugs (TrueNorth/Github)

TrueNorths audit on KelpDAO, using its bespoke Claude Code skill two weeks ago, did highlight the DVN configuration as a potential risk. But it noted there was an “information gap” about what the configuration actually was. So the tool was unable to flag the 1:1 setup itself as a risk.

However, it highlights how AI can potentially be used to identify and zero in on potential DeFi security gaps outside of protocol logic.

AI can help with bug hunting too

AI assisted bug hunting is definitely one of the most promising tools in DeFis arsenal. Cosmos Labs CEO Barry Plunkett said this week that AI had massively increased the number of bugs being reported to the firm’s bug bounty program.

“AI is changing the way that bug bounty programs must operate. Researchers armed with AI tools are submitting massively more valid and invalid submissions to our program than ever before. Our program has seen a 900% increase in submission volume from last year, on the order of 2050 a day.”

Immunifi reports that 61.4% of projects find a critical bug in the first year of running a program, and 93.3% have found a bug after five years. The average number of critical issues found is two, although one project had 50!

The median bounty is $20,000, while the record $10 million pay out was for a critical bug in the WormHole bridge. Needless to say, if you can find one of those for $1.22 in tokens, thats a pretty good return.

Curve researcher Chado claims that an analysis of DeFi and crypto hacks over the past five years shows the number of exploits blamed on code bugs fell from 37% to under 5% in 2024, suggesting that improved auditing, bug bounties and formal verification are making smart contracts safer. 

Curve analysis of this year’s hacks (Chado)

Formal verification is the difficult answer   

Vadim says that in future, DeFi smart contracts will need to be formally verified before they are safe enough to use.

“Assume every contract with a vulnerability will eventually be exploited. The only real defense is formal verification mathematically proving that the code can only do what it was designed to do, before it ever gets deployed.”

Formal verification would essentially make smart contracts unhackable. Ethereum creator Vitalik Buterin has set the ambitious task of “formally verifying everything” in Ethereum. This used to be so time consuming and difficult that it was impractical, but AI makes it an achievable goal.

“We’ve also begun actively applying artificial intelligence to generate code proofs demonstrating that the software version running Ethereum does indeed possess the characteristics it’s supposed to have,” he told the Hong Kong Web3 Carnival this week.

“We’ve made progress that was impossible two years ago. Artificial intelligence is developing rapidly, so we’re leveraging this to pursue ultimate simplicity, keeping long-term protocols as simple as possible, and preparing for the future as much as possible.”

Social engineering remains a threat 

But even after all the bugs have been weeded out of smart contracts, the humans in charge will remain the vulnerable part of the system. AI can be used to manipulate them too, using deepfakes and data mining. The Drift hack required six months of social engineering just to deploy the malware.

“In these times, smart contracts that have been audited are far safer than the operations around these DeFi platforms, especially operations that have key man risk susceptible to AI social engineering attempts,” Ma says. 

“Most DeFi platforms intentionally obfuscate their operations on the human-side in terms of multisig holders and admins and basically it’s this human part that is being targeted right now.”

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Tether, the company that issues the USDt dollar-pegged stablecoin, said Thursday that it froze more than $344 million in USDt at the request of US law enforcement officials. 

The company froze two wallet addresses at the request of US authorites for “activity tied to unlawful conduct,” according to Tether’s announcement.

Tether did not provide a specific reason for the asset freezes, but said that it freezes wallet addresses tied to “sanctions evasion, criminal networks, or other illicit activity.”

Source: Tether

“When credible links to sanctioned entities or criminal networks are identified, we act immediately and decisively,” Tether CEO Paolo Ardoino said. The stablecoin issuer did not immediately respond to Cointelegraph's request for further comment. 

Centralized stablecoin providers have a long history of freezing wallets tied to illicit activity, raising questions in the crypto community about the roles and responsibilities of crypto service providers to claw back illicit funds or assist law enforcement.

Crypto community debates ethics of wallet freezes

Following the Drift Protocol hack earlier this month, which saw the platform drained of $280 million, onchain sleuth ZachXBT criticized Circle for not freezing funds from the hack that were converted to the stablecoin issuer's USDC dollar-pegged token.

“Despite the attacker laundering funds over six consecutive hours across Circle's own native bridge, no USDC was frozen,” ZachXBT said following the hack, adding that centralized stablecoin issuers must do more to protect user funds following hacks and code exploits.

Others, like crypto media channel Truth for The Commoner (TFTC) were critical of Tether freezing the $344 million in stablecoins. “Your stablecoins are not your stablecoins. They never were,” TFTC said.

Source: TFTC

The debate follows at least a dozen hacks of decentralized finance platforms (DeFi) in April since the Drift Protocol hack, including the exploit of the Kelp restaking protocol. 

Kelp was drained of $293 million after malicious actors exploited the bridging contract used to manage the platform’s rsETH restaking token and transfer it across different blockchain protocols.

Magazine: Stablecoins will see explosive growth in 2025 as world embraces asset class

Bitcoin (BTC) has rallied 30% since its 2026 low of $60,000, and stablecoin balances on exchanges suggest the market has entered a disbelief phase, with roughly $7.5 billion in USDC on Binance highlighting readily deployable capital that traders could start positioning soon.

Negative funding rates fuel Bitcoin’s counter-trend

Data show that derivatives market positioning has not kept pace with the bullish price trend. Crypto analyst Darkfost tracked the 30-day cumulative funding rate, which aggregates funding over time to reveal sustained positioning. The metric stands near -4.5%, reflecting a prolonged bearish bias against the current move.

The analyst explained that the negative funding creates conditions that incentivize traders to take the opposite side.

Funding rates 30-day SUM on Binance. Source: CryptoQuant

A comparable phase emerged in late 2022, when Bitcoin began to recover from its bear market. The funding dropped to nearly -7% before the price extended higher.

This indicates a phase in which persistent short exposure provides fuel for continuation as the dominant positions are challenged. Darkfost added, 

“This context therefore indicates that the market has entered a phase of disbelief, where traders still prefer fighting the trend rather than following it.”

Related: Bitcoin buyers show ‘renewed conviction’ with BTC price push above $79K

USDC liquidity builds for redeployment on Binance

The liquidity trends reinforce that setup. Bitcoin has fallen roughly 36% from its October 2025 high at $126,000, marking a deep correction.

Circle’s USDC (USDC) reserves on Binance show a recovery following an earlier drawdown. The USDC balance dropped to nearly $4.5 billion in early March, then climbed back to $7.51 billion by April 21.

USDC balance on Binance. Source: CryptoQuant

From the November 2025 level of $8.32 billion, this still marks an 8.2% net decline, suggesting capital remains within the exchange rather than exiting it.

Market analyst CryptoOnChain explained that such behavior indicates sidelined funds waiting to enter. The stablecoin balances serve as available liquidity, or “dry powder,” that can be deployed quickly when the trader's conviction improves.

The exchange volumes add more context. Market analyst Maartunn noted that Binance has processed $1.09 trillion in trading volume in 2026 within 112 days. Other platforms trail, with MEXC at $284 billion, Bybit at $242 billion and Crypto.com at $219 billion.

The activity levels show traders are still engaged despite their cautious sentiment. With USDC reserves holding near $7.5 billion, the liquidity remains concentrated and available around key price zones.

Spot market leader in exchanges. Source: CryptoQuant

Related: Bitcoin chases monthly high above $80K as nearly all BTC price metrics turn bullish

MoonPay has launched fiat-to-stablecoin virtual accounts in New York, allowing businesses to convert incoming funds from bank rails such as ACH and SWIFT into stablecoins and settle them directly to non-custodial wallets through a single API.

The product is underpinned by technology provider Iron and allows platforms to issue named, dedicated accounts that receive fiat and automatically convert it into stablecoins, enabling payment, trading and treasury flows without relying on prefunded balances or multiple intermediaries.

The rollout in New York follows MoonPay’s acquisition of Iron in 2025 and builds on integrations with platforms including Deel and Paysafe, extending its stablecoin infrastructure across payroll and payments networks, according to Thursday's announcement.

MoonPay said it obtained a BitLicense, money transmitter licenses and a New York limited purpose trust charter from the New York State Department of Financial Services in 2025, allowing it to offer the service in one of the most tightly regulated crypto markets.

Source: MoonPay on X

The company said the accounts enable faster settlement and programmable payments by linking traditional banking rails with blockchain-based infrastructure through a single integration.

Stablecoins reduce reliance on prefunded accounts

Major payment companies and fintechs are increasingly integrating stablecoins into payment infrastructure to streamline cross-border transactions and reduce reliance on prefunded accounts.

On Tuesday, Singapore fintech Nium integrated USDC payments through Coinbase, allowing businesses to send, receive and convert stablecoins to fiat across more than 190 countries through a single platform.

The setup enables companies to fund cross-border payouts on demand using stablecoins and settle in either digital assets or local currencies, reducing the need to prefund accounts across multiple jurisdictions and streamlining global payment flows.

Card networks are also expanding stablecoin-linked payment infrastructure. In March, Visa and Stripe-owned Bridge rolled out stablecoin-linked cards across more than 100 countries and are testing onchain settlement that would allow transactions to be settled in digital assets rather than fiat. As of December 2025, Visa’s annualized stablecoin settlement run rate reached $4.6 billion, according to a company spokesperson.

Mastercard has also moved to expand its stablecoin capabilities, agreeing to acquire BVNK in a deal valued at up to $1.8 billion. The acquisition is aimed at strengthening its ability to connect traditional payment rails with blockchain-based transactions, supporting use cases including cross-border payments and business payouts.

The total stablecoin market capitalization stands at about $320 billion, according to DefiLlama data.

Stablecoin Market Capitalization Growth. Source: DefiLlama

Magazine: AI-driven hacks threaten to kill DeFi — unless projects act now

More than 120 entities affiliated with the cryptocurrency and blockchain industry are urging US lawmakers to stop stalling on the advancement of a digital asset market structure bill.

In a Thursday letter to leaders in the US Senate Banking Committee, the Crypto Council for Innovation (CCI) and Blockchain Association said that the body should “proceed towards a markup of the CLARITY Act to provide a comprehensive federal market structure framework for digital assets.”

The legislation, expected to be one of the most significant laws to potentially impact the industry crypto, passed the House of Representatives in July 2025 but has been delayed due in part to government shutdowns and debates over stablecoin yield and other issues.

“Timely action is critical, as other major jurisdictions have already implemented comprehensive frameworks, and the absence of comparable US policy risks ceding both economic and strategic advantages,” said the letter. “The US needs a comprehensive market structure framework to support domestic digital asset innovation, or risk migration of investment, jobs, and technological development offshore.”

Source: CCI

The Senate Banking Committee, under chair Tim Scott, postponed a markup on the CLARITY Act in January hours after Coinbase CEO Brian Armstrong said that the company could not support the bill as written. Since that time, representatives from the banking and crypto industries have met with lawmakers to discuss issues within the bill — e.g. how to address stablecoin yield — and possible paths forward. 

As of Thursday, the banking committee had not publicly announced a new date for the bill’s markup. However, US Senator Thom Tillis on Monday called for committee leaders to consider postponing any markup until May to give crypto and banking representatives more time to discuss a compromise on stablecoin yield.

About 120 crypto companies and organizations signed onto the letter, including exchanges like Coinbase and Kraken, but also groups like the Texas Blockchain Council and Solana Policy Institute. It came just three days after the advocacy organization The Digital Chamber asked the banking committee to schedule a markup “as soon as the calendar allows”:

“We are now more than halfway through the 119th Congress, and it has been more than 270 days since the House passed the CLARITY Act with strong bipartisan support and we recognize the legislative window for this Congress is narrowing.”

Banking association asks for more, not less, time to address stablecoins

While the legislative path forward for crypto market structure was unclear as of Thursday, US government agencies have already begun rulemaking for the GENIUS Act, a stablecoin bill signed into law in July 2025.

On Tuesday, the American Bankers Association asked four US government agencies responsible for GENIUS regulations for 60 additional days to comment after the Office of the Comptroller of the Currency finalized its rules. The request, if granted, would likely delay full implementation of the stablecoin bill.

Magazine: AI-driven hacks threaten to kill DeFi — unless projects act now

It's been a volatile week for the shares of Figure Technology Solutions as crypto-linked stocks react to shifting investor sentiment and early signs of a broader market rebound.

FIGR stock fell more than 9% in early Thursday trading, slipping back to the mid-$32 range after climbing near $37 earlier in the week. The earlier gains were driven by momentum in crypto-related equities and growing investor interest in companies tied to blockchain-based lending.

Today's decline extended Figure's more than 20% year-to-date slide, reflecting ongoing uncertainty around both crypto markets and higher-growth technology stocks. The sharp swings highlight how sensitive the stock has become to changes in market sentiment. 

Figure Technology Solutions (FIGR) stock opens sharply lower on Thursday. Source: Yahoo Finance

Despite renewed volatility, Figure has attracted positive coverage from Bernstein, which said the stock is undervalued given its tokenized credit platform and growing loan volumes. Bernstein assigned Figure a $67 price target, implying roughly 2x upside from current levels.

Figure Technology is a fintech company that uses blockchain to originate and manage consumer loans, including home equity products. CEO Michael Tannenbaum recently revealed that the company processed more than $1 billion in monthly volume for the first time. 

Source: Michael Tannenbaum

Crypto market sentiment shift underway

Figure is not alone in seeing volatility this year, as crypto-linked stocks have been pressured by falling digital asset prices and shifting risk sentiment tied to geopolitics and interest rates. 

However, a separate Bernstein note said many of these names, including Robinhood Markets, Circle and Coinbase, along with Figure, may be nearing a bottom or have already bottomed ahead of first-quarter earnings. At their lowest, these and other crypto stocks were down more than 50% from last year's highs.

That shift has coincided with a rebound in crypto prices, with Bitcoin recently climbing toward $80,000 and Ether moving above $2,400.

Figure expects to release Q1 earnings on May 11, after the market close. The average forecast is for earnings of $0.22 per share, on revenue of $160.3 million, according to Yahoo Finance.

Ether’s (ETH) 33% rally from its sub-$1,800 multi-year lows appears to be cooling, but several key metrics suggest the top altcoin is primed for a bigger rally toward $6,000 or higher.

Key takeaways:

Ether is currently displaying a technical setup similar to past cycles that ignited a massive rally in ETH price. 

Supply squeeze potential is growing as increasing accumulation and exchange outflows reduce immediate sell pressure.

A rising Coinbase premium reflects the return of US institutional demand.

Ether’s fractal targets $6,000 ETH price 

Ether is currently bouncing off a multi-year trend line that has historically marked macro ETH price bottoms. Previous instances in April 2025 and mid-2022 resulted in 260% and 130% ETH price rallies, respectively. 

“$ETH is holding a long-term ascending trendline support,” analyst CryptoJack said in a recent X post, adding:

“Will history repeat itself?”

ETH/USD weekly chart. Source: Cointelegraph/TradingView

A bullish cross from the moving average convergence divergence (MACD) indicator also confirmed the price bottom.

“$ETH weekly MACD bullish cross is now confirmed,” analyst Ash Crypto said in a recent X post, adding:

“The last 2 times this happened, ETH pumped 183% and 75%.”

The weekly RSI is meanwhile recovering from levels that marked previous macro lows, suggesting that Ether’s recent drop to $1,750 was the bottom.

ETH/USD weekly chart. Source: The Moon Show

Ether’s current price action is following a similar pattern, with the price again bouncing off the same structural support, a confirmed bullish MACD crossover, and the RSI’s recovery from oversold conditions.

If history repeats itself, ETH may rally by between 75% and 260% from the bottom, placing Ether’s upside target at $3,000-$6,300.

ETH supply squeeze signals stronger upside ahead

Ethereum’s on-chain metrics reveal a tightening supply dynamic, an occurrence that has previously ignited significant ETH price rallies.

The Binance ERC-20: Stablecoin Whale Activity Index indicator reveals a structural supply exhaustion.

The chart below shows that the number of daily accumulation addresses (wallets steadily buying ETH) has increased to 2,434, surpassing the number of exchange depositing addresses (wallets preparing to sell), which has dropped to 2,300. 

This shift suggests that large players have moved from a “wait-and-see” phase into active accumulation, CryptoQuant analyst GugaOnChain said in a recent QuickTake analysis.

“This scenario is extremely positive for the price structure, as it reveals that there are significantly fewer addresses sending ETH to the exchange with the intention to sell than players accumulating or positioned to absorb liquidity,” the analyst said, adding:

“The supply shock is fully underway.”

Binance ERC-20 stablecoin whale activity index. Source: CryptoQuant

This is further reinforced by increasing exchange outflows, as the ETH net position change among exchanges fell by 1.4 million ETH on April 2, marking the largest spike in seven months, according to Glassnode data. The net position change is at -351,300 ETH at the time of writing on Thursday.

ETH: Exchange net position change. Source: Glassnode

Such outflows typically indicate strong accumulation by large holders, who move tokens to cold storage or invest in investment products, thereby reducing immediate sell-side pressure.

This is usually referred to as a “supply squeeze,” conditions that have, historically, preceded sharp upside moves, especially when combined with improving market sentiment.

Ethereum demand is back

As Cointelegraph reported, Ether buyers are stepping in aggressively as ETH futures on Binance rose to a near two-month high over the past week.

The surge in Ether’s demand could also be attributed to rising US demand, as measured by the Coinbase premium index.

The ETH Coinbase premium index measures the price difference between the ETH/USD pair on Coinbase and Binance’s ETH/USD equivalent.

This metric flipped positive on April 4, rising to 0.055 on April 14, its highest level since October 2025. The index fell to as low as -0.21 in early February and now has a reading of 0.04 at the time of writing.

This typically signals increased demand from institutional investors, particularly in the US market.

Ethereum Coinbase Premium Index. Source: CryptoQuant

Meanwhile, spot Ethereum ETFs have recorded net inflows for 10 consecutive days, totaling $590 million. This marks the longest inflow streak since December 2024, accompanying a 95% ETH price rally in Q4 2024.

Spot Ethereum ETF flows table. Source: SoSoValue

Meanwhile, Bitmine Immersion Technologies, the world’s largest public holder of Ether, increased its holdings last week with another 101,627 ETH purchase, reinforcing increased demand for ETH among institutional investors.

Bitcoin (BTC) slipped from near three-month highs on Thursday as attention turned to the weekly close.

Key points:

Bitcoin retraces after its latest trip to its highest levels in several months.

The upcoming weekly candle close is of particular interest as price eyes its bull market support band.

A macro lull comes ahead of a deluge of US inflation data next week.

Bitcoin bull market support band returns after six months

Data from TradingView showed BTC/USD dropping to $77,200 prior to the Wall Street open.

The pair hit $79,500 the day prior, marking its highest levels since the last day of January as the $80,000 mark remained narrowly out of reach.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

“$BTC just keeps taking out the highs, taking out short stops without following through,” trader Jelle commented on the latest price action in a post on X. 

“Been a while since we saw PA like that; usually means liquidity is being generated for a larger position. The question is, when will they step on the gas?”

BTC/USD four-hour chart. Source: Jelle/X

As Cointelegraph reported, multiple resistance levels remain in play in the current spot price zone, with the 21-week exponential moving average (EMA) proving hard to flip to support. Bitcoin last traded above that trend line in October 2025.

With that, another chart feature finally making a comeback after a six-month absence is Bitcoin’s bull market support band.

Formed by the 21-week EMA and the 20-week simple moving average (SMA), the support band was lost as support soon after Bitcoin’s latest all-time highs.

“$BTC Attempting to break back above the bull market support band,” trader Daan Crypto Trades confirmed. 

“Eyes on the weekly close this weekend, as it will be an important one. Bitcoin has not traded above its bull market support band since October 2025.”

BTC/USD one-week chart. Source: Daan Crypto Trades/X

Fed policy, oil seen as next crypto catalysts

Macro markets provided little volatility on the day, with few cues from the US-Iran war.

The coming week was due to see key US macroeconomic data prints released, along with the latest interest-rate announcement from the Federal Reserve.

As Cointelegraph previously noted, markets saw little chance of Fed easing policy until the end of 2027 as geopolitical uncertainty raised the odds of inflation making a comeback.

The latest data from CME Group’s FedWatch Tool put the chances of the Fed changing rates at next week’s meeting at practically zero.

“The cleanest tells from here are still oil and policy. Oil below $100 would support the relief case, while clearer Fed signalling would help compress the policy premium,” trading company QCP Capital wrote in its latest “Market Color” analysis on Wednesday. 

“Until then, the broader message remains the same: risk has stepped back from the brink, but the underlying macro and geopolitical overhang has not been cleared.”

Fed target rate probabilities (screenshot). Source: CME Group

Spanish police seized two crypto cold wallets containing about 400,000 euros ($467,000) during a raid on what authorities described as the country’s largest illicit Spanish-language manga distribution platform.

Police in Almería arrested three suspects and confiscated two cold wallets hidden inside a wall thermometer, seized from what authorities called the largest portal for illegal manga distribution that generated over 4 million euros ($4.6 million) over the past decade, according to Spain's Interior Ministry.

The ministry said the website had offered free access to pirated manga since 2014 and generated most of its revenue through advertising.

The raid highlights how hardware wallets are increasingly appearing in investigations far removed from crypto-native crime. Authorities did not say whether they had obtained the credentials needed to access the funds stored on the devices. The Spanish Ministry of Interior had not responded to Cointelegraph's request for comment by publication.

The investigation was launched in June 2025 after complaints from rights holders, according to the ministry.

Spanish police seized two crypto cold wallets. Source: Interior.gob.es

South Korean authorities lose seized funds from police custody

Recent cases in South Korea have also shown that seizing digital assets is only part of the challenge, with custody and post-seizure handling emerging as separate risks.

In February, South Korean authorities discovered that about 22 Bitcoin (worth $1.5 million at the time) had disappeared from the custody of the Gangnam Police Station, after being confiscated in 2021.

The missing funds were discovered during a nationwide audit of digital asset custody practices. Authorities reportedly said the 22 Bitcoin had been transferred externally, though the cold wallet storing the tokens was not stolen.

The investigation followed a prior case at the Gwangju District Prosecutors’ Office where 320 BTC (worth about $21.3 million at the time) disappeared in August 2025. Prosecutors in that case blamed a leaked password as part of a phishing attack.

In January 2026, South Korea’s Supreme Court ruled that Bitcoin held in centralized exchanges can be seized by investigators, meaning that Korean users keeping their Bitcoin on exchanges may have their holdings frozen if linked to alleged criminal investigations.

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

The FTX bankruptcy estate sold a 5% stake in AI coding startup Cursor for $200,000 in April 2023, missing out on roughly $3 billion after the company was valued at $60 billion in a SpaceX-linked deal this week.

On Wednesday, SpaceX said it has secured the right to acquire Cursor later this year at a $60 billion valuation, or alternatively pay a $10 billion breakup fee if the transaction does not proceed.

That valuation sharply revalues FTX’s earlier position in the company, which traces back to April 2022 when Alameda Research, a quantitative trading firm also founded by Sam Bankman-Fried, invested $200,000 in Anysphere, the startup behind Cursor. The investment reportedly secured about a 5% equity stake at a $4 million valuation.

One year later, FTX had collapsed, Alameda was in bankruptcy, and the court-appointed estate moved to liquidate assets. Among those sales was the Cursor stake, which was sold for the same $200,000 originally invested. At today’s implied valuation, that same stake would be worth around $3 billion.

FTX estate faces scrutiny over early asset sales

The missed upside adds to ongoing scrutiny of how the FTX estate handled asset sales during bankruptcy proceedings. Bankman-Fried, who is currently serving a 25-year federal sentence, has repeatedly argued that the estate destroyed significant value by liquidating positions too early and at depressed prices.

“FTX was never bankrupt. I never filed for it,” Bankman-Fried wrote on X earlier this year. “The lawyers took over the company and 4 hours later, they filed a bogus bankruptcy so they could pilfer it for money,” he added.

FTX creditors have since been repaid in dollar terms under the restructuring plan, receiving their claim values plus interest.

Bankman-Fried was convicted on multiple federal charges including fraud and conspiracy after prosecutors argued he orchestrated one of the largest financial frauds in US history. He was found guilty of misappropriating billions of dollars in customer funds from FTX by funneling them to Alameda Research, making risky investments, political donations and personal expenditures.

FTX missed $114 billion in potential value

An analysis from financial research platform Bull Theory estimates that key positions sold early by the FTX estate could now be worth about $114 billion if they had been held through recent market cycles.

AI startup Anthropic tops the list, where an 8% stake purchased for $500 million would now be worth over $80 billion following a 165x increase. Moreover, SpaceX is estimated to account for a $15 billion valuation impact from early liquidations, alongside Solana at $5.1 billion after a reported 27x move, Robinhood at $4.9 billion and Genesis Digital at $3.5 billion.

“SBF was a genius at picking generational winners and a criminal at managing their money,” Bull Theory wrote on X, noting the estate ultimately recovered about $18 billion for users despite leaving significant upside on the table.

Magazine: How to fix suspected insider trading on Polymarket and Kalshi

Cryptocurrency exchange OKX is accelerating its push into the United States by rolling out off-exchange settlement for its US institutional clients.

OKX has integrated the Off-Exchange Settlement (OES) platform by publicly listed digital asset custodian BitGo, the company said Thursday in an announcement shared with Cointelegraph.

The integration enables institutional clients to trade on OKX while keeping assets secured in BitGo’s cold custody, aiming to eliminate pre-funding requirements and improve capital efficiency.

“Institutional capital entering crypto requires capital to be protected and to be put to work,” OKX US CEO Roshan Robert told Cointelegraph. “Our proprietary custody infrastructure has been proven at scale, and our partnership with BitGo gives clients flexibility in how they protect assets while freeing capital to work harder,” he said.

The development marks a broader industry push to improve security and liquidity access by raising custody standards and securing partnerships with major custodians.

OKX’s first US steps after ICE took stake in the exchange

The integration with BitGo is among OKX’s first US institutional infrastructure steps since Intercontinental Exchange invested in the company at a $25 billion valuation in early March, with ICE executives taking a board seat at the exchange.

OKX Global CEO Star Xu then said the partnership would shape the platform’s approach to the US, adding that the company viewed its local presence as a “blank sheet of paper.”

The investment came about a year after OKX officially reentered the US in April 2025, alongside the appointment of former Barclays director Roshan Robert as its US CEO.

Addressing the BitGo integration, Xu emphasized that safeguarding customer assets has always been a foundation to OKX. “At the same time, we've expanded our custody partnerships with trusted leaders like BitGo to give clients greater flexibility and choice in how they secure their assets,” he added.

BitGo has disclosed risks tied to its off-exchange settlement platform

BitGo has operated its off-exchange settlement platform for at least a couple of years, acting as custodian and settlement facilitator for digital asset transactions executed on third-party exchanges.

Despite the operational efficiencies provided by its OES platform, BitGo said it still faces multiple categories of risk, including operational, regulatory and counterparty risks.

“Operational risks associated with our OES services include potential errors in processing trade data, delays or failures in asset transfers, employee or insider misconduct, cybersecurity incidents, technological disruptions and reconciliation errors,” the company said in its IPO filing in January.

Magazine: How to fix suspected insider trading on Polymarket and Kalshi

The exploiter behind the roughly $293 million Kelp DAO hack appears to have laundered nearly all of the unfrozen Ether stolen in the attack, narrowing recovery efforts to the tranche Arbitrum’s security council managed to freeze.

The Kelp Dao hacker appears to have laundered nearly all of the 75,700 Ether (ETH) stolen from the protocol on Saturday. The hacker primarily used the THORChain to swap the Ether for Bitcoin (BTC), generating about $910,000 in fee revenue for the protocol, according to blockchain analyst EmberCN in a Thursday X post.

The attacker began moving the funds on Tuesday, sending roughly 75,700 ETH, worth about $175 million at the time, into newly created wallets before routing the assets through THORChain and privacy protocol Umbra. Arkham data showed the attacker’s tagged main wallet had been largely emptied by Thursday.

Transferring the funds through Thorchain makes them more difficult to trace, reducing the chances of recovery. The transaction patterns signal that the “attackers are executing an exit strategy rather than sitting on the proceeds,” Arkham said in a Tuesday report.

Arbitrum’s security council separately froze 30,766 ETH tied to the exploit and moved the funds into an intermediary wallet that can now be accessed only through further governance action.

The attacker laundered the remaining funds just five days after they drained about 116,500 restaked Ether (rsETH), worth roughly $290 million to $293 million at the time, from Kelp DAO’s LayerZero-powered rsETH bridge on Saturday.

Source: EmberCN

Aave and Kelp working towards a resolution to contain the fallout

The exploit sent shockwaves across decentralized finance (DeFi) applications, including Aave, where the hacker used the stolen funds as collateral to borrow against the protocol and created about $195 million of bad debt, according to early estimates. 

Aave is now working with affected protocols to find a resolution that reduces the exploit’s contagion effect, according to Aave founder and CEO, Stani Kulechov. He wrote in a Wednesday X post:

“Our priority is our users, and every decision we are making is aimed at an orderly return to normal market conditions and the best possible outcome for everyone involved.”

In a Thursday X post, Kelp DAO also said that they are making progress towards a “suitable resolution,” adding that their efforts are directed towards “safeguarding our users and strengthening the protocol.” 

On Monday, Aave’s risk provider outlined two potential outcomes: roughly $123.7 million in bad debt under one scenario and about $230.1 million under another.  

The first scenario would spread losses across all rsETH holders on Ethereum mainnet and layer–2s, shrinking the bad debt on Aave but risking a 15% depeg in rsETH relative to Ether. The second would spread the entire loss across rsETH holders on Ethereum layer-2s, leaving Aave with $230 million in bad debt.

Magazine: 53 DeFi projects infiltrated, 50M NEO tokens could be ‘given back’: Asia Express 

Flying Tulip, a decentralized finance (DeFi) platform founded by DeFi developer Andre Cronje, has added a circuit breaker that can delay or queue withdrawals during abnormal outflows, as April DeFi losses climbed amid a string of major exploits. 

According to Flying Tulip’s documentation, the mechanism is designed to slow funds leaving the protocol if outflow capacity is exceeded, giving the team time to investigate suspicious activity and limiting how much an attacker could drain in a worst-case scenario.

Flying Tulip said the circuit breaker works differently across products. In the first version of the circuit breaker, used in its Perpetual PUT product, withdrawals can revert and users must retry later. In the second version, used in Flying Tulip’s stable asset and settlement currency, ftUSD, withdrawals are queued and become claimable after a delay instead of being rejected outright.

Flying Tulip said the circuit breaker is built with a “fail-open” design, meaning transactions would still be allowed if the safety mechanism itself were to malfunction. The platform said users can track the feature through a dedicated status page. 

The design adds a new layer of protection for the DeFi platform as recent industry exploits exposed risks that extend beyond smart contract code. 

Circuit breaker definition. Source: Flying Tulip

Recent exploits put broader security failures in focus

The added attention to outflow controls comes as recent exploits underscored vulnerabilities tied to signers, infrastructure and collateral design rather than only smart contract bugs. 

Amir Hajian, a digital assets researcher at trading firm Keyrock, said the biggest failures in April were increasingly linked to operational and infrastructure weaknesses, including compromised multisigs, configuration flaws and key leaks. 

The new mechanism deployed by Flying Tulip is designed to slow abnormal outflows and give the protocol time to respond when losses stem from failures outside of the smart contract itself. 

Hajian highlighted April's DeFi losses, which reached over $600 million in the first 18 days of the month, with two incidents accounting for 95% of the damage. 

On April 2, Solana-based decentralized exchange Drift Protocol suffered an exploit, with estimated losses at about $280 million. On April 19, liquid restaking platform Kelp was exploited for about $293 million, prompting lending protocol Aave to freeze rsETH markets on V3 and V4. 

Magazine: 53 DeFi projects infiltrated, 50M NEO tokens could be ‘given back’: Asia Express

US-listed spot Bitcoin exchange-traded funds (ETFs) have been gaining momentum amid Bitcoin’s price recovery, showing steady inflows since mid-April.

Spot Bitcoin (BTC) ETFs logged $335.8 million in inflows on Wednesday, marking the seventh consecutive day of inflows, according to Farside data.

During the inflow streak, the ETFs drew around $1.9 billion in total inflows, surpassing the previous seven-day inflow streak in March, which totaled $1.2 billion.

According to Wallet Pilot data, Bitcoin ETFs hold a combined 1.3 million Bitcoin in assets under management, worth around $103 billion.

The steady inflows to Bitcoin ETFs were accompanied by a rising BTC price, which has surged 11% over the past 30 days. BTC briefly rose above $79,000 on Wednesday, its first time reaching that level since late January, according to CoinGecko.

BlackRock leads inflows at $1.4 billion as Morgan Stanley fund adds to streak

Out of $1.9 billion in the latest inflow streak, BlackRock’s iShares Bitcoin Trust ETF (IBIT) accounted for more than 73% of all the inflows at $1.4 billion. The fund holds 809,870 Bitcoin, accounting for 62% of total AUM in US-listed spot Bitcoin ETFs.

The Morgan Stanley Bitcoin Trust (MSBT) strongly contributed to the momentum, posting $95 million within the total streak. Notably, the fund itself has not yet seen a single day of outflows, generating $163 million since launch on April 8.

Daily spot Bitcoin ETF inflows since April 14. Source: Farside.co.uk

Still, several funds have clocked losses during the past seven trading sessions. The Grayscale Bitcoin Trust ETF (GBTC) led redemptions during the period, with net outflows of around $100 million.

Ether (ETH), the second-largest crypto asset by market capitalization, has also been gaining traction in US-listed spot ETFs, with these funds posting a 10-day inflow streak totaling $633.6 million, according to Farside.

Last week, broader ETH investment products recorded their strongest week since January, finally flipping to positive flows year-to-date, according to CoinShares.

The ongoing recovery in spot markets came as the Crypto Fear & Greed Index surged to 46 for the first time since late January. Still, the index remains in “fear” territory, as Bitcoin remains down about 11% year-to-date

Magazine: Adam Back says current demand is ‘almost’ enough to send Bitcoin to $1M