Cryptopolitan

HumidiFi, one of the most active decentralized exchanges on Solana, has suspended trading on its platform after it disclosed a security incident against its network.
The exchange maintains that the damage was confined to its own funds and no customer or third-party assets were affected.
What did HumidiFi disclose?
HimidiFi revealed on its official X account that a portion of its internal network has been affected and said the team was still investigating. It told followers that the impact of the attack was limited to its own funds and that no customer or outside assets had been touched.
Trading is currently suspended on the platform, but beyond that, the company did not reveal much about the incident. They have also not officially named the event a hack or put a dollar figure on any loss.
DefiLlama data shows that HumidiFi handled around $213.79 million in trades in the last day, with its 30-day volume reaching about $2.468 billion.
Meanwhile, WET, the exchange’s native token, saw its own 24-hour trading volume jump nearly 192% to about $5.49 million even as its price dropped 8.66% to $0.07173. The token now sits about 78% below its December 10, 2025, all-time high of $0.336.
What other security incidents has HumidiFi reported?
Prior to this attack, HumidiFi organized a token sale on Jupiter that quickly collapsed after a bad actor bought nearly all of the available tokens using automated wallets.
Bubblemaps reported that at least 1,100 wallets of the roughly 1,530 that participated in the sale had identical funding and timing patterns.
HumidiFi completely canceled the sale, writing, “The sniper is not getting shit,” in its statement, which was posted on its X account at the time. However, Cryptopolitan reported the event had still pulled in $1.39 million in USDC before it was canceled.
Following the cancellation, the team promised to organize fresh tokens and a pro-rata airdrop for legitimate buyers.
Cryptopolitan reported the growing regularity of probes into digital asset projects during Q2 of 2026, which closed as the quarter with the most incident reports on record. Roughly 83 separate security incidents occurred through June 22, and about $775 million in losses, per DefiLlama data.
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Jesse Pollak, VP of Engineering at Coinbase, was active on X, fighting accusations that Coinbase has been dumping Ethereum.
The Base creator has been telling those who care to hear that the exchange is the largest holder of Ethereum in the world.
How a “badly misplaced” comment started the argument
The argument erupted when chaskin.eth (@jchaskin22) said that the resentment of the Ethereum Twitter community towards Coinbase is “badly misplaced,” and likened the anger to when a business turns on its biggest customers because the customer chose not to buy so much of its stock.
Pollak agreed with the sentiments, saying it “blows my mind” to see Coinbase getting attacked because of ETH sales.
This didn’t sit well with everyone. cyp.eth (@0xcyp) responded to venture investor Nick Tomaino’s adulation of Coinbase as “values aligned with Ethereum,” by saying the company’s values include “constantly selling ETH from Base execution fees to USD and BTC.”
That response encapsulates the whole annoyance with the company: the folks in charge of Base earn in ether, then allegedly sell the proceeds into other assets.
Pollak’s “order of magnitude” defense
Choosing not to argue about specific transactions, Pollak coined his argument around size. In his opinion, Coinbase is “the largest non-DAT holder of ETH by an order of magnitude,” which means that it holds more ETH than any peer that isn’t a dedicated digital-asset-treasury vehicle.
He added that “Coinbase literally held 150K ETH for years.” It held them through market cycles and changing narratives about whether layer-2 networks were Ethereum’s future or not.
The public numbers are consistent with Pollak’s argument. Coinbase is listed with ~151,180 ETH, worth ~ $256 million, on the Strategic ETH Reserve tracker. It’s ranked sixth on the list, behind dedicated treasury firms like Bitmine Immersion Tech, which holds over 5.5 million ETH.
Where the sequencer revenue passes to
The criticism is centered on Base in particular. Coinbase operates the network’s sequencer, the component that is responsible for ordering and processing transactions. The sequencer earns fees in ETH; the fees are then converted to dollars or bitcoin, and outsiders have seen it as Coinbase dragging down the value of Ethereum rather than increasing its value
Others have noted how the company parks bitcoin on its balance sheet while dealing with ether like an operating asset rather than a long-term conviction.
Chaskin.eth agreed with the point about priorities and reasoned in the past that approximately 75% of Coinbase’s revenue has come from trading and holding bitcoin, while hoping for a change in that figure.
The ecosystem angle
Pollak’s rebuttal is that treasury math ignores the broader picture. He gave credit to Coinbase for shipping EIP-4844, the upgrade that reduced layer-2 costs by releasing “blob” data, and for playing a part in the creation of USDC, one of the largest stablecoins.
He went on to highlight the millions of users the exchange has brought into Ethereum, saying that reach trumps any single balance-sheet decision.
Base was launched in 2023 and is now one of Ethereum’s busiest layer-2 networks and just reached Stage 1 decentralization, which reduces Coinbase’s direct control over how the chain operates.
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Arthur Hayes, the cofounder of the crypto exchange BitMEX, clarified to his audience on Saturday that Flop Labs has issued no token, run no pre-sale, and put out no memecoin.
He warns that anything trading under the FLOP name today is not the genuine token.
Is the $FLOP token trading yet?
Arthur Hayes, the cofounder of the crypto exchange platform BitMEX, clarified through posts on his X account that Flop Labs has yet to issue a memecoin or any other token. He added he will announce the airdrop himself once it begins “in a few months” and flag the mainnet when it goes live next year.
Hayes announced roughly four days before his post that he was coming out of retirement to run Flop Labs as chief executive.
FLOP, in Hayes’s words, will function as “food for your AI agent.” It is expected to be a native currency that autonomous software would spend on computing power, inference, and memory storage.
Under the proposed design, miners will supply compute to run AI tasks and then earn FLOP through block rewards and fees in return. Validators will check to confirm that the work is done correctly and also hold memories for AI agents.
Hayes says the token will provide the missing payment system in what he calls the “agentic economy.”
He also previously argued the real risk of AI is the debt collected in the process of data-center construction, estimating back in June that about $1.5 trillion had been borrowed to fund AI infrastructure since November 2022.
Why is there skepticism around Hayes’ project?
Hayes’ warning about possible fake FLOP tokens arrives while he is still facing questions about his trading history. In June, his family office, Maelstrom, was accused of moving about $1.92 million worth of CARDS tokens to a market maker just days after Hayes publicly talked up the project, Cryptopolitan reported.
Weeks earlier, on-chain investigator ZachXBT documented Hayes exiting positions in tokens like HYPE, NEAR, Zcash (ZEC), and Worldcoin (WLD) within two weeks of endorsing them. Hayes responded to these accusations by saying he “sold to a willing seller at a price.”
Hayes has repeatedly said that the launch of the FLOP token will be a “100% fair” with no presale and no venture-capital allocation. However, Flop Labs is yet to publish a whitepaper, tokenomics schedule, contract address, blockchain choice, test network, or anything at all that a buyer could use to confirm that claim.
This controversial history is why a fair-launch pitch with rewards flowing to key opinion leaders draws extra scrutiny. The sequence of the FLOP project is also quite unusual, with the airdrop slated to happen before the chain that would host the tokens even exists.
When asked about the absent whitepaper, Hayes said the team was “still speaking with interested parties” and that infographics would start rolling out beginning with tokenomics.
Notably, Maelstrom has announced that it will be shutting down by September, while BitMEX plans to close its exchange on September 23, 2026.
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Amazon has raised prices across several of its consumer electronics. This comes amid soaring memory-chip costs that put pressure on the company’s hardware business. Echo speakers, Fire TV devices, Kindle e-readers and eero routers are among the products affected. Some prices are rising by as much as 60%.
The increases show how the AI boom is starting to hit consumers. Cloud companies and data-center operators are locking up more memory chips for AI infrastructure. This is leading to a supply crunch, and component costs are rising. Amazon is now passing at least part of that increase on to customers. The Kindle’s 16 GB price is reportedly rising by $40 to $149.99. However, the basic Echo Dot is expected to see a jump from $49.99 to $79.99.
Prices moved overnight, with Echo Dot up 60%
A report states that the sudden price increases affected streaming sticks, e-readers, smart speakers, and home networking equipment. Amazon’s basic Echo Dot is one of the clearest examples of this trend, going from $49.99 to $79.99 in an overnight price increase of $30, or 60%. Amazon claims that this was due to the “significant increases” in memory-component prices.
Similar efforts have been made by some other technology firms too. Apple cited rising costs of memory chips to justify its price hike, while Microsoft did the same for its Xbox hardware. Elon Musk has complained about the scale of price increases in public.
Amazon had also taken steps in the cloud market by raising prices of its EC2 Capacity Blocks for Machine Learning reservations by around 20% in July after a 15% hike in January.
Why AI data centers are draining the memory supply
The squeeze illustrates the amount of memory being consumed by the AI infrastructure. According to J.P. Morgan Global Research, DRAM prices are expected to increase 400% or more between the beginning of 2024 and the end of 2026 due to the shortage of supply, which is partially being caused by hyperscalers signing long-term supply agreements. The report also pointed out that the price indices for software, hardware, and storage have collectively increased by 23% since the end of 2024.
The money involved in that demand is incredible. According to TrendForce, the capital expenditures of the nine largest clouds, including Amazon, in 2026 will surpass approximately $886.7 billion, up to 90% from last year. It also increased its forecast for growth in AI server shipments for 2026 to nearly 31%.
Supply remains tight. Micron said 16 strategic customers had committed $22 billion to secure memory chips, while CEO Sanjay Mehrotra told Reuters he expects constrained conditions to persist beyond 2027.
Cheaper devices are the first casualties
Budget devices are taking the hardest hit. IDC now expects worldwide PC shipments to fall 11.3% in 2026 and smartphones to decline 12.9%, even as revenue remains roughly flat because average selling prices are rising.
Some manufacturers are also cutting specifications instead of absorbing the full cost. A phone that once shipped with 12GB of RAM and 256GB of storage may now arrive with 8GB and 128GB at the same price.
Counterpoint Research found the damage concentrated at the bottom of the market. Smartphones priced at $99 and below accounted for about 12% of sales by March 2026, while unit volumes in that segment fell 40% year over year. Amazon’s low-cost devices sit directly in that pressure zone.
No relief expected before 2027
Few market watchers expect a quick reversal. IDC said its forecasts do not show pricing returning to 2025 levels within its outlook period and expects supply strain to continue through 2026 and into 2027. TrendForce, even as consumers approach the limit of what they can absorb, still projects DRAM contract prices rising another 13% to 18% in the third quarter.
Cloud companies can at least hedge the risk. Cryptopolitan reported that CoreWeave is considering put options and other derivatives to manage memory-price swings after signing long-term supply deals with Micron and SanDisk.
Consumers have no comparable protection. Their hedge is simply whether they buy — and Amazon has just raised the price of doing so.

Official Trump (TRUMP) rallied above $3, at one point adding over 80% to its price. TRUMP rallied during Asian trading hours, wiping out more than $30M in liquidation.
TRUMP rallied above $3, later to return to $2.94. The meme token is still down by over 90% from its highs, but the recent rally showed the asset was quick to respond to any news of new crypto activities from the TRUMP family.
TRUMP trading volumes also reached a three-month peak above $1.79B, spiking immediately after a long period of depressed activity.
TRUMP briefly rallied above $3, on a combination of a short squeeze and rumors of a new Trump family asset on the Robinhood chain. | Source: Coingecko
The main driver of the rally was a short squeeze, causing $8.59M of short liquidations on Binance. TRUMP went through $30M in total liquidations for the past 24 hours, becoming one of the leading tokens to undergo a short squeeze.
The TRUMP rally also followed the rapid BTC recovery above $79,000, followed by a quick slide. This raises the question whether the TRUMP rally is sustainable beyond the wave of short liquidations.
Why did TRUMP rally?
The main driver of the pump on Asian markets was a rumor of a new Trump family coin launching on Robinhood. At the time of the biggest price changes, the rally was unconfirmed, and only mentioned on social media.
Some traders chose to short TRUMP, expecting the new launch to drain any excess liquidity from the meme token. However, the wave of short positions caused different market reactions, as most of those positions were liquidated.
TRUMP’s rally wiped out most short positions up to $3, potentially causing a reversal as liquidity runs out. | Source: Coinglass
As TRUMP moved above $3, most of the existing short positions were liquidated, with almost no remaining liquidity up to $3.50. This positioning may mean the TRUMP rally is over. However, traders would be more cautious in setting up new short positions.
Is the TRUMP rally sustainable?
The meme token rally showed the TRUMP brand was among the more resilient in crypto space, and capable of making short-term reversals.
TRUMP also rallied despite the recent claims of Justin Sun on achieving legal victory over World Liberty Fi for his frozen assets. Sun also did not harm the brand after his recent exposure of USD1 as an asset that could be frozen and clawed back from user wallets.
Following the TRUMP rally, the World Liberty Fi token WLFI also expanded to a one-month peak of 0.07, before correcting to its usual range of $0.06. The recent market volatility caused rapid recoveries for multiple assets, but also showed signs of a rapidly reversing trend. This would make the TRUMP and WLFI rallies unsustainable.
There are also no confirmations that either WLFI or TRUMP would have a new ‘use case’, or that holders would receive any additional allocations in the case of a new coin launch.
Despite the setback, the TRUMP meme token open interest is back to $172M, the highest level since April. The presence of newly built short and long positions may lead to more active trading and price fluctuations. At the same time, traders are still monitoring social media and on-chain data to intercept any new asset launches, or see a confirmation of a new Trump family asset.

Britain’s tax authority sent more than 81,000 warning letters to crypto investors over the past year. This highlights a sharp rise in scrutiny of digital asset holdings. Meanwhile, a much bigger change is coming in 2027, when the UK and dozens of other jurisdictions are expected to begin automatically sharing crypto account information under a new global tax reporting framework.
The OECD’s Cryptoasset Reporting Framework (CARF) will come into effect in 2027 in the UK. It is one of 46 countries that committed, according to the OECD list of commitments issued in June. It is expected that 29 more countries will join in 2028, while the United States will become part of the framework in 2029. The UK tax authority, HM Revenue and Customs (HMRC), provides insights into how this enforcement framework might play out.
The 81,000 figure and how fast it climbed
Around 81,000 letters were uncovered via a Freedom of Information request made by the accounting firm UHY Hacker Young and published on August 20. The number of nudge letters sent out by HMRC has increased by 25% from about 65,000 letters sent out the previous year. The total number of letters in 2023-24 is merely 27,714, which signifies a nearly 300% increase in two years.
Nudge letters do not represent official investigations. They offer taxpayers the opportunity to report the unpaid tax before HMRC pursues the matter. UHY Hacker Young reported that the penalties for voluntary disclosures can be limited to 30% of the total amount of unpaid tax, as opposed to 70% to 100% of it once HMRC has intervened in the situation.
According to Neela Chauhan, who is part of the firm, many holders of cryptocurrencies are young, inexperienced with tax authorities, and believe that their actions are not noticed. She said:
“There is the expectation amongst tax authorities that cryptocurrency investment is rife with tax evasion”
Why offshore exchanges stop being a shield
HMRC can receive information from UK platforms now, and by 2027, it will be able to access more information.
Chauhan said UHY expects 52 jurisdictions to provide HMRC with data on UK residents in 2027, including the Channel Islands, Cayman Islands, Ireland and Liechtenstein. Another 15, including Singapore, Switzerland and Gibraltar, are expected to join in 2028.
The records can be quite large in scope. In the UK, they would include transaction details with identifying information such as names, addresses and National Insurance numbers. According to Chauhan, the moment HMRC acquires the data, investigations will be “like shooting fish in a barrel.”
The same trend is happening throughout Europe. The EU’s DAC8 directive, which draws inspiration from the OECD framework, came into force as of January 1, 2026. Member states are expected to exchange information on crypto-assets for the reporting year 2026 by September 30, 2027.
In practice, this means that the use of a platform in one of the participating jurisdictions will provide less and less comfort from the scrutiny of local tax authorities.
What HMRC counts as a taxable event
Part of the compliance problem is that crypto tax rules are easy to misunderstand. Selling crypto for pounds is an obvious taxable disposal, but swapping one token for another can also qualify. So can spending crypto or giving it away. Lending and staking income may fall under separate income-tax rules.
Another common mistake, Chauhan said, is assuming an overseas account falls outside UK tax rules. UK residents are generally taxed on worldwide gains, meaning profits made through foreign platforms can still be reportable at home.
Cryptopolitan reported in January that HMRC had framed its crypto data push as part of an effort to recover about £300 million in tax, with the capital gains tax-free allowance set at £3,000.
The April 2027 DeFi change
At the same time, the UK is changing how some decentralized finance activity is taxed. From April 2027, qualifying crypto lending and automated market-making arrangements will receive no-gain, no-loss treatment until an actual economic disposal occurs. The change defers tax rather than eliminating it.
UHY Hacker Young estimates the revised treatment of crypto lending and liquidity pools could affect about 700,000 people.
For the wider market, the direction is clear. Governments are not only refining crypto tax rules; they are connecting their reporting systems across borders. As those exchanges begin, the long-standing assumption that tax authorities cannot see offshore crypto activity becomes much harder to sustain.
UK crypto-tax enforcement is accelerating
The tax authority recovered more than £8.3 million through settlements in 2024–25 and 2025–26, while crypto-related warning letters climbed from 8,329 in 2021–22 to more than 81,000 in 2025–26. The settlement figures should not be interpreted as HMRC’s total crypto-tax revenue.
Panel A — HMRC tax recovered through settlements Panel B — HMRC crypto warning (“nudge”) letters 2024–25: £3.5 million 2021–22: 8,329 2025–26: £4.8 million 2022–23: 0* Change: +37% 2023–24: 27,712 Average per settlement: £12,500 → £21,600 2024–25: 64,982 Average increase: ~73% 2025–26: 81,000+ Two-year total: >£8.3 million 2021–26 total: >181,000
HMRC’s crypto tax crackdown is expanding rapidly
*The available FOI series reports no crypto CGT nudge letters for 2022–23. The warning-letter figures for 2021–22, 2023–24 and 2024–25 come from FOI data obtained by BrokerChooser/UHY Hacker Young. The interesting divergence is that settlement collections rose while the number of settlements fell:
280 settlements → 222 settlements
£3.5m → £4.8m recovered
That means the average recovery per case increased by approximately 73%, from £12,500 to £21,600.
The next major data point is 2027, when CARF reporting starts feeding HMRC standardized crypto transaction data. HMRC says UK reporting cryptoasset service providers began collecting the required information from January 1, 2026, with the first reporting period ending December 31, 2026.
What happens if you pay late?
Receiving a nudge letter isn’t itself a 15% penalty. The taxpayer generally has an opportunity to correct their position before HMRC moves into formal enforcement.
Timeline after payment deadline Penalty / Cost Example if £10,000 tax is unpaid Due date £0 penalty £10,000 owed 30 days late 5% of unpaid tax +£500 6 months late Another 5% +£500 12 months late Another 5% +£500 Maximum late-payment penalties 15% £1,500 Throughout HMRC interest also accrues Added to the balance
Penalty timeline graphic for the UK Self Assessment System

Early Saturday, President Donald Trump imposed 50% tariffs on $20 billion worth of Canadian products after the two allies failed to reach a deal.
Canada has since promised to set an immediate, equivalent retaliatory levy package. Canadian Prime Minister Mark Carney particularly asserted that they would match the U.S. tariffs dollar for dollar.
Earlier this week, both sides had hinted at substantial progress in their negotiations, raising hopes that a trade deal was within reach. However, speaking with reporters on Friday, U.S. Trade Representative Jamieson Greer blamed Canada for the setback, claiming that Ottawa had retreated from the terms they had previously agreed to finalize.
He noted, “Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week. Despite the U.S. offer to Canada to receive the best treatment of any major exporter to our market, new demands and walk-backs of other commitments by Canada have upended the careful balance reached in the past days.”
Nonetheless, Canada’s Carney has so far maintained that the recent progress fell short of meeting the nation’s core economic objectives. Canada particularly wanted the U.S. to ease tariffs on steel, aluminum, autos, and lumber.
Trump’s tariffs just blew up U.S.-Canada trade talks
Trump’s tariffs will apply to around 5% of Canada’s yearly exports to the U.S. The tariffs were supposed to take effect early Wednesday, but Trump granted a three-day grace period to allow continued talks. Unfortunately, a deal still didn’t come together.
Canada has now halted negotiations and committed to matching any new U.S. tariffs with its own levies to protect Canadian workers and businesses. Carney noted, “I have decided to suspend trade negotiations with the U.S. and have directed Canada’s negotiators to return to Ottawa. […]Canada will match those tariffs dollar for dollar to protect our workers and businesses.”
He also promised immediate federal aid for Canadian workers and businesses within days. Moreover, he cited unfair and economically damaging late-stage revisions by the U.S. as the reason a deal couldn’t be salvaged, stating they broke the foundational trust of the talks. On the contrary, Greer presented the US provisions as forward-thinking and said they would have established a groundbreaking economic and national security alliance.
Before the new levies, the Trump administration maintained a 10% tariff on Canadian imports. However, because Canada is the U.S.’s second-largest trading partner after Mexico, the vast majority of its goods were exempt under the USMCA trade pact negotiated during Trump’s first term.
Some warn that the tariffs could jeopardize both markets
Some economists have shared their disappointment with the new tariffs. For starters, Canadian Chamber of Commerce President and CEO Candace Laing warned that the move would inflate costs for American consumers and jeopardize Canadian enterprises, investments, and livelihoods.
The new tariffs could also put fresh pressure on businesses operating across the U.S.-Canada supply chain. Canadian exporters facing higher costs may pass some of the additional expense to U.S. buyers, potentially raising prices for products that rely on cross-border trade.
Industries with tightly integrated supply chains could be particularly exposed, as companies may have limited options to quickly replace Canadian suppliers. The retaliatory measures from Ottawa could further increase costs for American exporters seeking access to the Canadian market, creating pressure on businesses on both sides of the border.
Ryan Majerus, a partner at King & Spalding and a former U.S. trade official, also commented, “Canada likely wanted further sector-specific relief than the U.S. was willing to offer, or Canada’s concessions did not go far enough. Either way, I think both sides will be under immense pressure in the coming days to still find an off-ramp. But if Canada has agreed to also impose tariffs, the off-ramp may be even harder to find.”
Not to mention, the current friction complicates efforts to renew the North American trade agreement. The three neighbors, Mexico, the U.S., and Canada, are looking to extend the landmark trade agreement brokered during Trump’s first term.
Although the U.S. has entered formal negotiations to revamp the deal with Mexico, talks with Canada have yet to start, and the intensifying trade conflict threatens to derail them entirely.
The immediate question is whether the two governments can return to negotiations and prevent the dispute from escalating further.
With Canada preparing to impose matching tariffs and businesses already facing uncertainty, both sides could come under pressure to reach a compromise. A prolonged standoff would not only threaten bilateral trade but could also complicate investment decisions and disrupt companies that depend on predictable access to the North American market.

A potential violation of security surrounding The Sandbox’s SAND token has caused a stir among traders. According to on-chain researchers, the perpetrators could be behind the minting of several hundred million in SAND tokens. On August 22, 2026, South Korean exchange Upbit cautioned traders to treat SAND with “special caution” due to indications of problems with security and potential fluctuations in prices.
The Sandbox still managed to print green indexes. SAND price surged by more than 19% over the last 7 days. Its 24-hour trading volume stood at $87 million. However, the biggest concern is supply. Lookonchain reported that more than 500 million new SAND were created during the incident. That is equivalent to at least 16.7% of the token’s maximum 3 billion supply.
BaseScan snapshot taken before the incident shows that the Base contract had a total supply of just 14.699 million SAND. This means that the new mint was more than 34 times the previous total supply of the Base chain. When new tokens are created without market demand, the existing token holders can be diluted. Especially if the newly minted tokens went to exchanges.
The risk goes way beyond SAND alone. Any sudden supply shocks can lead to a loss of trust in other utility tokens traded on exchanges if big exchanges notify customers about a problem.
Upbit announced the situation and advised the owners of the tokens to be ready for the possibility of increased volatility. The company, though, didn’t stop operations; nevertheless, both Upbit and Bithumb put restrictions on deposits and withdrawals for SAND.
What on-chain sleuths say happened
SAND on Base may possess a serious loophole that might let hackers mint tokens at any time, according to Lookonchain. The on-chain monitoring firm referred to what was happening as an “infinite mint attack,” which happens when the minting permissions are compromised, enabling the minting process that allows for tokens to be minted without limits.
The Base SAND contract can be represented as the following: 0xac531Eb26Ca1d21b85126De8FB87E80E09002DcF, while the address linked to the suspected unauthorized minting is 0x67624BFadee937c9281B4f98Ce18aF1bee01257e.
On August 22, Lookonchain announced that over 500 million SAND had been minted and that the alleged attack was still active. According to BaseScan, the wallet in question had executed 302 transactions at 05:23:10 UTC.
There are still many unanswered questions. The Sandbox has not furnished any official statement with regard to the entire episode since the time of writing, the reasons behind the incident, how the attacker was able to gain the rights for minting, and what happened with the new tokens.
BaseScan exposed the wallet summary, but attempts to open individual transaction details encountered a bot-protection screen. An exploit-specific transaction hash is therefore not included, rather than relying on an unverified repost.
The market has watched this movie before
Crypto traders have seen similar supply shocks before. In May 2024, Blockchain Game Partners Inc. said a compromised minter key allowed a malicious contractor to create 5 billion GALA tokens on Ethereum. The company said it stopped the incident before blocklisting the wallet and burning the supply.
More recently, Cryptopolitan reported that Harmony rolled back its blockchain to reverse the effects of a roughly 4 billion ONE mint, equal to about 26% of the token’s supply, after an attacker exploited a cross-shard flaw. ONE fell following the mint.
Those cases illustrate the two outcomes SAND holders are now weighing: whether The Sandbox can neutralize the unauthorized supply, or whether the market reprices the token before that happens.
What to watch next
The next signals are an official statement from The Sandbox, confirmation of the final amount minted, evidence showing where the new tokens moved, and whether more exchanges restrict SAND.
The incident also comes during an active year for crypto exploits. Global Ledger counted 224 publicly disclosed hacks totaling about $1.32 billion in losses during the first half of 2026. It also found that incidents are now being disclosed roughly twice as quickly as a year earlier, helping explain why exchange warnings can reach traders within hours of an emerging breach.

On-Chain data show that Machi Big Brother turned $152,000 into $12.72 million in just 3 days on Hyperliquid. The fresh surge in the crypto market has put the exchange’s leveraged perpetuals back in the limelight.
Hyperliquid controls a huge portion of trade leverage already. It held a perpetual futures volume of $12.19 billion on August 22 within 24 hours. This is almost 30% of the $40.79 billion volume traded by all perp decentralized exchanges that day.
In other words, when a trader handling Machi’s account reports $12 million in profits, the interest is not just on that single wallet. But rather on how much risk traders are willing to tolerate and the location of that risk.
The bet: about $103 million in longs on $12.9 million
HypurrScan data reveals the figures behind the news. Machi’s portfolio held around $12.9 million in total, consisting almost exclusively of USDC, but had about $103 million of open trades with $52.4 million in Bitcoin, $44.9 million in Ether, and $6.1 million in Hyperliquid Hype Tokens in long positions. The account was entirely net long with a margin ratio of 14.41%.
Ether has contributed to the gain. ETH price surged by almost 30% over the last 7 days, while its 24-hour futures open interest went on to hit $33.18 billion. With that level of exposure, a solid move in the right direction can quickly result in 8-figure gains.
The danger is that leverage works just as fast in reverse. Galaxy Research associate Zack Pokorny cautioned in an August 17 report:
“It’s important to note that the entirety of the futures open interest figure does not constitute an absolute amount of leverage.”
Nearly 500 liquidations and a Bored Ape fire sale
This latest run by Machi comes in the wake of a prolonged account of liquidation history. According to Lookonchain, the trader has faced liquidation nearly 500 times. In June, the account was liquidated on seven occasions in a time span of ten hours while making repeated forays into ETH longs.

Machi(@machibigbrother), who has been liquidated nearly 500 times, turned just $152K into $12.72M in only 3 days, making a profit of over $12.5M!
Looks like he doesn’t need to sell his Bored Apes to keep his longs going anymore.https://t.co/mQLVsDGoSP pic.twitter.com/EpJXACA9GV
— Lookonchain (@lookonchain) August 22, 2026
Falling ETH and PUMP prices left Machi’s positions at $21.77 million in September 2025, forcing him to top up $4.72 million in USDC to avert liquidation, reported by Cryptopolitan on June 30. Arkham data revealed he had lost a total of $80.43 million since September 2025, including five liquidations on a single January day. To finance the trades, Machi sold several NFTs from his collection of his Bored Ape Yacht Club collection, which had previously had 182 NFTs.
According to Lookonchain’s comment on this week’s reversal, Machi “doesn’t need to sell his Bored Apes to keep his longs going anymore.” Machi himself described his strategy in four words on August 20: “I’m longing my longs.”
Why the liquidation math is unforgiving
Hyperliquid’s liquidation process shows how and why fortunes can turn so fast. According to its documentation, liquidation starts as soon as account equity drops below the maintenance margin, which is set to be 50% of the initial margin required when the asset is leveraged to its fullest.
Maximum leverage can be as low as 3x or as high as 40x. The maintenance level is set at 1.25% to 16.7% of the position value, depending on the instrument.
When it comes to closing positions, all orders are executed using market orders. With regard to positions that exceed 100,000 USDC, the liquidation takes place in 20% increments, each one separated by a 30-second pause.
That makes the process transparent, but not forgiving. On roughly $103 million of long exposure, even a relatively modest adverse move can start the liquidation chain. That is why a trader who has been liquidated hundreds of times can still be up more than $12 million just days later.

Two former Wall Street investment bankers were charged with fraud by the SEC on Friday following their stock trades in South Jersey Industries prior to the company’s February 24, 2022 takeover announcement.
According to the lawsuit, Mr. Satsky, aged 59, was one of the heads of an energy and utility banking unit at the New York bank, while working on South Jersey’s business and being a lead banker for that deal. Mr. Wolfe, his 55-year-old friend and former colleague, was alleged to have traded about 2.2 million shares, making a profit of $18.5 million when the stock rose about 40% on the news.
Wolfe bought 2.2 million shares between November and December
The purchases ran through the last two months of 2021 at a cost of at least $53 million, according to the complaint, filed as case 1:26-cv-07132 in the Southern District of New York. Infrastructure Investments Fund agreed to take South Jersey private at $36 a share in a deal valued at $8.1 billion.
The two men spoke about a possible acquisition on several occasions, the SEC says, including at a nationally televised college basketball game they attended with their wives.
Wolfe traded through eight entities the agency has named as relief defendants, among them Evergreen Capital, Evergreen Financial, Empire Property Management and GAW Holdings. Evergreen manages Wolfe family assets. He and Satsky both left Credit Suisse for Bank of America in 2012.
A regulatory inquiry triggered BOA’s internal investigation
The complaint alleges that the two individuals attempted to hide their actions, and it explains how the issue came to light. After the announcement, a financial regulator prompted the bank to run an internal inquiry into trading in South Jersey shares. Bank of America terminated Satsky in March 2025.
The U.S. Attorney’s office in Manhattan has been investigating the very same transaction for at least since the spring of last year, and still there have been no criminal charges filed. Satsky’s lawyer, Robert Anello, said his client “strongly denies the SEC’s allegations” and gave Wolfe no material nonpublic information about the company.
Reed Brodsky, Wolfe’s attorney, said his client emphatically denies the accusations and contends that the SEC ignored the testimony and evidence that showed Wolfe purchased the stock based on his “own independent investment thesis.”
The case fits Atkins’ renewed focus on insider trading
This case is one that the SEC, under Paul Atkins, has said it will continue to bring while retreating on other issues. As Cryptopolitan reported this month, the agency’s back-to-basics approach targets insider trading, market manipulation, fiduciary breaches and accounting fraud, and it recently built a Financial Reporting and Accounting Unit inside the Enforcement Division.
According to Cornerstone Research, enforcement actions were reduced by about 60 percent after the arrival of Atkins into power in April 2025, whereby the financial penalties for crypto enforcement were reduced to $142 million in 2025, less than 3 percent of the previous year’s total.
The charges against Satsky and Wolfe fall under Section 10(b) of the Exchange Act and Rule 10b-5. The SEC seeks permanent injunctions, civil penalties and officer-and-director bars against both, disgorgement and prejudgment interest from Wolfe, and a conduct-based injunction against Satsky.

TikTok, ByteDance and affiliated entities agreed on Friday to pay $400 million to settle litigation over compliance with the Children’s Online Privacy Protection Act, the Justice Department announced. Three hundred million is payable immediately.
The remaining $100 million turns on a court entering an order vacating a prior consent decree against Musical.ly, the app ByteDance acquired in 2017 and folded into TikTok. The figure is considered by the department to be one of the biggest recoveries in a COPPA case.
This settlement is a major victory for American children and parents.
– Associate Attorney General Stanley E. Woodward Jr.
The 2019 children’s privacy order failed to prevent new violations
That decree followed a $5.7 million penalty the FTC obtained in February 2019, then the largest civil penalty in a children’s privacy case. It required the company to obtain parental consent for users under 13 and to remove videos posted by them.
The US DOJ and the FTC filed a lawsuit against ByteDance in the Californian federal court in August 2024, stating that ByteDance knowingly allowed kids younger than 13 to sign up for regular accounts where they were able to post and interact with adults, collecting their personal data without informing their parents and ignoring parental deletion requests.
The complaint further noted how the company changed its registration process to make identification of underage users more difficult, and kept data useful for targeted advertisements despite the objections of its staff. Government lawyers said more than 170 million teenagers were on the platform.
DOJ points to TikTok’s ownership and compliance changes
The department’s statement leans on what has changed since it filed. TikTok has undergone significant changes to its ownership, management, compliance functions and privacy practices, it said, and has implemented measures strengthening safeguards for younger users, age controls and parental oversight.
Those developments materially advanced the public interests behind the litigation, according to the release. The restructuring moved TikTok’s US operations into a joint venture controlled by Oracle, Silver Lake and MGX, with ByteDance retaining 19.9%. DOJ did not detail conduct requirements beyond the payment, and has not said what the money will be used for.
AFP reported that ABC News found in May the administration was weighing directing settlement funds toward beautification projects, among them resurfacing the Lincoln Memorial Reflecting Pool.
Senators want answers over a safety feature withheld from users
According to reports, which were based on an internal document, TikTok modified its algorithm in 2021 in order to ensure users don’t get flooded with the same harmful content again and again, and also withheld it from 10% of their users in the United States, which was a control group consisting of about 15 million users, to test whether the safer version reduced engagement.
Among them was Chase Nasca, a 16-year-old placed in the group in January 2022 who died by suicide the following month. Senators Marsha Blackburn and Richard Blumenthal, co-authors of the Kids Online Safety Act, wrote to chief executive Shou Chew and US spinoff head Adam Presser on Wednesday, per Fortune, saying the company withheld a critical safety measure “in order to determine whether protecting users would impact its financial bottom-line.”
The senators are seeking 13 answers by September 1, among them the reason for leaving minors in the control group and a list of all US experiments where a safety feature has been withheld.

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Eric Trump has agreed to pull back from decision-making at World Liberty Financial’s proposed national trust bank while the crypto business works through the federal approval process.
Eric, World Liberty co-founder Zak Folkman, and Emirati investor Hamad Khalfan Ali Matar Alshamsi each signed separate commitments through companies connected to them. The agreements keep all three investors away from bank management decisions.
The commitments became public when World Liberty won preliminary approval late last week. They deal with the company’s ties to Trump’s family and overseas money as its affiliate pursues a federal bank charter.
Such deals have been termed passivity commitments. According to World Liberty, the reason behind making such arrangements is to ensure that particular investors do not control the trust bank.
The lawyers said the reason why the case would be considered different is that, apart from a foreign investor, who has some connections with the royal family of Abu Dhabi, it is the son of the country’s president, which makes the situation different from others. This is also true for other aspects of financial business.
World Liberty keeps major investors away from management while regulators review the bank
World Liberty spokesman David Wachsman said the company expects to remain under federal oversight for years.
“World Liberty is intentionally running towards regulation and permanent supervision, not away from it. Before full approval and for many years afterward, the World Liberty Trust Company will fully cooperate with the OCC, a federal regulator, and will adhere to all other applicable laws and regulations,” Wachsman said.
More scrutiny has been directed at the proposed crypto bank compared to other such proposals in view of the ownership associations of World Liberty. World Liberty had just made an agreement prior to Donald Trump taking the helm as president of the country to sell 49% ownership to a business that is associated with Sheikh Tahnoon bin Zayed, brother to the UAE president.
Trump and his family also hold financial interests in World Liberty. The company says none of them work there as officers, directors, or employees. The White House rejects claims that Trump’s business interests amount to a conflict or that he uses presidential power to make himself richer.
Federal reviews for bank charters involve detailed checks on the finances of organizers and directors. World Liberty’s filing lists Zach Witkoff, son of presidential envoy Steve Witkoff. It also names Scott Alper, an executive at the Witkoff Group, along with Robert Witkoff, Steve’s brother.
A federal charter would move USD1 issuance and nearly $4 billion of reserves inside World Liberty
The charter would let World Liberty directly hold the assets supporting USD1, its dollar-backed stablecoin.
That setup would allow the company to keep issuance and reserve management within the same organization rather than depend on outside arrangements. USD1 is worth nearly $4 billion by market value, according to CoinGecko, making it one of the world’s largest stablecoins.
The filing also lands during a wider shift in federal policy toward crypto banking. Jonathan Gould, the U.S. Comptroller of the Currency, said after taking office that approving new bank charters would be one of his priorities.
That differed from the Biden administration, which had been far less welcoming toward charter requests from digital-asset firms.
World Liberty is part of that group. Ripple, Paxos, and Fidelity Digital Assets all won conditional trust bank approvals in 2025. Coinbase (NASDAQ: COIN) received comparable conditional approval earlier this year. Those decisions give the companies a route toward running regulated trust banks, but each still has federal requirements to meet before getting full authorization.
Trump’s administration has also moved deeper into digital-asset policy. On Wednesday, Trump met top executives from crypto companies at the White House. The meeting happened as the Securities and Exchange Commission works on finishing a broader regulatory structure for the industry.
World Liberty now faces the remaining steps in that process. Regulators still have to decide whether the company can bring USD1’s reserve setup inside a federally supervised banking business.
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Eric Trump has agreed to pull back from decision-making at World Liberty Financial’s proposed national trust bank while the crypto business works through the federal approval process.
Eric, World Liberty co-founder Zak Folkman, and Emirati investor Hamad Khalfan Ali Matar Alshamsi each signed separate commitments through companies connected to them. The agreements keep all three investors away from bank management decisions.
The commitments became public when World Liberty won preliminary approval late last week. They deal with the company’s ties to Trump’s family and overseas money as its affiliate pursues a federal bank charter.
Such deals have been termed passivity commitments. According to World Liberty, the reason behind making such arrangements is to ensure that particular investors do not control the trust bank.
The lawyers said the reason why the case would be considered different is that, apart from a foreign investor, who has some connections with the royal family of Abu Dhabi, it is the son of the country’s president, which makes the situation different from others. This is also true for other aspects of financial business.
World Liberty keeps major investors away from management while regulators review the bank
World Liberty spokesman David Wachsman said the company expects to remain under federal oversight for years.
“World Liberty is intentionally running towards regulation and permanent supervision, not away from it. Before full approval and for many years afterward, the World Liberty Trust Company will fully cooperate with the OCC, a federal regulator, and will adhere to all other applicable laws and regulations,” Wachsman said.
More scrutiny has been directed at the proposed crypto bank compared to other such proposals in view of the ownership associations of World Liberty. World Liberty had just made an agreement prior to Donald Trump taking the helm as president of the country to sell 49% ownership to a business that is associated with Sheikh Tahnoon bin Zayed, brother to the UAE president.
Trump and his family also hold financial interests in World Liberty. The company says none of them work there as officers, directors, or employees. The White House rejects claims that Trump’s business interests amount to a conflict or that he uses presidential power to make himself richer.
Federal reviews for bank charters involve detailed checks on the finances of organizers and directors. World Liberty’s filing lists Zach Witkoff, son of presidential envoy Steve Witkoff. It also names Scott Alper, an executive at the Witkoff Group, along with Robert Witkoff, Steve’s brother.
A federal charter would move USD1 issuance and nearly $4 billion of reserves inside World Liberty
The charter would let World Liberty directly hold the assets supporting USD1, its dollar-backed stablecoin.
That setup would allow the company to keep issuance and reserve management within the same organization rather than depend on outside arrangements. USD1 is worth nearly $4 billion by market value, according to CoinGecko, making it one of the world’s largest stablecoins.
The filing also lands during a wider shift in federal policy toward crypto banking. Jonathan Gould, the U.S. Comptroller of the Currency, said after taking office that approving new bank charters would be one of his priorities.
That differed from the Biden administration, which had been far less welcoming toward charter requests from digital-asset firms.
World Liberty is part of that group. Ripple, Paxos, and Fidelity Digital Assets all won conditional trust bank approvals in 2025. Coinbase (NASDAQ: COIN) received comparable conditional approval earlier this year. Those decisions give the companies a route toward running regulated trust banks, but each still has federal requirements to meet before getting full authorization.
Trump’s administration has also moved deeper into digital-asset policy. On Wednesday, Trump met top executives from crypto companies at the White House. The meeting happened as the Securities and Exchange Commission works on finishing a broader regulatory structure for the industry.
World Liberty now faces the remaining steps in that process. Regulators still have to decide whether the company can bring USD1’s reserve setup inside a federally supervised banking business.
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Ethereum co-founder Vitalik Buterin has published the third installment of his cryptographic obfuscation series on Friday.
He examined a method called “local mixing” that throws out lattices and elliptic curves in favor of ideas lifted from hash function design.
Buterin had published Part I on June 29, and the second one, which is the diamond iO writeup, was published on July 28.
In those publications, he touched on lattice-heavy constructions. With local mixing, Buterin said that it is “a totally different way of doing cryptography.” In his post, he wrote that local mixing has no elliptic curves, no prime factorization, and no lattices anywhere in the design.
According to Buterin, the closest relative to local mixing is symmetric cryptography, which is the discipline behind everyday encryption and hashing.
Junk gates and a circuit run in reverse
The local mixing process starts with a circuit made of logic gates such as XOR, AND, and NOT, that goes through a pipeline that keeps the output identical while it scrubs away any trace of the internal logic.
Buterin wrote that local mixing goes through the following original circuit, adding reversibility, hardening, gadgetization, mixing, and finally obfuscation.
During mixing, junk gates are scattered through the circuit. The arrangement is then shuffled, and it swaps out small blocks for different gates that compute the same thing.
However, it is not enough on its own, and that is why the other steps are important, as they do most of the work.
Reversibility comes first because it makes the rest possible. Buterin explains that a reversible gate can be rewritten as an arbitrary pile of other reversible gates with matching behavior. This is harder to do with an AND or an OR.
A bet built on past failures
Buterin still called local mixing a “wild and risky bet,” writing that it sits on “a graveyard of failed attempts at white-box cryptography.”
However, he pointed out that the authors of local mixing say that more efforts, along with a willingness to accept higher overhead, could make the idea hold.
One proposed shortcut is artificial intelligence, as it could compress the three decades of hash functions needed to mature into a span of a few years. However, it moves away from the lattice-based routes, where the trade-off was security assumptions.
Buterin called obfuscation the “final boss of cryptography” in his June publication, and he called it “the final frontier of cryptography” in this latest publication.
He said the most rigorous constructions carry “literally galactic” runtimes, longer than the lifetime of the universe.
Why is obfuscation worth the trouble?
A program can be turned into an encrypted version that still runs on ordinary inputs using obfuscation. Here, ordinary outputs are returned while hiding their code.
When obfuscation is paired with a blockchain, it gets close to a “trustless trusted third party” that enables things like private, collusion-resistant voting with no M-of-N committee to trust.
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India’s cybercrime agency has ordered Google to shut down hundreds of accounts on Firebase, the tech giant’s app building platform, after multiple fake banking apps and phishing sites were traced back to the service.
The Indian Cyber Crime Coordination Center (I4C) sent Google at least three notices in August, naming at least 57 websites and databases in total that all run on Firebase. These sent notices claimed the links were being used as tools for spreading malware and pulling financial data off victims’ devices.
Of these 57 websites and databases, seven were phishing pages built to closely resemble login screens of major Indian banks, including the State Bank of India, ICICI Bank, and Axis Bank. Officials described the others as collection points for stolen information like credit card numbers and one-time passwords.
Credit card scam method
According to an August 17 notice, scammers wrote Android malware camouflaged as real banking apps and went after cardholders specifically. The bait was regular financial temptation, including a new credit card, a reward to redeem, and a higher credit limit.
A victim who fell for the malware scam installed what looked like a bank’s app. Once on the phone, the software quietly forwarded data to a Firebase database controlled by the scammers. This gave the scammers a route into other apps on the device and, potentially, into the victim’s money.
Officials identified one scheme built around PM-KISAN, the federal program that pays small farmers directly. Fake sites promised to help recipients claim their money and told them to download an app to collect these funds. That app also siphoned user data straight to the attackers.
India’s crackdown on Firebase infrastructure
India had over 242 billion transactions occur via its real-time payments system from January 2026 to March 2026. This huge foundation gives fraudsters the chance to acquire a massive pool of targets within the country.
Firebase is used by millions of developers globally, as it is quite easily accessible. Criminals have also taken advantage of this, moving onto the platform from other free tools over the past year due to its free tier and database features.
The Indian government’s standard response to such fraudulent schemes has simply been to track down the scam websites and disable them. However, the new steps point to a more expansive approach aimed at the infrastructure supporting the schemes.
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Co-founder of Circle (NYSE: CRCL), Jeremy Allaire has called the new accounting proposal from the U.S. Financial Accounting Standards Board (FASB) “an enormous strategic unlock” for stablecoins like USDC. He said this on Friday 21, August, 2026.
He claimed that the proposal makes it easier for companies to hold tokens. This came three days after the FASB’s proposal that would allow financial institutions and corporations to classify appropriate stablecoins as cash equivalents.
Why Allaire is speaking on accounting rules
Allaire’s company, Circle, issues the USDC stablecoin, and he gave the proposal “a nine out of 10”. He linked the new policy to the GENIUS Act and said the new accounting change, coupled with the passage of the GENIUS Act, would pave the way for the wider usage of USDC.
The euphoria is not without reason. The manner in which a company records a stablecoin on its books will determine if a treasurer touches it or not. In fact, when lenders gauge a borrower’s capacity to pay back their loan, they regard cash equivalents more than they do intangible assets.
Thus, a token that is considered an intangible asset will carry a balance-sheet penalty while a cash-equivalent token will not.
What FASB proposed
On August 18, the board released its proposed Accounting Standards Update. The update contains additions to Topic 230, the standard that covers the statement of cash flows. The board chose this rather than changing the definition of a cash equivalent.
Based on Deloitte’s summary of the proposal, the definition remains unchanged. The only change would be the guidance surrounding it, and a new rule that requires every company that reports cash equivalents to disclose their major components each year, whether there are any digital assets involved or not.
Public comments end on November 19, and FASB has made it clear it will choose a final standard and an effective date when it has reviewed the feedback. For now, nothing is settled.
The three tests a token must clear
FASB laid out clear criteria a stablecoin must meet before being considered a cash equivalent.
First of all, the holder requires an on-demand contractual right to redeem the token.
Secondly, the redemption has to be directly with the issuer for an amount of cash that is known.
Lastly, the issuer has to keep segregated reserves worth a minimum of one dollar of short-term, very liquid assets for every token in circulation.
The ability to sell a token on an exchange does not matter. The FASB believes that market prices can move from the promised value under stress, thus secondary-market liquidity on its own does not pass the test.
The FASB turned down treatment as cash when reserves possess volatile assets like cryptocurrencies or gold. This inevitably leads to the exclusion of algorithmic and overcollateralized tokens despite being tagged as stablecoins. It is optional rather than mandatory for a qualifying company to meet the conditions laid out by the FASB.
Coinbase already jumped, but not everyone is sold
Coinbase (NASDAQ: COIN) began using a new accounting method on December 31, 2025. It told the SEC that USDC, EURC, and PYUSD are backed by segregated cash-equivalent reserves and redeemable one-to-one.
Coinbase made the change in retrospect and stated there were no alterations to previously reported assets, liabilities, equity, net income, or earnings per share.
The proposal, naturally, has its skeptics. An accounting professor at Hofstra University, Jack Castonguay, expressed glee that the draft “didn’t go farther” and still believes that allowing stablecoins to sit under cash is a step too far.
The November 19 comment deadline is one to watch. By then, we’ll get to know how issuers, corporate treasurers and auditors feel before FASB makes a final decision. For now, the two tracks will remain separate.
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BitMart recently told its users that it is weighing a “potential restructuring and business resumption plan.”
The company announced that it would begin winding down operations on July 26 and has since left many of its 12 million registered users waiting on their frozen funds.
Will BitMart reverse its shutdown?
BitMart recently posted a note, titled “Update Regarding BitMart’s Potential Restructuring and Business Resumption Plan,” on its X account. The note mentions the exchange’s announcement made on July 26 that it would be winding down its trading platform and thanked the community for its patience during the period.
Cryptopolitan reported that the shutdown of the platform was due to operating conditions, the wider market, and its strategic direction. New account creation was stopped the same day the shutdown was announced. Deposits were switched off, and fresh orders were disabled. BMX, the exchange’s own ERC-20 token, dropped close to 60% within a day on the news.
Despite the exchange possibly reversing its decision, the rest of the timeline it laid out stands. For instance, spot and futures trading is set to end on August 26, 2026, with the platform scheduled to close entirely on January 31, 2027.
Withdrawals are meant to stay open through that final date, though Cryptopolitan has reported that users are facing delays, extra compliance and security checks.
Is BitMart solvent?
The talk of restarting the exchange comes while people still do not know if Bitmart has enough money to pay everyone back. On August 8, founder Sheldon Xia posted in Chinese that the exchange “has not run away” and “will not run away.”
He also told users not to trust screenshots or leaks from people who say they are current or former staff, but he did not provide any numbers, dates, or a proof of reserves report. That same day was the deadline for U.S. customers to withdraw their crypto.
Notably, the doubts about Bitmart started before the shutdown was even announced. On August 10, Whale Alert reported that a co-founder of OpenGradient said his market-making team could not take their money out of Bitmart. He openly asked if the exchange had enough money to cover all user deposits.
Bitmart has said that withdrawals are still being processed, but it has still not released the proof of reserves it promised on May 23. Back then, it blamed earlier withdrawal problems on 239 accounts it said were abusing trading subsidies and said it would publish reserve figures “at an appropriate time.”
Bitmart also has a history of security issues, including one incident in December 2021, when hackers stole about $150 million from one of its online wallets, known as a hot wallet.
Why did staff hijack BitMart’s X account?
On August 17, people claiming to be employees took control of BitMart’s Chinese X account and addressed Xia and partner Yi Li directly. The group laid out five demands for the founders to fulfill and an August 19 deadline.
The group requests that the founders account for where user money went, explain why withdrawals remain blocked, open all related accounts, trusts, and affiliated entities to investigation, pay staff their outstanding wages, and deliver a workable repayment plan.
Xia rejected the posts as fabricated, stating that the Chinese account had been compromised and was not run by current employees. He claimed that he had gathered evidence, planned a police report, and would send a lawyer’s letter to X seeking technical and data checks.
He added that customer assets take priority and that employees get no special standing. Blockchain investigator ZachXBT pushed back, arguing that anyone holding real liquidity should just return the money rather than post vague statements.
Bitmart’s own numbers also raise questions. CoinMarketCap shows the exchange has about $272.6 million in daily trading volume, but Bitmart reports having only about $5.36 million in reserves. Most of that is in its own token, BMX ($3.88 million), plus roughly $677,000 in Ethereum (ETH).
On August 14, a rival exchange called MEXC published a report from a security company called Hacken showing that it has more than enough money to cover all user deposits, with 288% of the Bitcoin it needs.
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Ten South Korean lawmakers proposed a bill that would allow the Financial Intelligence Unit to pursue unregistered crypto operators and refer them to prosecutors.
The South Korean police have shelved almost every case the FIU has passed on to them.
Ten lawmakers file bill #2220655
The measure was introduced on Thursday by Rep. Eom Tae-young of the People Power Party and nine others. It amends the Act on Reporting and Using Specified Financial Transaction Information by inserting a new provision, Article 15-4.
According to the legislative tracking portal of South Korea, the bill was referred on August 21 to the political affairs committee of the National Assembly, which oversees the Financial Services Commission.
The bill still has to go through committee review and a floor vote. Wording can change along the way, and bills filed by individual legislators often die unpassed when an Assembly term ends.
Under the proposal, anyone could report a suspected violation directly to the FIU. The unit could then investigate the allegation, analyze it, file a complaint, request a criminal investigation, or pass the information to investigators.
The FIU is part of the Financial Services Commission (FSC) and operates the registration regime that crypto firms serving Korean customers must join.
As of June, it had 28 registered providers and said it had referred 40 suspected illegal operators to investigative authorities.
Police shelved 23 of 25 FIU referrals
Between August 2022 and August 2025, the FIU referred 25 unregistered virtual asset service providers to police for investigation.
But police suspended investigations or preliminary inquiries in 23 cases. Most of these firms and their people were said to be located overseas, making them difficult to access using the current process.
Today, the FIU can flag a suspected unregistered operator, but has to lean on police and other agencies to pursue it.
The bill’s statement of reasons contends that reliance on inter-agency cooperation and formal investigation requests makes a fast response difficult.
It warns that unregistered venues, which it calls “private coin exchange offices,” can be used for money laundering, illegal currency exchange, and illegal overseas remittance.
South Korea’s Cabinet approved an amendment on August 11 that removes the 1 million won reporting threshold for crypto transfers.
Registration provisions became effective on August 20, and the full Travel Rule expansion will follow in February 2027, per a past Cryptopolitan report. The package also introduced a 200% debt-ratio cap on exchange operators and stricter vetting of shareholders.
The FIU only permitted two new virtual asset service providers in 2025. That’s down from four the year before. According to previous coverage by Cryptopolitan, the average time it took to get approved went up from 11 months to 16 months.
Suspicious transaction reports rose to 36,684 last year in South Korea, and about 90% of them were linked to illegal cross-border remittance arrangements.
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Ten South Korean lawmakers proposed a bill that would allow the Financial Intelligence Unit to pursue unregistered crypto operators and refer them to prosecutors.
The South Korean police have shelved almost every case the FIU has passed on to them.
Ten lawmakers file bill #2220655
The measure was introduced on Thursday by Rep. Eom Tae-young of the People Power Party and nine others. It amends the Act on Reporting and Using Specified Financial Transaction Information by inserting a new provision, Article 15-4.
According to the legislative tracking portal of South Korea, the bill was referred on August 21 to the political affairs committee of the National Assembly, which oversees the Financial Services Commission.
The bill still has to go through committee review and a floor vote. Wording can change along the way, and bills filed by individual legislators often die unpassed when an Assembly term ends.
Under the proposal, anyone could report a suspected violation directly to the FIU. The unit could then investigate the allegation, analyze it, file a complaint, request a criminal investigation, or pass the information to investigators.
The FIU is part of the Financial Services Commission (FSC) and operates the registration regime that crypto firms serving Korean customers must join.
As of June, it had 28 registered providers and said it had referred 40 suspected illegal operators to investigative authorities.
Police shelved 23 of 25 FIU referrals
Between August 2022 and August 2025, the FIU referred 25 unregistered virtual asset service providers to police for investigation.
But police suspended investigations or preliminary inquiries in 23 cases. Most of these firms and their people were said to be located overseas, making them difficult to access using the current process.
Today, the FIU can flag a suspected unregistered operator, but has to lean on police and other agencies to pursue it.
The bill’s statement of reasons contends that reliance on inter-agency cooperation and formal investigation requests makes a fast response difficult.
It warns that unregistered venues, which it calls “private coin exchange offices,” can be used for money laundering, illegal currency exchange, and illegal overseas remittance.
South Korea’s Cabinet approved an amendment on August 11 that removes the 1 million won reporting threshold for crypto transfers.
Registration provisions became effective on August 20, and the full Travel Rule expansion will follow in February 2027, per a past Cryptopolitan report. The package also introduced a 200% debt-ratio cap on exchange operators and stricter vetting of shareholders.
The FIU only permitted two new virtual asset service providers in 2025. That’s down from four the year before. According to previous coverage by Cryptopolitan, the average time it took to get approved went up from 11 months to 16 months.
Suspicious transaction reports rose to 36,684 last year in South Korea, and about 90% of them were linked to illegal cross-border remittance arrangements.
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