The U.S. Commodity Futures Trading Commission (CFTC) has provided more details on its pilot program that allows cryptocurrencies to be used as collateral in derivatives markets. The new guidance was issued in response to frequently asked questions about the program that began last year.

The CFTC’s recent notice outlines the procedures for futures commission merchants (FCMs) wishing to participate in the pilot program. FCMs are required to file a notice with the Market Participants Division and specify the date they will begin accepting crypto assets as margin collateral. This development is part of the CFTC’s ongoing efforts to integrate crypto assets into traditional financial markets.

The CFTC’s pilot allows for the use of crypto as collateral in derivatives transactions, a move that aligns with the crypto industry’s push for 24/7 trading and immediate settlement. The guidance issued in December clarified which tokenized assets can be used as collateral and how they should be valued and calculated for trading positions.

Capital Charges and Aligning with SEC Guidelines

The CFTC made it clear that its guidance on capital charges would align with the Securities and Exchange Commission (SEC). Futures commission merchants must apply a 20% capital charge for positions in Bitcoin and Ether, while stablecoins will carry a 2% charge. This move is aimed at ensuring that both agencies maintain consistent regulatory approaches to crypto.

During the first three months of the pilot, FCMs can only accept Bitcoin, Ether, and stablecoins as collateral. They are also required to file weekly reports detailing the total amount of crypto held across customer account types. After three months, other cryptocurrencies can be accepted as collateral, and the reporting requirements will be lifted.

The CFTC also specified that proprietary payment stablecoins are the only ones that can be deposited as residual interest in customer segregated accounts. Additionally, the use of crypto and stablecoins as collateral for uncleared swaps is prohibited.

Crypto assets cannot be used as collateral for uncleared swaps. However, derivatives clearing organizations can accept Bitcoin, Ether, and stablecoins as initial margin for cleared transactions if the assets meet CFTC’s credit, market, and liquidity risk requirements.

Kalshi, a prediction market company, has faced a temporary setback in Nevada. A state judge issued a temporary restraining order, blocking the company from operating for 14 days. The decision follows concerns that Kalshi’s event contracts might violate Nevada’s gambling laws.

On Friday, Carson City District Court Judge Jason Woodbury granted a temporary restraining order, siding with the Nevada Gaming Control Board’s motion to block Kalshi. This comes after the company offered event contracts related to sports, elections, and entertainment, which Nevada regulators view as a form of unlicensed gambling. 

The court ruling states that Kalshi is prohibited from offering such contracts in Nevada, as these are considered “sports pools” under state law. Kalshi, however, has not responded to the ruling.

Nevada Gaming Control Board Chair Mike Dreitzer emphasized the state’s responsibility to protect the public, asserting that prediction markets like Kalshi could facilitate illegal gambling. 

“Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada,” Dreitzer said in a statement to Reuters.

Kalshi had argued that its contracts fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), not Nevada’s gaming regulations. The company has fought similar accusations in other states, asserting that its activities are federally regulated. 

However, Judge Woodbury rejected Kalshi’s defense, stating that the legal authority currently favors Nevada’s stance. The court’s decision sets a precedent for ongoing legal battles regarding prediction markets and their regulation across state lines.

Moreover, Kalshi is currently engaged in multiple legal disputes with state regulators. This includes a case in Massachusetts, where a state judge banned the company from offering sports event contracts, though this ban was later lifted on appeal. 

Additionally, Arizona has filed criminal charges against Kalshi, accusing the company of running an illegal gambling operation. Kalshi CEO Tarek Mansour has labeled these charges as “total overstep.”

CoinDCX, an Indian cryptocurrency exchange backed by Coinbase, is embroiled in a fraud case involving its founders, Sumit Gupta and Neeraj Khandelwal. 

Meanwhile, the founders were questioned by authorities following allegations of their involvement in a crypto investment scam. However, CoinDCX denies the accusations and attributes the fraud to impersonators using its brand for fraudulent activities.

The controversy started after a complaint from a 42-year-old insurance consultant, who claimed to have lost around 71 lakh rupees (roughly $75,000) after investing in a fake website posing as CoinDCX. The Thane Police reportedly arrested Gupta and Khandelwal on allegations of criminal breach of trust. However, other reports suggested that the founders were merely questioned by the authorities rather than arrested.

CoinDCX responded to the claims, stating that the complaint was part of a broader scheme by fraudsters who impersonated the exchange. The company clarified that it had no connection to the fake website and assured the public that funds were diverted by external parties unrelated to the exchange.

CoinDCX has emphasized that brand impersonation and cyber fraud are growing issues in India’s digital finance sector. The exchange stated that it is fully cooperating with law enforcement authorities in their investigation and stressed the importance of educating users about online fraud.

The company revealed that between April 2024 and January 2026, over 1,200 websites had impersonated its domain. This highlights the increasing risks of phishing attacks targeting crypto users in India, with CoinDCX working to combat such fraud.

A Broader Issue of Investment Scams

The case comes amid a rise in investment scams in India, which accounted for 76% of all financial losses in 2025, according to data from the Ministry of Home Affairs. Globally, Web3 platforms also faced significant losses due to hacking and exploitation, amounting to nearly $4 billion in 2025.

CoinDCX, founded in 2018, is one of India’s leading crypto exchanges, with a valuation of $2.45 billion after an investment from Coinbase Ventures in 2025. Despite the recent controversy, the platform remains committed to maintaining user security and combating fraudulent activities.

A prominent crypto influencer is speaking out about the fallout from promoting a memecoin that unraveled just days after its 2024 launch. Hailey Welch, popularly known as the Hawk Tuah girl, says the HAWK memecoin episode left lasting scars after a rapid rise and a dramatic collapse, and she stresses she did not profit from the project or help launch it.

Welch told Channel 5 in a recent interview that she fully cooperated with a Federal Bureau of Investigation (FBI) probe conducted in 2025, which she says cleared her of any wrongdoing. She also emphasized that she did not possess any of the memecoin’s funds and lacked the technical expertise to launch the coin herself. The experience, she says, took a toll on her mental health as she faced intense scrutiny and threats in the wake of the controversy.

“I was starting to get death threats and everything else. People telling me I owe them all this money, and I’m like, ‘I didn’t do this.’ I’m sitting here, and I’m the one getting hit for this. It’s rough. It’s one of those things where if you come out of the house, you put your head down.”

Despite Welch’s portrayal of the episode as a case of mistaken involvement, not everyone in crypto’s investigative community is sympathetic. On-chain sleuth ZachXBT criticized the backlash, arguing that promoters should bear responsibility when they publicly endorse meme coins that turn out to be high-risk bets. “No one should feel bad for the ‘trauma,’” he wrote, pointing to Welch’s decision to promote the token despite warnings from crypto Twitter, and later stepping away from social media as followers lost funds.

Key takeaways

• HAWK launched in December 2024 and quickly surged to a market cap north of $490 million within hours of going live, according to market trackers.
• The following day, the project collapsed by more than 91%, bringing its market cap down to about $41 million and sparking characterizations of a rug pull.
• An investor lawsuit was filed in December 2024 against the teams behind the memecoin, alleging the sale of unregistered securities; Welch was not named in the suit.
• Welch says she cooperated with a 2025 FBI inquiry that cleared her of wrongdoing, and that she neither owned funds from the launch nor had the technical capability to create the token.
• Despite the claims of broad investor losses, Welch’s legal team characterized the total dollar losses by retail investors as around $200,000, while she described the impact as disproportionately harsh on her personally due to threats and public scrutiny.
• Crypto observers remain divided: supporters say the episode underscores risks of influencer endorsements in memecoin hype, while critics argue that promoters should be accountable for the consequences of their campaigns.

The rise, collapse, and aftermath of the HAWK meme

The HAWK memecoin’s December 2024 debut drew immediate attention, with the token vaulting to a multi-hundred-million-dollar valuation in a matter of hours. Market trackers subsequently show the project losing momentum at a breathtaking pace, delivering a dramatic fall from grace as investor confidence eroded and liquidity questions surfaced. Within 24 hours of launch, the market capitalization had receded to roughly $41 million, a drop of more than 90% from its peak. The episode has since been widely described as a rug pull by observers who tracked the token’s early performance and post-mortem discussions in the community.

The public fallout extended beyond market data. In December 2024, an investor lawsuit was filed against the entities behind the memecoin’s launch, alleging the sale of unregistered securities. Welch, who had publicly promoted the token, was not named in the suit, but the case underscored the broader regulatory and legal risks tied to promoter-backed memes amid a crowded field of similar campaigns. The case added to a growing chorus calling for greater scrutiny of token offerings that hinge on celebrity or influencer endorsements rather than foundational project fundamentals.

Context, accountability, and what to watch next

Welch’s account highlights the ethical and personal stakes around influencer involvement in meme coins. She contends that she did not profit from the project and did not facilitate its launch, while still bearing the social and mental health consequences of the episode. The FBI’s involvement—according to Welch—yielded a clearing conclusion, though the broader debate about due diligence and disclosure remains active in crypto circles.

From a market dynamics perspective, the HAWK episode illustrates several enduring tensions in the meme-coin niche: how quickly hype can translate into astronomical valuations, how swiftly sentiment can reverse, and how investor protections lag behind the speed of social media-driven campaigns. For investors, the episode reinforces the importance of scrutinizing promoters’ claims, the provenance of a token, and the clarity of regulatory disclosures before participating in a launch. For builders and platforms, it underscores the necessity of clear governance and compliance frameworks to mitigate the risk of similar episodes undermining trust in the ecosystem.

As regulators and the crypto community continue to grapple with these questions, readers should watch for developments around enforcement actions tied to promoter-led token launches, potential updates to how unregistered securities are treated in meme-powered campaigns, and whether more empirical data will emerge on the real-world losses borne by retail participants in such episodes.

Readers should stay tuned to further statements from involved parties and to updates on any legal proceedings, as the broader narrative around influencer-led memecoins continues to evolve and shape the conversation about accountability in the space.

Hailey Welch, known as the “Hawk Tuah girl,” recently spoke about the fallout from the failed launch of the “HAWK” memecoin in 2024, which she promoted. 

Despite cooperating fully with an FBI investigation that cleared her of wrongdoing, Welch faced immense social backlash and personal distress following the memecoin’s collapse.

In December 2024, the HAWK memecoin launched with great fanfare, quickly surging to a market capitalization of over $490 million. However, within hours, the coin’s value dropped sharply, losing over 90% of its value. By the following day, the market cap had fallen to about $41 million. The event was widely described as a rug pull, where investors were left with significant losses.

Welch, who had publicly promoted the token, said that she was unaware of the technical details behind the launch and had no control over the funds. She added that the financial losses for investors were relatively small, estimating the total at around $200,000. However, the social and emotional toll was much greater.

Following the HAWK memecoin’s collapse, Welch received death threats and experienced heightened public scrutiny. 

“I was starting to get death threats and everything else. People telling me I owe them all this money, and I’m like, ‘I didn’t do this,’” Welch explained. 

She admitted that the backlash took a significant toll on her mental health, causing her to retreat from social media and try to maintain a low profile for months.

Welch’s lawyer emphasized that she had fully cooperated with the FBI investigation, which ultimately found no evidence of fraud or intentional wrongdoing on her part. Despite this, the public backlash continued, with many in the crypto community blaming her for promoting the memecoin.

Legal action and public reactions

After the HAWK memecoin’s collapse, an investor lawsuit was filed against the team behind the launch. The lawsuit accused the entities of selling unregistered securities, but Welch was not named as a defendant. The legal action pointed to the alleged mismanagement and fraudulent nature of the memecoin’s promotion.

Despite Welch’s claims of being a victim of the situation, not all observers were sympathetic. Onchain investigator ZachXBT criticized her involvement in the project, stating, 

“She starts posting about meme coins. The entirety of [crypto Twitter] tells her ‘do not launch a token.’ She launches a memecoin anyway, and after, she blames partners and disappears off social media, with followers losing funds.”

Indian crypto exchange CoinDCX co-founders Sumit Gupta and Neeraj Khandelwal have reportedly been arrested in India following a police complaint alleging their involvement in a crypto investment fraud.

The Economic Times reported Saturday that the pair were arrested by the Thane Police on allegations of criminal breach of trust, citing local officials. Other local media, including Entrackr, reported that the founders had been called for questioning rather than arrested.

The case reportedly centers on a website that allegedly posed as the CoinDCX platform and stemmed from a first information report (FIR) filed by a 42-year-old insurance consultant who claimed to have lost about 71 lakh Indian rupees (roughly $75,000) after being lured to invest via the fake site, according to an earlier report by the Times of India.

In a statement on X, CoinDCX said the FIR was “false and filed as a conspiracy” by impersonators posing as its founders and diverting funds to third-party accounts that it said had no connection to the exchange.

The company described brand impersonation and cyber fraud as growing problems in India’s digital finance sector and stressed that it was “fully cooperating with the relevant law enforcement authorities,” while remaining focused on user education and awareness.

Related: Hong Kong retiree loses $840K in triple ‘crypto expert’ scam

CoinDCX added that between April 1, 2024, and Jan. 5, 2026, it had reported more than 1,212 websites impersonating its coindcx.com domain, highlighting the scale of phishing and impersonation attacks that have increasingly plagued Indian crypto users. 

Investment scams and Web3 losses

The case comes amid a broader rise in online investment scams in India. According to data from the Ministry of Home Affairs cited in Insights IAS, investment scams accounted for 76% of all financial losses in 2025. Globally, Web3 platforms lost around $3.95 billion to hacks and exploits in 2025.

Founded in 2018 and based in Mumbai, CoinDCX is one of India’s best-known crypto trading platforms and was valued at about $2.45 billion after an investment from Coinbase Ventures in October 2025.

The exchange has also faced questions over security after a July 2025 breach in which attackers stole roughly $44 million from an internal operational account, an incident that made CoinDCX one of that month’s largest hacking victims by losses, though the company said customer assets were not affected.

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