IoTeX offered a 10% white-hat bounty to the hacker or hackers who exploited a private key on its cross-chain bridge ioTube, siphoning millions of dollars, in exchange for the voluntary return of funds within 48 hours.

With this move, IoTeX is offering the $440,000 if the malicious actor or actors return roughly $4.4 million they stole, according to an IoTeX X post, to which IoTeX co-founder and CEO Raullen Chai pointed “as a source of truth” on Monday.

Chai told CoinDesk that the team sent an onchain message offering not to pursue legal action or share identifying information with law enforcement if the remaining funds are returned.

“This is regarding the ioTube bridge exploit on Feb. 21, 2026,” Chai said in the message. “All fund movements across Ethereum, IoTeX, and bitcoin have been fully traced.”

The message states that exchange deposits have been flagged and frozen and offers a 10% bounty for the return of remaining funds.

Chai also said IoTeX is rolling out a new chain version, Mainnet v2.3.4, requiring node operators to upgrade. The update includes a default blacklist of malicious externally owned account (EOA) addresses.

“This blacklist contains a list of malicious or problematic EOA addresses that will be filtered by the node,” Chai said.

The offer comes after a Feb. 21 exploit in which a compromised validator owner private key enabled unauthorized control over ioTube’s bridge contracts.

IoTeX said the incident is “under control,” saying that its Layer 1 blockchain was not affected and that the breach was isolated to the Ethereum-side infrastructure of the bridge.

The IOTX token fell roughly 22% following the exploit, dropping from $0.0054 to below $0.0042 before partially rebounding.

Cross-chain bridges have been one of crypto’s main failure points, with several high-profile exploits in recent years. According to industry reports, more than $3.2 billion has been lost due to cross-chain bridge hacks, making them a prime target for advanced threat actors.

Responsibility and key control

IoTeX framed the exploit as an operational issue specific to the bridge rather than a failure of its Layer 1 network.

“IoTube is IoTeX’s own cross-chain bridge built and maintained by their team,” Nick Motz, CEO of ORQO Group and CIO of Soil, told CoinDesk. “The breach came down to a compromised validator owner private key on the Ethereum side, which is fundamentally an operational security failure, not a smart contract vulnerability discovered by an outside actor.”

Motz agreed that IoTeX’s Layer 1 was not compromised but said user funds were entrusted specifically to the bridge.

“When you build and operate the bridge infrastructure and the key management is what fails, it’s difficult to separate yourself from that outcome,” he said.

Nanak Nihal Khalsa, co-founder of human.tech, said responsibility in crypto often comes down to key custody.

“Yes, whoever holds the private key is responsible for securing it,” Khalsa said. “Is that a reasonable responsibility? It’s hard to say. But that’s how the industry works right now.”

He added that liability norms remain unsettled compared to traditional finance and called for stronger wallet and multisig setups to reduce similar risks.

The estimates diverge

On-chain analysis by security firm PeckShield estimated more than $8 million worth of assets were affected, saying the attacker swapped funds into ether (ETH) and began bridging them to bitcoin BTC$64,726.93 via THORChain.

“The hacker has swapped the stolen funds to $ETH and has started bridging them to #BTC via #Thorchain,” the firm wrote.

Another onchain investigator, Specter, said on X that “the private key of @iotex_io may have been compromised,” resulting in an estimated $4.3 million loss.

“Once assets are routed through THORChain […] recovery becomes extremely difficult,” Motz said.

IoTeX said it has identified four bitcoin addresses holding 66.78 BTC worth roughly $4.3 million at current prices and that the addresses are being monitored in cooperation with exchanges.

A CoinDesk review of those addresses on Feb. 23 confirmed they held roughly 66.6 BTC.

IoTeX did not immediately respond to CoinDesk’s request for comment.

“Containment is not the same as recovery,” he added. “The assets with actual market value were swapped and bridged. Those are, in my assessment, unlikely to be recovered.”

Khalsa similarly cautioned that recovery prospects are uncertain. “It’s hard to predict how much, if any, can be recovered,” he said.

IoTeX revised its figure upward to approximately $4.3 million, reflecting the direct asset drain but excluding minted tokens. Motz said broader estimates may better capture the severity of the breach.

“Private key compromise rather than smart contract bugs is emerging as a dominant attack vector,” Motz said, noting that such incidents target operational security rather than audited code.

Before offering the 10% bounty, IoTeX said a compensation plan would be in place within the next 48 hours.

Ethereum is already showing early signs of recovery. Since a recent low near $1,840, Ethereum has climbed nearly 4%, signaling that buyers are beginning to step back in. This rebound is not happening randomly. The bounce setup has been quietly building for weeks.

Several underlying signals now point to a shift. Selling pressure has collapsed sharply. Derivatives traders have turned aggressively bearish without adding new positions. At the same time, long-term holders have started buying again after weeks of selling. Together, these forces suggest the current Ethereum bounce could extend further.

Ethereum Bounce Setup Emerges As Bullish Divergence Builds

Ethereum’s short-term chart shows a symmetrical triangle. This pattern reflects indecision, where buyers and sellers are fighting for control.

At the same time, a bullish divergence has appeared between price and the Relative Strength Index (RSI). The RSI is a momentum indicator that measures whether selling pressure is strengthening or weakening. Between early February and today (February 23), Ethereum’s price has made lower lows, but the RSI has made higher lows. This pattern often signals that selling pressure is fading.

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This same signal worked recently. Between February 3 and February 13, a similar divergence triggered a nearly 10% rebound. Another divergence between February 3 and February 15 led to a 6% move higher.

Ethereum has already started responding again. The recent 4% rebound shows buyers reacting to weakening downside momentum. But technical signals alone are not enough. The bigger question is what changed underneath the surface.

Selling Pressure Collapses 90% Even As Price Fell, Reveals Another Catalyst

The most important shift comes from exchange inflows. Exchange inflow measures the number of coins moving into exchanges. When coins move into exchanges, it usually signals intent to sell.

On February 7, Ethereum exchange inflows peaked near 1.06 million ETH. Since then, inflows have collapsed to just 126,000 ETH. This represents an almost 90% drop in potential selling pressure.

This change becomes even more important when compared to price. During the same period, Ethereum’s price still fell roughly 14%. Normally, price drops when selling pressure rises. But here, the price dropped while the selling pressure disappeared.

This shows the decline was not driven by aggressive spot selling. Instead, it suggests the weakness came from another source. That source appears to be derivatives traders. Ethereum’s funding rate has turned deeply negative. When funding is negative, short sellers are paying to maintain bearish positions.

Since February 7, funding rates dropped from slightly positive levels to around -0.02%. This marks one of the most bearish sentiment flips in recent weeks.

However, open interest tells a different story. Open interest measures the total value of active futures positions. During this period, open interest stayed mostly flat, falling only slightly from around $9.06 billion to $8.88 billion.

This combination is important. It shows that new short positions are not aggressively entering. Instead, existing traders have turned bearish, and long positions have likely exited.

This type of setup can be unstable. When bearish sentiment rises without large new positions, the market becomes vulnerable to a short squeeze. A short squeeze happens when rising prices force short sellers to close positions, pushing the price even higher.

This helps explain why Ethereum’s bounce could extend beyond a simple short-term rebound.

Long-Term Holders Suddenly Turn Buyers After Weeks of Selling

Another important shift comes from long-term holders. The Hodler Net Position Change metric measures whether long-term investors are buying or selling.

Between February 3 and February 20, this metric stayed negative. This showed sustained selling from experienced investors. At its peak, long-term holders sold more than 41,000 ETH on a net basis. But this trend has now reversed. Over the past two days, the metric turned positive, reaching a net accumulation of over 6,000 ETH.

This confirms that experienced investors have resumed buying. This type of accumulation often happens near local bottoms, when long-term investors position early before broader recoveries begin.

With selling pressure falling, bearish derivatives sentiment stretched, and long-term buyers returning, Ethereum’s bounce setup now has stronger structural support.

Ethereum Price Faces Key Breakout Levels That Could Extend Bounce

Ethereum now faces several important resistance levels. The first key level sits at $1,920. Breaking above this level would confirm strengthening momentum. The next resistance appears at $2,020, followed by a major barrier near $2,060, a key technical level, where it can experience the most resistance.

If Ethereum breaks above $2,060, the bounce could accelerate toward $2,200 and potentially even $2,420.

However, the bullish setup depends on holding support. The critical downside level remains $1,840. If Ethereum falls below this level, the bounce structure would fail. In that case, the next downside target sits near $1,740.

For now, Ethereum’s bounce is no longer just a simple relief rally. Selling pressure has collapsed by nearly 90%. Bearish sentiment increased without strong conviction. And long-term holders have quietly returned as buyers.

These combined forces suggest Ethereum’s current rebound may be the early stage of a larger move — with the next breakout level now becoming the decisive trigger.

The Flying Tulip (FT) token became transferable and began trading today, Feb. 23, marking the token generation event (TGE) for the latest DeFi project linked to Andre Cronje, a systems architect best known for building early DeFi protocols Yearn Finance and Fantom.

Data from CoinGecko shows that despite an initial dip to around $0.08, FT has spent its first hours trading sideways around the $0.10 mark, implying a fully diluted valuation of around $1 billion.

FT Public Sale, Explained

Flying Tulip’s public sale price was set at $0.10, but it wasn’t a standard token sale. The project’s tokenomics make $0.10 something like a floor price for the asset trading on the open market, as public sale participants have the right to break even on their investment at any time.

Early buyers didn’t just get regular tokens but received ftPUTs, which are non-fungible tokens with a built-in perpetual put option, which gives holders the right, under certain rules, to redeem their tokens at the public sale price of $0.10, instead of having to sell them on the open market.

As Cronje explained earlier this month in an X post, given the project’s tokenomics, “Flying Tulip FDV is not standard FDV.” Typically, FDV is calculated by multiplying total token supply multiplied by current token price.

But Flying Tulip departs from that model because each FT token is only created if it is backed by a corresponding put option, leaving no path for unbacked supply to enter circulation. When tokens are redeemed, they’re also removed from circulating supply.

That tokenomics design means every token is effectively collateralized by its own $0.10, making the system “closer to a NAV valuation than FDV,” Cronje highlighted, adding, “this is something new, and aligns participation far more than any previous model.”

Flying Tulip is positioned as a DeFi “super app,” aiming to bring spot trading, perpetual derivatives and lending into a single interface.

Ahead of the launch, Flying Tulip wasn’t short on cash. The project had already pulled in $200 million in September last year from backers including Brevan Howard and DWF Labs, then added another tens of millions through later rounds and public sales on platforms such as Impossible Finance and CoinList.

SOL is “basically trading in a big no man’s land,” one popular analyst argued.

Solana’s SOL has been on a severe downfall lately, with its valuation plummeting by almost 40% over the past month alone.

According to some analysts, the bears are yet to reveal their full potential, envisioning a slump below $10 in the near future.

SOL HODLers, Beware

The leading altcoin was among the worst-affected cryptocurrencies following the latest market slump caused by Trump’s renewed tariff saga. Just a few hours ago, SOL briefly dipped to roughly $77 before snapping back above $80, meaning a 6% loss for the day.

The renowned analyst on X, Ali Martinez, observed the asset’s recent performance, claiming “the super trend indicator” has flashed a sell signal on the monthly chart. He noted that the last time this pattern appeared was in January 2022 and preceded a brutal 95% decline. Applying a decline of that magnitude to today’s levels would imply a staggering crash to approximately $4.

Moreover, Martinez warned investors to pay close attention to the $76 support zone. He believes that breaking below it could open the door to a further pullback to $53, $35, and $23.

Sjuul | AltCryptoGems also made bearish predictions recently. He argued that SOL “truly looks compromised on the high time frame” and is “basically trading in a big no man’s land.” The analyst claimed that as long as the price remains suppressed beneath the $110 resistance, SOL faces the risk of a deep retracement to as low as $20.

How About a Short-Term Bounce?

Despite the broader crypto market’s depressed condition and SOL’s substantial correction, the asset’s Relative Strength Index (RSI) suggests a rebound could be on the way.

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The technical analysis tool gauges the speed and magnitude of recent price movements, offering insight into whether a potential trend reversal may be developing. It ranges from 0 to 100, and ratios below 30 indicate that SOL is oversold and could be on the verge of a rally. Data shows that the RSI has dipped well below that zone on a weekly scale.

X user Mags revealed that the asset’s weekly RSI has reached the same level it was in December 2022, when SOL was trading around $8. In the following months, it posted a major bull run, and the analyst wondered if history was about to repeat itself.

Solana’s recent exchange netflow is another factor worth observing. Toward the end of 2025 and into early 2026, inflows exceeded outflows, suggesting that investors were moving funds from self-custody to centralized platforms. This shift is considered a bearish signal because it can be interpreted as a pre-sale step. In recent weeks, however, the trend has reversed with outflows surpassing inflows.

Analyst says public XRPL metrics are down 50–80%, but private institutional flows may explain the apparent decline.

XRP Ledger activity has dropped steeply, with public metrics showing active users, payment volume, and sender accounts falling between 50% and 80% within weeks, according to market watcher Arthur.

The data has sparked debate over whether the network is weakening or simply shifting activity away from public dashboards after a new institutional trading feature went live.

Public XRPL Stats Fall

In a thread posted on X on February 23, Arthur said active users with tags fell to about 38,000 from more than 200,000, while payment volume dropped to roughly 80 million XRP from over 2.5 billion. Additionally, unique sending accounts slid to about 3,000 from above 40,000, with the analyst describing the figures as “bad” but arguing they may not reflect real network demand.

He linked the drop to the February 18 activation of XLS-81, a permissioned decentralized exchange system that allows regulated entities to trade inside restricted pools. Transactions routed through those channels do not appear on public trackers. Furthermore, he suggested the late-2025 spike in activity came from retail flows visible on-chain, whereas institutional flows could now be moving privately.

At the same time, the XRP advocate criticized viral price forecasts, such as a February 22 post from trader CryptoBull2020 predicting XRP could hit $15 by March and $70 by May. He argued that liquidity and macro conditions matter more than social media optimism.

The asset was trading near $1.39 at the time of writing, down about 2% in the last 24 hours, 5% in seven days, and 27% over the past month. Across the last year, it has fallen by more than 46% and is now more than 60% below its July 2025 peak of $3.65.

By comparison, Bitcoin (BTC) has mostly ranged sideways recently, according to pseudonymous analyst Darkfost, which they said has limited direction across altcoins.

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Darkfost also reported that more than 31 million XRP moved into wallets on Binance in a single day, largely from large holders. They estimated the transfers could represent about $45 million in potential sell pressure if the funds reach the market.

Loss Data and Valuation Metrics Offer Mixed Signals

A recent report from Santiment adds longer-term context, saying XRP recorded its largest realized loss spike since 2022 after falling from about $3.60 to near $1.10 earlier this month. The firm noted that similar spikes previously came right before a 114% price rise within eight months, though it did not predict that pattern would repeat.

In another analysis, Santiment compared MVRV ratios to rank Ethereum as the most undervalued major crypto at -14.3%, followed by Bitcoin at -6.9%, with XRP at -4.1%. The metric measures whether holders are in profit or loss relative to their cost basis.

Welcome to the US Crypto News Morning Briefing—your essential rundown of the most important developments in crypto for the day ahead.

Grab a coffee — because stablecoins may be about to reshape the US bond market. A new Standard Chartered report suggests rising demand for Treasury bills from digital dollar issuers could quietly force Washington to rethink how it finances its debt.

Crypto News of the Day: Stablecoin Demand Could Force Washington to Rethink US Debt Strategy

Stablecoins may soon reshape the US Treasury market, potentially forcing a radical shift in debt issuance, according to a new report from Standard Chartered.

The bank projects that stablecoin issuers could generate between $0.8 trillion and $1 trillion of fresh demand for Treasury bills (T-bills) by the end of 2028.

This trend, when combined with Federal Reserve purchases, could push total short-term Treasury demand to $2.2 trillion.

The report warns that the Treasury could use this emerging excess demand as justification to increase T-bill issuance while reducing long-term bond supply. Such a move could, in effect, allow the US government to suspend all 30-year bond auctions for the next three years.

“We think the US Treasury may use this potential excess demand as a reason to issue more T-bills,” wrote Geoff Kendrick in the latest Standard Chartered report, highlighting stablecoin issuers as increasingly significant buyers of short-term US debt.

Emerging market stablecoins are expected to drive the majority of this demand. Standard Chartered estimates that two-thirds of projected T-bill demand will come from emerging markets, representing net new demand. Meanwhile, stablecoins in developed markets largely substitute for existing holdings.

This pattern highlights the growing role of digital assets in global capital flows and their influence on traditional fixed-income markets.

The potential implications for the Treasury yield curve are substantial. Shifting roughly $9 billion from long-term bonds to T-bills could initially flatten the US Treasury curve.

Yield Curve Risks Mount as Treasury Weighs Expanding T-Bill Share

Standard Chartered notes, however, that long-term premia, fiscal deficit concerns, and market sentiment could influence investor reaction over time.

The bank cautions that a bull flattening at the front end may be the immediate response, but structural factors, including term premia and rollover risk, could shape yields differently in the longer term.

Treasury Secretary Scott Bessent could leverage this scenario to increase the share of T-bills within the overall debt portfolio.

Raising the T-bill share by just 2.5% over three years would generate roughly $900 billion of additional T-bill supply, offsetting the projected excess demand.

This could ease scarcity at the front end of the curve while keeping the 10-year Treasury yield manageable.

The report also notes that historically, T-bills have averaged 26.1% of outstanding marketable debt. This is well above the Treasury Borrowing Advisory Committee’s recommended 15–20% range, suggesting room for an increase.

Despite short-term stagnation, stablecoin market capitalization is projected to reach $2 trillion by the end of 2028. Growth has recently stalled at around $304 billion, influenced by weaker digital asset markets and regulatory delays following the US GENIUS Act.

However, Standard Chartered considers these factors cyclical rather than structural. Stablecoin demand, combined with ongoing Fed Reserve Management Purchases and replacement of maturing mortgage-backed securities, could therefore drive a historic reshaping of short-term US debt markets.

The report concludes that while suspending 30-year bond auctions would not be unprecedented—the Treasury paused them from 2002 to 2006—the current deficit environment differs markedly.

Chart of the Day

Byte-Sized Alpha

Here’s a summary of more US crypto news to follow today:

San Francisco, CA – NEAR is launching Near.com, a new crypto wallet and consumer app that aims to make blockchain technology feel as simple as using a traditional finance app, while positioning itself at the intersection of crypto and artificial intelligence (AI).

Polosukhin previously co-authored the paper that introduced the transformer model, the architecture underpinning modern AI systems like ChatGPT and many other large language models, and has increasingly focused on how blockchain infrastructure can support the next wave of AI-driven applications.

“We are entering the world where AI is becoming our interface to compute,” Polosukhin said during the presentation.

NEAR token is down nearly 3% over the last 24 hours.

At its core, Near.com is designed to remove much of the friction that has long made crypto confusing for everyday users. Instead of worrying about gas fees, private keys or switching between different blockchains, users can manage their assets in one place.

“You don’t need to think about blockchains. You don’t need to think about gas, keys,” Polosukhin said. “You just use it as your main wallet.”

Near.com supports a range of digital assets, including bitcoin, stablecoins, NFTs and other tokens. The idea is to bring together activity that is typically spread across multiple wallets and networks into a single, streamlined interface.

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But NEAR’s ambitions extend beyond building just another wallet. The company is betting that the next big wave in crypto will come from its convergence with AI.

As AI agents become more capable, like booking travel, managing emails or handling online purchases, they will increasingly need the ability to transact. That’s where crypto infrastructure comes in. Blockchains can provide programmable payments, global transfers and automated settlement without relying on traditional intermediaries.

Polosukhin argued that as AI systems begin interacting with each other, they effectively become “economic actors,” software programs that negotiate, pay and coordinate tasks. In that world, crypto becomes the financial layer that allows these agents to operate.

Near.com is designed to serve as that layer, acting as both a user-friendly wallet for people and an economic backend for AI-driven activity.

A key part of the announcement is privacy. One of blockchain’s longstanding tradeoffs is transparency: transactions are typically visible to anyone. While that openness can build trust, it can also expose sensitive financial information.

“Everything you do onchain is transparent,” Polosukhin said. “That’s not realistic for usual use cases, for day-to-day usage.”

To address this, NEAR introduced a “confidential mode” within Near.com. The feature allows balances, transfers and trading activity to remain private within the network’s security framework. The company says this makes the wallet more practical not only for individuals and businesses, but also for AI agents that may need to transact without revealing strategy or sensitive data.

The launch signals a broader shift for NEAR.

“We have the stack. We have all the components. We have the product,” Polosukhin said. “Now we’re switching … to how we actually scale adoption — how we bring this to billions of people around the world.”

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Kraken’s decision to fund savings accounts for every child born in Wyoming this year is being viewed as the latest move aligning the exchange with the crypto-friendly Trump administration.

The cryptocurrency exchange currently ranks as the sixth largest globally by 24-hour trading volume, with about $1 billion traded over the past day – behind Binance, Bybit, OKX, Coinbase, and Bitget, according to CoinGecko.

Last week, Kraken said it would sponsor “Trump Accounts” for every child born in Wyoming in 2026, essentially pledging a financial contribution to each account as part of a savings program introduced by President Donald Trump.

While the exchange framed the plan as a way to grow financial opportunity for families, experts say it also underscores its close relationship with Wyoming (where it is headquartered), as well as the Trump administration.

Trump Ties

Jamie Green, COO at Superset, told The Defiant that funding the accounts is about “maintaining goodwill in the jurisdiction” that afforded Kraken its most significant banking license. In 2020, Wyoming approved Kraken’s plan to launch Kraken Bank, making it the first crypto company in the U.S. to receive an SPDI charter – a state banking license that lets it hold and safeguard digital assets.

However, Green said the move could invite political backlash, as opposed to regulatory scrutiny. “The greater risk is political. Democrats and progressive critics will cite this as further evidence of a cozy relationship between crypto firms and the White House,” he added.

Jesse Powell, Kraken’s co-founder, publicly backed Trump during the 2024 campaign, announcing in June of that year that he had personally donated $1 million to the president’s re-election bid, according to a congressional staff report.

Reuters also reported last year that Payward Inc., Kraken’s parent company, hired the Trump-aligned lobbying firm Ballard Partners in late 2024, joining several crypto companies that hoped to shape policy under the new administration.

“Being visibly Trump-aligned is an asset today – and a liability when political winds change,” Green said.

Wyoming’s Crypto Influence

Daniel Bara, director of the Olympus Association, told The Defiant that the move reflects Kraken’s long-standing relationship with Wyoming – a state that has often served as a testing ground for crypto policy and where initiatives launched are closely watched by other states.

“Wyoming built one of the first regulatory frameworks in the country that treated digital assets as a legitimate financial category,” Bara said. Earlier this year, the state also launched FRNT, the first U.S. state-issued dollar-backed stablecoin, managed by Franklin Templeton and available through partners including Kraken.

And in March 2025, Wyoming Senator Cynthia Lummis and Congressman Nick Begich introduced the BITCOIN Act – legislation that would establish a U.S. Strategic Bitcoin Reserve and codify a national digital asset policy.

“Committing $1.2 million to fund Trump Accounts for every child born in the state this year reflects the depth of that relationship,” Bara said. “And for a company preparing for a public offering, that kind of visible community investment likely carries weight.”

A Growing Convergence

From a broader standpoint, experts said that Kraken’s move aligns with a larger shift of crypto firms deepening ties with policymakers.

“We have a sitting president who has launched a meme coin, a DeFi platform, and has interests in Bitcoin mining,” Christopher Perceptions, lead at Jubilee Labs and a strategic advisor to Wisconsin State Senator Dora Drake, said. “The convergence is here, and the tidal wave is still gathering momentum.”

Bara added that just a few years ago, crypto companies largely operated outside the political system or rebelled against it. “Now you have hundreds of millions flowing into super PACs, companies relocating to regulatory-friendly states, and corporate sponsorships tied to federal initiatives,” he said.