Crypto World
How US Investigators Traced $61M in Crypto Linked to Romance Scams
Key takeaways
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Federal authorities in North Carolina seized more than $61 million in USDT, revealing how pig-butchering schemes combine emotional manipulation with fraudulent crypto investment platforms to defraud victims at scale.
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Investigators leveraged the public, immutable nature of blockchain records to trace victim deposits across multiple wallets. Despite attempts to obscure the trail, every transfer remained permanently visible and reconstructable.
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Using blockchain analytics, authorities clustered related addresses based on transaction flows, timing patterns and consolidation points, allowing them to connect dispersed wallets back to the broader scam network.
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Because the stolen funds were held in USDT, Tether’s ability to freeze tokens at specific addresses upon legal request played a decisive role in preventing the funds from disappearing permanently.
Federal authorities in North Carolina seized more than $61 million in Tether’s USDt (USDT) in February 2026, uncovering the inner workings of a massive cryptocurrency fraud.
The investigation targeted a romance-driven scam, also known as a pig-butchering scam, a deceptive practice in which criminals build romantic trust with victims to lure them into using fraudulent investment apps. While the amount of money recovered was significant, the case stands out for the technical skill investigators displayed. By tracking digital footprints across multiple accounts and decoding complex money laundering tactics, investigators successfully froze the funds before they could disappear.
This article explores how US federal investigators traced and seized funds linked to a romance-driven pig-butchering crypto scam. It details how blockchain forensics, wallet clustering and stablecoin cooperation helped unravel a complex laundering network.
The anatomy of a romance crypto scam
Romance crypto scams begin by grooming victims.
Scammers may pretend to be romantic partners or friendly contacts on social media, dating sites or messaging apps. They spend weeks or months cultivating trust with their victims. They then pitch a unique crypto investment opportunity, often touting insider knowledge or a proprietary trading platform.
Victims are guided to visually appealing but entirely fake crypto websites featuring bogus trading dashboards, phony inflated returns and real-time charts mimicking real exchanges.
Visible “gains” prompt victims to pour in more money. However, when they try to withdraw funds, new demands are made for taxes, fees or additional deposits. Eventually, the accounts are locked completely.
By that point, the money disappears.
Did you know? Blockchain analysis firms can map millions of wallet addresses into clusters using behavioral fingerprints even when criminals try to obscure ownership through rapid transfers.
The $61-million seizure in North Carolina
According to the US Attorney’s Office for the Eastern District of North Carolina, federal authorities seized more than $61 million in USDT connected to a romance-fueled crypto fraud ring.
Homeland Security Investigations (HSI) agents traced victim funds through an intricate network of digital wallets. Scammers had tried to hide the trail by shuffling assets across a number of addresses, a standard crypto laundering technique. However, blockchain’s public, immutable ledger records every transaction permanently.
That transparency ultimately enabled the breakthrough.
How investigators traced the funds
A systematic digital footprint recorded on the blockchain resulted in the $61-million seizure. Law enforcement reconstructed wallet transactions step-by-step, converting publicly available ledger information into solid proof.
Tracing transactions on the blockchain
When victims transferred money to fraudulent accounts, these transactions appeared transparently on the blockchain. Investigators could:
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Pinpoint the addresses where victims made deposits
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Monitor follow-up transfers between wallets
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Map transfer patterns across clusters of interconnected addresses.
While the scammers quickly shifted funds across wallets, the full transaction record remained intact on the blockchain.
Blockchain analytics tools enabled investigators to group wallets based on behavioral patterns such as shared transaction flows, fund consolidation points and timing correlations.
Eventually, investigators were able to zero in on multiple addresses holding significant USDT amounts.
Wallet clustering and laundering patterns
Pig-butchering operations frequently employ multi-tiered transfers:
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Dividing assets among various wallets
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Channeling them through intermediary accounts
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Merging funds into larger storage wallets.
Such tactics aim to create confusion and delay detection, yet they fail to erase the verifiable record.
Through reconstruction of the funds’ path, investigators linked several wallets to the broader fraudulent scheme.
With critical storage addresses confirmed, officials acted swiftly.
Did you know? The US Federal Bureau of Investigation’s Internet Crime Complaint Center (IC3) receives thousands of crypto-related fraud complaints annually, with romance-investment scams ranking among the fastest-growing categories.
Tether’s key role in freezing the assets
Since the stolen funds were held in USDT, a centralized stablecoin, active cooperation from the issuer became essential.
The Department of Justice (DOJ) publicly recognized Tether’s support in transferring and freezing the seized assets. Stablecoin issuers possess the technical capability to immobilize tokens at designated addresses when served with legitimate legal orders.
Tether’s CEO emphasized that the inherent transparency of blockchain allows law enforcement to respond swiftly and decisively to illicit activity.
This case highlights that although cryptocurrency transactions operate on decentralized networks, many stablecoins maintain centralized control features that authorities can invoke during investigations.
Cooperation by the issuer can play a major role in whether victims are able to recover their funds.
Did you know? Some pig-butchering operations are run from large overseas compounds where victims of human trafficking are forced to carry out online scams under coercion.
The escalating wave of crypto fraud
The $61-million seizure is far from an isolated incident.
Crypto scams have exploded in both volume and complexity. According to industry analyses, total losses from cryptocurrency fraud approached about $17 billion in 2025, with AI-enhanced impersonation schemes showing especially sharp year-on-year growth.
Pig-butchering operations stand out as particularly destructive due to their combination of:
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Psychological manipulation and trust-building
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Extended grooming periods
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Aggressive, high-stakes investment pressure
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Sophisticated, professionally designed fraudulent platforms.
In many instances, perpetrators have begun using AI-generated images and deepfake videos to bolster their credibility and deceive victims more effectively.
Judicial responses have grown markedly tougher. In early 2026, a central participant in a pig-butchering-related money laundering network tied to more than $73 million in illicit funds received a 20-year federal prison sentence. This signaled the heightened priority authorities now place on dismantling these schemes.
Why blockchain transparency is a game-changer
This investigation challenges a widespread myth that cryptocurrency transactions are impossible to trace.
While privacy-focused coins and mixing services do exist, the vast majority of widely used cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), run on fully public blockchains. Every transaction is permanently recorded on an open, immutable ledger.
For law enforcement and investigators, this transparency delivers powerful advantages:
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Complete, permanent visibility into historical transaction flows
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Advanced wallet clustering to link related addresses
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The ability to cross-reference blockchain data with Know Your Customer (KYC) records from regulated exchanges
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Detection of behavioral patterns that span multiple networks.
The moment illicit funds interact with compliant exchanges, custodial services or other identifiable entities, the odds of connecting anonymous wallets to real individuals rise dramatically.
Why crypto price volatility doesn’t shield criminals
A related myth holds that perpetrators can simply “wait out” authorities by parking stolen funds in volatile assets until scrutiny fades.
In this seizure, however, the funds were held in a dollar-pegged stablecoin, USDT. That price stability protects the value of the stolen assets, but it also keeps them firmly within the traceable realm.
Because blockchain records are permanent and publicly queryable, investigators can patiently reconstruct cases over months or even years. The digital trail typically remains available indefinitely, allowing authorities to return and execute seizures long after the initial crime occurred.
What this means for scam victims
For individuals targeted by romance-driven crypto scams, recovering stolen money remains an uphill battle.
Once funds reach self-custodied wallets under the scammers’ control, successful recovery hinges on several critical factors:
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Prompt reporting by victims as soon as the fraud is suspected
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Strong coordination among law enforcement agencies across countries
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Active participation from cryptocurrency exchanges
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The ability of stablecoin issuers to freeze assets on short notice.
The $61-million seizure in North Carolina shows that significant recoveries are achievable. However, they demand tight collaboration between victims, federal investigators, blockchain forensic specialists and compliant crypto companies.
The shifting landscape of crypto enforcement
This high-profile seizure reflects a clear evolution in how authorities handle cryptocurrency crime:
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Law enforcement teams are steadily improving their expertise in blockchain tracing techniques.
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Major stablecoin issuers are showing greater willingness to assist in active criminal probes.
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Judges and prosecutors are handing down substantially longer prison terms to participants in large-scale fraud and money laundering networks.
While pig-butchering schemes continue to grow more advanced and deceptive, investigative tools and international partnerships are advancing at a comparable pace.
The main question is no longer whether cryptocurrency transactions can be traced. The real challenge now is speed. The question is how fast authorities and their partners can freeze and seize assets before the funds are scattered across unreachable wallets or jurisdictions.
- KuCoin launches a $1 million USDT airdrop for new futures listings.
- Rewards based on time in market, not trading speed or volume.
- Aims to boost early liquidity in altcoin futures markets.
Crypto exchange KuCoin is rolling out a $1 million airdrop designed to reward traders who hold positions in newly listed futures contracts for longer periods, part of a broader push to stabilize early trading activity around new tokens.
The campaign, titled “Trade New Futures & Share 1M Airdrop,” departs from the quick‑profit competitions typical of crypto trading promotions.
Instead of rewarding high-frequency or large-volume trades, KuCoin will distribute rewards based on how long traders keep their positions open and the size of their exposure.
By measuring “time in market,” the exchange hopes to dampen the speculative surges that often accompany new listings, periods marked by fast price swings and fleeting liquidity.
Officials said the idea is to encourage steadier participation and help new markets mature with fewer distortions from short-term event-driven trading.
The program will allocate its 1 million USDT prize pool over an hourly accrual system, giving consistent participants a share of the rewards while nudging traders toward more deliberate strategies.
Push to broaden altcoin derivatives base
The move comes as KuCoin continues to expand its share of the altcoin futures segment, a space where it already ranks among the top two platforms globally, according to CryptoQuant’s 2025 Annual Exchange Leader Report.
The exchange’s data show that trading in “long-tail” altcoins and the top eight digital assets accounts for more than half of its perpetual futures activity.
Analysts say the latest initiative could help KuCoin deepen liquidity in lesser-traded markets, an area where smaller projects often struggle to sustain stable order books after listing.
By rewarding duration rather than volume, the exchange is betting that traders will be more willing to provide early liquidity to new pairs without fear of heavy early losses triggered by bots or flash volatility.
Founded in 2017, KuCoin says it now serves more than 40 million users worldwide and continues to expand its regulated footprint, with recent licenses in Austria and Australia.
The exchange, which offers spot, futures, and Web3 wallet services, has sought to differentiate itself by leaning into altcoin markets, a niche that remains one of the most competitive arenas in global crypto trading.
The airdrop initiative, available through KuCoin’s campaign page, runs as part of that strategy, aligning trader incentives with the platform’s bid to make new listings more liquid, transparent, and less dominated by short-term speculation.
Key Highlights
- The Trump White House is preparing export regulations that would mandate federal approval for AI chip sales to countries across the globe, extending current limitations worldwide.
- Orders exceeding 1,000 Nvidia GB300 GPUs would undergo government review; installations beyond 200,000 units would need host nation approval.
- Nvidia has discontinued H200 chip manufacturing for the Chinese market at TSMC, redirecting production resources to its forthcoming Vera Rubin chips.
- CFO Colette Kress revealed that Nvidia has recorded no revenue from China sales even with US authorization for certain H200 shipments.
- Jensen Huang indicated Nvidia’s $30 billion OpenAI investment could be its final one, anticipating the AI company’s public offering.
Nvidia $NVDA declined approximately 1.7% on Thursday following back-to-back news developments — both presenting challenges for the semiconductor giant.
A Bloomberg report revealed the Trump administration is working on new export regulations requiring federal government authorization for AI chip transactions with nearly all nations globally. The news pushed NVDA alongside $AMD, which fell roughly 2%, into negative territory during afternoon sessions.
The planned regulations would transform existing controls — presently applicable to approximately 40 nations — into a comprehensive worldwide licensing system. According to the proposal, any order containing up to 1,000 of Nvidia’s GB300 GPUs would enter a review pipeline, with certain exemption possibilities available.
Bulk purchases face heightened examination. Installations surpassing 200,000 GB300 units controlled by a single entity within one nation would mandate involvement from that country’s government in the authorization process.
Washington would only authorize such massive exports to partner nations that provide security guarantees and commit to investing in US-based AI infrastructure — although the proposal doesn’t define exact investment thresholds.
These regulations don’t constitute an outright prohibition, but they would grant the US Commerce Department extensive authority over AI chip distribution that powers platforms like ChatGPT and Gemini.
Chinese Market Revenue Remains at Zero
In a separate Financial Times report, Nvidia has discreetly halted H200 chip manufacturing for China at Taiwan Semiconductor Manufacturing Co., redirecting that production capability toward its next-generation Vera Rubin chip family.
The two product lines employ distinct technologies and manufacturing processes — H200 utilizes CoWoS-S packaging alongside earlier high-bandwidth memory, whereas Vera Rubin leverages CoWoS-L with the advanced HBM4 specification — meaning the production reallocation doesn’t directly impact availability of either product line.
Nvidia’s Chinese operations have remained in uncertainty for several months. The Trump administration granted H200 export approval to China last December, stipulating the US government receive a 25% revenue share. Previously, Nvidia had been distributing the less powerful H20 chip throughout China — until the administration prohibited those sales last April.
Despite securing federal approval, transactions haven’t materialized. During last week’s quarterly earnings discussion, CFO Colette Kress disclosed that Nvidia has “yet to generate any revenue” from the Chinese market and remains uncertain whether Beijing will permit any chip imports.
Domestic Chinese Competitors Advancing
Kress highlighted an additional challenge: multiple recent public offerings from Chinese semiconductor firms that she noted “have the potential to disrupt the structure of the global AI industry over the long term.” Nvidia maintains it will continue dialogue with both Washington and Beijing.
Regarding OpenAI developments, CEO Jensen Huang stated this week that Nvidia’s $30 billion stake in OpenAI’s $110 billion funding round completed in late February “might be the last time” the chipmaker backs the AI firm, as he anticipates OpenAI will pursue a public listing in the near future. Huang further noted that a previously considered $100 billion investment arrangement with OpenAI is “not in the cards.”
SoFi Technologies has selected digital asset custodian BitGo to support the rollout of its bank-issued stablecoin, the latest sign of growing momentum around federally regulated stablecoins for payments and settlements.
Under the partnership, BitGo will provide stablecoin infrastructure services for SoFiUSD, a US dollar-pegged token issued by SoFi Bank, a nationally chartered and insured depository institution, the companies disclosed Thursday.
The arrangement will run through BitGo’s “stablecoin-as-a-service” platform, which will support the issuance of SoFiUSD and help connect the token with payment providers, market participants and cryptocurrency exchanges.
SoFi said SoFiUSD is the first stablecoin issued by a US nationally chartered and insured deposit bank on a public, permissionless blockchain.
SoFi Technologies is a publicly traded Nasdaq-listed digital finance company that offers lending, banking and investment products to nearly 14 million members. The company entered the digital asset market in 2019 by adding cryptocurrency trading through its SoFi Invest platform and later secured a national bank charter after acquiring Golden Pacific Bancorp in 2022, establishing SoFi Bank.
Related: Crypto’s 2026 investment playbook: Bitcoin, stablecoin infrastructure, tokenized assets
US companies race to build stablecoin infrastructure
SoFi’s push into the stablecoin market comes amid a broader shift toward regulated digital dollar infrastructure in the United States, following the passage of the GENIUS Act, which establishes a federal regulatory framework for payment stablecoins and their issuers.
Against this backdrop, financial technology companies are expanding the infrastructure needed to support stablecoin payments and settlement.
As reported by Cointelegraph, payment operations platform Modern Treasury recently launched an integrated payment service that supports stablecoin rails alongside traditional banking infrastructure. The system enables businesses to settle transactions using stablecoins in addition to conventional payment methods such as ACH transfers and wire payments.
The platform currently supports several dollar-pegged tokens, including USDC (USDC), Global Dollar (USDG) and Pax Dollar (USDP).
Separately, digital asset infrastructure company Stablecore recently joined the Jack Henry Fintech Integration Network, which connects nearly 1,700 financial institutions. The integration enables banks and credit unions on the network to offer stablecoin and tokenized-asset services through their existing banking platforms.
Related: Wall Street’s crypto debate is over as banks go all-in on BTC, stablecoins, tokenized cash
Crypto World
Son of contractor managing seized crypto for U.S. Marshals arrested in France over alleged $46m theft
French authorities arrested John “Lick” Daghita, who allegedly stole tens of millions in crypto from the U.S. government.
In an X post on Thursday, FBI Director Kash Patel confirmed Daghita had been arrested on Wednesday on the island of Saint Martin in a joint FBI and French Gendarmerie operation.
In his social media post, Patel included images of Daghita handcuffed and another one of a metal suitcase filled with packs of $100 bills and several USB and what appear to be hardware crypto wallets.
“[The] FBI will continue working 24/7 with our international partners to track down, apprehend, and bring to justice those who attempt to defraud American taxpayers, no matter where they try to hide,” Patel said.
The arrest caps off a monthslong investigation by the U.S. Marshals Service into whether Daghita, the son of a government contractor tasked with managing seized crypto funds, stole over $46 million from government seizure wallets.
Brady McCarron, chief of public affairs for the USMS, told CoinDesk in late January that an investigation into allegations that Daghita had stolen cryptocurrency were underway.
The law enforcement investigation began after blockchain sleuth ZachXBT publicly alleged that Daghita, the son of CMDSS president Dean Daghita, had siphoned tens of millions of dollars in digital assets from wallets associated with U.S. government seizures.
CMDSS is a Virginia-based contractor that advertises information technology and operational support services for U.S. government agencies, including the Department of Justice and Department of Defense. The company has previously been reported to hold contracts assisting the USMS with managing and disposing of cryptocurrency seized during criminal investigations.
The investigator said he alerted authorities after identifying a wallet holding roughly 12,540 ETH, worth more than $36 million at the time, that he alleged was controlled by Daghita.
Daghita first drew attention in online circles after appearing in a recorded dispute in a Telegram group chat with another alleged threat actor in what is known as a “band for band” exchange, where participants attempt to prove control of large crypto holdings.
With Daghita now in custody, U.S. authorities are expected to pursue extradition as the investigation continues.
Howard Marks, co-chairman, Oaktree Capital.
Courtesy David A. Grogan | CNBC
Veteran investor Howard Marks said he doesn’t see a widespread problem brewing in private credit, but warned that the sector’s rapid expansion over the past 15 years could expose weaker lenders when markets eventually turn.
“There’s not a systemic problem with private credit,” Marks, co-chairman and co-founder of Oaktree Capital, said Thursday on CNBC’s “Money Movers.”
The noted investor said that the risk stems from the pace of expansion in direct lending, which has ballooned to a market now exceeding $1 trillion from its early development around 2011.
His comments come as sentiment toward direct lenders has soured following the collapse of auto-related borrowers Tricolor and First Brands. Much of the concern has centered on loans made to software companies as investors worry that artificial intelligence could disrupt those businesses.
“There’s a saying in the banking business that the worst of loans are made in the best of times. We’ve seen 17 years of good times. When the stuff hits the fan, or as Warren Buffett would say, when the tide goes out, we will find out whose credit analysis was discerning, who made fewer software loans to the better company,” Marks said.
The pressure has already begun to show up in fund flows. Investors pulled nearly 8% from Blackstone Inc.’s flagship private credit fund in the most recent quarter, highlighting growing caution among allocators.
Marks said it’s impossible to predict when exactly the cycle will turn.
“The things that affect the investment world so profoundly are the things that were not foreseen,” Marks said. “If they could be foreseen … anticipated and adjusted to and factored into prices, they wouldn’t have that cataclysmic effect.”
Market analysts said Ether’s (ETH) uptrend was confirmed after the latest 25% recovery to $2,200 from its multi-year lows below $1,800.
Key takeaways:
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Ether rose to $2,200 on Wednesday, as onchain data shows signs of returning demand.
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ETH price support around $2,100 remains key for the bulls to hold.
Ether sellers are “losing control”
Ether’s net taker volume suggests that “sellers may be losing control” as demand for ETH derivatives returned, data from CryptoQuant shows.
Net taker volume, a metric that measures the imbalance between buyers and sellers in derivatives markets, has flipped positive after being in negative territory for nearly two months.
This negative regime coincided with the bear market drawdown, indicating sustained aggressive selling across derivatives markets.
“The latest prints show flows starting to turn positive, suggesting that seller dominance may be fading,” CryptoQuant analyst MorenoDV_ said in a recent Quicktake post, adding:
“Historically, shifts from prolonged negative taker pressure toward positive territory often precede short covering rallies and liquidity-driven rebounds, particularly after periods of forced selling.”
The return in ETH demand is also reflected by Ether’s Coinbase Premium Index, which has risen to levels last seen in December 2025.
After being negative for several months, the index has flipped positive, pointing to a return in demand from US investors, which could propel the ETH price higher.
“This indicates that US buying pressure remains positive,” CryptoQuant analyst CW8900 said, adding:
“If the Coinbase premium rises further, the rally will accelerate.”
Meanwhile, demand for spot Ether ETFs continues to recover, with these investment products recording $169.4 million in inflows on Wednesday. This shows the return of demand from institutional investors.
ETH traders anticipate a price rebound
Ether’s latest breakout must, however, not pull back below the $1,750 mark, according to analysts.
Trader and analyst Crypto Patel said that the $1,750 support must hold for “bulls to stay in control,” with the upside target set at “$2,500-$2,600.
“Lose $1,750 and bears take over again.”
Commenting on Ether’s Thursday push above $2,000, analyst Bren said a “larger bounce above $2,200 is likely.”
Meanwhile, Man of Bitcoin said that a successful retest of $2,100 support after the current retracement could open the path to $3,400 or higher.
As Cointelegraph reported, a daily candlestick close above $2,100 will revive the hopes of a recovery toward the 50-day simple moving average (SMA) at $2,381. A break above this level will mean that the corrective phase may be over.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
Bitcoin mining and data center company Core Scientific has closed a $500 million loan facility with Morgan Stanley, with the option to expand the financing to as much as $1 billion.
According to a company announcement on Thursday, the financing may be used for general corporate purposes tied to building and expanding data center assets, including equipment purchases, real estate acquisition and securing additional power agreements.
The company operates large-scale data centers in several US states, including Texas, Georgia and North Carolina, hosting both Bitcoin (BTC) mining equipment and other high-density computing workloads.
The 364-day facility carries interest at the Secured Overnight Financing Rate (SOFR) plus 2.5% and includes an accordion feature that allows total commitments to increase by another $500 million.
Core Scientific currently derives most of its revenue from Bitcoin mining but is converting “most” of its data center footprint to support AI-related and other high-density computing workloads.
The announcement comes days after the company’s shares fell following a fourth-quarter earnings miss, as crypto mining income dropped to $42.2 million, nearly 50% lower than the same quarter a year earlier.
Related: Ex-OpenAI researcher’s hedge fund reveals big Bitcoin miner bets in new SEC filing
Core Scientific’s road to AI and HPC
Core Scientific filed for Chapter 11 bankruptcy protection in December 2022 after falling Bitcoin prices, rising energy costs and losses tied to crypto lender Celsius strained its finances. In January 2024, it emerged from bankruptcy and relisted its shares on Nasdaq after completing a court-approved restructuring.
Following the restructuring, Core Scientific began repurposing parts of its data center infrastructure to support artificial intelligence and high-performance computing (HPC) workloads alongside its Bitcoin mining operations.
That shift accelerated in June 2024, when the company signed a 12-year agreement with AI cloud provider CoreWeave to supply data center capacity for HPC.
A year later, CoreWeave sought to deepen the relationship through a proposed acquisition, agreeing in July 2025 to buy Core Scientific in an all-stock transaction valued at about $9 billion. However, the merger failed to gain sufficient shareholder approval during a vote in October and did not move forward.
Several other Bitcoin mining companies have also begun repurposing their infrastructure to support AI and HPC workloads in recent months.
In July, Hive Digital Technologies said it was expanding into HPC, building an AI infrastructure business that it expects could reach $100 million in annual revenue.
About a month later, TeraWulf signed 10-year colocation agreements with AI infrastructure company Fluidstack valued at $3.7 billion, with Google backing about $1.8 billion of the lease obligations.
Magazine: 6 weirdest devices people have used to mine Bitcoin and crypto
Reimagining DeFi Liquidity Through Time. Decentralized Finance has largely measured its strength using one metric: Total Value Locked (TVL). Billions of dollars sit inside smart contracts, signaling capital commitment, protocol confidence, and market depth. But TVL has a hidden flaw: it ignores time.
A dollar locked for 5 minutes and a dollar locked for 5 years are treated the same.
This blind spot opens the door to a new primitive in DeFi design: Liquidity Time Preference Markets, also known as Shadow TVL.
The Problem With Traditional TVL
TVL answers one question:
“How much capital is inside a protocol right now?”
But DeFi users behave very differently depending on how long they intend to stay.
Consider three liquidity providers:
| Provider | Capital | Lock Duration |
|---|---|---|
| Trader A | $1M | 30 minutes |
| Yield Farmer B | $1M | 7 days |
| DAO Treasury C | $1M | 2 years |
Traditional TVL says:
TVL = $3M
But economically, these deposits are not equal. The DAO treasury provides structural stability, while Trader A provides temporary liquidity that could vanish instantly.
This creates the concept of Shadow TVL — a deeper metric that accounts for time-weighted liquidity commitment.
What is Shadow TVL?
Shadow TVL = Liquidity adjusted by time commitment.
Instead of measuring only how much capital is present, Shadow TVL measures:
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How long is liquidity expected to remain
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How stable is the capital base, actually?
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The protocol’s real economic security
Example:
| Deposit | Amount | Lock Duration | Shadow Value |
|---|---|---|---|
| $1M | 1 hour | 0.0001 weight | |
| $1M | 30 days | 0.3 weight | |
| $1M | 2 years | 1.0 weight |
Even though TVL is $3M, Shadow TVL may only equal ~$1.3M in stable liquidity.
This reveals the true durability of a protocol’s liquidity base.
Introducing Liquidity Time Preference Markets
Rather than just measuring time preference, DeFi could trade it directly.
A Liquidity Time Preference Market allows participants to buy and sell liquidity commitment durations.
Participants could trade:
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Short-term liquidity rights
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Long-term liquidity guarantees
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Liquidity futures contracts
Think of it like interest rate markets, but for capital patience.
How It Could Work
Step 1 — Liquidity Commitment Tokens
When depositing liquidity, users mint a token representing their lock duration.
Example tokens:
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LQ-1D → Liquidity locked for 1 day
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LQ-30D → Liquidity locked for 30 days
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LQ-365D → Liquidity locked for 1 year
These tokens represent time-bound liquidity guarantees.
Step 2 — Secondary Markets
These liquidity commitments become tradable assets.
Traders could speculate on:
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Liquidity shortages
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Market volatility
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Protocol stability
Example:
If traders expect high volatility next month, 30-day liquidity tokens become more valuable, because protocols will need deeper liquidity.
Step 3 — Shadow TVL Pricing
Protocols could use market prices of these tokens to compute Shadow TVL in real time.
Instead of:
TVL = $500M
Protocols would show:
Shadow TVL = $500M capital with 87-day average commitment
This creates a liquidity durability index.
Why This Changes DeFi Economics
1. Eliminates “Mercenary Liquidity.”
Yield farmers often chase incentives and exit instantly.
Liquidity Time Markets reward long-term capital commitment, reducing unstable liquidity.
2. New Derivatives Market
Liquidity duration becomes a financial asset.
Examples:
DeFi could develop a yield curve for liquidity similar to government bond markets.
3. Predictable Protocol Stability
Protocols could price risk based on how long liquidity is expected to remain.
A DEX with:
is far more stable than one with $200M TVL but a 2-day commitment.
4. Capital Efficiency
DAOs and funds could optimize treasury deployment by selecting liquidity durations matching their risk profile.
Example:
| Strategy | Liquidity Duration |
|---|---|
| Arbitrage Funds | 1–3 days |
| Market Makers | 30–90 days |
| DAO Treasuries | 1–3 years |
Liquidity becomes programmable over time.
The Emergence of a Liquidity Yield Curve
Just like traditional finance has a bond yield curve, DeFi could develop a Liquidity Commitment Curve.
Example market rates:
| Duration | Expected Yield |
|---|---|
| 1 day | 2% APR |
| 30 days | 7% APR |
| 1 year | 18% APR |
This curve reflects market demand for liquidity stability.
During volatile markets, long-duration liquidity becomes extremely valuable.
Potential Use Cases
Stablecoin Defense
Stablecoin protocols could require a minimum liquidity duration for collateral pools.
This prevents bank-run style liquidity collapses.
MEV Protection
Validators and builders could secure blockspace liquidity guarantees, ensuring deep order books even during congestion.
DeFi Credit Markets
Lenders could issue loans backed by liquidity commitment tokens, turning liquidity guarantees into collateral.
Risks and Challenges
Despite its promise, Liquidity Time Preference Markets introduce new complexities:
Smart Contract Risk
Liquidity locks and tokenization increase protocol complexity.
Liquidity Fragmentation
Too many duration tokens could fragment capital across markets.
Speculation Loops
Traders might speculate heavily on liquidity scarcity.
However, these risks are similar to those seen in early interest rate derivatives markets in traditional finance.
Why This Idea Matters
DeFi’s biggest weakness is unstable liquidity.
TVL numbers can look impressive, but capital can disappear instantly.
Shadow TVL introduces a missing dimension: time.
Instead of measuring how much liquidity exists, DeFi could measure:
How committed is that liquidity actually?
Liquidity Time Preference Markets turn patience into a tradable financial primitive.
And once time becomes a market…
DeFi doesn’t just have liquidity.
It has predictable liquidity stability.
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[PRESS RELEASE – LODZ, Poland, March 5th, 2026]
BTCC, the world’s longest-serving cryptocurrency exchange, today announced that its recently launched TradFi product has surpassed $200 million in cumulative trading volume since going live on February 10, 2026. To celebrate this milestone, BTCC is introducing a zero-fee trading campaign for the XAU and XAG pairs, where participants can earn up to 10 grams of gold through a tiered volume bonus program.
The $200 million milestone demonstrates strong demand for traditional market access among crypto traders. BTCC TradFi, launched in February 2026, enables users to trade traditional financial instruments, including forex, commodities, indices, and equities, directly on the BTCC platform using USDT as margin and settlement currency. TradFi aims to remove barriers for crypto traders to gain exposure to the global traditional financial markets.
Running from March 5 to March 19, 2026, the zero-fee campaign waives all trading fees on XAU and XAG pairs. Alongside the 0-fee promotion, users can also participate in a tiered bonus program based on the total TradFi trading volume during the campaign. Participants can earn up to 10g of gold by reaching the milestone of 5,000,000 USDT in cumulative trading volume across all TradFi pairs.
Precious metals have been among the most actively traded asset classes on BTCC’s platform. In 2025, tokenized gold on BTCC recorded $5.72 billion in trading volume, with Q4 volume surging 809% over Q1, underscoring sustained user interest in precious metals. This momentum sets the stage for the zero-fee campaign on XAU and XAG, giving both new and existing users a cost-free entry point into one of the platform’s most in-demand markets.
For traders seeking traditional market exposure without leaving the crypto ecosystem, BTCC TradFi offers a seamless platform that bridges cryptocurrency and traditional assets. The zero-fee campaign is an opportunity to explore gold and silver trading at zero trading cost on the BTCC platform. For campaign details and eligibility requirements, users may visit BTCC’s 0-fee campaign page.
About BTCC
Founded in 2011, BTCC is a leading global cryptocurrency exchange serving over 11 million users across 100+ countries. Partnered with 2023 Defensive Player of the Year and 2x NBA All-Star Jaren Jackson Jr. as global brand ambassador, BTCC delivers secure, accessible crypto trading services with an unmatched user experience.
Official website: https://www.btcc.com/en-US
X: https://x.com/BTCCexchange
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Crypto World
xStocks Unveils xChange, Bringing Real-World Equity Liquidity Onchain Across Ethereum and Solana
TLDR:
- xChange is the first unified execution layer trading over 70 tokenized stocks across Ethereum and Solana onchain.
- Every xStock is backed 1:1 by underlying shares in custody, ensuring real equity exposure on the blockchain.
- Atomic settlement guarantees trades execute fully at the quoted price or not at all, eliminating partial fills.
- xStocks has surpassed $3.5 billion in onchain volume and 80,000 unique holders since launching in June 2025.
xChange, the new unified execution layer from xStocks, is now live on Ethereum and Solana. The platform enables trading of more than 70 tokenized stocks directly onchain.
Pricing is anchored to real-world public market data, while atomic settlement ensures each trade completes fully or not at all.
Since its June 2025 launch, xStocks has recorded over $3.5 billion in onchain transaction volume, marking rapid adoption of tokenized equities.
How xChange Bridges Traditional Markets and DeFi
xChange connects traditional market depth with decentralized finance infrastructure in one unified system. The platform does not rely on third-party intermediaries to process trades.
Instead, it executes transactions directly onchain across both Ethereum and Solana. This setup preserves the transparency and composability that DeFi participants expect.
Each xStock is fully collateralized and backed 1:1 by underlying shares held in custody. This structure means every onchain transaction reflects genuine equity exposure.
Atomic settlement removes the risk of partial fills entirely from the process. Trades either execute in full at the quoted price or do not go through.
Kraken announced the launch through its official X account, describing it as “the first unified execution layer for tokenized equities.” The exchange added that xChange delivers “TradFi liquidity. DeFi infrastructure. Always on.”
The platform operates 24/5, extending equity trading well beyond standard exchange hours. As a result, tokenized stocks function as always-on, programmable financial assets.
Val Gui, General Manager of xStocks, described the platform’s purpose directly. “xChange is about redefining how equities trade in a digital-first world,” Gui stated.
He added that it “brings real-world market liquidity onchain and turns tokenized stocks into fully programmable, always-on assets.” Gui noted these assets are built to “power the next generation of global financial applications.”
xStocks Records Strong Growth Metrics Since June 2025
Since launching in June 2025, xStocks has surpassed $3.5 billion in total onchain transaction volume. The platform has also crossed $25 billion in total trading volume across exchanges.
These figures reflect growing demand for tokenized equities among DeFi users and traditional finance participants. The pace of growth points to measurable market adoption across both audiences.
Over $225 million in tokenized assets are currently held onchain. More than 80,000 unique onchain holders have participated in the broader ecosystem.
Tokenized equities are gaining traction as a distinct and recognized asset class. Adoption has continued expanding across multiple chains, platforms, and applications.
xChange builds on this momentum by introducing a unified execution layer across networks. The platform connects liquidity across Ethereum and Solana while tying pricing to traditional equity markets.
This connection supports tighter spreads and improved execution quality throughout the system. Onchain settlement and transferability remain fully intact at every step.
Rather than replacing existing DeFi liquidity models, xChange functions as an added layer. It improves price alignment and execution reliability across the broader ecosystem.
The outcome is a hybrid model that combines real-world equity market depth with blockchain-based trading infrastructure. xChange positions tokenized stocks as a functional bridge connecting two distinct financial worlds.
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