TLDR:

• Ethereum daily ETH burn reached $1.2B in February 2026, still outpacing the 0.8% annual inflation rate.
  
• Validator APR held at 4–5% in March 2026, marginally above the 10-year U.S. Treasury yield of 4.2%.
  
• After removing L2 batch submissions, spam transactions account for only 4% of real network activity.
  
• Active Ethereum addresses surged 117% year-over-year, led by real users on Arbitrum, Base, and zk-EVMs.

Ethereum metrics challenge bearish claims as network burn continues to outpace supply in early 2026. A short report from Culper Research raised concerns about fee compression, spam activity, and validator sustainability.

However, on-chain data from February and March 2026 presents a contrasting picture. Daily ETH burn remained at $1.2 billion in February, exceeding the 0.8% annual inflation rate. The network continues to destroy more ETH than it produces, keeping supply dynamics intact.

Burn Rate and Fee Data Contradict the Bearish Narrative

Culper Research pointed to a 90% drop in median gas prices as a sign of network deterioration. Fees fell from roughly $2 to $0.20 following the Fusaka upgrade.

That decline, however, was built into the upgrade’s design from the start. The goal was to lower costs and redirect activity toward Layer 2 solutions. The drop was expected, not alarming.

Total daily ETH burn held at $1.2 billion through February 2026, despite lower per-gas prices. That figure still exceeds the network’s 0.8% annual inflation rate.

As a result, Ethereum remains deflationary in practice, with more ETH destroyed than created. The tokenomics argument against ETH loses ground when burn data is factored in.

Ethereum Daily, a crypto commentary account on X, addressed the report directly. The account wrote: “We need more clowns like Culper. Short $ETH if you want, but nobody cares.”

The post systematically challenged each claim in the Culper report. The response resonated broadly across crypto communities online.

The Fusaka upgrade’s fee reduction is also drawing more participants into the ecosystem. Lower transaction costs make Ethereum more accessible to everyday users.

That accessibility supports growing adoption across retail and institutional segments. Over time, broader usage tends to increase total burn volume even at lower per-unit rates.

Validator Yields and User Growth Support Network Stability

Validator economics also remain competitive heading into Q1 2026. Block rewards hold steady at approximately 2 ETH per block.

Total validator APR, including MEV rewards, ranged between 4% and 5% in March 2026. That return sits marginally above the 10-year U.S. Treasury yield of around 4.2%.

Staked ETH currently stands at roughly 19 million, representing about 66% of total supply. That level is well above the 30–40% threshold considered sufficient for network security.

The staking withdrawal queue has stayed flat near 3.2 million ETH for six consecutive months. Culper’s claim of a growing withdrawal backlog does not align with that data.

On the activity side, Culper flagged dust attacks as making up 22% of all transactions. After stripping out L2 batch submissions, spam transactions represent only about 4% of real network activity.

Non-spam wallet creation grew approximately 12% year-over-year in Q1 2026. Active addresses also rose 117% year-over-year, driven by users on Optimism, Arbitrum, Base, and zk-EVMs.

BitMine (BMNR) also drew scrutiny in the report for its ETH holdings. The firm holds roughly 4.47 million ETH, valued at around $9 billion.

Staking operations generate approximately $350 million annually in fees. With over $3 billion in cash equivalents on hand, the firm shows no signs of a financial strain.

BNB price has confirmed a bearish rising wedge breakdown after rejecting the $657 resistance level. With the value area high now lost, the probability of a corrective move toward the $587 support is increasing.

BNB (BNB) price is showing signs of growing technical weakness after rejecting a key resistance zone and breaking below a rising wedge structure. Rising wedges are widely recognized as bearish continuation patterns, often signaling exhaustion in bullish momentum.

With the pattern now activated, traders are closely watching the $587 high-timeframe support level as the next potential downside target.

BNB price key technical points

• Rising wedge breakdown: Bearish pattern activated following rejection at $657 resistance.
• Value Area High lost: Indicates weakening bullish momentum within the range.
• Downside target: $587 stands as the next major high-timeframe support level.

BNB recently attempted to push higher but faced strong resistance near the $657 level, which has historically acted as a key supply zone. The rejection from this level triggered a breakdown from the rising wedge pattern that had been forming over several weeks. Rising wedges typically form during periods of slowing upward momentum and are often followed by sharp corrective moves once support breaks.

The wedge structure itself reflected a tightening price range where each push higher was met with increasing selling pressure. While buyers continued to attempt new highs, the inability to sustain momentum above key resistance levels suggested that bullish strength was gradually weakening. Once the lower boundary of the wedge began to give way, the bearish structure became increasingly clear.

A significant technical development following the wedge rejection is the loss of the value area high within the current trading range. The value area high often acts as a key pivot where buyers attempt to maintain control of price. When this level is lost, it typically signals that market participants are no longer willing to support higher prices in the short term. This loss strengthens the bearish outlook and increases the likelihood of a deeper corrective move.

Currently, BNB is trading near the point of control, which represents the price level with the highest traded volume within the current range. The point of control often acts as a temporary support level, as it reflects a zone where buyers and sellers previously found balance. However, if this level fails to hold, it could trigger a stronger downside move as price seeks liquidity at lower support levels.

The next major area of interest sits around the $587 level, which aligns with the technical target derived from the rising wedge breakdown. This level also coincides with a higher-timeframe support zone, making it a logical destination if bearish momentum continues to build.

Markets often move quickly toward these types of structural targets once key support levels begin to fail. Meanwhile, on the fundamental side, YZi Labs has committed $100 million to Hash Global’s BNB Holdings Fund, positioning BNB as institutional-grade yield infrastructure within the broader digital asset ecosystem.

In addition to the structural breakdown, broader market dynamics may also play a role in shaping BNB’s near-term direction. If sellers maintain control below the wedge structure, it further strengthens the probability of a move toward the next support level.

What to expect in the coming price action

From a technical perspective, BNB remains vulnerable to further downside after confirming the rising wedge breakdown. As long as price remains below the rejected $657 resistance and fails to reclaim the value area high, the probability favors a continuation toward the $587 support level.

A breakdown below the point of control would further confirm bearish momentum and increase the likelihood of a deeper corrective move.

High-profile whale reloads on 25x ETH leverage despite racking up over $29.7 million in realized losses as majors slide and funding turns negative.

In the middle of a red day for majors, on-chain data shows Machi (machibigbrother) wiring an additional 210,000 USDC to the derivatives venue HyperLiquid, explicitly to expand a high-octane long position in ETH with maximum leverage up to 25x.

This is not a fresh thesis so much as an attempt to press a bruised conviction trade: as the market rolled over, Machi had already been forced to cut and close most of his earlier exposure, crystallizing more than $29.7 million in realized losses on this campaign alone. Yet rather than de-risk into weakness, he is stepping back into the same structure, in the same asset, with the same extreme gearing.

The timing is stark. At the moment of the report, BTC trades around $68,583, down roughly 4%, while ETH changes hands near $1,978, off almost 4.9% on the day. Across the board, majors are under pressure: SOL slides more than 5%, LINK nearly 4.8%, with alt liquidity thin and correlations elevated. Derivatives metrics confirm stress under the surface, with the 8‑hour average funding rate on ETH marginally negative at about -0.0047%, a sign that perpetual traders are skewed short or at least no longer willing to pay up for long exposure.

At the same time, structural flows are turning against the complex. U.S. spot Bitcoin ETFs saw net outflows equivalent to 1,697 BTC, while Ethereum ETFs bled around 3,185 ETH, draining some of the passive bid that had previously supported dips. Network-wide, the liquidation tally over the last 24 hours reached roughly $354 million, with the bulk coming from overleveraged longs that were forced out as prices slid. Against that backdrop, Machi’s decision to reload on 25x ETH longs looks less like quiet accumulation and more like a public stress test of risk tolerance—one that will either be rewarded by a sharp mean-reversion bounce or remembered as a textbook case of throwing good money after bad into a structurally weak tape.

A Seattle judge sentenced Nevin Shetty, the former chief financial officer of a local startup, to two years in prison after a jury found him guilty of wire fraud tied to a covert crypto venture. Prosecutors say Shetty secretly moved around $35 million of company funds to a cryptocurrency platform he controlled as a side business, channeling the money into high-yield DeFi lending protocols in 2022. The transfers went undetected by executives and the board until a market downturn exposed the scheme. Indicted in May 2023 and convicted on four counts in November 2025, Shetty was ordered to repay the stolen funds and will face three years of supervised release after serving his sentence. The case unfolds amid a wider crypto winter and the Terra ecosystem crash in 2022, which underscored the sector’s volatility and governance risks.

Key takeaways

• The CFO allegedly diverted approximately $35 million from a Seattle startup to a crypto platform he controlled as a side business in 2022, moving funds to HighTower Treasury before a market downturn.
• Initial returns appeared promising, with about $133,000 earned in the first month, but those gains were short-lived as the Terra-related downturn and broader market conditions reversed the position, leading to a near-total loss by May 13, 2022.
• The misappropriation remained hidden from the board and executives until the scheme’s exposure during market stress, after which Shetty was terminated from the company.
• Shetty was indicted in May 2023 and later found guilty on four counts following a nine-day jury trial in November 2025, marking a high-profile enforcement action in crypto-related corporate fraud.
• The sentence requires repayment of the stolen funds and imposes three years of supervised release in addition to the two-year prison term, highlighting consequences for fraud in crypto-enabled ventures.
• Contextual factors include the Terra ecosystem collapse in 2022 and the broader regulatory and enforcement environment surrounding crypto-related misconduct and corporate governance.

Market context: The case arrived amid heightened regulatory scrutiny of crypto-related fund movements and DeFi activity, with investors and policymakers watching closely how startups manage corporate assets in a volatile market. The Terra meltdown in 2022 contributed to a period of risk-off sentiment, while high-profile incidents such as the FTX collapse underscored the need for stronger governance, disclosure, and accountability when crypto instruments intersect with corporate funds.

Why it matters

The court outcome reinforces the fundamental principle that corporate funds, even when they move through crypto channels, remain subject to fiduciary duties and return obligations. For startups, the Shetty case underscores the imperative of robust internal controls, independent oversight, and clear separation between business operations and personal crypto ventures. When executives borrow or divert company capital into volatile DeFi strategies, the risk is not only financial losses but potential legal exposure for fraud and embezzlement. The decision serves as a cautionary milestone for small firms navigating the frontier between traditional corporate finance and rapidly evolving crypto instruments.

Beyond the specific individuals involved, the episode sheds light on governance gaps in early-stage tech firms that experimentally engaged crypto funding or DeFi strategies. While diversification and alternative funding channels can offer value, misalignment between management incentives and shareholder interests can lead to scenarios where value is eroded swiftly as markets turn. The Terra-related downturn of 2022, which contributed to the decline in crypto asset valuations, framed a period in which the line between investment strategy and personal venture became dangerously blurred for some executives.

From a policy perspective, the case accentuates the ongoing need for clear reporting requirements, enhanced internal audit capabilities, and accountability mechanisms when corporate leaders pursue crypto opportunities with corporate money. It also highlights the legal framework surrounding wire fraud prosecutions in cases where crypto assets and DeFi activities are used to enrich private interests at the expense of a company and its stakeholders.

For investors and prosecutors alike, the story underlines a broader truth about the crypto era: enthusiasm for new financial rails must be matched by stringent governance, transparent disclosures, and rigorous risk management to protect both enterprises and their communities. The legal resolution in this instance may influence how similar cases are pursued, particularly where cross-currents of corporate finance, DeFi yield farming, and market volatility intersect.

Video coverage and trial glimpses are available here: YouTube video.

Additional context around related cases and the evolving enforcement landscape can be found in prior reporting on the matter, including official statements and analyses tied to the indictment and subsequent verdict.

Note: The developments sit alongside broader industry events, such as the FTX collapse and ongoing appellate proceedings related to that case, which illustrate the persistent risk environment in crypto markets and the judiciary’s role in resolving disputes that straddle traditional finance and decentralized finance.

What to watch next

• Post-sentencing restitution: monitoring how the court enforces repayment of the $35 million or facilitates recovery from related assets.
• Appeals and potential changes in the case record: any appellate filings or rulings that could modify the outcome or sentence.
• Regulatory and governance reforms at startup and corporate venture levels to prevent similar misappropriations.
• Impact on HighTower Treasury and any related platforms as new compliance and risk controls are evaluated.

Sources & verification

• Department of Justice press release: Former CFO sentenced to two years in prison for $35 million theft from a Seattle tech firm. https://www.justice.gov/usao-wdwa/pr/former-cfo-sentenced-two-years-prison-35-million-theft-start-tech-firm
• DOJ press release: Indictment for wire fraud related to diverted funds to a cryptocurrency venture (May 2023). https://cointelegraph.com/news/former-cfo-indicted-for-diverting-35m-to-cryptocurrency-venture
• Official court and docket coverage referenced in contemporaneous reporting and subsequent verdict details. https://cointelegraph.com/news/ftx-sam-bankman-fried-returns-court-appeal

Gavel falls on former CFO who siphoned funds into DeFi bets

A Seattle startup’s former chief financial officer, Nevin Shetty, faced a judicial reckoning after prosecutors alleged a calculated scheme to divert company funds into a cryptocurrency venture that operated on the side. In 2022, according to the Department of Justice, Shetty covertly redirected roughly $35 million from the startup’s coffers to a crypto platform he controlled, channeling the money into DeFi lending protocols touted as high-yield investments. The funds were placed on HighTower Treasury, a platform described in court filings as a vehicle for his personal crypto ambitions rather than a legitimate corporate treasury tool. The maneuver proceeded without board or executive oversight, and the board only became aware of the transfer when market volatility exposed the hidden accounts.

Initial performance figures painted a misleading picture. The government noted that Shetty supposedly earned about $133,000 in the first month from these crypto wagers, a figure that many investors would consider a disproportionate return relative to risk. Yet the 2022 market environment—framed in part by a downturn in Terra-linked assets—quickly eroded the value of the crypto positions. By mid-May 2022, authorities said, the investments had collapsed toward zero, erasing the apparent early gains and triggering questions about the source and stewardship of the funds.

According to DOJ filings, Shetty did not disclose the transfers to the startup’s leadership or its board, effectively isolating the activity from proper governance channels. After the initial losses became evident, he disclosed the situation to two other executives and was subsequently fired from his role. The subsequent legal process unfolded over years, culminating in a nine-day jury trial that ended in November 2025 with a four-count conviction on wire fraud charges. The court ordered Shetty to repay the $35 million and imposed three years of supervised release beyond the two-year prison sentence.

The case sits within a broader arc of crypto-focused enforcement that has defined much of the industry’s recent history. It occurred in the wake of the Terra ecosystem’s dramatic downturn in 2022, a sequence of events that rattled investor confidence and intensified scrutiny of how crypto investments intersect with corporate capital. The trial and its outcome also align with ongoing enforcement actions that accompanied the FTX collapse, a watershed event that reshaped public and regulatory expectations for crypto exchanges, corporate risk disclosures, and the accountability of executives who oversee digital asset ventures.

For readers tracking the legal and regulatory environment around crypto, the Shetty case underscores a persistent risk: when corporate resources are funneled into personal crypto ventures, the consequences extend beyond financial losses, potentially triggering criminal charges, restitution requirements, and long-term reputational damage. It serves as a reminder that governance frameworks, internal controls, and transparent reporting remain essential as startups navigate an industry characterized by rapid innovation and heightened volatility.

Payments company Strike received a virtual currency license and a money transmitter license (MTL) from the New York State Department of Financial Services (NYDFS), allowing the company to offer its Bitcoin services to residents and businesses in New York.

Granted in February, the approvals authorize Zap Solutions, Inc., which does business as Strike, to operate under New York’s digital asset regulatory framework, the company said in a Thursday release.

New York residents can now use Strike to buy and sell Bitcoin (BTC), set recurring or price-targeted purchases and convert direct-deposited paychecks into Bitcoin. The platform also allows users to pay bills from Bitcoin balances and withdraw funds to self-custody wallets.

“Receiving our BitLicense is a defining milestone for Strike,” founder and CEO Jack Mallers said in a statement, adding that the approval allows the company to expand its Bitcoin-based financial services in a major financial market.

A BitLicense allows companies to conduct digital currency business with New York residents, but does not by itself authorize nationwide operations.

Companies looking to operate across the US must typically obtain MTLs in other states as well.

Related: MoonPay to operate in all 50 US states after NY BitLicense approval

The framework requires companies to maintain capital reserves, implement Anti-Money Laundering (AML) controls and undergo regular regulatory examinations.

NY approvals remain a key step for US crypto companies

The approvals are another step in Strike’s US expansion, with New York’s stringent licensing framework often serving as a benchmark for crypto companies seeking regulated market access.

Others holding BitLicenses in New York include MoonPay, Coinbase, eToro, Robinhood and Circle, according to NYDFS records.

New York regulators have also taken enforcement action against license holders. In 2024, Genesis Global Trading agreed to surrender its BitLicense and pay an $8 million penalty to the regulator after investigators found failures in its AML and cybersecurity programs.

In 2025, Adrienne Harris, former superintendent of the New York State Department of Financial Services, said the state has an “outsized role to play” in the crypto ecosystem and that lawmakers frequently consult the regulator when drafting digital asset legislation.

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