A New York federal judge has postponed a decision on Aave’s request to release $71 million in frozen Ethereum tied to the Kelp DAO exploit, ordering both sides to submit additional legal arguments before a June hearing.

According to filings submitted Wednesday in the Southern District of New York, Judge Margaret M. Garnett said Aave LLC had not sufficiently explained how “compounding losses” to users would occur if the restraining notice on the funds remained active. The judge scheduled another hearing for June 5 and directed both parties to file supplemental briefs by May 22.

At the center of the dispute is 30,765 ETH that Arbitrum’s Security Council froze on April 21 after tracing the assets to the April 18 Kelp DAO exploit. 

The attack targeted Kelp’s LayerZero-powered bridge and allowed hackers to mint unbacked rsETH, which was later used as collateral on Aave v3 to borrow an estimated $230 million in wrapped ETH. Earlier reports tied the exploit to roughly $190 million in bad debt across DeFi lending markets.

Earlier this month, Gerstein Harrow LLP secured court approval to serve a restraining notice on Arbitrum DAO. The law firm represents families holding about $877 million in unpaid terrorism judgments against North Korea and argued the frozen ETH should be treated as DPRK-linked property because blockchain analytics firms associated the exploit with the Lazarus Group. No court has formally determined that North Korea or Lazarus carried out the attack.

Aave pushed back against that argument in an emergency filing on May 4. Its lawyers argued that stolen crypto does not become the legal property of a thief simply because it passed through attacker-controlled wallets. The company also warned that extended restrictions on the ETH could hurt affected users and interfere with recovery efforts tied to rsETH.

Court asks for clarification on ownership and creditor claims

In her latest order, Judge Garnett acknowledged the risks facing Aave users but said the legal questions raised by the dispute require deeper examination. The court asked both sides to address six specific issues, including whether New York’s shelter principle applies to the hacking transactions, how theft differs from fraud under the relevant law, and whether the hackers ever gained a recognizable ownership interest in the stolen assets.

Additional questions focused on creditor priority rights over the frozen ETH and whether a constructive trust could be used to return funds proportionally to affected users. Judge Garnett also asked whether Aave or Arbitrum can identify individual victims well enough to support a pro rata distribution plan.

Days before the latest order, Judge Garnett modified an earlier freeze to allow an Arbitrum governance proposal tied to the recovery effort to continue moving through on-chain voting. The proposal, introduced on May 12, would transfer the 30,765 ETH from Arbitrum’s Security Council wallet to an address controlled by Aave LLC.

While the judge permitted governance participants to proceed without personal liability under the restraining notice, the court preserved the plaintiffs’ legal claim over the ETH. Aave, therefore, cannot freely use the assets until the dispute is resolved.

Elsewhere in the recovery effort, Aave and Kelp DAO said Tuesday they had taken steps to restore rsETH backing. The attacker’s rsETH on Arbitrum has already been burned, while nearly $278 million worth of replacement assets is expected to be restored over the next two weeks through funds managed by the Aave Recovery Guardian multisignature wallet.

Bitcoin company Nakamoto saw a 500% quarter-on-quarter increase in Q1 revenue after completing two key strategic acquisitions in February aimed at expanding its footprint across the Bitcoin ecosystem. 

Despite recording a $238.8 million net loss, Nakamoto CEO David Bailey said Wednesday that Q1 “marked a transformational period” for the company as it closed the acquisitions of Bitcoin-focused news outlet BTC Inc. and Bitcoin-focused investment platform UTXO Management.

More than $1.1 million of Nakamoto’s revenue came from its new Bitcoin treasury and derivatives strategy, $800,000 from its media business, $500,000 from healthcare operations and $200,000 from asset management services. 

Source: Nakamoto

Nakamoto attributed the bulk of its Q1 net loss to a $107.7 million non-cash reduction linked to a pre-acquisition option and a $102.5 million mark-to-market loss on its 5,058 Bitcoin (BTC) treasury as the cryptocurrency fell 23% during the quarter. 

The Bitcoin treasury industry has faced pressure over the past year, with Bitcoin down 37% from its all-time high, causing some analysts to cast doubt on the sustainability of buy-and-hold strategies.

Most Bitcoin treasuries outside of Strategy and Metaplanet have slowed Bitcoin buying over the last 12 months, while others have eaten into their Bitcoin treasury to pay off debt.
Nakamoto has been one of the hardest-hit Bitcoin treasuries during this downturn, with company shares down over 99.2% from its all-time high.

The company didn’t buy any Bitcoin during the quarter, but sold 284 Bitcoin on March 31 to cover operational expenses.

Related: Bitcoin traders expect ‘fast move’ to $90K following CLARITY Act vote 

Nakamoto (NAKA) rose 2.7% to $0.18 in after-hours trading after Nakamoto posted its results.

Nakamoto expands from Bitcoin treasury company

Nakamoto said BTC Inc. and UTXO Management would be two of the “foundational businesses” setting the company up for long-term growth in the Bitcoin ecosystem.

The Bitcoin company said that its sixfold revenue increase came despite only a partial quarter of contribution from these businesses, as deals were finalized on Feb. 20.

Looking forward, Bailey said Nakamoto’s “focus for the remainder of 2026 is execution — scaling our operating businesses, expanding revenue opportunities, and continuing to build durable shareholder value through disciplined capital allocation and long-term conviction in Bitcoin.” 

One of those strategies involves using the company’s Bitcoin holdings as collateral to run yield-generating derivatives strategies.

Nakamoto also plans to fully wind down its healthcare business by the end of Q2, placing more focus on Bitcoin-related activities. 

Nakamoto changed its name from KindlyMD in January after forming a merger with the Utah-based healthcare provider in August.

Magazine: eToro founder timed Bitcoin top perfectly due to belief in 4-year cycles

Forward Industries, the self-described world’s largest Solana treasury company, reported a net loss of $585.6 million for the fiscal quarter ended Dec. 31, 2025. 

The loss was driven mainly by a $560.2 million loss on digital assets and a $33.0 million impairment linked to its SOL holdings.

The company still reported higher revenue. First-quarter revenue rose more than fourfold to $21.4 million from $4.6 million a year earlier, mainly due to staking revenue from its Solana treasury strategy.

Treasury sits below cost basis

Forward said it held 6,962,501 SOL on Dec. 31, 2025. It also said 6,834,505.96 SOL had been bought at a net cost of $232.08 per token, for a total cost of about $1.59 billion.

A later treasury update showed holdings had risen to 6,979,967.46 SOL by Jan. 15, 2026. With SOL recently trading near $91.24, the full position would be worth about $636.9 million, leaving a paper gap of about $983.1 million against the reported cost level.

Meanwhile, Forward said nearly all its SOL was staked. Its validator setup generated a 6.73% gross annual percentage yield before fees as of Jan. 15, while the company reported more than 112,171 SOL in staking rewards as of Dec. 31.

The staking income gives Forward recurring crypto revenue, but the price drop still shaped the quarter. Management said the accounting loss reflected the change in fair value of the company’s SOL holdings under U.S. GAAP.

Solana treasury model faces market test

Forward launched its Solana treasury strategy after a $1.65 billion PIPE backed by Galaxy Digital, Jump Crypto and Multicoin Capital. Earlier reports noted that the company moved quickly, buying 6.82 million SOL in its first week and staking the tokens.

The company has also tried to make its treasury more active. It launched fwdSOL, a liquid staking token, and began testing an automated market maker developed with Galaxy and infrastructure input from Jump Crypto.

Chairman Kyle Samani said the quarter marked the company’s first full reporting period as the largest Solana treasury firm. He said Forward was “actively executing” its strategy while building the base to compound SOL per share over time.

Forward also scheduled its fiscal second-quarter 2026 conference call for May 14. That makes the next update important for traders tracking staking rewards, SOL per share, liquidity and any shift in treasury use.

Key Highlights

• Cardano has posted an 11% gain throughout May 2026, hovering near $0.27–$0.28 with key resistance at $0.30–$0.32
• Founder Charles Hoskinson confirmed the updated CLARITY Act no longer treats ADA as a security
• Major holders controlling 1M+ ADA tokens now possess 67.47% of total circulating supply
• Derivative open interest climbed from $69M in February to $122M currently
• Technical analysts suggest a sustained move past $0.28 could target $0.34

Cardano has delivered an 11% rally since May 2026 began, propelled by two critical catalysts: favorable developments surrounding the U.S. CLARITY Act and sustained buying from institutional-sized wallets. While the upward momentum is notable, ADA continues trading within a defined range on shorter timeframes without a decisive breakout confirmation.

The digital asset currently trades between $0.27 and $0.28. Last week saw price rebound sharply from a demand area spanning $0.24 to $0.25, creating the most substantial weekly candle observed since mid-March. Immediate resistance appears at $0.28, while more formidable supply clusters exist between $0.317 and $0.329.

Downside protection remains intact within the $0.254–$0.266 band, which corresponds with the 50%–61.8% Fibonacci retracement levels. Should this critical zone fail, the next major support structure lies near $0.227–$0.233.

Cardano’s creator Charles Hoskinson recently voiced approval for the revised CLARITY Act via social media platform X, praising Senator Tim Scott for demonstrating “strong leadership” in refining the legislation. Hoskinson clarified that the updated draft explicitly recognizes ADA as a non-security, crediting Cardano’s decentralized governance framework.

Hoskinson had earlier expressed concern about the CLARITY Act’s initial language, cautioning it might categorize certain digital assets as securities. The revised legislation now accommodates decentralized networks more favorably, which directly benefits Cardano’s operational model.

Large Holders Continue Expanding Positions

Data from Santiment reveals that major ADA holders have maintained consistent accumulation patterns since December 2023. Addresses containing a minimum of 1 million ADA tokens collectively hold 25.09 billion units — representing 67.47% of available supply. This buying trend has persisted despite ADA experiencing a 71% market capitalization decline over the preceding nine months.

Technical momentum metrics suggest cautious optimism. The Relative Strength Index registers 60.28, positioned above the neutral midpoint of 50. The MACD indicator shows 0.00673 versus a signal line at 0.00444, producing a positive histogram value of 0.00229, which indicates strengthening buyer momentum.

Futures Market Shows Growing Interest

Open interest across ADA derivative contracts has expanded from $69 million in February to $122 million presently, based on Coinglass metrics. Binance exchange data reveals a long/short ratio of 2.30, indicating bullish positions outnumber bearish ones by more than two-to-one.

Nevertheless, the CLARITY Act continues facing headwinds. Banking institutions have submitted 8,000 written objections to the Senate regarding stablecoin yield components. Polymarket prediction markets currently assess the bill’s passage likelihood at 60%, representing a decline from the previous 74% probability.

Technical analyst More Crypto Online identifies near-term resistance at $0.299, with a significant extension target at $0.349. A confirmed breakout requires ADA to decisively reclaim the $0.30–$0.32 zone supported by substantial trading volume.

The elevated long/short ratio of 2.30 on Binance introduces potential downside risk — any price stagnation could trigger rapid liquidations among overleveraged long positions, potentially sparking a sharp correction.

Nakamoto reported $2.7 million in first-quarter operating revenue after completing its acquisitions of BTC Inc. and UTXO Management on Feb. 20. 

The company said the deals added media, asset management and advisory businesses to its Bitcoin-focused model.

Revenue included $1.1 million from Bitcoin treasury and derivatives activity, $0.8 million from media and information services, $0.2 million from asset management, and $0.5 million from healthcare operations. Nakamoto said the acquired businesses contributed for only part of the quarter.

Net loss reaches $238.8 million

The company posted a net loss of $238.8 million for Q1, compared with a $1.0 million loss a year earlier. Nakamoto said the result was mainly tied to non-cash and transaction-related items.

Those items included a $102.5 million mark-to-market loss from the fall in Bitcoin’s price during the quarter and a $107.7 million non-cash reduction tied to a pre-acquisition call option. The company also reported about $8.0 million in transaction and integration costs.

In addition, Nakamoto held more than 5,000 Bitcoin at the end of March, with an aggregate fair value of about $345 million. The company said Bitcoin fell from $87,519 at the end of 2025 to $68,220 on March 31, which weighed on quarterly results.

Nakamoto also sold about 284 BTC during the quarter to support working capital. Its derivatives strategy generated about 43 BTC in premium income, after which the company sold about 40 BTC.

CEO David Bailey said “the first quarter marked a transformational period” as Nakamoto shifted into a Bitcoin operating company. He added that management is focused on scaling operating businesses, expanding revenue lines and using disciplined capital allocation.

Treasury strategy faces market test

Crypto.news reported in February that Nakamoto’s all-stock BTC Inc. and UTXO Management deal was valued at more than $107 million. That report said the acquisitions were meant to add recurring revenue beyond capital markets activity.

Earlier crypto.news coverage also showed the pressure around Nakamoto’s stock. The report said NAKA had fallen about 95% from its all-time high by September 2025, after PIPE share unlocks and concern around Bitcoin treasury firms weighed on sentiment.

Nakamoto is now moving further away from its legacy healthcare business. The company said healthcare operations are being wound down and are expected to be mostly completed by the end of the second quarter.

BitGo Holdings reported $3.77 billion in first-quarter revenue, up 112.6% from $1.77 billion a year earlier. 

The result marked the crypto infrastructure firm’s first quarterly earnings update since its January public listing on the New York Stock Exchange.

The company said digital asset sales remained its main revenue driver. That unit generated about $3.66 billion in Q1, while staking revenue reached $49.4 million. Subscription and services revenue stood at $25.6 million.

Net loss widens despite revenue growth

BitGo’s net loss widened to $60.7 million in Q1, compared with a loss of $25.7 million in the same quarter last year. The company linked the wider loss to non-cash mark-to-market changes tied to its Bitcoin treasury and higher stock-based compensation after its IPO.

The firm also reported an adjusted EBITDA loss of $1.7 million, compared with a $3.9 million gain a year earlier. BitGo ended March with $186.6 million in cash and cash equivalents, plus 2,449 Bitcoin valued at about $167.1 million.

Stablecoins and derivatives add new revenue lines

BitGo said its Stablecoin-as-a-Service revenue rose 43.6% from the prior quarter to $38.2 million. The company linked the increase to client adoption, new partnerships, BitGo Mint, and related stablecoin workflows.

BitGo launched BitGo Mint in April to let institutions mint, redeem, and manage stablecoins within its platform. The product started with USD1 and SoFiUSD, both supported by BitGo’s Stablecoin-as-a-Service infrastructure.

The company also launched a derivatives offering during Q1. CFO Ed Reginelli said the product generated about $3 billion in notional trading volume during the quarter. He added that reported revenue comparisons were not directly comparable because derivatives revenue is booked on a net basis, while spot trading revenue is booked on a gross basis.

BitGo’s public-market push

Crypto.news reported in January that BitGo targeted a valuation of up to $1.96 billion before its IPO, with Goldman Sachs and Citigroup leading the offering. BitGo later priced shares at $18 and raised about $212.8 million.

Related coverage also noted that YZi Labs backed BitGo’s IPO as the custodian made its NYSE debut. The report said BitGo served more than 5,100 institutional clients across more than 100 countries at the time.

CEO Mike Belshe said “BitGo delivered strong underlying business performance in Q1 despite a challenging market environment.” He added that the company is investing in stablecoins and tokenized assets as institutional adoption continues.

European currencies have moved into a corrective phase following recent gains, while market participants focus on upcoming macroeconomic data from the UK, the eurozone and the United States. After a strong upward move, both currencies returned to their previous trading ranges, signalling a shift towards consolidation ahead of important economic releases. Additional pressure on the euro and pound is coming from partial profit-taking after the earlier weakening of the US dollar.

Investors will assess data on UK GDP, industrial production and business activity across European economies. These figures may influence expectations regarding future actions by the Bank of England and the European Central Bank. At the same time, markets continue to monitor US statistics, including retail sales and jobless claims, which could affect expectations surrounding future Federal Reserve policy.

EUR/USD

EUR/USD has entered a corrective decline after recent gains and is once again trading within its previous range. Technical analysis suggests the pair may fall towards the lower boundary of the four-week range near 1.1650–1.1670, as a bearish engulfing pattern has formed on the daily timeframe. A break below these support levels could trigger a deeper downward correction. If the pair rebounds from 1.1650, a renewed test of 1.1760–1.1780 may follow.

Key Events For EUR/USD:

• today at 10:00 (GMT+3): Spain Consumer Price Index (CPI)
• today at 13:00 (GMT+3): Thomson Reuters/Ipsos Primary Consumer Sentiment Index (PCSI) in Germany
• today at 15:30 (GMT+3): US retail sales volume

GBP/USD

GBP/USD is also correcting after its previous rally and remains within a range-bound structure. A move below yesterday’s low at 1.3490 could lead to a decline towards the 1.3400–1.3440 area. The bearish correction scenario remains valid while the pair stays below 1.3550.

Key Events For GBP/USD:

• today at 09:00 (GMT+3): UK GDP
• today at 09:00 (GMT+3): UK manufacturing production
• today at 15:30 (GMT+3): US initial jobless claims

Market attention remains focused on UK economic data, including industrial production, construction output and investment activity. At the same time, the pair will continue to be influenced by US statistics and the dollar’s reaction to macroeconomic releases. If US data confirms signs of economic slowing, the dollar may come under renewed pressure, allowing GBP/USD to resume its upward movement. However, stronger US figures could intensify the current correction and keep the pair within its established range.

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)Major shifts toward a digitized financial architecture are edging closer to mainstream adoption, according to a forthcoming Moody’s Ratings assessment. In conversations with U.S. banks and other market intermediaries, the credit-ratings firm found a common view: tokenization will unfold in two stages—an initial slow phase that gradually accelerates into a tipping point where broader asset classes, participants, and use cases come on chain.

)Moody’s quotes industry leaders as saying broad asset tokenization is likely, but the timing and sequencing remain the big unknowns. In Moody’s words, “Across our conversations, industry leaders generally believed that broad asset tokenization will happen; the main uncertainties center around how quickly and in what sequence.”

)The report notes that near term progress is expected to be measured and focused on simpler segments—funds and short-term instruments—running in parallel with traditional processes. Yet, a growing cadre of market participants anticipates a point where adoption accelerates rapidly as infrastructure matures and more use cases prove viable, Moody’s said.

Tokenization — the on-chain representation of real-world assets or financial instruments — has long been cited as a foundational driver of institutional interest in blockchain and crypto. Moody’s underscores that, while the current activity remains modest, large banks and market intermediaries are actively building out capabilities to position themselves for a potential surge in demand. The report aligns with projections from analysts who see tokenization as a structural shift rather than a one-off trend.

Key takeaways

• Moody’s expects tokenization to proceed in a two-phase pattern: a gradual near-term ramp-up followed by a more rapid expansion as assets, markets, and participants come on chain.
• The market for tokenized real-world assets has grown rapidly, rising more than 420% since the start of 2025 and reaching about $31.6 billion, according to RWA.xyz.
• Institutional preparation is underway: virtually all large banks and major market intermediaries have created dedicated digital-asset teams and participate in pilots to test new infrastructure.
• Moody’s identifies three potential trajectories for the financial system based on tokenization pace: steady growth, constrained growth, or rapid disruption if tokenization accelerates, with meaningful implications for incumbents.

Momentum, pilots, and the coming tipping point

Despite the current quiet phase, the cross-currents pushing tokenization forward are evident. Moody’s highlights ongoing industry pilots aimed at validating new settlement rails, custody, and interoperability across networks. These efforts are described as strategic, with incumbents aiming to be ready to serve clients who demand digital asset and digital money capabilities if demand expands rapidly.

The debate about timing sits alongside other macro- and regulatory considerations. In parallel, industry observers point to a broader capital allocation shift toward tokenized assets as a potential source of efficiency improvements and transparency in settlement and record-keeping. The adoption curve remains a focal point for investors watching how quickly tokenization can scale beyond niche use cases toward mainstream financial products.

Three possible futures for a tokenized financial system

Moody’s lays out a trio of potential outcomes, tied to how quickly tokenization captures momentum. The base case, described as steady growth, envisions tokenization scaling in select assets such as stablecoins and tokenized deposits, while core banking and asset-management ecosystems retain influence. This is the scenario Moody’s views as most likely.

In a low-growth path, regulatory friction, unresolved legal questions, and tepid end-user demand could restrict tokenization to narrow uses, leaving the broader financial system largely intact and tokenization gains minimal.

The most disruptive scenario imagines rapid growth, with widespread on-chain settlement enabled by tokenized assets and digital money. In such a world, incumbents like payment processors and certain traditional interfaces could lose revenue tied to settlement delays and siloed infrastructures, while deposits at smaller banks might come under pressure as flows rechannel onto digital rails.

Industry voices outside Moody’s echo the sense that tokenization could reshape payments and settlement in meaningful ways. Macro investor Jordi Visser has suggested the tokenization reality could begin this year, highlighting the potential of tokenized assets to power more autonomous, AI-assisted payment flows. Meanwhile, international bodies have urged caution: the IMF has warned that tokenization can reduce friction and increase transparency, but also acknowledges the new risks it introduces for financial stability.

On the market-building side, demand signals are starting to coalesce around real-world assets and cross-border rails. The tokenization story intersects with the broader growth narrative around digital assets, with institutional interest sustained by pilots and strategic asset-token programs. Morgan Stanley’s ongoing crypto unit expansion, including leadership appointments and ETF/digital wallet initiatives announced earlier this year, illustrates how traditional banks are aligning with the tokenization narrative to capture a potential first-mover advantage in a more digitized financial system.

ARK Invest has positioned tokenized assets as a catalyst for a much larger digital assets market, with projections pointing toward a multi-trillion-dollar expansion by the end of the decade. While such forecasts are ambitious, the underlying premise remains: tokenization could unlock efficiencies and new liquidity pools that were previously inaccessible to traditional assets.

In regulatory and risk terms, observers will be watching how authorities balance innovation with stability. The IMF’s assessment underscores both opportunity and risk: tokenization can streamline finance, but it also demands robust oversight to avoid destabilizing side effects as on-chain markets scale.

What this means for investors and market participants

For investors and builders, the Moody’s report offers a structured view of the ecosystem dynamics shaping tokenization’s path. The near-term emphasis on funds and short-term instruments suggests early-stage opportunities exist in familiar, regulated investment vehicles that can bridge traditional finance and digital rails. Yet the longer-term potential hinges on the maturation of infrastructure—custody, interoperability, and settlement—alongside clear regulatory guardrails that unlock cross-border applicability and consumer access.

As institutions continue to assemble digital-asset teams and participate in pilots, market participants should monitor the following developments:

• Speed of expansion beyond niche asset classes into broader securities, funds, and possibly tokenized deposits.
• The pace at which stablecoins and central-bank digital money concepts gain credibility as reliable on-chain settlement options.
• Regulatory clarity and risk management frameworks that enable cross-border flows without compromising financial stability.
• Evidence from pilots on interoperability and settlement efficiency that could translate into measurable cost savings and improved liquidity.

For readers tracking the arc of this transition, the next phases will hinge on real-world deployments and the outcomes of ongoing pilots across major banks and asset managers. The Morgan Stanley crypto unit developments, public-facing product initiatives, and the evolving stance of international bodies will be key indicators of whether tokenization moves from aspiration to widespread practice in the near term.

Further coverage from Moody’s, along with continued industry pilots and regulatory updates, will illuminate how quickly the tipping point may arrive and which segments stand to gain or recede as tokenization reshapes the financial landscape.

Readers should stay tuned for updates on grand-scale pilots, cross-border settlement experiments, and any regulatory milestones that could accelerate or slow the tokenization trajectory.