Crypto World
DeFi User Loses $50M in Crypto Swap Gone Wrong
A crypto user has lost millions during a crypto swap on the decentralized finance protocol Aave, with a Maximal Extractable Value, or MEV, bot also front-running the transaction to make almost $10 million.
A recently funded wallet from Binance containing $50.4 million USDt (USDT) executed a swap via decentralized exchange aggregator CoW Protocol and the SushiSwap DEX on Thursday, aiming to convert the full amount into the Aave (AAVE) token.
However, the wallet only received 327 AAVE tokens valued at approximately $36,000, according to Etherscan.
The result was an almost total loss as the user paid around $154,000 per AAVE, compared to its market price of around $114.
Adding to the loss was a MEV bot that did a “sandwich attack” on the user. MEV bots scan pending blockchain transactions, and in this case, targeted the large incoming AAVE order to inflate the price of the token ahead of the order to profit.
The bot front-ran the transaction by flash-borrowing $29 million wrapped Ether (ETH) tokens from Morpho to drive up the price of AAVE ahead of the user’s transaction with a purchase on Bancor. It then sold the inflated tokens on SushiSwap for a $9.9 million profit.
User ignored slippage warnings: Aave
Automated market makers, such as SushiSwap, use an automated pricing formula that adjusts slippage, the intended and actual price of a trade, depending on the size of the trading pool and impending trades.
Aave founder Stani Kulechov posted to X that the protocol interface warned the user about the “extraordinary slippage” due to the “unusually large size of the single order.”
“The user confirmed the warning on their mobile device and proceeded with the swap, accepting the high slippage, which ultimately resulted in receiving only 324 AAVE in return,” he said.
Related: Vitalik Buterin proposes solutions for Ethereum’s MEV problem
CoW DAO said on X that “despite clear warnings that showed the user they would lose nearly all of the value of their transaction, and despite needing to explicitly opt into the trade after seeing the warning, the user chose to proceed with their swap.”
“No DEX, DEX aggregator, public liquidity pool, or private liquidity pool (or combination thereof) would have been able to fill this trade at anywhere near a reasonable price.”
CoW DAO said that trades like this “show that DeFi UX still isn’t where it needs to be to protect all users,” adding that it would refund any protocol fees associated with the transaction.
Aave’s Kulechov said it sympathized with the user and would attempt to contact them to return $600,000 in fees it collected from the transaction.
“The key takeaway is that while DeFi should remain open and permissionless, allowing users to perform transactions freely, there are additional guardrails the industry can build to better protect users.”
Magazine: All 21 million Bitcoin is at risk from quantum computers
Another Friday has rolled around again, and that means more crypto options contracts are expiring as spot markets post rare gains.
Around 27,000 Bitcoin options contracts will expire on Friday, Mar. 13, with a notional value of roughly $1.9 billion. This event is smaller than usual, so it is unlikely to affect spot markets.
Crypto prices have been flat for most of this week, picking up a little on Friday, with total capitalization gaining $150 billion since Monday, but volatility and volumes have dwindled.
Bitcoin Options Expiry
This week’s batch of Bitcoin options contracts has a put/call ratio of 0.97, meaning that the longs and the shorts are relatively evenly matched. Max pain is around $69,000, according to Coinglass, which is pretty close to current spot prices, so many could be in the money on expiry.
Open interest (OI), or the value or number of Bitcoin options contracts yet to expire, remains highest at the $60,000 strike price on Deribit, with $1.7 billion in bearish bets. Total BTC options OI across all exchanges has been climbing this month, reaching $45.5 billion.
Crypto derivatives provider Greeks Live observed the market rebound, noting that Bitcoin was firmly holding above the $70,000 psychological threshold and is “now poised to challenge $75,000.”
Beyond March, the flat forward implied volatility curve implies no significant term structure premium, suggesting balanced risk pricing for longer-dated options amid stable crypto sentiment, noted Greeks Live this week.
🚨 Options Expiry Alert | 08:00 UTC Friday
~$2.27B in crypto options are set to expire on Deribit.$BTC: 26,889 contracts | $1.89B notional | P/C: 0.97
OI stacked at $55K-$60K puts vs $75K-$80K calls, spot at $70.2K sitting right in no man’s land.
Max Pain: $69K$ETH: 185,268… pic.twitter.com/H9zji7lzbW— Deribit (@DeribitOfficial) March 12, 2026
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In addition to today’s batch of Bitcoin options, around 185,000 Ethereum contracts are also expiring, with a notional value of $382 million, max pain at $2,000, and a put/call ratio of 1.2. Total ETH options OI across all exchanges is around $7.9 billion.
This brings the total notional value of crypto options expiries to around $2.3 billion.
Spot Market Outlook
Spot markets have ticked up on Friday morning in Asia, with total capitalization reaching $2.5 trillion again, its highest level for a week.
Bitcoin came just short of $72,000 in early trading but again found resistance there and started to retreat at the time of writing.
Ether prices were faring better with a 4% gain, sending them just above $2,100.
The altcoins were also mostly in the green today with larger moves for Solana, Hyperliquid, Avalanche, and Sui. Meanwhile, Pi Network, PI, skyrocketed 33% on the day to $0.29 following a listing on Kraken.
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Donald Trump-linked meme coin Official Trump posted double-digit gains on Friday after the team announced a second exclusive event where top holders will get the chance to attend a luncheon with the president at Mar-a-Lago.
Summary
- The Official Trump meme coin rose after the project announced a second exclusive Mar-a-Lago luncheon for the top 297 token holders.
- Eligibility is based on time-weighted holdings between March 12 and April 10, with the top 29 holders qualifying for a private reception with Donald Trump.
According to the official announcement, the top 297 Official Trump (TRUMP) holders will get a chance to attend the luncheon with the United States President at his Mar-a-Lago residence in Florida, where he will appear as the keynote speaker.
Eligibility, however, would depend on participants’ time-weighted holdings between Mar. 12 and April 10, and attendees would be required to pass a background check. Among the group, the top 29 holders will be allowed a private reception with Trump.
While the meme coin’s website says Trump will attend the event, a White House official told Politico that the luncheon would be taking place alongside the White House Correspondents’ Dinner.
Right after the announcement, the meme coin rallied over 11% and was up over 8% in the past 24 hours as of last check. The meme coin has remained in a downtrend since its launch in early 2025.
Despite efforts from the team to revive interest through new ecosystem initiatives, investor enthusiasm has remained limited. Last month, the project team outlined plans for yield and liquidity programs through Kamino vaults, new market makers, and a fund to back ecosystem projects, but that did not translate into any meaningful recovery for the meme coin, which remains down over 95% from its all-time high.
This is the second exclusive event hosted by the project following a similar gathering held in May. At the time, Tron founder Justin Sun emerged as the top TRUMP holder among the attendees.
However, the event became a source of controversy, with critics accusing Trump of using his position as president for personal financial gain. Rep. Jamie Raskin, the ranking Democrat on the House Judiciary Committee, launched a probe into the dinner over how the guest list was compiled and whether foreign money may have flowed into the meme coin purchases.
XRP pushed higher after breaking a months-long descending trendline, with a surge in trading volume confirming renewed momentum above the $1.39 resistance zone.
News Background
- XRP has struggled to sustain rallies through early 2026 as sellers repeatedly defended a descending resistance line formed by lower highs since January.
- The latest move marks the first decisive break above that structure, shifting short-term sentiment as traders reassess whether the corrective phase may be ending.
- Fund flows offered a mixed backdrop. U.S.-listed XRP ETFs recorded roughly $3.9 million in outflows during the session, extending a short streak of redemptions even as technical momentum improved.
- Meanwhile, activity on the XRP Ledger continued to rise. Daily transactions recently climbed to around 2.7 million, among the highest levels in recent months, partly driven by projects focused on tokenizing real-world assets.
Price Action Summary
- XRP climbed from about $1.37 to $1.41 during the 24-hour session
- Price cleared the $1.39 resistance zone that capped rallies earlier this year
- Trading volume surged to roughly 205 million tokens, more than triple the recent average
- The token traded within a roughly $0.057 intraday range during the breakout
Technical Analysis
- The key technical development was XRP’s break above the descending trendline that had defined its downtrend since early 2026.
- The move came with a sharp expansion in trading volume, suggesting the breakout reflected active participation rather than thin liquidity.
- After the breakout, price briefly tested the $1.41 area before consolidating slightly lower.
- On shorter timeframes, XRP held above the $1.40 zone, forming a sequence of higher lows that indicates buyers are attempting to establish the former resistance area as support.
- If this structure holds, it would confirm a shift from the previous pattern of lower highs that dominated the past several months.
What traders say is next?
- Traders are now watching whether XRP can hold above the $1.39–$1.40 area.
- Maintaining that level would confirm the trendline breakout and could open the door for a move toward the next resistance zones around $1.44 and $1.50.
- A failure to hold above the breakout level, however, could pull XRP back toward the $1.34–$1.37 support band and signal the move was a short-term liquidity sweep rather than the start of a sustained trend reversal.
Democratic lawmakers are intensifying oversight as the Department of Justice weighs a probe into Binance’s handling of Iran-related sanctions. In a joint statement, Senators Chris Van Hollen, Elizabeth Warren and Ruben Gallego said they would oversee any DOJ inquiry to ensure the agency conducts a serious review and holds the exchange accountable for potential sanctions violations. The move follows a Wall Street Journal report that cited people familiar with the matter, indicating investigators are examining whether Iran-based entities used Binance to evade sanctions. The disclosure arrives amid broader questions about how crypto platforms enforce U.S. sanctions and how regulators scrutinize exchanges’ risk controls and compliance programs.
The WSJ report, published on a Wednesday, highlighted alleged gaps in verification and monitoring that could have allowed the movement of funds tied to sanctioned actors. In their response, the senators framed Binance as a firm with a documented tendency to place profits ahead of the law and warned that ongoing scrutiny could reveal new sanction-law breaches or reckless assistance to sanctioned networks tied to Iran.
Binance did not respond to a request for comment in this coverage window. A company spokesperson previously told Cointelegraph that the firm was “not aware of any investigations,” adding that Binance is “collaborating with regulators and law enforcement to investigate the facts.”
Last month, the legislators pressed other U.S. authorities—Treasury Secretary Janet Yellen’s successor and the U.S. Attorney General—to probe Binance over concerns about moving Iran-linked funds. The push underscores a concrete shift from high-profile rhetoric toward formal oversight and potential enforcement actions.
Key takeaways
- The Department of Justice is reportedly examining Binance for possible Iran sanctions evasion, per a Wall Street Journal report citing sources familiar with the matter.
- A bipartisan group of U.S. senators vowed to conduct oversight to ensure a serious DOJ investigation and accountability for any wrongdoing by the exchange.
- Binance has publicly stated it is not aware of investigations, while indicating it remains open to regulator and law-enforcement cooperation.
- Binance’s legal history looms over the current scrutiny, including a November 2023 settlement in which the firm pleaded guilty to AML and sanctions violations and agreed to a substantial fine and U.S. oversight.
- Associated twists include a defamation suit Binance filed against the Wall Street Journal over related reporting and past leadership actions by Changpeng Zhao, including a high-profile money-laundering case and a later pardon event.
Market context: The episode sits within a broader climate of tightening regulatory scrutiny over crypto exchanges, with sanctions enforcement and U.S. enforcement actions shaping how platforms implement compliance controls, monitor cross-border flows, and cooperate with authorities. The events also intersect with ongoing debates about how aggressively financial regulators should police crypto-related activities versus fostering innovation.
Why it matters
The unfolding developments are significant for investors, users and builders across the crypto landscape. For users, the episode reinforces the importance of robust know-your-customer and sanctions-screening processes on exchanges, especially those operating with global liquidity pools and complex counterparties. For the market, the alleged Iran-related activity intersects with sanctions enforcement risk—a factor that can influence liquidity, exchange flows and the perceived regulatory exposure of major platforms.
From a policy perspective, the bipartisan call for oversight signals a willingness in Congress to elevate sanction-compliance risk as a central governance issue for crypto businesses. Regulators’ willingness to scrutinize and potentially sanction exchanges for lax controls could accelerate investment in compliance tooling, internal controls, and audit regimes. For Binance, the situation underscores the reputational and legal headwinds that can follow high-stakes enforcement actions, even as the firm continues to court regulatory clarity and operational resilience under scrutiny.
What to watch next
- DOJ conclusions or disclosures stemming from any formal investigation into Binance’s sanctions compliance (dates pending).
- Statements or hearings from the Senate oversight group outlining findings, scope, or requested remedies related to Binance’s conduct.
- Any regulatory actions or consent orders resulting from broader sanctions-enforcement activities involving major crypto exchanges.
- Binance’s public responses or new compliance commitments in response to renewed inquiries and potential legal actions.
- Developments in related legal proceedings, including Binance’s defamation suit against the Wall Street Journal and any outcomes related to prior AML/sanctions settlements.
Sources & verification
- Joint statement by Senators Van Hollen, Warren and Gallego on DOJ investigation into Binance compliance with U.S. sanctions law.
- Wall Street Journal report detailing the DOJ’s potential probe into Iran’s use of Binance to evade sanctions.
- Binance’s public remarks to Cointelegraph about not being aware of investigations and willingness to cooperate with regulators.
- Binance’s defamation suit against the Wall Street Journal over reporting regarding Iran-sanctions-related financing.
Regulatory scrutiny and Binance’s Iran sanctions probe
Regulatory attention on Malta-based, global crypto trading platforms has intensified, and Binance’s case sits squarely at the intersection of sanctions enforcement and exchange governance. The sequence of events paints a picture of a landscape where regulators are elevating sanctions-compliance into a central risk category for platform operators. The Wall Street Journal’s reporting framed the DOJ inquiry as a potential line of inquiry into whether Binance enabled or facilitated transactions linked to Iran-linked entities in breach of U.S. sanctions regimes, including the long-standing restrictions designed to curb financing for designated groups and programs.
The senators’ response underscores the political dimension of the issue. By pledging to oversee the DOJ’s handling of the matter, they are signaling that oversight will extend beyond a single agency or incident, potentially prompting a broader review of Binance’s internal controls, transaction-monitoring capabilities, and cooperation with law enforcement. The public tension between scrutiny and corporate defense is a familiar rhythm in the crypto regulatory era: as investigations surface, exchanges lean on assurances of compliance and collaboration while lawmakers seek concrete accountability measures.
Binance’s public position has consistently emphasized cooperation with regulators and law enforcement, even as it navigates the fallout from earlier enforcement actions. The firm has faced substantial consequences in the past, including a November 2023 settlement that required a record penalty and ongoing oversight to resolve U.S. AML and sanctions concerns. The current inquiry adds another layer of uncertainty around the company’s ability to weather intensified enforcement pressures while maintaining global liquidity and user access. The defamation suit against the Wall Street Journal adds a legal counterpoint to the narrative, illustrating how market participants increasingly engage in strategic communications as investigations unfold.
Beyond Binance, the broader regulatory environment continues to evolve. The developments reflect ongoing efforts to tighten sanctions enforcement, improve compliance in cross-border crypto flows, and align exchange practices with U.S. national security objectives. For market participants, the emphasis on robust due diligence, transparent reporting, and rigorous transaction monitoring could reshape industry norms and drive investment in compliance-focused technologies and procedures. The balance between enabling legitimate crypto activity and enforcing sanctions remains delicate, with outcomes likely to influence how exchanges structure risk controls, governance, and regulatory engagement in the months ahead.
Pi Network’s PI token led the market higher on Friday, according to CoinGecko data, rising 30% during Asia’s morning hours, after crypto exchange Kraken said it would list the asset.
Pi Network is a mobile-first cryptocurrency project that replaces traditional proof-of-work mining with a phone-based trust graph, where users tap a mobile app daily to “mine” tokens and form identity-verified security circles that feed into a consensus system derived from the Stellar protocol.
The project launched its externally connected mainnet in February 2025 after operating for years in a closed ecosystem, saying it had about 19 million KYC-verified users and roughly 10 million accounts migrated to the chain.
Pi Network is currently listed on OKX, Gate, and Bitget, as well as some smaller exchanges.
In February 2025, Bybit CEO Ben Zhou publicly refused to list Pi Network’s token and called the project a scam, citing a 2023 warning from Chinese police alleging that Pi Network targeted elderly users, collected personal information, and caused some victims to lose pension savings.
A group of Democratic senators say they will oversee a reported Justice Department investigation into possible Iran-related sanctions violations on the crypto exchange Binance.
Senators Chris Van Hollen, Elizabeth Warren and Ruben Gallego said in a joint statement on Thursday that they “will conduct oversight to ensure the Department of Justice conducts a serious investigation into Binance and holds the company accountable for any wrongdoing.”
The Wall Street Journal reported on Wednesday, citing people familiar with the matter, that the Justice Department was investigating Iran’s possible use of Binance to evade sanctions.
“Binance has an established track record of putting profits ahead of the law,” the senators said, adding that the report raised “serious concerns that the firm is again violating US sanctions laws, recklessly helping bankroll the activities of terrorist groups connected to Iran.”
Binance did not immediately respond to a request for comment, but a company spokesperson previously told Cointelegraph it was “not aware of any investigations. But as always, we are collaborating with regulators and law enforcement to investigate the facts.”
The senators said that last month, they asked US Treasury Secretary Scott Bessent and US Attorney General Pam Bondi to investigate Binance over concerns about the movement of Iran-linked funds.
Binance filed defamation suit against WSJ
Binance sued the Wall Street Journal on Wednesday, claiming a report it published on Feb. 23 was defamatory.
The report said that Binance fired staff who flagged $1 billion worth of crypto tied to sanctioned Iranian entities, including Yemen’s Houthis and the Islamic Revolutionary Guard Corps.
Binance denied that it had stopped any investigation and said the Wall Street Journal’s report was false.
Related: Binance claims ‘full and complete legal victory‘ in Alabama court
Binance had pleaded guilty in November 2023 to violating US anti-money-laundering and sanctions laws, paying a record $4.3 billion fine and agreeing to operate under US oversight.
Former Binance CEO Changpeng Zhao pleaded guilty to a money laundering-related charge and was sentenced to four months in jail in 2024.
US President Donald Trump pardoned Zhao in October.
Magazine: Clarity Act risks repeat of Europe’s mistakes, crypto lawyer warns
Bitcoin held firm near $71,000 on Friday, extending a quiet stretch of consolidation that has kept the crypto market largely unmoved by turbulence in global equities.
BTC traded around $71,300 in early trading, up roughly 2.6% over the past 24 hours and slightly higher on the week. Ether changed hands near $2,117, gaining about 4.6% on the day, while Solana’s SOL climbed more than 5%. XRP rose to $1.41 and BNB hovered around $661, both posting modest daily gains.
The broader crypto market capitalization sat near $2.4 trillion for a third straight session, reflecting a market that has been stuck in a tight band since the sharp sell-off in late January.
That stability stands out against a much shakier backdrop in traditional markets. Asian stocks slipped earlier Friday and the S&P 500 has struggled this week as oil prices surged toward $100 per barrel amid geopolitical tensions in the Middle East and supply disruptions.
Yet crypto markets appear to be largely ignoring those pressures for now.
“Bitcoin is feeling more confident at levels near $70K, settling at the upper limit of the consolidation range of the last four weeks,” said Alex Kuptsikevich, chief market analyst at FxPro. “It is difficult for Bitcoin to grow amid a strengthening dollar and falling stock indices.”
“But the very fact that it is holding steady against this backdrop supports hopes for a fundamental change in sentiment compared to previous months, when almost any news was a reason to sell BTC.”
Data from analytics firm Glassnode suggests the current phase is more stabilization than breakout. The firm noted that while some on-chain metrics are improving, a sustained bull run would likely require a fresh influx of capital rather than continued rotation among existing holders.
The relative calm may also reflect a broader shift in how institutions view the asset.
“Indeed, Bitcoin is in its transition phase as a financial tool,” said Dom Harz, co-founder of BOB. “Institutions want more than exposure to Bitcoin and are increasingly looking for the infrastructure designed to unlock Bitcoin’s financial utility.”
Harz pointed to the growing push toward Bitcoin-native financial infrastructure — often referred to as Bitcoin DeFi — that allows institutions to build lending, payments and yield products directly on top of Bitcoin’s security layer.
“This Bitcoin-native financial architecture is at the centre of Bitcoin DeFi,” Harz said. “As the macro backdrop continues to challenge legacy asset classes, the advantages of a financial system built on Bitcoin DeFi become clear.”
For now, price action suggests traders remain comfortable keeping bitcoin inside its recent $60,000–$72,000 corridor. Until a clear macro catalyst or wave of new capital arrives, the market appears content to consolidate near the upper end of that range rather than chase a breakout.
The team behind the Solana-based memecoin launch platform Bonk.fun warned users to avoid its website after hackers reportedly compromised the domain and deployed a malicious wallet drainer, with at least one trader claiming losses of $273,000 after connecting their wallet.
Summary
- The Bonk.fun domain was reportedly compromised and used to deploy a malicious wallet drainer.
- The team says only users who signed a fake approval message after the breach were affected.
- Some users reported significant losses, including one trader claiming a $273,000 wallet drain.
Bonk.fun domain hack triggers wallet drainer
In a statement posted on social media, the Bonk.fun account said a “malicious actor” had taken control of the platform’s domain and urged users not to interact with the website until the issue is resolved.
“A malicious actor has compromised the BONKfun domain, do not interact with the website until we have secured everything,” the platform said.
Tom, an operator associated with Bonk.fun, also warned that hackers had hijacked a team account and placed a crypto drainer directly on the site’s domain. The attacker allegedly used the compromised domain to prompt users to sign a fraudulent approval message disguised as a terms-of-service request.
According to Tom, only users who signed the fake message after the compromise were affected.
“If you connected to Bonk.fun in the past you’re not affected,” Tom wrote, adding that users trading Bonk.fun tokens through external trading terminals were also safe.
He said the team quickly detected the incident and spread warnings across social media, which helped limit losses.
Despite the response, some users reported significant losses. One user claimed on X that they lost their entire wallet after connecting to the site.
“I just got drained for $273,000 on Bonk.fun,” the user wrote, adding that their wallet was left “bone dry” after connecting.
The team said it is working to secure the domain and investigate the incident, stressing that protecting users remains its top priority.
The attack highlights a recurring security risk in the crypto sector, where compromised websites are often used to trick users into signing malicious transactions that grant attackers access to their funds.
Security researchers at Ledger have discovered a major flaw in some Android smartphone chips that lets an attacker siphon encrypted user data like passwords and private keys in a matter of seconds using just a USB connection.
Summary
- Ledger’s Donjon security team discovered a vulnerability in MediaTek and Trustonic TEE chips that could allow attackers to extract encrypted data from Android phones in under 45 seconds.
- The exploit bypasses the secure boot chain before Android loads, allowing attackers to recover the device PIN, decrypt storage and extract seed phrases from popular wallets.
The vulnerability was first spotted in January by Ledger’s internal security research team, Donjon, Ledger Chief Technology Officer Charles Guillemet wrote in a recent X post.
According to Guillemet, the vulnerability affected smartphones powered by MediaTek and Trustonic’s TEE processors.
MediaTek has since issued a security patch to fix the issue; users who have not installed the latest security updates on their devices may still remain at risk.
White hat hackers were able to penetrate a smartphone from manufacturer Nothing, notably the company’s CMF 1 phone, in under 45 seconds using a laptop.
“Without ever even booting into Android, the exploit automatically recovered the phone’s PIN, decrypted its storage, and extracted the seed phrases from the most popular software wallets,” Guillemet said.
This puts software wallets like Trust Wallet, Base, Kraken Wallet, Rabby, Tangem’s mobile wallet, and Phantom at risk, as the seed phrases and other sensitive credentials are stored locally on the device.
In their report, researchers noted that the vulnerability allowed attackers with physical access to bypass the phone’s security protections through the secure boot chain, which is a core startup process that runs at the highest privilege level before the operating system loads. Subsequently, the attacker can recover the device’s PIN, decrypt its storage, and extract the information.
“This has the potential to affect millions of Android smartphones,” Guillemet added.
Estimates suggest nearly 36 million people manage digital assets on their smartphones, which means that if attackers manage to exploit a vulnerability, it could put a large number of wallets at risk.
Guillemet advised using devices with dedicated secure elements that are built for key protection and can safeguard sensitive data even under physical attack.
The Ledger team also detailed a separate attack it tested on MediaTek Dimensity 7300 processors (MT6878) in December, where the team used electromagnetic fault injection to disrupt the chip’s boot process. It allowed them to bypass security checks and ultimately gain full control over the smartphone at the highest privilege level.
As covered by crypto.news on several occasions, crypto users have been targeted across multiple platforms, including iOS, macOS, and Windows.
While Android devices are often easier to compromise due to Google’s more open ecosystem and flexible app distribution model, Apple’s iOS devices have also developed unique attack vectors that target users through malicious frameworks embedded inside otherwise legitimate apps.
For instance, last year, security researchers discovered a malicious app that infiltrated both iOS and Android devices by requesting file access and subsequently scanning device storage to extract wallet data. Although not as technically severe in nature as hardware-level exploits, the scheme still managed to steal more than $1.8 million in cryptocurrency.
Around the same time, Kaspersky flagged a malware campaign that spread through malicious software development kits embedded in seemingly harmless apps.
There is a growing risk that a looming crisis in the private credit market, fueled by rising redemptions and defaults, could spill over into Bitcoin (BTC) and crypto markets, according to analysts.
Key takeaways:
-
The $2 trillion private credit sector faces a crisis from defaults, redemptions, and limited oversight.
-
A liquidity crunch may force investors to sell readily accessible assets, like Bitcoin, first.
-
Historical crises show Fed interventions often lead to strong Bitcoin price rallies as a hedge against money supply expansion.
The private credit ticking time bomb?
The private credit sector, the non-bank lending sector that has grown to over $2 trillion from $500 billion in the past five years, is flashing warning signs of an impending crisis.
Fueled by low rates and investor hunger for high yields, it now rivals traditional banks but lacks the same oversight.
Related: Will Bitcoin crash if oil prices hit $100 per barrel?
In 2024, the International Monetary Fund (IMF) warned that the private credit sector “warranted closer watch,” adding:
“Rapid growth of this opaque and highly interconnected segment of the financial system could heighten financial vulnerabilities given its limited oversight.”
Now, the private credit market shows cracks that threaten triggering a financial crisis.
BlackRock, the world’s largest asset manager, with over $10 trillion under management, limited withdrawals from its $26 billion flagship credit funds, reported Bloomberg.
Blue Owl Capital halted redemptions amid software sector woes from AI disruptions, while UBS warns of default rates hitting 15% in worst-case scenarios.
On Wednesday, Reuters reported that JPMorgan restricted lending to its private credit funds while Morgan Stanley and Cliffwater Private Credit Fund joined the growing list of asset managers under distress.
”Bond King” Jeffrey Gundlach, founder at Double Line said that the private credit fund of funds in 2026 closely mirrors CDO-squared in early 2007, before the 2008 global financial crisis.
“Financial repression is incoming,” market analyst MartyParty said in an X post on Thursday, attributing the problems to the sector’s rapid growth in the face of ‘increasing scrutiny’ over liquidity during periods of investor outflows.
“Either the Fed injects liquidity, or we go into crisis.”
Global conflict and macroeconomic uncertainties exacerbate this, potentially delaying Fed easing while putting pressure on equities and the Bitcoin price.
As Cointelegraph reported, futures markets are pricing less than a 1% chance of Fed rate cuts at the March 18 FOMC meeting.
Liquidity crunch could crash Bitcoin price, at first
While the withdrawal limitations directly affect the private credit market, the implications extend far beyond traditional finance.
Withdrawal limits are a “big deal for crypto,” crypto investor Paul Barron said in a recent post on X, adding:
“When giants like Blackrock lock the gates on private funds, it signals a ‘liquidity crunch.’ Investors stuck in private credit might sell their ‘liquid’ assets (Bitcoin/ETH) to raise cash elsewhere.”
This means that if investors cannot access funds from illiquid private credit portfolios, they may turn to assets that can be sold instantly in public markets.
Bitcoin, which trades 24/7, often serves as the first pressure valve. Its price dropped sharply by 50% in March 2020 as the market priced in the COVID-19 crisis.
But this usually forces government interventions: emergency liquidity injections and rate cuts, aimed at averting systemic collapse.
In 2020, Fed actions post-crash fueled Bitcoin’s surge to its previous all-time high of $69,000 by year-end from $4,400, a 1,400% rally.
Similarly, during the March 2023 banking turmoil, Bitcoin initially sold off on contagion fears, then rallied more than 200% as markets priced in a Fed pause on rate hikes.
This suggests that a private credit breakdown might ultimately result in the further expansion of the money supply, sending BTC price to new highs.
As Cointelegraph reported, BitMEX co-founder Arthur Hayes will wait untill until the Fed loosens its monetary policy before buying any more Bitcoin. BTC price will then rise to $250,000, he predicted.
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.
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