Crypto World
FDIC, OCC, and NCUA Propose New AML/CFT Rule Updates for Banks and Credit Unions
TLDR:
- FDIC, OCC, and NCUA jointly propose updated AML/CFT rules aligned with FinCEN’s new framework.
- Banks must adopt risk-based programs, focusing resources on higher-risk customers and activities.
- Only systemic or significant compliance failures will trigger formal AML/CFT enforcement actions.
- A new FinCEN consultation framework will strengthen coordination across federal banking regulators.
Federal banking regulators have jointly proposed a rule to update anti-money laundering and countering the financing of terrorism requirements.
The FDIC, OCC, and NCUA are seeking public comment on amendments to AML/CFT compliance programs. These changes align with updates proposed by the Treasury’s Financial Crimes Enforcement Network.
The rule stems from the Anti-Money Laundering Act of 2020, which directed agencies to modernize the existing regulatory framework.
Risk-Based Approach Takes Center Stage
The proposed rule places greater focus on risk-based AML/CFT programs for supervised institutions. Banks would be required to direct more resources toward higher-risk customers and activities.
Lower-risk customers and activities would receive proportionally less regulatory attention under the new framework.
The FDIC shared this update directly, stating:
“The FDIC Board also approved a proposed rule to update requirements related to anti-money laundering and countering the financing of terrorism.”
This approach encourages institutions to align compliance efforts with their actual risk profiles. Rather than applying uniform scrutiny across all customers, banks must assess and prioritize accordingly. The goal is to produce more effective outcomes for financial institutions and law enforcement alike.
The proposed rule also requires that a bank’s designated AML/CFT compliance officer be located in the United States.
That officer must remain accessible to regulators at all times. This provision adds a layer of accountability to institutional compliance structures.
Clearer Enforcement Standards and FinCEN Coordination
The proposed rule also introduces clearer standards around when enforcement actions may be triggered. Only significant or systemic failures to implement a properly established program would qualify. This change offers banks more regulatory certainty around compliance expectations.
Additionally, the rule establishes a new consultation framework between the agencies and FinCEN. This framework applies to certain supervisory and enforcement actions taken by the FDIC, OCC, and NCUA. It is designed to strengthen coordination and consistency across federal regulators.
Banks would also gain explicit authority to share AML/CFT-related information directly with FinCEN. This provision supports more open communication between institutions and federal financial intelligence units. It further reflects the broader effort to modernize information-sharing under the Bank Secrecy Act.
The public comment period gives financial institutions, credit unions, and other stakeholders the opportunity to weigh in.
The agencies intend for these changes to produce a stronger, more consistent AML/CFT compliance environment nationwide.
The latest AI news artificial intelligence US military Iran war 2026 debate has crystallized around one figure: in the first 24 hours of Operation Epic Fury on February 28, the US military struck more than 1,000 targets in Iran using Palantir’s Maven Smart System with Anthropic’s Claude embedded inside it — a pace CENTCOM head Admiral Brad Cooper confirmed publicly, and one that human rights experts say has raised serious questions about AI-assisted targeting and civilian harm.
Summary
- CENTCOM Commander Admiral Brad Cooper confirmed in a March 11 video statement that US forces are “leveraging a variety of advanced AI tools” that allow commanders to make decisions “faster than the enemy can react,” with tasks that previously took hours or days now completed in seconds
- Palantir’s Maven Smart System with Anthropic’s Claude embedded processes satellite imagery, drone feeds, radar data, and signals intelligence into prioritized target lists with GPS coordinates, weapons recommendations, and automated legal justifications — what previously required roughly 2,000 intelligence analysts now reportedly requires approximately 20
- A US strike on a girls’ elementary school in Minab killed over 165 civilians, according to Iranian reports; the Pentagon is investigating whether the school was on an AI-assisted target list, and more than 120 House Democrats have demanded answers
The latest AI news artificial intelligence US military Iran war 2026 story is both a technological milestone and a humanitarian reckoning. According to IBTimes, more than 1,000 targets were struck in the first 24 hours of Operation Epic Fury on February 28 — more than double the air power deployed during the entire opening phase of the 2003 Iraq invasion. That pace is only possible with AI. A human-led targeting process would have required thousands of analysts working for weeks to generate and validate that many aim points.
The system at the center of it is Palantir’s Maven Smart System, running on Anthropic’s Claude large language model. Maven fuses classified feeds from satellites, surveillance drones, and archived intelligence into a unified platform. Claude synthesizes that information into prioritized target lists, complete with precise GPS coordinates, weapons recommendations, and automated legal justifications for strikes.
Admiral Brad Cooper confirmed the AI role in a publicly released video statement: “These systems help us sift through vast amounts of data in seconds so our leaders can cut through the noise and make smarter decisions faster than the enemy can react. Humans will always make final decisions on what to shoot and what not to shoot and when to shoot. But advanced AI tools can turn processes that used to take hours and sometimes even days into seconds.”
Cooper did not identify specific AI systems by name. What the statement left unaddressed was Maven’s reported accuracy rate: approximately 60%, compared with 84% for human analysts in some assessments.
The School Strike and the Accountability Gap
The most serious accountability question surrounds a US strike on the Shajareh Tayyebeh girls’ elementary school in Minab that killed over 165 civilians. The school was reportedly on a target list generated with AI assistance. Pentagon officials said outdated intelligence contributed to the strike and a full investigation is underway. More than 120 House Democrats have formally demanded answers about AI’s role. As warfare expert Craig Jones told Democracy Now!, AI targeting is “reducing a massive human workload of tens of thousands of hours into seconds and minutes” — but “automating human-made targeting decisions in ways which open up all kinds of problematic legal, ethical and political questions.”
The conflict carries direct implications for commercial tech. Iran has explicitly named Palantir, Google, Microsoft, Amazon, and other US companies as legitimate military targets because of their infrastructure’s role in the war. Iranian strikes have already damaged AWS data centers in the UAE and Bahrain. As crypto.news reported, Iran has demonstrated willingness to strike economic and technology infrastructure across the Gulf — a threat that now extends to the commercial cloud backbone powering US AI military systems.
What the Iran war has confirmed, as analysts have begun calling it “the first AI war,” is that commercial AI and warfare are no longer separate domains. As crypto.news noted, every escalation in this conflict reaches financial markets within hours. The AI targeting dimension adds a new layer of systemic risk: not just military escalation, but the weaponization of commercial technology infrastructure itself.
The seven House members may have affirmed the commission‘s authority over prediction markets, but asked questions about its inaction on insider trading.
Seven members of the US House of Representatives sent a letter to Commodity Futures Trading Commission (CFTC) Chair Michael Selig, asking for information on the agency’s inaction on insider trading on prediction markets and event contracts related to war and conflicts.
In a Monday letter, the seven US lawmakers said that the CFTC had the authority under the Commodities Exchange Act “to apply its rules and regulations for the purpose of preventing evasion of the [act’s] underlying swap provisions.” The statement signaled that the representatives affirmed Selig’s position that the commission had jurisdiction over prediction markets.
However, the House members expressed concerns about how the CFTC was policing “morally obscene” event contracts, including those on US military actions in Iran and Venezuela — in those cases, there were suspicious trades related to the timing and outcomes of US military involvement.
“Such corrupt trades deserve swift and decisive oversight,” said the letter. “Allowing these contracts to persist raises troubling concerns about the Commission’s desire and capacity to fulfill a global regulatory role.”
The legal battles over regulating prediction market platforms like Kalshi and Polymarket are being waged both at a federal and state level. Several US state gaming authorities have filed lawsuits alleging that the companies are illegally offering sports bets, while the CFTC, under Selig, claims that the event contracts on the platform amount to swaps and fall under its federal regulations.
The seven House members requested that Selig respond to their six questions by April 15.
Related: Polymarket bags 97% of onchain prediction market fees after pricing overhaul
In one of the most recent legal decisions, the US Court of Appeals for the Third Circuit affirmed a lower court ruling blocking New Jersey gaming authorities from filing enforcement actions against Kalshi. Two out of three circuit judges said that the company had a ”reasonable chance of success” in arguing that federal commodities laws preempted state authorities.
CFTC enforcement director says agency is “watching” for insider trading
The Monday letter followed CFTC enforcement director David Miller responding to concerns over insider trading, which has also resulted in legislation proposed by Democrats. According to Miller, the commission would only prosecute instances “against those who tip or trade with misappropriated information,” but not dedicate resources to “trivial” cases.
Magazine: All 21 million Bitcoin is at risk from quantum computers
TLDR
- Anthropic unveiled its new AI model, Claude Mythos, designed to enhance cybersecurity by identifying high-severity vulnerabilities in systems.
- The Mythos model has already detected thousands of flaws across major operating systems and web browsers.
- Anthropic launched Project Glasswing, a partner program offering select organizations early access to the Mythos model for defensive tasks.
- The company committed up to $100 million in usage credits and $4 million in donations to support open-source security initiatives.
- Anthropic decided not to release the Mythos model widely, citing the need for further safeguards to ensure its safe deployment.
Anthropic introduced its latest AI model, Claude Mythos Preview, on Tuesday, focusing on cybersecurity. The model aims to strengthen defenses against cyber threats by identifying vulnerabilities and developing exploits with little human oversight. This move comes weeks after a security lapse exposed Claude’s code, which drew significant attention to Anthropic’s internal security measures.
New AI Model Targets Cybersecurity Threats
Claude Mythos Preview represents Anthropic’s cutting-edge effort in cybersecurity, designed to uncover high-severity vulnerabilities. In its testing, Mythos has already identified thousands of flaws across major systems, including operating systems and web browsers. According to the company, this new model aims to equip defenders with advanced tools before cyber attackers can harness similar AI capabilities.
Project Glasswing, a partner program, was also announced alongside the Mythos model. It offers early access to the new AI system for select companies like AWS, Google, and Microsoft, among others. More than 40 organizations will be part of the initiative, with Anthropic committing up to $100 million in usage credits to support the program.
Anthropic Pushes for Secure Deployment
Despite Mythos’s promising capabilities, Anthropic has decided against a wide release. The company emphasized the need for further safeguards before deploying Mythos at scale. “Our goal is to ensure that this powerful tool can be deployed safely and responsibly,” an Anthropic representative stated.
This caution follows a mishap earlier this year when a packaging error exposed Claude’s code. The incident led to the accidental release of over 500,000 lines of code, causing a significant security breach. Anthropic’s attempt to take down the leaked files further escalated the issue, as it mistakenly removed thousands of GitHub repositories.
Large-Scale Support for Cybersecurity Defenders
Project Glasswing’s partner organizations will be among the first to test Claude Mythos. These partners include some of the largest players in technology and infrastructure, with the Linux Foundation and Palo Alto Networks joining the program. The initiative aims to harness Mythos’s ability to identify and exploit vulnerabilities while prioritizing the security of its deployment.
Along with the partner program, Anthropic has pledged $4 million in donations to open-source security groups. The company’s focus on supporting cybersecurity initiatives highlights its commitment to safeguarding against advanced cyber threats. However, Mythos’s future remains uncertain, as Anthropic continues to refine its defensive capabilities before making the model more widely available.
The development of Mythos marks a significant step in the AI-driven defense against cybersecurity risks, though Anthropic remains cautious about its broader use.
Three suspects in a crypto wrench attack ring have been charged, according to reporting from the San Francisco Chronicle.
According to the reporting, the three men have been charged in two specific crimes, but police believe that they’re part of a larger operation and are tied to several similar crimes.
The criminals apparently used a similar technique for these crimes, namely:
- Identifying a major cryptocurrency holder.
- Researching and surveilling that cryptocurrency holder. A detective who spoke to the Chronicle described this, saying, “They figure out your trends, your life cycle, what do you normally order online, What do you normally order for takeout?”
- The criminals attempt to gain access to accounts; in the case of one victim who spoke to the Chronicle, “for me, it was my DoorDash and Uber Eats accounts.”
- The criminals would then create a fake delivery, meet the victim at the door, and then threaten them.
Wrench attacks are inherent risk
Cryptocurrency’s censorship-resistant transfers as well as its pseudonymous nature make holders an attractive target for these types of attacks.
These attacks that don’t try to bypass the cryptographic security that protects the assets but use threats and violence to influence the person who has access to the keys.
Indeed, kidnappings and extortion have become an international problem for cryptocurrency holders and firms.
Read more: French crypto tax firm targeted in ShinyHunters extortion attempt
These attacks have included French firm Waltio and UK-based Sillytuna.
France has become something of a leader when it comes to this type of activity, with even Ledger co-founder David Balland targeted.
The utility of cryptocurrency for this type of attack has resulted in even non-cryptocurrency holders having ransoms demanded in bitcoin (BTC). Prominently, Nancy Guthrie, the mother of TODAY Show host Savannah Guthrie, has been kidnapped and her apparent kidnappers have sought the ransom in BTC.
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New data suggests that Bitcoin (BTC) could be moving closer to a bull market phase as its supply slowly shifts back into long-term, retail-investor-linked wallets. The figure surpassed 4 million BTC in Q1 2026.
The accumulation trend aligns with a rise in Bitcoin network activity index to levels last seen in April 2025, signaling a return of stronger network activity.
Bitcoin long-term wallets expand holdings
CryptoQuant data shows that balances held by accumulating address cohorts continued to rise into Q1 2026. The total BTC held by these cohorts has crossed 4.37 million BTC as of April 7, up from about 2 million BTC in early 2024, signaling sustained supply absorption.
The retail-investor-linked accumulation addresses added roughly 857,000 BTC, while the accumulating pattern wallets, defined as addresses that steadily add BTC at recurring intervals with minimal outflows, expanded to 1.29 million BTC.
This growth occurred while the price remained capped below $70,000 throughout the first quarter of 2026.
In contrast, the inflows from centralized exchanges and highly active addresses have slowed. During the 2023–2024 expansion phases, the inflows often exceeded 1.2 million to 1.5 million BTC. The recent activity has averaged 300,000 to 350,000 BTC.
The divergence shows a shift in coin distribution. More BTC is moving into long-term wallets, while fewer coins are circulating on the exchanges. This indicates a tightening of the liquid supply and a reduction in short-term trading turnover.
Related: Bitcoin holds $67K support as data exposes price to sentiment divergence
Bitcoin network activity index highlights the trend
The CryptoQuant Bitcoin network activity index has climbed to 3,600 from 3,320 on March 22. The index aggregates broader usage signals, including transaction counts and network throughput.
As observed in the chart, it has moved above its 365-day moving average for the first time since December 2024 and entered the “bull-phase” classification for the first time since April 2025.
In parallel, Bitcoin’s active addresses momentum dropped to -0.25 on April 6, the lowest reading since April 2018. The metric tracks the rate of change in active addresses, with negative values pointing to declining user participation.
The low activity levels have persisted since July 2025, echoing a similar stretch in 2024 that preceded a 35% price decline.
According to crypto analyst Gaah, the drop in activity signals the absence of short-term participants, or “tourists.” The network usage is now dominated by long-term holders focused on accumulation.
Historically, low readings have aligned with profitable accumulation phases. The reduced activity often coincides with lower sell pressure as the coins move into long-term wallets.
Related: Bitcoin’s quantum challenges are ‘more social than technical’: Grayscale
This article is produced in accordance with Cointelegraph’s Editorial Policy and is intended for informational purposes only. It does not constitute investment advice or recommendations. All investments and trades carry risk; readers are encouraged to conduct independent research before making any decisions. Cointelegraph makes no guarantees regarding the accuracy or completeness of the information presented, including forward-looking statements, and will not be liable for any loss or damage arising from reliance on this content.
U.S. spot Bitcoin exchange-traded funds (ETFs) experienced substantial inflows at the beginning of the week, marking the strongest single-day performance in over six weeks. On Monday, Bitcoin ETFs attracted $471.3 million in net inflows. This surge reversed the previous month’s outflows and underscored renewed investor interest.
The strong inflows on Monday were primarily driven by BlackRock and Fidelity. Other prominent funds, including Ark 21Shares, Grayscale, Bitwise, and VanEck, also contributed to the influx. The total inflow for Bitcoin ETFs represents the highest daily intake since late February, signaling a potential shift in market sentiment.
The positive momentum in Bitcoin-related assets has injected optimism into the market. The latest data indicates that spot Ethereum products also saw significant inflows. While uncertainty remains due to broader macroeconomic conditions, the trend could support further upside potential for Bitcoin.
BlackRock and Fidelity Lead the Charge
BlackRock’s Bitcoin ETF, IBIT, led the pack with $181.9 million in inflows on Monday. Fidelity’s FBTC followed with $147.3 million, securing a significant portion of the daily total. Together, these two funds accounted for more than half of the day’s inflows, signaling the strength of institutional support for Bitcoin.
ARK Invest and 21Shares’ ARKB also contributed meaningfully, with $118.7 million in inflows. These funds, which focus on offering innovative financial products, are benefiting from growing interest in cryptocurrency investments. Their substantial contributions reflect the continued expansion of Bitcoin’s presence in the mainstream financial ecosystem.
This surge in investments coincides with the release of positive market data and could further bolster Bitcoin’s price performance. As the leading players in the ETF space continue to drive interest, the momentum for Bitcoin is expected to continue. Analysts predict that this trend could propel Bitcoin past its current trading range if the macroeconomic climate stabilizes.
Spot Ethereum Products See Uptick
Ethereum ETFs also experienced a surge in demand on Monday, with $120.2 million in inflows. This marked the highest single-day net inflow since mid-March. The increase highlights growing investor interest in Ethereum as an alternative to Bitcoin.
Ethereum’s price has faced increased volatility in recent months, but these inflows signal a resurgence of confidence. Investors appear to be looking at Ethereum as a strong performer amid the broader cryptocurrency market’s rally. The combination of rising interest in both Bitcoin and Ethereum products could be a sign of a broader recovery in the digital asset space.
However, macroeconomic challenges, such as ongoing geopolitical tensions and economic uncertainty, continue to loom over the market. If these external pressures ease, it could further fuel positive sentiment for cryptocurrencies like Bitcoin and Ethereum.
The Solana Foundation has launched STRIDE – Solana crypto Trust, Resilience and Infrastructure for DeFi Enterprises – a structured security evaluation program covering all Solana-based DeFi protocols, funded through a partnership with security firm Asymmetric Research.
The program arrives five days after the Drift Protocol exploit on April 1, in which attackers drained $286 million in under 12 minutes – a breach that exposed the absence of any standardized, ongoing security baseline across Solana’s DeFi layer.
STRIDE is not a bug bounty or a one-time audit mandate. It is a continuous monitoring framework, independently administered by Asymmetric Research, with tiered benefits tied directly to protocol TVL and public evaluation results available to users and investors.
Whether that structure is sufficient to rebuild institutional confidence in Solana DeFi is the question the market will answer over the next several months.
- What It Is: STRIDE (Solana Trust, Resilience and Infrastructure for DeFi Enterprises) is a foundation-funded, structured security evaluation program for all Solana DeFi protocols, administered by Asymmetric Research.
- How It Works: Asymmetric Research independently assesses protocols across eight security categories – including operational security, access controls, multisig configurations, and governance vulnerabilities – with results published in a public repository.
- Tiered Benefits: Protocols with over $10M TVL that pass evaluation receive foundation-funded 24/7 threat monitoring; those above $100M TVL unlock formal verification tools using mathematical proofs across all smart contract execution paths.
- Rapid Response Network: The companion Solana Incident Response Network (SIRN) launches with five founding firms – Asymmetric Research, OtterSec, Neodyme, Squads, and Zeroshadow – sharing threat intelligence with response priority determined by TVL and impact.
- Current Status: STRIDE version 0.1 is live; the framework will evolve based on real-world assessment feedback, with the first public evaluation reports expected as protocols apply.
- What to Watch: Track the first published STRIDE evaluation results and any SIRN activations – those two data points will signal whether the program functions as operational infrastructure or credentialing theater.
Discover: The Best Crypto to Get Right Now
What STRIDE Actually Does for Solana Crypto and Why the TVL Threshold Structure Changes the Calculus
The core mechanism: Asymmetric Research evaluates protocols against its own eight-pillar security framework covering operational security, access controls, multisig configurations, and governance vulnerabilities, then publishes those results publicly.
That is not an audit; it is a continuously maintained security rating. The distinction matters because audits are point-in-time assessments that expire when a protocol upgrades; STRIDE’s continuous monitoring model keeps ratings calibrated to evolving threats.
The tiered benefit structure is where the program’s real incentive logic lives. Protocols above $10 million TVL that pass evaluation receive foundation-funded 24/7 threat monitoring at no cost to the protocol – operational security support that most teams currently cannot fund independently.
Protocols above $100 million TVL receive access to formal verification tooling, which uses mathematical proofs to check every possible smart contract execution path rather than sampling representative scenarios. At current Solana DeFi TVL concentrations, that $100M threshold covers the protocols whose failures carry systemic contagion risk.
Running alongside STRIDE is SIRN – the Solana crypto Incident Response Network – a membership-based coalition of security firms that functions as a shared threat intelligence layer and rapid-response coordinating body.
The five founding members are Asymmetric Research, OtterSec, Neodyme, Squads, and Zeroshadow. SIRN is open to all Solana protocols, but response prioritization is explicitly ordered by TVL and estimated impact. The foundation funds the coalition’s operations; protocols don’t pay for access.
Prior Solana security infrastructure – Hypernative for threat detection, Range Security for risk alerts, Riverguard for attack simulation, Sec3 X-Ray for static analysis – addressed individual threat vectors. STRIDE’s version 0.1 attempts to unify those capabilities under a single evaluative baseline. Whether version 0.1 evolves quickly enough to match the attack surface expanding in parallel is the core execution risk.
Explore: The Best Pre-Launch Token Sales With Asymmetric Upside Potential
The post Solana Crypto Foundation Launches STRIDE Program to Strengthen Ecosystem Security appeared first on Cryptonews.
Binance has expanded its institutional loan product with higher leverage, broader access, and fixed-rate options, even as its chief compliance officer (CCO) reportedly weighs an exit.
The update raises the maximum leverage cap from 4x to 5x for all eligible risk units. Know Your Business (KYB)-verified clients at VIP 1 and above now qualify, down from the previous VIP 5 threshold.
What Changed in the Binance Loan Terms
Initial loan-to-value (LTV) ratios increased from 75% to 80%, while transfer-out LTV moved to 83%. Margin call and liquidation thresholds remain at 85% and 90%, respectively.
Binance also introduced fixed-rate term loans with 30-, 60-, and 90-day terms. Upon expiry, unpaid balances are rolled over to the prevailing variable rate.
Co-CEO Richard Teng promoted the changes, saying the exchange continues to raise standards for institutional clients.
The Binance VIP account confirmed existing clients were upgraded automatically.
Compliance Leadership Under Pressure
Meanwhile, Chief Compliance Officer Noah Perlman is reportedly in discussions about leaving the company.
According to a Bloomberg report, Binance stated that Perlman has no confirmed exit date, and no successor has been identified.
Several other senior compliance staff have also departed, including employees handling sanctions, investigations, and financial crime monitoring.
Perlman joined Binance in 2023 following the firm’s $4.3 billion settlement with U.S. authorities.
The company has said it expanded compliance-related staff by more than 30% and reduced illicit exposure by 97% between January 2023 and June 2025.
Whether Binance can sustain those improvements amid ongoing personnel turnover will likely shape how regulators assess the exchange’s compliance trajectory in the months ahead.
The post Binance Boosts Institutional Loans to 5x Leverage as Compliance Chief Eyes Exit appeared first on BeInCrypto.
Binance announced the Spot Price Range Execution Rule (PRER), a new mechanism that expires taker orders when execution prices fall outside a dynamic fair-value band.
The rule takes effect gradually starting April 14, 2026. It directly targets the type of spot-market failures that surfaced during the October 10, 2025 flash crash.
What Triggered the Binance PRER
On October 10, 2025, President Trump’s announcement of 100% tariffs on Chinese imports set off the largest single-day liquidation cascade in crypto history.
Over $19.13 billion in leveraged positions were liquidated in a 24-hour period, affecting more than 1.6 million traders.
On Binance, assets like Cosmos (ATOM) briefly traded near zero as margin collateral was sold off in bulk.
Stale limit orders, some placed years earlier, filled against one-sided liquidity at extreme prices. Binance paid $283 million to compensate users affected by the de-pegging of USDe, BNSOL, and WBETH.
The exchange later launched a separate $400 million “Together Initiative” covering forced liquidation losses, bringing total compensation to $683 million.
How PRER Works
PRER calculates a dynamic reference price per trading pair using a moving average of recent trades. Configurable bands above and below that reference define the acceptable execution range.
When a taker order would fill outside that band, the unfilled portion expires rather than executing at an abnormal price. Maker orders resting on the book remain unaffected, and under normal conditions daily trading sees no impact.
Binance stated this mechanism will roll out pair by pair, with new listings activating once sufficient trading history establishes a reliable reference price.
API users can query reference prices and band parameters through dedicated endpoints in real time.
Traders with open orders should review their strategies before April 14.
Nevertheless, while PRER adds a protective layer against extreme fills, it does not eliminate volatility or the broader risks of leveraged crypto trading.
The post Binance’s New Rule Could Have Prevented the $19 Billion October Crash appeared first on BeInCrypto.
Aave $50 billion crypto TVL now operates without a dedicated risk manager – the direct consequence of Chaos Labs’ exit, which strips the protocol of the firm responsible for pricing every loan on the platform since 2022 and managing liquidation thresholds, collateral factors, and interest rate parameters across all V2 and V3 markets.
The departure follows the earlier exits of BGD Labs and Aave Chan Initiative, leaving Aave with no remaining technical contributors from its V3 build team at precisely the moment V4 demands dual-stack oversight.
The mechanism is a governance dispute over compensation structure and risk philosophy – but the structural exposure is a protocol-risk vacuum landing on a $50 billion balance sheet mid-migration.
- What Happened: Chaos Labs, Aave’s primary risk manager since November 2022, announced its exit citing unprofitability, contributor attrition, and a fundamental disagreement with Aave Labs over risk methodology for the V4 migration.
- Protocol Risk: Chaos managed collateral factors, liquidation thresholds, and interest rate models across all Aave V2 and V3 markets – functions that now lack an assigned owner on a platform holding over $50 billion in TVL and processing nearly $1 trillion in cumulative loans.
- Compensation Dispute: Aave Labs proposed raising Chaos Labs’ budget to $5 million annually – roughly 3.5% of Aave’s $142 million in 2025 revenue – but Chaos deemed it insufficient given three years of operating losses and the expanded V4 workload. Banks typically allocate 6–10% of revenue to risk and compliance functions.
- V4 Complexity: Aave V4, which launched one week before the exit announcement, introduces a hub-and-spoke liquidity architecture requiring entirely new infrastructure, tooling, and simulation models – while V3 simultaneously requires active support until full migration, a process Chaos Labs founder Omer Goldberg said historically takes years, not months.
- Contributor Attrition: Chaos Labs is the third major Aave contributor to exit in 2025, following BGD Labs and Aave Chan Initiative – a sequence that compresses the remaining institutional knowledge base inside the DAO at a critical transition point.
- What to Watch: The DAO’s governance forum vote on interim risk mandate appointments – specifically whether a credentialed replacement is named before Aave’s first V4 parameter adjustment is required. Any V4 liquidation event without a designated risk manager in place would represent a measurable failure of the transition framework.
Discover: Best Crypto Exchanges for Active DeFi Traders in 2025
What Chaos Labs Actually Did at Aave Crypto – and Why Its Exit Creates a Structural Gap
The real story isn’t that a vendor relationship ended. It’s that Aave’s core risk infrastructure, the system that determined which assets could be used as collateral, at what ratios, with what liquidation buffers – was built and maintained by a single external firm now walking out during the most complex protocol upgrade in Aave’s history.
Chaos Labs priced every loan initiated on Aave from November 2022 through the present, managing risk parameters across V2 and V3 deployments spanning more than a dozen networks.
That scope includes liquidation threshold calibration, interest rate curve configuration, and collateral factor adjustments – the parameters that determine whether a $50 billion lending platform absorbs volatility or generates cascading bad debt.
Goldberg stated on X that Chaos achieved zero material bad debt during this tenure, a claim that carries weight given the scale of assets under management.
The governance dispute crystallized around three compounding pressures. First, Aave Labs’ proposed $5 million annual budget – approximately 3.5% of Aave’s $142 million in 2025 protocol revenue – fell short of what Chaos calculated as cost recovery after three years of operational losses.
Risk and compliance functions at traditional financial institutions absorb 6–10% of revenue; Chaos was being asked to operate at roughly half that floor while taking on materially greater complexity.
Second, V4’s hub-and-spoke architecture requires building from scratch: new infrastructure, new liquidation simulations, and new oracle integrations for asset classes Aave has not previously managed. Goldberg described it plainly – “going from zero to one again on a codebase that has not yet been battle-tested.”
Third, and structurally most significant: the legal liability question for DeFi risk managers remains entirely unresolved.
A March 2026 oracle misconfiguration – a Chaos Labs CAPO risk agent feeding an inaccurate price ratio for staked Ether – triggered $26.9 million in erroneous liquidations. No regulatory safe harbor exists for DeFi risk managers operating at this scale.
As DeFi governance disputes increasingly surface legal and ethical liability questions, the undefined exposure attached to managing $50 billion in lending parameters is no longer theoretical – it is priced into the decision to walk away.
Aave Labs CEO Stani Kulechov pushed back on the urgency framing, stating that V4 is additive and V3 migration carries no forced deadline. That may be true at the protocol level. It does not resolve who manages V3 risk parameters while the replacement search runs – or who sets V4’s initial collateral factors when the first major markets go live.
The post Chaos Labs Exits as Aave Crypto Risk Manager Amid Governance Dispute appeared first on Cryptonews.
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