Crypto World
Polymarket traders don’t see Kelp socializing losses after $292 million exploit
A Polymarket contract on whether Kelp DAO will spread the losses from the weekend’s $292 million exploit beyond those directly affected is pointing to a clear answer: probably not.
Bettors are giving a 14% chance that Kelp will “socialize the losses,” or implement a mechanism forcing rsETH holders on Ethereum, which wasn’t hit, to share the pain of users on other chains.
The attackers drained roughly 116,500 rsETH from a LayerZero-powered bridge that held the reserves backing the token across more than 20 blockchains. That left parts of the system undercollateralized, with some holders effectively owning tokens no longer fully backed by ether (ETH).
“Socializing the losses” would mean Kelp redistributes the shortfall across all rsETH holders, including those on the Ethereum mainnet, rather than leaving losses concentrated among users and protocols tied to the compromised bridge.
The most widely cited precedent of this approach came in 2016, when Bitfinex imposed losses on all users after a $60 million hack, effectively mutualizing the hit to avoid shutting down.
More recently, derivatives exchanges have used variations of the concept through auto-deleveraging (ADL), in which profitable positions are forcibly reduced to cover losses when insurance funds are exhausted.
During the October flash crash, ADL mechanisms were triggered across some venues, closing out even market-neutral positions and leaving traders exposed. These moves are rare and controversial, but they have been used as a last resort to stabilize systems under stress.
Kelp’s situation is more complex. The exploit drained the reserve backing rsETH across more than 20 chains, leaving losses fragmented across different user groups and platforms.
Holders on affected networks face impaired backing, while others remain relatively insulated. Any attempt to equalize losses would require coordination across chains, clear accounting of liabilities, and a willingness to impose losses on users who may not see themselves as affected.
That makes a clean, system-wide redistribution both technically and politically difficult, which may explain why Polymarket traders are approaching the question with skepticism.
A single forged signature drained $292M from KelpDAO on Saturday and triggered a $6.6 billion run on Aave. The bridges that kept running all had one thing in common.
By John Egan, Head of Product, Polygon Labs
Between Saturday evening and Sunday morning, a single forged message on a single cross-chain bridge turned into DeFi’s worst week since FTX.
An attacker drained $292 million of rsETH from KelpDAO’s LayerZero bridge, used it as collateral to borrow real ether on Aave, and stuck the protocol with $123 million to $230 million in potential bad debt before markets could freeze.
Within 24 hours, users pulled $6.6 billion out of Aave. Lido, SparkLend, Fluid, Upshift, and Ethena all paused the relevant markets or bridges. rsETH on more than twenty chains became collateral of uncertain backing overnight.
Polygon escaped the contagion. Agglayer’s unified ZK bridge operated without incident. No Polygon-connected chain had to freeze contracts. Polygon PoS & Agglayer bridges processed approximately $200M in volume post hack, while much of DeFi and bridging paused.
That Agglayer held up under that kind of stress reflects a design choice we made early: math proof-based ZK verification and accounting live on-chain, so the system doesn’t depend on a small set of operators getting it right under pressure. Polygon pioneered ZK proving for Agglayer bridging back in July 2024.
One forensic detail is worth holding onto. The root cause was a single verifier. One signature, on the LayerZero V2 route between Unichain and Ethereum, waved through a message corresponding to no real deposit. The bridge released 116,500 rsETH to the attacker’s wallet, roughly one in six rsETH tokens ever issued.
This is unfortunately the predictable outcome of an industry that secures tens of billions of dollars with trust assumptions that held up when bridges moved a few million dollars and nobody sophisticated was watching.
Three exploits in three weeks, all traced to the same broken assumption: that a handful of signers can be trusted with a hundred-billion-dollar industry.
Nine out of ten cross-chain apps trust one or two signers with everything
Most cross-chain infrastructure in crypto works like a notary desk. A small committee watches activity on one chain and attests to it on another. The committee might be a five-key multisig, a decentralized verifier network, a relayer set, or an oracle committee.
Compromise the committee or the data feeds underneath it, and the bridge will happily notarize a lie.
The shorthand making the rounds for this is MultisigFi. The technically precise name is trusted off-chain attestation. Either label points at the same category of design.
A sweep of active LayerZero applications on Dune found 47% running a 1-of-1 verifier configuration. Another 45% run 2-of-2. Fewer than 5% run 3-of-3 or anything stronger. For nine out of ten cross-chain apps, one or two compromised signers is the entire security model between user funds and an attacker.
This high risk pattern isn’t new. Lazarus has been draining cross-chain bridges since 2022, taking $620M from Ronin and $100M from Harmony before moving on to Drift and, in all likelihood, Kelp. What’s changed is the cadence. AI-assisted audits let small teams probe operational infrastructure at a rate that used to require years by hand. Misconfigurations that once stayed hidden beneath layers of obfuscation now get found by relentless AI-driven automation.
Drift drained $285 million on April 1, attributed to Lazarus. Polkadot’s Hyperbridge minted a billion wrapped DOT on Ethereum on April 13 through a Merkle proof replay, though thin destination liquidity capped realized losses around $2.5 million per the postmortem. KelpDAO on Saturday made it three strikes.
Agglayer replaces signers with ZK proofs and enforces accounting at the protocol level
Agglayer validates cross-chain activity with mathematical proofs rather than a committee of attestors.
The core technology is a zero-knowledge proof, which is best understood as a tiny cryptographic receipt. The receipt proves that a complex computation was performed correctly, and any machine can verify it in milliseconds without redoing the work. Either the math holds and the withdrawal clears, or it doesn’t.
Other designs – like LayerZero, Wormhole or Chainlink – have been described as essentially a multisig of validators who attest to the state of chains. Each of these validators in turn rely on a quorum of RPCs and other offchain infra. In the case of the KelpDAO hack – it appears the validator’s underlying RPCs were compromised, causing it to sign the malicious transaction.
With Agglayer, there’s no validator judgment to manipulate, no RPC feed to poison. The signers that get compromised in every other bridge hack don’t exist in this architecture, because the architecture doesn’t need them.
Layered on top of that, Agglayer enforces what we call pessimistic proofs. Think of it as the bridge’s accountant who trusts nobody and verifies everything.
Every chain connected to Agglayer has a running balance of what it has received and what it has sent. Before any withdrawal finalizes, the math has to add up. Any other outcome, including if a chain tries to withdraw more of an asset than it actually has, the proof defaults to failure and nothing moves. Strict firewalls between chains.
This is the design choice that blocks the entire infinite-mint category of attack. The historical record is instructive. Wormhole, February 2022: $325 million, a skipped signature check on the guardian committee. BNB Chain Bridge, October 2022: $570 million, a proof verifier bug. Polkadot’s Hyperbridge last week: a billion unbacked tokens through a proof replay. KelpDAO on Saturday: one DVN approving a forged message for $292 million.
Different bugs, identical outcome. A bridge releasing assets that were never backed on the other side.
If we re-run the KelpDAO scenario through Agglayer’s accounting the pessimistic proof fails to validate the attacker’s withdrawal of 116,500 rsETH because the accounting shows no corresponding deposit. So the withdrawal is blocked and no funds leave the system.
Agglayer’s accounting catches the outcome at the door. Even if upstream verification has a bug, the infinite mint can’t clear into the rest of the system.
Agglayer is open source, works across stacks, and settles in minutes
Agglayer is the only ZK bridge that’s fully open source, with no protocol fee and open to anyone thanks to no commercial licensing. It’s stack-agnostic by design, so ZK rollups, optimistic rollups, proof-of-stake chains, EVM, and non-EVM all coordinate through the same infrastructure without giving up their own security models.
On speed: optimistic bridges connecting Arbitrum and Optimism to Ethereum make users wait seven days for a fraud challenge window to close. Agglayer uses validity proofs that verify state actively, so transfers settle in minutes once the proof lands on L1. Fast Interop Phase 1 ships May 27 with roughly three-minute cross-chain settlement, dropping to sub-minute later this year.
$2.4 trillion settled, zero bridge exploits, and one team on call
Good architecture isn’t enough on its own. Surviving this threat environment also takes having seen the failure modes at scale.
Polygon has processed $2.4 trillion in cumulative stablecoin settlement volume. 6.4 billion transactions. 159 million unique wallets. 99.99% uptime over five years. Zero bridge exploits on Agglayer. Revolut, Stripe, Paxos, and Tazapay put production payment volume on Polygon after months of vendor risk review, compliance sign-off, and technical due diligence. That kind of integration doesn’t happen on infrastructure institutions have to worry about.
When the KelpDAO exploit started surfacing this weekend, our security team paused LayerZero integrations across the ecosystem before the root cause was publicly disclosed. That call gets made in twenty minutes rather than twenty hours because one team owns the full stack.
Polygon’s rapid response did not end there. Its Product, Security and Support teams worked hand in hand through the weekend with our institutional partners, providing white glove support on how to best respond to the crisis and access liquidity.
When a fintech integrates Polygon to bring assets on-chain, tap into yield, or run a cross-chain swap, the rails underneath are cryptographic proofs an adversary cannot forge, run by a team that has seen every variant of this weekend before.
When an institution chooses CDK to launch its own chain, native Agglayer connectivity ships with the deployment. No separate bridge project, no third-party integration, no additional vendor negotiation. The same security architecture that held this weekend arrives with the chain, along with immediate access to the liquidity and cross-chain activity of every other chain in the network.
That connectivity is also what separates Polygon’s blockchain-as-a-service from every other enterprise chain option. Canton, Tempo, and Hyperledger give institutions privacy but wall them off from global liquidity. Public L2s give liquidity but expose positions, counterparties, and transactions to the world. CDK chains connect to the full crypto economy through Agglayer without broadcasting any of it. This is what institutional-caliber crypto infrastructure looks like.
Polygon’s bet has been that institutions eventually want the same things from crypto infrastructure they want from every other financial rail: predictable behavior under stress, accountability when something goes wrong, and security that doesn’t rest on anyone’s good behavior. We’ve been building toward that standard for five years and $2.4 trillion in settlement volume. Last weekend was a preview of why it matters.
The post How Polygon Agglayer Held Through DeFi’s Worst Week Since FTX appeared first on BeInCrypto.
Justin Sun has filed a federal lawsuit in California against World Liberty Financial, alleging breach of contract, fraud, and conversion after WLFI crypto froze approximately 540 million of his unlocked tokens and barred him from governance participation.
The filing, by Sun and affiliated entities, exposes an admin-controlled blacklist function embedded in WLFI’s smart contract that allowed the team to unilaterally freeze any wallet’s transfers, sales, and protocol interactions without, Sun alleges, disclosing that capability to investors.
The core question this lawsuit raises is not who is legally right. It is whether a governance token that can be frozen by a centralized admin function was ever meaningfully decentralized to begin with – and what that means for every other WLFI holder.
- Filing: Sun sued World Liberty Financial in California federal court, charging breach of contract, fraud, and conversion over frozen WLFI holdings.
- Token freeze details: WLFI froze 540 million of Sun’s unlocked tokens and 2.4 billion locked tokens – holdings that dropped from over $107 million at the September 2025 freeze to an estimated $43–60 million by April 2026.
- Governance dispute: Sun alleges WLFI excluded him from governance activities and that the blacklist function enabling the freeze was never disclosed to investors.
- Market impact: WLFI fell 15% to a record low after Sun publicly accused the project of embedding an undisclosed backdoor on April 12, 2026.
- Sun’s exposure: Sun invested approximately $75 million directly into WLFI – the project’s largest known outside investor – with total exposure to Trump-affiliated crypto ventures reaching $175 million.
- Key watch item: The California court’s ruling on Sun’s motion for immediate token unfreezing will be the first hard signal on whether the blacklist function survives legal scrutiny.
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What the Token Freeze Actually Reveals About WLFI Crypto Architecture
The dispute is, at its structural core, a governance architecture failure, not a standard investor disagreement.
WLFI’s smart contract contains an admin-controlled blacklist function that enables the project team to freeze any wallet’s ability to transfer, sell, or interact with tokens. Sun claims this capability was not disclosed to investors as required, a material omission for a project marketed as a decentralized governance platform.
The freeze was triggered in September 2025 after Sun transferred roughly $9 million worth of WLFI tokens to external wallets following the governance token launch, a move WLFI characterized as a potential violation of his investor agreement.
The project defended the blacklist as a standard compliance tool comparable to those used in USDT or USDC.
That framing matters, because it concedes the function operates like a centralized stablecoin control mechanism, not a decentralized governance token.
Today, I filed a lawsuit in California federal court against World Liberty Financial to protect my legal rights as a holder of $WLFI tokens. — H.E. Justin Sun
I have always been—and remain—an ardent supporter of President Trump and his Administration’s efforts to make America crypto friendly.…
(@justinsuntron) April 22, 2026
Sun’s lawsuit seeks a court order to unfreeze his holdings, trial-determined damages, and an injunction barring WLFI from burning or otherwise tampering with his tokens.
The allegations, if proven, would indicate that WLFI’s governance token design gives its founding team veto power over any holder’s economic rights, a structural reality that extends well beyond Sun’s individual dispute. Governance disputes and frozen assets remain a documented risk across DeFi projects, as recent protocol-level failures have shown.
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The post Justin Sun Sues World Liberty Financial Over WLFI Crypto Token Freeze appeared first on Cryptonews.
Key Highlights
- Axe Compute shares explode 145% following announcement of $260M GPU infrastructure agreement
- Enterprise AI contract featuring NVIDIA hardware drives AGPU stock momentum
- Deployment of 2,304 NVIDIA B300 GPUs fuels massive pre-market rally
- Multi-year AI computing deal provides unprecedented revenue predictability
- AGPU gains significant ground with long-term enterprise infrastructure commitment
Shares of Axe Compute Inc. (AGPU) experienced explosive growth during pre-market hours following the company’s announcement of a substantial enterprise AI infrastructure agreement valued at $260 million. Trading closed at $4.88 before skyrocketing to $12.00, representing a remarkable 145.90% increase. This dramatic price movement demonstrates investor enthusiasm for the company’s entry into large-scale GPU deployment for enterprise AI applications.
Multi-Year Agreement Establishes Predictable Revenue Foundation
The company has finalized a 36-month enterprise infrastructure arrangement worth approximately $260 million. This agreement encompasses GPU-based computing services and advanced high-speed storage solutions delivered through a comprehensive payment framework. Payment terms include initial deposits, upfront prepayments, and recurring monthly advance payments structured on a take-or-pay arrangement.
Axe Compute will install 2,304 NVIDIA B300 GPUs within a Tier 3-certified data center facility located in the United States. The configuration incorporates high-performance storage infrastructure optimized for handling massive data processing requirements. This powerful system will facilitate training operations, model fine-tuning activities, and inference execution at enterprise magnitude.
Deployment operations are scheduled to commence during Q3 2026, with provisions allowing for contract extension beyond the initial term. Additionally, the infrastructure configuration will operate on 4.8 megawatts of committed power allocation. The architecture implements N+1 redundancy protocols to maintain continuous operational availability and system resilience.
Strategic Infrastructure Approach Strengthens AI Computing Market Position
Axe Compute maintains its strategic focus as a specialized provider of exclusive AI infrastructure capabilities. The organization concentrates on securing extended-term agreements featuring established pricing structures and guaranteed service parameters. This business approach generates stable revenue flows and enhanced long-term operational predictability.
The service framework enables enterprise customers to select deployment locations aligned with specific workload requirements. This adaptability addresses constraints commonly encountered in conventional hyperscale cloud infrastructure models. The company delivers isolated computing clusters with committed delivery schedules.
This agreement underscores an evolving trend toward customer-specified infrastructure configurations within AI marketplace segments. Enterprise organizations increasingly pursue dedicated computing resources rather than shared cloud platforms. Consequently, Axe Compute intends to replicate this operational framework across additional enterprise partnerships.
Advanced Computing Workloads Drive Market Expansion
The installed GPU cluster specifically addresses intensive AI workload requirements spanning multiple industry verticals. The infrastructure will support foundation model training operations demanding substantial coordination across thousands of parallel GPU units. The B300 architecture delivers optimized communication pathways and accelerated processing completion.
Enterprise clients will leverage the system for customizing models using proprietary data repositories. Dedicated infrastructure guarantees data sovereignty and consistent computing availability. This configuration mitigates vulnerabilities associated with shared computing environments and unpredictable resource access.
The platform additionally manages high-volume inference operations and AI-powered data processing applications. Use cases encompass real-time decision frameworks, personalized recommendation systems, and complex multimodal data workflows. Integrated high-performance storage capabilities will enhance data ingestion velocity and overall processing effectiveness.
This landmark contract represents Axe Compute’s most substantial enterprise partnership achieved thus far. The agreement reinforces the company’s competitive positioning within the expanding AI infrastructure sector. The organization’s growth trajectory remains synchronized with accelerating enterprise demand for scalable, dedicated GPU computing capabilities.
XRP: Hex Trust Confirms Isolation From Kelp DAO Exploit
XRP exposure concerns eased after Hex Trust confirmed that wXRP had no link to the exploited infrastructure. The firm explained that the attack targeted rsETH through a LayerZero bridge, not its own system. As a result, the wrapped XRP structure remained isolated from the compromised pathway.
Hex Trust also detailed its validator setup, which uses multiple decentralised verifier networks for transaction approvals. This structure prevents any single verifier from authorising transactions independently. Therefore, the firm reduced the risk of a single point of failure that affected Kelp DAO.
In addition, the custodian confirmed that none of its verifier networks experienced compromise during the exploit. The company also clarified that it does not rely on the same verifier configuration used by Kelp DAO. Consequently, the operational separation protected wXRP users from direct exposure.
wXRP Backing Structure and Bridge Safeguards
Hex Trust emphasised that it securely holds the underlying XRP assets in regulated custody environments. The firm does not store these assets on cross-chain bridges. Therefore, the exploited bridge had no access to the reserves backing wXRP tokens.
The company also reaffirmed that every wXRP token maintains a strict one-to-one backing with XRP. This structure ensures transparency and consistency across the token supply. Currently, around 50 million wXRP tokens circulate on the Ethereum network.
However, Hex Trust paused its bridge operations as a precautionary measure after the incident. The firm has begun reviewing its configurations to strengthen existing safeguards. This action reflects a broader effort to maintain system integrity amid rising DeFi security concerns.
Solana Expansion and Rising DeFi Risk Concerns
Hex Trust recently expanded wXRP availability to the Solana ecosystem, where adoption has grown rapidly. The token’s circulating supply approached one million within a week of launch. This growth followed integration with several Solana-based applications and trading platforms.
Meanwhile, industry participants raised concerns about holding wrapped tokens instead of native assets. Some analysts highlighted counterparty risks tied to issued tokens across external networks. These concerns intensified after multiple DeFi exploits occurred within a short period.
The Kelp DAO breach also renewed scrutiny of cross-chain bridge infrastructure and validator configurations. Earlier, a separate exploit involving Drift increased pressure on DeFi security frameworks. In response, developers and infrastructure providers have begun reassessing risk management strategies across networks.
The broader context shows increasing attention on secure custody and verification systems in decentralised finance. Firms now prioritise multi-layer validation and asset isolation to reduce vulnerabilities. As a result, the industry continues refining its approach to cross-chain interoperability and asset protection.
CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.
The CoinDesk 20 is currently trading at 2157.12, up 3.4% (+71.19) since 4 p.m. ET on Tuesday.
All 20 assets are trading higher.
Leaders: APT (+5.5%) and ICP (+5.3%).
Laggards: XLM (+0.9%) and CRO (+1.9%).
The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.
Crypto exchange Kraken says it filed 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS) for the 2025 tax year. Roughly 18.5 million of them covered transactions worth less than $1, and over half were for $10 or less.
Only 8.5% of the newly introduced Form 1099-DAs cleared $600, the threshold that triggers reporting for non-employee compensation, and 74% were for less than $50, the company said in a Wednesday blog post.
Each form is also sent to the customer and creates a reconciliation task for the taxpayer who receives it. On top of that, standard tax software does not handle crypto transactions. Kraken estimated the additional burden on an active crypto holder at $250-$500 a year for dedicated tax software, on top of standard filing costs.
“The hours taxpayers spend reconciling these micro-transactions, often with incomplete data, generate costs wildly disproportionate to any revenue the IRS will collect from them,” Kraken said.
The Tax Foundation estimates individual returns already cost Americans a combined $146 billion in time and expenses, the exchange said, and the National Taxpayers Union Foundation puts the average time for non-business filers at about 13 hours and $290 per return.
Brokers reporting for 2025 provide gross proceeds without cost basis, meaning the form shows what was sold, but not what it was bought for. Kraken said it fielded thousands of client questions about forms that captured only one side of the calculation.
Two problems
Kraken pointed to two parts of the tax code that cause problems. One is the lack of a de minimis, or low-level, exemption for crypto payments, which means even small purchases with crypto can trigger a taxable event that needs to be declared.
“Imagine you walk into a Steak ’n Shake and pay for a $7.99 meal with Bitcoin through a payment app. You have triggered a taxable event,” Kraken wrote as an example. “You are technically required to look up the cost basis of the specific Bitcoin you spent, calculate whether you had a gain or loss on that fraction of a coin, and report it on Form 8949.”
That’s the same argument libertarian think tank Cato Institute recently made. According to the institute, buying a cup of coffee every day with BTC “can result in over 100 pages of tax filings.”
The second issue is staking. Rewards earned on staked assets are treated as ordinary income at the moment of receipt, based on the token’s market price that day. Most holders keep those tokens instead of selling them, meaning they owe tax on tokens that haven’t been sold.
If the token price falls between receipt and filing, the tax can exceed the asset’s current value. Kraken calls this phantom income and says a large share of the sub-dollar 1099-DAs it issued were staking distributions.
Legislation moving through Congress includes a de minimis provision, but is limited to stablecoins. Kraken is pushing for a broader inflation-indexed exemption, paired with anti-abuse guardrails to prevent structuring.
The exchange is also asking Congress to let taxpayers elect when staking rewards are taxed, either at receipt under current rules or at sale, when a gain or loss is realized.
Kraken says its systems and those of other exchanges already support both reporting methods, but the choice needs to be authorized.
Key takeaways
- Bitcoin price rallies higher, trading above $78,000 on Wednesday after surging nearly 6% so far this week.
- US-listed spot ETF recorded a mild inflow of $11.84 million on Tuesday amid uncertainty over US-Iran peace talks.
Bitcoin (BTC) extended its gains on Wednesday, trading above $78,000 after a significant 6% surge this week. BTC showed relatively muted institutional demand on Tuesday, with Bitcoin spot Exchange Traded Funds (ETFs) adding $11 million in inflows.
Bitcoin’s price was buoyed by both geopolitical developments and the US Treasury’s buyback plan, which could inject additional liquidity into markets and further support Bitcoin’s price momentum.
Ceasefire extension pushes BTC’s price higher
Bitcoin’s positive momentum was fueled by the extension of the two-week ceasefire announced by US President Donald Trump late Tuesday. The ceasefire, which was set to expire on April 22, was extended upon Pakistan’s request until Washington receives a unified proposal from Tehran.
While Trump emphasized that the US blockade of Iranian seaports would remain in place, the ceasefire extension triggered a broad risk rally, driving Bitcoin to its highest price since February 3, reaching $78,452.
Market liquidity is expected to receive a significant boost this week, as the US Treasury is poised to buy back $15 billion of its own debt—matching the largest buyback in history. This move could provide fresh liquidity to the markets, creating favorable conditions for Bitcoin. As a liquidity-driven asset, Bitcoin could benefit from the influx of excess capital, which often flows into risk assets and alternative stores of value.
However, Bitcoin spot ETFs recorded a modest inflow of $11.84 million on Tuesday, down from $238.37 million the day before.
This cautious approach reflects investor uncertainty surrounding the ongoing US-Iran peace talks. However, if ETF inflows continue to increase, Bitcoin could see further upside potential.
Bitcoin price outlook: Bullish bias remains
The BTC/USD 4-hour chart remains bullish in the near term as Bitcoin is trading above both the 50-day and 100-day Exponential Moving Averages (EMAs) at $72,345 and $75,368, respectively.
The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) remain constructive, suggesting that buyers are in control.
Resistance levels lie at the 50% Fibonacci retracement near $78,962, followed by the psychological $80,000 level and the 200-day EMA at $82,769.
On the downside, initial support is expected around the prior channel top at $75,680, with further protection from the 100-day EMA at $75,368 and the 38.2% Fibonacci level at $74,487. The 50-day EMA at $72,345 and the lower channel boundary near $62,950 provide deeper support.
UK regulator FCA raided eight London sites over alleged illegal P2P crypto trading, issuing stop notices and escalating its wider crackdown on unregistered platforms.
Summary
- The UK Financial Conduct Authority raided eight London locations tied to alleged illegal peer-to-peer crypto trading.
- Stop notices were issued as part of multiple anti-money laundering and counter-terrorist financing probes.
- No peer-to-peer crypto traders are currently registered with the FCA in the UK.
According to Reuters, the UK’s Financial Conduct Authority (FCA) has raided eight locations across London suspected of running illegal peer-to-peer cryptocurrency trading operations, in a coordinated sweep conducted on April 22 with tax authorities and the Metropolitan Police.
Stop notices were issued at every site, effectively ordering the alleged operators to cease all unregistered cryptoasset activity while multiple criminal investigations into potential anti-money laundering (AML) and counter-terrorist financing breaches continue.
In a statement, the FCA said the raids were part of “ongoing criminal investigations under the Money Laundering Regulations 2017 and counter-terrorist financing legislation,” underscoring that cryptoasset exchange providers must be registered to operate legally in the UK.
Notably, there are currently zero registered peer-to-peer crypto trading businesses with the FCA, meaning any P2P platform offering UK-facing services is doing so without formal authorization.
The latest action builds on previous FCA operations that have targeted unregistered crypto ATMs and unlicensed exchanges, including raids that disrupted at least 26 illegal crypto machines across the country.
In 2024, the regulator and Metropolitan Police arrested two individuals in London suspected of running an unlicensed cryptoasset exchange that allegedly processed more than $1.25 billion worth of unregistered crypto over several years, according to the FCA and Sky News.
Therese Chambers, the FCA’s Executive Director of Enforcement and Market Oversight, has warned that “crypto businesses operating without registration are illegal” and pledged that the watchdog “will do everything in our power to stop crypto firms from operating illegally in the UK.”
The FCA has also rejected roughly 90% of crypto firms seeking registration in recent years due to AML and fraud-prevention failures, approving only a small fraction of applicants under its tightened regime.
The London raids come as UK authorities step up enforcement against crypto platforms that either ignore registration rules or promote services illegally to local investors, including recent court actions over unlawful financial promotions.
With the FCA warning consumers they should be prepared to lose all their money in crypto and emphasizing that unregistered P2P trading offers no regulatory protection, the message to UK-facing platforms is increasingly blunt: register, or risk being shut down.
Laundering of the proceeds from Saturday’s $290 million rsETH hack is well and truly underway, and state-sponsored North Korean hacking collective Lazarus Group is suspected to be behind the theft, given the commingling of funds with other TraderTraitor-related hacks, BTC Turk and ByBit.
As with previous incidents, the culprits have taken to funneling vast volumes through blockchain bridges. The tools used so far even include LayerZero, the bridging protocol from which the $290 million rsETH were originally stolen.
Read more: DeFi sector in $14B meltdown as $290M rsETH hack fallout burns Aave
The efforts began shortly after Arbitrum’s Security Council rescued over 30,000 ether (ETH), slashing the hackers’ realized profit from $245 million to around $175 million.
One on-chain analyst, who goes by “Specter,” claims to have tracked over 1,600 transactions via 370 addresses in the first 12 hours of laundering. That’s an average of one transaction every 25 seconds.
As of Wednesday morning, they tallied $116 million as having been laundered to bitcoin (BTC), with another wallet currently holding $61 million still to go.
Read more: DeFi plays the blame game
Mixed reactions
The projects behind the bridges themselves have responded differently to the ill-gotten gains flowing through their tech.
Privacy protocol Umbra acknowledged that $800,000 worth of ETH had passed through its system. While the project underlined its inability to stop illicit use of its autonomous smart contracts, it did put its own hosted front end into “maintenance mode.”
THORChain, as usual, washed its hands of responsibility, with varying degrees of diplomacy.
Read more: Vultisig founder says DPRK-linked Bybit transactions are ‘legitimate’
Specter estimates that 99% of the laundered funds flowed through THORChain, whose dashboard shows over $100,000 of affiliate fees earned on Tuesday.
While THORChain’s bridging infrastructure is decentralized across a network of 95 active nodes, affiliate fees come from use of its front end. Blockchain investigator Tanuki42 puts the recent fees at more than double year-to-date revenue.
In attempting to defend THORChain’s inability to prevent illicit use, founder JP let slip that the protocol held an admin key for many years.
Read more: DeFi karma: Garden hacked for $11M after bridging Lazarus’ loot
No let up
The DeFi sector has faced two catastrophic hacks so far this month, with combined losses of well over half a billion dollars.
On top of this, a slew of smaller incidents also continue to batter community morale.
While DeFi users and developers alike are still reeling from the fallout of Saturday’s incident, just last night a further $3.5 million was lost.
Read more: Inside the $280M Drift hack: weeks of setup, minutes to drain
Since the hack, Volo has provided two separate updates, informing users it had recovered $500,000, and then 19.6 BTC ($1.3 million).
As if near constant multi-million dollar hacks weren’t enough to worry about, ongoing phishing campaigns continue to hook victims.
In a span of just 11 hours, four victims reportedly lost almost $600,000 to the same drainer contract.
Got a tip? Send us an email securely via Protos Leaks. For more informed news and investigations, follow us on X, Bluesky, and Google News, or subscribe to our YouTube channel.
Solana price has rebounded by 6% since its Monday drop as investor confidence returns to the market. It is in the process of forming a double bottom pattern, which could position it for a significant trend reversal in the coming sessions.
Summary
- Solana rose to $88.5 as market sentiment improved, supported by easing geopolitical tensions and rising trading volume.
- The token is forming a double bottom pattern, with a breakout above $97.8 potentially targeting $118.
- Liquidation data shows $20.5 million in short positions near $91, raising the likelihood of a short squeeze on further upside.
According to data from crypto.news, Solana (SOL) price rose 3% to $88.5 on Wednesday, bringing its market cap to over $50 billion. Its gains came amid its daily trading volume rising by 22% to $4.96 billion.
Solana price rose after U.S. President Donald Trump announced an extension of the Iran ceasefire, easing broader macro fears and leading to a relief rally across the entire crypto sector.
The token has also benefited from institutional players doubling down on the token. Notably, Goldman Sachs recently disclosed that it holds $108 million in spot Solana ETFs. At the same time, assets in Solana spot ETFs, including those from Bitwise and Fidelity, have now surpassed $1 billion.
Solana is now in the process of completing a double bottom pattern on the daily, a setup that typically signals a bullish reversal on breakout from the neckline of the pattern. For Solana price, the neckline stands at $97.8, just 10% above the current price.
A decisive breakout could position the token for an upside to $118 with no more major resistance levels on the way. The target is calculated by adding the height of the double bottom formed to the point at which the breakout occurs.
Meanwhile, the Solana weekly liquidation heat map shows a large cluster of dense liquidity at $91, where more than $20.5 million in short positions are currently sitting. If the price reaches this level, it could trigger a short squeeze that accelerates the move toward the neckline.
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