TLDR:

• A federal judge ordered Circle to blacklist Zama’s cUSDC contract, freezing roughly $12.6 million in pooled USDC funds.

• Plaintiffs allege Overnight Finance’s Ermilov moved $15.77M from a shared treasury just before an OVN holder vote passed.

• Zama’s entire cUSDC pool was frozen because the contract holds funds from all depositors, not just the disputed address.

• Activist firm Patagon Management, known for forcing DAO treasury payouts, is one of the co-plaintiffs driving the suit.

A federal court order has led Circle to blacklist Zama’s confidential USDC contract, freezing roughly $12.6 million in funds early Saturday.

The freeze stems from a class action suit filed against Overnight Finance creator Maxim Ermilov. Plaintiffs allege Ermilov diverted more than $15 million from a shared treasury.

The move has drawn attention because it swept innocent users’ funds into the dispute.

Court Order Triggers Freeze on Zama’s Contract

Circle blacklisted the cUSDC contract address at 1:08 a.m. UTC on Saturday. The freeze locked 12,606,386 USDC in the Ethereum-based contract. Public block explorers identify the frozen address as Zama’s confidential USDC token.

Zama CEO Rand Hindi said on X that his team was investigating the freeze. He later wrote that the contract appeared to have been “caught in a crossfire of another case.” Hindi also confirmed that Circle gave no prior warning before the blacklist was executed.

Because cUSDC wraps the USDC backing every token holder, blacklisting the contract locks the full pool. The frozen amount is slightly more than the disputed deposit, meaning other users’ funds were also swept in. The plaintiffs told the court they were prepared to advance funds to make unrelated parties whole.

Hindi addressed the scale of outside exposure directly. “Since there wasn’t much utility yet for the cUSDC wrapper, there were very little funds in it, and as a result the vast majority (>99%) of funds in the cUSDC contract came from that single hacker’s deposit,” he wrote on X. Zama also announced it would pause the cUSDC, cUSDT, and cWETH contracts during its investigation.

Zama said in a statement that it is “an infrastructure provider, not a mixer or a tumbler.” The firm added that its legal team is working to isolate the flagged address and restore access for affected users as quickly as possible. Hindi also pushed back on any suggestion that the protocol enables money laundering.

“It’s also really useless for hackers to try to use Zama to hide their trail as we are precisely not a mixer and we do not obfuscate the sender and recipient, only balances and amounts,” he wrote.

Overnight Finance Treasury Dispute Explained

The class action was filed on May 28 in the U.S. District Court for the Northern District of California. Three funds holding OVN tokens accuse Ermilov of moving more than $15 million from a shared treasury. The filing describes Ermilov as a Russian national living in Abu Dhabi.

Ermilov built Overnight Finance, a DeFi yield platform that issued the USD+ stablecoin and OVN governance token.

The project raised $850,000 in a pre-seed round led by Hack VC in February 2022. OVN token sales began in September 2023, with holders promised a pro rata claim on the treasury.

The complaint quotes a November 6, 2024 Discord message in which Ermilov wrote, “you can buy 51% of OVNs and vote to have [the Treasury] distributed.”

OVN holders initiated a vote on May 4, 2026, to liquidate the treasury and distribute the funds. Just before the vote crossed a majority threshold on May 11, the lawsuit alleges Ermilov moved more than $15.77 million. About $12.5 million of those funds were USDC, and the bulk ended up in Zama’s cUSDC contract.

Ermilov, however, disputed the plaintiffs’ account. “They had no right to vote the way they did,” he told The Block. He also argued that the token confers no financial entitlement.

“OVN is not a security, so no rights to profit or distributions of any nature,” he said. Asked why funds were moved into Zama’s system, he said the move was meant to “hide balances from general public to minimize personal security risks,” citing recent kidnappings of crypto holders.

Activist Investors and a Familiar Legal Strategy

The plaintiffs in this case are not ordinary token holders. One co-plaintiff, Patagon Management, has built a practice around pressuring DAOs to liquidate treasuries and return value to token holders. The firm is run by Diogenes Casares, who is associated with a group sometimes called the RFV Raiders.

Casares has said the broader community has unwound DAOs including Fei Protocol, Rome DAO, and Temple DAO, and shaped governance of others. “Collectively, these protocols have Risk-Free assets in excess of $1B,” he wrote in January 2023.

Patagon previously sued Wei “Max” Wu over Spartacus DAO, a project whose holders had voted to dissolve it and reclaim the treasury. In that case, a judge granted an emergency restraining order barring Wu from moving $35 million in crypto.

The court also allowed service by NFT, email, and Discord — the same channels the Overnight plaintiffs are now seeking to use on Ermilov.

On May 29, U.S. District Judge P. Casey Pitts issued a text-only order directing Circle to block the USDC and set a hearing for Monday, June 1.

The order came on an ex parte motion, meaning Ermilov’s side had not yet been heard. The June 1 hearing will allow both sides to present arguments.

Onchain investigator ZachXBT called the freeze “precedent setting” for blacklisting a contract where funds are pooled with other users. “Overall I feel bad for Zama users who have now been indirectly impacted with this mess of a US civil case,” he wrote.

The case is now set to test the limits of Circle’s freeze authority in private legal disputes involving pooled DeFi contracts.

The Securities and Exchange Commission has charged a Texas man with running a crypto fraud scheme that raised $12.3 million from roughly 150 investors by falsely claiming to use AI-powered trading bots to generate guaranteed returns.

Nathan Fuller, a resident of Cypress, Texas, operated the scheme through his company Privvy Investments, LLC, and under the assumed business name Gateway Digital Investments between at least October 2022 and mid-2024, according to the SEC’s complaint filed in the US District Court for the Southern District of Texas.

Fuller allegedly promised investors returns of 40% to 50% within 30 to 45 days, with some told they could make guaranteed profits exceeding 100% in as little as 21 days. To back up the pitch, he claimed investor funds were secured by a surety bond, insured by the  Federal Deposit Insurance Corporation (FDIC) and protected by a professional liability insurance policy. None of it was true, the SEC alleges.

Source: SEC

At the center of the scheme were proprietary AI-based trading bots that Fuller claimed would conduct high-frequency arbitrage trading across crypto platforms. “Fuller’s bots did not function as represented,” according to the complaint.

Related: SEC Commissioner Peirce defends crypto privacy tools against surveillance push

Half of raised money went to personal expenses

Of the $12.3 million raised, Fuller allegedly misappropriated at least $6.2 million for personal expenses and used roughly $5.5 million to make Ponzi-like payments to earlier investors. To keep the scheme going, he sent investors fake account statements and fabricated correspondence from fictitious entities.

The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains and civil penalties.

The Fuller case comes as the combination of AI and crypto has opened new frontiers for bad actors. Last year, the agency charged multiple crypto platforms and investment clubs in a separate $14 million scheme that also leaned on AI branding to lure retail investors, with fraudsters posing as financial professionals in WhatsApp groups and promising profits from AI-generated trading tips.

Related: SEC approves Paxos as ‘blockchain-native’ clearing agency

SEC charges Donald Basile in $16 million crypto scheme

Last month, the SEC charged crypto executive Donald Basile and two companies he controlled with raising roughly $16 million from hundreds of investors through false claims tied to a crypto token called Bitcoin Latinum.

Despite recent moves, the agency has acknowledged that some of its past enforcement actions against crypto companies lacked clear investor benefit and misinterpreted federal securities laws. In a statement on its 2025 enforcement results, the regulator said that since fiscal year 2022, it brought 95 actions and imposed $2.3 billion in penalties for book-and-record violations that “identified no direct investor harm” and “produced no investor benefit or protection.”

Magazine: AI-driven hacks could kill DeFi — unless projects act now

TLDR:

• Top crypto analyst, Crypto Patel projects Litecoin could reclaim the $100-$140 range during its current accumulation phase.
• The analyst expects LTC to target $200-$280 after the next halving-driven market expansion.
• A move toward $500-$700 remains possible if Litecoin breaks key resistance during the next cycle.
• Reaching $1,000 may require institutional adoption and stronger long-term demand beyond 2030.

Despite years of muted performance and fading investor interest, the analyst believes Litecoin remains positioned within a historically important accumulation zone that could support future gains.

Analyst Maps Litecoin Rally to $1,000 Through Three Phases

Crypto analyst Crypto Patel has presented a multi-cycle roadmap outlining how a Litecoin rally to $1,000 could unfold over the coming years.

According to the analyst, LTC remains in a deep accumulation phase despite trading more than 80% below its all-time high.

In a recent post on X, Patel divided Litecoin’s potential growth into three distinct phases. The first phase involves reclaiming the $100 to $140 range, which he expects could occur between now and 2027 as market conditions improve.

The second phase targets a move toward $200 to $280. Patel believes this stage could develop following the next Litecoin halving cycle, which is expected to strengthen supply-side dynamics and attract renewed market attention.

His final phase focuses on the next major bull market peak. During that period, the analyst expects Litecoin to challenge its previous record high before extending toward the $500 to $700 range.

While Patel acknowledged that a Litecoin rally to $1,000 remains possible, he described it as a longer-term objective that may require conditions extending beyond 2030.

The analyst assigned a 20% to 30% probability to a move toward $500. However, he estimated only a 5% to 10% chance of Litecoin reaching $1,000 under an extreme bullish scenario supported by stronger institutional participation.

Why Litecoin Bulls See Opportunity Despite Market Skepticism

Patel argues that Litecoin’s current market structure presents a favorable risk-reward setup compared with assets already trading near cycle highs.

The analyst pointed out that LTC is trading within a long-term support region where buyers have historically emerged after extended periods of weakness.

He also cited several factors that could support future growth. Among them are Canary Capital’s proposed Litecoin ETF, the network’s upcoming 2027 halving event, and Litecoin’s continued reputation as a payment-focused cryptocurrency.

The analyst additionally referenced Litecoin’s MWEB privacy feature and its long-standing position as the asset often described as silver to Bitcoin’s gold. These factors, he noted, continue to support the project’s relevance within the broader digital asset market.

Still, Patel outlined notable challenges. He observed that Litecoin failed to surpass its 2021 peak while Bitcoin, Ethereum, and Solana established new highs.

He also noted that ETF-related demand remains limited and that Litecoin lacks the smart contract ecosystem available on competing blockchain networks.

For now, Patel maintains that Litecoin remains a slow-moving, long-term cycle asset. Whether a Litecoin rally to $1,000 eventually materializes may depend on broader adoption trends and sustained demand growth in future market cycles.

TLDR:

• XRP liquidation heatmaps show that most major leveraged long positions have been cleared from the market.
• Reduced leverage exposure has created a cleaner market structure with fewer downside liquidity targets.
• MACD and RSI indicators are turning bullish as XRP forms higher lows on the 4-hour chart.
• XRP faces key resistance near $1.38, with a breakout potentially opening the path to $1.42.

XRP Price remains below recent highs, and the removal of leveraged positions and improving technical indicators have created a bullish landscape. This has prompted traders to reassess the asset’s near-term outlook.

XRP Price Recovery Benefits From Major Liquidation Reset

The XRP Price Recovery story extends beyond recent price action. One of the most notable developments has emerged from the derivatives market, where a large share of leveraged long positions accumulated throughout May has been eliminated.

Liquidation heatmaps show that many of the largest liquidity clusters beneath XRP have already been absorbed. These zones represented areas where overleveraged traders were vulnerable to forced liquidations if prices continued moving lower. As XRP gradually declined during the month, those positions were systematically removed from the market.

This process has changed the broader market structure. Earlier in May, repeated attempts to catch a bottom created layers of leveraged exposure underneath the price.

Every bounce attracted fresh longs, while each pullback increased liquidation risks. Instead of triggering a sustainable rally, XRP continued drifting lower, consuming those liquidity pockets along the way.

As a result, the market now appears significantly cleaner. The concentration of leverage that previously acted as a downside magnet has largely disappeared.

Many traders view such resets as an important stage in establishing healthier market conditions because excessive positioning often prevents sustained directional moves.

Technical Indicators Signal Improving Momentum

Alongside the liquidation reset, XRP’s technical structure has started showing signs of stabilization. The strongest indication came from the rebound that followed the May 28 decline toward $1.28, where buyers quickly stepped in after oversold conditions emerged.

Since then, XRP has recovered above the $1.34 level while forming a sequence of higher lows on the four-hour chart.

Although the broader trend remains corrective, this pattern suggests sellers are losing some control over short-term price action.

Source: CryptoRank

Momentum indicators have also strengthened. The MACD recently produced a bullish crossover, with the MACD line moving above the signal line. At the same time, the histogram continues expanding into positive territory, reflecting growing buying pressure.

The Relative Strength Index offers additional support for the recovery narrative. RSI has moved comfortably above the neutral 50 level and is approaching 57.

Importantly, the indicator remains below overbought territory, leaving room for further upside if demand continues improving.

Trading volume has also increased, confirming that price gains are supported by genuine market interest rather than temporary volatility.

Attention now turns to the $1.36-$1.38 resistance range, which previously served as support before the latest decline.

A successful move above that zone could strengthen the recovery case. However, XRP still trades below the May high near $1.55, leaving the broader corrective structure intact for now.

The crypto market is struggling, competitors are either passing through hard times or pivoting to other areas, while Binance is building with eyes on increasing its active user base ten-fold to 3 billion by 2030, Catherine Chen, the head of VIP and Institutional told CoinDesk in an interview.

“It is true, the market is going through a hard time,” Chen said. “There is still some regulatory development, we are seeing some of our competitors either struggling or perhaps shifting their focus.”

Coinbase, for example, recently reduced its workforce by 14% or nearly 700 staffers, citing negative market conditions as well as AI challenges, part of a wave of crypto employee layoffs this year.

As BTC faces resistance to reclaim the psychological six-figure mark over $100,000, a level it has not seen since mid-November, the broader market seeks sustainable growth drivers beyond retail speculation. The total crypto market capitalization was hovering around the $2.7 trillion mark, down by nearly 40% from its all-time-high of $4.38 trillion before the October Flash Crash, from which bitcoin has not recovered.

Chen said Binance’s position remains robust despite the market downturn, noting the exchange currently serves more than 310 million active users. She emphasized these are “actual active individual users,” verified through stringent KYC and corporate KYB protocols, not just “registered” accounts, she clarified. Binance is considered the largest crypto exchange in the world, dominating in the market in trading volume and registered users. Coingecko ranks Binance second with daily trading volume averaging roughly $7 billion.

Bridging the $2 billion institution spending gap

Chen speaks of a digital asset market that is growing so significantly and with such enormous potential, that only collaboration between traditional finance (TradFi) and native cryptocurrency will see both sides emerge winners in the future.

Binance is going after the massive spending disparity between traditional and digital asset desks, Chen said. She noted that TradFi spends north of $2 billion annually on advanced Order Management Systems (OMS). In crypto, infrastructure spend is less than a tenth of that, sitting at around $185 million.

Binance’s newOMS tool kit is designed to bridge this exact gap, partnering with industry mainstays like Coin Metrics, Talos and 3Commas to provide institutional-grade flow analytics, Chen said.

“Financial institutions are increasingly merging with crypto exchanges and blockchain infrastructure providers,” said Chen. “They don’t want to be building all that infrastructure themselves.”

Pledging Wall Street assets on crypto rails

This convergence has moved past theoretical trading and into the core plumbing of institutional custody. So, while the market watches retail trends, Chen noted, Binance has rolled out an institutional “triparty” banking framework designed to alleviate the ultimate TradFi pain point that is counterparty risk.

Institutional clients do not want to custody crypto directly nor do they want to leave their capital on an exchange, Chen added. Instead, they want to custody fiat or fiat-equivalents with their existing banking partners.

To solve this problem, Binance has silently integrated with sovereign-grade asset management, Chen stated, adding that the crypto exchange now accepts tokenized money market funds from institutional giants BlackRock and Franklin Templeton as eligible triparty ecosystems.

Instead of manually rolling Treasury futures and incurring heavy administrative fees, institutional traders can now pledge real-time, yield-bearing tokenized shares to back their trading operations.

“Whether it is equities, treasury, or debt, this is the way forward,” Chen notes, pointing to a 12-to-18-month horizon where real-world asset (RWA) tokenization matures rapidly. “People have finally figured out that you don’t magically change the fundamental characteristics or price of an asset by tokenizing it. It is fundamentally an improved form to ensure better accessibility.”

Binance also recently rolled out its Crypto-as-a-Service (CaaS) platform designed exclusively for financial institutions seeking to get involved in the digital asset sector in September of last year, Chen recalled. Since then, she added, over 15 major financial institutions have sought their services.

“Whenever the market is bad, it is always the best time for us to build,” Chen says. “We are building and positioning ourselves to 10x our user base when people aren’t noticing—and then, hopefully, we are already there.”

Hyperliquid (HYPE), a decentralized trading platform that began as a crypto perpetual futures exchange less than three years ago, is increasingly being viewed by Wall Street analysts as a broader financial infrastructure play that could challenge parts of traditional exchanges and derivatives markets.

In a new report, Grayscale described Hyperliquid as a fast-growing blockchain-based platform that generated roughly $800 million in revenue in 2025 while capturing meaningful market share in crypto perpetual futures, one of the largest segments of digital asset trading.

“Hyperliquid is not directly comparable to another project in either crypto or traditional finance,” Grayscale wrote. “If it continues to execute well … we think Hyperliquid could become a financial services juggernaut.”

Perpetual futures, or “perps,” are derivatives contracts that allow traders to speculate on asset prices without expiration dates. The market has become a cornerstone of crypto trading, averaging roughly $200 billion in daily volume this year, according to Grayscale.

Historically, the market has been dominated by centralized exchanges such as Binance and Bybit. Hyperliquid, however, earlier this year emerged as one of the first decentralized exchanges to compete at scale while offering self-custody and onchain transparency.

The platform processed roughly $2.9 trillion in perpetual futures volume in 2025 and now holds about $7 billion in open interest, according to the report.

Grayscale argued Hyperliquid’s ambitions now extend far beyond crypto trading.

The platform has expanded into tokenized equities, commodities and prediction-style markets through its HIP-3 and HIP-4 systems, allowing developers to launch new markets directly on the network. Grayscale said those products are increasingly functioning as round-the-clock trading venues for assets traditionally confined to Wall Street hours.

FalconX reached a similar conclusion in a separate report last week, saying Hyperliquid is beginning to compete with firms such as CME Group and prediction market operators including Kalshi and Polymarket.

“Hyperliquid is seeing traction as demand for its HIP-3 markets expands to include pre-IPO markets,” FalconX strategist Martin Gaspar wrote.

Both reports pointed to regulation as a critical factor for Hyperliquid’s future growth.

Hyperliquid currently blocks U.S. users because perpetual futures markets operate in a regulatory gray area under American law. But Grayscale said evolving guidance from regulators and growing interest from firms such as Coinbase (COIN), Robinhood (HOOD) and Kraken suggest regulated perpetual-style products could eventually enter the U.S. market.

Even so, risks remain. Grayscale noted that Hyperliquid’s token, HYPE, remains highly volatile and warned that the platform’s long-term growth depends heavily on future regulatory changes.

Still, both firms suggested Hyperliquid has moved beyond being viewed as just another crypto exchange.

Instead, analysts increasingly see it as an early attempt to build a 24/7 global financial market on blockchain rails.

TLDR:

• U.S. spot Bitcoin ETFs posted a tenth consecutive day of net withdrawals on May 29.
• Ethereum ETFs extended their outflow streak to fourteen sessions, reflecting weaker demand.
• Retail traders increased Bitcoin purchases as prices remained under pressure near support.
• Large investors reduced accumulation activity, keeping market momentum constrained.

Institutional sentiment in the digital asset sector remains under scrutiny as capital continues flowing out of major crypto investment products.

At the same time, exchange-level trading activity reveals that retail participants are actively accumulating during market weakness.

Bitcoin ETF Outflows Signal a Shift in Market Participation

On May 29, U.S. spot funds recorded net withdrawals of $125 million. The latest session marked ten consecutive trading days of capital exiting these investment vehicles, reflecting a notable cooling in institutional appetite.

The current trend stands in contrast to the powerful accumulation phase that fueled much of Bitcoin’s historic rally.

Throughout 2024 and the first half of 2025, strong fund inflows helped support a sustained advance, while assets under management climbed alongside price performance.

Recent fund-flow data now paints a different picture. Monthly withdrawals have become increasingly visible, and total ETF assets have started retreating from previous highs.

A reported monthly net outflow of roughly $2.43 billion suggests large investors remain focused on reducing exposure rather than building new positions.

Ethereum-linked products have followed a similar path. Spot Ethereum ETFs recorded $17.91 million in net outflows, extending a fourteen-day withdrawal streak.

The continued selling pressure indicates institutional demand across the broader digital asset market remains subdued.

Charts circulating across crypto-focused social media platforms illustrate this transition clearly. The data shows declining fund holdings occurring alongside weaker price action, reinforcing the market’s current defensive tone.

Retail Accumulation Grows as Smart Money Remains Defensive

While institutional capital continues moving to the sidelines, order-book and liquidity data suggest another group of investors is becoming increasingly active. Material Indicators’ latest market charts point to steady buying from smaller participants despite recent volatility.

The liquidity heatmap reveals substantial sell walls positioned between $75,000 and $80,000. These areas have repeatedly capped recovery attempts, preventing Bitcoin from establishing stronger upward momentum. Meanwhile, support remains concentrated around the $72,000 to $73,000 range.

The cumulative volume delta data offers additional insight. Traders executing transactions between $100 and $10,000 have significantly increased their buying activity.

This behavior suggests retail investors are treating recent declines as an accumulation opportunity rather than a warning sign.

In contrast, larger market participants continue showing restraint. Trading groups handling positions between $100,000 and $10 million have either slowed purchases or distributed holdings into weakness.

A noticeable reduction in activity appeared around May 28 as prices approached the lower end of the current range.

This divergence reflects an ongoing transfer of ownership within the market. Smaller investors are absorbing available supply, while institutional players remain cautious.

Until larger buyers begin accumulating alongside retail demand, price action may continue to fluctuate within a relatively narrow trading band.