Crypto World
Trump’s National Cyber Strategy Backs Crypto and Blockchain
The US administration released its National Cyber Strategy on Friday, signaling that crypto and blockchain technologies are now explicitly targeted for protection and secure integration within the nation’s digital infrastructure. Industry executives say the emphasis could shape policy levers ranging from funding for security research to potential enforcement actions. The six-page document frames the crypto ecosystem not only as a financial frontier but as a critical layer in national security, calling for secure supply chains and privacy protections from design to deployment. As crypto firms digest the implications, questions linger about how the administration will balance innovation with controls on privacy tools, mixers, and unregulated off-ramps.
Among the bold lines, the strategy states a commitment to “build secure technologies and supply chains that protect user privacy from design to deployment, including supporting the security of cryptocurrencies and blockchain technologies.” That clause, highlighted by industry observers as a first for a US cybersecurity framework, signals a potential opening for closer public-private collaboration on security standards. Yet, the policy also contains tougher language about criminal infrastructure and the denial of financial exits for illicit actors, a section that some analysts say could justify crackdowns on privacy-focused tools and crypto mixers in the longer run.
“We will build secure technologies and supply chains that protect user privacy from design to deployment, including supporting the security of cryptocurrencies and blockchain technologies.”
For Galaxy Digital’s head of firmwide research, the wording is a telling shift. Alex Thorn argued that explicitly naming crypto and blockchain as technologies to be protected marks a milestone in how Washington views the sector’s role in national security. The broader document, the industry veteran noted in a post, maps a future where cybersecurity risk management dovetails with crypto governance, potentially guiding federal engagement with crypto firms and infrastructure projects.
Another thread running through the document concerns resilience against emerging threats, notably quantum computing. Castle Island Ventures founder Nic Carter has been vocal about quantum risk to Bitcoin and the broader crypto ecosystem. In a take that aligns with the strategy’s emphasis on modernizing federal information systems, Carter pointed to the section calling for “post-quantum cryptography, zero-trust architecture, and cloud transition” as proof that policymakers are taking quantum threats seriously. “Sure seems like they’re taking quantum seriously. Nothing to worry about, I’m sure,” he said on X.
Bitcoin’s quantum risk lens tightens policy dialogue
The strategy’s posture toward quantum resilience comes at a time when the industry has debated how close practical quantum computing is to undermining current cryptographic underpinnings. Carter’s views reflect a broader tension inside the crypto community: balancing the need for robust, future-proof security with the practicalities of ongoing network upgrades and governance. The document’s emphasis on post-quantum cryptography is not merely an academic exercise; it foreshadows potential standards for federal and industry-grade security that could ripple through crypto custody, exchanges, and other critical components of the ecosystem.
In the same breath, the strategy reframes AI as a frontier technology that warrants careful risk management and innovation safeguards. The document states, “We will secure the AI technology stack—including our data centers—and promote innovation in AI security.” For crypto developers and asset managers, that phrasing suggests a growing overlap between AI-enabled security tooling, data integrity, and the safeguarding of sensitive financial information within crypto networks.
Beyond technology, the strategy highlights the importance of recruiting the next generation of cyber professionals to design and deploy advanced cyber technologies. This workforce emphasis mirrors a broader policy objective of aligning national security priorities with a vibrant tech economy, including the crypto sector, which relies on sophisticated cryptography, secure software supply chains, and resilient cloud infrastructure.
Market context
Market participants are watching how this policy direction translates into practical steps. The strategy’s emphasis on secure technologies and anti-criminal enforcement may influence risk sentiment, regulator expectations, and capital flows within crypto markets. While the document stops short of prescribing specific new rules, its signaling—particularly around post-quantum security, zero-trust architectures, and secure supply chains—could shape future standards, audits, and compliance requirements for crypto firms and their service providers.
Why it matters
For crypto users and investors, the strategy’s framework could translate into clearer security expectations and potentially more formal coordination between government agencies and the private sector on safeguarding digital assets. Acknowledging crypto and blockchain as technologies warranting protection might open avenues for collaboration on security research, testing, and standard-setting, helping to reduce systemic risk in the space.
For builders and operators, the document signals that security-by-design will be a central theme in any future regulatory guidance. Post-quantum readiness, zero-trust adoption, and robust cloud migration plans could become de facto prerequisites for governmental contracts, subsidies, or public-private partnerships, shaping how wallets, exchanges, and custody solutions structure their software, audits, and incident-response playbooks.
From a policy perspective, the juxtaposition of safeguarding innovation with criminal offense enforcement creates a dynamic tension. The “uproar against criminal infrastructure” language may push policymakers to balance privacy rights with anti-money-laundering goals, a debate that will likely surface in regulatory conversations and legislative proposals in the months ahead. Market participants will need to watch not only for new rules but for how agencies interpret and implement the strategy’s guardrails across different fiscal cycles and political winds.
What to watch next
- Implementation details on the post-quantum cryptography rollout and zero-trust adoption across federal information systems.
- Guidance or proposed regulations related to privacy-focused tools, mixers, and off-ramps for digital assets.
- Standards development and collaboration efforts between government agencies and crypto industry participants on secure supply chains.
- Budget allocations or policy actions that fund cybersecurity research relevant to crypto infrastructure.
Sources & verification
- President Trump’s Cyber Strategy for America (White House PDF): https://www.whitehouse.gov/wp-content/uploads/2026/03/President-Trumps-Cyber-Strategy-for-America.pdf
- Galaxy Digital’s Alex Thorn on crypto security in the strategy: https://x.com/intangiblecoins/status/2030078133303455922?s=20
- Nic Carter on quantum readiness and policy emphasis: https://x.com/nic_carter/status/2030091238742053115?s=20
- Bitcoin quantum risk discussion and institutional concerns: https://cointelegraph.com/news/bitcoin-quantum-computing-risk-institutions-developers
- Bitcoin price context referenced in coverage: https://cointelegraph.com/bitcoin-price
National Cyber Strategy reframes crypto under security and quantum guardrails
The six-page document makes it clear that the administration views cryptography, digital assets, and blockchain as components of critical national infrastructure rather than peripheral technologies. While the exact regulatory path remains to be seen, the emphasis on post-quantum readiness and secure, privacy-conscious design sets a baseline for how federal agencies intend to engage with the crypto ecosystem. Industry voices have already started parsing the strategy’s language for practical implications—ranging from research funding opportunities to potential investigations into privacy-preserving architectures and on-ramps.
The strategy’s commitment to privacy-by-design, coupled with its tough stance on combatting illicit financial activity, positions the policy as a pivot point for the sector. Whether this translates into collaboration on cryptographic standards or a tightening of enforcement around privacy tools remains to be seen. What is clear is that the policy framework now recognizes crypto and blockchain as central to national security considerations, not just speculative technologies with speculative risk profiles.
Alcoa is reportedly closing in on a deal to sell its Massena East smelter site in upstate New York to New York Digital Investment Group (NYDIG), a strategy move that would repurpose idle industrial capacity for Bitcoin mining and other digital infrastructure. Bloomberg reported on Friday that the two parties are in advanced discussions, with an expected close in the middle of this year. Massena East, along the St. Lawrence River, has been dormant since 2014 after Alcoa shut it down amid rising energy costs and competitive pressures.
The site’s built-in heavy-industry footprint—substations, transmission lines and high-capacity grid connections—positions it as a prime target for Bitcoin miners and data-center operators who often spend years securing such infrastructure from scratch. In addition, the Massena East location benefits from hydropower supplied by the New York Power Authority (NYPA), a factor that has drawn energy-intensive compute operations seeking scale with relatively low-cost, lower-carbon power.
The broader narrative around US industrial sites being repurposed for digital infrastructure is gaining traction. Earlier this year, Century Aluminum sold its Hawesville smelter in Kentucky to TeraWulf for $200 million, with plans to transform the facility into a high-performance computing and AI facility rather than a traditional smelting operation. The shift underscores a market interest in converting legacy industrial assets into computing capacity rather than conventional manufacturing.
New York-based NYDIG has been expanding its footprint in Bitcoin mining infrastructure. The firm, owned by Stone Ridge, already holds a stake in Coinmint, which operates mining hardware at the same campus under a long-term lease. The consolidation reflects NYDIG’s broader ambitions in both mining and related AI-oriented data-center deployments. The narrative around NYDIG’s activity in the space has intensified after Crusoe Energy agreed to sell its Bitcoin mining business to NYDIG last year, signaling a growing convergence between mining and AI infrastructure initiatives.
Key takeaways
- Alcoa is in advanced discussions to sell the Massena East site to NYDIG, with a closing expected in the middle of 2026, according to CEO Bill Oplinger as cited by Bloomberg.
- The Massena East campus benefits from existing heavy-industrial infrastructure and hydropower from NYPA, which reduces the friction and cost typically associated with siting new digital infrastructure projects.
- NYDIG’s expansion in mining infrastructure includes stakes in Coinmint and a history of acquiring mining assets, including Crusoe Energy’s mining business, highlighting a strategy that blends crypto mining with broader data-center ambitions.
- The deal sits within a broader U.S. trend of converting retired industrial facilities into AI, HPC and data-center campuses, a pattern already visible in the Hawesville example and other recent moves by miners and energy partners.
Industrial assets, power deals and a changing crypto playbook
Massena East’s potential sale is notable for what it reveals about how the crypto and AI infrastructure ecosystems are leveraging pre-existing energy and grid assets. The site’s proximity to hydropower from NYPA provides a cost and emissions angle that matters to operators facing energy-price volatility and the push toward lower-carbon compute. Built to run around the clock, aluminum smelters are, by design, already configured for continuous power delivery—a characteristic that makes them appealing hubs for mining rigs and AI data centers that demand consistent energy supply and scale.
NYDIG’s involvement signals a broader strategic alignment between mining and AI-focused infrastructure. The company has been extending its reach in Bitcoin mining by leveraging established facilities and leases—an approach that can accelerate project timelines and reduce regulatory hurdles compared with greenfield development. The Coinmint stake and the Crusoe Energy sale to NYDIG reinforce a pattern where crypto-dedicated capital is funding facilities that can pivot between mining and AI workloads depending on market conditions.
These developments also dovetail with the evolving competitive landscape among crypto miners worldwide. While some players double down on expansion in traditional mining, others are actively repositioning assets for AI and cloud computing services. MARA Holdings’ recent stake in Exaion illustrates the AI services dimension, while peers like Hive, Hut 8, TeraWulf and Iren are repurposing existing sites into data-center ecosystems. CoreWeave, for its part, has migrated toward AI-focused infrastructure, signaling a broader shift in how capital and operators view the value of large-scale computing capacity beyond pure mining.
Implications for investors and the crypto infrastructure market
The Massena East development is a microcosm of a larger market dynamic: the convergence of retired industrial assets, power accords, and the demand for scalable compute. For investors, the potential sale underscores several practical considerations. The presence of prebuilt infrastructure and hydropower can shorten project timelines and reduce capex risk, while strong local energy partnerships may support more predictable operating costs. Yet investors should also monitor regulatory developments, energy pricing trends, and community reception to large-scale crypto or AI facilities in energy-rich regions like upstate New York.
Market observers are watching whether such repurposing efforts will catalyze a more stable, diversified revenue mix for miners—balancing traditional BTC mining with AI-related compute services and data-center operations. The Hawesville example, where Century Aluminum sold the site for AI-focused development, illustrates how industrial assets can transition toward higher-value, location-specific digital infrastructure without relying solely on commodity mining cycles. If Massena East proceeds, it could become another data point supporting this broader retooling trend.
Meanwhile, NYDIG’s ongoing expansion and its portfolio moves—along with other industry players who are gradually tilting toward AI-enabled infrastructure—may influence how capital flows into the sector. The emphasis on durable infrastructure, long-term leases, and energy partnerships could offer a more resilient framework for funding and operating large-scale computing assets in a competitive energy market.
As with any major asset repositioning, the path forward will hinge on regulatory clarity, local permitting, and the economics of power supply. Until the deal closes, readers should watch for updates from Alcoa and NYDIG, and note how the Massena site’s conversion could inform future repurposing plays across the industry.
Readers should keep an eye on how this shift interacts with the broader crypto landscape, where miners are increasingly balancing BTC exposure with AI, data-center demand and cloud computing opportunities. The coming months will reveal whether the Massena East project becomes a notable blueprint for how industrial relics can fuel next-generation digital infrastructure—and what that implies for energy markets, regional economies, and the strategic playbooks of miners and AI operators alike.
What’s next remains uncertain, but the trend toward repurposing legacy industrial capacity for high-performance computing and AI workloads is likely to accelerate as energy deals, regulatory clarity and demand for scalable compute continue to evolve.
Crypto World
One person holds the keys to $200 million of a project’s crypto. His co-founder says that has to end
For years, NEO’s treasury was held in a setup that would be unusual for most financial institutions: hundreds of millions of dollars in crypto assets were controlled through personal wallets, with no multisig protections and little formal oversight.
That person, according to co-founder Da Hongfei, is Erik Zhang, NEO’s other co-founder and the architect of its core protocol.
“Around 85% is controlled by Eric alone with single signature,” Da said in an interview. “It had never been transferred to any individual or any multi-sig.” The native NEO and GAS tokens Zhang holds are currently worth between $200 million and $250 million, Da estimated. That’s more than NEO’s current $197 million market capitalization.
Zhang, for his part, has accused Da of separate problems. The two founders have been airing those disputes in public since December.
The fight has since produced rival governance plans and an unsuccessful mediation effort in Hong Kong.
Da published his restructuring proposal on GitHub on April 9. It calls for redomiciling the Neo Foundation from Singapore to the Cayman Islands, replacing the current two-founder governance with an independent five-member board, barring both founders from that board for 24 months, and redistributing roughly 26 million NEO and 40 million GAS to tokenholders.
Zhang’s counter-proposal called staying on the board keeping the Foundation in Singapore, not move it to the Cayman Islands.
Most pointedly, Zhang’s proposal calls for a formal investigation into historical asset management, including provisions to address potential corruption, improper asset transfers, and concealment of public assets.
Da dismissed those provisions flatly. “I think it’s a very blunt and empty accusation,” he said. “There is no corruption, no misuse of funds.”
For some observers, however, the numbers seem quite stark. NEO’s treasury holds ~$460 million in assets, roughly double the project’s $197 million market value, while the token has dropped 98% from its 2018 peak.
Mutual disarmament
NEO’s FY2025 financial report, its first comprehensive disclosure since 2020, revealed over 1,100 BTC, more than $100 million in stablecoins and cash, and a portfolio of venture investments including an unliquidated stake in Binance.
Da broke the treasury into two halves. The first, the native NEO and GAS tokens, sits largely under Zhang’s single-signature control. The second, bitcoin, ether, stablecoins, fund-of-fund investments, and bank balances, is managed by NGD, the entity Da runs.
Those non-token assets, once relatively modest, have grown to over $200 million, driven largely by the appreciation of its BTC and ETH holdings accumulated through early-stage investment returns.
The result is a treasury split almost evenly between two people who are no longer speaking productively, each holding leverage over the other, neither willing to move first.
Da framed his proposal as mutual disarmament.
“NGD will lose its control over most of the assets, including the BTC and stablecoins, which are over $200 million. And Eric will lose his personal control of the majority of the NEO tokens,” he said.
“Basically, me and Eric need to sacrifice our individual control over assets. I think that’s the fundamental change.”
He said he’s willing, but doesn’t know if Zhang is.
Da’s restructuring depends entirely on Zhang’s cooperation for its most critical step of transferring the single-signature token holdings to a multisig lock address. In an April 10 AMA, Da committed to a one-to-three month timeline.
Asked what happens if Zhang refuses, Da was candid.
“If there’s one person holding around half of a crypto native token and not willing to hand over to a multi-sig, constitutional governance, then what the community should do, I think the answer should come from the community itself.
CoinDesk reached out to Erik Zhang for comment and had not heard back by time of publication
Strategy Inc. has proposed a change to the dividend schedule of its STRC preferred stock.
Summary
- Strategy proposes STRC dividend payments move from monthly schedule to twice per month structure.
- STRC carries variable 11.5% annualized dividend and aims to trade near $100 par value.
- Shareholder vote scheduled June 8 will decide approval of new dividend payment structure.
The proposal suggests moving payments from a monthly cycle to a semi-monthly structure, subject to shareholder approval.
The company stated that the adjustment could “lead to reduced reinvestment lag, enhanced liquidity, market efficiency, and increased price stability.” The change is still under review and has not taken effect.
Structure of STRC preferred stock
STRC, known as Variable Rate Series A Perpetual Stretch Preferred Stock, is designed to trade near a $100 par value. It currently offers a variable dividend with an annualized rate of 11.5%.
The dividend rate adjusts on a monthly basis. Strategy uses this structure to support price movement close to par while limiting sharp changes in value.
Strategy has built a portfolio of preferred shares to support its broader bitcoin acquisition plan. These instruments sit above common stock in the capital structure and have helped the firm raise large amounts of funding.
Alongside STRC, the company has issued other preferred stocks including STRF, STRE, STRK, and STRD. Unlike STRC, these carry fixed dividend rates and different payout terms.
Voting Process and Market Activity
Strategy has scheduled its annual meeting for June 8, where shareholders will vote on the proposed update. If approved, the new dividend structure will begin with a record date of June 30, and the first payment is expected on July 15.
The company also reported recent activity in STRC trading. Earlier in the week, STRC saw a trading volume of $1.1 billion in a single day, which was higher than its previous peak. The firm also disclosed that its bitcoin holdings stand at 780,897 BTC after recent purchases.
US aluminium giant Alcoa is reportedly nearing a deal to offload its long-idle Massena East smelter in upstate New York to Bitcoin mining firm New York Digital Investment Group (NYDIG).
The company is in advanced discussions and expects the transaction to close “in the middle part of this year,” CEO Bill Oplinger told Bloomberg on Friday. The site, located along the St. Lawrence River, has been inactive since 2014 after Alcoa shut it down amid rising energy costs and global competition.
Built for 24/7 heavy industrial operations, aluminum smelters come with pre-existing substations, transmission lines and high-capacity grid connections. That makes them attractive targets for Bitcoin miners and data center operators, who often spend years securing similar infrastructure approvals from scratch.
Massena East also benefits from hydropower supplied by the New York Power Authority, a key draw for energy-intensive computing firms seeking low-cost and lower-carbon power sources.
Related: Bitcoin mining difficulty falls, but projected to rise in next adjustment
US smelters reborn as crypto, AI data centers
The potential sale comes amid a broader trend across the US, where retired industrial sites are being repurposed for digital infrastructure. Earlier this year, Century Aluminum sold its Hawesville smelter in Kentucky to TeraWulf for $200 million, with plans to convert it into a high-performance computing and AI facility rather than traditional industrial use.
Meanwhile, NYDIG has been growing its footprint in Bitcoin (BTC) mining infrastructure. The firm, owned by Stone Ridge, already holds a stake in Coinmint, which operates mining hardware at the same campus under a long-term lease.
Last year, Crusoe Energy also agreed to sell its Bitcoin mining business, including its digital flare mitigation operations, to NYDIG.
Related: HIVE plans $75M raise to fund AI infrastructure push
Bitcoin miners pivot to AI
NYDIG’s renewed push into Bitcoin mining comes as other miners are increasingly pivoting toward AI and cloud computing as shrinking margins in mining push them to diversify revenue streams.
Earleir this year, MARA Holdings acquired a 64% stake in French infrastructure company Exaion, giving the company a foothold in AI services. Other miners, including Hive, Hut 8, TeraWulf and Iren, are also repurposing mining facilities into data centers, while some, such as CoreWeave, have fully transitioned into AI-focused infrastructure.
Magazine: Bitcoin may take 7 years to upgrade to post-quantum — BIP-360 co-author
Charles Schwab has shown interest in entering prediction markets as part of its wider product review. Chief executive Rick Wurster told investors that the company is considering whether to offer such services in the future.
Summary
- Schwab considers prediction markets but excludes sports, politics, and entertainment-related betting products.
- Citadel Securities monitors prediction markets growth but notes low liquidity limits current participation plans.
- Both firms see potential in event contracts for hedging financial and portfolio-related risks.
Wurster said prediction markets were “not of tremendous interest” among some clients when discussed recently.
He also noted that Schwab would “take a hard look at” the sector and described the setup as “quite straightforward” to introduce if the firm moves ahead.
Schwab has stated that any potential offering would avoid sports, politics, and pop culture. The firm aims to remain focused on investment services linked to long-term financial planning.
Wurster said prediction products outside that scope would not be pursued. He added that “people generally lose money” in gambling-style markets, which supports the firm’s approach of limiting exposure to speculative areas.
In addition, Citadel Securities has also expressed interest in the development of prediction markets. President Jim Esposito said the company is “absolutely keeping an eye on developments,” while noting that activity levels are still limited.
Esposito added that it is “certainly possible” Citadel could take part in the future. However, he said the firm is “not there yet” due to low liquidity in current platforms, suggesting that broader participation depends on market growth.
Event Contracts Viewed as Potential Tool
Citadel has shown more interest in event-based contracts linked to financial risks rather than entertainment or sports outcomes. The firm sees possible use in areas such as election-related contracts that may affect market behaviour.
Esposito said such contracts could offer a “clean and distinct way” for investors to manage risk. He also said there is “a good use case and industrial logic” for these tools as clients look for ways to hedge specific exposures.
A US federal judge has dismissed a class-action lawsuit linked to a memecoin promoted by Caitlyn Jenner.
Summary
- US judge ruled Caitlyn Jenner memecoin did not qualify as security under investment contract standards.
- Court said investors failed to prove pooled funds or structured financial returns linked to token.
- Lawsuit claims involving token promotions and donations were rejected and case dismissed from federal court.
The court found that the claims did not meet the legal standard required to classify the token as a security under US law.
Judge Stanley Blumenfeld Jr. stated that the complaint failed to show that the token functioned as an investment contract. He noted that there was no clear evidence of pooled investor funds or structured returns tied to shared efforts. The ruling stated that “promotion alone, however, does not establish a common enterprise.”
The case began when a group of investors filed a lawsuit in November 2024. They claimed they suffered financial losses after the token’s value dropped sharply. The plaintiffs argued that the token was an unregistered securities offering.
An amended complaint followed in May 2025. It included claims that investors contributed funds with expectations tied to future actions. These included token buybacks, marketing efforts, and other planned uses. However, the court found that these claims did not clearly show how investors would gain financial returns.
Moreover, the amended complaint focused on several proposed uses of funds. These included donations and plans for fractional ownership linked to Jenner’s Olympic gold medal. The judge stated that these claims lacked clear connections to investor benefits.
The ruling noted that some of these plans were introduced after certain investors had already purchased the token. It also pointed out that some proposals were never carried out. The court stated that these details did not support the claim of a structured investment arrangement.
Background of Token Launch and Controversy
The JENNER token was launched in May 2024 and later moved from one blockchain to another. This change became part of the dispute, as some investors said it affected the token’s value.
The project also faced controversy linked to alleged issues with collaborators. Over time, the token’s market value declined from its earlier peak. The judge denied further amendments to the lawsuit and directed related claims to state court for review.
US Senator Elizabeth Warren has raised concerns about statements made by SEC Chair Paul Atkins regarding enforcement activity.
Summary
- Warren questioned SEC Chair Atkins after data showed enforcement actions dropped to lowest levels in years.
- SEC data release contradicted earlier testimony where Atkins said he was unsure about enforcement figures.
- Warren requested answers by April 28 on whether Congress was misled about enforcement activity levels.
In a letter sent on Wednesday, she questioned whether his earlier testimony before Congress reflected accurate information.
Warren referred to a congressional hearing held on Feb. 12. During that session, she asked Atkins about reports showing a drop in enforcement actions. According to her letter, Atkins responded that he was “not sure what data” she was referencing at the time.
The issue gained attention after the SEC released its fiscal year 2025 enforcement data on April 7. The figures showed a decline in enforcement actions compared to previous years. Warren stated that the data confirmed earlier concerns about reduced activity.
In her letter, she wrote that the new figures show enforcement actions at their lowest level in a decade. She said this raised questions about the accuracy of Atkins’ earlier response. Warren described the situation as “deeply troubling” based on the available data.
In addition, Warren suggested that Atkins may have provided incomplete information during the hearing. She stated that his response now appears “deeply misleading” given the data released later. The letter also noted that the hearing took place months after the fiscal year had ended.
She further wrote that Atkins “may have been deliberately trying to mislead the Committee.” The statement referred to his lack of clarity when asked about enforcement trends. Warren asked whether he was aware of the enforcement data at the time of his testimony.
Request for Clarification From SEC
The letter includes a series of questions directed at Atkins. Warren requested detailed explanations about the decline in enforcement activity. She also asked him to clarify what information he had access to during the hearing.
A response has been requested by April 28. The discussion comes as the SEC faces scrutiny over its recent approach to enforcement, including actions related to crypto companies. Lawmakers continue to review the agency’s performance based on the latest data.
Kelp, a liquid restaking platform, reported a cyber attack on Saturday that affected its rsETH token operations.
Summary
- Kelp exploit targeted rsETH bridge contract, leading to $293 million loss within a short period.
- Stolen funds moved through Tornado Cash, with large portion converted into Ether across networks.
- DeFi platforms froze rsETH activity after contagion risk spread across at least nine connected protocols.
The team detected unusual cross-chain activity and quickly paused smart contracts across the main network and several Layer-2 systems. The platform stated that it “investigates” the issue while assessing the full scope of the breach.
Meanwhile, the exploit focused on the rsETH adapter bridge contract. This component manages token transfers across chains.
Blockchain security firm Cyvers estimated losses at around $293 million. The attacker gained access to funds by targeting this contract, leading to a large outflow within a short time.
Cyvers reported that the attacker used an address funded through Tornado Cash. This tool is often used to obscure transaction trails. A large portion of the stolen funds, about $250 million, has already been converted into Ether.
The movement of funds has raised concerns among platforms connected to rsETH. Monitoring teams continue to track the assets as they move across networks. No recovery of funds has been confirmed so far. Kelp has not released further technical details about the breach at this stage.
Moreover, the attack caused what Cyvers described as “cross-protocol contagion.” At least nine crypto platforms had exposure to rsETH and took action to limit risk. Many of them paused or restricted activity involving the token.
Aave confirmed that it froze rsETH markets on its V3 and V4 platforms. This step aimed to prevent further losses and contain risk. Cyvers CEO Deddy Lavid stated that the event “highlights the risks of composability in DeFi,” referring to how connected systems can spread risk quickly.
Rising Security Concerns in Crypto Sector
The Kelp incident adds to a growing list of crypto platform breaches. Data shows that losses from hacks and scams reached about $482 million in the first quarter of 2026. These events continue to affect user confidence and platform operations.
Another recent caseinvolved Drift Protocol, which lost about $280 million in an exploit. The platform reported that attackers spent months gaining access before deploying malware. These incidents show ongoing challenges in securing decentralized finance systems.
RaveDAO has denied any role in the dramatic surge and subsequent collapse of its RAVE token, even as major crypto exchanges have opened inquiries into trading activity amid allegations of market manipulation. The project pushed back on social media, saying it was “not engaged in, nor responsible for, recent price action” after RAVE spiked from about $0.25 to nearly $28 in a matter of days before sliding more than 80%.
On-chain sleuth ZachXBT publicly accused RaveDAO of orchestrating a pump-and-dump scheme, pointing to concentrated token holdings and suspicious exchange flows. He suggested that more than 90% of the token supply could be controlled by insiders and urged exchanges to take action.
Key takeaways
- RaveDAO rejects being involved in the sudden RAVE price action, even as critics point to potential pump-and-dump dynamics and concentrated insider holdings.
- ZachXBT alleged a coordinated scheme and called for exchange-focused scrutiny of flows and ownership distribution.
- Major exchanges Binance and Bitget confirmed they are reviewing the situation; Binance’s CEO said the exchange is looking into it, and Bitget’s CEO said the exchange has started investigating RAVE trading activity.
- RaveDAO outlined plans to sell portions of unlocked tokens to fund operations, marketing, and hiring, and is exploring price-triggered or performance-triggered locks to align incentives.
- RAVE trades at around $1.36 after a volatile run; CoinMarketCap data shows a 94.95% drop over the past day at the time of writing.
RaveDAO’s response and token-economy plans
RaveDAO describes itself as a Web3-based entertainment project blending electronic music events with blockchain technology. The goal is to onboard crypto users through real-world experiences—festivals, parties, and other live events—with attendees receiving NFTs for participation. The RAVE token is intended to serve governance, ticketing, and access roles within its ecosystem.
In a bid to support growth while maintaining transparency, the team disclosed plans to sell portions of unlocked RAVE tokens to fund operations, marketing, and hiring. They also said they are examining “price-triggered or performance-triggered locks” as a mechanism to better align incentives with sustainable growth. The project stressed that it aims to build its movement “sustainably and transparently.”
These governance- and event-focused ambitions come at a time of heightened scrutiny of token distributions and market-making practices across the ecosystem. The ongoing focus on token unlocks signals a broader tension between financing growth and protecting holders from abrupt, unpredictable price movements.
As a reminder, RAVE’s role in the ecosystem is tied to its use for governance, ticketing, and access to events. The reported price action—rising from a sub-dollar level to near $28 within days, followed by a steep decline—has raised questions about whether the run was driven by organic demand or speculative trading. At the time this article was prepared, RAVE was trading around $1.36, down roughly 95% over the previous 24 hours, according to CoinMarketCap data.
Related coverage on market-making transparency underscores a recurring theme in crypto: many protocols do not disclose detailed market-maker terms, complicating investor assessment of liquidity dynamics and price discovery. For readers seeking additional context, see the study highlighting disclosure gaps in crypto market-making terms.
Industry backdrop: a wave of DeFi exploits in April
The RAVE episode arrives amid a recent surge in DeFi security incidents. In the first weeks of April, more than a dozen protocols and firms were affected by a string of exploits, beginning with the substantial $280 million Drift Protocol attack on April 1. The incidents touched DeFi liquidity pools, cross-chain bridges, and centralized- and decentralized-exchange ecosystems, illustrating the ongoing risk environment for investors and builders alike.
Projects including CoW Swap, Hyperbridge, Bybit, Silo Finance, Aethir, and Rhea Finance were among those impacted, with breaches ranging from smart contract bugs and oracle manipulation to access-control failures and liquidity-pool exploits. The events have reinforced a narrative around security hygiene, incident response, and governance accountability across the broader crypto space.
Against this backdrop, RaveDAO’s plans to diversify funding and improve token-management practices will be watched closely by holders and potential partners. The situation also underscores the broader market-wide demand for greater transparency around token emission schedules, unlocks, and long-term incentives in community-led ecosystems.
Related coverage of market-maker transparency remains relevant as readers assess how liquidity and price signals are shaped across new multi-chain ecosystems. For background, see coverage noting the ongoing gap in disclosed market-maker terms across many protocols.
What’s next could hinge on official disclosures from the exchanges reviewing activity, any new statements from RaveDAO about token unlocks, and the evolution of their governance and incentive structures. The coming weeks will be telling for investors looking to gauge whether the project can stabilize and deliver on its live-event experiences, or whether the episode signals deeper governance and distribution risks.
Investors should watch for further clarifications on token ownership distribution, the maturity and impact of any proposed price- or performance-triggered locks, and how exchanges handle potential market-manipulation signals as investigations continue.
Readers should monitor official updates from Binance and Bitget, as well as any new disclosures from RaveDAO, to better understand the implications for governance tokens, event-based ecosystems, and the balance between fundraising needs and holder protection.
The RAVE token recorded a rapid increase in value, rising from about $0.25 to nearly $28 within a short period.
Summary
- RAVE token surged rapidly before crashing over 80%, raising concerns about trading activity and liquidity patterns.
- Binance and Bitget launched investigations following claims of insider control and unusual token movement patterns.
- RaveDAO denied involvement and plans token sales to fund operations while promising transparent growth strategies ahead.
The surge attracted attention across the crypto market due to its speed and scale. Soon after, the token lost more than 80% of its value, leaving traders with large losses.
Market data shows that the token later dropped further, trading near $1.39 within a day of the crash. This sharp movement raised questions about trading patterns and liquidity. Observers noted unusual activity during both the rise and fall.
RaveDAO Responds to Allegations
RaveDAO issued a public statement denying any role in the price movement. The team stated that it was “not engaged in, nor responsible for, recent price action.” The response came as discussions grew across social media and trading platforms.
The project also addressed claims about token control. It did not confirm the figures but maintained that operations follow internal plans. The team added that it aims to act “sustainably and transparently” as it develops its platform.
In addition, major crypto exchanges have started reviewing the situation. Binance CEO Richard Teng stated, “We’re looking into it,” confirming that internal checks are underway. Bitget CEO Gracy Chen also said the platform had “started investigating” the trading activity.
These actions followed claims by onchain analyst ZachXBT, who pointed to concentrated holdings and unusual exchange flows. He suggested that more than 90% of the supply could be linked to insiders. Exchanges have not released detailed findings at this stage.
Project Plans and Market Context
RaveDAO shared plans to sell part of its unlocked tokens to fund growth. The funds are expected to support hiring, marketing, and operations. The team also mentioned possible “price-triggered or performance-triggered locks” to manage supply.
The project operates in the Web3 entertainment space, linking music events with blockchain use.
At the same time, the broader crypto sector has seen increased security issues. Several DeFi platforms have reported recent exploits, adding pressure on market confidence.
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