Crypto World
What is a governance attack? How BonkDAO lost $20M in a single vote
On July 6, 2026, someone spent about four million dollars buying BONK, used it to control almost a hundred percent of a seven-wallet vote, and legally walked off with twenty million from the DAO’s treasury. No code was hacked. The voting worked exactly as designed. Here is how governance attacks work, why they are getting more common, and what actually stops them.
Summary
- BonkDAO lost about $20 million after an attacker bought enough BONK tokens to dominate a governance vote without exploiting any code.
- Governance attacks allow attackers to use legitimate voting systems to approve malicious proposals when token ownership is concentrated and voter participation is low.
- Timelocks, quorum requirements, and emergency controls remain the main safeguards against governance attacks by making treasury takeovers harder to execute.
Most crypto thefts break something: a smart-contract bug, a stolen key, a spoofed website. A governance attack breaks nothing. It uses a decentralized organization’s own voting system, exactly as intended, to pass a proposal that hands the attacker the treasury. The code performs flawlessly. The rules are followed to the letter. And the money leaves anyway, because the rules themselves allowed it.
That is what happened to BonkDAO on July 6, 2026. An attacker quietly bought roughly four million dollars of the BONK token on exchanges over several days, accumulated a dominant share of voting power, and submitted a proposal to the DAO’s treasury. When the vote closed, wallets linked to the attacker controlled about 99.878 percent of the votes cast, the proposal passed, and around twenty million dollars in BONK drained from the treasury to attacker-controlled wallets. Only seven addresses voted at all. There was no exploit in the usual sense; there was a takeover, executed through the front door.
Governance attacks are becoming more common precisely because they require no elite technical skill, only capital and a poorly defended voting system, and a growing number of DAOs, many of them memecoin projects with outsized treasuries, hold large treasuries behind exactly such systems. This guide explains what a governance attack is, walks through the BonkDAO case in detail, covers the main variants including the flash-loan version that needs no upfront capital at all, surveys the historical record from Beanstalk to Compound to Tornado Cash, and lays out the defenses that actually work along with the reasons they are so rarely fully deployed. The through-line is a single uncomfortable idea: in a system where money votes, whoever can rent enough votes can rewrite the rules, a vulnerability distinct from the code exploits and key compromises that drain cross-chain bridges.
What a governance attack is
A decentralized autonomous organization, or DAO, replaces executives and boards with token-holder voting. Holders of the governance token submit proposals, other holders vote, and if a proposal reaches the required threshold, a smart contract executes it automatically. Proposals can adjust parameters, upgrade code, or move treasury funds, and the appeal is that no single person controls the outcome; the community does, transparently and on-chain.
A governance attack turns that openness into a weapon. Instead of finding a bug in the DAO’s code, the attacker acquires enough voting power through entirely legitimate means, usually by buying the governance token, and then uses that power to pass a proposal that benefits the attacker at everyone else’s expense, most often by transferring the treasury to themselves, a purely economic attack that needs no transaction-ordering exploit or mempool trickery. Because the acquisition of tokens and the casting of votes are both permitted actions, the attack is what security researchers call purely in-protocol: it cannot be prevented by cryptography or better code auditing, because nothing is being exploited except the voting mechanism working as designed.
This is what makes governance attacks conceptually different from every other crypto theft. A reentrancy bug or a stolen private key is a failure of implementation; the system did something it was not supposed to do. A governance attack is a failure of design; the system did exactly what it was supposed to do, and the outcome was still a robbery. Fixing it requires rethinking the rules of the vote, not patching a line of code, which is why these attacks keep succeeding against protocols whose smart contracts are flawless.
The root vulnerability is almost always token-weighted voting, the default model in which one token equals one vote. Token-weighted voting quietly assumes that large holders are aligned with the protocol’s success, because they have money at stake. That assumption fails completely against an attacker who does not care about the protocol’s future and only wants to control one vote long enough to drain the treasury. To that attacker, buying tokens is not an investment in the project; it is the purchase of a weapon, discarded the moment it has fired.
The BonkDAO case, step by step
The July 2026 BonkDAO attack is a near-perfect illustration, because it used no exploit at all and every step was visible on-chain.
The setup was patient accumulation. Over several days, the attacker bought roughly four million dollars of BONK using exchange wallets, building voting power gradually instead of in one conspicuous purchase. Because BonkDAO used ordinary token-weighted voting on a standard governance platform, that accumulated BONK translated directly into accumulated votes, and because the buying was spread out and routed through exchanges, it did not trigger alarm. To any observer, it looked like ordinary accumulation of a memecoin.
The execution was a proposal to the treasury. The attacker submitted a governance proposal and let it sit live for six days, the normal voting window. Here the fatal weakness showed: almost nobody else voted. When the window closed, only seven wallet addresses had participated, and wallets controlled by the attacker held about 99.878 percent of the total voting weight. The four-million-dollar token position was more than enough to dominate a vote that essentially no one else showed up for. The proposal passed, and the DAO’s smart contract did what passed proposals do: it executed, moving roughly twenty million dollars in BONK from the treasury to the attacker’s wallets.
Three design failures converged. There was no meaningful quorum requirement, so a vote decided by seven wallets counted as legitimate. There was no timelock strong enough to let the community notice and react to an anomalous treasury proposal before it executed. And there was no emergency check, such as a multisignature control over large treasury movements, to catch a proposal that would drain the treasury. Any one of these, properly set, might have stopped the attack; their combined absence made a four-million-dollar purchase sufficient to steal twenty million.
The aftermath followed the now-familiar script. BonkDAO traced the exchange wallets used to accumulate the tokens and began working with exchanges, cross-chain bridges, the network’s foundation, and law enforcement to pursue recovery, while at least one exchange suspended BONK transfers. But governance-attack recoveries are notoriously hard, precisely because the theft was executed through the DAO’s own legitimate process, not an exploit that might be reversed, and the token’s price fell sharply on the news. The attack also did not stand alone: it landed in a stretch of DeFi security incidents that had the market on edge, underscoring how quickly value can leave when the weakest link is the governance layer instead of the code.
The main variants
Governance attacks share a logic but come in several forms, distinguished mainly by how the attacker acquires voting power and how quickly they strike.
The slow accumulation attack is the BonkDAO model: buy tokens gradually over days or weeks, avoid suspicion, and strike when you control enough votes and turnout is low. A patient attacker can go further, spreading purchases across many anonymous wallets so the accumulation looks like healthy, distributed participation instead of a single entity building a weapon. Low voter turnout is the enabling condition because it lowers the number of tokens needed to dominate; in a DAO where almost no one votes, a modest position can control outcomes.
The flash-loan attack is the most dramatic variant, because it requires no upfront capital at all. A flash loan lets a user borrow a very large sum with no collateral, provided the loan is repaid within the same transaction. An attacker borrows a huge amount, uses it to buy or otherwise acquire a controlling block of governance tokens, votes to pass a malicious proposal, extracts the treasury, and repays the loan, all atomically in a single transaction that either fully succeeds or fully reverts. Because everything happens in one block, there is no window for anyone to react. This variant is what makes timelocks so important, since a mandatory delay between a vote passing and its execution breaks the single-transaction requirement that flash-loan attacks depend on.
Other paths to voting power exist. An attacker might exploit a flaw in how the protocol distributes or mints governance tokens, acquiring votes without paying market price. They might manipulate a price oracle to acquire tokens cheaply, exploiting a swap’s slippage and price impact to move a thin market in their favor. Or they might use a sybil strategy, splitting holdings across many accounts to appear as many independent voters while acting as one. What unites all variants is the goal: assemble enough voting weight, by whatever means, to pass a proposal the rest of the community would never approve, then convert that proposal into stolen funds before anyone can stop it.
A short history of governance attacks
The BonkDAO attack was severe but far from the first, and the historical record shows both the pattern’s persistence and how defenses have evolved in response.
The Beanstalk attack in 2022 is the textbook flash-loan case. An attacker took an enormous flash loan, used it to acquire a supermajority of the stablecoin protocol’s governance tokens, passed a proposal that drained the treasury, and repaid the loan, all in a single transaction. The haul was well over a hundred million dollars, and the entire operation lasted one block. Beanstalk became the canonical example of why any governance system that lets freshly acquired tokens vote immediately, with no delay before execution, is dangerously exposed to flash loans.
The Compound episode in 2024 showed a subtler form. A group associated with a well-known whale pushed through a proposal directing tens of millions in the protocol’s tokens to a vehicle they controlled, after delegating enough tokens to meet quorum. The community was divided over whether to call it an attack or aggressive-but-legitimate governance, and the resolution came partly through the threat of centralized intervention and partly through negotiation, a reminder that many DAOs retain a centralized backstop precisely because pure token voting can produce capture. It also illustrated that governance attacks are not always anonymous outsiders; they can be sophisticated insiders exploiting low participation and misaligned incentives in plain sight, the same fragility that shadows liquid staking tokens when one provider dominates.
The Tornado Cash case in 2023
The Tornado Cash case in 2023 delivered a chilling twist: an attacker passed a malicious proposal that granted themselves a controlling number of votes, effectively seizing the entire governance system, then, after extracting value, used their captured power to reset the malicious changes. The privacy protocol’s governance briefly ceased to exist as a decentralized entity because one proposal handed one actor total control. Smaller cases, from Build Finance to various memecoin DAOs, repeat the pattern at lower stakes. The consistent lesson across all of them is that treasuries are only as safe as the voting rules guarding them, and that a flawless smart contract offers no protection when the vote itself is the attack surface.
Why this is so hard to fix
If the defenses are known, a fair question is why governance attacks keep succeeding. The answer is that every defense trades away something a DAO values, and the trade-offs are genuinely uncomfortable, which is why so many projects postpone them until an attack forces the issue.
Consider the central tension. The entire premise of a DAO is open, permissionless participation: anyone can hold the token, anyone can propose, anyone can vote, and outcomes reflect the community instead of a gatekeeper. Every strong defense against governance attacks chips at exactly that openness. A high quorum requirement can paralyze a DAO whose members rarely vote, leaving it unable to pass even benign proposals. A long timelock slows the organization’s ability to respond to genuine emergencies, the very speed that on-chain governance was supposed to improve. An emergency multisignature or veto committee reintroduces a trusted group, which is a form of the centralization DAOs exist to escape. Each safeguard makes the DAO safer and less decentralized at the same time, and communities are understandably reluctant to give up the ideal that drew them together.
Low participation compounds the problem and resists easy solution. Most DAOs suffer chronically low voter turnout, with studies finding that a large share have only a handful of active voters, and low turnout is the single condition that makes governance attacks cheap, because it lowers the token threshold an attacker must reach. Yet turnout cannot simply be mandated; it reflects the reality that most token holders are passive, hold for price rather than participation, and have little time or expertise to evaluate proposals. Delegation, where holders assign their votes to engaged representatives, helps, but it concentrates power in delegates and introduces its own capture risks. The passivity that enables attacks is a structural feature of token ownership, not a bug that a single mechanism can eliminate.
There is also the deeper problem that a token market cannot distinguish a supporter from an attacker. Both are simply buyers willing to pay for tokens, and from the market’s perspective they are indistinguishable right up until the malicious proposal executes. Token-weighted governance assumes economic alignment, that anyone holding many tokens must want the protocol to succeed, but an attacker who plans to drain the treasury and discard the tokens has no such alignment, and no purchase-time signal reveals the difference. This is why some researchers argue that token voting alone can never be fully secure and that durable solutions require non-token inputs, reputation, identity, or contribution history, that markets cannot simply buy. Those approaches are early and hard to implement without reintroducing gatekeepers. The uncomfortable conclusion is that governance security is not a solved problem with a checklist to apply, but a live design frontier where every fix costs some decentralization, and where the cheapest, most open configuration, the one many DAOs default to, is precisely the one attackers find most inviting.
The defenses that work
Because governance attacks exploit design, not code, the defenses are matters of mechanism design, and a well-configured DAO can make an attack unprofitable even if it cannot make it impossible.
Timelocks are the single most important defense. A timelock imposes a mandatory delay between a proposal passing and its execution, and it does two things at once. It breaks flash-loan attacks entirely, because the borrowed tokens cannot be held across the delay, defeating the single-transaction requirement. And it gives the community a window to notice an anomalous proposal and respond before the treasury moves. The BonkDAO attack, with its six-day live window but apparently no effective execution delay or reaction, shows that a voting period is not the same as a timelock; what matters is a hard delay between approval and execution during which defenders can act.
Quorum requirements raise the bar for legitimacy. A quorum sets a minimum amount of voting participation for a proposal to pass, so a vote decided by a handful of wallets does not count. Had BonkDAO required a substantial quorum, a seven-wallet vote would have failed regardless of how the attacker’s tokens were distributed. Related measures include conviction voting, where voting power builds the longer tokens are committed, penalizing the sudden accumulation that attacks rely on, and delegation systems that raise overall turnout, which mechanically increases the tokens an attacker must acquire.
Emergency controls provide a last line. A multisignature control over large treasury movements, or a veto mechanism allowing trusted actors to pause or reject a clearly malicious proposal, can stop a drain even after a vote passes. These measures reduce decentralization, which is a real trade-off DAOs must weigh, but they exist precisely because pure token voting has repeatedly proven drainable. Many protocols keep a centralized safeguard for exactly the scenario Compound faced.
Finally, limiting what governance can do shrinks the prize. If a single proposal cannot unilaterally move the entire treasury, and if large disbursements require additional steps or approvals, the value an attacker can extract falls, and with it the incentive to attack at all. The unifying principle across every defense is to make the cost of acquiring enough votes exceed the value that could be stolen, or to insert enough delay and friction that the community can intervene before the theft completes. A DAO that has done neither, holding a large treasury behind cheap, immediate, low-turnout token voting, is not running a governance system so much as an unlocked vault with a suggestion box. BonkDAO’s twenty-million-dollar lesson is that the suggestion box, in the wrong hands and with enough tokens behind it, opens the vault.
The wider context is that governance is becoming a bigger target as DAOs hold more value. Memecoin communities in particular have accumulated substantial treasuries, often denominated in volatile tokens whose value can swing sharply, while running the simplest possible voting systems, and the combination of a rich prize behind a weak lock is exactly what attackers seek. As on-chain governance spreads from experimental protocols to organizations managing serious money, the gap between DAOs that have hardened their voting and those that have not becomes one of the clearest dividing lines in crypto security. The attacks are not going away, because the incentive is structural and the cheapest configuration is the most vulnerable one. What changes, DAO by DAO, is whether the treasury sits behind defenses proportionate to its size, or behind a vote that four million dollars and an empty room can win.
Frequently asked questions
What is a governance attack?
A governance attack is when someone acquires enough voting power in a DAO, usually by buying its governance token, and uses that power to pass a proposal that benefits them at the community’s expense, typically draining the treasury. It exploits the voting mechanism working as designed, not a bug in the code, which is what makes it different from a typical smart-contract hack.
How did the BonkDAO attack work?
The attacker spent roughly four million dollars buying BONK on exchanges over several days, accumulating dominant voting power. They submitted a treasury proposal that sat live for six days, and because only seven wallets voted, the attacker’s wallets controlled about 99.878 percent of the vote. The proposal passed, and roughly twenty million dollars in BONK drained from the treasury, with no smart-contract exploit involved.
Was any code hacked in a governance attack?
No. In a governance attack, the smart contracts perform exactly as designed. The theft happens because the voting rules themselves allowed a malicious proposal to pass and execute. This is why governance attacks cannot be prevented by better code audits alone; they require changes to the voting mechanism, such as timelocks, quorums, and emergency controls.
What is a flash-loan governance attack?
It is a variant that needs no upfront capital. The attacker borrows a large sum with no collateral, uses it to acquire a controlling block of governance tokens, passes a malicious proposal, drains the treasury, and repays the loan, all within a single transaction. The 2022 Beanstalk attack, which took over a hundred million dollars, is the canonical example, and timelocks are the main defense because they prevent execution within one transaction.
Why are governance attacks becoming more common?
They require capital and a weak voting system rather than elite technical skill, which lowers the barrier compared with finding code exploits. Many DAOs, especially memecoin projects, hold large treasuries behind simple token-weighted voting with low voter turnout, making them attractive targets. Accumulating enough tokens to control a low-turnout vote is often cheaper than the treasury it can capture.
Can stolen funds from a governance attack be recovered?
Recovery is difficult because the theft was executed through the DAO’s own legitimate process rather than an exploit that might be reversed. Projects typically trace the wallets, coordinate with exchanges, bridges, and law enforcement, and hope to freeze funds before they are laundered, but success is uncertain. BonkDAO began such efforts after its attack, with recovery unresolved.
What defenses stop governance attacks?
The main defenses are timelocks that delay execution after a vote passes, quorum requirements that invalidate low-turnout votes, conviction voting that penalizes sudden token accumulation, emergency multisignature or veto controls over large treasury movements, and limits on what a single proposal can do. Together, they aim to make an attack cost more than it could steal or to give the community time to intervene.
Is token-weighted voting the problem?
Token-weighted voting is the core vulnerability because it assumes large holders are aligned with the protocol when in fact, an attacker can buy votes purely to drain the treasury. Alternatives and supplements like conviction voting, quorum floors, delegation to raise turnout, and non-token reputation systems all aim to weaken the assumption that whoever holds the most tokens should control the outcome.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Digital asset markets are volatile, and you can lose your entire investment. Always do your own research. Information current as of July 7, 2026.
Bitcoin price fell below $64,000 on July 31 as renewed U.S.–Iran tensions lifted oil prices and strengthened the dollar, while its 4-hour chart formed a bearish rounded-top structure.
Summary
- Bitcoin price fell as low as $62,466, extending its rejection from the $65,000 area.
- A rounded-top breakdown points toward $59,000 if support near $62,000 fails.
- Iran reportedly attacked two tankers under U.S. escort in the Strait of Hormuz.
- Oversold momentum and concentrated liquidity near $62,000 could produce a short-term rebound.
Bitcoin price falls below key moving averages
According to data from crypto.news, Bitcoin (BTC) price dropped as much as 3.6% from its intraday high on Friday, sliding from $65,410 to a low of $62,466. It was trading near $63,155 at the time of the daily-chart snapshot, down 2.5% for the session.
The decline pushed Bitcoin below its seven-day and 25-day simple moving averages at approximately $63,445 and $64,488. Losing both levels indicates that short-term sellers have regained control after BTC failed to sustain its July recovery.
Bitcoin also remains far below the 50-day SMA at $69,104 and the 200-day SMA near $71,499. These averages represent major overhead resistance and reinforce the wider bearish structure that has remained in place since the asset fell from above $82,000 in May.
The daily Aroon indicator supports the bearish reading. Aroon Down jumped to 100%, while Aroon Up stood at 28.57%, showing that the latest low occurred much more recently than the last meaningful high.
However, Bitcoin has not yet broken the broader range between approximately $58,000 and $67,000. Sellers would need to force a sustained move below $62,000 to expose the lower end of that structure.
Iran escalation adds to risk-off pressure
Bitcoin’s latest decline coincided with another escalation in the U.S.–Iran conflict and renewed concerns about energy supplies passing through the Strait of Hormuz.
Iran said it attacked two oil tankers attempting to cross the waterway under U.S. military escort. Tehran also claimed it turned back four other vessels, while ship-tracking data showed that traffic through the strait remained thin.
The development carries greater market risk than an isolated attack on commercial vessels because the presence of a U.S. escort raises the possibility of a direct military response.
Iran separately launched drone attacks targeting U.S.-linked military facilities in Kuwait and Bahrain. Kuwait said it intercepted the drones and reported no casualties.
President Donald Trump also convened his Cabinet at Camp David as the administration considered its next steps in the conflict. No new military operation was formally announced during the meeting.
Meanwhile, the U.S. Senate failed in a 49–50 vote to advance a measure restricting Trump’s authority to continue hostilities. The result left the administration’s short-term military options largely unchanged.
These developments lifted oil prices and renewed concerns that higher energy costs could keep U.S. inflation elevated. A stronger dollar and rising Treasury yields added pressure on Bitcoin and other non-yielding risk assets.
The reported U.S.–Israeli proposal for a land blockade of Iran remains an option under discussion rather than an announced policy. It would reportedly involve persuading neighboring countries to restrict Iranian imports and exports.
Bitcoin rounded top targets $59,000
Bitcoin’s 4-hour chart shows a rounded-top formation developing since late June. BTC climbed from approximately $59,000 to a July 22 peak near $66,700 before forming a gradual series of lower highs.
The latest rejection from around $65,000 pushed the price toward the pattern’s neckline between $62,000 and $63,000. A confirmed 4-hour close below that area could validate the breakdown and place $59,000 back in focus.
Momentum indicators currently favor sellers. The 4-hour MACD line fell to approximately minus 229, below its signal line near minus 109. The negative histogram widened to around minus 120, showing that bearish momentum accelerated during the latest decline.
Still, the Stochastic RSI has reached oversold territory. Its two lines stood at 12.29 and 18.60, both below the 20 threshold. That reading does not guarantee an immediate recovery, but it suggests that the sell-off may be becoming stretched over the short term.
Bitcoin may therefore retest the broken $63,400–$64,500 area before deciding its next direction. Reclaiming $64,500 would weaken the immediate bearish setup, while a move above $65,500 would challenge the rounded-top structure.
Liquidity near $62K could trigger a reversal
Trader Ted Pillows identified another possible downside target using Bitcoin’s liquidation map. He said the decline had already cleared much of the liquidity beneath the previous trading range, leaving a remaining concentration close to $62,000.
“There’s still one cluster around the $62,000 level, which might be next. But after that, a reversal might happen.”
The $62,000 area aligns with the rounded top’s neckline and several recent intraday lows, making it the most important near-term level.
A sweep below that support could trigger leveraged long liquidations before buyers attempt a recovery. Failure to attract demand would instead open the path toward $60,000 and the rounded-top objective near $59,000.
On the upside, Bitcoin must first reclaim $63,445 and $64,488. Stronger resistance sits between $65,000 and $66,700, where several July rallies stalled.
Geopolitical headlines remain the immediate external risk. Further attacks involving U.S. forces, tankers, or major shipping routes could lift oil and extend the risk-off move. Conversely, evidence of negotiations or safer passage through Hormuz could ease inflation concerns and help Bitcoin stabilize.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
AMLBot, a crypto compliance and forensics firm, has introduced “AI Tracer,” a new self-service blockchain analysis tool designed to help users follow funds across networks starting from a single transaction hash. The company positions the product as a way to reduce reliance on specialist tracing software and deep internal expertise when investigating how crypto moves on-chain.
In an announcement shared with Cointelegraph, AMLBot says AI Tracer automatically builds a transaction graph, follows movements of funds through intermediate wallets, and attempts to map the journey toward the endpoint addresses the funds ultimately reach. As it walks the trail, the tool matches wallet activity against known entity labels such as exchanges, related services, and flagged addresses.
Key takeaways
- AI Tracer is a self-service tracing tool that begins with a transaction hash and maps visible fund movements across supported blockchains.
- The tool is designed to follow cross-chain transfers through bridges and to handle cases where assets are split among multiple wallets.
- According to AMLBot, AI Tracer cannot view transfers between internal exchange accounts or explain the intent behind payments.
- Reports are intended as an investigation starting point and do not replace audits, legal processes, or asset recovery.
- The product includes a free check and paid plans that increase the number of automated checks.
How AI Tracer works for on-chain investigations
The core premise behind AI Tracer is graph-based transaction tracing. AMLBot states that the process is automatic: the system traverses the transaction graph from a starting transaction, follows where funds move through intermediary wallets, and continues until it reaches the money’s endpoint. This approach is aimed at giving users a structured view of the transfer path instead of requiring manual analysis across many hops.
A key added layer is entity labeling. AMLBot says it “matches known entity labels — exchanges, services, flagged addresses — against every wallet it encounters” during the traversal. For traders, compliance staff, and researchers, this can matter because addresses that look unrelated at first glance may in fact map to familiar services, custody providers, or previously identified risk clusters—information that can shape how an investigation is prioritized.
Cross-chain and split-funds tracing—plus clear limits
AMLBot highlights two real-world situations where tracing often becomes complicated: cross-chain activity and value fragmentation. The company says AI Tracer can trace through bridges that move assets between networks. It also claims it can follow cases where assets are split across multiple wallets, which is a common pattern in laundering attempts and in complex payment workflows.
At the same time, AMLBot lays out boundaries to prevent users from over-interpreting outputs. The tool, it says, cannot see transfers between internal exchange accounts. That limitation reflects a broader constraint in public blockchain data: while blockchains can show withdrawals and on-chain transfers, they do not reveal internal bookkeeping decisions inside centralized services. AI Tracer also cannot determine why a payment was made, cannot freeze assets, and does not guarantee recovery.
In the company’s description, AI Tracer’s findings are meant to help form hypotheses and provide a lead for next steps. Reports are positioned as a starting point rather than a substitute for audit procedures, legal processes, or formal enforcement action.
Networks supported and who the tool is for
AI Tracer is currently designed to work across a wide set of networks, according to AMLBot. The supported list includes Bitcoin, Bitcoin Cash, Litecoin, TRON, Ethereum, BNB Chain, Ethereum Classic, Polygon, Arbitrum, Base, Optimism, Solana, Cardano, and Ripple.
AMLBot says the tool is meant for multiple user groups, including journalists, researchers, traders, and crypto users who want to understand transaction paths. It also names law enforcement agents investigating crypto crime, along with independent investigators and compliance teams that need fast, repeatable analysis for due diligence or incident triage.
That “self-service” framing is significant: investigators often face a trade-off between speed and depth. By automating the tracing and labeling steps, AI Tracer aims to lower the initial friction for routine inquiries—especially when someone has a transaction hash but lacks the time or tooling to manually map intermediate hops across chains.
Pricing model and what to watch next
AMLBot states that AI Tracer offers a free check, with paid plans that raise limits on the number of automated checks users can run. While the announcement emphasizes usability and coverage, the practical value for compliance teams will likely depend on those limits and on the consistency of label matching over time.
For readers considering the tool, the biggest takeaway is to treat AI Tracer outputs as a structured visualization of on-chain movement—not as proof of culpability or intent. The company’s own limitations—no visibility into internal exchange transfers, inability to infer payment purpose, and no asset-freezing or recovery guarantees—signal that users should still pair the tool’s results with further verification and formal processes when stakes are high.
Going forward, attention should focus on how effectively AI Tracer handles increasingly complex cross-chain routes and entity labeling as bridge usage and address clustering tactics evolve. Users should also watch for updates that expand network support or refine what the system can reliably infer from public transaction data.
Several users of the long-defunct crypto exchange reported that distribution agents had begun releasing funds to reimburse creditors for some of their 2022 losses.
Most leading cryptocurrencies have headed south over the past 24 hours, yet Hyperliquid’s HYPE is among the few to defy the latest red wave.
While it has risen by a mere 1.5%, one analyst assumed it might be gearing up for a staggering 40% pump in the near future.
The Necessary Condition
Currently, HYPE trades at around $54.70, placing it above the lower boundary of an important channel depicted by Ali Martinez. He suggested that if the asset holds the $53 level, a move up to $75 is possible. Also speaking on the matter was Altcoin Sherpa, who claimed that HYPE’s current level is “a good spot for a bounce.”
“Expecting huge tradfi trading volumes to come over the next few days too, which helps,” the analyst added.
Some on-chain signals also suggest that the asset may post additional gains in the short term. CoinGlass’s data shows that exchange outflows have dominated over inflows in the last several days, meaning that investors have transferred their holdings from centralized platforms to self-custody solutions. This is considered a bullish factor since it reduces the immediate selling pressure.
The Bearish Case
The number of pessimists, though, seems even more well-represented. X user Cut recently doubted HYPE’s potential, reminding of its inability to break its all-time high and wondering if its price would make a substantial decline. Ryker joined the discussion, projecting a plunge to $32 “soon.”
Cryptorphic also gave their two cents, arguing that HYPE is showing weakness after losing its long-term trendline and its price has broken below the key ascending support. They believe that if the $57-$58 range turns into resistance, the breakdown could confirm further downside, envisioning a possible crash under $30.
Meanwhile, the whales’ activity reinforces the pessimists’ outlook. Lookonchain disclosed that large investors keep selling HYPE, revealing the case of a market participant who purchased over one million tokens at an average price of $18 17 months ago and unstaked and deposited the stash into FalconX and Coinbase, perhaps with the intention to cash out.
The waning institutional interest adds more weight to the bearish perspective. Spot HYPE ETFs, which attracted substantial capital in June, have not appealed to pension funds, hedge funds, and other conservative investors during most days of July, with outflows significantly dwarfing inflows.
The post Hyperliquid (HYPE) Could Soar by 40% But Under This Condition: Details appeared first on CryptoPotato.
Tether reported $1.5 billion in net operating profit for the second quarter of 2026, driven by returns from its U.S. Treasury and repurchase agreement holdings.
The issuer of USDT, the world’s largest stablecoin, reported holding $187.75 billion in assets against $183.64 billion in liabilities as of June 30, leaving it with $4.11 billion in excess reserves, according to the BDO attestation released Friday. Those excess reserves are down from just over $8.23 billion three months earlier.
The second quater report shows Tether increased its physical gold holdings by 14 tons to roughly 146.2 metric tons from 132.2 tons during the quarter. The value of those holdings, however, fell to $18.84 billion from $19.84 billion because the price of gold dropped about 15% to just over $4,000 per ounce.
The company lifted bitcoin holdings by roughly 1,796 coins to 98,933 BTC. The value of those holdings fell to $5.80 billion from $6.62 billion as the bitcoin price used in the reports declined to $58,600 from $68,200, during the period.
Tether’s USDT issuance increased by about $446 million to $184.6 billion during the quarter.
SBI Holdings has reaffirmed its commitment to Ripple despite weaker XRP prices and slower cryptocurrency activity. The Japanese financial group values its Ripple shareholding at ¥6.6 trillion, equal to about $41.2 billion. Meanwhile, SBI delivered record first-quarter earnings and continued expanding its digital asset operations.
SBI Holdings Maintains Its Ripple Investment
SBI disclosed the updated Ripple valuation during its first-quarter earnings presentation. The company stressed that its Ripple shareholding remains highly valuable despite the current weakness in the cryptocurrency market. Therefore, SBI continues to treat Ripple as a major strategic asset within its broader financial portfolio.
The group has maintained a long relationship with Ripple and has supported XRP-based payment services. SBI has also promoted blockchain settlement systems through its financial subsidiaries and regional partnerships. Consequently, its latest statement reinforces the group’s long-term focus on Ripple’s payments technology and international network.
XRP has faced selling pressure during the recent cryptocurrency market slowdown. However, SBI did not announce any reduction in its Ripple position during the earnings update. Instead, the company highlighted the stake’s valuation while explaining weaker conditions across its cryptocurrency division.
Clarity Act Uncertainty Weighs on Crypto Activity
SBI linked the sluggish cryptocurrency market to uncertainty surrounding the proposed Clarity Act. The legislation seeks to establish clearer oversight rules for digital assets within the United States. Therefore, its progress could influence market structure, regulation, and business planning across the cryptocurrency sector.
The United States Senate continues considering the bill before its scheduled August recess. Senator Cynthia Lummis recently indicated that Senate leaders had reserved potential floor time for the measure. However, several other legislative matters were also competing for attention during the remaining session.
The Clarity Act has become an important issue for cryptocurrency companies seeking clearer federal rules. Ripple has spent years operating within an uncertain American regulatory environment. As a result, regulatory progress could affect its domestic operations and the wider use of XRP-related services.
SBI Reports Record First-Quarter Earnings
SBI Holdings recorded its strongest first-quarter performance as revenue and profit increased sharply. Revenue reached ¥571.0 billion, while profit before tax climbed to ¥225.8 billion. Additionally, shareholder-attributable net profit rose 149.9% year-over-year to ¥148.1 billion.
The group reported a 29% return on equity for the previous twelve months. That result exceeded SBI’s medium-term return target of 15% by a wide margin. Strong performance across its main financial businesses offset weakness within the cryptocurrency asset division.
SBI’s crypto asset business recorded a ¥1.4 billion pre-tax loss during the quarter. However, global cryptocurrency market maker B2C2 remained profitable and supported the group’s digital asset operations. The mixed results showed continued pressure in retail crypto services but stronger performance within institutional trading activities.
SBI Expands Its Digital Asset Services
SBI continues building its digital asset business through lending, stablecoins, custody, and exchange services. SBI VC Trade recently introduced cryptocurrency lending and support services linked to the JPYSC stablecoin. These services extend the group’s reach across regulated digital payments and blockchain-based financial products.
The company also plans to acquire Bitbank and expand its cryptocurrency customer base. SBI expects the combined operations to serve about three million cryptocurrency accounts after completing the planned transaction. Furthermore, it targets approximately ¥870 billion in digital assets under custody.
These expansion plans support SBI’s strategy of combining traditional finance with regulated cryptocurrency services. The group continues investing in trading, custody, payments, stablecoins, and blockchain infrastructure. Meanwhile, its $41.2 billion Ripple stake remains the largest highlighted asset within that digital strategy.
BlackRock clients bought $273.2 million of Bitcoin over two days after selling $63.6 million earlier in the week. Those figures match BlackRock’s reported fund creations to the decimal.
The buying made BlackRock close to the entire US spot Bitcoin ETF market this week. It also arrived with the average fund dollar sitting deeply underwater.
BlackRock Was More Than the Whole Market This Week
The iShares Bitcoin Trust (IBIT) took in a net $209.6 million across the four sessions from July 27 to July 30, according to Farside Investors. The full 13-fund complex took in $203.9 million. Every other fund combined therefore came out slightly negative.
The daily split shows the same concentration. IBIT supplied $183.38 million of the $233.13 million that arrived on July 30, or 79% of the total. That was the largest single-day inflow since July 6, SoSoValue records show.
Arkham’s on-chain tally reconciles exactly with those creations. IBIT redeemed $8.8 million and $54.8 million on July 27 and July 28, producing the $63.6 million of selling Arkham logged. Creations of $89.8 million and $183.4 million followed, matching its $273.2 million figure.
Follow us on X to get the latest news as it happens
The Average ETF Buyer Is Still Down 22%
Research firm Hedgeye published Bloomberg Intelligence data on July 28 showing how badly the typical fund buyer has fared since launch.
The average U.S. Bitcoin ETF buyer is now down -22%,” they wrote.
The underlying chart puts the gross cost basis of all US spot Bitcoin ETF purchases at $82,249. Measured against the $64,114 price it marks, that is a 22% shortfall.
Bitcoin (BTC) traded around $62,907 on Friday, down 2.96% over 24 hours. At that level the gap widens to roughly 24%.
The scale reads more clearly in dollars. Aggregate unrealized losses hit $16.33 billion on July 20. The same measure peaked at an $86.32 billion gain on October 6, 2025, the day Bitcoin set its $126,080 record.
Creations Track Client Demand, Not a House Bet
Flows into IBIT reflect share creations by authorized participants rather than proprietary positions taken by BlackRock. Rising demand forces the fund to buy Bitcoin. Redemptions force it to sell.
That mechanism cuts both ways, and IBIT has led in both directions. It absorbed $202.5 million and $212.2 million of outflows on July 23 and July 24, the two worst sessions of the month.
The longer arc is starker. IBIT holdings peaked near 823,000 BTC in mid-May, then fell by roughly 90,000 BTC through early July before flattening near 730,000.
BlackRock has commercial reasons to want that bleeding stopped. IBIT holds $47.86 billion, or 61% of the $78.76 billion across all US spot Bitcoin ETFs, and the firm issues formal Bitcoin allocation guidance of 1% to 2% of institutional portfolios.
Chief executive Larry Fink told CNBC on July 15 that the crypto leverage washout ended. Flow data has since moved his way, though not far. June drained $4.51 billion in the worst month on record since the funds launched in January 2024, and July has recovered $438 million of it.
Cumulative net inflows across the complex stand at $51.59 billion. IBIT alone has drawn $60.60 billion, a gap explained by Grayscale’s $27.42 billion of redemptions from GBTC. One issuer now accounts for all of the industry’s net growth, and its newest clients are buying at prices its earlier ones never saw.
The post BlackRock Bitcoin Buying Rebounds as ETF Investors Sit 22% Underwater appeared first on BeInCrypto.
South Korea will begin taxing cryptocurrency gains at a combined rate of 22% from Jan. 1, 2027, ending expectations that the long-delayed measure could be postponed for a fourth time.
Summary
- Annual crypto gains above 2.5 million won will become taxable as “other income.”
- Investors will pay 20% national tax plus 2% local income tax on gains exceeding the allowance.
- Critics warn that the absence of loss carryforwards could push trading toward offshore platforms.
- A pending opposition bill could still repeal the provisions before the rules take effect.
South Korea confirms crypto tax launch
Deputy Prime Minister and Finance Minister Koo Yun-cheol confirmed the implementation schedule during a National Assembly Finance and Economy Planning Committee meeting on July 29.
“We are pushing forward with the plan to tax cryptocurrency starting next year as scheduled,” Koo said.
Under the Income Tax Act, income earned by transferring or lending virtual assets will be classified as other income. Annual gains exceeding 2.5 million won, or about $1,740, will face a 20% national tax. A local income tax raises the combined rate to 22%.
Investors whose annual gains remain below the threshold will owe no tax under the framework. Taxpayers are expected to file their first returns in May 2028 for income earned during 2027.
The government first approved the levy in 2020 and planned to introduce it in January 2022. Lawmakers initially postponed implementation until 2025 before a December 2024 amendment moved the deadline to 2027. South Korea’s National Assembly approved that latest delay through revisions to the Income Tax Act.
Loss rules raise offshore trading concerns
People Power Party lawmaker Kim Sang-hoon questioned the tax design during the committee meeting, arguing that investors would not be allowed to offset losses against gains earned in later years.
Kim warned that the restriction could encourage traders to move activity away from domestic exchanges, including Upbit, Bithumb, Coinone and Korbit. Possible alternatives include overseas centralized exchanges, decentralized finance platforms and peer-to-peer markets.
Such a shift could reduce trading volume and tax visibility inside South Korea. Kim argued that implementation should wait until the OECD’s Crypto-Asset Reporting Framework is fully operational, allowing authorities to exchange tax information across borders.
Koo acknowledged the concern but said moving virtual assets into a capital-gains framework would require a broader review of South Korea’s tax treatment of financial markets. He left open the possibility of revising the system after authorities collect operational data.
A separate opposition bill introduced in March seeks to remove crypto income from the Income Tax Act entirely. Lawmakers referred the proposal to a subcommittee on July 29, meaning repeal or another delay remains legally possible before the end of 2026.
Crypto policy develops beyond taxation
The tax confirmation comes as South Korea considers a broader regulatory framework for digital assets and stablecoins.
Hashed Open Research and the Solana Policy Institute called for interim stablecoin licensing guidance in a policy report published July 29. The recommendations include temporary rules covering issuance, payments, permitted activities and foreign-issued tokens while lawmakers negotiate the Digital Asset Basic Act.
The proposals are advisory and do not change existing law. However, the report argues that waiting for the complete legislation could leave businesses without clear requirements for issuing or using won-backed stablecoins.
South Korea is also expanding state-backed investment in technology. As crypto.news previously reported, the government approved plans for a 20 trillion won investment account under the Korea Investment Corporation.
Unlike KIC’s existing overseas-focused portfolio, the new account can invest domestically in artificial intelligence, data centers and other industries considered strategically important.
What the tax means for US investors
The Korean framework differs from the US approach, where the Internal Revenue Service generally treats digital assets as property. US taxpayers can use capital losses to offset capital gains, subject to the applicable tax rules and reporting requirements.
South Korea’s lack of loss carryforwards could therefore leave some active traders with a less flexible tax position than US investors. The direct tax applies to income covered by Korean law, but US investors using Korean platforms should still monitor whether exchanges change access, reporting requirements or available products before 2027.
Domestic exchanges must now prepare their reporting infrastructure, while lawmakers consider the repeal bill and possible changes to loss treatment. Unless the National Assembly intervenes, the 22% levy will take effect on Jan. 1.
Talk about crypto trading with any savvy trader, and the first thing that comes up these days is perpetual futures, or “perps” — derivatives contracts that allow traders to control a much larger position than the money held in the account. Perps work like standard futures, but with one key advantage: there is no expiry.
While bitcoin and ether traders can dabble in spot, futures, options, perpetual futures and even structured products, for traders of other altcoins, perps are perhaps the only avenue for derivatives available to them. Dated futures (those with expiry) for altcoins are illiquid, and the spot market is an afterthought for anybody who doesn’t plan to hold.
So, CoinDesk talked to traders who have thrived in the perpetual futures market to explain what makes perps different from other derivatives, how they help efficiently manage the needs of institutional traders and retail traders alike and what perps trading actually costs.
Their answers were clear and nearly unanimous: everyone loves perps because of their deep liquidity, cheap trading fees and brutal margin efficiency, which is the amount of trading exposure you can get per unit of collateral you post.
But trading fees aren’t the only expense for traders. There’s also a recurring cost for keeping positions open, called funding rates. Think of it as an interest charge that builds up the longer you hold, and the traders we spoke with are concerned about how much this could add up.
Why perps?
If you ask traders why crypto perps average a daily volume of over $200 billion, they’ll tell you it’s not a matter of choice, but one of necessity.
Lucas Krenn, a derivatives trader at market-making firm STS Digital, and an independent trader for six years, said perps are the plumbing underneath everything the firm does.
“Outside bitcoin and ether, dated futures liquidity is thin to the point of being unusable,” he said. “So perps are not one tool among several. For a crypto native firm, they are the tool.”
Dated futures aren’t popular mainly because they have to be replaced with new contracts at expiry, and that process costs money. Those same costs are why futures-based ETFs tend to be less efficient than spot ETFs.
Liquidity refers to the market’s ability to absorb large buy and sell orders at stable prices. Per Krenn, standard dated futures are largely illiquid, meaning a few big orders can easily sway prices in either direction, raising slippage and spoiling execution for traders. (Slippage is the price at which the trade was submitted and the price at which it was actually executed.
Kenneth Ong, an independent trader for six years, with most of his trading activity concentrated in perps, explained a similar draw to perpetual futures from the perspective of a retail trader. According to Ong, perps offer better fills, meaning your order is executed at a more favorable price than you expected or than the ongoing market quote when you sent the order, lower fees, and the ability to run both sides at once via hedge mode. In simple terms, the hedge mode allows the trader to hold longs (bullish bets) and shorts (bearish plays) on the same token at the same time in the same account. These are treated as separate positions, not netted against each other.
That’s a big advantage over a regulated venue like CME, which offers standard futures in which a single account is typically netted by default.
Ong started in the spot market and drifted almost entirely into perps once he saw the difference. Spot, for him now, is “for actually holding something long term.”
Both Ong and Krenn told CoinDesk that margin efficiency was the real draw to perps. As noted earlier, for most tokens, perps listed across different exchanges are the only real venue to trade. That fragmentation is an issue for perps, but the leverage they offer, which is significantly greater than that of standard futures, helps manage risk efficiently across different venues and tokens.
Because perps require only a fraction of a position’s value as collateral, the same pool of capital can be split across a dozen venues and still back meaningful positions at each one.
Perps and price discovery
The always-on nature of perps has shifted price discovery to occur whenever the news breaks, not just whenever markets are open.
Ong found himself in the middle of this during the Iran conflict, which flared up repeatedly across the first half of 2026. It started with the conflict’s opening weekend in late February, when tokenized oil trading on Hyperliquid saw its first real surge in volume.
“That opening weekend, all the real reaction happened on crypto/tokenized commodity perps while the ‘official’ market was straight up closed,” Ong said. “By Monday, a chunk of the repricing already happened somewhere else.”
Krenn sees the same mechanism playing out in perps tied to other traditional assets.
For instance, building a proper tokenized equity product is genuinely hard primarily because it requires recreating the full legal, operational, and regulatory machinery of traditional share ownership on-chain. A perpetual that references the price sidesteps all of it, and is handy for those looking to just trade rather than invest for the long-term.
“That is why the instrument is so powerful and why it keeps spreading into new asset classes,” Krenn said.
Both traders see this perpification of various assets gaining momentum in the coming years. Ong said that tokenized oil trading over the weekend “is basically a preview” of what’s to come for other commodities. Deepen that liquidity across commodities and equities, and “it kills one of the last reasons to bother with dated futures at all,” he said.
Beware the funding rate
Ask any crypto trader what’s wrong with perps and you’ll usually get “liquidations,” or forced closure of long and short positions on account of margin shortage. But, according to Krenn and Ong, the funding rate is more of a cause for concern.
A dated futures contract tells you the interest rate of the trade right away. The trader knows exactly what he is getting into. A perpetual futures contract, on the other hand, has a funding rate that changes over time and is typically charged every eight hours. The trader, therefore, remains exposed to the floating rate while holding the position, with no built-in mechanism to lock it in. And if the market doesn’t move as expected, that funding rate becomes a burden.
“It is unquantifiable at the point of trade and unhedgeable afterwards,” Krenn said.
Ong was blunter in expressing his concern: “That funding’s not just some tiny fee you can ignore. It’s not. If you hold positions for long periods, it can potentially balloon to the point where a profitable trade loses money.”
The myth of the safe trade
Bitcoin’s current bear market kicked off with the Oct. 10 crash last year, which triggered widespread deleveraging across both losing and profitable positions. In a sense, it was the opposite of the Fed’s quantitative easing response to past crises, in which liquidity injections lifted both weak and strong assets alike.
.
On Oct. 10, exchanges socialized losses to protect their own systems. Longs got liquidated on price, which is normal. Then, profitable shorts were force-closed anyway, because the exchange’s insurance fund couldn’t absorb losses coming from the other side. Being right and being well-capitalized didn’t matter, and perpetuals faced a lot of criticism then.
But Krenn said the problem wasn’t with perps..
“It is not a perpetual problem. It is a crypto exchange margin model problem,” Krenn said. “Dated futures on those same venues sit behind the same insurance funds and the same deleveraging queue.”
“The distinction that matters is not perpetual versus dated [futures]. It is whether you are facing a proper clearing house with a mutualized default fund, or an exchange that socializes losses onto the winners,” Krenn added.
The asymmetry almost nobody prices correctly
Krenn, the institutional trader, offered one insight that inverts what most people assume about perp risk.
“Being long is the structurally safer side,” Krenn said.
His logic is that positive funding is easy to arbitrage away. Anyone holding stablecoins can buy spot, sell the perp, and pocket the spread, thereby compressing positive funding.
However, when the funding rate is negative, the arbitrage, involving a long position in the per and short position in the spot, the so-called reverse cash-and-carry is easier said than done. This only works if you can short the underlying token and only existing holders can readily short, and it becomes even more difficult if the circulating supply is small and concentrated. With arbitrage constrained, the gap between perp and spot prices can persist, meaning funding rates can stay extremely negative for long stretches.
Funding rates can stay extremely high or low for a long time.
“So the long side has a bounded cost and an unbounded upside. The short side has a bounded upside and an unbounded cost,” Krenn explained. “That asymmetry sits in very few risk models.”
He pointed to lending protocol Euler’s token this year as an example: a hard run on a listing, a small and concentrated float, funding on the perp going deeply negative, a situation where shorts “paying in the region of one percent every four hours,” to longs with almost nobody able to compress it because almost nobody had the token stash.
The takeaway
Perps seem to have democratized futures trading by solving the problem of access, cost and margin efficiency, but they are not without unique pain points, namely, the
volatile funding-rate exposure that can’t be quantified while taking bets and can’t be hedged once the trade is on.
As Krenn put it: “Until there is a liquid dated curve in crypto, the whole market is carrying an interest rate exposure it cannot price and cannot hedge.”
In the meantime, funding is the tax everyone pays for easy access to this leveraged market.
HYPE fell below $55 after Hyperliquid activated permissionless HIP-4 deployments on testnet, with whale transfers and broader crypto market weakness weighing on the token.
Summary
- HIP-4 permissionless deployments are now live on testnet, allowing developers to create prediction markets.
- HYPE declined almost 2% to around $54.70, losing the psychological $55 support level.
- HIP-4 markets hold roughly $182,000 in open interest and $881,000 in notional trading volume.
- A whale moved previously unstaked HYPE to FalconX and Coinbase Prime, according to Lookonchain.
Hyperliquid opens HIP-4 deployments on testnet
Hyperliquid has released the first implementation of permissionless deployments for its HIP-4 prediction-market framework on testnet.
The update allows developers to begin testing their own prediction and outcome markets on the decentralized exchange. Hyperliquid said it plans to introduce more features, including configurable fees and additional testnet templates.
HIP-4 extends the permissionless listing model used by HIP-3, which allows developers to deploy perpetual futures markets for different assets. The newer framework applies a similar approach to event contracts, placing Hyperliquid in closer competition with prediction-market platforms such as Polymarket and Kalshi.
A mainnet launch is expected to follow the testing phase, although Hyperliquid has not provided a confirmed date. Developers will likely use the testnet period to assess market settlement, liquidity, and contract configuration before deploying products involving real capital.
HIP-4 activity declines after the World Cup
Current activity on HIP-4 remains limited compared with established prediction-market platforms. Blockworks data shows that HIP-4 markets have about $182,000 in open interest and $881,000 in notional trading volume.
Sports contracts have accounted for most of the open positions. However, open interest has declined since the end of the 2026 FIFA World Cup earlier in July, reducing activity across Hyperliquid’s early event markets.
Permissionless deployment could broaden the available contract range beyond sports. Developers may eventually create markets tied to economic releases, elections and other measurable events, subject to the platform’s rules and applicable regulations.
The rollout also carries operational risks. Crypto.news reported on July 28 that Hyperliquid’s SK Hynix perpetual contract briefly dropped about 17.9% after an unusually low pre-market trade in South Korea affected its oracle price.
The market, listed as xyz:SKHX and displayed as SKHYNIX-USDC, tracks the U.S. dollar value of SK Hynix shares and offers leverage of up to 10 times. A Hyperliquid representative said Trade.xyz deployed and operated the market under HIP-3. Trade.xyz is investigating the incident and plans to release an update after completing its review.
Although that incident involved HIP-3 rather than HIP-4, it shows the importance of reliable pricing and settlement systems as Hyperliquid opens market creation to more developers.
HYPE price loses the $55 level
HYPE traded near $54.70 at the time of reporting, down almost 2% over the previous 24 hours. The decline pushed the token below $55 despite the HIP-4 testnet announcement.
The move followed weakness across the broader crypto market as Bitcoin fell below $64,000. Risk appetite declined amid reports that the United States and Israel were discussing a land blockade on Iran, raising concerns about a further escalation of the conflict.
On-chain transfers added to the pressure. Lookonchain identified a whale that acquired HYPE at an average price of about $18 several months ago before unstaking the tokens and depositing them with FalconX and Coinbase Prime.
Transfers to institutional trading platforms do not prove that a sale occurred. However, they can increase expectations of incoming supply, particularly when the holder sits on a large unrealized gain.
US prediction-market rules remain in focus
HIP-4’s expansion comes as U.S. regulators consider clearer federal standards for event contracts.
The Hyperliquid Policy Center and Multicoin Capital filed a joint comment supporting the Commodity Futures Trading Commission’s proposed prediction-market framework on July 27. They argued that written standards would help operators structure event contracts while limiting policy changes between presidential administrations.
The CFTC proposal addresses how the agency reviews contracts involving gaming, war, terrorism, assassination and conduct prohibited under federal or state law. These rules could affect how prediction markets are offered to U.S. traders, even as Hyperliquid advances its permissionless infrastructure.
HIP-4’s mainnet timing, developer participation, and recovery in open interest will determine whether the framework can develop beyond its initial concentration in sports markets. HYPE, meanwhile, must reclaim $55 to ease the immediate pressure created by market weakness and potential whale selling.
Andrew Garfield 'Was And Wasn't Surprised' Sam Altman Film Got Dropped By Amazon
Men’s Hundred: Manchester Super Giants’ Jos Buttler’s boundaries in half-century knock against Trent Rockets
Roblox Introduces New Ways to Discover and Play Games
-
Sports5 days agoCommonwealth Games boxing: Jadumani Singh seals dominant 5-0 win over Pakistan’s Sumama Rehman to enter quarter-finals | Commonwealth Games News
-
Business2 days agoWhy Trees Belong on the Risk Register
-
Tech5 days agoIntel is reversing course and bringing hyper-threading back to its server chips
-
Crypto World6 days agoRipple bought a bank in pieces. The $4 billion audit
-
Politics4 days agoLuke Littler dismantles Gerwyn Price to retain title in Blackpool
-
Politics3 days agoThe Part of the Electric Transition Nobody Wants to Discuss
-
News Videos5 days agoBITCOIN JUST ENTERED THIS CRITICAL ZONE…
-
Entertainment3 days ago‘Stargate’ Creator’s New Sci-Fi Series Returns for Season 3 Tomorrow
-
Business3 days agoMajor shareholder moves on Canyon
-
Crypto World5 days agoXRP Ledger adds $2.6B as RWA inflows rank second
-
News Videos1 day agoBitcoin Enters the 3rd Stage of the Bear Market
-
Politics5 days agoSpain sweeps the board at 2026 World Cup with individual awards
-
Entertainment6 days agoSara Gilson Killed By Husband After Viral “Pedophile” TikTok Video
-
Crypto World3 days agoKraken Enables Retail Access to Jersey Mike’s IPO via Tokenized Shares
-
Tech7 days agoAnthropic launches Claude Opus 5, a cheaper AI model for coding, agents and enterprise workflows
-
Tech4 days agoNew macOS Sequoia & Sonoma security updates for older Macs
-
News Videos3 days agoClaude: Build Financial Dashboards in Minutes (2026)
-
Politics1 day agoLuke Littler’s dominance sparks GOAT debate
-
Sports19 hours agoSeema Kaliramna Wins Discus Throw Bronze, Takes India’s CWG Medals Tally To 17
-
Crypto World6 days agoUpbit expands KRW market with two major DeFi token listings
You must be logged in to post a comment Login