Bitcoin BTC$81,648.42 pushed higher Tuesday, climbing to $81,500 to its strongest level since January as the latest leg of the rally spread beyond major tokens into tokenization-focused plays.

The largest cryptocurrency rose another 2% over the past 24 hours and is now up more than 35% from its early February lows. Ether (ETH), XRP (XRP) and Solana (SOL) also advanced, though they lagged bitcoin’s pace.

Feeding that momentum is strong demand for spot bitcoin ETFs, according to Paul Howard, senior director at Wincent. More than $500 million has flowed into spot BTC funds led by BlackRock’s and Fidelity’s products on the Monday session, reflecting continued interest from large investors, he said.

The positive sentiment is likely to stay constructive unless geopolitical conditions deteriorate materially, he said.

Tokenization theme gains traction

The move coincided with renewed momentum in tokenization — the effort to bring traditional financial assets onchain.

In equities, Bullish (BLSH) surged 12% after announcing the $4.2 billion acquisition of transfer agent Equiniti, a move that positions the company deeper into capital markets infrastructure. Bullish is CoinDesk’s owner.

The deal marks a shift beyond trading, said Owen Lau, analyst at Clear Street.

“Strategically we see this acquisition as a big push to transform Bullish from a crypto exchange to a capital market infrastructure provider capturing the tokenization trend,” said Lau. He added that the move could drive more recurring revenue and stronger margins over time, with the key question being timing rather than viability.

Galaxy Digital (GLXY), which just unveiled with State Street a tokenized cash-management fund for large investors, climbed 3.6%. Other digital asset infrastructure-linked stocks also moved higher.

Among tokens, tokenized real-world asset protocol Centrifuge’s native crypto (CFG) jumped 15% after Coinbase (COIN) tapped the protocol as a partner to help bring ETFs, credit and structured products onto blockchain rails, signaling growing institutional interest in the space. Coinbase also took an equity stake in Centrifuge.

What makes tokenization compelling to investors that it’s one of the fastest-growing sector at the intersection of blockchain tech and traditional finance. The market of tokenized assets, including stablecoins, is projected to reach $18.9 trillion by 2033, according to Ripple and BCG.

Not all crypto stocks participated in the rally. Circle (CRCL) and Coinbase (COIN) slipped 3-4%%, respectively, paring some of their Monday gains, suggesting some rotation within the sector.

Meanwhile, the broader equity market also pushed higher: the tech-heavy Nasdaq 100 climbed 1.2% to a fresh record and the S&P 500 advanced 0.8% during the session.

Aave court motion filed today in New York asks a federal judge to unfreeze $71 million in ETH.

Aave LLC filed an emergency motion today in the Southern District of New York to vacate a restraining notice blocking 30,765 ETH, worth roughly $71 million, from returning to exploit victims.

The filing argues the assets belong to users of the Aave Protocol harmed in the April 18 Kelp DAO bridge exploit, not to North Korea or its alleged Lazarus Group hackers.

The restraining notice was served on May 1 by Gerstein Harrow LLP, representing three sets of judgment creditors holding $877 million in unpaid terrorism awards against North Korea. Their argument: because the attackers are linked to Pyongyang’s Lazarus Group, the recovered ETH qualifies as DPRK property subject to seizure.

Aave calls that theory “flatly wrong.” Aave founder Stani Kulechov said: “The global DeFi community came together to recover assets stolen from users, and we are not going to let those assets be wrongfully redirected.”

Why the legal theory matters for DeFi

Aave’s filing draws a clear legal line: “A thief does not gain lawful ownership of stolen property simply by taking it.” The motion argues that on-chain movement between addresses does not determine ownership, and that treating recovered funds as belonging to the thief would punish innocent users while rewriting basic property law.

As crypto.news reported, Arbitrum DAO had already secured more than 99% governance support for a plan to route the frozen ETH into the DeFi United recovery fund, which has raised over $314 million across multiple DAOs to restore rsETH’s backing. That plan now depends on the court’s decision.

The stakes extend beyond this case. If courts allow unrelated creditors to intercept DeFi recovery funds based on alleged state-actor attribution, future rescue efforts could be deterred entirely.

Aave’s motion asks the court to lift the notice immediately or require plaintiffs to post a $300 million bond while the case is heard. No hearing date has been set.

Strategy (MSTR) reported a net loss of $12.54 billion in the first quarter of 2026, as bitcoin BTC$81,711.01 fell from around $87,000 on Jan. 1 to roughly $68,000 by March 31.

Since the start of the second quarter, bitcoin has rebounded to above $80,000, while Strategy has continued to accumulate coins at a rapid pace, potentially setting the company up to post a sizable profit in the April-June period.

Led by Executive Chairman Michael Saylor, the company, the largest corporate holder of bitcoin, currently owns 818,334 BTC, acquired at an average price of $75,537.

Strategy ended the first quarter with $2.25 billion in cash, enough to cover approximately 18 months of preferred stock dividends.

MSTR shares are higher by nearly 20% year-to-date, though they remain lower by more than 50% on a year-over-year basis.

With first-quarter results largely expected and likely long ago priced in, investor focus will shift to the 5 p.m. ET earnings call, where Saylor and his leadership team are likely to outline their strategy.

Kelp DAO claims that LayerZero personnel approved the 1-of-1 verifier setup, a decision LayerZero has since cited as the reason a North Korea-linked attacker drained roughly $292 million from Kelp’s rsETH bridge.

The claim runs counter to LayerZero’s April 19 postmortem, which said Kelp’s rsETH application relied on LayerZero Labs as its sole verifier and that the setup “directly contradicts” LayerZero’s recommended multi-DVN model.

Kelp’s memo says LayerZero personnel reviewed its configurations for over 2.5 years and in eight integration discussions, without warning that a 1-of-1 setup posed a material security risk.

The memo, titled “Setting the Record Straight Around the LayerZero Bridge Hack,” includes screenshots of Telegram exchanges that document LayerZero’s awareness and lack of objection to Kelp’s verifier setup.

One screenshot shows a LayerZero team member saying: “No problem on using defaults either — just tagging [redacted] here since he mentioned you may have wanted to use a custom DVN setup for verifying messages, but will leave that to your team!” Kelp says the “defaults” referenced in the exchange were the 1-of-1 LayerZero Labs DVN configuration later cited by LayerZero as the application-level setup that enabled the exploit.

CoinDesk could not independently authenticate the screenshot.

LayerZero’s templates

Kelp also points to LayerZero’s bug bounty scope, OFT Quickstart and developer examples as evidence that LayerZero treated verifier-network choices as application-level configuration while showing builders a one-DVN setup.

LayerZero’s published bug bounty scope on Immunefi excludes from rewards “impacts to OApps themselves as a result of their own misconfiguration,” including verifier networks and executors.

The LayerZero OFT Quickstart and the official OFT example configuration on GitHub show LayerZero Labs as the required DVN, with no optional DVN set.

Kelp’s memo cites an April 19 post from Spearbit security researcher Sujith Somraaj, in which Somraaj said he had submitted a bug bounty report describing the same attack pattern and that LayerZero rejected it.

“My bug bounty: not a vuln, requires all DVNs,” Somraaj wrote on X. “Their deployment: removes the ‘all’ part. Hackers: collects $295M bounty instead.” Somraaj is a prior LayerZero auditor, according to his Cantina profile.

Kelp moves to Chainlink

Kelp also said it is moving rsETH off LayerZero to Chainlink’s Cross-Chain Interoperability Protocol. The shift moves rsETH from LayerZero’s OFT standard to Chainlink’s Cross-Chain Token standard.

The exploit drained 116,500 rsETH, worth roughly $292 million, from Kelp’s LayerZero-powered bridge. Two additional forged transactions totaling more than $100 million were signed and processed by the LayerZero Labs DVN before Kelp paused its contracts, the protocol said.

LayerZero said attackers are likely linked to North Korea’s Lazarus Group, who accessed the list of RPCs used by the LayerZero Labs DVN, compromised two RPC nodes and swapped out the binaries running on them.

The attackers then launched a DDoS attack against uncompromised RPC nodes, forcing a failover to the poisoned ones. LayerZero said the DVN then confirmed transactions that had not occurred.

Kelp argues the 1-of-1 setup was widespread. CoinGecko, citing Dune Analytics data, said 47% of roughly 2,665 active LayerZero OApp contracts ran a 1-of-1 DVN configuration over a 90-day period ending around April 22, with more than $4.5 billion in associated market value exposed to the same class of risk.

LayerZero’s postmortem said the protocol “functioned exactly as intended.” The company said it would no longer sign messages for any application running a 1-of-1 configuration, a policy change that took effect after the hack.

Kelp alleges that its team had to flag the exploit to LayerZero rather than the other way around, raising questions about LayerZero’s monitoring.

The memo also alleges substantial overlap in addresses granted ADMIN_ROLE on both the LayerZero Labs DVN and the Nethermind DVN, listing ten on April 8, 2026 and five additional on February 6, 2025. CoinDesk has not independently verified the onchain claim.

LayerZero did not respond to a request for comment by publication.

On at least two integrated chains, Dinari and Skale, the LayerZero Labs DVN is still listed as the only available attestor, according to the documentation.

Crypto asset ETPs just notched a fifth straight week of inflows, lifting five-week net flows above $4B and pushing AUM near $155B despite sharp midweek outflows.

CoinShares said that digital asset ETPs took in $117.8 million last week, extending their inflow streak to five weeks and bringing cumulative inflows over that period to more than $4 billion, as total industry AUM climbed to around $155 billion.

Inflows mask sharp intraweek reversal

Beneath the headline, however, flows were choppy. From Monday through Thursday, products collectively saw $619 million in net outflows, before a $737 million influx on Friday alone swung the weekly balance back into positive territory, a pattern CoinShares interpreted as a late‑week rebound in risk appetite.

Regionally, U.S. crypto ETP inflows slowed to about $47.5 million — a steep deceleration compared with roughly $1.1 billion the previous week — while Germany and Canada posted steadier gains of $43.8 million and $16 million, respectively, helping keep the global tally in the green.

CoinShares noted that only four assets saw meaningful inflows last week, down from nine in prior reports, which it said reflected “a significant weakening in sentiment midweek” before buyers returned to close out the period.

Bitcoin ETFs dominate while Ethereum stumbles

By asset type, Bitcoin-linked products once again led the pack, attracting $192.1 million in net inflows over the week, with U.S. spot ETFs accounting for roughly $162.8 million of that figure according to flow trackers cited in the report.

Those flows add to year‑to‑date Bitcoin ETP inflows that already exceeded $4 billion by late April, with CoinShares previously highlighting U.S. spot ETF demand as the primary driver behind the recent five‑week inflow streak.

Ethereum products moved in the opposite direction, suffering $81.6 million of net outflows as traders rotated away from ETH exposure, a reversal from earlier weeks in April when Ether ETPs enjoyed three consecutive weeks of inflows above $190 million.

CoinShares analysts suggested that the narrowing set of assets attracting fresh capital — combined with the midweek outflows and Friday’s outsized rebound — indicates a fragile but still positive backdrop, where institutional investors are selectively adding Bitcoin risk while remaining cautious on the rest of the market.

Australian rapper Iggy Azalea has been hit with a class action lawsuit accusing her of falsely promoting the use cases of her cryptocurrency MOTHER and causing investors financial losses. 

Azalea, real name is Amethyst Amelia Kelly, was named today by crypto legal firm Burwick Law in a suit filed in the New York Southern District Court.  

The suit details how the rapper promoted MOTHER as an exclusive means of accessing her online casino, MOTHERLAND, and as a means of securing discounts with mobile firm Unreal Mobile. 

However, it claims that the casino was never entirely dependent on MOTHER, and often dealt with stablecoin tether (USDT). It also notes that the Unreal Mobile MOTHER integration never occurred.

One year of $MOTHER 🫶✨ What we’ve built speaks for itself. Today marks more than just a milestone, it’s the start of something that’s about to ignite.. 🔥🔥 pic.twitter.com/4L3EtT02c8

— IGGY AZALEA (@IGGYAZALEA) May 28, 2025

Read more: N3on promised ‘up, up, up’ memecoin without any risk — it’s down 96%

Another luxury marketplace launched by Kelly, Dream Vault, made similar exclusivity promises regarding MOTHER’s usage, but these were never present, according to the lawsuit. 

Overall, the lawsuit alleges that the promises surrounding MOTHER’s utility uses, market support, and access rights were “limited, incomplete, contradicted, temporary, or not delivered.”

It also claims that buyers were misled, and that Kelly misrepresented the token’s economics and the amount of tokens owned by insiders. She claimed to only hold 3% of the supply. 

However, crypto analysts like Bubblemaps noted that 20% of the supply was bought by insiders before Kelly’s public launch, and they sold their holdings for $2 million.

The lawsuit’s various claims for relief accuse the defendants of deceptive practices, false advertising, negligent misrepresentation, and unjust enrichment. It seeks various compensatory damages to cover the losses the victims have allegedly suffered. 

Burwick Law’s Azalea suit shows signs of AI usage

Burwick Law was recently forced to apologise for and correct various citations and grammatical errors, including multiple misplaced quotation marks, in its lawsuit against memecoin platform Pump Fun.

The firm wrote that the errors “do not affect any substantive legal argument in the opposition,” and that it “regrets these errors and any inconvenience to the court or opposing counsel.”

However, these flaws could point to signs of potential AI usage, something which also appears to be present in its Azeala lawsuit.

Read more: ‘Hawk Tuah’ star pulled into expanding memecoin lawsuit

Indeed, the suit is littered with complex sentence structures, colons, and em dashes. There are also multiple short sentences that open paragraphs while adding little to no extra information.

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Protos has reached out to Burwick Law and Azalea’s talent agency, United Talent Agency, for comment and will update this piece should we hear anything back.

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Federal prosecutors are recommending a light sentence for Roni Cohen-Pavon, the former chief revenue officer of defunct cryptocurrency lending platform Celsius.

In a Monday letter filed in the US District Court for the Southern District of New York (SDNY), US Attorney Jay Clayton cited Cohen-Pavon’s “substantial assistance” to the government, by being prepared to testify against former Celsius CEO Alex Mashinsky.

Prosecutors did not request a specific amount of time for the former chief revenue officer to spend in prison, instead asking the judge to consider the sentencing guidelines for an “appropriate sentencing reduction for a defendant who has rendered substantial assistance.”

“As soon as he pled guilty, Cohen-Pavon’s cooperation was public and known to Mashinsky,” said Clayton. “Cohen-Pavon’s cooperation was likely a significant factor in Mashinsky’s decision to plead guilty a few months prior to his January 2025 trial date.”

Excerpt from US Attorney’s letter in Cohen-Pavon sentencing. Source: PACER

Cohen-Pavon pleaded guilty to fraud and conspiracy to commit price manipulation related to Celsius’s CEL token in September 2023 as part of his role in the crypto lending platform’s activities that led to the loss of billions of dollars when the company collapsed in 2022. He had been scheduled to be sentenced before Judge John Koeltl on May 7, but on Monday the judge moved the sentencing hearing to May 13.

Related: Celsius founder Alex Mashinsky settles FTC case with $10M payment

Mashinsky, the public face of Celsius and one of the most prominent figures in the cryptocurrency industry at the time, was sentenced to 12 years in prison in May 2025 after pleading guilty to commodities and securities fraud. Many experts saw the fall of Celsius as intertwined with the 2022 crypto market downturn that resulted in the collapse of several exchanges, including FTX and Voyager Digital.

Cohen-Pavon’s lawyers asked for time served ahead of his sentencing hearing, saying that the former Celsius executive took “full responsibility for his conduct and the harms caused by his participation in the CEL token manipulation scheme.”

No new trial for former FTX CEO

The sentencing hearing, expected to wrap up the criminal cases associated with Celsius, will come after another SDNY federal judge denied former FTX CEO Sam Bankman-Fried’s request for a new trial. Bankman-Fried, also known as SBF, asked for a new trial by claiming that the judge overseeing his 2023 trial, Lewis Kaplan, showed “manifest prejudice” during the proceedings. He still awaits the results of a motion to overturn his conviction and sentence in appellate court.

Magazine: How to fix suspected insider trading on Polymarket and Kalshi

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

The Crypto Fear and Greed Index hit 50 on Tuesday, measuring “neutral” for the first time since Jan. 17. This shift ended a 108-day stretch dominated by negative sentiment. The index gauges market sentiment using volatility, momentum, trading volume, and social signals. A score below 25 signals “extreme fear” or risk aversion, while 26–49 reflects cautious positioning or “fear,” with higher readings indicating improving investor confidence. 

Crypto Fear and Greed Index. Source: Alternative.me

The index’s move to 50 marks its first neutral score since mid-January and follows a steady recovery in the total crypto market capitalization, which rose 5.45% in May. Since March, the market has expanded by 16.51%, climbing to $2.66 trillion from $2.28 trillion.

TOTAL market cap on the one-month chart. Source: Cointelegraph/TradingView

The positive shift in sentiment aligns with Bitcoin’s attempt to stabilize above the $81,000 level. Crypto analyst Darkfost noted that BTC sentiment is turning more constructive as the price tests higher levels. The analyst added that a separate sentiment index, ranging from -100 to +100, has also edged into the greed zone. This indicates that investor confidence is improving, with a growing preference to hold BTC rather than exiting positions.

Bitcoin unified sentiment index. Source: CryptoQuant

January showed a similar shift in sentiment before the momentum faded. Darkfost pointed to the current phase as a potential pivot, with investor behavior shaping the next move.

Related: Bitcoin ‘supercycle’ or a bear market rally? BTC breaking $81K has traders at odds

Stablecoin outflows may stall momentum 

Binance stablecoin netflows have recorded a cumulative outflow of $11.8 billion since April 25. This metric tracks the movement of stablecoins into and out of the exchange and is often used as a proxy for available buying power.

Positive net flows signal capital entering the exchanges, often associated with accumulation. A negative net flow indicates capital leaving, which can reduce liquidity for spot crypto purchases.

Binance stablecoin netflows. Source: CryptoQuant

Recent data shows a sustained drainage phase, with daily outflows exceeding $1.5 billion across multiple sessions. Earlier in April, Binance saw consistent inflows as Bitcoin climbed from $74,000 toward $78,000. That inflow cycle has now reversed.

Market analyst Crazzyblockk noted that the earlier buildup of stablecoin reserves helped fuel the upward movement. The current outflow trend suggests this pool of deployable capital has thinned in the short term, potentially tempering the bullish momentum for BTC and other crypto assets. 

Related: Crypto products post 5th straight week of inflows despite mid-week selloff

This article is produced in accordance with Cointelegraph’s Editorial Policy and is intended for informational purposes only. It does not constitute investment advice or recommendations. All investments and trades carry risk; readers are encouraged to conduct independent research.

The Tennessee Bankers Association (TBA), a trade group representing the state’s commercial banks, has selected Stablecore as a preferred technology provider for digital asset services, highlighting growing interest among regional lenders in crypto infrastructure.

In a Tuesday announcement, the TBA said Stablecore will provide infrastructure that enables community and regional banks to offer products such as stablecoins, tokenized deposits and digital asset-backed lending through their existing systems.

The endorsement gives Stablecore exposure to the association’s roughly 175 member institutions, potentially accelerating adoption among smaller banks that lack in-house digital asset capabilities.

The partnership reflects a broader trend among traditional financial institutions of seeking third-party providers to integrate crypto-related services rather than building the infrastructure internally.

Stablecore develops backend infrastructure that allows banks to issue and manage tokenized assets, including stablecoins and deposit tokens, while handling compliance and integration with core banking systems.

As previously reported by Cointelegraph, Stablecore recently joined the Jack Henry Integration Network, which provides digital banking technology to around 1,670 banks and credit unions across the United States.

Related: Crypto Biz: Capital has no consensus

Banks eye digital assets as US lawmakers debate market structure rules

TSA’s endorsement of Stablecore comes as more regional lenders look to roll out digital asset services, even as US lawmakers continue to debate the regulatory framework.

Tennessee’s junior US Senator Bill Hagerty, a member of the Senate Banking Committee, said last month that there is “still a lot more work to do” before Congress can advance comprehensive market structure legislation. 

Meanwhile, Senator Thom Tillis told reporters last week that he plans to push the Senate Banking panel to take up crypto market-structure legislation when lawmakers return to session on May 11.

Proposed bills aim to clarify how stablecoins are issued and supervised, which could give banks a clearer path to offering tokenized deposits and related services.

Source: Eleanor Terrett

At the same time, banking groups continue to raise concerns about stablecoin design, particularly whether issuers should be allowed to offer yield or interest. Industry advocates argue that recent compromises fall short of fully restricting yield-bearing stablecoins, potentially blurring the line between bank deposits and digital assets.

The Independent Community Bankers of America last month called on Congress to ensure the measure addresses concerns with what it called “the harmful impact on local economies of allowing crypto exchanges and other intermediaries to pay interest or yield on payment stablecoins.”

Related: Key US senator lifts block on Trump’s Fed pick Kevin Warsh

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.