The President of the United States, Donald Trump, has denied having any role in a reported $500 million cryptocurrency deal involving his family and a member of the Abu Dhabi royal family, saying he was not aware of the transaction and that his sons were managing the business separately.

Speaking to reporters in the Oval Office on Monday, Trump said he had no direct knowledge of the deal, while acknowledging that cryptocurrency has become a major area of investment.

“I don’t know about it,” Trump said. “I know that crypto is a big thing.”

He added that the business decisions were being handled by his family. “My sons are handling that — my family is handling it. And I guess they get investments from different people.”

What the World Liberty Financial deal is about

The deal centers on World Liberty Financial (WLFI), a cryptocurrency platform closely linked to the Trump family. According to reporting by the Wall Street Journal, emissaries of Sheikh Tahnoon bin Zayed Al Nahyan, a senior member of the Abu Dhabi royal family, reached an agreement with Eric Trump to purchase a 49% stake in WLFI for $500 million.

The agreement was reportedly finalized four days before Donald Trump was inaugurated as US president last year. The WSJ based its report on internal WLFI documents and comments from people familiar with the matter.

According to Fortune, the investment was not executed directly by Sheikh Tahnoon himself but through two senior lieutenants closely associated with him, both of whom hold leadership roles at G42, an Abu Dhabi-based technology and investment group backed by the royal family. Their involvement further tightens the link between the crypto deal and the UAE’s state-aligned tech and investment ecosystem.

Breakdown of the $500 million investment 

The investment was structured in phases, beginning with an initial payment of $250 million. Of that amount, $187 million was directed to entities linked to the Trump family. According to the report, at least $31 million was earmarked for entities associated with Steve Witkoff, a co-founder of World Liberty Financial who currently serves as the US special envoy to the Middle East.

Another $31 million was allocated to an entity connected to the platform’s other co-founders, Zak Folkman and Chase Herro.

The investment was made through Aryam Investment 1, a company backed by Sheikh Tahnoon, which would become World Liberty Financial’s largest shareholder if the full transaction is completed.

According to Fortune, World Liberty Financial was launched in 2024 as a decentralized finance platform, marking one of the Trump family’s most significant moves into the cryptocurrency space. Before the Abu Dhabi stake purchase, the project had already brought in about $550 million through token sales, highlighting its rapid growth ahead of the equity investment.

Why the deal has drawn wider attention

The transaction has attracted attention not only because of its size and timing, but also because of Sheikh Tahnoon’s broader diplomatic and business relationships with the United States.

The scrutiny has also intensified due to overlapping financial flows within the Trump-linked crypto ecosystem. Fortune notes that World Liberty Financial later launched its own stablecoin, USD1, which gained prominence after MGX, another Abu Dhabi-backed entity, used USD1 to settle a $2 billion investment into Binance. This effectively tied Emirati sovereign capital to a Trump-issued digital currency.

Sheikh Tahnoon is the Chairman of Group 42 Holding Ltd. (G42), an Abu Dhabi-based artificial intelligence company. In December last year, G42 received approval from the US Department of Commerce to purchase advanced AI chips from major American firms, including Nvidia Corp., Advanced Micro Devices Inc., and Cerebras Systems Inc., following discussions with US officials at the White House.

The timing of the crypto investment, the approval of advanced AI chip sales, and the involvement of Sheikh Tahnoon’s close associates have prompted questions about whether diplomacy, access to sensitive technology, and private business interests intersected during the presidential transition.

While no wrongdoing has been alleged, the convergence of these factors has drawn heightened scrutiny because it brings together foreign policy decisions, national-security-linked technology, and a substantial investment in a Trump-linked crypto venture.

Political and regulatory response

The reported deal has also prompted questions from US lawmakers. In January, Democratic Senator Elizabeth Warren urged banking regulators to delay reviewing World Liberty Financial’s application for a bank charter until President Trump divested his interest in the company.

Ethics watchdogs cited by Fortune have warned that such arrangements could revive concerns tied to the Emoluments Clause of the US Constitution, which bars a sitting president from receiving benefits from foreign governments. While no formal violation has been alleged, critics describe the structure and timing of the deal as a textbook example of a potential conflict of interest.

The Office of the Comptroller of the Currency (OCC) later rejected that request, stating that political or personal financial ties would not affect the review process and that WLFI’s application would be evaluated under the same “rigorous review” standards applied to other companies.

Company pushes back on claims

World Liberty Financial has maintained that President Trump had no involvement in the transaction after taking office. Responding to the reports, company spokesman David Wachsman said, “Neither President Trump nor Steve Witkoff had any involvement whatsoever in this transaction and have had no involvement in World Liberty Financial since taking office.”

He also defended the company’s approach to raising capital, adding, “The idea that, when raising capital, a privately-held American company should be held to some unique standard that no other similar company would be held is both ridiculous and un-American.”

What comes next

While no investigation has been announced, the scale of the investment, its timing just before Trump’s inauguration, and the involvement of a foreign royal have ensured continued attention from regulators, lawmakers, and the media.

For now, Trump continues to distance himself from the deal, while the company insists the transaction was conducted independently, as questions around politics, crypto, and global capital remain firmly in focus.

Also Read: Could Kevin Warsh’s Crypto Ties Boost Trump’s Financial Play?

As newly unsealed records released by the U.S. Department of Justice began circulating online, familiar names from politics, finance, and high society once again drew attention in connection with the Jeffrey Epstein case. 

This time, however, online discussion turned toward the crypto sector, after a billionaire linked to digital assets appeared in a decades-old private email included in the DOJ release. 

The reference contains no allegations or criminal claims, but it has been enough to spark curiosity and debate on social media. 

So who is the crypto billionaire whose name has surfaced in the Epstein files? This article looks at the documents and explains who the individual is, and what the records actually show.

Michael J. Saylor, Executive Chairman of Strategy (formerly MicroStrategy) and one of the most visible corporate advocates of Bitcoin, has been referenced in documents released by the United States Department of Justice (DOJ) as part of the latest unsealing of records connected to the late financier Jeffrey Epstein.

The documents, released publicly on January 31, 2026, include a private email dated May 8, 2010. The email was written by Hollywood publicist Peggy Siegal and references a New York charity gala attended by individuals from the film, fashion, finance, and media industries. Michael Saylor is mentioned in relation to a donation made in order to attend the event.

The documents do not make any allegations of criminal wrongdoing against Saylor, nor do they link him to Jeffrey Epstein’s later criminal cases. His mention is limited to a short social interaction described by a third party in private correspondence.

The source of the reference

Saylor’s name appears in a detailed email written by Peggy Siegal, a Hollywood publicist known for arranging high-profile fundraising dinners and managing relationships with wealthy donors and public figures. The email was circulated privately in 2010 and later became part of the materials reviewed and released by U.S. authorities.

In the email, Siegal describes Saylor’s attendance at the event following a $25,000 donation. She wrote: “Michael Saylor giving $25,000 for food and the opportunity to get his name on invite and meet a hip group. Saylor is a complete creep. He has no personality. Sort of like a zombie on a drug.”

She further described her personal experience interacting with him, stating: “I walked him around and he was so weird that even I ran away from him. There is an obvious personal disconnect and I don’t think I can just take his money and deliver a better life because he has no feel for social behavior.”

The remarks in the email represent Siegal’s personal views and social impressions. The correspondence does not include any claims of illegal activity, financial wrongdoing, or behavior connected to Epstein’s criminal actions.

Details of the 2010 charity event

The email refers to a charity gala linked to the Independent Filmmaker Project, hosted at the New York studio of fashion designer Diane von Furstenberg. According to the email, the event was attended by individuals from the entertainment, media, and finance sectors and was organized as a fundraising and networking gathering.

According to the email, Saylor’s involvement was limited to making a donation and attending the event. There is no indication in the released documents that he maintained ongoing contact with Epstein, participated in Epstein’s inner social circle, or engaged in further events tied to Epstein.

No allegations or evidence of wrongdoing

The U.S. Department of Justice (DOJ) has clarified that the unsealed Epstein-related records include a mix of verified documents and uncorroborated third-party statements. The appearance of an individual’s name in the materials does not imply criminal wrongdoing.

In Saylor’s case, the documents contain:

• No allegations of illegal conduct
• No claims of involvement in Epstein’s criminal activity
• No evidence of sustained personal or financial ties to Epstein

Authorities have also confirmed that the Epstein files contain no references to cryptocurrency usage, blockchain transactions, or digital asset wallets associated with Epstein or individuals named in the documents.

Public circulation on X

Following the release of the documents, excerpts from Siegal’s 2010 email circulated widely on X. The material was shared by several high-profile accounts, including the technology-focused account TechFlow (@TechFlowPost).

Online discussion has largely focused on the way the email described Saylor as socially detached, rather than as someone integrated into Epstein’s social network. Many posts pointed to the critical tone of the description to suggest that Saylor did not become part of the elite social circles linked to Epstein at that time.

While opinions online have differed, the underlying source material reflects only a short and unproductive social encounter, as characterized by Siegal.

Contrast with Saylor’s present-day profile

More than a decade after the 2010 event, Michael Saylor is best known for his singular focus on Bitcoin rather than elite social networking.

Under his leadership, Strategy, earlier operating as MicroStrategy Incorporated (MSTR), has accumulated over 700,000 bitcoin (BTC), making it the largest publicly traded corporate holder of the digital asset. 

In public interviews, conference appearances, and posts shared on X, Michael Saylor has described Bitcoin as “digital property,” “a superior form of capital,” and “the apex monetary asset.” 

He has repeatedly spoken about Bitcoin in the context of monetary theory, technology, and capital preservation, and has publicly positioned it as a long-term treasury reserve asset.

Following the release of the Epstein-related documents, online attention has focused on the contrast between how Saylor was portrayed in Peggy Siegal’s 2010 email and his public-facing image today. This contrast has been widely discussed across posts and commentary on X. 

In several public forums, Saylor has stated that he has “no interest in social status games” and that his focus remains on “long-duration capital preservation through Bitcoin.”

The crypto context and what the documents indicate based on public information

Saylor’s name appearing in the Epstein-related files has coincided with his prominence in the global cryptocurrency space. He currently serves as Executive Chairman of Strategy and is frequently referenced in online discussions for his publicly stated views on institutional Bitcoin adoption, corporate treasury allocation, and long-term holding strategies, based on statements he has made publicly over time.

In multiple publicly available statements, Saylor has said that Bitcoin is “not a trade,” “not a hedge,” but “a strategy,” describing it as a long-term balance sheet asset rather than a short-term speculative instrument.

What the documents ultimately establish

The Epstein-related records demonstrate that Epstein maintained contact, direct or indirect, with a wide range of influential figures across finance, technology, politics, and entertainment.

In Michael Saylor’s case, the documentation is limited to a single email describing a one-time social encounter at a charity event. The records show no evidence of continued association, collaboration, or personal relationship beyond that setting.

As with other names appearing in the unsealed materials, Saylor’s inclusion reflects proximity, not implication. The documents provide historical context without making claims or conclusions about wrongdoing.

Also Read: Could Kevin Warsh’s Crypto Ties Boost Trump’s Financial Play?

Crypto markets moved through a week driven mainly by policy decisions and institutional activity rather than price action. Regulators across regions continued to clarify how digital assets will be treated, with Japan signalling a shift toward crypto ETFs and India keeping its existing tax regime unchanged. 

Developments in U.S. politics, corporate treasury moves, and blockchain infrastructure also influenced sentiment during the week.

Below is a recap of the developments that mattered most.

Top Headlines

The week’s biggest developments reflected how policy decisions, regulatory signals, and institutional positioning continue to shape crypto markets, even as price action remained relatively muted.

Trump picks Kevin Warsh for Fed Role, stirring market debate

U.S. President Donald Trump’s backing of Kevin Warsh for a senior Federal Reserve role brought monetary policy back into focus. Warsh, a former Fed governor, has long criticised extended quantitative easing and has raised concerns about the side effects of aggressive central bank intervention.

The development drew attention across financial markets, including crypto. Market participants pointed to Warsh’s views on inflation control, balance sheet management, and asset valuations as factors that could influence liquidity conditions. Any move toward tighter policy is seen as relevant for Bitcoin and other risk assets, especially as institutional participation remains closely linked to macro policy signals.

Tether posts $10B profit as U.S. treasury holdings hit record $141B

Tether reported over $10 billion in profit for 2025, with reserve assets growing to nearly $193 billion. Its U.S. Treasury holdings hit a record $141 billion, making it one of the largest private holders of government debt. The stablecoin now serves more than 530 million users, underlining its dominance as a key liquidity provider in crypto markets.

Japan lays out crypto ETF roadmap for 2028

Japan indicated a possible shift in its approach to digital assets after reports suggested crypto exchange-traded funds (ETFs) could be allowed by 2028. While regulators have not announced any immediate approvals, discussions are reportedly underway to bring Japan’s framework closer to global standards.

The move stands out for a market that has traditionally taken a cautious stance following earlier exchange failures. If implemented, crypto ETFs could allow greater participation from institutional investors, including asset managers and pension-linked funds, though the proposed timeline points to a gradual rollout.

Union Budget 2026 leaves India’s crypto policy unchanged

India’s Union Budget 2026 did not introduce any changes to crypto taxation or regulation. The government retained the 30% tax on crypto gains and the 1% TDS on transactions, with no reference to licensing, classification, or oversight.

For India’s estimated 90 million crypto users, the outcome reinforced concerns around prolonged uncertainty. Industry participants said the lack of movement continues to limit domestic participation and innovation, while encouraging startups, traders, and capital to move offshore.

Strategy Inc. and Bitmine extend corporate accumulation

Corporate accumulation remained active during the week. Strategy Inc. disclosed the purchase of 2,932 Bitcoin for $264 million, bringing its total holdings to 712,647 BTC. The company continues to expand its Bitcoin treasury through periodic purchases.

Bitmine disclosed this week that its Ethereum holdings have climbed to 4.2 million ETH, with a total valuation of about $12.8 billion. The update places the company among the largest known corporate holders of Ether. The disclosure also reinforces the steady interest from institutions treating Ethereum as a long-term balance sheet asset rather than a short-term trade.

Ethereum prepares ERC-8004 mainnet rollout

Ethereum developers confirmed that ERC-8004 is scheduled to go live on the mainnet. The new standard is intended to support AI-driven agents that interact directly with smart contracts and manage assets on-chain.

According to developers, ERC-8004 is aimed at simplifying automated contract interactions across decentralized applications. While usage is still expected to be limited in the early stages, the rollout reflects continued development work linking artificial intelligence tools with Ethereum’s existing infrastructure.

Hyperliquid leads liquidity rankings

Hyperliquid topped global crypto liquidity rankings during the week, moving ahead of several centralized exchanges in reported market depth. The data showed increased activity on the decentralized derivatives platform, pointing to growing trader participation outside traditional centralized venues.

Following the rankings, Hyperliquid’s HYPE token rose about 20%, reflecting increased activity on the platform.

News you might have missed

• Winter Storm Frenan caused a 60% drop in Foundry USA’s mining hashrate as operations were temporarily halted.
• Fake Clawdbot tokens surged amid online speculation before being flagged as scams; the Moltbot founder said he would “never do a coin.”
• Binance shifted $1 billion from its SAFU fund into Bitcoin, adjusting its user protection reserves.
• The U.S. government built cash reserves ahead of a possible shutdown as Trump initiated legal action against his administration.
• The SEC reiterated that tokenized securities fall under the same rules as traditional assets.
• OFAC sanctioned UK-based crypto exchanges over alleged Iran-linked activity.
• The Czech central bank governor reaffirmed support for a Bitcoin pilot.
• Justin Sun claimed trillions could move to Tron in 2026.
• OKX’s CEO criticized Binance over responsibility for the October market crash.
• Silver gained 100% in 50 days, while gold prices declined sharply.
• The U.S. DOJ forfeited $400 million tied to a major cryptocurrency mixer.

What to expect next week

Market sentiment is expected to stay closely tied to macro and political developments, especially around Federal Reserve leadership and ongoing fiscal uncertainty in the U.S. Ethereum developers will be watching the rollout of ERC-8004, while markets across Asia look for more clarity on Japan’s ETF plans. In India, focus remains on whether any regulatory direction emerges following the Union Budget 2026.

Union Budget 2026 has once again passed without any reference to cryptocurrency, extending India’s long-standing silence on crypto regulation. There was no mention of digital assets, no indication of a regulatory framework, and no change to the existing tax structure introduced in 2022.

The 30% tax on crypto gains and the 1% TDS on every transaction continue for the fourth straight year. Since their introduction, these measures were expected to act as interim steps until clearer rules were put in place. Budget 2026 indicates that this transition has yet to occur.

Crypto remains taxed, but not recognised.

Four years since the crypto tax, still no policy framework

When crypto taxation was announced in 2022, the government indicated that regulation would follow. That framework is still missing.

Budget 2026 does not explain how crypto is treated under Indian law. It is still unclear whether it is considered an asset, a security, or a speculative instrument. The budget also does not mention investor protection, exchange licensing, or the place of crypto in the wider financial system.

This continued silence reinforces the impression that crypto is being treated more like gambling than as a financial or technology-based asset.

Industry Reactions

Reacting to the Union Budget 2026, Edul Patel, CEO of Mudrex, said the decision to retain the existing tax framework brings continuity but falls short of industry expectations.

“The Union Budget’s decision to maintain the existing taxation framework for Virtual Digital Assets provides continuity, but the industry was hoping for calibrated reforms to improve market participation and onshore liquidity.”

He added that despite regulatory and tax hurdles, the sector continues to expand, and targeted reforms could have strengthened India’s global position.

“While the sector continues to grow despite regulatory and tax challenges, the rationalisation of transaction taxes and enabling loss offsets would have further strengthened India’s competitiveness in the global digital asset economy.”

Patel noted that the industry remains hopeful that ongoing engagement with policymakers will lead to a more supportive environment.

“We remain optimistic that continued dialogue between industry and policymakers will help shape a more growth-oriented framework going forward.”

— Edul Patel, CEO, Mudrex

Meanwhile, Ashish Singhal, Co-founder of CoinSwitch, welcomed the introduction of explicit penalty provisions, calling them a step forward for compliance in the crypto ecosystem.

“The introduction of specific penalty provisions is a positive milestone for the crypto industry. By mandating a ₹200 daily penalty for reporting delays and a ₹50,000 fine for inaccuracies, the Government has formalized high standards of tax compliance and reporting for both users and VASPs.”

He said these measures validate the compliance-first approach followed by Indian platforms.

“This validates the ‘Compliance-First’ model of Indian platforms like CoinSwitch, shielding users from reporting risks and aligning with compliance goals.”

However, Singhal cautioned that compliance alone would not be enough to drive sustainable growth in the sector.

“While compliance and surveillance have tightened, true growth requires economic rationalization to keep Web3 innovation and talent within India.”

He pointed to existing tax provisions as barriers to genuine participation.

“The 1% TDS, lack of offset of losses and the 30% flat capital gains rate create an asymmetric environment for genuine participation.”

According to Singhal, such measures could push users toward offshore platforms.

“These measures risk driving Indian capital toward non-compliant offshore platforms, leaving users vulnerable to legal and financial scrutiny.”

He reiterated CoinSwitch’s commitment to working with policymakers on reforms.

“CoinSwitch remains fully committed and we will continue to work with the Government towards a balanced, user-first tax regime that pairs robust oversight with economic viability.”

— Ashish Singhal, Co-founder, CoinSwitch

In a separate remark, Edul Patel said the proposed penalties signal a broader policy push towards transparency and accountability.

“The proposed penalties for non-disclosure and misreporting of crypto assets reflect a broader policy shift towards strengthening compliance and transparency in India’s digital asset ecosystem, building on the recently updated FIU-IND guidelines for exchanges.”

He added that clearer accountability helps align crypto with mainstream financial standards.

“By creating clearer accountability, these measures bring crypto transactions closer to mainstream financial reporting standards.”

Patel concluded that long-term growth would depend on trust and regulatory clarity.

— Edul Patel, CEO, Mudrex

“Long-term growth in the sector depends not only on innovation, but also on trust, consistency, and regulatory clarity, and measures like these move the industry in the right direction.”

Commenting on the Budget, SB Seker, Head of APAC at Binance, said the Union Budget 2026:

“reiterates India’s focus on building the foundations of a Viksit Bharat, with continued emphasis on digital public infrastructure such as AI, data centres, and cloud-led growth.

“From a digital assets perspective, the Budget maintains the existing taxation framework. At the same time, it underlines the need for a more forward-looking tax approach that evolves with market maturity, technological convergence, and India’s broader digital ambitions.

“Globally, governments are moving towards clearer and more calibrated tax and compliance frameworks for digital assets. Binance believes that globally aligned tax policies, combined with strong compliance standards and investor education, can support sustainable long-term growth.”

India leads global crypto adoption despite policy silence

India remains a global leader in crypto adoption, with more than 90 million users as of 2024. The country has the largest crypto user base in the world, mainly driven by retail investors, a young population, and widespread access to mobile trading apps.

In November 2025, India became the world’s second-largest holder of Bitcoin, with retail investors holding nearly $120 billion worth of the asset. This placed the country just behind the United States in terms of retail Bitcoin holdings.

Despite the scale of adoption and capital involved, crypto does not find any mention in the country’s most important fiscal policy document.

Crackdowns increase even as regulation remains absent

Even as crypto remains outside budget discussions, regulatory action around the sector has picked up.

Earlier this year, the Financial Intelligence Unit (FIU) tightened the screws on crypto platforms by pushing stricter KYC compliance norms. Exchanges were asked to strengthen verification and reporting processes, adding regulatory pressure without offering legal clarity.

From April 2026, authorities will also be able to track crypto-related emails and social media activity, expanding oversight of digital asset discussions and transactions.

The focus, for now, appears to be on monitoring and enforcement rather than putting a formal regulatory framework in place.

Stablecoin signals and digital rupee add to confusion

The silence in Budget 2026 stands in contrast to recent government statements on digital assets.

In October, Finance Minister Nirmala Sitharaman urged nations to prepare for stablecoins, recognising their growing role in global finance and cross-border payments. Around the same period, the government reiterated its plans to expand the RBI-backed digital currency.

But Union Budget 2026 stays silent on where private cryptocurrencies fit into this wider plan. There is still no clarity on whether India intends to introduce a sovereign stablecoin or how it would work alongside crypto assets already used by millions of Indians.

Taxed, tracked but still ignored

The continued exclusion of crypto from the Union Budget 2026 reflects the gap between how widely crypto is used in India and how it is dealt with at the policy level.

Crypto in India continues to be heavily taxed and closely monitored, but it still functions without a clear regulatory framework. With millions of users and substantial retail money already involved, the lack of direction raises a basic question: how long can the government continue to delay taking a clear policy call?

As the Union Budget 2026 ends without addressing crypto once again, that question remains unanswered. Why does a country that leads global crypto adoption continue to avoid spelling out crypto’s place in its financial system?

In a move that has sent shockwaves through Wall Street and the crypto world, the U.S. President Donald Trump nominated Kevin Warsh to succeed Jerome Powell as Chair of the Federal Reserve on January 30, 2026.

This was not a routine leadership change at the world’s most powerful central bank. It marked a sharp philosophical turn at a moment when interest rates, digital assets, and the global role of the U.S. dollar are colliding in ways not seen since the end of the Bretton Woods system. 

Trump’s choice of Warsh signals a deliberate shift away from the Powell-era Federal Reserve, which treated crypto largely as a speculative side effect of excess liquidity, toward a leadership that views digital assets as a direct response to monetary policy itself.

But why Warsh? What is the nature of his long and largely unexamined relationship with crypto? And is there more at stake than monetary theory, including potential alignment with Trump’s own financial and political interests in digital assets?

This article examines angles rarely discussed in mainstream coverage: Warsh’s direct advisory roles in crypto firms like Bitwise and Electric Capital, his early investment in algorithmic money experiments, the clash between Powell’s dollar-first orthodoxy and Warsh’s “Bitcoin as discipline” thesis, and the increasingly blurred boundary between public policy and private gain. 

It also explores controversial peripheral issues, including Warsh’s appearance in recently released Epstein-related documents, not as an accusation but as a window into elite financial networks that quietly shape power.

Everything you need to know about Kevin Warsh: Trump’s pick to lead the Federal Reserve

Kevin Warsh is no outsider to the Federal Reserve. He rose rapidly through finance and policy circles, becoming one of the youngest Fed Governors in history when President George W. Bush appointed him in 2006. He served until 2011 and played a central role during the 2008 global financial crisis, a period that continues to define debates over central bank authority.

During that crisis, Warsh was deeply involved in designing emergency lending programs aimed at stabilizing frozen credit markets. He worked closely with the Treasury Department on initiatives that intersected with the Troubled Asset Relief Program, collaborating with figures such as Neel Kashkari, now President of the Minneapolis Federal Reserve. Those measures helped avert systemic collapse, but they also left Warsh uneasy about the long-term consequences of extraordinary intervention.

As the crisis faded, Warsh emerged as one of the earliest and most vocal internal critics of the Fed’s post-crisis policy direction. He warned that prolonged near-zero interest rates and large-scale asset purchases would distort asset prices, inflate speculative behavior, and weaken confidence in the dollar. His vote against the second round of quantitative easing in 2010 cemented his reputation as a monetary hawk who prioritized price stability over market support.

After leaving the Fed, Warsh joined Morgan Stanley and later became a distinguished visiting fellow at Stanford’s Hoover Institution. He also married Jane Lauder, heir to the Estée Lauder fortune, embedding him within elite Republican donor and financial networks. To Trump, this combination of polish, pedigree, and ideological clarity made Warsh “central casting” for the role.

Trump announced the nomination on Truth Social, praising Warsh as a “GREAT Fed Chairman” who would reverse what he described as Jerome Powell’s “stubborn” and growth-suppressing policies. The timing mattered. The announcement came amid renewed volatility in crypto markets, with Bitcoin sliding to around $82,800, down roughly 7% on the week, as traders reassessed the future path of interest rates.

Why did Trump remove Jerome Powell? 

Trump’s decision not to reappoint Powell, whose term as Chair ends in May 2026, though his Board seat runs until 2028, was driven by a convergence of personal, ideological, and strategic conflicts.

Interest rates and the crypto liquidity war

At the center was the interest rate. Under Powell, the Federal Reserve raised rates aggressively to combat inflation and then held them at restrictive levels longer than markets expected. 

By late 2025 and early 2026, rates remained in the 3.5% to 3.75% range. Powell argued that easing too soon would risk inflation’s return and undermine the Fed’s credibility.

Trump saw it differently. High rates increased the cost of servicing a $38 trillion national debt, suppressed asset prices, and drained liquidity from risk markets, including crypto. Trump repeatedly compared the Fed unfavorably with the European Central Bank, which had already begun cutting rates, and publicly labeled Powell “Mr. Too Late.”

The Fed renovation fight

Tensions escalated in late 2025 when Trump-aligned officials launched a public and legal offensive against Powell over a $2.5 billion renovation of the Fed’s headquarters. 

The Justice Department opened an investigation into whether Powell had misled Congress about cost overruns. Powell denied wrongdoing and characterized the probe as political pressure aimed at forcing rate cuts.

To Trump allies, the renovation symbolized an insulated and unaccountable central bank. To Powell, it was a red herring. The conflict made reconciliation impossible.

Ideology and the “Woke Fed”

Trump also accused Powell of allowing the Fed to drift into non-core issues, including climate risk analysis and diversity initiatives in banking supervision. Powell defended these efforts as risk management. Warsh publicly disagreed, arguing in interviews that the Fed should narrow its mandate and focus exclusively on monetary discipline.

Removing Powell was not just retaliation. It cleared the path for a Federal Reserve aligned with Trump’s broader economic vision, including a more permissive stance toward crypto.

Why Trump chose Kevin Warsh: The strategic calculation

Warsh offered Trump something Powell never would: intellectual alignment without institutional rebellion. As a former Fed Governor and Wall Street insider, Warsh carried establishment credibility. Yet unlike Powell, he openly acknowledged crypto as a consequence of monetary policy rather than a fringe distraction.

Trump saw Warsh as a bridge. A figure who could reassure markets about inflation while understanding why Bitcoin exists at all.

The hidden crypto connection: What Warsh has actually done

Warsh’s crypto ties are not speculative. They are documented.

He served as an advisor to Bitwise Asset Management, one of the largest crypto index fund managers, whose business depends on institutional adoption and regulatory clarity, as per chatter on X. 

He also advised Electric Capital, a venture firm focused almost exclusively on blockchain and crypto-native companies whose valuations are directly influenced by interest rates, banking access, and regulatory interpretation.

Most significantly, Warsh was an early investor in Basis, an algorithmic stablecoin project that sought to create a decentralized, rules-based monetary system capable of expanding and contracting supply without human discretion. 

While Basis ultimately shut down under regulatory pressure, its ambition mirrored Warsh’s long-standing critique of discretionary central banking.

These experiences informed Warsh’s public views. He has described Bitcoin as “digital gold” and as a “policeman” on central banks. In his framework, Bitcoin does not threaten the dollar directly. It exposes policy failure. When central banks keep rates artificially low for too long or blow up their balance sheets, Bitcoin turns into the escape hatch. Not because it’s trendy, but because people start looking for an exit from monetary excess.

Powell vs Warsh vs Trump on crypto and the dollar

Jerome Powell has always treated crypto as something on the sidelines. To him, it’s speculative, volatile, and full of consumer risk. His focus stayed firmly on protecting the dollar and preserving financial stability. 

Under Powell, banks became more cautious about touching crypto, stablecoins were put under a microscope, and Bitcoin was never acknowledged as anything close to a serious monetary alternative.

Donald Trump’s view is very different and far more strategic. He frames crypto through the lens of power and sovereignty. He’s openly hostile to CBDCs, but supportive of private-sector innovation, Bitcoin holdings, and the idea that the U.S. should lead the digital finance race. For Trump, crypto isn’t just an asset — it’s a geopolitical tool to reinforce American dominance in the next financial era.

Warsh sits between them. He does not advocate loose money or crypto evangelism. But he acknowledges that crypto exists because monetary policy matters, and that ignoring it weakens, rather than strengthens, the dollar’s credibility.

The upsides and risks for crypto

Warsh could legitimize crypto by acknowledging its role in modern finance and supporting wholesale digital dollar infrastructure. At the same time, his hawkish stance on inflation, balance sheets, and stablecoin regulation could restrain speculative excess and suppress short-term rallies.

Markets recognize the contradiction. Bitcoin often sells off after Fed announcements, even during cutting cycles, reflecting disappointment rather than relief. Warsh’s presence amplifies that uncertainty.

Power, Proximity, and Perception

Trump’s own crypto-linked ventures, including World Liberty Financial (WLFI), stand to benefit from lower rates and regulatory clarity. Warsh’s past advisory roles have raised inevitable questions about conflicts of interest, even if he adheres to all recusal requirements.

Separately, his name appeared in recently released Epstein-related documents, tied to a social reference from 2010. No wrongdoing has been alleged, but the mention added to public scrutiny and served as a reminder of how elite social and professional circles often intersect away from public view.

Conclusion: The great convergence of power and crypto

The nomination of Kevin Warsh marks a turning point. For the first time, a prospective Fed Chair has not only studied crypto but also participated in its financial and ideological development. Trump’s decision reflects a belief that the future of money cannot be separated from politics, power, or technology.

Whether this convergence strengthens the dollar or blurs the boundary between public policy and private interest will depend on what comes next. What is already clear is that crypto is no longer outside the Federal Reserve’s walls. It has entered through the career of the man now poised to lead it.

Also Read: Why Trump Pardoned the Crypto Industry but Left SBF to Rot

Disclaimer: This article is an opinion piece and reflects the author’s personal analysis and interpretation of publicly available information and reporting. The Crypto Times does not intend to allege, imply, or assert any wrongdoing or make factual claims beyond what has been reported by credible public sources. All views expressed are based on information available online at the time of writing and are presented solely for commentary and discussion purposes.

The U.S. President Donald Trump has nominated former Federal Reserve governor Kevin Warsh as the next Chair of the Federal Reserve, ending weeks of speculation over who would replace Jerome Powell when his term expires in May.

The announcement was made on Friday, with Trump saying on his Truth Social platform that Warsh would be “one of the great Fed chairmen” and praising his understanding of the economy and interest rate policy.

Financial markets reacted cautiously. The US dollar trimmed early gains, Treasury yields moved slightly higher, and stock futures pointed to a softer open on Wall Street.

Markets react with caution

Investors showed little sign of panic following the announcement, largely because Warsh had been widely tipped as a frontrunner in recent weeks.

US two-year Treasury yields rose modestly before easing, while longer-dated yields were little changed. The USD initially strengthened but later gave up gains as traders assessed what the appointment could mean for future rate decisions.

Market participants said the muted reaction reflected uncertainty over how Warsh would act once in office, especially given the Federal Reserve’s committee-based decision-making structure.

Why Trump picked Warsh

Warsh served as a Federal Reserve governor from 2006 to 2011 and played a role in policy decisions during the global financial crisis. Since then, he has been a frequent critic of the Fed’s large balance sheet and long period of ultra-loose monetary policy.

Trump has repeatedly criticized the central bank for keeping interest rates too high and slowing economic growth. Warsh has recently echoed similar views, saying the Fed has been slow to adjust policy as inflation pressures ease.

In December, Trump publicly said that Warsh believed rates should be lower, a comment that signalled his growing support for the former Fed official.

Unlike some other names linked to the role, Warsh is seen as having both policy experience and credibility in financial markets, reducing fears of a politically driven appointment.

What it means for crypto markets

Crypto traders are keeping a close eye on the nomination, even though it’s not expected to have an immediate impact on the market.

Warsh has long been critical of extended easy-money policies and has warned that too much liquidity tends to inflate asset bubbles. That view isn’t especially friendly for crypto, which has historically done best when monetary conditions are loose and liquidity is flowing freely.

However, his more recent comments suggest a softer tone. Warsh has acknowledged slowing inflation and has indicated that rate cuts may be appropriate if economic growth weakens.

For crypto markets, the picture is mixed. On one hand, lower interest rates usually help assets like Bitcoin by improving liquidity and risk appetite. On the other, Warsh’s long-held view that the Fed should shrink its balance sheet could cap any major upside.

For now, traders are paying far more attention to inflation numbers and signals on when rate cuts might begin, rather than the Fed chair appointment itself.

Background on Warsh

Warsh previously served as a senior economic adviser in the George W. Bush administration and represented the Federal Reserve at G20 meetings. He is currently a lecturer at Stanford’s Graduate School of Business and has ties to several major investment firms.

He is married to Jane Lauder, granddaughter of the iconic fashion businesswoman Estée Lauder, and has longstanding connections across Wall Street and Washington.

Warsh’s nomination now heads to the U.S. Senate for confirmation. If approved, he will take over the central bank at a time when markets are increasingly sensitive to signals around interest rates, inflation, and liquidity conditions.

Also Read: Why Trump is Taking His Own Government to the Court

In a dramatic legal move, pro-crypto U.S. President Donald Trump, along with his sons Donald Trump Jr. and Eric Trump and the Trump Organization, filed a $10 billion lawsuit against the Internal Revenue Service (IRS) and the U.S. Treasury Department. 

The lawsuit, filed Thursday in Miami federal court, claims the agencies failed to prevent the leak of Trump’s tax records, exposing private financial information to the media during his first term.

This is not an ordinary lawsuit. It is very unusual for a sitting president to take legal action against his own administration, and the case is already making headlines across the country. It raises serious questions about how the government protects taxpayers’ private information and how politics can mix with the legal system.

The heart of the lawsuit: Reputational and financial damage

Trump’s legal team says the leak caused serious harm, resulting in “reputational and financial harm, public embarrassment, unfairly tarnished their business reputations, portrayed them in a false light, and negatively affected President Trump, and the other Plaintiffs’ public standing.”

The complaint specifically points to former IRS contractor Charles “Chaz” Littlejohn, who admitted in a 2024 deposition that he provided Trump’s tax records to the investigative news outlet ProPublica, as per CNBC. Littlejohn also provided documents to The New York Times, which reported on Trump’s minimal federal tax payments in certain years, a story that sparked national headlines.

Trump’s legal team claims that ProPublica’s reporting falsely suggested that the returns contained “versions of fraud,” a statement Trump says misrepresented the financial records of him and his businesses.

Charles Littlejohn and Booz Allen Hamilton: A data breach fallout

Littlejohn, 40, pleaded guilty in 2023 to one count of disclosure of tax return information and is now serving a five-year prison sentence. Beyond Trump’s documents, Littlejohn admitted to stealing and leaking records of thousands of other wealthy individuals, including billionaires Jeff Bezos and Elon Musk.

The Treasury Department responded by canceling all contracts with Booz Allen Hamilton, the consulting firm employing Littlejohn. Treasury Secretary Scott Bessent said, “Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service.”

The IRS, meanwhile, called Littlejohn’s actions “unacceptable” and said it has taken “substantial investments in data security to strengthen its safeguarding of taxpayer information.”

Trump’s pattern of high-value lawsuits

This $10 billion lawsuit is not Trump’s first move of this kind. In October 2025, he sought $230 million from the Department of Justice (DOJ), claiming the agency had improperly investigated him. 

Trump told reporters, “They probably owe me a lot of money, but if I get money from our country, I’ll do something nice with it, like give it to charity or give it to the White House.”

Trump has also filed similar multi-billion-dollar lawsuits against major media outlets, including:

• BBC: $10 billion defamation suit over edits to a January 6, 2021, speech clip.
• The Wall Street Journal (WSJ): $10 billion suit over reporting on an alleged crude drawing sent to Jeffrey Epstein in 2003.

Both media companies vowed to fight the lawsuits.

Historical context: IRS leaks and other victims

Trump is not the first high-profile figure affected by IRS leaks. In 2024, hedge fund billionaire Ken Griffin sued the IRS after Littlejohn leaked his tax records. Griffin later dropped his lawsuit after the IRS strengthened its data security measures.

Legal experts say Trump’s case is unusual and complicated. It raises questions about how much responsibility the government bears when a contractor mishandles sensitive information, the privacy of taxpayers, and the potential conflicts when a sitting president takes legal action against federal agencies.

Crypto angle: Why the lawsuit hits even closer to home

This lawsuit takes on an added layer because of Trump’s growing involvement in the cryptocurrency world.

Trump’s embrace of crypto began with his NFT projects, selling digital trading cards of himself that quickly drew strong interest. At events like the Bitcoin 2024 conference, he spoke about supporting Bitcoin and digital assets, pledging to champion the industry and overhaul federal regulation.

As president, Trump has become a major player in crypto, earning substantial sums through non-fungible tokens (NFTs), memecoins, and his own digital token ventures, including the Trump-branded coin ($TRUMP) and projects under World Liberty Financial. 

According to Bloomberg, digital assets added roughly $1.4 billion to the Trump family’s net worth over the past year, now making up about one-fifth of their estimated $6.8 billion fortune. 

Separately, financial disclosures show that Trump personally earned at least $57.7 million from token sales tied to World Liberty Financial, while additional crypto venture proceeds over recent months brought in hundreds of millions more.

Experts note that if his crypto income were ever examined alongside the leaked tax returns, it could show not only past tax behavior but also the scale of his digital asset earnings and what taxes have been paid. For Trump, the issue is about more than just reputation—it now involves a multi-million-dollar crypto empire.

This leads many observers to ask: Why is Trump pushing so hard against the leaked tax returns when his crypto earnings alone are far larger than the amounts at issue? The likely answer is control—he wants to prevent scrutiny of his entire financial picture, both traditional businesses and newer digital ventures.

Political and legal implications

By filing this lawsuit, Trump is in a rare position. He is challenging agencies that are part of his own administration while asking for one of the largest financial settlements ever. 

Even if the case doesn’t succeed, analysts say it is likely to attract huge public attention and could ignite wider discussions about government data security, oversight of the IRS, and the limits of presidential authority in civil matters.

With the case now filed, all eyes are on the Miami federal court. The White House and the Trump Organization have not commented on the potential use of the $10 billion if awarded. Meanwhile, the case adds yet another chapter to the president’s complex relationship with the federal government.

Also Read: Why Trump Pardoned the Crypto Industry but Left SBF to Rot

Disclaimer: The Crypto Times is not making any claims about President Trump’s financial holdings. References to crypto assets, NFTs, or digital earnings in this article are based solely on publicly available news reports and media coverage, and should be considered context or speculation rather than verified fact.

Ethereum (ETH), the world’s second-largest cryptocurrency, began the day around $2,738 but quickly lost momentum, slipping below the crucial $2,700 mark and touching nearly $2,680. The drop caught traders off guard and pushed ETH into one of its sharpest declines in recent weeks, down nearly 7% in the last 24 hours.

At the time of writing, ETH is hovering around $2,715–$2,720, a level that now feels like a make-or-break zone. All eyes are on whether the price can stabilize here — or if the selling pressure will drag it even lower.

Ethereum’s trading range

Since November 14, 2025, Ethereum has been moving in a range between $2,737 and $3,410. This means the price has been mostly sideways for over two months. The upper limit, $3,410, acts as resistance.

The lower limit, around $2,700, shows support, where buyers usually step in to prevent the price from falling further.

Because of this range, the market has been quiet in terms of trends. Neither buyers nor sellers have been able to take control. The move today shows how fast things can change if pressure builds on the market.

Liquidations and market activity

Ethereum’s recent drop triggered a lot of forced position closures. In the last 24 hours, roughly $414 million worth of ETH trades were liquidated, as per data by Coinglass. 

Most of this — about $387.88 million — came from traders who had bet on the price going up, while $26.52 million came from those betting it would fall. When these positions get closed automatically, it adds more selling pressure, and the price drops faster.

Ethereum’s 24-hour trading volume also shot up to $44.34 billion, almost 90% higher than yesterday. Traders were moving quickly, buying and selling as the price changed, and that kept the downward pressure going.

ETF outflows add more pressure on ETH

Ethereum’s weakness wasn’t limited to futures and leveraged traders. Spot ETF data also showed clear signs of caution from institutional investors.

On January 29, U.S. spot Ethereum ETFs recorded a net outflow of $155.61 million, as per SosoValue, suggesting that big players were reducing exposure as prices slipped.

Some of the largest funds saw notable withdrawals:

• BlackRock’s ETHA recorded outflows of $54.88 million
• Fidelity’s FETH saw $59.19 million leave the fund
• Grayscale’s ETHE lost $13.05 million, while its lower-fee ETH fund saw another $26.49 million in outflows
• Even smaller ETFs like Bitwise’s ETHW saw money move out

Despite this, total assets held across Ethereum spot ETFs remain sizable at $16.75 billion, accounting for nearly 5% of Ethereum’s total market value. The big outflow in just one day shows that investors are starting to step back as Ethereum’s price weakens. 

Market confidence has clearly cooled off, with many choosing to stay on the sidelines instead of taking fresh bets.

At the same time, trading picked up sharply. ETF volumes jumped to $2.15 billion as investors moved quickly to adjust their positions after ETH slipped below key support levels.

Taken together, the ETF data adds to the growing bearish tone in the market — suggesting that it’s not just short-term traders pulling back, but institutional investors as well, who are choosing to stay on the sidelines as uncertainty builds.

Options expiry adds pressure

Ethereum’s drop today was partly due to a $1.4 billion options expiry. Large expiries often make the market more active because traders and institutions adjust their positions to protect themselves. This can push the price up or down quickly.

Today, it added to the selling pressure and helped ETH fall below $2,700. Traders pay close attention to these expiry dates since they can trigger sudden moves.

What could happen next

Ethereum is at a tricky point right now. If it can hold the $2,700 support, it might keep trading sideways within its usual range and try to climb back toward the resistance at $3,410. But if selling pressure keeps building, or if any negative news hits the market, ETH could break support and head toward $2,094, which would be a bigger drop.

The market is playing it safe right now. Ethereum has been stuck between $2,737 and $3,410 for the past two months, and today’s big drop shows that the price is still swinging a lot. Traders and investors will be watching closely over the next few days to see if Ethereum can settle down or if it will fall even more.

Also Read: Silver Outshines Bitcoin with 100% Gain in 50 Days — Is Risk Appetite Changing?

Crypto markets saw heavy selling over the past 24 hours as traders tried to cut their risk, while silver surged to record highs, highlighting a shift in investor sentiment.

According to CoinGlass, more than $346 million in crypto positions were liquidated during this period, affecting over 120,000 traders. The largest single liquidation was a Bitcoin trade on Hyperliquid worth $31.64 million.

This wave of selling pushed Bitcoin further down, continuing its recent decline.

Bitcoin slips amid liquidations

At the time of writing, Bitcoin was trading near $87,800, down around 1.7% in the last 24 hours. Over the past week, the world’s largest cryptocurrency has slipped more than 2%, as leveraged bets were unwound and traders turned cautious.

Data showed that $135.83 million worth of Bitcoin positions were liquidated in a day, with the majority coming from long trades. This suggested that many traders were caught on the wrong side of the move after betting on a rebound.

Ethereum under pressure

The second-largest cryptocurrency also moved lower. Ethereum fell to around $2,940, losing more than 2.5% on the day, as per CoinMarketCap data. 

Nearly $52 million in ETH positions were liquidated, most of them longs. The fall accelerated after Ethereum slipped below the $3,000 mark, a level closely watched by traders.

Silver hits record high as crypto struggles

While crypto struggled, precious metals moved in the opposite direction.

Silver shot up to a record $120 per ounce before pulling back a little to about $119.26, as per TradingView data. In India, it climbed to around ₹4,10,000–₹4,25,000 per kilogram, showing strong demand for the physical metal. Gold also went up sharply, reaching $5,516 per ounce, as investors looked for safer places to put their money.

Economist and Bitcoin critic Peter Schiff reacted to the metals rally on social media, posting: “In 2017, at its peak of nearly $20k, Bitcoin was worth 14.25 ounces of gold. Today it’s worth 16 ounces. That’s a 12% gain in nine years. Was it worth the risk to beat gold by just 1.3% per year? HODLers will find out the hard way as Bitcoin crashes and gold continues to soar.” His comment highlights concerns about crypto, with many investors turning to precious metals for safety.

Global uncertainty fuels safe-haven demand

The rally in metals comes at a time of rising global uncertainty. Markets reacted after U.S. President Donald Trump warned of possible 100% tariffs on Canada if it moved ahead with trade deals involving China. The comments revived fears of trade tensions and pushed investors toward traditional safe havens.

Demand for physical silver has been especially strong in China and India. Market participants say buying of silver bars has increased sharply in recent weeks, tightening supply and pushing prices higher.

Fed policy and market caution

Uncertainty around U.S. monetary policy continues to weigh on markets. The Federal Reserve voted 10–2 to keep interest rates unchanged, pushing back against pressure for immediate cuts. Officials said inflation remains sticky and they want clearer signs before easing policy. The decision has added to investor caution, with many staying away from riskier assets like crypto.

Recent data showed the U.S. unemployment rate fell to 4.4% in December despite weak job growth, and economists expect the Personal Consumption Expenditures Price Index, excluding food and energy, to rise 3% year-over-year for the month, well above the Fed’s 2% target. 

Inflation remains higher than desired, and the latest jobs data leaves little room for quick policy easing. Because of this, investors are being careful and staying away from riskier assets like crypto.

Indian markets stay steady

Indian markets remained steady through the session. The Sensex rose nearly 500 points to close above ₹82,300, while the Nifty gained over 160 points. Investors remained cautious ahead of the Economic Survey and the Union Budget 2026, which are expected to set the direction for markets.

Early signals pointed to a soft start in the next session. Gift Nifty was trading around 25,364, nearly 86 points lower than the previous Nifty futures close, indicating a slightly negative opening. The weakness reflected mixed global cues rather than any domestic concern.

Asian markets showed mixed trends following the US Federal Reserve’s policy decision.

• Japan’s Nikkei: up 0.18%
• Topix: down 0.57%
• South Korea’s Kospi: up 1.09%
• Kosdaq: up 2.69%
• Hang Seng futures indicated a lower open

In the U.S., Wall Street closed mostly higher after the Fed kept interest rates unchanged.

• Dow Jones: up 12.19 points to $49,015.60
• S&P 500: down 0.01% to $6,978.03
• Nasdaq Composite: up 40.35 points to $23,857.45

The S&P 500 briefly crossed the $7,000 mark, showing resilience despite caution around future rate cuts.

Overall, mixed global signals suggest Indian markets may open cautiously, with stock-specific movement likely to drive trading.

Why Bitcoin is falling while silver rises

It’s an old question, but worth asking again: why is Bitcoin going down while silver is climbing?

Traders say it’s all about how risky investors feel things are. When times feel uncertain, people move their money to things that feel safer, like gold and silver. Bitcoin is often called digital gold, but in the short term, it still acts like a risky investment, especially when people are using leverage.

In the past, Bitcoin has sometimes fallen behind gold and silver before bouncing back once things settle down. Whether that happens this time, we’ll have to wait and see. For now, it’s clear that investors are playing it safe, volatility is up, and people are choosing security over big bets.

Also Read: Crypto Trader Makes $2M in 24 Hours on Hyperliquid Amid HYPE Rally

Sygnum, a Swiss digital asset bank, and Starboard Digital, a crypto investment firm, have raised over 750 Bitcoin (BTC) for a new fund that focuses on arbitrage trading, as institutional investors look for ways to earn returns from crypto without relying only on price increases.

The fund, called the BTC Alpha Fund, was launched in October 2025 and has drawn capital from professional and institutional investors over the past four months. According to figures shared by the firms, it delivered an annualized return of 8.9% in Bitcoin terms during the fourth quarter of 2025.

📣 News: Sygnum and Starboard Digital raise over 750 BTC for BTC Alpha Fund

▪️ Over 750 BTC raised from professional investors in first four months, validating institutional demand for yield-generating Bitcoin strategies
▪️ First regulated bank globally to offer market-neutral… pic.twitter.com/1PTHym83RW

— Sygnum Bank (@sygnumofficial) January 29, 2026

Instead of betting on whether Bitcoin’s price will go up, the fund follows market-neutral strategies. It focuses on exploiting price differences across crypto markets, especially between spot and derivatives, making profits from these gaps rather than from changes in BTC’s price.

Shift in institutional approach

The fund is launching at a time when institutional interest in digital assets is shifting. With spot Bitcoin exchange-traded funds (ETFs) making it easier for big investors to get exposure, and price volatility lower than in earlier cycles, simple long-only strategies are becoming less appealing. 

Because of this, some investors are now looking at approaches similar to traditional hedge funds, such as market-neutral and relative-value strategies, which aim to generate returns under a variety of market conditions.

Sygnum provides the banking and custody infrastructure for the fund, while Starboard Digital is responsible for managing the trading strategy.

Markus Hämmerli, who leads the BTC Alpha Fund at Sygnum, said the product was developed in response to this shift in investor behavior.

“As Bitcoin becomes a core portfolio allocation for institutional investors, we’re seeing growing demand for strategies that can generate returns beyond simple price appreciation. The fund’s Q4 performance demonstrates that professional Bitcoin management can deliver meaningful results even when spot markets are flat or declining.”

How the strategy works

The BTC Alpha Fund is domiciled in the Cayman Islands and uses systematic arbitrage strategies across major crypto trading venues. These include price differences between spot and derivatives markets, as well as short-term inefficiencies that arise across exchanges.

The fund does not bet on whether Bitcoin’s price will go up or down. It is designed to stay market-neutral, earning returns mainly through trading activity that does not depend on overall market movements. Any profits are added back into Bitcoin rather than being converted to fiat.

To manage risk, the fund uses position limits, liquidity checks, and focuses on markets with high trading volumes. It offers monthly liquidity to investors and keeps its assets stored off-exchange.

Role of Sygnum and Starboard

Sygnum acts as the banking and infrastructure provider, offering custody and financing services linked to the fund. Starboard Digital manages execution and portfolio construction.

One feature of the structure is that fund units can be used as collateral for US dollar–denominated Lombard loans through Sygnum, allowing investors to access liquidity without selling their Bitcoin exposure.

Nikolas Skarlatos of Starboard Digital said the fund was built to address a long-standing challenge in institutional crypto investing. “Generating yield on Bitcoin while maintaining exposure to its long-term upside has been a persistent challenge for institutional investors. The early performance of the fund points to growing acceptance of yield-focused strategies, with a target range of 8–10% annual returns across different market conditions.”

Broader market context

The fund is launching at a time when crypto markets are growing more mature, with deeper liquidity and stronger infrastructure that make more complex investment strategies possible. 

At the same time, arbitrage strategies depend on gaps in the market, which can narrow as more money flows in. How well the fund performs also depends on execution, the depth of the markets it trades in, and how risks are handled during volatile periods. Data from the industry suggests that demand for professionally managed Bitcoin products is growing. Around 68% of institutional investors have either already invested in, or plan to invest in, Bitcoin exchange-traded products (ETPs) or related instruments, reflecting the growing appetite for structured crypto strategies beyond simple spot exposure.

Even so, the scale of capital raised in a relatively short period suggests that institutional investors are becoming more comfortable allocating to structured crypto products that go beyond simple price exposure.

Also Read: ABTC Expands Treasury To 5,843 BTC As Corporate Buying Ramps Up

When the Union Budget for 2026–27 is presented in Parliament by Finance Minister Nirmala Sitharaman on February 1, 2026, it will arrive at a moment of quiet consequence for India’s digital economy. 

Over the last decade, India has quietly built one of the world’s most advanced public digital backbones, from real-time payments and digital identity systems to large-scale financial inclusion infrastructure that reaches hundreds of millions of people. 

In parallel, the country has also emerged as a major source of blockchain talent, fintech founders, and engineers working at the cutting edge of global crypto and Web3 development.

And yet, despite these structural advantages, India today finds itself drifting toward the margins of the global digital asset economy rather than shaping its direction.

This gap sits at the centre of the policy challenge now confronting the government. The question is no longer whether cryptocurrencies or blockchain-based systems belong in India’s financial future. Market behavior, international adoption, and domestic participation have already answered that. 

What remains unresolved is how India chooses to engage with this reality—and on what terms. The real question is whether India intends to shape this sector strategically or allow it to grow beyond its regulatory and economic influence.

The answer will not be found in speeches or policy intent notes. It will be embedded in the fine print of taxation, compliance architecture, and regulatory signalling contained in the Union Budget 2026.

In the Union Budget 2025, the government chose to maintain the existing crypto tax framework, offering no relief to the industry. The 30% tax on virtual digital asset gains and the 1% TDS on transactions were retained without any changes, despite repeated appeals from exchanges and industry stakeholders. 

The budget made no specific mention of crypto or Web3, signalling that the government preferred to continue with a cautious, tax-first approach rather than introduce regulatory clarity or reforms.

What parliament data shows about crypto tax in India

In a written reply tabled in the Lok Sabha in December 2025, the government laid out, for the first time in detail, how crypto taxation is actually playing out on the ground. The response showed that while tax collections from crypto transactions have gone up over the last three years, the system itself is far from settled. 

The Finance Ministry admitted that enforcement action had to be taken against several exchanges for non-compliance. 

In its own words, “survey actions under Section 133A of the Income Tax Act were carried out against three crypto exchanges and non-compliance of TDS provisions under Section 194S to the tune of ₹39.8 crore and undisclosed income of ₹125.79 crore were detected.” The reply also revealed that further investigations led to the discovery of undisclosed income amounting to ₹888.82 crore linked to virtual digital asset transactions.

What stands out even more is what the government has not done. In the same reply, the Finance Ministry clearly stated that no study has been carried out to examine how other countries tax or regulate crypto. 

“No studies for implementation of taxation models as seen in other countries, such as Thailand and Indonesia, for cryptocurrency have been undertaken,” the government said. This effectively confirms that India’s approach so far has been driven almost entirely by tax enforcement, not by policy design.

The contradiction is hard to miss. On one hand, authorities are collecting hundreds of crores in taxes and carrying out surveys and searches. On the other hand, there is still no formal framework that defines how crypto should operate in India, how exchanges should be regulated, or how the sector fits into the broader financial system. 

Even during India’s G20 presidency, no concrete global framework on crypto regulation emerged. As things stand, India is taxing crypto aggressively, but without clearly deciding what role the asset class is meant to play in the country’s economy.

The illusion of success in the tax numbers

At first glance, the government appears to have succeeded in bringing crypto activity into the tax net. Official data shows that tax deducted at source on virtual digital asset transactions rose to approximately ₹511.83 crore ($55.8 million) in Financial Year (FY) 2024–25, up from ₹362.7 crore ($39.5 million) the previous year and more than double the ₹221.27 crore ($24.1 million) collected in FY 2022–23.

These figures are frequently cited as proof that the crypto tax framework is working. But this conclusion does not survive closer scrutiny.

Tax Deducted at Source (TDS) data captures only transactions conducted on Indian exchanges that comply with domestic reporting norms. It does not reflect the much larger volume of trading undertaken by Indian users on offshore platforms, nor does it capture activity routed through decentralized exchanges, peer-to-peer networks, or overseas entities that fall outside Indian jurisdiction.

Industry estimates derived from blockchain analytics, exchange order flow, and cross-border settlement data indicate that Indian residents traded between ₹4.8 lakh crore ($52.37 billion) and ₹5.2 lakh crore ($56.7 billion) worth of digital assets on offshore platforms in FY 2024–25 alone. In other words, for every rupee collected in TDS, nearly ₹100 worth of trading activity occurred outside the Indian tax net.

Once this context is applied, the apparent success of the current regime begins to look less like regulatory effectiveness and more like statistical distortion. The tax system is capturing a shrinking slice of a much larger market that has quietly moved beyond its reach.

Background of the crypto tax framework

India introduced crypto taxation in the Union Budget 2022. The Finance Act that year brought virtual digital assets under the Income Tax Act, imposing a 30% tax on gains and a 1% TDS on every transaction.

The idea behind the TDS was to track transactions in a market that was largely unregulated at the time. It was not meant to be a revenue source. It was not designed as a revenue-raising measure.

The measure was positioned as a tracking mechanism rather than a fiscal one. No changes have been made to this structure since its introduction, and no separate regulatory framework has been notified alongside it.

How a compliance tool became a market distorter

The central flaw in India’s crypto taxation regime lies not in its intent, but in its structure.

Unlike the capital gains tax, which applies only to profits, the 1% TDS on virtual digital assets is levied on the gross value of every transaction. In traditional financial markets, the very idea of such a setup would be unheard of.

In markets where liquidity and turnover are the main drivers, margins are slim, and capital efficiency is of the utmost importance.

Typically, professional traders use margins that range between 0.1% and 0.3% per trade.

Market makers, who facilitate liquidity and help stabilize prices, operate on even tighter spreads. A flat 1% deduction on every transaction renders these activities mathematically unviable.

The arithmetic is unforgiving. After 10 trades, 10% of deployed capital is lost to tax regardless of profitability. No market participant can sustain operations under such conditions.

The impact was immediate and predictable. Liquidity providers exited Indian exchanges. Bid–ask spreads widened sharply. Trading volumes collapsed. Retail participants faced poorer execution and higher costs. Exchanges saw revenues shrink, leading to layoffs, closures, and consolidation.

What emerged was not a regulated ecosystem, but a hollowed-out one.

The tax structure that made participation unviable

The impact of the 1% TDS cannot be understood without looking at the second pillar of India’s crypto tax framework: the 30% tax on gains under Section 115BBH.

This provision applies a flat tax rate on all profits from virtual digital assets, with no allowance for loss set-off, no carry-forward of losses, and no deduction for trading costs. In effect, crypto is treated differently from every other financial asset class in the country.

In equity markets, losses can be adjusted against gains. In commodities and derivatives, trading expenses are deductible. In crypto, none of this applies.

The practical consequence is visible at the transaction level.

Why the math simply does not work for traders

To understand why India’s crypto tax regime has driven activity offshore, it helps to look at a simple, real-world example.

Consider a retail trader who deploys ₹10 lakh in crypto over the course of a year.

When this trader first deposits funds into a crypto exchange and executes a buy order, 1% TDS is deducted immediately. That means ₹10,000 is taken at the time of purchase itself, even before any profit is made.

If the trader later sells the asset and withdraws the funds, another 1% TDS is deducted at exit. That is another ₹10,000 gone.

Now, assume the trader redeploys the same capital again during the year, which is common in active markets. The moment the funds are deposited again and trades are executed, another 1% TDS applies. And when the trader exits for the second time, yet another 1% is deducted.

In practical terms, a trader who deposits and withdraws capital twice in a year ends up paying close to 4% of total capital purely in TDS, regardless of whether any profit was made.

This deduction happens on turnover, not on income.

It is important to underline what this means. The tax is applied even if the trader makes a loss. It is applied even if the trade breaks even. And it is applied before profitability is calculated.

On top of this, any profit that does remain is taxed separately at 30% under Section 115BBH, with no allowance for loss set-off, no carry forward of losses, and no deduction for transaction costs or fees.

So in effect, a crypto trader in India faces:

• 1% TDS when buying (18% GST on exchange fees)
• 1% TDS when selling (18% GST on exchange fees)
• Repetition of this cycle with every redeployment of capital
• 30% tax on net profits
• On top of this, the government also charges 4% as a health and education cess
• No ability to offset losses
• No recognition of trading expenses

This structure means that even a modest trading strategy becomes unviable. A trader making 2–3% annual returns can end up paying more in tax than the profit actually earned.

How does this compare with stock market taxation

This is where the contrast with India’s equity markets becomes stark.

In stock trading:

• There is no TDS on buying or selling shares
• Securities Transaction Tax (STT) is extremely small and applies only once per trade
• Capital gains are taxed only on profit, not on turnover
• Losses can be set off against gains
• Losses can be carried forward for up to eight years
• Business expenses can be deducted for active traders

For example, an equity trader who trades ₹10 lakh multiple times in a year does not lose capital simply for participating in the market. Tax liability arises only when profits are realized.

In crypto, however, the tax is imposed at every step of activity, regardless of outcome.

This is why the crypto market reacts so differently to taxation than equity markets. Crypto trading depends heavily on liquidity, volume, and capital efficiency. A structure that taxes capital movement itself destroys these fundamentals.

The result is predictable. Serious traders move offshore. Liquidity migrates. Market making disappears. And the remaining activity becomes shallow, expensive, and inefficient.

This is not a question of avoiding tax. It is a question of whether a market can function at all under a structure where capital is taxed repeatedly before profits even exist.

Adding to the regulatory burden, the government has now made crypto tax reporting mandatory from 2026, requiring all traders to disclose their crypto holdings and transactions to the tax authorities. This measure reinforces the existing TDS and flat tax structure, making compliance even more complex for active traders.

That is the core flaw in India’s current crypto tax design and the reason why trading volumes have shifted abroad despite rising TDS collections.

This is why volumes did not decline gradually. They collapsed.

Comparison of Crypto vs Stock Market Taxation in India (₹10 Lakh Example)

Between FY 2022–23 and FY 2023–24, trading activity on Indian exchanges fell by more than 70%, even as global crypto volumes remained stable. The issue was not demand. It was costly.

Crypto became the only asset class in India where capital was taxed on entry, exit, and profit, without recognition of risk or loss. Once this structure took hold, the outcome was inevitable.

The quiet migration offshore

By late 2023, the consequences of this structure had become visible. Trading volumes on Indian exchanges had declined by more than 70% from their peak. Several platforms shut down entirely, while others pivoted to non-crypto businesses.

At the same time, Indian activity on offshore exchanges surged. Dubai, Singapore, Seychelles, and similar crypto-friendly jurisdictions turned out to be the hotspots of choice for Indian traders. Stablecoins replaced the fiat rails. Peer-to-peer markets boomed. 

VPN usage increased after the ban of some foreign platforms, showing that users bypassed restrictions to continue trading. This migration was not limited to retail traders. 

Founders, developers, market makers, and proprietary trading desks began relocating operations abroad. Intellectual property was registered outside India. Treasury functions moved offshore. Venture capital followed.

What occurred was not capital flight in the traditional sense, but something more subtle and potentially more damaging: the gradual export of an entire financial ecosystem.

The numbers behind the shift 

When viewed alongside actual trading activity, the scale of this displacement becomes clear.

The data reveal a stark reality: as enforcement increased, compliance did not rise proportionally. Instead, the activity migrated. The tax base narrowed even as headline collections rose.

This is the classic signature of a policy that suppresses participation rather than regulating it.

Consolidation at the exchange level

FY 2024–25 crypto data shows concentration at a few exchanges. CoinDCX paid ₹259.58 crore ($28.3 million) in TDS. Total TDS collected was ₹511.83 crore ($55.8 million). More than 50% came from CoinDCX. 

Also Read: CoinDCX CEO bats for 0.01% Crypto Tax in India ahead of budget

Smaller exchanges struggled with TDS compliance. Some shut down. Some reduced operations. Liquidity moved to larger exchanges. 1% TDS made market making difficult. Section 133A surveys found ₹39.8 crore ($4.38 million) unpaid TDS and ₹125.79 crore ($13.72 million) undisclosed income at the exchange level. Other investigations found ₹888.82 crore in undisclosed income from Virtual Digital Assets (VDAs). Most trading now happens at a few large platforms.

A growing gap between potential and reality

The timing of the Union Budget 2026 matters because the economic opportunity is no longer speculative.

Estimates suggest that embracing virtual digital assets and the broader Web3 ecosystem could add $1.1 trillion to India’s GDP by 2032. Large-scale cloud and digital adoption, including blockchain, could contribute $380 billion to GDP by 2026 and create 14 million jobs. 

Yet, the divergence between India’s potential and its current trajectory is illustrated by the staggering volume of trade that has exited the domestic jurisdiction. Indian nationals traded nearly ₹5 lakh crore on offshore platforms in a single year. 

If this volume had been executed on compliant domestic exchanges, the 1% TDS, or even a rationalized 0.01% TDS, would have yielded significant revenue. More importantly, trading fees would have generated Goods and Services Tax for the state. Instead, this value was captured by foreign entities such as Binance, Bybit, and KuCoin, contributing nothing to the Indian exchequer.

The shadow multiplier of Web3

The ₹5 trillion figure cited in industry discourse refers not just to lost trading volumes but to the broader multiplier effect of the Web3 economy. By pushing trading offshore, India disincentivizes the establishment of domestic liquidity providers, market makers, and custodians. 

These are high-tech businesses that pay corporate tax and employ skilled engineers. Startups require liquid token markets to monetize their products. Suppressed domestic markets force them to incorporate in Dubai or Singapore to access capital and liquidity. India possesses 11% of the global Web3 talent pool, yet without a domestic market, this talent largely works for foreign protocols. 

Indian engineers build the product, but the intellectual property and economic value accrual occur elsewhere. The current tax regime acts as a primary incentive for offshore migration, effectively subsidizing foreign exchanges at the cost of domestic industry health. The Make in India initiative is undermined in the digital sector by a tax policy that makes trade in India mathematically unviable.

How India’s approach differs from global practice

Globally, the trajectory has been markedly different.

The United States has gone down the path of regulatory clarity through legislation and agency guidance, culminating in the GENIUS Act, which brings stablecoins into the regular banking system. 

Europe’s Markets in Crypto Assets (MiCA) regulation is a single licensing regime for 27 countries. Singapore and Dubai have set up clear and predictable rules, thus fostering institutional involvement.

India, by contrast, has relied primarily on taxation as a regulatory substitute.

This approach has produced a paradox. While the country possesses one of the largest crypto user bases and developer communities in the world, it remains largely absent from the institutional layer of the global digital asset economy. Major funds, custodians, and infrastructure providers operate elsewhere.

Markets can adapt to high taxes. What they cannot adapt to is uncertainty.

Global regulatory benchmarks

While India debated TDS rates, the United States and the European Union moved decisively to integrate digital assets into formal financial systems. The GENIUS Act in the United States integrates stablecoins with insured banks. 

Dollarization risk is a major concern for the Reserve Bank of India (RBI) and remittance flows. Europe’s MiCA regulation creates a single licensing framework for 27 countries, allowing passporting for CASPs and institutional inflows. 

Dubai VARA and Singapore MAS have established clear rules, attracting Indian founders and capital. India’s focus on taxation rather than regulation has produced a paradox. 

While the country possesses one of the largest crypto user bases and developer communities, it remains absent from the institutional layer of the global digital asset economy. Major funds, custodians, and infrastructure providers operate elsewhere.

What global data shows

A recent PricewaterhouseCoopers (PwC) report, a firm that provides audit, tax, and advisory services across 151 countries, on global crypto regulation shows how far other markets have already moved ahead. The report says more than 560 million people worldwide now hold digital assets, and most large economies no longer treat crypto as an experimental sector.

According to PwC, countries in Europe, the US, and parts of Asia have already put full regulatory systems in place for crypto exchanges, custodians, and stablecoin issuers. This includes licensing for exchanges, mandatory audits, capital requirements, and compliance standards that mirror those followed by banks.

The report also points out that enforcement has replaced uncertainty. Regulators are no longer debating whether crypto should exist. They are monitoring transactions, tracking risks, and supervising platforms through formal frameworks.

PwC notes that jurisdictions offering clear rules and predictable taxation are seeing higher institutional participation and business activity. In contrast, countries relying mainly on restrictive taxes or unclear policies are seeing trading volumes and startups shift abroad.

The report adds that stablecoins and tokenised assets are now a key focus area globally, with several countries integrating them into their financial systems under regulated structures.

What the PwC report says about India

India does not have a full crypto rulebook yet. PwC says over 52 countries already have clear regulations for crypto. These rules include licensing, audits, and compliance requirements. India is not among them.

Despite this, India has a very large crypto market. Around 90 million Indians hold or have used crypto. Adoption is high, but there are no clear rules for exchanges or businesses.

So far, India has focused on taxation. There is a 30% tax on crypto income and a 1% TDS on transactions. This helps the government track activity, but it does not make things clear for companies or users. There is no licensing system, no set capital requirements, and no standard compliance process.

In other countries, exchanges follow strict rules. They have audits, customer protection, and reporting requirements. India has some checks, but mostly through tax tracking. There is no dedicated regulatory structure.

Because of this, bigger exchanges can survive because they can pay for compliance. Smaller exchanges struggle, and some have shut down or reduced activity. Some trading has moved abroad because of uncertainty about the rules.

India has scale and a lot of users, but no clear framework to support them. Without proper rules, the market is unstable. If things do not change, India could fall behind countries that have set up clear crypto regulations.

The policy dilemma for the Union Budget 2026

The Finance Ministry faces a choice. Retaining a 1% TDS may secure ₹500–600 crore ($55 – $65 million) for the Consolidated Fund, but it risks losing India’s seat in the future digital economy. Industry bodies advocate for a reduced TDS of 0.01%, allowing liquidity providers to return and offshore volume to be repatriated. 

Regulatory clarity and incentives to build domestic infrastructure are critical if India is to capture the $5 trillion opportunity and protect its talent and intellectual property. Strategic action now could turn policy inertia into an economic engine, creating jobs, tax revenue, and global leadership.

Industry voices on Budget 2026 and crypto

As Union Budget 2026 approaches, leaders in India’s crypto industry are watching closely. They say the current tax framework, introduced in 2022, has shaped trading behavior and pushed activity offshore.

Many highlight that regulatory clarity and predictable rules will be key to bringing domestic activity back. India already has a large base of crypto users and Web3 talent. But high taxes and unclear rules are limiting domestic participation.

Vikram Subburaj, CEO, Giottus.com, said: “The India crypto story is no longer hypothetical. Nearly 100 million Indians hold digital assets and the broader global base is over 560 million. We are past early adoption and are in the real participatory growth stage. For 2026, FIU-IND’s updated AML and CFT expectations push the sector toward bank-grade KYC, monitoring, and traceability. In the Budget, the most practical unlock would be predictability. This includes a clear rulebook for VDA intermediaries and reviewing frictions like the 1% TDS that hurts liquidity and onshore participation.”

He also added, “India can be an innovation hub if compliant players get clarity on licensing, custody, and taxation. There should also be regulatory sandboxes for Web3 rails at UPI scale and a dedicated crypto regulatory body for single-window clearance and customer protection.”

Sumit Gupta, Co-Founder & CEO, CoinDCX, said: “As we approach Budget 2026, the virtual digital asset sector is looking for measured relief, especially since it has been four years since the current taxation framework was introduced. The decisions taken now can accelerate innovation and help India emerge as a global Web3 and VDA leader.”

Gupta added, “Pragmatic reforms that bring users back to compliant platforms while strengthening compliance are key. Reducing TDS from 1% to 0.01% would retain monitoring while removing the primary incentive for offshore migration. Aligning the 30% capital gains tax with income tax slabs, allowing loss offsetting and standard business deductions for Web3 ventures, would create a stable and transparent ecosystem for responsible innovation.”

Edul Patel, CEO, Mudrex, said: “I do not expect anything to change immediately in this Budget regarding the 1% TDS or the 30% tax. These do not solve government concerns. Over time, more clarity is expected on regulatory rules. Recent FIU updates focus on the formalization of infrastructure and tracking for crypto players. There is also chatter about dedicated bodies responsible for crypto, including stablecoin monitoring by the RBI. Gradually, we expect more formalization and clarity for crypto payments in India.”

Vikas Gupta, Country Manager – India, Bybit, said: “2026 is likely to be a selective market rather than broadly bullish. Short-term rebounds may appear due to liquidity shifts, positioning resets, or technical factors, not underlying fundamentals. Macro developments, like US inflation and Fed policy, will influence market direction. Investors should focus on risk management, diversification, controlled exposure, and technical signals. The market will reward informed and disciplined participation rather than speculation.”

Ashish Singhal, Co-Founder of CoinSwitch, said: “India’s VDA ecosystem is at a pivotal stage, with growing adoption across the country. However, the current tax framework presents challenges for retail participants by taxing transactions without recognizing losses, creating friction rather than fairness. A reduction in TDS on VDA transactions from 1% to 0.01% could improve liquidity, ease compliance, and enhance transparency while preserving transaction traceability. Raising the TDS threshold to ₹5 lakh would help protect small investors from disproportionate impact.”

Ashish also added, “Introduced in 2022 as a stand-in for regulation at that time, VDA taxation has since been complemented by strong oversight from FIU-IND and improved compliance. This Budget presents a great opportunity to revisit the framework in a manner beneficial to both investors and the government. We remain hopeful that the government will recognize this gap and consider reviewing the current framework soon.”

Together, these perspectives show that the industry is not looking for exemptions. They are asking for “predictable rules, rational taxation, and a clear regulatory framework.” This can support domestic liquidity, innovation, and compliance.

What the industry is actually asking for

Contrary to popular perception, the industry is not seeking exemptions or special treatment. Its demands are narrow and pragmatic.

A reduction of TDS to around 0.01%, sufficient to maintain transaction traceability without destroying liquidity.

Rationalization of capital gains taxation, including loss set-offs.

Clear legal classification of digital assets and custody norms.

Regulatory certainty that allows long-term planning and institutional participation.

These measures would not weaken oversight. They would strengthen it by bringing activity back within the formal economy.

A decision that will shape the next decade

The debate around crypto in India is often framed as ideological. In reality, it is economic.

It is about whether India wants to shape the next generation of financial infrastructure or merely observe it from the sidelines. Whether it wishes to build platforms or consume them. Whether it wants to capture value or export it.

Budget 2026 will not announce this choice explicitly. But it will encode it — quietly, precisely, and decisively — in tax rates, definitions, and compliance rules.

And those choices will determine whether India emerges as a serious participant in the global digital economy or watches its most promising frontier mature elsewhere.

Japanese bitcoin treasury firm Metaplanet recorded a 104.6 billion yen ($680 million) impairment on its bitcoin holdings for fiscal 2025, reflecting a slump in the cryptocurrency market. While the loss appears significant, the company said it does not affect cash flows or operations because it is a non-operating, non-cash expense.

Record Bitcoin holdings despite market drop

Metaplanet’s bitcoin holdings grew dramatically over the year, from 1,762 BTC at the end of 2024 to 35,102 BTC at the close of 2025. CEO Simon Gerovich said the company spent $451 million in the fourth quarter (Q4) of 2025 to buy bitcoin, paying an average of $105,412 per Bitcoin, while bitcoin was trading at around $87,500 at the end of the year.

Despite the impairment, the company’s BTC Yield—the growth in BTC per diluted share—reached 568%, underscoring that its long-term accumulation plan remains on track.

Financial impact

The impairment will contribute to an expected consolidated ordinary loss of 98.56 billion yen ($640 million) and a net loss of 76.63 billion yen ($498 million) for the year. Comprehensive loss attributable to shareholders is projected at 54.02 billion yen ($351 million). Final figures will be published on February 16, 2026.

*Notice Regarding Revision of Full-Year Earnings Forecast for Fiscal Year Ending December 2025, Recording of Bitcoin Impairment Loss, and Announcement of Full-Year Earnings Forecast for Fiscal Year Ending December 2026* pic.twitter.com/VIKYRYb981

— Metaplanet Inc. (@Metaplanet) January 26, 2026

At the same time, Metaplanet raised its full-year revenue forecast to 8.9 billion yen ($57.8 million), up 31% from the previous estimate. Operating income is now expected at 6.3 billion yen ($41 million), a 33.8% increase over earlier projections.

Explaining the impairment

Metaplanet marks its bitcoin holdings to market at each quarter-end. The 104.6 billion yen impairment is therefore an accounting adjustment, not a cash loss. Foreign exchange effects also played a role: with a weak yen, Metaplanet reported FX translation gains of 22.6 billion yen, partially offsetting the bitcoin loss. The net effect on BTC value was around 82 billion yen.

“While short-term accounting volatility is inherent to our business model, our medium- to long-term BTC accumulation and capital strategy remain on track,” the company said.

Bitcoin income generation outperforms

Metaplanet’s Bitcoin Income Generation business, which uses derivatives and options strategies, performed better than expected in the fourth quarter. Revenue from the Bitcoin Income Generation segment is now expected to reach 8.6 billion yen for the full year, up from the previous forecast of 6.3 billion yen. 

To fund its operations, Metaplanet raised money by issuing Series B perpetual convertible preferred stock and securing a $500 million credit facility, giving it more room to expand its bitcoin-related activities.

For 2026, the company expects revenue of 16 billion yen ($104 million) and operating income of 11.4 billion yen ($74 million), which would be about an 80% increase over 2025. 

Almost all of this revenue—15.6 billion yen- is expected to come from the Bitcoin Income Generation business, while its hotel operations are expected to stay stable. The company did not guide net income, noting that bitcoin prices remain unpredictable.

Even though Metaplanet posted big accounting losses in 2025, the company still plans to continue buying bitcoin. Most other treasury-focused firms would probably pause or slow down their purchases in a market slump, which makes Metaplanet’s approach unusual.

This brings up a few important questions:

• Will other big investors start buying bitcoin as aggressively as Metaplanet?
• How will Metaplanet deal with the risk if Bitcoin prices keep falling?
• Could holding a lot of bitcoin and using derivatives become the new way for companies to manage crypto?

Also Read: GameStop Moves Bitcoin to Coinbase Prime, Signals Possible Exit

Japan is finally beginning to move on cryptocurrency exchange-traded funds (ETFs), but the pace remains slow and cautious, even as global markets race ahead.

According to Nikkei, Japan’s Financial Services Agency (FSA) is reviewing possible rule changes that would allow cryptocurrencies to be treated as eligible assets for exchange-traded funds. 

If those changes go through, Japan could see its first crypto-linked ETFs by 2028, a notable shift for a market that has traditionally kept digital assets on the fringes of its financial system.

The proposal would also introduce stronger investor protection measures, reflecting the regulator’s long-standing concern about volatility and retail risk. Major financial groups, including Nomura Holdings and SBI Holdings, are already preparing for the possibility of launching products once the regulatory door opens, though any ETF would still need approval from the Tokyo Stock Exchange.

For now, however, the discussions remain preliminary. There is no confirmed timeline, no draft rulebook, and no formal approval process underway.

A market falling behind its peers

Japan’s hesitation stands out at a time when other major markets have moved decisively. The United States and Hong Kong cleared spot crypto ETFs in 2024, opening the door to large-scale institutional participation almost overnight. 

In the US, those products now hold close to $120 billion in assets, underscoring how quickly demand materialised once regulatory barriers were removed.

The broader market has expanded just as rapidly. Global cryptocurrency valuations have climbed to around $3 trillion, fuelled in part by inflows from pension funds, university endowments, and state-linked investment vehicles that previously stayed on the sidelines. For many institutions, ETFs have provided a familiar and regulated route into crypto, removing the need to deal directly with custody or technical infrastructure.

Japan, however, has not followed the same path. Despite being an early centre for crypto development and home to a strong fintech ecosystem, the country has struggled to turn that advantage into wider financial adoption.

For retail investors, access remains awkward. Buying crypto still means opening exchange accounts, managing private keys, and navigating security risks that many everyday investors are unwilling to take on. ETFs would remove much of that friction by allowing investors to buy and sell crypto exposure through standard brokerage accounts, much like stocks or mutual funds.

That gap between global momentum and domestic policy is now becoming increasingly difficult for Japan to ignore.

Why 2027 or 2028 is the realistic timeline

At the WebX2025 conference in Tokyo, Kenji Hoki, Head of KPMG Japan’s Web3 and Fintech Division, laid out why progress remains slow.

According to Hoki, Japan’s tax and investment framework does not currently allow investment trusts, which form the basis of ETFs, to hold crypto assets directly. Any change would require revisions to either tax policy or the Investment Trust Act itself.

Japan’s tax reform proposals are typically submitted at the start of each year. If regulators include crypto ETFs in their 2026 submissions and lawmakers approve them, the earliest practical launch window would be spring 2027. Even that timeline is optimistic. 

“The assets that investment trusts can invest in are limited,” Hoki said. “It doesn’t seem that the investment trusts that form the basis of ETFs will be allowed to buy cryptoassets directly.”

He also pointed to supervisory guidelines and the lack of consensus within the industry as ongoing obstacles.

Pressure mounts from the industry

Executives in Japan’s asset management sector are increasingly vocal about the risk of falling behind.

Tomoya Asakura, President and CEO of SBI Global Asset Management, warned that Japan is already losing ground to faster-moving jurisdictions.

“The earliest we can expect approval is two years from now. But that is still too late,” he said. “The US market has been moving very quickly over the past six months. In a year’s time, we can also expect to be significantly behind Hong Kong and Singapore.”

Asakura said Japan has made clear its intention to treat crypto as a legitimate financial asset, but execution has lagged behind policy statements.

One possible workaround, he suggested, would be to allow Japanese investors access to overseas Bitcoin ETFs through domestic investment trusts. That approach could potentially be implemented through supervisory changes rather than full legislative reform.

“If this can be addressed by simply changing supervisory guidelines, that would be the quickest way,” he said.

Government signals are shifting

There are signs that the political mood is changing.

In January, Japan’s Finance Minister Satsuki Katayama publicly acknowledged the growing role of crypto ETFs in global markets, noting that in the United States, such products are increasingly used as inflation hedges.

She added that Japan must pursue more advanced fintech initiatives if it wants to remain competitive, comments that were widely interpreted as a soft endorsement of regulated crypto investment products.

Still, officials have been careful not to commit to specific timelines. The Financial Services Agency has not confirmed when or whether crypto ETFs will be approved, and insiders say discussions remain exploratory.

What approval would change

If Japan eventually clears crypto ETFs, it would mark a real inflection point for the country’s digital asset market.

For everyday investors, the change would be practical rather than ideological. Instead of navigating exchanges, wallets, and private keys, they would be able to gain exposure to bitcoin and other cryptocurrencies through regular brokerage accounts, in the same way they buy stocks or funds today. That simplicity alone could bring a much wider segment of investors into the market.

Asset managers, meanwhile, would gain an entirely new product category at a time when demand for alternatives is steadily growing. For institutions, ETFs would offer a compliant route into crypto, avoiding the operational and regulatory risks that have so far kept many on the sidelines.

According to estimates cited by Nikkei, crypto ETFs in Japan could eventually attract as much as 1 trillion yen, or about $6.4 billion, in assets, depending on how quickly investor appetite develops and how the rules are structured.

Beyond the numbers, approval would carry symbolic weight. It would signal that Japan is ready to move past years of regulatory caution and reassert itself in a global market that has continued to evolve without it.

A signal, not a green light

For now, Japan’s discussions represent intent rather than action.

The policy direction is becoming clearer, but legal barriers, regulatory caution and political process mean progress will be slow. Whether Japan moves in 2027, 2028, or later may ultimately determine whether it becomes a serious player in crypto finance or continues to trail markets that have already embraced digital assets.

What is certain is that the window is narrowing, and the rest of the world is not waiting.

Also Read: Grayscale Files S-1 with U.S. SEC for BNB ETF

Matcha Meta, the trading platform built by 0x, has issued a security alert after noticing a potential issue linked to SwapNet, one of the aggregators on its platform. The update was shared earlier today on X, where the team said some users may have been exposed to risk depending on how they had set up token approvals while using Matcha Meta.

According to Matcha Meta, the issue affects users who had disabled One-Time Approvals and instead allowed direct token approvals to individual aggregator contracts.

In its first statement, the team said: “We are aware of an incident with SwapNet that users may have been exposed to on Matcha Meta for those who turned off One-Time Approvals.”

Following the discovery, Matcha confirmed it is working closely with the SwapNet team, which has already taken action by disabling its contracts temporarily.

“We are in contact with the SwapNet team and they have temporarily disabled their contracts. The team is actively investigating and will provide rolling updates as more information becomes clear.”

SwapNet router address flagged

As part of the advisory, Matcha Meta urged users to revoke approvals associated with SwapNet’s router contract, identifying the following address as the default deployment across supported EVM chains: 0x616000e384Ef1C2B52f5f3A88D57a3B64F23757e.

Users were advised to revoke permissions granted to this contract, especially if approvals were set manually instead of using Matcha’s One-Time Approval system.

Vulnerability linked to an arbitrary call

Further investigation suggests the issue may be linked to an arbitrary call vulnerability in the SwapNet contract. This appears to have allowed the attacker to move funds that users had already approved, without needing any additional permission.

On-chain data shows the attacker using this method to transfer user funds. One of the transactions linked to the activity can be viewed here: 0xaf77dda2c805c299703dbf83c5aa96f99425b35c9241dab5bdefb8d9d19273d3

Matcha has since confirmed that the affected contracts have been disabled while the investigation remains ongoing.

PeckShield flags fund drain

Blockchain security firm PeckShield later confirmed that the incident had resulted in an on-chain fund drain. In a post shared on X, the firm said users who had opted out of Matcha’s One-Time Approval system were affected.

According to PeckShield, around $16.8 million worth of crypto has been drained so far. On Base, the attacker reportedly swapped nearly $10.5 million in USDC for around 3,655 ETH, before beginning to bridge the funds over to Ethereum.

The firm also urged users to immediately revoke approvals granted to individual aggregators outside of 0x’s One-Time Approval contracts, warning that such permissions remain a major attack vector.

BlockSec confirms wider impact

BlockSec’s Phalcon platform also flagged the activity, noting that multiple victim contracts were targeted across chains.

According to BlockSec, attackers exploited contracts deployed across Ethereum, Arbitrum, Base, and BNB Chain, with total losses exceeding $17 million.

The firm said the affected contracts were not open-source and appeared to expose an arbitrary-call function, allowing attackers to abuse existing token approvals and execute transferFrom calls to drain assets.

Two major impacted deployers were identified:

• 0xbeef63AE5a2102506e8a352a5bB32aA8B30B3112 — approximately $3.67 million
• 0x9cb8d9BaE84830b7f5F11ee5048c04a80b8514BA — approximately $13.41 million

0x confirms core protocol not affected

Matcha Meta issued a follow-up clarification after reviewing the incident with the 0x protocol team.

“After reviewing with 0x’s protocol team, we have confirmed that the nature of the incident was not associated with 0x’s AllowanceHolder or Settler contracts.”

The update confirmed that users who relied on One-Time Approvals were not impacted. “Users who have interacted with Matcha Meta via One-Time Approval are thus safe.”

However, the platform reiterated that users who chose to grant direct token approvals to third-party aggregators do so at their own risk.

“Users who have disabled One-Time Approval and have set direct allowances on individual aggregator contracts assume the risks of each aggregator.”

To prevent similar issues going forward, Matcha Meta confirmed that it has now removed the option for users to directly approve aggregator contracts.

“We have removed the ability for users to set allowances on aggregators directly such that this cannot happen moving forward.”

What users should do

Users are advised to:

• Revoke approvals linked to SwapNet and other third-party aggregators.
• Use One-Time Approvals when trading on Matcha.
• Stay alert for further updates as the investigation continues.

At the time of writing, there is no indication that 0x’s core infrastructure was compromised. The incident appears limited to how permissions were handled at the aggregator level.

Also Read: Makina Finance: 83% of Lost ETH Recovered, v1.1 Upgrade Live Monday

This week’s activity in crypto had little to do with price swings and far more to do with how institutions and regulators positioned themselves.

While the broader market stayed relatively steady, some of the biggest moves came from institutions, regulators, and companies quietly stacking assets or drawing clear lines around how crypto will be treated going forward. From BitGo’s long-awaited NYSE debut to MicroStrategy and Bitmine aggressively moving into their treasuries, the week reflected a market that is slowly but steadily maturing.

Here’s a look at what actually mattered.

BitGo finally goes public

After years of operating behind the scenes as one of crypto’s most important custodians, BitGo made its public market debut this week.

The company listed on the New York Stock Exchange under the ticker BTGO, pricing its IPO at $18 per share and raising $212.8 million. Shares moved higher soon after listing, signalling solid demand from public market investors.

The timing is notable. Custody has quietly become one of the most critical parts of crypto infrastructure, especially as institutions demand clearer regulatory oversight. BitGo now safeguards more than $90 billion in digital assets, and its listing comes as traditional finance increasingly looks for compliant, US-based crypto exposure.

Adding to the momentum, YZi Labs disclosed a strategic investment in BitGo, reinforcing the view that regulated custody is becoming a core pillar of the industry rather than a side business.

MicroStrategy and Bitmine keep buying

If there was any doubt that corporate crypto accumulation was slowing down, this week put it to rest.

MicroStrategy announced another major Bitcoin purchase, spending $2.13 billion to increase its holdings to 709,715 BTC. The company continues to treat Bitcoin as a long-term treasury asset rather than a trade, a strategy it has stuck with through multiple market cycles.

On the Ethereum side, Bitmine Immersion Technologies revealed it had added 35,000 ETH, bringing its total holdings to roughly 4.2 million ETH. The move puts Bitmine among the largest known ETH holders in the public markets.

Together, the purchases underline a shift that has been quietly building: some public companies are no longer “testing” crypto exposure. They are committing to it.

Makina Finance recovers most of its stolen funds

The week also brought a rare bit of good news out of DeFi.

Following a flash loan exploit that drained 1,299 ETH, Makina Finance confirmed it has recovered around 83% of the stolen funds. The recovery came after an MEV builder front-ran the attacker and later returned the funds under the SEAL White Hat Safe Harbor process.

After a 10% bounty, about 1,023 ETH was returned to a recovery wallet.

Makina has since announced that its v1.1 upgrade will go live on Monday, introducing stronger Oracle protections and updated security checks. While the exploit initially sent the token sharply lower, the recovery helped stabilize sentiment toward the end of the week.

Regulators take very different paths

Regulation was another major theme — and this week highlighted just how fragmented the global approach still is.

In Europe, Portugal ordered Polymarket to shut down operations within 48 hours, citing laws banning political betting. The move was one of the strongest actions yet taken against prediction markets and signals tighter enforcement across the region.

In contrast, the US saw a more crypto-friendly development. Kansas introduced a bill proposing a state Bitcoin reserve, funded through unclaimed digital assets. If passed, it would mark one of the first instances of a US state formally holding Bitcoin as part of its public financial strategy.

Meanwhile, Binance filed for a MiCA license in Greece, positioning itself to operate legally across the European Union once the framework comes fully into force.

Chainlink and Grayscale push the market access forward

Infrastructure and investment products continued to expand quietly in the background.

Chainlink rolled out 24/5 data streams for US stocks and ETFs, enabling near real-time pricing for traditional assets on-chain. The move is aimed squarely at institutions experimenting with tokenized finance.

At the same time, Grayscale filed an S-1 for a spot BNB ETF and moved to convert its NEAR Trust into a spot ETF listed on NYSE Arca. Reports also suggest the firm is exploring products tied to Avalanche, Hedera, and Hyperliquid.

The message is clear: ETF expansion is no longer limited to Bitcoin and Ethereum.

Other developments worth noting

• Caroline Ellison was released from custody after serving 14 months, following her cooperation in the FTX case.
• Nasdaq filed to raise position limits on Bitcoin and Ethereum ETF options, a move aimed at improving institutional liquidity.
• Bhutan announced plans to launch a sovereign Sei validator in Q1 2026 through Druk Holding and Investments.
• Solana Mobile launched the SKR token airdrop for Seeker phone users.
• Farcaster confirmed it is not shutting down, despite returning $180 million in VC funding.
• ZachXBT traced a $23 million wallet linked to a US government seizure, drawing attention to on-chain transparency issues.

What comes next

The coming week will likely hinge on three things:

• The rollout of Makina’s v1.1 upgrade and whether confidence returns
• ETF developments, especially around Grayscale’s new filings
• Broader liquidity signals, as traders watch whether institutional buying translates into sustained market momentum

For now, the trend is clear: institutions are leaning in, regulators are drawing clearer boundaries, and crypto is increasingly behaving like a structured financial market rather than a speculative frontier.

In a rare win for retail investors, the U.S. Securities and Exchange Commission (SEC) has dropped its long-running case against Gemini Trust Company, the crypto exchange founded by Tyler and Cameron Winklevoss. 

This comes after users in the Gemini Earn program received 100% of their cryptocurrency, a recovery almost unheard of in the crypto world.

How it all began

The trouble started back in January 2023, when the SEC, the agency that enforces U.S. securities laws, filed a lawsuit against Gemini and its former partner, Genesis Global Capital. The regulator said the Gemini Earn program, which let everyday investors lend their crypto for interest, was essentially selling unregistered securities.

At its peak, the program held nearly $940 million in crypto from about 340,000 investors. Everything seemed fine until November 2022, when Genesis froze withdrawals during a liquidity crunch. Suddenly, people who thought their crypto was safe couldn’t access it. Many users were locked out of their accounts for months as the fallout from FTX and Terra/Luna rippled through the market.

“After the 100% in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and the settlements … the Commission believes the dismissal of the claims against Defendant is appropriate,” the SEC stated in court filings.

Gemini Earn’s rise and collapse

Gemini Earn launched in December 2020. It offered users the chance to earn interest on their crypto while keeping their funds accessible at any time. Investors were drawn by the promise of higher yields than traditional banks, and for a while, the program ran smoothly.

Trouble began when Genesis’s institutional borrowers defaulted on loans. Withdrawals were frozen, and nearly $1 billion in investor crypto was inaccessible. Unlike most bankruptcies, where investors are repaid in cash at the asset’s market value, Gemini Earn users eventually received the exact tokens they had deposited, allowing them to benefit from crypto price recoveries in 2024 and 2025.

Tyler Winklevoss had once called the SEC lawsuit a “manufactured parking ticket,” a comment that now appears to have been accurate.

Settlements and repayments

Even before the federal case ended, Gemini had taken steps to protect its users. The exchange paid $37 million to the New York Department of Financial Services, and Genesis created a $2 billion fund for affected investors. Gemini added about $50 million in crypto to make sure every investor got back all of their funds.

Because of this, the SEC decided to drop the case. With everyone fully repaid, the regulators felt there was no reason to keep the lawsuit going.

A changing regulatory landscape

The SEC’s move comes amid a broader shift in U.S. crypto regulation under President Donald Trump, who returned to office in January 2025. Since then, the agency has eased enforcement in a number of high-profile cases, with Gemini now the eighth major crypto company to have a federal lawsuit dismissed.

Although the SEC denies political influence, the move aligns with the administration’s Project Crypto, aimed at encouraging cryptocurrency growth and positioning the U.S. as a global leader in digital assets.

With 100% of those assets returned, the SEC seems satisfied that the lesson has been learned without further litigation, said a market analyst following the case.

What lies ahead of Gemini

Now that the lawsuit is behind them, Gemini is moving on to new things. They are focusing on services for big institutional investors, exploring prediction markets, and growing their business on Nasdaq. Since going public on Nasdaq in late 2025, the exchange is valued at about $1.14 billion, which shows that investors are starting to trust it again.

For the crypto world, the Gemini Earn story is unusual. It’s one of the few times investors got back all of their money after a major program failed. The episode shows the risks of crypto lending programs but also that full recovery is possible when companies and regulators work together.

Also Read: Grayscale Files S-1 with U.S. SEC for BNB ETF

DeFi platform Makina Finance has finished distributing the funds recovered from the DUSD/USDC Curve pool exploit, bringing an initial close to an incident that unsettled the protocol earlier this month.

In an update shared on January 23, the team said it had managed to recover 1,077.8 ETH, accounting for roughly 83% of the 1,299.18 ETH lost in the January 20 exploit. Of this, 920 ETH came directly from the MEV builder, highlighting the crucial role front-running played in enabling the high recovery rate.

The recovered funds were held in the recovery wallet 0xc22F7346eaF4340f51513bF9f01e5d722E558AB9 and have now been sent out to affected users on a pro-rata basis.

Makina said users should already see the funds in their wallets. Anyone who hasn’t received their WETH within 24 hours has been asked to open a ticket on the project’s Discord. The team also confirmed that a full technical post-mortem, along with details on how the remaining unrecovered funds will be handled, will be released next week.

How the recovery played out

The recovery hinged on two key sources: an MEV builder and a Rocket Pool validator that received part of the exploited funds during the attack.

When the exploit occurred, 276 ETH was routed to a Rocket Pool validator’s distributor contract. Under Rocket Pool’s design, rewards are automatically split between the node operator and rETH holders. In this case, 157 ETH was claimable by the operator, who later returned the full amount to Makina’s recovery wallet.

The remaining 118 ETH was automatically absorbed into rETH backing and could not be retrieved. Makina said it stayed in touch with the Rocket Pool team throughout the process, but the funds were already locked in by the protocol’s immutable logic.

MEV builder returned the bulk of the funds

The larger portion of the recovered ETH came from the MEV builder that front-ran the original exploit transaction. After discussions with Makina, the builder returned the funds it had captured, allowing the protocol to recover the majority of the losses.

Together with the Rocket Pool recovery, this brought the total recovered amount to 1,077.8 ETH, or just over four-fifths of what was lost. The funds were then moved into a multi-signature wallet before being distributed to users.

Distribution now complete

Makina confirmed that distribution has now been completed. Payouts were made in ETH and calculated using a snapshot taken at block 24273361, the block immediately before the exploit occurred.

The team said distributing ETH directly was the simplest and most transparent option, as it avoided making assumptions about how users might want their funds converted. A second distribution, covering USDC fees that were unintentionally earned during the exploit, is expected to take place next week.

What actually caused the exploit

The January 20 incident was triggered by an oracle manipulation attack on the DUSD/USDC Curve pool. The attacker used a flash loan of roughly $280 million in USDC to distort the pool’s pricing mechanics.

By manipulating the relationship between assets under management and the pool’s supply, the attacker was able to drain liquidity from the pool. While the exploit itself was executed by the attacker, a large part of the transaction was front-run by an MEV builder, a factor that ultimately made the high recovery rate possible.

Curve pool to be phased out

In the aftermath of the incident, Makina has decided to move away from the DUSD/USDC Curve pool altogether.

The protocol plans to shift liquidity to a Uniswap-based pool that will allow users to exit DUSD into USDC at a fixed price. According to the team, the move is meant to reduce reliance on external pricing mechanisms and limit the risk of similar attacks going forward.

Users who are still holding DUSD/USDC Curve LP tokens have been advised to withdraw single-sided into DUSD, as remaining in the pool will not improve recovery outcomes.

What comes next

Makina is preparing to disable Recovery Mode once its v1.1 upgrade goes live, which is currently expected around January 26. The update includes fixes for the Oracle vulnerability as well as other changes that were already scheduled prior to the exploit.

Once Recovery Mode is lifted, redemptions will reopen for whitelisted users. Holders with more than $100,000 worth of DUSD will need to complete anti-money laundering (AML) and know-your-customer (KYC) checks, while the team is working on liquidity options for users who are not whitelisted.

The team says a full technical breakdown of the exploit and a detailed plan for handling the remaining 221.38 ETH in losses will be shared in the coming days.

For now, the focus shifts to whether Makina can stabilize the protocol and rebuild trust after one of the more closely watched DeFi incidents of early 2026.

Also Read: Saga Forced to Halt its EVM Network After $7 Million Exploit

UBS Group AG is preparing to allow some of its private banking clients to trade cryptocurrencies, according to people familiar with the matter, as the world’s largest wealth manager takes another step toward digital assets.

The Swiss lender, which managed around $4.7 trillion in client assets as of September 30, has been in discussions for several months on how to structure the offering. The plans are still under review, and no final decision has been taken, the people said, requesting anonymity as the discussions are not public.

Initial rollout likely to begin in Switzerland

According to a Bloomberg News report, UBS plans to initially allow a limited set of private banking clients in Switzerland to buy and sell cryptocurrencies such as bitcoin and ether.

The service could later be expanded to other markets, including Asia-Pacific and the United States, depending on regulatory approvals and client demand.

UBS is understood to be evaluating external partners for the offering, though the bank has not disclosed who it is working with or when the service may be launched.

UBS responds, declines detailed comment

UBS declined to comment directly on the Bloomberg report. However, a spokesperson told Reuters that the bank continues to assess opportunities in the digital asset space. 

“As part of UBS’s digital asset strategy, we actively monitor developments and explore initiatives that reflect client needs, regulatory developments, market trends and robust risk controls,” the spokesperson said.

The spokesperson added: “We recognize the importance of distributed ledger technology like blockchain, which underpins digital assets.”

Reuters said it was unable to independently verify the details of the report.

Demand from wealthy clients drives move

Interest in cryptocurrencies continues to rise among wealthy investors, many of whom prefer accessing the asset class through established banks rather than retail platforms or offshore exchanges.

Private banks have traditionally stayed cautious on digital assets because of regulatory uncertainty and sharp price swings. However, growing client demand has increasingly pushed wealth managers to look at more structured and compliant ways to offer crypto-related services.

People familiar with UBS’s plans said the bank is taking a careful approach, with a focus on risk management and regulatory safeguards before expanding any offering.

Global banks step up crypto offerings

UBS’s move comes as part of a broader shift across the global banking industry.

Last year, Bloomberg reported that JPMorgan Chase was looking at offering cryptocurrency trading to its institutional clients. Morgan Stanley has also said it plans to launch crypto trading on its E*Trade platform in the first half of the year, pointing to growing interest among major Wall Street firms.

Together, these moves highlight a gradual shift within traditional finance, where digital assets are starting to gain wider acceptance despite ongoing regulatory scrutiny and concerns around market volatility.

Political backdrop adds momentum

The renewed interest comes at a time when political sentiment in the United States has turned more favourable toward cryptocurrencies.

President Donald Trump has said he wants to make the country the “crypto capital of the world,” raising expectations of a more supportive regulatory environment for the sector.

Even as questions around regulation and oversight remain, large financial institutions appear to be positioning themselves for a future in which digital assets play a larger role. If UBS follows through on its plans, it would mark one of the clearest signs yet of a global wealth manager moving directly into crypto trading, showing how digital assets are steadily becoming part of mainstream private banking.

Also Read: YZi Labs Invests in BitGo as Crypto Custody Firm Lists on NYSE

BitGo, one of the longest-running digital asset custody firms, made its public market debut this week with a listing on the New York Stock Exchange (NYSE). Among the institutional investors taking part in the initial public offering (IPO) was YZi Labs, the firm previously known as Binance Labs. 

Its participation reflects a broader shift in where serious capital is moving within the crypto space, away from speculation and toward infrastructure.

The listing comes at a moment when the crypto industry is still working to restore confidence after years marked by sharp market swings, major failures and increased regulatory pressure. 

Unlike trading platforms or token issuers, BitGo operates in a quieter part of the market. Its work sits behind the scenes, focused on custody, security and the core systems institutions rely on to hold and manage digital assets.

A custodian that grew with the industry

BitGo was founded in the early years of Bitcoin, at a time when secure storage was one of the biggest unresolved issues in the space. The company built its reputation by focusing almost entirely on asset security, well before institutional custody became a mainstream requirement.

Over time, BitGo moved past being just a storage provider. As interest from institutions picked up, the company widened its scope beyond custody. It introduced services such as staking and stablecoin infrastructure, slowly shifting its role toward supporting large financial players rather than catering to retail users.

Today, BitGo says it manages close to $82 billion in assets and works with over 5,100 institutional clients around the world. Its operations span multiple regulatory markets, including the United States, Europe, the Middle East and parts of Asia, highlighting how global its client base has become.

In an industry where security breaches have repeatedly wiped out billions of dollars, BitGo’s decade-long record without a major hack has become one of its defining credentials.

Why YZi Labs entered the picture

YZi Labs, previously known as Binance Labs, has repositioned itself in recent years as a long-term investor focused on infrastructure rather than speculative crypto projects. Its participation in BitGo’s IPO reflects that shift.

Ella Zhang, Head of YZi Labs, pointed to BitGo’s technical foundation and regulatory posture as key reasons behind the investment.

“BitGo has maintained a hack-free security record for over a decade, a testament to the technical foundation laid by its inventor and CEO, Mike Belshe – not only a Bitcoin OG but a pioneer architect of the modern web through his early work at Netscape and Google Chrome,” she said. 

https://t.co/RixOKzJ5vp

— YZi Labs (@yzilabs) January 23, 2026

“As the digital asset industry matures, BitGo’s regulated, institutional-grade infrastructure has become a critical competitive advantage. With $82 billion AOP, BitGo is a corner-stone asset. We are committed to providing the strategic resources necessary to fuel its next phase of global growth as a public company.”

The investment does not involve operational control but signals confidence in regulated digital asset infrastructure at a time when regulators are tightening oversight globally.

What BitGo actually does

Unlike exchanges that depend on trading volumes, BitGo’s business is built around custody and backend infrastructure. Its work largely stays out of the public eye but plays a central role in how institutions hold and manage digital assets.

Its offerings include secure custody for institutions, staking services that allow firms to generate returns on their holdings, and infrastructure that supports the issuance of stablecoins by banks and enterprises.

Because of this setup, BitGo’s business is less affected by short-term market swings and more closely linked to the steady, long-term adoption of digital assets by institutions.

As banks, asset managers and large funds look at tokenisation and blockchain-based settlement, custody has emerged as one of the biggest bottlenecks. That shift has pushed firms like BitGo into a more important position than they held during earlier phases of the crypto market.

A public listing at a sensitive moment 

BitGo’s IPO comes at a cautious time for the industry. Following the collapse of several high-profile crypto companies earlier in the decade, regulators have placed much heavier emphasis on compliance, transparency and the separation of customer assets. These are no longer best practices, they are expectations.

A public listing adds another layer of accountability. Regular disclosures, audits, and ongoing regulatory oversight force companies to operate in the open, something much of the crypto sector has historically avoided. For institutional investors, that level of visibility is often a basic requirement before committing capital.

Seen in that light, BitGo’s market debut is less about hype and more about where the industry now stands. It reflects a stage where infrastructure matters more than momentum.

What this could mean going forward

For institutions, the listing offers a clearer view into how crypto infrastructure businesses actually operate and generate revenue. For regulators, the listing offers a real-world look at how a digital asset company operates when it is subject to public market rules and ongoing scrutiny.

For the industry more broadly, it points to a shift away from fast, speculative growth and toward a slower, compliance-first model built around structure and oversight.

Whether other infrastructure firms choose to take the same route remains to be seen. But the move reflects a wider change taking place in crypto, where custody, regulation and risk management are starting to carry as much weight as innovation itself.

As digital assets continue to move closer to traditional finance, the companies working quietly behind the scenes may end up shaping the next phase of the market more than the high-profile trading platforms ever did.

Also Read: BitGo Tops IPO Range at $18, Aims to Raise $212.8M

Makina Finance, a DeFi platform that specializes in yield-earning stablecoins, has made strong progress in getting back funds after its DUSD/USDC Curve pool was exploited earlier this week. The January 20 incident saw around 1,299 ETH taken from the protocol. By January 22, about 920 ETH had already been returned by the MEV builder involved, after a 10% bounty under the SEAL Whitehat Safe Harbor program. The recovered funds are now securely stored in a dedicated recovery multi-sig wallet, while the team works to recover the remaining 276 ETH that ended up with a Rocket Pool validator.

In an update released on January 21 at 21:00 UTC, the team explained how the attack played out, where the funds moved after the exploit, and what steps are now being taken to recover assets and bring the protocol back to normal functioning. The statement comes after the issue first came to light when unusual activity was detected in the DUSD/USDC liquidity pool.

What happened

According to Makina’s disclosure, the exploit unfolded over a short window of roughly 11 minutes in the early hours of January 20.

At 3:40:23 am UTC, in Ethereum block 24273361, a wallet identified as 0x2F934B0Fd5c4f99BAb37d47604a3a1AEADEF1CCc deployed an unverified smart contract. According to the investigation, the contract was created solely to manipulate prices in the DUSD/USDC pool on Curve, a platform commonly used for stablecoin trading.

In the very next block, an MEV trader spotted the activity and stepped in before the original attacker could complete the transaction. These traders constantly watch the blockchain for profitable openings and jump in when they see one. The transaction was ultimately processed by an MEV builder identified as 0xa6c2.

As a result, most of the extracted funds were split between the MEV builder and the validator that produced the block. On-chain data shows that approximately 1,299 ETH was removed from the pool, with around 1,023 ETH going to the MEV builder and roughly 276 ETH landing with a Rocket Pool validator.

Makina confirmed that the exploit was limited strictly to the USDC side of the DUSD/USDC Curve pool. Other pools connected to the protocol, including DETH/WETH and DBIT/WBTC, were not affected. The protocol also stated that funds held inside the DUSD Machine itself remain secure and that DUSD continues to be fully collateralized.

How the exploit worked

The issue was traced back to a flaw in a Weiroll script used by the DUSD Machine, which handles accounting and collateral management for the stablecoin.

According to Makina, the problem began with a position the protocol held in the MIM-3CRV pool on Curve. The attacker used a flash loan to temporarily push up the price of MIM, which caused the value of that position to rise sharply for a short period of time.

That inflated value was then picked up by the DUSD system and treated as genuine. Because of this, the system believed it was holding more assets than it actually was. This incorrect data later flowed into the pricing oracle, which is used to set the value of DUSD on the Curve pool.

Once the incorrect pricing made its way to the DUSD/USDC pool, the attacker was able to drain USDC at an inflated rate before the system could correct itself.

Makina stated that the issue has been identified and confirmed by external auditors. A patch addressing the vulnerability is currently being developed and has been submitted for audit. A full technical post-mortem is expected to be released once the review process is complete.

Recovery efforts and fund tracking

Makina and Dialectic, the operator of the DUSD Machine, said they are pursuing multiple recovery paths.

The MEV builder has returned roughly 920 ETH of the 1,023 ETH initially received, after a 10% bounty under the SEAL Whitehat Safe Harbor. The recovered funds have been moved to a dedicated recovery multi-sig wallet at 0xc22F7346eaF4340f51513bF9f01e5d722E558AB9.

The team is still working to get back the remaining amount, including roughly 276 ETH that was sent to a Rocket Pool validator (0x573Db3Aed219EfD4D2cDABC0D00366E7B80F910E).

Makina also acknowledged the MEV builder involved (0xbed) for cooperating quickly, noting that this kind of responsible behaviour played a key role in limiting further losses.

In addition, Dialectic confirmed it will return USD 104,491 in liquidity provider fees earned during the exploit window in the MIM-3CRV pool.

A snapshot of the DUSD/USDC Curve pool taken before the exploit will be used to determine the distribution of any recovered funds once the process concludes.

The first involves efforts to recover approximately 1,023 ETH currently held by the MEV builder that executed the transaction. Discussions are ongoing, though no resolution has been announced so far.

The second effort relates to the Rocket Pool validator that received approximately 276 ETH. The validator address involved has been identified as 0x573D, with ownership linked to the address 0x3b6fc5cc2feefc357212617930aedac9493288af. Makina said it is working with external security firms to establish contact with the operator of the validator.

The company has also asked anyone with information that could help identify or contact the validator to reach out through official channels or via security@makina.finance.

In addition, Dialectic confirmed it will return USD 104,491 in liquidity provider fees that were earned by the DUSD Machine during the exploit window from activity in the MIM-3CRV pool.

A snapshot of the DUSD/USDC Curve pool taken before the exploit will be used to determine how any recovered funds are distributed once the recovery process concludes.

Recovery mode and timeline

Following the incident, Makina placed all three Dialectic-operated Machines into Recovery Mode. This temporarily halted redemptions and other protocol actions while the investigation and patch development took place.

The protocol will remain in Recovery Mode until the fix has passed an external audit and completed a mandatory 48-hour timelock period. If no issues arise, Makina is targeting January 26, 2026, for the resumption of normal operations.

Once Recovery Mode is lifted, redemptions will be available only to users who have completed anti-money laundering (AML) and know-your-customer (KYC) checks. Users holding more than USD 100,000 in DUSD and intending to redeem have been asked to begin the verification process through Makina’s Discord support channel.

For users who are not whitelisted, Makina is working to arrange secondary market liquidity, with several liquidity providers already expressing interest.

Curve pool to be phased out

Makina also said that the DUSD/USDC Curve pool will be phased out after the incident. In its place, the team plans to launch a new pool on Uniswap, where users will be able to swap DUSD for USDC at a fixed rate.

The new pool is expected to go live shortly after Recovery Mode is lifted. Further details are expected to be announced once deployment is closer.

Users currently holding DUSD/USDC Curve LP tokens have been advised to withdraw into DUSD. Remaining in the pool will not improve recovery outcomes and may delay participation in any future distribution process.

No impact on other integrations

The protocol also clarified that users holding DUSD through other platforms, including Gearbox and Pendle, are not affected by the Curve pool exploit. Positions linked to PT-DUSD and YT-DUSD have not been impacted by the incident. Users holding these positions can continue to manage them normally, according to the team.

What happens next

Makina said it will continue to share updates as the recovery process moves ahead. The incident adds to the growing list of DeFi hacks seen in early 2026 and once again highlights the risks that come with oracle-based pricing, complex internal accounting, and tightly connected on-chain systems.

For now, it is still unclear how much of the stolen funds can be recovered. The next few days are expected to be important in deciding how the situation unfolds and what the final impact on the protocol will be.

Also Read: Saga Forced to Halt its EVM Network After $7 Million Exploit

Indian cryptocurrency exchange Mudrex has added a new AI-based feature to its platform that provides investors with analysis and insights directly within their portfolios. 

The system is designed to give information on market trends, portfolio performance, and potential risks, appearing on asset pages and dashboards without requiring users to consult other sources.

Edul Patel, CEO of Mudrex, said, “Crypto investors today have access to overwhelming amounts of data and information. Mudrex AI transforms raw data into concise takeaways, trends, and implications that can be understood within seconds, helping users focus on what matters rather than how to interpret it.”

Mudrex serves over 3 million users, primarily in India, and its current valuation is approximately $93 million. The AI feature was initially tested with a small pilot group of users. During this period, the company observed that participants spent more time reviewing their portfolios and exploring individual assets than they had previously.

Changes in user behavior

Somesh Chaturvedi, Head of Engineering at Mudrex, said, “During the pilot phase, we saw users engage more deeply, spending more time exploring assets, revisiting their portfolios, and understanding positions instead of jumping across apps for research.” 

Analysts say that having data and analysis integrated into the platform could change how investors interact with the market. Users are likely to spend more time reviewing assets within the platform instead of visiting multiple websites or apps. This may affect both the speed at which they make decisions and the way they manage their investments, since more information is available in one place.

Potential risks

The feature needs access to users’ portfolios and activity on the platform. This raises concerns about privacy and how safely the data is stored. The analysis may also oversimplify market trends, which could give users an incomplete view or make them rely too much on the tool. 

India’s cryptocurrency rules are still changing, and tools that give investment guidance could come under closer scrutiny. Experts suggest that users continue doing their own research instead of depending entirely on automated suggestions.

Broader implications

This feature shows a trend where trading platforms are putting tools inside their apps to help investors understand the market. These tools make it easier to see and follow information, but they only work well if the data is correct and safe. 

If more platforms start offering similar tools, it could change how everyday investors make decisions in crypto, though the basic risks of investing would stay the same.

Also Read: Acurast Mainnet Launch & ACU Token Airdrop Confirmed

A recent governance vote at World Liberty Financial (WLFI) has made some investors uneasy, not so much because of what was being voted on, but because of how the decision was made. The proposal focused on using treasury-held WLFI tokens to support the growth of USD1. 

However, what stood out, according to observers and some traders on X, was the influence of large, team-linked wallets and the fact that many regular holders were unable to take part in the vote.

A popular trader and DeFi analyst on X, going by the username DefiSquared, suggested in a post that the vote may have been coordinated in a way that benefited the protocol.

Haven’t seen anyone else talk about this yet, so I wanted to bring up an alarming governance vote by World Liberty Fi this month that appears to be the start of a slow extraction of value from WLFI holders by the team:

What you see above appears to be a rigged vote, where the… pic.twitter.com/CGsj7vVUUk

— DeFi^2 (@DefiSquared) January 20, 2026

On-chain data and voting records shows a small number of wallets holding very large amounts of WLFI were responsible for pushing the proposal through. These wallets voted in favor, while a large section of ordinary investors were unable to participate at all because their tokens have remained locked since the token generation event. 

Token holders locked out of governance

One of the biggest issues around this vote is that many WLFI holders still cannot access or move their tokens. Since the launch, investors have repeatedly asked for clarity on when their tokens will be unlocked, but so far there has been no clear answer from the team. Because of this, a large number of holders have effectively been excluded from governance, even though decisions are being made that directly affect the project.

During the voting period, several participants openly expressed their frustration. Some asked for the remaining tokens to be unlocked before any new proposals were passed, while others said they would oppose all future votes until the issue was addressed. Despite this, the proposal went ahead and passed, largely due to votes cast by high-balance wallets.

This has led many to question whether WLFI’s governance system reflects the wider community at all, or whether it mainly serves those who already hold large allocations.

Questions around the USD1 proposal

The proposal itself focused on using unlocked WLFI treasury tokens to support the expansion of USD1. While it was presented as a growth-focused move, critics have questioned the timing, especially given that basic concerns around token access and governance remain unresolved.

At one point, the proposal appeared unlikely to pass, with a noticeable number of votes against it. That changed only after large wallets entered the vote and tipped the balance. For some investors, this raised doubts about whether the outcome was ever really in question.

Revenue structure adds to concerns

The vote has also brought renewed attention to WLFI’s revenue structure. According to the project’s own documentation, WLFI token holders do not receive any share of protocol revenue. Instead, 75% of the net revenue goes to DT Marks DEFI LLC, with the remaining 25% going to AMG and WC Digital Fi LLC, which is linked to the Witkoff family. 

Haven’t seen anyone else talk about this yet, so I wanted to bring up an alarming governance vote by World Liberty Fi this month that appears to be the start of a slow extraction of value from WLFI holders by the team:

What you see above appears to be a rigged vote, where the… pic.twitter.com/CGsj7vVUUk

— DeFi^2 (@DefiSquared) January 20, 2026

In practice, this means that even though there are governance votes, the financial upside stays almost entirely with entities connected to the project’s leadership.

For many holders, that leads to a simple but important question: if there’s no share in revenue and very little say in how things are run, what’s the real long-term reason to hold WLFI?

Token distribution and market reaction

The token distribution only adds to these concerns. Around 33.5% of the total supply is held by the team, with another 5.85% held by strategic partners. Public investors, by comparison, received roughly 20% of the supply.

The governance proposal to use a portion of the unlocked treasury to incentivize USD1 adoption has passed with 77.75% of the vote in favor.

This happened because the community showed up, evaluated the proposal, and made a clear decision about the direction of the WLFI ecosystem.…

— WLFI (@worldlibertyfi) January 4, 2026

After the vote, blockchain data showed large transfers taking place, including a movement of 500 million WLFI to Jump Trading. At the same time, retail investors still can’t access or move their tokens. That has added to concerns that control and liquidity remain concentrated at the top, while ordinary holders are effectively stuck on the sidelines with no way to react or participate.

Market response so far has been cautious. Some traders have said they are taking short positions on WLFI, mainly because of dilution concerns, centralized control, and the fact that the token does not offer any form of revenue sharing.

Broader implications for governance

This situation has again brought attention to how WLFI’s governance actually works. While the project claims to be decentralized, the voting power clearly sits with a small group. Most token holders still don’t have any real say, simply because they can’t access or use their tokens.

For many people watching this closely, this vote isn’t just about USD1 anymore. It has started to look like a pattern, where decisions are pushed through by a few large wallets while everyone else is left on the sidelines.

So far, there has been no public response from the WLFI team on these concerns. And until there is some clarity on token unlocks, voting rights, and how revenue is handled, doubts around fairness and transparency are likely to continue.

Disclaimer: This article does not make any claims or allegations against WLFI or its team. The information presented reflects observations from publicly available on-chain data and commentary from traders, including posts on X. Nothing in this report is intended as a personal claim or accusation.

Also Read: Optimism Proposes 50% Superchain Revenue for OP Token Buybacks

Makina Finance, a DeFi protocol, was exploited early Tuesday, with about $4.13 million in Ethereum stolen, according to on-chain data reviewed by blockchain security firm PeckShield.

The attack involved the withdrawal of 1,299 ETH, which was moved out in a single transaction. PeckShield said the attacker was front-run by a MEV builder during the execution of the transaction, a detail that became clear after reviewing the on-chain flow of funds.

In a classic ‘sandwich’ or front-running maneuver, a specialized bot detected the exploiter’s pending transaction in the mempool and replicated it with a higher gas fee, effectively stealing the bounty from the original hacker.

Following the exploit, the stolen assets were traced to two wallet addresses. One address currently holds about $3.3 million, while another has roughly $880,000, according to wallet balances at the time.

Swap on Uniswap triggered the exploit

The exploit happened through a large swap on Uniswap V3, where around 4.24 million USDC was exchanged for 1,299.18 ETH, worth roughly $4.13 million at the time.

The transaction was confirmed on Ethereum block 24,273,362 at 03:40:35 UTC on January 20, 2026. Despite the size of the swap, it went through without any errors and with a gas fee of just over $0.50, showing that the transaction was executed carefully.

The swap moved liquidity through several protocols before it was finally settled. On-chain records indicate activity across Curve and Aave, with over $5.1 million in USDC passing through the transactions. Part of the swap went through Curve’s DAI and 3Crv pools before the funds were ultimately settled on Uniswap, according to blockchain data.

MEV builder intercepts the transaction

Soon after the ETH arrived in the attacker’s wallet, nearly the entire amount was transferred again, this time to an address linked to a MEV builder, identified as (0xa6c2….). The transfer happened right after the swap was completed, indicating the transaction was processed at the block-building stage.

On-chain data shows that the ETH was sent to another address before the attacker could move it, indicating MEV activity rather than a normal post-exploit transfer.

The transfer happened right after the swap, suggesting the transaction was noticed and acted on during the block-building process. The ETH appears to have been captured before the attacker could move it further, a pattern that has become increasingly common in large on-chain exploits involving MEV infrastructure.

It remains unclear if the stolen funds belonged to user liquidity providers or the protocol treasury. Users are advised to revoke token approvals for Makina contracts immediately via tools like Revoke.cash.

The funds came from Wrapped Ether and were sent in a single transaction, with no sign of splitting or delay.

So far, there has been no further movement of the stolen funds held in the two wallets. The funds have not been bridged, mixed, or sent to any exchanges, and there is no sign of attempts to hide them.

Makina Finance is yet to respond

Makina Finance has not made any public statement about the exploit. The team has not acknowledged it on social media or clarified whether user funds were affected or if any recovery actions are being taken.

The silence has drawn attention because of the size of the loss and how quickly the attack happened.

This is a developing story.

Also Read: Truebit Exploit Drains $26M in ETH as Hacks Pile Up

Ethereum co-founder Vitalik Buterin has stressed that the long-term security and independence of Ethereum depend on keeping the protocol simple. In a post on X, he said that even though Ethereum has hundreds of thousands of nodes and strong fault tolerance, the network could become fragile if it grows too complex.

“Even if a protocol is super decentralized with hundreds of thousands of nodes, and it has 49 percent byzantine fault tolerance, and nodes fully verify everything with quantum-safe proofs, if the protocol is an unwieldy mess of hundreds of thousands of lines of code and five forms of PhD-level cryptography, ultimately that protocol fails all three tests,” Buterin wrote.

He explained that these three tests are trustlessness, the walkaway test, and self-sovereignty. When the system becomes too complicated, users have to rely on a small group of experts. New teams cannot easily take over development, and even very technical people cannot fully understand the network.

The need for garbage collection

Buterin said that Ethereum tends to add new features more often than it removes old ones. Over time, this leads to bloat that could weaken the network. To address this, he proposed a deliberate process of simplification, or “garbage collection.”

He outlined three main ideas:

• Reduce Code Size: The protocol should be as short and clear as possible, ideally just a few pages.
• Avoid Complex Dependencies: The network should rely on simple, widely understood components. Adding unnecessary cryptography or complicated features increases the risk of failure.
• Strengthen Core Rules: Certain rules should be added to make the protocol easier to work with. For example, EIP-6780 limits how many storage slots can be changed, and EIP-7825 puts a maximum on gas per transaction.

Small and big changes

Garbage collection can happen gradually. For example, the Glamsterdam gas reforms simplified how transaction costs are calculated. Large changes are also possible, such as the shift from Proof of Work to Proof of Stake or the upcoming Lean Consensus improvements.

Buterin suggested another approach called “Rosetta-style backwards compatibility.” Rarely used and complex features could be moved out of the core protocol and run as smart contracts. This would allow developers to ignore older systems while still keeping them available. Examples include retiring old transaction types after account abstraction and eventually replacing the Ethereum Virtual Machine with a simpler virtual machine, such as RISC-V.

Looking ahead

Buterin said the first fifteen years of Ethereum were a time to explore ideas and see what works. Going forward, he wants the protocol to evolve more slowly, focusing on keeping it simple and reliable instead of constantly adding new features.

“In the long term, I hope that the rate of change to Ethereum can be slower. We should strive to avoid the parts that are not useful being a permanent drag on the Ethereum protocol,” he wrote.

Why this matters

Vitalik warned that if the protocol keeps getting more complex, only a small group of experts will be able to understand it. Ethereum has millions of users, thousands of developers, and countless applications. 

Buterin said that if Ethereum keeps getting more complicated, only a few people will really understand how it works. That threatens the very features that make Ethereum unique: the ability for anyone to use it without trusting others, the possibility for new developers to step in when needed, and real control for people over their own funds.

According to Buterin, simplifying the network, removing outdated parts, and keeping the rules clear are essential. Doing this will allow Ethereum to remain strong, easy to use, and reliable for years, even as technology and the world continue to change.

Also Read: Vitalik Buterin Wants Ethereum Ready for a ‘Walkaway’ Future

India’s security agencies are confronting a new and far more elusive threat — one that does not cross borders with guns or couriers, but slips quietly through encrypted wallets and anonymous digital trails.

Investigators have uncovered what they describe as a “crypto hawala” network, a shadow financial system using unregulated cryptocurrency to funnel foreign funds into Jammu and Kashmir. The money, officials say, is being used to quietly revive terror-linked activities and separatist ecosystems that had been significantly weakened over the past few years.

Unlike older terror funding methods that depended on cash couriers or organised hawala networks, this new system leaves almost nothing behind for investigators to follow. There are no bank entries, no remittance records, and no paperwork — just encrypted digital transfers that vanish into anonymity.

Senior officials say this shift marks a dangerous evolution in how extremist networks now operate.

A digital upgrade to an old system

Hawala, for decades, has been the preferred underground banking system for moving money across borders. What has changed now is the medium.

In place of old-style couriers or coded phone calls, handlers based in countries such as China, Malaysia, Myanmar and Cambodia are now moving money straight into India through cryptocurrency. These wallets are created using VPNs, false identities and platforms that do not insist on any formal verification, making the transfers almost impossible to trace.

Once the money lands in these wallets, it is no longer connected to any regulated financial channel. From there, it is quietly converted into cash through peer-to-peer traders in cities like Delhi and Mumbai — outside the reach of banks, auditors, or regulators.

The result is a clean break in the money trail. To investigators, this is the most worrying aspect of the operation.

Why Jammu and Kashmir is back in focus

Officials believe the renewed flow of funds is not coincidental. Over the past few years, sustained crackdowns by security agencies had choked traditional terror-financing routes in Jammu and Kashmir. Properties were seized, NGOs scrutinized, and hawala operators dismantled.

But extremist networks adapt quickly.

With conventional channels blocked, funding has shifted to crypto — not to finance large-scale attacks, but to quietly sustain logistics, recruitment, propaganda, and underground networks. The objective, agencies say, is to slowly rebuild influence rather than stage headline-grabbing violence.

“It’s about keeping the ecosystem alive,” a senior officer involved in the probe said. “You don’t need big attacks if you can keep ideology, money, and recruitment flowing.”

The invisible role of mule accounts

At the heart of the operation are what investigators call “mule accounts” — ordinary individuals whose bank accounts or crypto wallets are used to move money without their full understanding of the consequences.

These individuals are often promised small commissions and told they are participating in legitimate transactions. In reality, they surrender full access to their accounts, allowing handlers to move funds across multiple layers, making detection nearly impossible.

Often, one person handles several accounts at the same time, moving money in small chunks so it doesn’t raise alarms while still shifting large sums overall. This layered method, along with the lack of transparency in crypto transactions, makes it very hard for agencies to trace where the money is going.

Why crypto has become the weapon of choice

Cryptocurrency was designed to eliminate intermediaries. That same feature now makes it attractive to terror networks.

The money moves quickly, crosses borders without restriction, and once sent, cannot be reversed. Wallets can be set up in minutes, VPNs hide locations, and once crypto is exchanged for cash through informal traders, the trail all but vanishes.

For agencies used to tracking bank records and financial institutions, this represents a fundamental shift in the nature of financial crime.

“It’s no longer about following the money,” an official said. “It’s about finding it before it vanishes.”

A new front in counter-terrorism

What worries security planners most is not just the technology, but the timing.

The rise of crypto hawala comes at a moment when traditional terror infrastructure has weakened. The fear is that digital money could quietly rebuild what was dismantled — without attracting immediate attention.

While India’s Financial Intelligence Unit has tightened oversight of registered crypto exchanges, the grey market remains a blind spot. And as long as unregulated wallets and P2P trading exist, enforcement agencies are playing catch-up.

This, officials admit, is no longer just a law-and-order issue. It is a national security challenge unfolding in cyberspace.

The bigger picture

The emergence of crypto hawala underscores a harsh reality: terrorism has adapted to the digital age faster than regulation has.

Where once money moved in suitcases, it now moves in code. Where once borders mattered, now only internet access does.

And as long as financial anonymity exists, extremist networks will continue to exploit it.

For India’s security agencies, the message is clear — the next battlefield is not just on the ground in Kashmir, but inside encrypted wallets scattered across the world.

Also Read: India’s ED Raids Target Crypto Links in Multi-State Drug Case

The US Senate Banking Committee has circulated a draft of its long-anticipated crypto market structure bill, giving the clearest signal yet of how lawmakers want to bring digital assets under formal federal regulation.

The text, which began circulating informally before its official release, is still unfinished. Senators now have a 48-hour window to propose amendments, and several of the most sensitive provisions could still change. 

But even in its incomplete form, the draft shows where compromises have been struck, and where one side clearly walked away with more leverage than the other.

Stablecoin yield: A quiet but telling decision

One of the first things industry watchers noticed was what the draft does not clearly allow. The bill does not permit companies to pay interest simply for holding stablecoin balances. Instead, the language draws a sharp distinction between passive yield and activity-based rewards. Under the current draft, users can earn rewards only if they do something — open an account, make transactions, stake assets, provide liquidity, post collateral, or participate in governance. In plain terms, holding a stablecoin alone is not enough. 

This is a meaningful win for banks, which have spent months arguing that yield-bearing stablecoins look too much like unregulated deposits. Lawmakers appear to have accepted that argument, at least for now.

For crypto firms, the restriction limits one of the most powerful incentives behind stablecoin growth. For users, it reinforces the idea that stablecoins are meant to function as payment and settlement tools, not savings accounts.

Still, this part of the bill is far from locked in. Senators can still amend the text, and stablecoin yield remains one of the most politically sensitive topics in crypto regulation.

Ethics language appears where it normally wouldn’t

Buried deep in the draft are two ethics-related provisions that stand out precisely because they appear here at all.

Language relating to felony convictions appears around page 72, while insider trading provisions show up much later, near page 270. These sections fall under the Banking Committee’s jurisdiction, which is why they appear in this bill rather than being handled elsewhere.

They are relatively narrow, but their inclusion reflects a broader unease in Washington about misconduct in financial markets, and a growing expectation that crypto legislation should not be silent on ethics.

A deal on DeFi, after tense negotiations

Section 601 is one of the most consequential parts of the draft, and it reflects a compromise that nearly didn’t happen.

The section offers protections for software developers working on decentralized systems. According to people familiar with the talks, the language was finalized only after tense, closed-door meetings last week.

The core idea is straightforward: writing or maintaining blockchain software, by itself, should not automatically make someone a regulated financial intermediary — as long as they are not controlling funds or operating a centralized service.

This matters because DeFi developers have long worried they could be regulated like broker-dealers simply for publishing code. Traditional finance groups — particularly securities trade bodies, resisted the provision, arguing that DeFi platforms could be used to sidestep existing rules. 

The compromise language reflects that pushback. It recognizes that decentralized systems don’t function like banks or brokerages, but stops short of giving them a free pass. How regulators choose to read and apply this section may end up being just as important as the wording itself.

Token classification: A big shift, quietly written

One of the more surprising elements of the draft appears in a section dealing with token classification.

The bill proposes that tokens that are already the primary asset in exchange-traded products listed on US national securities exchanges as of January 1, 2026, will be treated as non-ancillary assets. That means they would not have to meet the same disclosure requirements imposed on other tokens.

🚨NEW: Here’s an interesting section giving some tokens classification as non-ancillary assets based on their inclusion in exchange-traded products as of January 1, 2026.

It says that if a token is the main asset of an ETF listed on a national securities exchange and registered… https://t.co/zYJzn44P4k pic.twitter.com/3CiGMeEW9G

— Eleanor Terrett (@EleanorTerrett) January 13, 2026

Practically speaking, this places assets like XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink in the same regulatory category as Bitcoin and Ethereum from the start.

This is a significant departure from the enforcement-first approach that has defined US crypto policy for years. Instead of re-litigating the status of widely traded tokens, lawmakers appear to be accepting their market reality and building regulation around it.

For issuers and investors, this reduces uncertainty. For regulators, it offers a cleaner framework that avoids retroactive decisions.

Why this bill actually matters

For most of crypto’s history in the US, regulation has arrived through lawsuits and settlements, not statutes. This draft represents a shift away from that approach.

If it survives in anything close to its current form, the bill would clarify who regulates what, limit how stablecoins compete with banks, draw boundaries around DeFi development, and formalize how major tokens are treated under federal law.

Supporters say this is exactly what the industry has been asking for: clarity, predictability, and a path for institutional participation. Critics worry the bill either goes too far — by constraining stablecoin innovation, or not far enough, particularly when it comes to investor protection in decentralized systems.

Both views are reflected in the compromises written into the text.

What happens next

Lawmakers now have two days to propose amendments before the bill moves to markup. Stablecoin yield rules, DeFi protections, and token classification are all likely pressure points.

Even if the bill clears committee, it will still face scrutiny on the Senate floor, where political priorities, lobbying pressure, and regulatory philosophy tend to collide.

For now, the draft offers something rare in US crypto policy: not speculation, not enforcement theory, but a real attempt to draw lines, imperfect, negotiated, and very human, around a market that Washington has finally accepted is not going away.

Also Read: US Senate Delays CLARITY Act Markup, Casting Doubt on Crypto Rules in 2026

Standard Chartered is getting ready to launch a prime brokerage for cryptocurrency trading, a move that shows how seriously global banks are now taking digital assets. A prime brokerage is a service designed for large investors, offering support like asset safekeeping, lending, and funding so they can trade smoothly across different markets. 

The new business is expected to operate under the bank’s venture capital and innovation unit, SC Ventures. The talks are in early planning stages and no official launch date has been announced, according to sources familiar with the matter.

Building on a crypto footprint

Standard Chartered has been actively involved in the world of digital assets. The bank supports Zodia Custody, which keeps cryptocurrencies safe for institutional clients, and Zodia Markets, a platform where professional investors can trade digital currencies. 

In July 2025, it became the first major global bank to let institutional clients trade cryptocurrencies directly, known as spot trading, which means buying and selling coins like Bitcoin and Ether for immediate delivery instead of using futures or other contracts.

Last December, SC Ventures announced on LinkedIn that it was developing a digital-asset venture called Project37C, described as a “light financing and markets platform” that would offer custody, tokenization, and market access. 

Tokenization refers to the process of converting rights to an asset into a digital token on a blockchain. The post did not mention a prime brokerage explicitly or name any external partners. A spokesperson for SC Ventures declined to comment.

Managing capital and regulatory requirements 

Housing the prime brokerage within SC Ventures may allow Standard Chartered to manage capital requirements, the minimum funds a bank must hold to cover risks. Banks need to be careful when holding cryptocurrencies on their own books, because these assets carry much higher risk requirements than traditional investments. 

By placing its crypto operations under SC Ventures, Standard Chartered can offer digital asset services to clients without putting as much strain on its balance sheet. 

The broader banking trend

Standard Chartered is not the only bank looking seriously at crypto.In the United States, JPMorgan Chase is weighing options to offer cryptocurrency trading to institutional clients, while Morgan Stanley has moved ahead with filings to introduce exchange-traded funds (ETFs) linked to Bitcoin, Ether, and Solana. 

ETFs are traded on stock exchanges and let people invest in crypto without owning the coins. When firms like BlackRock and ARK get involved, it shows that crypto is no longer a fringe idea and is slowly becoming part of mainstream finance.

In the U.S., spot crypto ETFs now manage close to $140 billion in assets, reflecting the growing interest from large institutional investors.

Prime brokerage deals show market momentum

The prime brokerage space has already seen some of the biggest deals in recent months. In April 2025, Ripple, the blockchain payments company, acquired Hidden Road, a crypto prime brokerage, for $1.25 billion. 

Later in the same year, in October, another prime broker, FalconX, purchased 21Shares, one of the largest issuers of cryptocurrency ETFs. These big-ticket deals show that prime brokerages are quickly becoming the main entry point for large institutions looking to invest in crypto.

Looking ahead

By planning its own prime brokerage, Standard Chartered is aiming to give institutional investors a safer and more regulated route into the crypto market. It also reflects a change in how banks are now viewing digital assets, which are no longer seen as side experiments but as part of regular financial services.

As crypto rules become clearer and more large investors step in, prime brokerages are likely to play a bigger role. They will make it easier for banks and institutions to deal with cryptocurrencies in a structured and regulated manner.

Also Read: Dubai Tightens Crypto Rules, Bans Privacy Tokens

Ethereum co-founder Vitalik Buterin has said the crypto industry still hasn’t figured out how to build decentralized stablecoins that can actually hold up over time. In a long reply on X, Buterin laid out why, despite years of experiments, the core problems remain unresolved.

The comments were made in response to Cyberpunk Lawyer, who argued that Ethereum has increasingly become a contrarian bet in crypto. 

“It’s increasingly obvious that Ethereum is a contrarian bet against most of what crypto VCs are betting on,” Cyberpunk Lawyer Gabriel wrote, listing gambling apps, CeDeFi, custodial stablecoins, and “neo-banks” as dominant VC narratives.

“Ethereum is tripling down on disrupting power to enable sovereign individuals.”

According to him, most venture capital money is flowing into gambling products, CeDeFi, custodial stablecoins, and crypto “neo-banks,” while Ethereum continues to focus on decentralization and individual sovereignty.

Buterin didn’t disagree with that framing. Instead, he used the moment to explain why decentralized stablecoins — one of Ethereum’s most important use cases – are still unfinished.

Dollar-pegged stablecoins are a short-term fix

Buterin’s first issue was with the reference point most stablecoins use: the U.S. dollar.

He said tracking the dollar works for now, but relying on it long term goes against the idea of building systems that can survive independently of nation-states. If the goal is resilience, tying decentralized money to a single government-issued currency creates an obvious dependency.

Over a long enough time frame, even moderate inflation or policy changes could weaken the stability these coins claim to offer. In that sense, dollar-pegged stablecoins solve today’s problem but ignore tomorrow’s risks. Buterin made it clear this isn’t about rejecting USD-based stablecoins immediately, but about admitting they are not a final solution.

Oracle capture is still a real risk

The second issue Buterin pointed out is oracle design.

For stablecoins to work, they need reliable price data. But if those oracles can be influenced or captured by large pools of capital, the system stops being meaningfully decentralized. When that happens, protocols are forced to raise the cost of attack by increasing fees, emissions, or other forms of value extraction.

Vitalik highlighted, “Oracle design that’s decentralized and is not capturable with a large pool of money.”

Buterin argued that this setup hurts users and explains why so many governance-heavy DeFi systems end up over-financialized. If defending a protocol requires constant extraction, then decentralization becomes expensive for the people using it.

This is also why he remains critical of purely financialized governance models. According to Buterin, they don’t offer strong defensive advantages and often collapse into rent-seeking structures just to stay secure.

Staking yield competes directly with stablecoins

The third problem is staking yield. “Solve the problem that staking yield is competition,” says Vitalik.

As long as Ethereum staking offers a few percent in returns, decentralized stablecoins are competing against a safer and simpler option. Locking collateral into a stablecoin system that earns less doesn’t make economic sense for many users.

Buterin outlined a few possible directions the ecosystem could explore. These included drastically lowering staking yields, creating new forms of staking with reduced slashing risk, or finding ways to make slashable staking usable as stablecoin collateral. None of these options are easy, and all of them introduce new risks.

He also pointed out that slashing risk is often misunderstood. It’s not just about validators behaving badly, but also about inactivity leaks and scenarios where a majority tries to censor the network. Stablecoin designs need to account for those situations, not just normal market conditions.

Why Ethereum keeps moving against the market

What stood out in Buterin’s comments is how clearly they separate Ethereum’s priorities from the rest of the crypto market.

While many VC-backed projects focus on yield, custody, and financial products that resemble traditional systems, Ethereum continues to focus on decentralization even when it slows things down. That difference explains why Ethereum often looks conservative or unfinished compared to newer chains.

For Buterin, decentralized stablecoins are not just another product. They are a test of whether crypto can actually reduce reliance on centralized power. Until the problems around reference currencies, oracle security, and staking competition are solved, he believes pretending the issue is fixed does more harm than good.

Ethereum, at least for now, seems willing to live with that discomfort.

Also Read: PeerDAS & ZKEVMs Mark Structural Changes in Ethereum, Says Vitalik

The Financial Intelligence Unit of India (FIU-IND) has issued updated guidelines for crypto and virtual digital asset (VDA) companies, tightening compliance norms around governance, cybersecurity, and transaction monitoring.

The guidelines apply to crypto exchanges and VDA service providers registering or operating in India. The move comes as FIU continues to widen its oversight over crypto platforms.

Principal officer role spelt out

A key part of the update focuses on the Principal Officer (PO).

FIU-IND has clearly defined the role, responsibility, and reporting structure of the PO. The officer will be responsible for anti-money laundering, countering the financing of terrorism, and counter-proliferation financing obligations.

The PO must report directly to the board of directors or a board-level committee. The guidelines also state that the board must review the PO’s appointment every year.

For many exchanges, this puts formal structure around a role that earlier existed largely on paper.

Cybersecurity audit is now mandatory

The updated guidelines also make cybersecurity audits compulsory.

Crypto firms will now have to submit a Cyber Security Audit Certificate issued by an auditor empanelled with CERT-In. The audit must confirm compliance with CERT-In directions and applicable cybersecurity standards.

“The audit shall be comprehensive and proportionate in coverage across all critical risk domains, and the audit report shall certify whether the audited environment is adequately safe to host and operate the notified VDA activities,” the guidelines said.

The audit will cover governance controls, access management, infrastructure and network security, application security for KYC and transaction monitoring systems, wallet security, cryptographic controls, backup and recovery, and third-party risks involving cloud services and APIs.

Incident response capability and readiness to report to CERT-In will also be reviewed.

Travel rule and unhosted wallet transactions

FIU-IND has also clarified how crypto firms must implement travel rule requirements.

VDA service providers will have to collect and maintain detailed originator and beneficiary information for each transaction. The data must be verified and transmitted before or during a transfer.

The guidelines also require exchanges to carry out due diligence and sanction screening on counterparties.

A notable addition is the treatment of unhosted wallets. Reporting entities must collect information on transactions involving unhosted wallets, assess the risk, and apply enhanced due diligence measures where needed. This applies to peer-to-peer transfers that pass through an exchange as well.

Industry reaction

Industry players say the guidelines largely formalize existing expectations.

“This isn’t just a compliance update; it’s a strategic signal that India is ready to lead in the digital asset space through a balanced approach of innovation and financial stability…From an investor standpoint, this oversight transforms VDA platforms into accountability-driven entities,” said Sumit Gupta, Co-founder, CoinDCX.

“These rules were always around as best business practices to follow, but now FIU has put this in pen and paper,” said Vikram Subburaj, Co-founder and CEO, Giottus.

Subburaj said the guidelines clearly explain the responsibilities of roles like the Principal Officer and provide operational clarity on how travel rule data must be collected and processed.

Part of a broader enforcement push

The updated guidelines come days after FIU-IND brought 49 crypto exchanges under its oversight, expanding compliance requirements to a wider set of platforms, including offshore exchanges serving Indian users.

This has increased pressure on exchanges to align fully with Indian AML and reporting norms.

At the same time, the industry is watching the Union Budget 2026 closely. There is growing expectation that clarity on taxation and compliance could help bring crypto trading activity back to India, after volumes shifted offshore over the last few years.

What users are still asking

Many users are still unclear about how these changes affect them.

Unhosted wallets and peer-to-peer transfers are not banned. However, users may see additional verification, data collection, or delays for certain transactions, especially when exchanges flag higher risk.

Another concern is whether smaller exchanges can absorb the cost of audits and compliance. Over time, the tighter rules could lead to fewer but more regulated platforms operating in India.

For now, FIU-IND’s message is simple: crypto businesses can operate, but only under strict monitoring and reporting standards.

Also Read: India’s IT Dept. Flags Crypto Risks, Users Face Higher Scrutiny

Polygon, which supports everything from payments to DeFi apps, NFTs, and games, is currently handling some of the heaviest traffic in its history. It runs alongside Ethereum and is often used when Ethereum’s main network becomes slow or expensive.

Recently, that demand reached a new peak.

During the surge in activity, Polygon users paid more than 13.6 million POL in transaction fees. Of that amount, over 12.5 million POL were burned and permanently removed from circulation.

These numbers matter because they show people weren’t just moving tokens around cheaply. They were actively willing to pay for blockspace.

What fee generation and token burning actually mean

Every time someone sends a transaction on Polygon, they pay a small fee in POL, the network’s native token. A portion of those fees is burned, meaning those tokens are permanently destroyed and can never be used again.

According to Polygon’s own figures: “During a period of ATH usage, the network generated 13,600,000+ POL in fees (up 7.2X) and burned 12,500,000+ POL (up 10X).”

A jump of this size usually points to real demand. It also means the network was under pressure. As activity picked up and more transactions hit the network at the same time, fees started creeping higher.

Rising demand brought higher gas fees

Users pay gas fees to get their transactions confirmed. When the network gets busy and block space fills up, those fees tend to rise as transactions compete to be included.

Polygon was no exception. As activity climbed to all-time highs, gas prices became less predictable. For users running applications or moving funds frequently, that kind of volatility can be disruptive.

In response, Polygon activated a network upgrade known as the Dandeli hardfork.

A hardfork is a protocol upgrade that changes how the blockchain operates at a fundamental level. Nodes must update their software for the changes to take effect.

Polygon described the result this way: “Following this period of ATH usage and heightened gas prices, the Dandeli hardfork has successfully stabilized gas costs on Polygon.”

What changed after the Dandeli upgrade

The Dandeli upgrade focused on how much work Polygon can handle in each block.

A block is a bundle of transactions added to the blockchain every few seconds. Each block has a gas limit, which caps how much computation it can include. When blocks fill up too quickly, fees rise.

After the upgrade: 

• Polygon increased its peak block capacity by roughly 30%.
• The gas target — the level the network aims to operate at — was raised from 50% to 65%.
• Network throughput reached about 20 million gas per second, a measure of how much activity the chain can process.

Polygon summarized this change by saying: “What’s new: More capacity per block. More predictable fees when demand gets heavy.”

For everyday users, predictability matters. Even slightly higher fees can be manageable if they don’t suddenly spike without warning.

Scaling instead of restricting users

One thing worth noting is the approach Polygon took. When blockchains become congested, there are a few common responses. Some chains let fees rise sharply. Others restrict usage, either indirectly through high costs or directly by limiting throughput.

Polygon chose to expand capacity instead. That choice reflects a broader philosophy: absorb demand rather than push it away. Whether that approach continues to work as activity grows further is an open question.

A move toward self-adjusting fees

Polygon also hinted that this upgrade is not the final step. The team said it plans to make gas parameters dynamic in the future, meaning the network could automatically adjust limits based on demand rather than relying on manual upgrades.

Polygon explained: “In the future, we will be working on making both gas limit and gas target dynamic so they can adjust to maintain gas fees at healthy levels making it suitable for the users while also making sure that the chain earns sufficient fees.”

If implemented, this would allow the network to respond more smoothly to sudden usage spikes. But dynamic systems also add complexity, and how well they perform in real market conditions remains to be seen.

Part of Polygon’s larger scaling push

The upgrade fits into what Polygon calls its Gigagas roadmap, an internal plan aimed at pushing transaction capacity far beyond current levels.

Polygon framed this effort by stating: “The Gigagas roadmap is in full swing for Polygon and primed to bring all money onchain.”

From a neutral standpoint, the ambition is clear. Polygon wants to be an infrastructure capable of handling sustained, high-value financial activity. Whether it can do so consistently will depend on how the network performs during future demand surges.

What comes next

The Dandeli upgrade went live at Block 81424000. Polygon has said it will continue monitoring base gas fees and adjust parameters if needed.

For now, the takeaway is straightforward: Polygon is no longer operating in a low-stress environment. It is seeing enough real usage to force changes at the protocol level.

How well those changes hold up will become clearer the next time the network is pushed to its limits.

Also Read: EdgeX Overtakes Tron, Hyperliquid, and Other Chains in 24-Hour Fees

Nasdaq and CME Group, two of the world’s most influential financial market operators, have announced the reintroduction of the Nasdaq CME Crypto™ Index (NCITM), a move that signals growing institutional interest in digital assets and the push for more regulated, transparent investment tools in the crypto space.

Bridging traditional markets and crypto

CME Group and Nasdaq have been working together to develop and promote Nasdaq’s Index Futures since 1996, when they first launched their Index Futures. They have formed a partnership that has led to their collaboration on developing one of the largest and most liquid derivative markets in the world, with an incredibly diverse assortment of all types of derivative products: futures, options, and exchange-traded funds (ETFs).

Currently, both firms are applying what they learned in this area to develop products for the rapidly growing digital asset market, which continues to struggle with issues concerning transparency, liquidity, and governance.

“The Nasdaq CME Crypto™ Index is not just tracking crypto — it’s shaping how global investors build diversified portfolios,” said Giovanni Vicioso, Executive Director of Equity and Alternative Products at CME Group.

What the index does

The NCITM replaces the earlier Nasdaq Crypto Index (NCI) and introduces a multi-asset approach, allowing investors to gain exposure to several digital assets instead of focusing solely on Bitcoin or Ethereum. 

The index is calculated by CF Benchmarks and governed by a joint oversight committee, drawing on regulated exchanges and vetted custodians to maintain credibility and alignment with evolving market standards.

According to Sean Wasserman, Head of Index Product Management at Nasdaq, the timing reflects a broader shift in investor behavior. “Now that we are starting to see regulatory clarity coming to the treatment of crypto assets, particularly in the U.S., the door has been opened for industry participants to bring to the crypto asset class the types of regulated investment solutions that investors rely on every day.”

Why it matters

For professional investors, governance and transparency are critical. Unlike early crypto products that were largely speculative and single-asset focused, the NCITM provides a structured, regulated benchmark. 

By reducing the risk profile and enhancing the credibility of cryptocurrency investment opportunities, institutions like pension funds, hedge funds, and other asset managers are encouraged to include cryptocurrencies as part of their overall investment strategy. Even a small amount can help drive cryptocurrencies into further awareness and market stabilization.

The introduction of the index will also assist with creating various investment vehicles ranging from ETFs, structured products, and actively managed funds. 

Therefore, the new index is not only used to measure price fluctuations, but to provide foundations for a professional-type crypto-investing strategy where there have been many barriers to entry due to an unpredictable and fragmented marketplace.

Market impact

With the launch of the NCITM, the crypto marketplace is maturing. The combination of Nasdaq’s index experience with CME’s established track record related to regulated derivatives will have the ability to impact future price formation, liquidity, and product development. 

Hashdex, the asset management firm responsible for launching numerous products linked to the index across North America, Latin America, and Europe, has already amassed over $1 billion in assets, including the United States’ first-ever multi-crypto asset index ETF.

Analysts say that as more institutional money flows into crypto, volatility may gradually decrease, and digital assets could become a recognized component of diversified investment portfolios.

Looking ahead

CME Group and Nasdaq have been working together to develop and promote Nasdaq’s Index Futures since 1996, when they first launched their Index Futures. They have formed a partnership that has led to their collaboration on developing one of the largest and most liquid derivative markets in the world, with an incredibly diverse assortment of all types of derivative products: futures, options, and ETFs.

Also Read: FCA to Open UK Crypto Licensing Window in September 2026

Every Union Budget creates winners and losers. But for crypto in India, Budget 2026 could do something bigger; it could decide whether the industry operates inside the country or permanently outside it.

Four years after India introduced one of the world’s strictest crypto tax regimes, the results are now impossible to ignore. Instead of improving oversight or boosting revenue, the rules have quietly pushed Indian traders, startups, and capital onto offshore platforms, many of which operate beyond the reach of Indian regulators.

In a recent Moneycontrol column, Sumit Gupta, CEO and Co-Founder of CoinDCX, laid this reality bare. His argument is not ideological. It is practical: the policy didn’t fail because Indians don’t want regulation; it failed because it made compliance economically irrational.

When taxes drove users away instead of bringing them in

In 2022, the government introduced a 30% flat tax on crypto gains and a 1% TDS on every transaction, regardless of profit or loss. The intent was to track activity and formalise the market.

What followed was an immediate and predictable reaction.

As soon as the rules were announced—and even more so once they came into force—Indian traders began shifting to offshore exchanges. Between 2022 and late 2024, Indians traded more than ₹5.8 lakh crore on foreign platforms, accounting for over 90% of crypto trading by Indian users.

Budget 2026 is a chance to reset crypto policy in India!

3 key changes I believe that can help India continue to be a global leader in the crypto space.

1. Standardize TDS at 0.01%: Reduce from 1% uniformly across all exchanges. Lower compliance costs will bring more users… pic.twitter.com/frCl4KzaDP

— Sumit Gupta (CoinDCX) (@smtgpt) January 9, 2026

The government, meanwhile, collected just ₹258 crore (approx. $31 million) in TDS. Estimates suggest ₹2,500–5,000 crore (approx. $300–600 million) in tax revenue has already slipped through the cracks. A Delhi-based think tank puts total losses at ₹6,000 crore (approx. $720 million) so far, with another ₹17,700 crore (approx. $2.12 billion) over the next five years if nothing changes.

The message from the market was clear: users didn’t stop trading—they simply stopped trading where India could see them.

The bigger problem: Crypto didn’t just move offshore, it went dark

This shift wasn’t only about saving on taxes. It also created a much deeper problem.

Roughly five million Indian users are now estimated to be active on offshore platforms, many of which do not follow Indian KYC norms or report to FIU-India. Transactions increasingly happen through peer-to-peer routes, informal networks, and loosely monitored channels.

Recent reports from across the country show how some operators deliberately stay outside India’s regulatory net. They lure users with unrealistic returns, expose them to scams, or quietly plug them into money-laundering networks.

As Gupta warns, this has led to the creation of a parallel financial ecosystem—one that undermines tax compliance, weakens AML enforcement, and poses real risks to investor safety and national security.

Ironically, in trying to control crypto too tightly, India may have lost control altogether.

A strange time to push an industry away

All of this is happening at a moment when India should be doubling down.

The country has ranked first in grassroots crypto adoption for three years in a row. It is home to over 1,000 Web3 startups, around 75,000 blockchain professionals, and nearly 12% of the world’s crypto developers.

By some estimates, blockchain could add $1.1 trillion to India’s economy by 2032. And yet, founders are leaving.

Dubai offers zero personal income tax on crypto. Singapore provides regulatory clarity. The US is openly integrating crypto into its financial strategy, even setting up a strategic Bitcoin reserve. Indian startups, meanwhile, are relocating not because they want to avoid rules, but because staying has become financially unviable.

India risks losing not just capital, but influence in a technology that will shape global finance.

What budget 2026 can still fix

Gupta’s suggestions are not about deregulation. They are about course correction.

The first step is enforcing TDS uniformly across all exchanges, especially offshore platforms catering to Indian users. Today, the competitive field is skewed because Indian exchanges follow the rules while others don’t.

At the same time, reducing TDS from 1% to 0.01% would keep transaction tracking intact without draining liquidity. The original monitoring objective remains, but the incentive to flee disappears.

The second issue is the 30% flat tax. Treating crypto differently from every other asset class makes little sense. A college student and a high-income professional should not face the same tax rate. Aligning crypto gains with existing income tax slabs would restore basic fairness and encourage honest reporting.

Then there’s the question of losses. Web3 businesses—like any others—have good years and bad ones. Disallowing loss offsets and standard deductions breaks basic accounting logic and discourages domestic innovation.

What many retail users are quietly asking

One concern often raised is whether easing taxes will lead to reckless speculation.

But there’s another way to look at it: regulated platforms are safer than unregulated ones. When users trade on FIU-registered exchanges, authorities can see transaction flows, flag suspicious activity, and protect investors. When trading happens offshore, India sees nothing.

Lower friction doesn’t mean lower control. In practice, it often means better visibility.

Regulation works best when people don’t run from it

The Indian crypto industry has already shown it can comply with PMLA norms, KYC rules, and reporting obligations. The issue is not resistance to regulation—it is resistance to a system that punishes compliance and rewards evasion.

Right now, India has the worst of both worlds: limited tax collection and almost no visibility into actual trading behaviour.

Budget 2026 offers a chance to change that.

As the Finance Ministry begins pre-Budget consultations, voices from the sector—including Gupta’s, are calling for engagement, not confrontation. The message is simple: crypto is not asking for a free pass. It is asking for rules that work.

Whether India listens may decide if its crypto future is built at home or written elsewhere.

Also Read: India’s IT Dept. Flags Crypto Risks, Users Face Higher Scrutiny 

Bitcoin’s push toward $120,000 in 2025 initially felt familiar. The market picked up momentum again, bullish stories started doing the rounds, and across trading desks, there was a growing belief that another post-halving run was taking shape. Then, October 10 hit. 

A sudden flash crash tore through the market, liquidating leveraged positions within minutes and once again showing how quickly sentiment can flip.

Inside the industry, though, the response was unusually restrained.

Instead of setting off panic, the crash pushed the conversation in a different direction—away from price levels and toward what was actually happening beneath the surface of the market. The question many long-term participants began asking was not how high Bitcoin could go next, but whether it was still the same market at all.

That question sat at the center of ARK Invest’s year-end Bitcoin Brainstorm discussion, where Cathie Wood and her team framed 2025 as something more than just another volatile year. According to Wood, the changes underway are big enough that Bitcoin may now be entering a fundamentally different era.

“I think 2025 is going to be like one era before that—and one era after that,” Wood said.

Volatility is still here, but it means something different now

Wood was clear that risk has not disappeared. She acknowledged that further downside remains possible and that leverage can still unwind unexpectedly. But the scale of that risk, she argued, has changed.

In earlier cycles, Bitcoin routinely suffered drawdowns of 50% to 70%, events that reset the market but also reinforced its reputation as an unstable asset. Today, Wood suggested, a decline closer to 30% would be interpreted very differently, not as a failure of the system, but as evidence that Bitcoin is maturing.

That shift, she said, reflects how the market itself has evolved. Bitcoin is no longer dominated by short-term speculative capital alone. Instead, it is increasingly held by entities with longer time horizons and balance-sheet-level conviction.

Why the four-year cycle is losing its grip

For more than a decade, Bitcoin’s price behavior followed a rhythm closely tied to its four-year halving cycle. Peaks, crashes, accumulation, and recovery became almost ritualistic. In 2025, that rhythm began to feel less reliable.

ARK analyst Lorenzo Valente pointed to the changing composition of Bitcoin holders as a key reason. The capital flowing into the market today is not primarily looking for quick exits. Public companies, institutional allocators, and long-term investors are approaching Bitcoin as a strategic asset rather than a trade.

“These are companies and people with a long-term vision,” Valente said. “They’re not here for six months or a year.”

As that type of capital becomes more dominant, extreme volatility becomes harder to sustain. The result is a market that still moves, but no longer collapses under its own weight in the same way.

2025 and the role of regulation

The market’s structural shift did not happen in isolation. It unfolded alongside one of the most consequential years for crypto regulation in the United States.

Progress on the GENIUS Act and the CLARITY Act helped establish clearer rules around stablecoins, market structure, and digital asset classification. While neither framework resolved every open question, both sent a signal that crypto, Bitcoin included, was moving out of regulatory limbo.

For institutions that had spent years watching from the sidelines, that clarity mattered. Bitcoin and Ethereum began to function less like regulatory risks and more like assets that could be integrated into existing financial systems.

Bitcoin as a reserve: Holding instead of selling

A key change discussed was how miners and infrastructure companies are handling their Bitcoin. Instead of selling it to pay for costs, many are now keeping their Bitcoin as a reserve. They borrow money using their Bitcoin as collateral, which lets them raise funds without selling the coins they hold.

This approach is helping companies pay for energy contracts, expand mining operations, and build new infrastructure. It shows a bigger shift: Bitcoin is no longer just a short-term trading asset. Companies are now using it as part of long-term planning, linking it more closely to real-world projects and business strategies.

Bitcoin’s quiet transformation into collateral

One of the most telling signs of that integration is how Bitcoin is being used. Instead of selling Bitcoin to cover costs, miners and infrastructure companies are increasingly choosing to borrow against it. The idea is simple: keep the Bitcoin, use it as collateral, and avoid exiting positions they still believe in.

That shift has started to change how these businesses operate. Bitcoin is no longer just something they hold or trade around market cycles. It is being used to finance power contracts, expand mining sites, and build out infrastructure, tying the asset more directly to physical projects and long-term planning.

Stablecoins took the transaction role, and Bitcoin took the rest

During the discussion, Wood acknowledged that stablecoins have taken on roles many once expected Bitcoin to fill, particularly in payments and remittances across emerging markets.

“Stablecoins are serving as the insurance policy that we thought Bitcoin would provide,” she said.

Rather than weakening Bitcoin’s relevance, Wood argued, this division of labor has clarified it. Stablecoins handle transactions. Bitcoin, increasingly, is held for what it represents: scarcity, neutrality, and independence from sovereign monetary systems.

A network still spreading, not concentrating

Concerns about mining centralization surfaced repeatedly over the past year, particularly as some large miners shifted infrastructure toward artificial intelligence and high-performance computing.

Several speakers challenged the view that Bitcoin mining is becoming more centralized. They said that as some of the largest mining firms shift resources toward artificial intelligence and high-performance computing, opportunities have emerged for smaller operators. Many of these newer mining operations rely on renewable or off-grid energy, allowing them to function outside traditional power markets.

In places with abundant hydroelectric and solar energy, particularly across parts of Africa, miners are increasingly using surplus power that would otherwise go unused. By turning that excess energy into Bitcoin, these operations are quietly expanding the network’s geographic spread, even as the industry itself becomes more mature and institutional.

Privacy, developers, and the line policymakers are drawing

Another theme that emerged was the treatment of developers and privacy tools. Legal cases involving wallet developers have raised alarms across the industry, but the tone from policymakers has begun to shift.

“We will no longer go after the people who create this technology,” one speaker noted. “We will go after the people who abuse the technology.”

That distinction, if upheld, could shape Bitcoin’s long-term role as open financial infrastructure rather than a tightly controlled product.

Why 2025 will be remembered differently

Looking back, 2025 may not stand out for how high Bitcoin traded or how sharply it corrected. Instead, it may be remembered as the year Bitcoin stopped behaving like a purely speculative asset and started acting like embedded financial infrastructure.

As Cathie Wood put it, the real story is not the price—but the transition underway beneath it.

Also Read: Bitcoin Bulls Busted on Their Predictions as BTC Closes 2025 at $87K

Nike has sold RTFKT, its digital collectibles and NFT-focused subsidiary, to an unnamed buyer, according to multiple media reports. The sale was completed in mid-December 2025, roughly one year after the sportswear company announced it would shut down the business.

“RTFKT transitioned to a new owner on December 17, launching a new chapter for the company and its community,” a Nike spokesperson told Bloomberg. The Oregonian first reported the development.

Nike did not disclose the buyer or the financial terms of the deal. The company has also not clarified whether the new owner plans to relaunch operations or maintain RTFKT as an active brand.

RTFKT’s website and official social media channels currently make no reference to the sale. There have been no public announcements from the new owner.

Sale comes a year after RTFKT was shut down

RTFKT announced plans to wind down operations in late 2024. In a post at the time, the team said it would stop producing new non-fungible tokens (NFTs) and instead create an archive website documenting the project’s work and history.

The archive was positioned as a way to preserve what the team described as “everything we created, forged, and built together.”

A “Next Chapter FAQ” published on the RTFKT website refers only to this archive. It states that “website content will reflect the history of past RTFKT Creator contributions and challenges.” The page does not mention a sale, new ownership, or future operations. Nike separately confirmed that the transaction became effective on December 16.

“Nike continues to invest in delivering innovative products and experiences across physical, digital and virtual environments,” the company said in a statement.

RTFKT’s rise during the NFT boom

RTFKT was founded in 2020 as an independent digital studio working on virtual sneakers and blockchain-based collectibles. It gained attention quickly during the NFT boom and became one of the more visible brands in the space.

Nike acquired RTFKT in late 2021, at a time when interest in NFTs was at its peak. The company did not disclose the purchase price, but the deal was widely seen as a strong signal of Nike’s interest in digital collectibles.

After the acquisition, RTFKT released several NFT collections and worked with creators including sneaker designer Jeff Staple and Japanese artist Takashi Murakami. It also launched CloneX, a profile-picture NFT series that became the project’s best-known and most actively traded collection.

Data shows that trading volume across RTFKT collections has reached about $1.5 billion, with CloneX accounting for most of that activity.

Even after operations were shut down, RTFKT continues to rank among the most commercially successful NFT projects to emerge from the market’s early growth period. Data from DeFiLlama shows the project ranks ninth among NFT projects by lifetime earnings, with more than $49 million generated from token sales and royalties.

Nike’s digital push under former CEO

Nike bought RTFKT when John Donahoe was CEO. During his time, he focused on direct-to-consumer sales and digital growth. He also put a lot of emphasis on technology, like e-commerce, apps, and other digital products.

RTFKT was part of that strategy, positioned as a bridge between physical sneakers and digital ownership. The project experimented with virtual wearables, token-gated access, and preorder systems tied to NFT ownership.

“RTFKT revolutionized the sneaker industry by introducing an innovative production model alongside Nike,” the project’s website states. “By merging digital design capabilities with traditional manufacturing, they created a groundbreaking preorder system that transformed how sneakers are produced and delivered.”

Donahoe stepped down as CEO in 2024.

Strategic shift under Elliott Hill

Nike’s current CEO, Elliott Hill, took over in 2024 and has focused on returning the company to its core sports business. The Oregonian reported that Hill is working to strengthen Nike’s presence in physical retail and rebuild relationships with wholesale partners, including Dick’s Sporting Goods and Foot Locker.

The sale of RTFKT comes as part of this broader shift away from experimental digital ventures. It also comes amid speculation around other parts of Nike’s portfolio. In December, Converse reported a 30% decline in quarterly sales, prompting a BNP Paribas investment analyst to question whether Nike might consider selling the brand. Nike has not indicated any plans to do so.

Wider NFT market pullback

Nike’s decision to move on from RTFKT comes as the NFT market continues to slow down. Trading activity across most major NFT platforms is far lower than it was during the 2021 boom.

Earlier this year, NFT marketplace X2Y2 said it would shut down its operations, pointing to a long-term drop in user activity and trading volumes. NFT Paris, once one of the industry’s largest conferences, also confirmed that its 2026 event has been canceled.

Before announcing RTFKT’s shutdown, Nike said it would pause NFT production while continuing partnerships with video game companies to develop virtual products, including in-game wearables.

Lawsuit filed by investors

RTFKT’s shutdown later led to legal action in the United States. In April 2025, a class-action lawsuit was filed in Brooklyn, New York, by investors who said they lost more than $5 million after Nike decided to close the project.

The lawsuit claims that the decision to shut down RTFKT caused a sharp drop in the value of NFTs linked to the brand. The case is still ongoing.

Unclear future under new ownership

Nike has described the sale of RTFKT as a “new chapter,” but there has been no public communication outlining what that chapter will involve. There is no announced roadmap, no confirmation of staff retention, and no indication of whether new products will be launched.

For now, RTFKT exists primarily as an archived brand with a new owner whose plans remain undisclosed.

Also Read: Drake Named in Lawsuit Tied to Crypto Casino Stake

Tarek Mansour, CEO of U.S.-regulated prediction market platform Kalshi, has publicly endorsed a proposed congressional bill aimed at banning insider trading on prediction markets, emphasizing that Kalshi already enforces such rules as part of its regulatory framework.

In a detailed, public LinkedIn post published Wednesday, Mansour expressed support for legislation being introduced by the U.S. Representative Ritchie Torres, while also pushing back against what he described as growing confusion between regulated American platforms and unregulated offshore prediction markets.

“Kalshi is supportive of the bill Ritchie Torres is looking to introduce to affirm the ban on insider trading on prediction markets. Why? Because we already implement it.”

The bill: Public integrity in financial prediction markets act of 2026

Earlier this week, New York Congressman Ritchie Torres moved to formally address concerns around insider activity in prediction markets by introducing the Public Integrity in Financial Prediction Markets Act of 2026. The proposal would prevent federal lawmakers, political appointees, and executive branch officials from placing bets on prediction markets linked to government decisions, policy actions, or political events.

The timing of the bill is closely tied to growing unease within the industry. In recent weeks, reports emerged that a trader on the decentralized prediction platform Polymarket allegedly pocketed close to $400,000 after wagering on the removal of Venezuelan President Nicolás Maduro before the outcome was publicly known. 

The episode has raised uncomfortable questions about whether access to confidential or early information is being leveraged for profit in loosely regulated markets.

While the reported incident involves an offshore, decentralized platform, the fallout has not remained contained. The controversy has spilled over into the wider prediction market ecosystem, prompting renewed debate over market integrity, regulatory gaps, and whether current safeguards are sufficient to prevent misuse of privileged information.

Kalshi distances itself from offshore platforms

In his post, Mansour sought to clearly separate Kalshi from platforms accused of enabling insider trading, without naming any specific companies.

“This should be obvious, but some recent reporting has been conflating regulated prediction markets with unregulated, offshore prediction markets. What non-American, unregulated platforms do has no relationship to what regulated, American platforms do.”

He argued that treating all prediction markets as a single category risks misleading the public and regulators alike, especially as the sector continues to evolve.

“In nascent industries, the difference between regulated and unregulated players can get lost in the noise.”

To illustrate the point, Mansour drew comparisons to other financial sectors where regulation has historically separated legitimate exchanges from high-risk operators.

“Robinhood vs NoBrokerLicenseBuyStocksdotcom, Coinbase vs OffshoreTradeCryptoThingdotcom, Nasdaq vs BuyFOREXHereButOnlyAcceptWiresdotcom.”

Insider trading rules modeled on the NYSE and the Nasdaq

Mansour emphasized that Kalshi operates as a federally regulated exchange and has enforced insider trading prohibitions since its inception. According to him, Kalshi’s rules are directly adapted from those used by major U.S. stock exchanges.

“Our insider trading rules are adapted from the rules on NYSE and Nasdaq: if you have material non-public information on a market, you cannot trade it and if you do, you are committing a financial crime.”

He added that these restrictions apply broadly, including to government employees, policymakers, executives, and any individuals who possess information that is legally required to remain confidential.

Kalshi, which is regulated by the U.S. Commodity Futures Trading Commission (CFTC), delayed its public launch for several years until it secured regulatory approval — a decision Mansour framed as foundational to the company’s identity.

“From day one, we firmly believed in the regulatory first approach because it is the right thing to do.”

A key limitation of the proposed law

While backing Torres’ bill, Mansour also highlighted what he sees as a critical limitation: its jurisdiction.

“However, it’s important to emphasize that this American bill only applies to regulated, American companies and not to unregulated, non-American companies, which is where the alleged issues are occurring.”

This distinction underscores a broader challenge facing U.S. regulators — enforcing standards in a global, internet-native market where offshore platforms remain accessible to American users and lacking U.S. oversight.

Why this matters for the prediction market industry

The debate comes at a time when prediction markets are stepping out of niche corners and into a wider public view, increasingly used to gauge outcomes around elections, geopolitics, and major economic developments. Advocates see them as useful tools for capturing collective insight, while critics caution that, without strong guardrails, these markets can reward questionable or unethical behavior.

Mansour’s remarks highlight a clear split taking shape within the industry itself — between regulated platforms that are trying to build credibility by playing within the rules, and offshore operators that function beyond the reach of standard regulatory oversight.

“Prediction markets, like any industry, are not a monolith: there are important distinctions that matter.”

As lawmakers debate how far regulation should extend, Kalshi’s public alignment with stricter rules may help position regulated prediction markets as a legitimate financial instrument — while leaving unresolved questions about how governments should deal with unregulated platforms operating beyond their reach.

Also Read: Polymarket Trader Cashes In on Israel–Iran Strike Bets

The Income Tax Department has flagged serious risks linked to cryptocurrencies and other virtual digital assets (VDAs), formally aligning itself with the Reserve Bank of India’s (RBI) long-standing opposition to their entry into India’s financial system.

According to a report by The Times of India, tax officials made these observations while briefing the Parliamentary Standing Committee on Finance. The department said that crypto allows anonymous, cross-border, and near-instant transfer of value, often without regulated intermediaries, making it difficult to track income, identify owners, and recover tax dues.

Officials also pointed out that the growing use of offshore exchanges, private wallets, and decentralized platforms has added to these problems. In many cases, the authorities said, it becomes hard to even establish who the beneficial owner of the asset is.

Why is the tax department raising the issue again

While concerns around crypto are not new, the timing is linked to enforcement difficulties the department is facing on the ground.

Over the last few years, disclosures related to VDAs in income tax returns have gone up after crypto was brought under the tax net. At the same time, tax officials have noticed that a large part of trading activity has moved to offshore platforms, especially after compliance requirements tightened for Indian exchanges.

The department is also examining crypto transactions from earlier assessment years. In several cases, officials are trying to reconcile declared income with blockchain-linked activity. Where funds have moved across foreign exchanges or multiple wallets, reconstructing transaction histories has proven slow and complicated.

Does this mean crypto will be banned in India?

The department’s opposition should not be read as a signal of an immediate ban.

So far, India has avoided taking a final call on cryptocurrencies. Trading has been allowed to continue, but without legal recognition. High taxes and reporting requirements have been used to control activity rather than legitimize it.

This is different from how countries such as the US or the European Union have approached crypto. There, governments have moved towards clearer rules and defined regulatory frameworks. In India, crypto is not illegal, but it is also not encouraged. Trading is allowed, taxation is enforced, and formal recognition is still missing.

What this means for Indian users

For Indian users, the basic legal position remains the same. Holding and trading crypto is still permitted. What has changed is the intensity of scrutiny.

Tax officials are now paying closer attention to trading activity on overseas exchanges and to crypto income reported in earlier years. In cases where gains were not disclosed properly or where transactions were routed through foreign platforms, users could be asked to clarify their records. 

At this point, the larger concern is not a sudden ban on crypto, but unresolved compliance issues coming up during tax scrutiny later on.

Why offshore exchanges and private wallets are a concern

Jurisdiction remains a key challenge for the tax department. Many offshore exchanges operate outside Indian regulatory control. They do not deduct TDS and may not respond promptly to tax notices or information requests. This makes it difficult for authorities to verify transaction data or issue a summons when required.

Private wallets add to this problem. Since there is no intermediary involved, linking wallet addresses to individual taxpayers becomes difficult, especially when funds move across multiple blockchains or platforms.

RBI’s position remains unchanged

The tax department’s concerns echo the Reserve Bank of India’s long-standing views.

The RBI has repeatedly said that private cryptocurrencies can create problems for financial stability and capital controls. It has also pointed out that these assets do not have any underlying backing. 

At the same time, the central bank has been promoting the digital rupee, which is designed to work within a regulated system and allows full traceability of transactions.

The contrast makes it clear that India’s resistance is directed at decentralized crypto assets, not digital currency as a concept.

Why crypto is taxed despite opposition

India’s crypto tax policy often appears contradictory. However, taxation in this case is mainly a tracking tool. 

The 1% TDS requirement helps authorities create transaction trails and identify participants, even where regulation is limited. Tax, in this sense, is being used to improve visibility rather than signal approval.

What comes next

The tax department’s warning suggests that the current approach will continue.

Rather than a clear green or red signal on crypto, authorities are likely to focus on tighter reporting, greater pressure on exchanges to comply, and increased scrutiny of offshore activity. Broader legal clarity may still take time.

The Income Tax Department’s comments make it clear that crypto in India is now being looked at mainly as a compliance issue. Trading is likely to continue, but staying outside the tax system is becoming increasingly difficult. For users, correct reporting is no longer optional and will matter going forward.

Also Read: BWA’s Dilip Chenoy Urges Key Tax Reforms for India’s VDA Sector

Decentralized finance (DeFi) has always promoted itself as a complete alternative to the trust-based system of traditional banks. Its main idea is simple but ambitious: replace human judgment with automated code, replace banks and institutions with smart contracts, and make decision-making transparent and unchangeable.

In theory, once a smart contract is on the blockchain, it runs automatically and fairly, without favoritism, censorship, or human intervention. This promise has proven powerful. Over successive market cycles, more than $100 billion in capital has flowed into on-chain lending markets, decentralized exchanges (DEXs), derivatives protocols, and synthetic asset platforms.

For many participants, DeFi represents not merely a new asset class, but an alternative financial system—one that claims to be resilient precisely because it eliminates trust.

The Oracle reality: Where autonomy breaks down

This framing collapses under closer examination, because smart contracts are not autonomous in any meaningful real-world sense. A blockchain is a closed computational environment. It cannot observe the price of Ether, the exchange rate between the dollar and the euro, the solvency of a custodian, or the outcome of a real-world event.

A lending protocol does not inherently “know” when collateral has lost value. A derivatives contract cannot independently calculate profit and loss. Every such function depends on external information being injected into the system. That injection point is the oracle layer.

Chainlink and the consolidation of reality

Centralized perception of the reality of decentralized finance was achieved with Chainlink as the primary tool for how decentralization would be defined, therefore creating a monopoly on the technology that allows people to interact with and view the reality of their transactions.

In most instances, when people transact in decentralized finance, they are doing so through smart contracts. When they do this, they are utilizing or “executing” the functions of the smart contracts without any sort of third-party title (intermediary). In turn, the perception of what is real for decentralized finance has been consolidated within one singular central authority.

This creates a deeply asymmetric architecture. Execution may be distributed, but observation is not. And because financial systems are only as robust as their weakest assumptions, the normalization of a single source of truth represents a form of systemic risk that would be considered unacceptable in traditional finance, yet remains largely unexamined in crypto discourse.

From emergency solution to structural dependency

Chainlink’s rise was neither accidental nor malicious. It emerged during a period when decentralized finance was failing under the weight of its own naivety.

Between 2019 and 2020, early DeFi protocols routinely relied on single-source price feeds, often pulling data directly from centralized exchanges or public APIs. These designs proved catastrophically fragile. Flash loan attacks took advantage of low liquidity and easily manipulated prices, draining protocols by briefly changing prices just enough to cause wrongly priced liquidations.

Chainlink’s practical solution

Chainlink solved this problem not by being perfectly decentralized, but by setting a practical standard for what “secure enough” looks like in the real world. It aggregated prices from multiple sources, processed them through a network of independent node operators, and published a single reference price on-chain. This did not eliminate manipulation, but it raised the cost of attack beyond what most adversaries could sustain.

For developers trying to keep their protocols alive, Chainlink was not an ideological choice. It was a survival mechanism.

As more value flowed into protocols secured by Chainlink feeds, the network effect became self-reinforcing. Liquidity gravitated toward applications that used Chainlink because they were perceived as safer. Auditors started to take for granted the use of Chainlink as a baseline for their operations.

The risk models, liquidation engines, and emergency procedures across the ecosystem were fine-tuned to Chainlink’s update cadence and aggregation logic. Eventually, this process solidified the structure of the system.

By the mid-2020s, Chainlink was no longer a component that could be easily replaced. It had become a structural dependency, deeply embedded in the financial nervous system of DeFi.

The dependency trap: When there is no redundancy left

In spite of DeFi’s insistence on decentralization, the design of its oracles has evolved into a single point of failure that closely resembles a centralized system. Most major protocols rely on Chainlink feeds as their sole source of reference.

While fallback mechanisms often exist on paper, switching to alternative feeds in a live production environment is operationally difficult, risky, and rarely tested under real stress conditions. This creates a monoculture.

When a large number of protocols depend on the same ETH/USD feed, they inherit the same assumptions around latency, aggregation, and market structure. If that feed is delayed, manipulated, or paused, the impact is not isolated. It propagates immediately across the entire ecosystem.

When infrastructure risk turns into market risk

The financial consequences of this dependence are reinforced by CryptoQuant data. During major market downturns, LINK exchange netflows rise sharply, indicating defensive positioning by large holders. The asset securing DeFi’s oracle layer behaves like a high-volatility risk token precisely when the system requires maximum stability.

In effect, DeFi’s core data infrastructure is tied to an asset that is itself highly sensitive to market stress.

Where does Chainlink (DeFi) even get prices from?

Most people using DeFi never think about where prices actually come from. A lending app does not magically know the price of Bitcoin or Ethereum. A smart contract cannot check a chart or open an exchange.

Chainlink exists because DeFi needs someone to tell it what the market price is.

Chainlink collects price data from large centralized exchanges, major decentralized exchanges, and established market data providers where real trading volume exists. These are the same places where billions of dollars are traded every day and where prices are actually formed.

Multiple Chainlink node operators collect this price data independently. Each node submits its data on-chain, and a smart contract combines all the values and publishes a final price, usually based on the middle value. That final number is what DeFi protocols treat as reality.

At its peak, Chainlink secured more than $76 billion across DeFi and has processed over $27 trillion in total transaction value. That means a very large part of DeFi depends on Chainlink prices every single minute.

Has Chainlink ever gone down or faced outages?

Chainlink has never fully shut down, but there have been moments during extreme market chaos when its systems were under heavy pressure. In those situations, even small delays or pauses became important, because a lot of money across DeFi depends on price updates happening on time.

In March 2020, during the COVID market crash, Ethereum prices dropped rapidly while network congestion pushed gas fees above $200 per transaction. Because posting updates became extremely expensive, some Chainlink price feeds stopped updating for nearly six hours. 

No wrong prices were published, but DeFi lending platforms could not liquidate risky loans in time, which increased losses once prices were finally updated.

In May 2022, during the Terra collapse, the LUNA token crashed by over 90%, and prices fell from above $80 to almost $0 in a very short period. During the Terra crash, Chainlink stopped updating its LUNA price feeds to avoid showing inaccurate data from a market that had basically collapsed. 

Even so, many DeFi platforms kept using the last price that had been published, which was much higher than LUNA’s real value at the time. This led to people borrowing against worthless collateral, ultimately causing about $11 million in losses on platforms like Venus.

In both of these cases, the problem was fixed within a few hours, and no one tampered with the data. Still, the losses happened because these automated systems rely on constant, up-to-date prices to work correctly.

Oracle dependence and the illusion of backup

People often defend Chainlink’s dominance by saying it’s already redundant since many nodes provide data. But this misses the real risk.

Even though several operators supply data, they usually get it from the same sources, have similar financial limits, and react to the same market conditions. Aggregation smooths individual errors, but it does not create an independent truth. It produces consensus around a shared dataset.

Logical versus real redundancy

In traditional finance, redundancy comes from genuinely independent systems: competing pricing vendors, separate clearinghouses, and parallel settlement rails. In DeFi, redundancy is often simulated rather than real.

Multiple protocols reference the same oracle contracts, the same aggregation logic, and frequently the same exchanges. This results in logical redundancy without physical independence.

The core risk is not occasional oracle failure, but synchronized behavior. When stress hits, every dependent system reacts in the same way, at the same time, using the same information. This is how localized issues escalate into systemic crises.

Centralization hiding in the open

Chainlink is often described as decentralized because it relies on many node operators. Decentralization isn’t just about having many participants; it’s about who actually makes the decisions.

At the core of Chainlink’s system is a multi-signature wallet that controls things like contract updates, feed settings, and emergency actions. Because this wallet has historically been managed by only a few people, it gives a lot of power to a small group, which doesn’t match the idea of a fully decentralized network.

Operational participation is also limited. High-value feeds are serviced by whitelisted operators chosen by the core team. These operators are typically large, professional infrastructure firms, which improves reliability but introduces identifiable choke points.

From a regulatory standpoint, this structure is critical. Applying pressure to a small set of known entities is far more effective than regulating a diffuse, anonymous network. DeFi’s oracle layer—far from being censorship-resistant—may be one of the most easily regulated parts of the entire ecosystem.

Chainlink and the re-creation of financial gatekeepers

Decentralized finance was born out of a distrust of intermediaries, yet the oracle layer has quietly recreated a familiar hierarchy.

Chainlink does not merely provide data; it determines which data sources are legitimate, which node operators are trusted, and which feeds are considered canonical. This mirrors the role of credit rating agencies in traditional finance, whose judgments are technically advisory but functionally authoritative.

Just as a downgrade from a major rating agency can cascade through bond markets, an oracle update can ripple through DeFi. Liquidations trigger, collateral values shift, and solvency assumptions change instantly. The power to define reality confers power over outcomes, even if exercised indirectly.

This concentration is especially concerning because Oracle decisions are not subject to the same scrutiny as protocol governance. There is no transparent voting process for feed inclusion, weighting, or depreciation. Decisions are framed as technical necessities rather than policy choices, even though their consequences are economic and systemic.

When accurate data produces wrong outcomes

One of the most misunderstood risks in oracle design is that failure does not require malfunction.

Chainlink nodes don’t just make up prices; they grab them from exchanges and aggregators. The problem is that in markets where not a lot is being traded, someone can mess with things pretty easily through normal trading. A person could briefly mess up prices in those markets where there’s not good liquidity and get the oracle to report a price that’s technically correct but still misleading.

The oracle does its job as it should, but things still go wrong badly. Liquidations happen, collateral gets taken, and value disappears—even though there’s no actual bug or exploit in the oracle.

This kind of thing has led to billions of dollars in losses in DeFi. It shows a key problem with how oracles gather data: they can’t tell the difference between real price changes and when someone’s messing with the market.

The danger of failures that happen as designed

One of the worst parts about Oracle problems is that they often happen even when everything seems to be working the way it’s supposed to.

When price manipulation, stale updates, or source-level distortions occur, Chainlink frequently behaves exactly as specified. Nodes fetch data, aggregation executes correctly, and the result is published on-chain. From a technical standpoint, nothing is broken. Yet the economic outcome can still be disastrous.

When correct data still breaks the system

This reveals a gap between getting the numbers right and keeping the system safe. DeFi protocols often assume that if the data is technically accurate, the outcome will automatically be fair. But real markets don’t work that way. In adversarial conditions, accuracy and fairness are not the same thing.

A price can be “correct” for a brief moment, reflecting real trades in a thin or manipulated market and still cause serious damage when it is used to trigger liquidations or other irreversible actions.

Traditional financial systems recognize this risk. That’s why they rely on circuit breakers, manual overrides, and human judgment to slow things down when markets behave irrationally or are clearly being gamed.

DeFi, by contrast, treats oracle outputs as final, because there is no institutional layer empowered to intervene once execution begins.

Gas costs, stale prices, and cascading insolvency

Under extreme market conditions, Ethereum gas fees can spike dramatically, sometimes even exceeding 500 gwei. Oracle updates become expensive. Node operators face a rational decision: publish updates at a loss or delay.

When updates are delayed, prices become stale. Positions that should be liquidated remain open, accumulating hidden insolvency. When the oracle eventually updates, the correction is sudden and violent, triggering liquidation cascades that overwhelm liquidity and leave protocols with bad debt.

This phenomenon is not theoretical. It is an emergent property of oracle-based systems operating on fee-constrained blockchains.

Liquidity problems and oracle feedback

One overlooked risk is how oracle pricing and on-chain liquidity affect each other.

When oracles report lower prices during market craziness, automated market makers change pool balances. This makes slippage bigger, and liquidity seems to disappear. Then, the price changes get bigger on the same exchanges that feed info to the oracle network.

So, it’s like a loop: oracle updates mess up liquidity, which makes price signals worse, which messes with the oracle aggregation. When things get really wild, oracle prices can go out of whack, even without anyone trying to cheat.

LINK exchange balances fluctuate during volatile periods, showing shifting liquidity even without major price moves.

CryptoQuant’s data from times of high volatility shows LINK exchange activity jumping without the prices really changing much. This suggests liquidity is all over the place instead of orderly markets. And this happens when Oracle reliability is needed most, but it’s also hardest to guarantee.

Tokenomics weirdness: Usage without value

One thing that doesn’t make sense in crypto is that Chainlink is being used a lot, but the LINK token isn’t doing so great.

As of January 2026, LINK is trading around $13.92, which is way down from the $23.65 it was trading at a year ago. That’s a 41% drop while Chainlink’s usage in the real world has blown up. The network has handled over $27.3 trillion in transactions, and it secures over $76 billion. That’s as much as some big financial companies.

This isn’t just because of bad market feelings or short-term hype. It’s a built-in thing.

Chainlink’s oracle network isn’t really paid for by steady fees. Instead, it’s like a subsidized system. Node operators get paid in LINK tokens from reserves the protocol controls. About 70 million LINK per year, or around 7% of the total supply, gets released to keep things running.

But node operators have real costs that they can’t pay in LINK. They have to pay for infrastructure, compliance, servers, and Ethereum gas fees in regular money or ETH. So, they usually sell LINK tokens to cover these costs, which puts constant pressure on the price.

CryptoQuant’s exchange data shows this too. When the price goes up, LINK flows into centralized exchanges more. This means people are selling off their LINK rather than holding onto it. LINK is less of a store of value and more of a token used to keep the infrastructure running.

This creates a paradox at the heart of the network. The more Chainlink is used, the more LINK must be sold to sustain that usage. Adoption does not drive scarcity; it drives distribution.

LINK as a labor token, not a value token

Many people assume that LINK works like ETH or BTC, where more usage should lead to long-term value. In reality, that isn’t how LINK is used. LINK is mainly paid to oracle operators for the data they provide, rather than functioning as an asset that reflects the network’s growth. 

LINK’s incentive structure under stress

This shows up clearly in on-chain data from CryptoQuant. LINK activity rises during periods of high oracle demand or market stress, not during phases of steady accumulation. Exchange inflows often increase at these times, suggesting that node operators and other participants are selling rewards to fund operations or reduce exposure, instead of holding LINK as a long-term value asset.

This places LINK in a structurally different category from assets whose supply dynamics are directly tied to demand. Increased oracle usage does not reduce circulating supply; it accelerates distribution. 

As Chainlink grows and more data is used, more LINK needs to be paid out to keep the system running. That means a steady amount of LINK is constantly being sold to cover real operating costs.

This also helps explain why LINK often fails to hold rallies even when the fundamentals look strong. When the price goes up, the rewards paid to operators become worth more in fiat terms, which gives them more reason to sell quickly. The result is a feedback loop where higher prices lead to more selling, making it hard for LINK to stay scarce even as the network succeeds.

Why DeFi has not stress-tested its backbone

Despite its scale, DeFi has not conducted systemic stress testing of its oracle layer in the way traditional financial systems test clearinghouses and payment rails.

There are no industry-wide simulations of oracle outages, delayed updates, or coordinated feed manipulation. There are no standardized fallback drills. Each protocol assumes that its own safeguards are sufficient, ignoring the shared dependencies beneath them.

The lack of any shared approach to risk points to a deeper problem: no one is responsible for how the system holds up as a whole. Chainlink focuses on securing data feeds, protocols focus on smart contracts, and users are expected to manage their own risk. But there is no single party accountable for whether everything still works when markets come under stress.

What this creates is a coordination problem. Each participant is acting logically within their own role, yet the combined outcome is a system that becomes fragile when it is tested.

The regulatory pressure vector no one prices in 

As regulatory attention increases, oracle providers are being pushed into an uncomfortable position. They are not just neutral software tools; they actively supply data that directly affects financial transactions and asset movements.

If regulators begin to treat oracle operators as part of the financial infrastructure, they could be forced to follow compliance rules that clash with DeFi’s assumptions of neutrality. Obligations to block certain addresses, assets, or regions would effectively introduce censorship at the data level, changing how “permissionless” these systems really are.

Because Chainlink’s node set is permissioned and professionally operated, it is uniquely exposed to this pressure. Oracle operators, unlike anonymous miners, are known and can be held legally responsible. This creates a one-sided weakness that code alone can’t fix.

From regulatory exposure to institutional lock-in

As Chainlink grows into institutional infrastructure with CCIP and its Runtime Environment, it gets even more dominant. When banks and settlement networks integrate with it, it becomes the go-to oracle layer.

But this success makes the system more fragile. It becomes harder to switch, and dependency gets stronger. What started as a practical choice turns into something that can’t be avoided.

Strangely, there’s not much talk about having various oracle options in DeFi.

For real strength, several independent oracle networks should run side by side. Protocols should be designed to handle conflicting information instead of relying on just one source. This would make things more complicated, slower, and less clear, but it would also lower the risk of big disasters.

The industry hasn’t gone this way because it values speed over strength. If Chainlink keeps working well enough, there’s little reason to change. But history shows that we usually only see infrastructure risks after something fails, not before.

This is super important now because Chainlink is moving into cross-chain messaging, institutional settlement, and real-world asset infrastructure. It’s not just for DeFi anymore; it’s becoming a general tool for coordinating digital finance.

This raises the stakes considerably. A failure, compromise, or regulatory capture at this layer would not merely disrupt DeFi protocols; it could ripple into tokenized securities, on-chain settlement systems, and hybrid TradFi-DeFi architectures.

The invisible monolith is growing taller, not narrower.

What happens if one Oracle is used everywhere?

Most major DeFi protocols rely on the same Chainlink price feeds. This means when something goes wrong, it does not affect just one app.

If a major ETH/USD or BTC/USD feed slows down, pauses, or reacts sharply to market stress, lending platforms, derivatives protocols, and stablecoin systems all respond at the same time. Liquidations trigger together, liquidity disappears together, and losses spread across the ecosystem almost instantly.

Backup systems often exist on paper, but switching oracles during live market chaos is risky and rarely tested. In practice, DeFi relies on one shared version of reality, even though execution happens on many different platforms.

What if Chainlink ever stops working properly?

This is hypothetical, but it shows how fragile the system can become.

If a major Chainlink price feed stopped updating and did not recover for several hours, DeFi lending platforms would not be able to liquidate risky loans. Bad debt would quietly build across multiple protocols. When the feed finally resumed, liquidations would happen all at once, potentially wiping out billions of dollars.

Another possible situation is when prices briefly move in strange ways because trading volume dries up. For example, Bitcoin could trade close to $20,000 on a few low-liquidity markets for a short period, even though the current price is much higher, above $90,000. 

If that price is picked up by the oracle during that window, it will be treated as real. One update like that is enough to trigger mass liquidations across DeFi, even if the price recovers within minutes and returns to normal levels.

The same kind of risk exists with stablecoins. During periods of panic, USDT has traded around $0.95 on some markets. When that happens, DeFi protocols do not wait to see whether the price recovers. DeFi protocols see that price as the real one and react right away. Loans are automatically liquidated, trading positions are closed, and users end up losing money, even if USDT goes back to $1 later the same day.

In all these cases, the oracle works exactly as designed. The damage comes from the assumption that fast, automated reactions always produce fair outcomes.

Why nobody really talk about this risk

Chainlink works well most of the time, and that reliability makes its risks easy to ignore. Because major failures are rare, the oracle layer becomes invisible, even as more money depends on it.

Traditional finance expects markets to behave irrationally during stress, which is why it uses delays, manual intervention, and multiple independent price sources. DeFi prioritizes speed and automation, even during chaos.

Until DeFi treats oracle diversity and disagreement as necessary protections rather than inefficiencies, this dependency will remain one of the most underpriced risks in the entire system.

Conclusion: The cost of an invisible backbone

Chainlink is not failing. It is succeeding too well.

By becoming indispensable, it has transformed from a security solution into a single point of systemic risk. The problem is not malicious intent or technical incompetence. It is concentration—of trust, control, and dependency—in a system that claims to eliminate all three.

DeFi has built extraordinary applications. But beneath them lies an oracle layer whose success has quietly recreated the very fragilities the movement sought to escape. Until oracle redundancy is treated as a foundational requirement rather than an optional upgrade, the invisible monolith at the center of decentralized finance will remain its greatest unpriced risk.

Ethereum co-founder Vitalik Buterin said in a recent post on X that Ethereum is moving into a new stage of its development, driven by two changes that are now real rather than theoretical. One is the launch of PeerDAS on the Ethereum mainnet. The other is that ZK-EVMs have reached production-level performance, even though they are still at an early, alpha stage.

Buterin’s point was not that Ethereum has simply become faster. He argued that the way Ethereum handles data and block validation is beginning to change, and that this alters the long-standing limits blockchains have worked under.

What problem Ethereum has been trying to solve

For years, blockchains have had to make trade-offs. Networks could be decentralized and secure, but slow. Or they could be fast, but rely on fewer participants and more central control.

Buterin explained this by comparing Ethereum with earlier peer-to-peer systems. BitTorrent managed to move large amounts of data in a decentralized way, but it had no shared agreement about the state. Bitcoin solved decentralized consensus, but did so by making every node repeat the same work, which kept throughput low.

Ethereum, he said, is now reaching a point where it can avoid that trade-off. “Now, Ethereum with PeerDAS (2025) and ZK-EVMs (expect small portions of the network using it in 2026), we get: decentralized, consensus and high bandwidth.”

What PeerDAS actually does

PeerDAS stands for Peer Data Availability Sampling. In simple terms, it changes how Ethereum checks that data exists and is accessible.

Instead of requiring every validator to download and store all the data attached to blocks, validators only check small, random parts. If the data were missing, this would be detected quickly. This allows Ethereum to carry much more data without forcing validators to run expensive hardware or large storage setups.

PeerDAS is already live on the mainnet, which means Ethereum is already using this approach today.

What ZK-EVMs change about validation

ZK-EVMs, or zero-knowledge Ethereum Virtual Machines, change how blocks are verified. Normally, validators re-run all the transactions in a block to check that it is correct. With ZK-EVMs, a validator can instead check a cryptographic proof that shows the block was executed correctly.

This reduces how much computation validators need to do. It also makes it possible to increase gas limits without overwhelming the network. Buterin said ZK-EVMs are now fast enough for real use, though more work is still needed to make them safe enough to rely on widely.

Why Buterin says the trilemma is no longer theoretical

Buterin stressed that this is no longer just a research idea. “The trilemma has been solved – not on paper, but with live running code.”

One half of this, data availability sampling, is already running on the Ethereum mainnet. The other half, ZK-EVMs, is already usable from a performance point of view, even if further safety improvements are needed.

He described this as the result of work that started nearly ten years ago, including early research into data availability and the first serious attempts to build ZK-EVMs around 2020.

What Ethereum’s path looks like from here

According to Buterin, the changes will not arrive all at once.

In 2026, Ethereum is expected to support higher gas limits without relying on ZK-EVMs, enabled by changes such as BALs and ePBS. Around the same time, it should become possible for some participants to run ZK-EVM nodes.

Between 2026 and 2028, Ethereum is expected to make further internal adjustments, including gas repricing, changes to how state is stored, and moving execution data into blobs, to make higher throughput safe.

From 2027 to 2030, Buterin expects ZK-EVMs to become the main way blocks are validated on the network, allowing for much larger increases in gas limits.

Vitalik added, “In 2027-30, large further gas limit increases, as ZKEVM becomes the primary way to validate blocks on the network.”

Block building and centralization risks

Buterin also addressed block building, which has increasingly become concentrated in a small number of hands. He said a long-term goal is to reach a point where a full block is never assembled in one place. He added, “The full block is never constituted in one single place.”

He noted that this is not something Ethereum needs immediately, but argued that moving in this direction would reduce the risk of censorship and improve fairness across different regions. He said this could happen either through changes built into the protocol, such as expanding FOCIL, or through distributed builder marketplaces operating outside the protocol.

What this means in practice

Buterin acknowledged that important challenges remain. ZK-EVMs still need further safety work. Higher gas limits increase complexity. Distributed block building is still a long-term aim rather than a near-term reality.

Even so, his post makes clear that Ethereum is no longer waiting for core research ideas to become practical. Key parts of that research are now live or close to being usable.

Rather than pointing to a single upgrade, Buterin described a gradual change in how Ethereum is designed to grow. If the roadmap plays out as expected, Ethereum could support far higher usage while keeping validation decentralized, something that has been difficult for blockchains to achieve until now.

Also Read: Vitalik Buterin Calls for Renewed Focus on Ethereum in 2026

Ethereum’s staking system is seeing more ETH waiting to enter and exit the network. That waiting is quietly slowing down how staking rewards are distributed. Most traders watch prices or exchange activity. Few notice what is happening inside the network itself. The validator queue shows this clearly.

The queue exists because Ethereum limits how many validators can join or leave at once. When more ETH is staked than the system can handle, it waits. While in the queue, the ETH is locked. It cannot earn rewards. That slows down new participants and delays when staking returns actually start.

How Ethereum staking works

Ethereum uses proof of stake. Instead of miners, validators run the network. Validators put their ETH aside to help run the network. They check transactions and make sure everything on the blockchain is correct. For doing this work, they earn rewards. If a validator does something wrong or breaks the rules, some of the ETH they staked can be taken away.

Becoming a validator does not happen immediately. After staking, the network needs to approve the validator before they can start earning rewards. Exiting staking also takes time. These limits are meant to keep the network stable.

The queue at a glance

Right now, about 904,000 ETH is waiting to enter staking. On average, it takes around 15 days before it starts earning rewards. On the exit side, roughly 180,000 ETH is waiting to leave. That wait is shorter, about three days, but withdrawals are still delayed.

Ethereum has about 981,000 active validators. Total staked ETH is 35.6 million, nearly 30% of all ETH in circulation. The average annual reward for staking is around 2.8%.

The queue is uneven. Much more ETH is waiting to enter than to exit. That means new participants wait longer to start earning, while withdrawals are faster.

Why the queue matters

Rewards only start once a validator is active. ETH in the entry queue is already staked but idle. A growing queue slows how fast new rewards enter the system. Existing validators are unaffected, but anyone staking now faces delays.

The queue also shows something price charts do not. A long entry queue means strong demand to stake. A smaller exit queue shows some are taking out funds or adjusting positions. These changes happen slowly, over time.

Why Ethereum limits validator movement

The queue is deliberate. Ethereum only allows a certain number of validators to join or leave at a time. If everyone entered or exited at once, it could threaten network security.

The trade-off is slower movement of funds, but the network remains stable. The limit has always been part of Ethereum. Now, with more people staking, the effect is more obvious.

Staking is not for short-term moves. Participants have to plan for the time it takes for ETH to enter or exit. Even with strong demand, rewards are not instant.

What the queue tells

The growing validator queue shows steady interest in staking and long-term participation. Many ETH holders are willing to accept delayed access in exchange for predictable rewards.

It also shows how Ethereum manages risk. The network lets people join and leave slowly to keep everything secure. The waiting line affects when staking rewards start and when withdrawals happen, even though you won’t see it in regular market charts.

As more people stake, knowing how the queue works is becoming more important. For anyone locking ETH in Ethereum, it is one of the clearest indicators of both demand and timing for rewards.

Also Read: Ethereum Rises 4% as On-Chain Activity Hits Record Levels

Stablecoin issuer Tether has invested in SQRIL, a Southeast Asia–based payments company working on cross-border QR code payments for banks, e-wallets, and fintech platforms across Asia, Africa, and Latin America. 

The investment ties Tether to a payments system that operates quietly in the background, without any direct consumer crypto product attached to it.

SQRIL is building an API-based payment switch that allows users of one country’s banking or wallet app to scan and pay QR codes in another country. The customer pays in their own currency, while the merchant receives funds in local currency. Currency conversion and settlement are handled by SQRIL as part of the transaction.

How the system works

According to SQRIL Founder and CEO Malcolm Weed, “any traditional bank such as Barclays or Bank of America, or neobanks such as Venmo, Revolut or Cash app can integrate with our APIs and allow their user base to scan and pay local QR codes across Asia, Africa and Latam. Users would pay with their home currency, and the merchant in the foreign country would receive their local currency. SQRIL would handle the forex and local payout in the destination currency.”

SQRIL is not trying to attract consumers directly. It does not offer a wallet, a payment app, or a branded checkout experience. Instead, it positions itself as a technical layer connecting national QR systems that were never designed to work with one another.

Why QR payments matter outside the West

In much of Asia, QR code payments are already part of daily life. In countries like the Philippines, Vietnam, Indonesia, and Thailand, people routinely pay by scanning a code, whether they are in a convenience store, a café, or buying something from a street vendor. These systems are usually built around national standards, often supported or overseen by central banks.

FUNDING ANNOUNCEMENT!!!

TETHER BACKS STARTUP SQRIL, THE FIRST REAL-TIME, CROSSBORDER SCAN-TO-PAY QR CODE PAYMENT SWITCH FOR ASIA, AFRICA AND LATIN AMERICA.

Singapore, January 3, 2026 – Stablecoin issuer Tether has invested in SQRIL (pronounced squirrel), the Southeast Asia… pic.twitter.com/PZdoGOsShl

— SQRIL (@SQRILpay) January 2, 2026

Similar payment patterns are starting to take hold in parts of Latin America and Africa, where real-time payment systems are spreading faster than card infrastructure ever did. The systems work well inside their own borders. The problem begins the moment a user tries to pay outside their home country.

What SQRIL has built so far

At present, SQRIL supports QR code payments in the Philippines, Vietnam, and Indonesia. It also enables bank transfers in Malaysia and Thailand. The company has said it plans to add more countries across Asia, Africa, and Latin America in the coming months.

The platform is still early. It functions in a limited number of markets and depends heavily on whether banks and wallet providers decide to integrate it. Without those partnerships, the technology remains useful in theory but limited in reach.

Why Tether’s involvement is not about retail crypto

Tether’s investment does not mean USDT is being pushed into QR payments. There is no indication that stablecoins are part of the payment flow today. The deal appears focused on infrastructure rather than consumer usage.

This fits with how Tether has been spending its time recently. The company has moved beyond stablecoins into other areas, including artificial intelligence (AI). It recently expanded its QVAC Genesis II dataset to 148 billion tokens and released it for open-source use by researchers and developers working on large language models.

Tether has also said it is exploring a mobile wallet built around Bitcoin and USDT, designed to be non-custodial and to run AI models directly on the device rather than relying on cloud services.

These efforts are not consumer-facing in the traditional sense. They sit underneath products, rather than competing for attention.

Why SQRIL, and not a larger payments player

Cross-border payments are not a new problem, and large payment networks already operate globally. SQRIL’s appeal lies in what it does not try to do. It does not issue accounts, manage users, or compete with banks and wallets for customer relationships.

By staying out of the spotlight, it can position itself as a neutral connector rather than another platform demanding control.

That kind of role is easier to integrate quietly, especially in markets where regulators and banks are cautious about foreign payment systems.

The regulatory clarity

Even with the technology in place, SQRIL cannot avoid the limits set by regulation. Payments are governed locally, not globally. Each national QR system follows its own rules around settlement, compliance, foreign exchange, and transaction monitoring.

SQRIL can connect systems, but it cannot harmonize how different countries regulate money movement. As it expands into Africa and Latin America, that complexity is likely to grow rather than shrink.

Progress will depend as much on regulatory cooperation as on technical execution.

A long-term infrastructure play

Weed believes QR payments will eventually become common worldwide, even in markets that still rely heavily on cards.

“Usually you see developed world technologies making their way to emerging markets, but I really believe this will happen in the reverse,” he said.

Whether that happens will depend less on consumer behavior and more on whether institutions are willing to align their systems.

For now, Tether’s backing of SQRIL looks less like a push for immediate disruption and more like a quiet investment in payment plumbing. If it works, it will do so without much attention. If it doesn’t, it will fail just as quietly.

Also Read: BitVentures Launches Digital Assets Segment via Crypto Mining Deal

Ethereum co-founder Vitalik Buterin started the new year with a post that didn’t announce a fork, a deadline, or a roadmap. Instead, it read like a pause — the kind someone takes when they feel a project is moving fast but not always in the right direction.

“Welcome to 2026! Milady is back,” Buterin wrote on X. He also switched his profile picture to a Milady Maker NFT, a move that instantly pulled attention toward a collection many people thought had already had its moment.

But the post itself wasn’t about Non-Fungible Tokens (NFTs), prices, or markets. It was about Ethereum and what it risks losing if it keeps chasing whatever happens to be popular.

Looking back at 2025, without victory laps

Buterin acknowledged that 2025 was a productive year for Ethereum. Gas limits increased. Blob capacity went up. Node software became more reliable. zkEVMs crossed performance milestones that, not long ago, felt theoretical. Combined with PeerDAS, Ethereum moved closer to a version of itself that can scale without leaning too heavily on centralization.

Those wins mattered. But they weren’t the point.

The concern, as Buterin framed it, is that Ethereum can still miss its own goals even while shipping upgrades. The network doesn’t exist to win narratives, he argued — not tokenized dollars, not political memecoins, not any short-term meta that fills blockspace for a while and then disappears.

Ethereum, he said, is supposed to be infrastructure.

What Buterin means by “world computer”

The phrase “world computer” gets used often in Ethereum circles, sometimes without much thought. Buterin used the post to spell out what he actually means by it.

Ethereum is meant to support applications that don’t depend on trust in developers, companies, or intermediaries. Apps that keep working even if the original team vanishes. Apps where users don’t need permission to continue using them. Apps that don’t quietly fail the moment a cloud provider has an outage or a centralized service is compromised.

He described this as the “walkaway test.” If users can walk away from the people who built a system and the system still works, then it’s doing something right.

That standard isn’t limited to finance. Buterin placed identity, governance, and future forms of digital public infrastructure in the same category. Privacy, he stressed, isn’t optional in any of this.

Why this shouldn’t sound extreme

One of the more grounded parts of the post was how Buterin framed decentralization as something society once had by default. Wallets worked without asking permission. Books didn’t stop functioning if a company went bankrupt. Cars didn’t require subscriptions to unlock basic features.

Today, many products quietly depend on centralized control, remote updates, and ongoing approval. Lose access, lose functionality.

Ethereum, in Buterin’s view, is a pushback against that direction — not perfect, not finished, but aimed at restoring user control at the infrastructure level.

To do that, Ethereum has to be usable at scale and actually decentralized, not just in theory. That applies both to the base blockchain and to the software people use to interact with it. Progress is happening, he said, but it needs to go further.

Milady Maker sees sharp jump in activity

Milady Maker, an NFT collection released in August 2021 by the Remilia Collective, saw a sudden burst of trading over the past day. The floor price moved up to 1.07 ETH, roughly 27% higher than the previous day, initially had pumped around 47%, while about 220 ETH worth of Miladys changed hands across just over 200 sales. That was enough to put the collection back into the top ten by floor price.

The rise came at a time when most of the NFT market had been relatively inactive. Over the past seven days, Milady NFTs changed hands at an average price of 0.91 ETH, with sales spanning from 0.67 ETH to 2.95 ETH, suggesting steady buying rather than a single unusually large trade.

Milady Maker has a fixed supply of 10,000 NFTs. At current prices, that puts the collection’s floor value at around 10,700 ETH. Only about 2% of the supply is listed for sale, and ownership is spread across a little more than 5,100 wallets, covering just over half of the collection.

The collection originally minted at 0.06 ETH, putting current floor prices more than 16 times higher than mint, even after several market downturns since its 2021 launch.

Why “Milady” suddenly matters again

The Milady reference is what gave the post its edge.

Milady Maker is an NFT collection launched in August 2021 by the Remilia Collective. It’s known for its anime-style avatars, heavy internet-culture influence, and a history that includes both deep community loyalty and repeated controversy. Over the years, it has been praised, mocked, criticized, and dissected, sometimes all at once.

Around the time of Buterin’s post, Milady Maker’s floor price jumped sharply, moving above one ETH alongside a surge in trading volume. The timing made people connect dots, even though Buterin made no comment about value, trading, or investment.

Whether intentional or not, the reference pulled an old NFT project back into the spotlight at a time when NFTs are no longer driving the crypto conversation.

Where the NFT market actually is right now

NFTs are far removed from their peak years. In 2021 and early 2022, the market ballooned on speculation, celebrity attention, and the belief that every new collection might matter. At the height of the cycle, NFTs were estimated to carry over $100 billion in market value, with monthly trading volumes reaching $4–5 billion at times.

That phase burned out quickly. As crypto markets turned in 2022, NFT liquidity dried up even faster. Prices across most collections fell sharply, trading activity collapsed, and overall NFT volumes dropped by more than 90% from peak levels. Thousands of projects effectively stopped trading altogether.

By 2025, NFTs were no longer a dominant crypto narrative — but they weren’t gone either. Forecasts for 2026 reflect that uncertainty. Some estimates suggest NFT revenues could shrink to well under $500 million, while more optimistic projections still point to a market worth tens or even hundreds of billions, largely depending on adoption in areas like gaming and virtual worlds.

What exists today is a much smaller, quieter market, concentrated around a limited number of older collections that still attract consistent attention.

Not a comeback, but not the end either

There’s no clear sign that NFTs are about to reclaim the spotlight. Volumes are still far below past highs, and mainstream enthusiasm hasn’t returned.

But moments like this suggest NFTs may be settling into a different role — less speculative, more tied to identity, community, and on-chain culture. If Ethereum succeeds in becoming the resilient infrastructure Buterin described, NFTs could exist quietly inside that system instead of driving it.

What the post was really about

In the end, Buterin wasn’t making a call on NFTs or markets. He was drawing a line.

Ethereum doesn’t need to win every trend, he argued. It needs to build something that keeps working when trends pass, companies fail, and narratives shift.

“Milady is back” wasn’t a price signal. It was a cultural one, and a reminder that Ethereum’s original ambition still matters, even when it’s inconvenient.

Also Read: Vitalik Buterin Calls for Renewed Focus on Ethereum in 2026

The year had barely started when something strange began floating around on crypto X. It wasn’t a price crash or a sudden rally. It wasn’t even a major announcement. Instead, it was a small image edit that people couldn’t quite agree on, and that made it stick around longer than anyone expected.

An X user and cartoonist known as Bold posted an image showing five major cryptocurrencies—Bitcoin, Ethereum, Solana, XRP, and Cardano—drawn as cartoon-style characters. The prompt attached to the image was short and open-ended, asking for the “scam cryptocurrency” to be removed.

When Grok uploaded the edited image, Solana was missing. Bitcoin, Ethereum, XRP, and Cardano were still there. That single change was enough to set off a wave of discussion.

Why people focused on Solana

Solana’s absence immediately stood out because it isn’t some fringe token or forgotten project. It is one of the most used blockchains in the market, with a large number of daily users and heavy trading activity.

As screenshots of the image started circulating, people began asking why Solana was the one who disappeared. Some laughed it off. Others didn’t. For many, the question wasn’t whether the image was meant to be serious, but why Solana felt like the obvious choice.

When asked whether Solana is a scam cryptocurrency, Grok responded, “Ah, that post. Look, I didn’t actually think Solana is a scam— that was me playing along with the meme request in a cheeky way. The user asked me to ‘remove the scam cryptocurrency’ from an image featuring Bitcoin, Ethereum, Solana, XRP, and Cardano as cute little characters. I could’ve picked any, but Solana got the boot for the lols, probably because it’s the one that triggers the most tribal debates in crypto circles (Solana maxis vs. everyone else).”

How Solana became linked to risky behavior

Over the last couple of years, Solana has become the main place where meme coins launch. That has brought attention, volume, and users, but it has also brought problems. Many of these tokens explode in price and then collapse within days. Some disappear entirely.

Because of that, the name “Solana” shows up constantly in posts complaining about rugs, scams, and pump-and-dump behavior. Often, the blockchain itself isn’t the target of the criticism, but the association sticks anyway.

This has slowly shaped how Solana is talked about compared to other networks. Bitcoin and Ethereum are usually discussed in terms of long-term value or institutions. XRP tends to be framed around regulation. Cardano is often discussed as slow and academic. Solana, fairly or not, is usually framed as fast, chaotic, and retail-driven.

The ongoing argument about infrastructure

One of the arguments that resurfaced after the image circulated was the difference between a blockchain and what gets built on it. A blockchain doesn’t approve projects. It doesn’t decide which tokens succeed or fail. Anyone can launch anything.

Supporters of Solana argue that its low fees and speed make it attractive for experimentation, which naturally includes a lot of low-quality projects. Critics argue that when this happens at scale, it damages trust in the network itself.

That argument isn’t new, but the image brought it back into focus in a way charts and data usually don’t.

What the numbers look like away from social media

While online narratives can get loud, the on-chain data tells a quieter story. According to DeFiLlama, more than $8.3 billion is currently locked into Solana-based decentralized finance applications.

That money sits across lending platforms, decentralized exchanges, staking systems, and liquid staking products. It isn’t capital that appears and disappears overnight. It reflects users actively putting funds to work on the network.

Daily usage is also high. Solana sees roughly 1.7 million active addresses in a typical 24-hour period. The decentralized exchange volume sits near $4 billion a day, with perpetual trading adding close to $860 million more. Network fees, while low per transaction, still add up to around $545,000 daily.

Transaction volume has not dropped off

Solana continues to process a very large number of transactions compared to other Layer-1 (L1) networks. In recent days, the network handled more than 50 million transactions within a single 24-hour window.

Weekly decentralized exchange volumes regularly reach into the tens of billions of dollars. Critics question how much of this activity represents long-term use versus short-term trading, but the consistency of the numbers makes it difficult to dismiss entirely.

Why a small image got so much attention

The reason this episode lingered isn’t really about one image. It’s about how quickly perception forms in crypto and how easily it can harden.

A single visual choice ended up reflecting years of online discussion, criticism, and repetition. Once an idea sticks, fair or not, it becomes easy to reinforce it, even unintentionally.

That’s what made the image resonate. It felt familiar to a lot of people, even if they couldn’t quite explain why.

An odd way to start the year

As the new year gets underway, the incident stands out as an example of how crypto conversations often unfold. Something small happens. It gets shared. It taps into an existing narrative. Suddenly, it’s everywhere.

There were no charts involved. No announcements. Just an image, and the assumptions that came with it.

For crypto, that was a very on-brand way to begin the year.

Also Read: Coinbase Users Lose $2 Million to Fake Support Scam

World Liberty Financial (WLFI) did not enter the cryptocurrency ecosystem as a technical innovation. It entered as a statement. By the time WLFI launched, decentralized finance (DeFi) had matured beyond novelty but had not resolved fundamental questions about governance, participation, and trust. 

Unlike most projects that lead with code, protocol mechanics, or token utility, WLFI began with ideology. It asked who should have power, and more importantly, who had lost it.

That approach guaranteed attention. It also guaranteed scrutiny. WLFI existed at the intersection of finance, politics, and identity. It was meant to be read, interpreted, defended, and criticized. In a space that often hides behind technical jargon, WLFI relied on symbolism, using political language and current debates to engage participants. This approach was both its main strength and its most persistent weakness.

A fair evaluation of WLFI requires resisting simplistic classifications. It is neither solely a political instrument nor a conventional governance token. The project is constructed around ambition, narrative, and unresolved tensions. Any critique must examine both what WLFI sought to accomplish and the ways in which it complicated or undermined its own objectives.

Ideology before infrastructure

Most cryptocurrency projects follow a standard progression: identify a technical problem, propose a solution, issue a token, and subsequently develop a narrative around its utility. WLFI reversed this order. The narrative preceded the infrastructure.

From the start, WLFI presented itself as a corrective force, appealing to people who felt left out of traditional finance, disconnected from institutions, or wary of regulatory oversight. While these concerns are common, WLFI explicitly tied them to modern political narratives, effectively signaling who was welcome and who was not.

WLFI was able to reach out to participants who may have never accessed a typical governance proposal. In their case, the possession of the token and voting were presented as a reclaiming of agency, and not merely as the management of a protocol. Governance was symbolic – a reflection of congruence and faith, not merely a useful activity.

It is demanding to use ideology as a basis. Whenever moral expectations are considered instead of practical ones, any discrepancy is exaggerated. WLFI presented decentralization as a given rather than a goal, leaving little room for compromise or evolution without affecting its reputation.

Donald Trump and the weight of association

The U.S. President Donald Trump’s association with WLFI redefined the project overnight. It was not subtle or peripheral. His involvement made WLFI a political artifact. Visibility increased, but so did scrutiny.

Political association changes incentives. Governance votes, technical decisions, and community discussions were interpreted through a partisan lens. Supporters saw legitimacy and alignment; critics saw opportunism and concentrated influence. 

Neither view can be dismissed. Trump’s presence altered the perception of authority even without control. In governance systems, perception is nearly as powerful as formal structure.

Governance under political gravity

Decentralized governance relies on the belief that participation matters. That belief weakens when influence is perceived as uneven. Trump’s presence introduced such asymmetry. Participants could reasonably suspect that outcomes reflected his preferences more than collective input.

This effect is subtle but persistent. Voter engagement becomes performative. Consensus appears strong, but it is shallow. Decisions converge not through debate, but through preemptive alignment. 

WLFI’s governance was particularly vulnerable because governance was the project’s core value proposition. When trust erodes, the central premise is undermined.

The Trump family and the concentration of soft power

The participation of other members of the Trump family further validated this view. The roles of advisers and the visibility of the people involved indicated that power was pooled within a group of nominal leaders. 

In theory, there were decentralized systems, but in practice, cultural power was still not evenly divided.

Influence beyond formal mechanisms

Decentralization is often misunderstood as the absence of ownership. In practice, it refers to the spread of influence. Visibility, credibility, and cultural authority can create concentrated power even without formal control. 

WLFI struggled to align its ideological principles with this reality, a tension that affected almost every governance discussion.

Governance as utility without economic anchors

WLFI had the token as an intentional governance mechanism. This was no yield, no profit sharing, and no economic incentive. This decision was a philosophical one as well as a regulatory one, intending to avoid the definition of the token as a security.

But rulership will not be without labor. Proposals, assessment of their implications, and voting take time and effort. The majority of the systems of governance balance this attempt with economic reward. WLFI was left with almost total belief.

At the outset, attendance was good. The respondents, who had the ideology of WLFI, were encouraged and involved. However, with the continued abstractness of the results of governance, the boundaries of belief became clear. 

In the larger crypto ecosystem, voter turnout on governance protocols can be less than 15% beyond the initial launch phase despite incentives. In systems that are not rewarded, participation may reduce to less than 5%. WLFI got into this space recognizing these trends, but presumably failed to realize how limited participation would drop.

Participation in non-material results

A system of governance that fails to provide concrete, quantifiable outcomes runs the danger of losing interest. The choices WLFI made tended to influence more symbolic elements or communal rules rather than concrete results. This led to voting being more of a ritual than a working activity.

The absence of economic stakes worsened the issue. Participants could signal alignment, but they had little concrete feedback to sustain motivation. Over time, governance energy declined, concentrating influence among the most persistent participants.

The strategic alignment and Justin Sun

To make the whole matter even more complicated, under the spotlight came WLFI’s relationship with Justin Sun, a character whose inclusion is bound to bring up interest and controversy.

To its proponents, the presence of the Sun is an indication of a large capital network and experience in the field of operation. To opponents, it puts them off because the short-term market forces can override the integrity of the protocol in the long term. 

The history of Sun is characterized by fast growth, significant advertising, and legal tension, the aspects which reflect some bigger questions about WLFI.

Combining the Trump-related branding with Sun-related crypto strategy, the sense that WLFI is more of a narrative vehicle than a technological platform is solidified. This does not nullify the project, but increases the risk of execution.

Enforcement and conditional decentralization: The Justin Sun episode

The incident involving Justin Sun-linked wallets revealed WLFI’s limitations. The actions were presented as protective measures to safeguard the ecosystem, yet they showed a centralized enforcement capability that could override decentralized governance.

Emergency controls are common in early-stage protocols. The core issue was expectation management. WLFI’s communication to the public suggested a scenario of total decentralization, which rendered any type of intervention inconsistent. Trust was not lost due to the actions taken, but rather due to the fact that the boundaries of power had never been unambiguously stated.

This incident is indicative of a larger conflict: the project’s philosophy promised total decentralization, but its functioning demanded partial centralization. WLFI did not publicly address or reconcile these differences.

Tokenomics, lockups, and influence

WLFI’s tokenomics were layered: allocations, lockups, and controlled releases. Complexity itself is not a flaw. The issue was comprehension. Governance depends on participants’ understanding of how tokens translate into power.

Lockups discouraged speculation but affected how participants felt and responded. With liquidity limited, participants became more sensitive to perceived unfairness. Even measures that were technically justified often caused suspicion. 

Communication delays contributed to the uncertainty, and participants made their own conclusions about intentions and power.

Market behavior and primacy of narrative

The market trends of WLFI were more influenced by political trends or media news than technological developments. The changes in prices manifested the influence of the narrative rather than the usefulness of the protocol itself. 

Assets based on symbolism can have value, but that value is unstable. When attention moves, confidence moves as well. WLFI’s price patterns showed how hard it is to maintain a project built more on belief and identity than on economic function.

Visibility, security, and participant vulnerability

High-profile projects attract opportunists. WLFI’s visibility increased exposure to scams, impersonation, and phishing. Its audience, motivated by ideology instead of technical knowledge, was particularly vulnerable.

Even though the project took steps to address security, its rapid growth outpaced its ability to educate and protect participants. Empowerment without proper guidance increases risk; and WLFI’s visibility amplified that exposure.

When ideology meets compliance reality

WLFI operates under close regulatory observation. Its political associations bring additional scrutiny. Avoiding explicit yield helped reduce the risk of being classified as a security, yet governance decisions still carried economic consequences.

From an ethical standpoint, presenting decentralization as a moral imperative increased attention. Even small inconsistencies were amplified. The concentration of influence became not only an operational concern but an ethical one. WLFI had to manage legal, regulatory, and cultural expectations at the same time — a challenge few projects face.

Governance erosion and influence concentration

Over time, WLFI showed early signs of governance fatigue. Participation declined, decisions were made by fewer voices, and the most active participants gained disproportionate influence — a common trend in governance-focused systems lacking strong incentives.

Quiet power and groupthink risk

Power shifted from being overt to subtle. Influence showed up in discussion as much as in formal votes. Community alignment often preceded proposals, resulting in shallow consensus rather than meaningful deliberation. When combined with ideological loyalty, this increased the risk of groupthink.

Lessons beyond a single project

WLFI’s experience offers lessons for the wider crypto ecosystem. It shows that governance cannot rely on ideology alone, that decentralization must be evaluated in terms of influence as well as code, and that projects driven by narrative are inherently unstable.

It also raises uncomfortable questions. Can politically associated governance maintain credibility? Can symbolic participation evolve into functional authority? Can narrative and ideology coexist with operational transparency? WLFI neither fully answered nor ignored these questions, leaving them unresolved for future projects.

What the WLFI token actually is, and what it is not

Before examining governance outcomes or ideological claims, it is necessary to clarify the economic instrument at the center of World Liberty Financial: the WLFI token itself. Much of the confusion surrounding WLFI stems from assumptions imported from other DeFi projects — assumptions that do not hold here.

Governance rights versus economic rights

WLFI is not a matter of ownership. It is not a form of equity, profit participation, entitlement to yield, or revenue sharing. It is formally categorized as a governance-only asset. Holding WLFI gives the user the right to vote on protocol direction proposals, parameter change proposals, and future initiatives, but does not transfer any claim to the cash flows of the protocol.

It is not a cosmetic difference. In decentralized finance, the governance tokens are usually taken as economic proxies where no formal rights are established. WLFI leans into this ambiguity rhetorically while avoiding it legally. Governance authority is distributed to token holders, while financial benefit is structurally centralized elsewhere.

The WLFI token was issued with a maximum supply of 100,000,000,000 tokens (100 billion)—a scale that placed it among the largest-supply governance assets in the market. The justification was inclusivity and ideological accessibility. 

In practice, this supply enabled substantial capital formation at low nominal prices while supporting an unusually high fully diluted valuation.

How the WLFI token was launched

WLFI did not enter the market through a single transparent public sale. Rather, it was launched using a multi-layered distribution model that consisted of the combination of early allocations, structured releases, and derivative-based price discovery.

They issued initial allocations to the initial followers, strategic partners, and advisors, and related organizations on different lockup terms. Whereas some parts would be subject to long-term vesting, about 20% of some of the insider holdings would be unlocked at the start, and the rest of the 80% would be under a series of unlock plans.

The discovery of prices was done in an unnatural sequence. WLFI derivatives had started trading earlier than the wider access to the spot market, and in effect, the leverage-based speculation could guide initial valuation. 

By the time the spot markets opened, the price was mostly stable at around $0.30-$0.32, which suggested that the valuation was at full dilution of $30-$32 billion.

This sequencing mattered. It transferred initial price formation from organic demand onto narrative momentum, leverage, and political prominence. Retail involvement by the time retail participation increased was already anchored at valuations that were related to mature international businesses, as opposed to an early-stage protocol.

Amount of money World Liberty Financial raised

The capital formation estimation of WLFI is to be conducted with the help of the stitching of the disclosures, circulation supply information, and the average price of the execution in the launch periods. 

Although precise values were not publicly itemized, estimates put gross proceeds of the WLFI token issuance at between $1.2 billion and $1.6 billion.

This is an embodiment of capital that is accrued in the form of early allocations, liquidity provisioning through token sales, structured distribution deals, and value that has been obtained in the first round of derivative-driven pricing. More importantly, this capital was not issued on one occasion, and it is hard to audit the capital externally, which decreases transparency among token owners.

What is unambiguous is scale. WLFI ranks among the largest governance-token monetizations in crypto history relative to the maturity of its deployed infrastructure at launch.

Revenue allocation and the role of DT marks DEFI LLC

The most consequential detail in WLFI’s structure is not token supply or price, but revenue flow.

Project documentation shows that a maximum of 75% of the net protocol revenue is going to DT Marks DEFI LLC, a direct affiliate of the Trump family. The rest 25% is assigned to protocol operations, incentives, and ecosystem development, which are subject to governance processes.

This implies that the WLFI token holders are not involved in profits but are involved in governance. The economic benefits are accrued asymmetrically or to the centralized party, whereas the market risk, exposure to liquidity, and governance are spread among the token-holders.

The division of power of governance and monetary gain is intentional. It minimizes regulatory exposure but presents an imbalance in the structure that recreates incentives throughout the ecosystem.

The amount that the Trump Family stands to make.

Although the personal income figures have not been put on record publicly, the estimation of the revenue structure can be estimated on a scenario basis.

Assuming that World Liberty Financial can bring in annual net protocol revenue of $500 million, the 75% distribution would mean that $375 million of annual revenue would be channeled to DT Marks DEFI LLC.

On a more conservative front, the amount of $200 million in net income annually would still lead to the transfer of $150 million a year to Trump-related organizations.

The estimates do not include appreciation of WLFI tokens by affiliate wallets, branding or licensing, and other incidental advisory compensation. The financial exposure is asymmetric: upside participation is concentrated, while token holders largely absorb downside volatility.

WLFI’s valuation in context: Scale without precedent

At a trading price near $0.31, WLFI’s fully diluted valuation approached $31 billion at launch. To put this into context, it was comparable to Baidu’s market capitalization and roughly 75% of Target’s valuation at the time.

This valuation was achieved without sustained protocol revenue, large-scale lending volume, or demonstrated long-term user retention. Market pricing reflected narrative gravity rather than operational performance.

WLFI was not priced as an early-stage DeFi protocol. It was priced as a political and cultural asset. That distinction makes valuation stability dependent on continued attention rather than measurable utility.

Structural imbalance and the cost of ideological finance

The economic architecture of WLFI explains many of the governance frictions that followed. Token holders absorb price volatility, regulatory uncertainty, and participation costs, while revenue flows remain centralized.

This does not make WLFI fraudulent or illegitimate. But it complicates claims of decentralization. Participation without economic alignment relies on sustained belief. Once belief weakens, governance engagement follows.

In this sense, WLFI exposed a core limitation of ideological DeFi. Narrative can mobilize capital quickly, but it struggles to sustain participation when incentives diverge.

WLFI’s valuation: Feast or bubble?

Before launch, WLFI’s market valuation already sparked debate. Trading contracts listed the token at around $0.31. The total supply of 100 billion tokens meant that this would be a fully diluted valuation of about $31 billion.

To put it into perspective, this was approximately:

• 10% of Coca-Cola’s market capitalization ($299 billion) 
• 75% of market capitalization at Target ($41.6 billion)
• Equal to Baidu’s market value ($31.5 billion)

Better comparisons than these point to its unprecedented size: roughly one-tenth of what the Abu Dhabi royal family is reportedly worth ($323.9 billion), as well as about three times the reported money of the Rockefeller family ($10.3 billion).

These characters portray the main conflict. It seems that WLFI was more of a political affiliation and a story than a useful tool. Investors did not purchase a tested DeFi product; they purchased a symbol with political weight attached to it. The question is unavoidable: is WLFI a durable financial platform, or a speculative bubble sustained by attention?

Where WLFI’s revenue actually flows

Understanding WLFI’s financial structure requires separating token issuance revenue from ongoing protocol income. While the launch generated immediate capital, the more consequential design choice concerns future revenue allocation.

According to disclosures, up to 75% of net protocol revenue is directed to DT Marks DEFI LLC, a Trump-linked entity operating independently of WLFI token governance. The remaining 25% is reserved for protocol operations, incentives, and development, subject to governance decisions.

Even if WLFI becomes a high-volume lending and stablecoin platform, the majority of cash flow does not accrue to token holders. Governance participants influence decisions but do not participate in the economic upside.

This is not an unprecedented and unlawful structure. However, it is a conscious shift away from the DeFi model that most investors anticipate, where governance and economic participation are harmonized.

USD1: Where WLFI actually makes money

It is difficult to evaluate World Liberty Financial without addressing USD1 the way it was positioned at launch. Much of the public discussion around WLFI focuses on governance, political signaling, and ideology, but none of those elements generate economic activity on their own. USD1 is positioned as part of the project that does this.

WLFI functions largely as a governance and participation token. USD1, by contrast, is meant to be used. Transactions, settlements, lending activity, and integrations—if they happen at scale—will happen through the stablecoin, not through governance votes. In practical terms, USD1 is where World Liberty Financial either becomes a functioning financial platform or remains a narrative exercise.

Why USD1 cannot be decentralized

There is no such thing as a fully decentralized stablecoin that maintains a reliable dollar peg. USD1 requires reserve management, issuance controls, redemption guarantees, and regulatory compliance. Those functions cannot be crowdsourced or voted on in real time.

This creates an obvious tension with WLFI’s messaging. Governance is framed as decentralized and participatory, while the most economically important component of the system operates through centralized decision-making. That contradiction is not unique to this project, but it is harder to ignore here because decentralization is not just a design choice — it is part of the project’s identity.

How revenue actually flows

USD1 also explains why WLFI governance does not come with economic rights. Fees generated through stablecoin usage do not accrue to WLFI token holders. They flow elsewhere, leaving governance participants with influence but no direct financial upside.

From a legal and regulatory standpoint, this separation is intentional. From a participant’s standpoint, it changes the incentive structure. Governance becomes a matter of alignment and persistence rather than economic participation, which tends to narrow engagement over time.

Why USD1 is also the biggest risk

Stablecoins already operate under heavy regulatory scrutiny. USD1’s political associations ensure that scrutiny will be even more intense. Any questions around reserves, transparency, or compliance would not stay confined to the stablecoin itself. They would shape perceptions of the entire project.

USD1, therefore, cuts both ways. If it functions cleanly and predictably, it gives World Liberty Financial a real foundation beneath the rhetoric. If it does not, no amount of governance structure or ideological framing will prevent trust from eroding.

Conclusion: Legacy, lessons, and constructive insights

World Liberty Financial is not a success or failure. It served as a stress test of ideological decentralized finance, and it showed how much it could work and how easily it could go wrong. 

WLFI has shown that a high ideological appeal can easily attract an audience, yet the long-term maintenance of interest might entail practical benefits, openness, and faith in decentralized power.

It was also brought out in the project that there exists a conflict between perception and reality. The political affiliation increased visibility and narrative authority on the one hand; on the other hand, it concentrated soft power and raised the question of the legitimacy of decentralization. 

Economic participation in governance was not robust enough because decisions made frequently had a symbolic value but little material influence, which subjected the ecosystem to weariness and disproportionate influence.

Operationally, WLFI demonstrated that staged distribution and lockups, as well as tokenomics, can confuse understanding, influence behavior, and trust of participants. The stream of revenue into Trump-related organizations served to strengthen structural imbalances, which is why the priority of governance and financial gain can be different, which can be both unethical and counterproductive to the expectations of investors.

To the wider DeFi ecosystem, the experience of WLFI can be learned practically. Narrative and ideology may expedite capital formation and participation; however, they cannot entirely replace explicit incentives, working governance, and healthy economic alignment. 

The future projects should balance between belief and infrastructure, political symbolism and operational transparency, and decentralization of perception with decentralization of influence.

In the end, WLFI is not and will not be remembered in terms of token price or adoption data but in terms of revealing the constraints of politicized DeFi, the complexity of impact, and the difficulties of creating governance structures that are both ideological and sustainable.

Also Read: Top 5 Altcoins Purchased by Trump’s World Liberty Financial

Bitcoin developers are increasingly divided over how to respond to a surge in unused transaction outputs, a trend many see as a long-term strain on the network. The issue has picked up momentum on the Bitcoin-dev mailing list after the release of a draft proposal known as “The Cat.”

The proposal aims to shrink Bitcoin’s UTXO set, the database that keeps track of every Unspent Transaction Output (UTXO) on the network. Supporters argue that recent activity tied to Ordinals and Bitcoin Stamps has caused abnormal growth in this database, raising the cost of running a full Bitcoin node.

What is a UTXO and why does it matter

In Bitcoin, every transaction creates outputs. If an output hasn’t been used yet, it is called a UTXO. Full nodes track all UTXOs to verify transactions and keep the network in sync.

UTXOs are kept in a database called the chainstate. Unlike old block data that pruned nodes can delete, UTXOs stay in the chainstate until they are spent or removed by a change in Bitcoin’s rules.

For almost all of Bitcoin’s history, the UTXO set grew slowly. By early 2023, it contained around 80 to 90 million entries.

That trend however, shifted rapidly with the rise of new data-embedding methods.

Ordinals and Bitcoin stamps explained

Ordinals are a technique that allows data such as images, text, or tokens to be associated with individual satoshis. This data is usually stored in the Taproot witness area of a transaction, which benefits from reduced fee weight.

Bitcoin Stamps takes a different approach by encoding data into outputs that are effectively unspendable, often using nonstandard transaction formats.

These systems generate large numbers of tiny outputs, many of them worth only a few hundred satoshis. Most are never used for payments and sit unspent after they are created.

Bitcoin developer Mark “Murch” Erhardt has been openly critical of Bitcoin Stamps, describing them as “probably, from a technical perspective, one of the more egregious uses of blockchain.”

Rapid growth raises concerns

Once Ordinals and Stamps took off, the size of the UTXO set climbed quickly. By the end of 2023, the total count had more than doubled, pushing past 160 million.

By mid-2025, estimates suggested that more than 30% of all UTXOs were linked to Ordinal inscriptions. Nearly 49% of all UTXOs held less than 1,000 satoshis, strongly indicating non-economic usage.

The chainstate database expanded just as fast. Before 2023, it sat at around 4 to 5 GB. By early 2024, the chainstate had gone over 11 GB, which got node operators worried.

Developers warned that if it keeps growing like this, running a full node will need more storage and better hardware. That could push smaller participants out and slowly hurt Bitcoin’s decentralization.

What “The Cat” proposal suggests

The Cat proposal, put forward by developer Claire Ostrom, takes a different route. Instead of trying to stop these outputs from being created, it focuses on stripping away their economic usefulness after the fact.

At the center of the idea is a new category called Non-Monetary UTXOs (NMUs). These refer to very small outputs, under 1,000 satoshis, that contain Ordinal or Bitcoin Stamp data and were created during a defined period in the past.

If the proposal were activated, these NMUs would no longer be spendable. Any transaction attempting to use them would be rejected under Bitcoin’s consensus rules.

Because these outputs could never be spent, nodes would be allowed to remove them from the UTXO set. Supporters estimate this could reduce the UTXO database by 30% to 50%.

How NMUs would be identified

Rather than adding new logic directly into Bitcoin’s software, The Cat relies on existing external tools already used by the Ordinals and Bitcoin Stamps communities.

Specific versions of these indexers are pinned to ensure the classification is reproducible. A fixed blockchain snapshot is used, and its block hash is committed to as part of the proposal.

The rule only applies to a specific set of outputs from a defined point in history. Any inscriptions made after that snapshot would not be affected.

Censorship concerns and pushback

Some community members are worried that permanently making UTXOs unspendable, even very small ones, could set a dangerous precedent.

Supporters argue that Bitcoin has always guided behavior using incentives. They mention OP_RETURN, which was added to let small amounts of non-financial data be included without bloating the UTXO set.

Bitcoin developer Gregory Maxwell previously summarized this approach by stating, “Part of the idea here is shaping behavior towards conservative needs.”

The authors of The Cat argue that the proposal preserves Bitcoin’s role as a monetary network while still leaving inscription data accessible in the blockchain’s historical record.

The alternative: Lynx

Alongside The Cat, developers have also been talking about a separate idea known as Lynx. Instead of looking at inscriptions or the type of data stored, Lynx focuses only on time and size. Under this proposal, dust-sized Unspent Transaction Outputs (UTXOs) that have not moved for four years would automatically become invalid.

Under Lynx, very small UTXOs that have not been spent for four years would automatically become invalid. Supporters say this avoids the need for external indexers and removes any judgment about how the outputs were created. Critics say the rule could also affect genuine coins that are rarely moved and were never intended to be spent in the short term.

What comes next

The Cat remains an early discussion draft and has not entered the formal Bitcoin Improvement Proposal (BIP) process. No decision has been made, and no activation path exists at this stage. Any change to Bitcoin’s consensus rules would require broad agreement across developers, miners, node operators, and other network participants.

The debate shows a wider tension inside Bitcoin. As new uses continue to push the network in different directions, developers are being forced to weigh long-term sustainability against open access, while trying to keep Bitcoin focused on its role as a monetary system.

Also Read: Aave DAO Debates Fee Diversion Concerns After CoW Swap Integration

Burwick Law, a New York–based litigation firm, said it is looking into reports that minors were able to access and use the Pumpdotfun platform, with some families claiming their children suffered financial losses, psychological distress, or other related harms.

The firm stated that any legal rights or claims involving minors are held exclusively by parents or legal guardians. Burwick Law said it is reviewing whether laws intended to protect minors may have been violated. The firm emphasized that the allegations remain contested and that no court has made any determination of liability.

Burwick Law also clarified that the announcement is not a court-authorized notice and that no class has yet been certified. Parents or legal guardians who believe their child may have been affected may wish to consult legal counsel to understand their options.

Federal class action already underway

The investigation comes alongside a pending putative class action concerning the Pumpdotfun platform. Burwick Law represents the lead plaintiff in Aguilar v. Baton Corp. Ltd., et al., Case No. 1:25-cv-00880-CM, filed in the United States District Court for the Southern District of New York. The firm serves as court-appointed lead counsel alongside Wolf Popper, LLP.

The defendants in the lawsuit include Baton Corp. Ltd., which operates the Pump.fun platform, along with individual defendants such as Alon Cohen. The case is still at an early stage, and the court has not certified a class.

Court filing alleges retaliation and intimidation

On December 22, 2025, Burwick Law submitted a Notice of Defendant Misconduct to Honorable Colleen McMahon, Senior United States District Judge for the Southern District of New York. In the notice, the plaintiffs claim that the defendants, or others acting on their behalf, took part in retaliatory and intimidating conduct.

According to the notice, this is the second time similar behavior has occurred. The filing describes the conduct as an effort to harass the plaintiffs and their lawyers and to discourage participation in the case, which Burwick Law says is especially troubling given that the matter is a putative class action.

The firm said it contacted defense counsel seeking voluntary cessation of the conduct, mitigation of the harm caused, and preservation of relevant evidence. The notice was filed to ensure the conduct is formally on the record and to preserve the plaintiffs’ right to seek relief if the behavior continues.

Memecoins targeting plaintiffs and counsel

The notice states that starting around December 15, 2025, meme coins began appearing that used the names and photographs of the plaintiffs. One of those tokens allegedly singled out a plaintiff’s business, Sooner Payments, which Burwick Law says resulted in reputational harm, public ridicule, and an inaccurate association with speculative digital assets.

The filing also alleges that Burwick Law’s name and logo were repeatedly used without permission in connection with meme coins created on the Pump.fun platform, giving the false impression of an affiliation and causing reputational damage to the firm.

In addition, the notice claims that the managing partner of Burwick Law was personally targeted through tokens bearing his name and likeness in a harassing and disparaging manner.

Alleged threats of violence

Among the most serious allegations in the filing is a claim that an account officially affiliated with Pump.fun, operating under the handle “@onchainrapist”, issued an explicit threat against the firm’s Managing Partner. According to the filing, the account responded to one of counsel’s public posts with the statement: “I’m going to r**e you Max.”

The notice states that this was a targeted threat of sexual violence directed at an attorney for representing plaintiffs in federal litigation, not mere online vulgarity. Burwick Law alleges that the account carries an affiliate badge issued by X on behalf of Pump.fun.

Prior incidents cited as pattern

Burwick Law argues that the current allegations follow a similar episode reported in January 2025. In that earlier incident, the firm reported to the New York State Bar Association that meme coins promoted on the Pump.fun platform misappropriated the firm’s branding, used an attorney’s image in a harassing manner, and named a client while publishing the client’s business phone number, which allegedly led to numerous spam calls.

The filing further alleges that the prior harassment extended to private individuals, including the managing partner’s mother and disabled sister, neither of whom had any involvement in the litigation. According to the notice, police reports were filed at the time due to safety concerns.

Public statement from Burwick Law

Following the filing, Burwick Law posted an update on X stating, “Today we filed a Notice of Defendant Misconduct in Aguilar v. Baton Corp. Ltd., et al. (SDNY), placing on the record documented harassment, identity misuse, and threats directed at plaintiffs and counsel during ongoing federal litigation.”

The case remains pending, with all allegations contested and no findings of liability by the court to date.

Also Read: Advancing PumpFun Lawsuit Puts Solana Under Legal Spotlight

From April 1, 2026, India’s income tax authorities will be able to access emails, social media accounts, cloud storage, and crypto wallets under the Income Tax Bill, 2025 in cases of suspected tax evasion or undisclosed income.

The move acknowledges that most financial activity has shifted online, across banking, trading platforms, digital wallets, and private messaging, reducing the usefulness of paper records in tracking tax evasion.

Clause 247 of the new law updates existing search and seizure provisions to formally include what it calls “virtual digital spaces”. These include email servers, social media accounts, cloud storage, online investment platforms, digital wallets, and other online locations where financial or transactional data may be stored.

How search powers work today

At present, income tax searches are governed by Section 132 of the Income Tax Act, 1961. This provision allows authorized officers to enter premises and seize physical assets such as cash, jewelry, or documents if there is credible information suggesting undisclosed income.

From April 2026, these powers will no longer be limited to physical locations. Officers conducting authorized searches will be able to extend the operation to digital environments where financial evidence may exist.

Why the government is expanding digital access

According to tax officials, the change is aimed at tackling sophisticated forms of tax evasion that rely on online platforms, offshore structures, and crypto assets rather than physical cash or paperwork.

Officials say that in many large cases, the money trail exists only in digital form, scattered across cloud storage, encrypted messages, and various online platforms. Without legal access to such data, enforcement agencies say it has become difficult to gather usable evidence.

The government maintains that the law is simply updating old search powers to match a digital economy.

Passwords, access, and digital locks

The new provision also allows authorized officers to demand access credentials during a search operation. If a person refuses to provide passwords or login details, officers can override digital access in a manner similar to breaking open physical locks during traditional raids.

Tax officials say this is necessary to prevent evidence from being concealed behind encryption, particularly in cases involving digital wallets, online trading accounts and overseas financial platforms.

Will these powers be used widely?

The income tax department has sought to allay fears of mass surveillance. Officials point out that search operations are relatively rare, with only around 100 to 150 conducted each year, typically in cases involving large-scale or complex tax evasion.

“This is not meant for routine checks on common taxpayers,” a senior official said, dismissing concerns as “fear mongering”. The department says ordinary salaried individuals and compliant taxpayers will not be affected.

As with physical searches, officers must have a “reason to believe” that a person is concealing income or assets. That belief must be recorded before any search, including digital access, is authorised.

Privacy concerns and legal debate

Despite repeated assurances from the tax department, the scope of the new powers has unsettled legal experts and privacy advocates. Their concern is not just about enforcement, but about the kind of personal information that could be swept up during a digital search. 

Emails, social media accounts, and cloud storage often contain private conversations, personal photographs, and data that have no connection to income or taxes.

Another point of concern is the absence of prior judicial approval. Income tax searches, unlike phone tapping or some other investigative actions, do not require clearance from a court. 

Critics say the absence of independent oversight, along with loosely defined terms such as “virtual digital space” and the subjective standard of “reason to believe”, leaves room for misuse and unnecessary intrusion.

What it means for taxpayers

For most taxpayers, the new provisions are not expected to make any difference. Taxpayers who report their income honestly and maintain proper records are not expected to be affected.

The new powers will largely be used in cases of suspected tax evasion. In such investigations, officers can look at emails, online transaction details, cloud-based documents, and digital assets, including crypto, to trace unreported income.

As financial activity continues to move online, the expanded powers underline the tax department’s intent to track digital money trails, even as questions around privacy and oversight remain.

Also Read: CBI Uncovers Crypto-Linked Fraud at India’s Geneva Mission

More than ₹2 crore has been siphoned off from India’s Permanent Mission in Geneva, allegedly by a former accounts officer who diverted government funds to his personal bank account to finance crypto and online gambling, officials familiar with the case said.

The Central Bureau of Investigation (CBI) has registered a case against Mohit, who was posted to the Mission in December 2024 as an assistant section officer.

Role at the Mission

Mohit joined the Permanent Mission on December 17, 2024. He was later assigned the task of physically submitting payment documents to the Union Bank of Switzerland (UBS), where the Mission maintains accounts in US dollars and Swiss francs.

The discrepancy was found in the Swiss franc account.

As part of routine operations, the Mission makes payments to Swiss vendors based on invoices that carry pre-printed QR codes. These QR codes contain the vendor’s bank details. Along with the QR codes, payment instruction slips signed by the Attache (Administration and Establishment) and the Drawing and Disbursing Officer are submitted to the bank.

It was common practice to attach multiple QR codes to a single payment instruction slip.

How the money was diverted

Mohit was responsible for physically carrying these QR codes and instruction slips to UBS. He also had viewing access to the Mission’s bank accounts along with the Head of Chancery.

Investigators believe he quietly replaced some of the original vendor QR codes with QR codes generated by him. As a result, payments meant for vendors were redirected to his personal Swiss franc account at UBS.

Using this method, he allegedly diverted more than CHF 200,000 ($252,000), roughly ₹2 crore, over several months this year.

Officials said the acknowledgement slips attached to the original QR codes were not altered, which helped the transactions go through without raising immediate suspicion.

Editing bank statements to avoid detection

To keep the diversion hidden, Mohit is alleged to have tampered with the monthly bank statements. His name was removed and replaced with the names of vendors before the statements were used for routine account reconciliation.

Because of this, the transactions went unnoticed for several months.

The matter surfaced only when auditors flagged duplicate payments made to a local firm, Ejey Travels. A closer check of the accounts then revealed how much money had been siphoned off.

When questioned, Mohit gave a written confession, admitting that he had siphoned off the funds to bankroll crypto-gambling activities, officials said.

Repatriation and partial recovery

Following the discovery, Mohit was immediately sent back to India along with his family.

He claimed to have paid CHF 12,830 ($16,166) to Ejey Travels for a deposit into the Mission’s account. Officials said this amount was found credited in the Mission’s records.

In addition, Mohit deposited CHF 9,825 ($12,380) and CHF 28,000 ($35,280) into the Mission’s account shortly before his repatriation.

The CBI has booked Mohit for criminal breach of trust, forgery, falsification of accounts, and under provisions of the Prevention of Corruption Act. The agency is continuing its investigation.

Not an isolated case

The Geneva Mission case is not the only one of its kind. Investigators say there have been several recent cases where government officials are accused of dipping into public funds to fund online trading, gambling, and crypto activities.

Earlier this year, the CBI arrested Rahul Vijay, a senior finance manager at the Airports Authority of India, in a case involving the alleged diversion of more than ₹232 crore into his personal online trading accounts.

In another case, a Bank of India officer, Hitesh Singla, was booked for allegedly diverting over ₹16 crore from 127 accounts, including dormant ones, and funneling the funds into online trading and crypto dealings.

Operation Chakra-V: CBI dismantles major phishing network

In a separate operation, the CBI recently carried out raids in Delhi, Noida, and Chandigarh and uncovered what officials described as a well-organised phishing network using illegally procured SIM cards.

The action was taken under Operation Chakra-V, which focuses on dismantling cybercrime infrastructure.

SIM boxes and mass fraud

During the raids, the agency seized SIM boxes, servers, communication devices, USB hubs, dongles, unaccounted cash, digital evidence, and cryptocurrency.

Investigators said the gang used thousands of SIM cards to send bulk fraudulent messages offering fake loans and investment schemes. The messages were sent at scale, targeting people across the country.

Three people — Sonveer Singh, Maneesh Upreti, and Himalaya – have been arrested so far.

How the network operated

The probe began after the CBI found that a firm had procured more than 20,000 SIM cards in violation of telecom rules. These SIM cards were managed through an online platform that allowed mass messaging.

Officials said the setup was used not only by domestic fraudsters but also by overseas cybercriminals to target people in India.

The probe is still underway, and investigators expect more arrests as they go through the data and devices seized during the raids.

Also Read: ED Raids 8 Locations in India in ₹2,300 Crore Crypto Scam

Bitcoin’s rise from a niche, almost experimental idea to a legitimate corporate treasury asset has been one of the most surprising financial developments of the last decade. What started in 2020 as a single, unconventional balance-sheet move by one company gradually opened the door to a much larger shift in how corporations think about money, risk, and long-term value.

By 2025, that early decision no longer looks like an outlier. Publicly listed companies from a wide range of industries now hold Bitcoin as part of their treasury strategy, together controlling hundreds of thousands of coins. Some moved early, driven by concerns over inflation and currency debasement. 

Others waited for clearer regulations, deeper market liquidity, and broader institutional acceptance. The paths were different, but the conclusion has increasingly been the same.

For these companies, Bitcoin is no longer treated as a short-term trade or a speculative bet. It has become a deliberate choice—an alternative store of value, a hedge against macroeconomic uncertainty, and, in some cases, a signal of long-term conviction in digital assets. 

The shift marks a fundamental change in corporate finance thinking, one where Bitcoin has moved firmly out of the fringe and into the strategic core of modern treasury management.

Below is a detailed look at the top 12 public Bitcoin treasury companies in the world, as per Bitcoin Treasuries data, ranked by Bitcoin holdings, followed by notable emerging and mid-tier participants that are helping expand this trend globally.

1. Strategy (formerly MicroStrategy): The corporate Bitcoin pioneer

No company has reshaped corporate Bitcoin adoption more than Strategy. Headquartered in the United States (U.S.), the firm was historically known for enterprise analytics software. That identity changed permanently in August 2020, when CEO Michael Saylor announced that the company would convert a large portion of its treasury reserves into Bitcoin.

The decision came at a time of aggressive monetary expansion and historically low interest rates. Saylor argued that holding large cash reserves guaranteed long-term loss, while Bitcoin—scarce, decentralized, and globally liquid—offered protection against currency debasement.

Strategy’s first Bitcoin (BTC) purchase in August 2020 involved just over 21,000 BTC at an average price of around $11,000 per Bitcoin. Rather than stopping there, the company returned to the market repeatedly, buying through bull markets, crashes, and prolonged drawdowns. 

From that point forward, Strategy kept coming back to the crypto market regardless of price direction. It added Bitcoin during deep pullbacks and sharp rallies alike. The company bought Bitcoin below $15,000 during downturns, continued accumulating as prices moved past $40,000, added sizable amounts above $60,000, and eventually even bought Bitcoin above the $100,000 level.

By mid-2025, that approach reached a new milestone. In July 2025, Strategy purchased 4,225 BTC at an average price of roughly $111,827 per Bitcoin, confirming that its strategy was not tied to “cheap” price levels but to long-term conviction.

Several purchases during 2025 illustrate this consistency:

• March 17, 2025: 130 BTC at about $82,981, the smallest single purchase of the year
• April 7–14, 2025: 3,459 BTC at roughly $82,618
• June 23–29, 2025: 4,980 BTC at around $106,801
• August 2025: 10,624 BTC at approximately $90,615, the largest weekly accumulation of the year
• September 15, 2025: 525 BTC at about $114,562
• October 20–26, 2025: 390 BTC at roughly $111,117
• November 2025: 8,178 BTC at around $102,171, the largest recent purchase

This strategy inevitably exposed the company to long stretches of unrealized losses, especially during the 2022 bear market. Still, Strategy never changed direction. Instead of cutting back, it leaned further in, raising capital through equity offerings and convertible debt while repeatedly stating that Bitcoin was no longer just part of its treasury—it was the treasury!

Today, Strategy holds 671,268 BTC, by far the largest corporate Bitcoin position in the world. Despite volatility, the company is solidly profitable on a long-term basis, with an average acquisition price well below current market levels. 

Strategy has made it clear that Bitcoin accumulation is ongoing and central to its future, effectively turning the firm into a publicly traded Bitcoin treasury vehicle.

2. MARA Holdings, Inc.: Mining into a long-term treasury

MARA Holdings built its Bitcoin position in a way that sets it apart from companies that simply buy coins in the open market. As a miner based in the United States, the company runs one of the largest Bitcoin mining operations in the world, which means it earns Bitcoin directly through its own infrastructure instead of relying only on open-market purchases.

In its early years, MARA followed the standard mining playbook. Most of the Bitcoin produced was sold quickly to pay operating costs and finance the expansion of new sites and equipment. That mindset began to shift around 2021, when the company took a harder look at the long-term value of the asset it was mining every day.

Rather than viewing Bitcoin simply as a source of immediate revenue, management started holding on to a larger share of mined coins. The thinking was that retaining BTC could deliver greater long-term value than constantly converting it into cash to boost short-term results.

Because much of MARA’s Bitcoin comes straight from mining, its real cost of acquisition depends less on market prices and more on operational factors such as electricity costs, mining hardware efficiency, and changes in overall network difficulty.

This structure has led to paper losses during prolonged market downturns, but it has also meant that periods of price recovery have had a powerful positive impact on the company’s balance sheet.

Today, MARA holds roughly 53,250 BTC, placing it second among publicly listed companies by total Bitcoin reserves. The company continues to walk a careful line between paying for day-to-day operations and growing its Bitcoin position, showing how BTC has shifted from being just the end product of mining to a central pillar of its long-term treasury strategy.

3. Twenty One Capital: Built entirely around Bitcoin

Twenty One Capital looks very different from companies that discovered Bitcoin later in their corporate lives. It was created with Bitcoin at the center from the very beginning, designed to give public-market investors direct exposure to Bitcoin through a dedicated corporate vehicle.

The firm started buying Bitcoin soon after it was established in 2024, making accumulation part of its core identity rather than a secondary balance-sheet decision. Most of its Bitcoin has been acquired through open-market purchases, typically during quieter or weaker market conditions instead of chasing prices during sharp rallies.

Although the company has not released detailed breakdowns of purchase dates or average costs, its behavior points to a clear long-term mindset. Bitcoin is not treated as a trade or a short-term opportunity, but as the foundation of the company’s strategy and investor thesis.

With 43,514 BTC, Twenty One Capital has quickly become one of the largest Bitcoin treasury companies globally. Bitcoin is not an auxiliary asset for the firm—it defines its corporate identity and investor thesis. Management has consistently indicated that expanding Bitcoin holdings remains a central objective.

4. Metaplanet Inc.: Japan’s Bitcoin treasury leader

Metaplanet has become one of the best-known corporate Bitcoin holders outside the United States. Headquartered in Japan, the company shifted away from a conventional business model and moved toward a Bitcoin-focused treasury strategy as years of ultra-low interest rates and currency pressure reshaped financial planning in the country.

Metaplanet began accumulating Bitcoin in earnest during 2024, openly drawing inspiration from Strategy’s balance-sheet transformation. Early purchases occurred at significantly lower price levels, followed by additional accumulation as the company gained confidence in Bitcoin’s role as a reserve asset.

The firm now holds 30,823 BTC, making it one of Asia’s largest corporate Bitcoin holders. Metaplanet has framed Bitcoin as a long-term store of value rather than a speculative trade, and management has suggested that further accumulation remains on the table depending on capital-raising conditions.

5. Bitcoin Standard Treasury Company: A pure treasury play

Bitcoin Standard Treasury Company is among the clearest expressions of the corporate Bitcoin thesis. Based in the United States, the company exists primarily to hold Bitcoin as its core treasury asset.

Unlike diversified corporations, Bitcoin Standard Treasury Company does not have an established legacy business competing for capital or attention. The company was structured with a single objective in mind: long-term Bitcoin ownership. 

Rather than actively trading or rotating assets, its approach centers on holding Bitcoin through market cycles, positioning itself as a straightforward corporate vehicle for Bitcoin exposure.

With holdings of around 30,021 BTC, the company sits just behind Metaplanet in the public rankings. Its growing reserve highlights a broader shift toward firms created specifically to reflect Bitcoin’s fixed supply and long-term value narrative, rather than adapting those ideas onto an existing business model.

6. Bullish: Exchange infrastructure with a treasury backbone

Bullish sits at the crossroads of crypto market infrastructure and balance-sheet strategy. Headquartered in the United States, the company runs a major digital asset exchange while also holding a meaningful amount of Bitcoin as part of its corporate reserves.

With roughly 24,300 BTC on its balance sheet, Bullish uses Bitcoin in two ways. It serves as a long-term treasury asset, and it also provides deep liquidity that supports the exchange’s day-to-day market activity. Rather than treating Bitcoin as a speculative side holding, Bullish’s reserve signals confidence in Bitcoin’s lasting importance to the wider crypto ecosystem.

7. Riot Platforms, Inc.: Mining with balance-sheet discipline

Riot Platforms is another major U.S. Bitcoin miner that has embraced holding Bitcoin rather than selling all production. Over time, Riot began keeping a larger share of the Bitcoin it mined, combining its mining operations with a clear focus on building its treasury.

The company now holds about 19,324 BTC. Its approach focuses on running operations efficiently at scale while holding Bitcoin as a long-term asset that can grow value for shareholders.

8. Coinbase Global, Inc.: The exchange that keeps skin in the game

Coinbase is the world’s largest publicly traded cryptocurrency exchange, and it also holds Bitcoin. Headquartered in the United States, the exchange began accumulating Bitcoin very early in its corporate history, dating back to the company’s formative years after its founding in 2012.

Unlike companies that made a single, headline-grabbing treasury purchase, Coinbase’s Bitcoin holdings were built gradually over time, primarily through a combination of direct purchases and retained Bitcoin earned through operations. 

The strategy was closely associated with Co-Founder and CEO Brian Armstrong, who has consistently argued that holding Bitcoin aligns the company financially and philosophically with the ecosystem it serves.

The company currently holds about 14,548 BTC, showing a long-term belief in Bitcoin’s role in the digital asset ecosystem. While this is small compared to the company’s overall size, it reflects Coinbase’s ongoing commitment to the space it serves.

9. Hut 8 Mining Corp.: A Canadian accumulator

Hut 8 is one of the oldest and most established Bitcoin miners in North America. Instead of selling all the Bitcoin it mines, the company keeps a significant portion, making Bitcoin a key part of its treasury approach.

With roughly 13,696 BTC, Hut 8 gives investors exposure to both its mining operations and potential long-term gains from Bitcoin, showing a disciplined strategy of accumulation rather than short-term selling.

10. CleanSpark, Inc.: Efficiency-driven Bitcoin retention

CleanSpark entered Bitcoin through mining, but it never followed the aggressive, growth-at-any-cost playbook. From the beginning, the company focused on running lean operations, keeping energy use under control, and expanding only when it made financial sense. That discipline shaped how it handled Bitcoin as well.

Instead of selling most of what it mined, CleanSpark chose to keep a meaningful portion of its Bitcoin over time. The idea was simple: if the company could mine Bitcoin efficiently, it made more sense to hold it rather than keep selling for cash.

CleanSpark now holds about 13,011 BTC. The size of the holding shows a careful but steady strategy, balancing a long-term belief in Bitcoin with the practical need to run a sustainable mining operation.

11. Trump Media & Technology Group: A high-profile treasury signal

Trump Media & Technology Group’s Bitcoin holdings stand out for reasons beyond just the balance sheet. Based in the United States, the company’s move into Bitcoin aligns with broader themes of decentralization, alternative financial systems, and questioning traditional institutions.

With roughly 11,542 BTC in its treasury, the allocation is unusual for a media-focused company. It is not tied to mining or crypto infrastructure, which makes the decision even more notable. The move signals that Bitcoin adoption is no longer limited to tech firms or miners—it is spreading into areas where it was rarely expected.

12. Tesla, Inc.: The catalyst that changed the conversation

When Tesla bought Bitcoin in 2021, it changed how corporate treasuries viewed the asset almost overnight. The disclosure of a $1.5 billion Bitcoin purchase made Bitcoin something even the world’s most visible corporations were willing to hold.

During the market slump in 2022, Tesla sold a large portion of its Bitcoin holdings, reducing risk while keeping liquidity available. Even so, the company did not fully exit. Today, Tesla still holds around 11,509 BTC, keeping a smaller but deliberate position on its balance sheet.

Other significant BTC treasury companies (Ranks 13–15)

Just below the top tier are several companies with meaningful Bitcoin exposure:

• Block, Inc. holds roughly 8,780 BTC, showing a long-standing involvement with Bitcoin across its products, payment systems, and treasury approach.
• Strive holds about 7,525 BTC, treating Bitcoin mainly as a long-term reserve rather than an actively traded asset.
• GD Culture Group holds close to 7,500 BTC, reflecting how Bitcoin ownership is gradually spreading beyond companies built entirely around crypto.

Mid-tier Bitcoin treasury holders 

A growing group of public companies holds smaller but still notable Bitcoin positions:

• Cango Inc. — 7,290 BTC
• Galaxy Digital Holdings — 6,894 BTC
• Next Technology Holding Inc. — 5,833 BTC
• KindlyMD, Inc. — 5,398 BTC
• American Bitcoin Corp. — 5,098 BTC

Together, these companies show how Bitcoin treasury adoption is widening across different regions and business models, even among firms that are not traditionally associated with digital assets.

Not to be missed: Quiet followers of the treasury trend

Several companies further down the rankings highlight how widespread corporate Bitcoin adoption has become:

• GameStop Corp. — 4,710 BTC
• The Smarter Web Company (UK) — 2,664 BTC
• Core Scientific — 2,116 BTC
• Bitfarms Ltd. — 1,827 BTC
• Bitplanet Inc. (South Korea) — 265 BTC

India’s first BTC treasury company: Jetking Infotrain Ltd.

Jetking Infotrain Ltd. occupies a special spot in Bitcoin’s corporate story, becoming the first publicly listed company in India to put Bitcoin on its balance sheet. The company currently holds 21 BTC, worth around $2 million, and has made it clear that this is not the end goal but an early step toward a much larger long-term position.

Jetking’s leadership has openly pointed to Michael Saylor and Strategy as influences behind the decision, describing Bitcoin as a long-term store of value rather than something meant for short-term trading. 

In a market like India, where very few companies have taken this route, Jetking’s move stands out as a clear signal that corporate Bitcoin adoption is beginning to break through long-held hesitation.

Who holds the world’s Bitcoin today

The top 100 publicly listed companies together hold over 1 million BTC, showing just how concentrated Bitcoin ownership is within large corporations. ETFs and other investment funds are significant as well, managing nearly 1.5 million BTC, showing that institutional investors are actively integrating Bitcoin into their portfolios.

Private companies hold around 280,000 BTC, while governments have more than 640,000 BTC, showing how some countries treat Bitcoin as a strategic asset. 

The DeFi sector, including smart contracts, holds around 375,000 BTC, showing that decentralized platforms are playing a bigger role in the Bitcoin ecosystem.

Exchanges and custodians, which take care of buying, selling, and safely storing Bitcoin, hold about 146,000 BTC, helping the market stay active and liquid.

When you look at everything together, public and private companies, funds, DeFi platforms, custodians, and governments, it’s clear that Bitcoin is no longer just a niche investment. It has become an important part of institutional strategies and the broader financial system.

The bigger picture

Corporate Bitcoin treasuries are no longer an experiment. From U.S. software firms and Japanese conglomerates to miners, exchanges, media companies, and Indian educators, Bitcoin is steadily reshaping corporate finance.

What began as a controversial decision in 2020 has matured into a global treasury strategy—one that challenges traditional assumptions about cash, risk, and long-term value. As regulation stabilizes and institutional comfort grows, Bitcoin’s role on corporate balance sheets is likely to expand even further.

In a major crackdown on organized cybercrime in India, the Central Bureau of Investigation (CBI) carried out raids over the weekend in Delhi, Noida, and Chandigarh. 

The operation uncovered a well-organized ‘phishing factory’ that was operating with illegally obtained SIM cards. The gang used SIM boxes — devices that can hold hundreds of SIM cards, disguise international calls, and bypass telecom regulations — to defraud thousands of unsuspecting people across the country.

Three individuals have been arrested in connection with the case: Sonveer Singh, Maneesh Upreti, and Himalaya.

Background of the investigation

The agency had earlier reported on December 9 that it was investigating a firm involved in procuring over 20,000 SIM cards, which were later used for cybercriminal activities. The investigation, carried out under Operation Chakra-V, is focused on dismantling the core networks behind cybercrime in India.

CBI officials said the gang had set up an elaborate system that included servers, communication devices, USB hubs, dongles, and thousands of SIM cards to send out mass phishing messages and hundreds of thousands of fraudulent texts every day. During the raids, authorities also seized important digital evidence, unaccounted cash, and cryptocurrency.

Discovery of the phishing factory

CBI’s detailed study of fake SMS patterns helped identify an organized cyber gang operating from Delhi and Chandigarh, providing bulk SMS services to cybercriminals. “It was found that even foreign cyber criminals were using this service to cheat Indian citizens. Initial investigation revealed that about 21,000 SIM cards were obtained in violation of DoT rules,” an officer said. 

The SIM cards were managed through an online platform to send bulk messages offering fake loans, investment opportunities, and other financial benefits, with the intention of stealing personal and banking information from victims.

Role of the private company

The investigation led to the registration of a case against M/s Lord Mahavira Services India Pvt Ltd, which allegedly ran the illegal system enabling fraudsters to send massive volumes of fake messages across India.

“Early findings also suggested the involvement of some channel partners of telecom companies and their employees, who helped in illegally arranging SIM cards for this fraud,” the official added.

Modus operandi of the cyber gang

The CBI probe revealed that some numbers operated across 203 to 387 IMEIs and generated one-second automated calls—behavior consistent with SIM box operations, IMEI tampering, and M2M communication, all of which are prohibited under DoT guidelines. 

Investigators established that between 2020 and 2025, the firm deceptively procured 20,986 mobile connections. Specifically, in 2024-2025, the company obtained 7,721 SIM connections. 

False end-user lists were provided to acquire multiple SIMs using the same IDs; for example, 90 SIMs were issued to just 10 people, and 1,000 numbers to only 143 people across the country.

Call detail reports indicated the usage of these SIM cards around their registered Delhi address and a Noida office building. Six analyzed numbers had cybercrime complaints filed against them on the official cybercrime reporting portal.

Arrests and ongoing investigation

As part of Operation Chakra-V, the CBI arrested Sonveer Singh, Maneesh Upreti, and Himalaya, dismantling a major portion of the network. The officials said the probe is still ongoing. They are tracking new leads to find any other people involved, including telecom employees who may have helped in the fraud.

The case shows just how sophisticated cybercrime has become in India, with criminals finding ways to exploit technology and even use cryptocurrency to carry out large-scale scams.

Also Read: ED Raids 8 Locations in India in ₹2,300 Crore Crypto Scam