DL News

The price of Bitcoin and Ethereum held steady on Saturday after US President Donald Trump said he would raise temporary tariffs on almost all imports from 10% to 15%.

Bitcoin was up nearly 2% over a 24-hour period, trading at $68,273, at midday in New York, according to CoinGecko. Ethereum rose by 2% over the same time and was trading hands for close to $1,987.

Trump wrote on his social media platform, Truth Social, that the move would be “effective immediately” on the “countries, many of which have been ‘ripping’ the US off for decades, without retribution (until I came along!).”

The announcement came after the Supreme Court struck down his previous tariff program as invalid on Friday.

Trump had hours after the court’s ruling imposed a 10% global tariff on foreign goods.

Tariff shock no more?

Crypto markets have previously reacted negatively to Trump’s trade announcements. In April, Trump’s Liberation Day speech shed billions of dollars off Bitcoin, Ethereum, and XRP.

Markets then rebounded but were shocked again in May following further threats on the European Union.

Though markets are less volatile now with Bitcoin and Ethereum well below the records they set in 2025 following two brutal selloffs. Crypto prices have struggled to recover following the biggest liquidation event in the history of the industry back in October.

Bitcoin rose only slightly after the Supreme Court struck down Trump’s signature tariff policy on Friday, ruling that the president had acted unlawfully in applying the reciprocal tariffs.

ETF flows

Price action from Bitcoin and Ethereum comes after a week of more redemptions from top US exchange-traded funds.

US investors cashed out nearly $316 million from the Bitcoin funds this week, with Friday the only day with positive flows. Their Ethereum counterparts, meanwhile, lost over $123 million.

Heavy redemptions from the products — managed by the likes of BlackRock, Fidelity, and Grayscale — usually come as prices take a hit, and Bitcoin and Ethereum over the past seven days are down 2% and 5%, respectively.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

Asset manager BNP Paribas Asset Management has become the latest TradFi giant to use Ethereum as part of a tokenisation push.

The investment arm of Paris-based bank BNP Paribas said Friday that it had used the top crypto network to issue a tokenised share class of a French‑domiciled money market fund.

“The tokenised fund shares were issued on the public Ethereum network with permissioned tokens ensuring that only eligible participants can hold and transfer the tokens, while benefiting from the strength and broad adoption of public blockchain infrastructure,” the firm said in a statement.

It added that it was the second such money market tokenisation trial it did — the first being in 2025 using a private blockchain.

“This second issuance of tokenised money market funds, this time using public blockchain infrastructure, supports our ongoing efforts to explore how tokenisation can contribute to greater operational efficiency and security within a regulated framework,” added Edouard Legrand, BNP Paribas Asset Management’s chief digital and data officer.

BNP Paribas did not immediately respond to questions from DL News.

Tokenisation trend

BNP Paribas isn’t the only one tapping permissionless, public blockchains as part of tokenisation experiments.

BlackRock and Franklin Templeton for years have used networks like Ethereum, Arbitrum, and Avalanche to tokenise money funds.

BlackRock’s BUIDL is right now the largest tokenized Treasury product, available on a number of blockchains but mostly running on Ethereum.

And New York asset manager WisdomTree also offers a fund on Ethereum. In January, it made its tokenised products available on Solana.

What’s next

BlackRock CEO Larry Fink has since 2022 spoken about the tokenisation of all assets.

Now, Wall Street’s push into the sphere is creating more mainstream crypto use cases, with proponents saying that tokenisation will reduce costs and provide more accountability in the TradFi space.

Crypto asset manager Grayscale said in 2025 that the tokenisation market will hit a market value of $35 trillion by 2030 as putting everything on the blockchain — from commodities to private equity and credit — will become the norm.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

With Bitcoin’s price down the pan, investors are now waiting to see what Federal Reserve Chair nominee Kevin Warsh will do to markets if he takes the helm in June.

Despite praising Bitcoin and calling for lower interest rates last year, markets initially priced in Warsh as a hawk — someone who would keep interest rates high in an aggressive bid to tamp down inflation. But it’s what Warsh might do with the Fed’s balance sheet that concerns investors.

Since the Great Recession, the Fed has purchased trillions of dollars of US Treasury bills, flooding banks, and, in turn, the economy with cash. That policy, known as quantitative easing, stimulated the economy, but it has also led financial markets to be addicted to central bank liquidity, Warsh has said.

Reducing its balance sheet could be a problem for Bitcoin, which has in the past benefited from quantitative easing.

Dilin Wu, research analyst at forex broker Pepperstone, told DL News it was “very likely” Warsh as Fed Chair could spark more volatility in crypto markets.

“Aggressive tightening [from Warsh] could shrink bank reserves just as tech firms ramp up leveraged infrastructure and AI spending,” she said “Mismanagement here could trigger stress.”

Hawk or dove?

While Warsh is aligned with Trump, who has aggressively pushed for lower interest rates, market observers have said he is a pragmatist who wouldn’t cut too quickly for fear of overheating the economy.

This explains Bitcoin’s price dip since Trump announced his nomination.

“The 14% [immediate] Bitcoin decline since his nomination reflects market concerns about his hawkish monetary philosophy overriding his crypto-friendly credentials in the near term,” Jimmy Xue, co-founder and chief operating officer of Axis, a liquidity infrastructure startup, said.

Still, experts told DL News that Warsh being a pro-crypto candidate would help Bitcoin in the long-run.

Warsh back in 2018 said that Bitcoin could “serve as a sustainable store of value, like gold.”

Marcin Kaźmierczak, Co-Founder of RedStone, a blockchain oracle network, said that while Warsh’s nomination in the short-term “spooked markets immediately,” a Warsh-led Fed “could paradoxically strengthen Bitcoin’s narrative as a hedge against monetary policy risk” in the long run due to him being personally sympathetic to the coin.

Narrative matters

Factors other than the Warsh nomination are weighing on Bitcoin’s price. One is its “narrative divergence,” David Lawant, Anchorage Digital’s head of research, said.

The asset last year was trading in line with gold as part of the so-called debasement trade — hedging against a currency losing value — but it has since diverged.

“Bitcoin is now trading more in tandem with non-AI tech assets, a cohort that has struggled over the past few months,” Lawant said.

But Bitcoin could soon find its feet again.

“A lot of that feels out of place and can correct over time,” he said, pointing to the calibre of institutional investment.

Crypto market movers

Bitcoin is unmoved over the past 24 hours, trading for $68,143.

Ethereum is up 1% over the past day and is priced at $1,979.

What we’re reading

Bitcoin dev says we’re ‘not prepared’ for quantum future where major players are ‘spooks’ — DL News

Bitcoin Trapped in Fragile Trading as Hedge Funds Pivot to Cash — Bloomberg

OpenAI KYC provider accused of sharing users’ crypto addresses with federal agencies — DL News

CME to Launch 24/7 Crypto Futures Trading in May — Unchained

Why crypto’s future is built on AI — Milk Road

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

Investors are capitalising on the $2 trillion crypto market downturn by squeezing better deals out of the projects they back, according to Yat Siu, co-founder and executive chairman of Animoca Brands.

The disappearance of “crypto tourist” venture capitalists — investors not really prioritising digital assets — “sharply reduced the competition” for good deals, Siu told DL News.

“As is usually the case, when the markets are more difficult, deal terms become more attractive,” he said. “However, top deals continue to command premium valuations.”

The comments come as VCs poured $95 million into crypto startups this week, DefiLlama data shows.

The main investors doubling down this week are crypto-centric firms like Pantera Capital, Consensys, and Frachtis Ventures.

Siu added that interest in artificial intelligence-powered projects continues to grow. His firm Animoca Brands, a VC firm known for its moves in web3 gaming projects, is launching its own AI agent platform.

“In 2026, we expect to see an overall more rational, fundamentals-driven investment landscape for our sector,” he said.

Here are the top three raises this week.

Novig, $75 million

Novig, a peer-to-peer sports prediction marketplace, secured $75 million in a Series B round led by Pantera Capital, marking one of the larger raises in the sector this quarter.

Unlike conventional bookmakers that embed a house margin, Novig operates without commission, allowing users to trade directly against one another.

By offering live position trading and market-based pricing, the platform resembles a financial exchange more than a traditional betting site.

The company says it aims to scale its exchange-style model as it challenges incumbents, positioning blockchain infrastructure as a tool for greater transparency, tighter spreads and improved pricing efficiency for sports traders.

Kresus Labs, $13 million

Kresus raised $13m in a funding round backed by South Korean bank Hanwha Investment and Securities to expand its Web3 mobile platform.

The company is focused on simplifying blockchain access through a “seedless” wallet architecture, removing the need for users to manage complex private key phrases.

The backing reflects growing institutional confidence in infrastructure that lowers barriers to mainstream digital asset adoption while strengthening consumer-grade custody standards.

PlutonAI, $2.7 million

PlutonAI secured $2.7 million to expand its crypto platform centred on autonomous AI agents. Integrated primarily through conversational interfaces such as Telegram, the system allows users to execute decentralised finance strategies like automated trading and yield management through simple prompts.

The startup is targeting a market for decentralised financial tools by combining the artificial intelligence theme with blockchain settlement.

You’re reading the latest instalment of The Weekly Raise, our column covering fundraising deals across the crypto and DeFi spaces, powered by DefiLlama.

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.

Amid the unfettered frenzy of last year’s Bitcoin treasury trade, David Bailey managed to raise $710 million to build what he called a Bitcoin treasury dynasty.

Nine months and one implosion later, he’s using the carapace of that company to buy two other businesses — from himself.

Nakamoto Inc., the publicly traded Bitcoin treasury company that Bailey founded in 2025, announced on Monday it will acquire BTC Inc — which owns Bitcoin Magazine and runs the Bitcoin Conference — along with UTXO Management, a Bitcoin-focused hedge fund.

The deal has raised eyebrows, especially because Bailey founded the companies being sold and chairs the company buying them.

Existing Nakamoto shareholders will see their ownership diluted by 363.6 million newly issued shares — roughly doubling the outstanding share count.

That’s because Nakamoto will issue that amount of new stock to acquire the two companies, with shares valued at $1.12 each based on an agreement that shareholders approved in 2025, before the stock collapsed.

At $1.12 per share, the deal is worth $407 million on paper. But Nakamoto’s stock closed at $0.29 on Wednesday, meaning those same 363.6 million shares were actually worth just $107 million at the time of announcement.

The stock fell even further in the days following the announcement. On Friday afternoon, it was trading at $0.24.

This isn’t Bailey’s first rodeo destroying shareholder value. Last year, Nakamoto plunged 96% when PIPE shares unlocked, prompting Bailey to tell shareholders who “came looking for a trade” to exit their positions.

A PIPE, or Private Investment in Public Equity, allows select investors to buy shares at a fixed price before the stock trades publicly, typically at a discount to market price.

Now, five months later, he’s using the same collapsed stock to buy his own companies.

Nakamoto and David Bailey did not immediately reply to a request for comment from DL News.

The acquisition

Bailey also appeared to overstate the health of his own newly-acquired companies.

Just one day after the announcement, Bailey appeared on an X space hosted by Bitcoin Magazine, where he told investors that BTC Inc and UTXO management had done “over $100 million in revenue” in 2025.

But on Wednesday, Nakamoto filed an 8-K with the SEC correcting its chairman. The actual number was $78 million.

One man who has been following the treasury trade closely — and with suspicion — is renowned short seller Jim Chanos. He actively shorted Strategy’s premium, and has been an avid contrarian to the trade.

Chanos didn’t shy away from commenting about Bailey’s latest deal: “Theater of the Absurd,” he said.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him atpsolimano@dlnews.com.

Aave’s civil war has its first casualty.

Bored Ghosts Developing, a company hired by digital cooperative Aave DAO to provide software development services for the world’s largest decentralised finance protocol, said on Friday it would not seek renewal of its contract in April.

And it blamed Aave Labs, the creator of the that protocol.

In a lengthy post on Aave’s governance forum, Bored Ghosts said it could not continue to work on the latest version of the protocol while Labs attempts to push users to a newer one, dubbed “v4.”

“We believe even proposing this on the main revenue-maker & fully functional engine of Aave, is borderline outrageous,” Bored Ghosts wrote.

The Aave token fell more than 6% on the news on Friday.

In a statement on social media, Aave Labs CEO Stani Kulechov, the protocol’s founder, lamented Bored Ghosts’ departure. Bored Ghosts co-founder Ernesto Boado was previously the chief technology officer at Aave Labs.

“For four years, BGD has played an important role in Aave V3’s technical development, and it is fair to say that Aave V3 would not be what it is today without their contributions,” Kulechov wrote.

Marc Zeller, head of Aave DAO delegate Aave Chan Initiative and one of Labs’ fiercest critics in recent months, called Bored Ghosts’ departure “devastating.”

“Most of the revenue V3 generates today is driven by their code and innovations,” he wrote. “They saved Aave more than once. They’ve been the most productive engineering team this ecosystem has ever had.”

Aave’s ‘crown jewel’

Aave’s stakeholders are caught in a long-running dispute over control of the protocol and the Aave brand. And it could have massive implications for the world of decentralised finance.

Aave is the largest DeFi protocol, with more than $26 billion in user deposits. It has long been managed by the DAO, investors who hold the Aave token and their representatives, known as “delegates.”

Over the past year, however, major delegates began to chafe at Aave Labs’ growing role in DAO affairs.

That culminated in a recent push to demand that Labs transfer brand assets — such as naming rights, social media accounts, and the aave.com website — to the DAO. That proposal narrowly failed in a Christmas Day vote.

In an attempt to settle the dispute, Labs recently proposed directing all of its revenue from Aave-branded products, such as the Aave website, to the DAO.

But that proposal also included language “ratifying” Aave v4 as the “core technical foundation for future development.” That would mean pausing work to improve Aave v3 and even changing its lending and borrowing parameters in order to compel users to migrate to v4.

Bored Ghosts called it an unacceptable attack on the “crown jewel” of the Aave empire.

Aave Labs has said it is willing to slow-walk any efforts to move users to v4.

“At launch, [v4] will serve V3 users with higher capital efficiency and more advanced features,” the company wrote in the governance forum last week.

“That said, there is zero rush. V3 is stable, battle-tested, and will continue to be actively maintained and serviced until users are comfortable migrating to V4 at their own pace.”

A model DAO

The company was founded four years ago, and has almost exclusively worked on Aave since then.

“Any technical sub-system of Aave that the community knows about, BGD Labs was leading its development, or at least participating/collaborating with other entities in it,” the company wrote in its farewell notice.

“Unfortunately, the organisational scenario of the DAO has, during recent times, started to change radically.”

Aave DAO was once a model cooperative. Where other DAOs saw software development priorities turn on the whims of their founders, Aave appeared to be run by tokenholders, just as the first proponents of DeFi had envisioned. Aave Labs was just another service provider, albeit one that controlled the aave.com website and the Aave brand.

That began to change last year as Labs neared completion of Aave v4, according to Bored Ghosts.

“While this pivot is totally legitimate and potentially positive to overall Aave, we believe the way of addressing it has been badly executed,” the company wrote.

“Aave Labs believes that the whole Aave DAO and contributors should pivot in the direction they believe in, without sufficient consideration of existing contributors’ expertise.”

While the DAO controls the direction of the Aave protocol, recent votes suggest Kulechov and other Labs employees retain enough voting power to overwhelm their opponents, according to the company’s critics.

Bored Ghosts is currently serving out a six-month contract for $2.2 million in stablecoins and another 3,000 in Aave tokens, valued at more than $300,000 as of Friday.

That contract ends on April 1. Bored Ghosts said it would request a $200,000, two-month retainer in order to help the DAO transition to a new service provider.

Kulechov said Labs would be willing and able to assume any work as needed.

“Aave V3, and every other part of the Aave protocol stack, will continue to operate as normal,” he wrote.

“We built V3 and will be happy to take on all maintenance work until a time that the DAO votes otherwise.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

A version of this article appeared in our The Roundup newsletter on February 20. Sign up here.

Hi. Eric here.

Crypto sentiment has hit a new rock bottom.

Signals that investors are losing faith are coming hard and fast as the market trades at $2 trillion, or 44%, below its October record.

Google searches for “is Bitcoin dead” have surged since the start of the year (and it had topped in December), and analysts bet Bitcoin’s price will fall another 85% to $10,000.

Elsewhere, the Bitcoin Fear and Greed Index has slumped to levels not seen since 2019, and traders have pulled over $10 billion out of Bitcoin and Ethereum exchange-traded funds since October, according to DefiLlama data.

Investors have reason to be hesitant.

Despite Donald Trump leaning heavily on the Federal Reserve, interest rate traders are betting that the US central bank won’t cut interest rates before June.

The sentiment is further fuelled by the fact that stock markets and assets like gold are hitting new heights.

The problem with that, as Wolfgang Münchau, director of Eurointelligence, points out in his latest column for DL News, is that Bitcoin is struggling to find a narrative.

If it’s a tech asset, it would’ve rallied alongside tech stocks. If it were a safe-haven asset, it would’ve soared when gold did.

This, however, could change, Münchau said.

Trump has nominated Kevin Warsh to lead the Federal Reserve when Jerome Powell’s term as chair comes to an end this summer.

Not only is Warsh — if confirmed — expected to follow the White House’s lead and lower interest rates, but Münchau suggests he may also help push Bitcoin into the central bank’s official reserves.

“The lack of reserve asset status is what distinguishes Bitcoin from gold at this point —and it is the reason why the political uncertainty recently has been benefiting gold relatively more than Bitcoin,” Münchau said.

To be sure, not everyone shares the market’s bearish sentiment.

Perennial pumpers like Arthur Hayes, Tom Lee and Michael Saylor — the last two of which have seen their digital asset treasury firms take on brutal beatings from the market — continue to wax lyrical about cryptocurrencies’ incoming rallies.

And, to be fair, the first year of the second Trump presidency laid the groundwork for blockchain-based businesses to triumph.

The Oval Office has supported pro-crypto bills and executive orders, ended regulators’ crackdown on crypto, and pardoned influential industry insiders.

This week, the Trump-linked crypto project World Liberty Financial even hosted both crypto company CEOs and top dogs at financial giants like Goldman Sachs — all of whom sang the praises of the industry.

Even so, things still look grim at the moment.

OpenAI KYC provider accused of sharing users’ crypto addresses with federal agencies

A background-checks provider tied to OpenAI is reportedly sharing private data, including crypto addresses, with regulators, Tim Craig and Liam Kelly report.

‘Get real gnarly’ and other tips for surviving wrench attacks from ex-Secret Service member

The threat of violent attacks looms darker across the crypto industry. This week, Liam asked a former Secret Service member on how investors can stay safe.

Bitcoin needs a quantum upgrade. So why isn’t it happening?

Quantum computers seem closer than ever. So why haven’t Bitcoin developers updated the blockchain? This week Tim set out to find the answer to that question.

Post of the Week

The release of Anthropic’s Claude is making waves in crypto circles.

This is what L1 blockchains were supposed to feel like.

Each new mainnet launch drop making you go "wow, I need to plug this shit in and test it immediately"

Instead we got Monad, Berachain, endless slop L2s and MegaETH. https://t.co/XefSVJ0C22

— Flood (@ThinkingUSD) February 17, 2026

In 1983, the film Trading Places did far more than just catapult Eddie Murphy’s acting career.

When the billionaire Duke brothers are shown discussing an upcoming crop report, they confirm that their operative, Clarence Beeks, is already working to gather the report before its public release, providing audiences with a clear understanding of a specific type of financial fraud.

Insider trading.

So clear that in 2010, the then-Commodity Futures Trading Commission Chief, Gary Gensler, cited the film when appending new regulations for commodities markets.

“The Duke brothers intended to profit from trades in frozen concentrated orange juice futures contracts using an illicitly obtained and not yet public Department of Agriculture orange crop report,” Gensler told Congress.

“To protect our markets, we have recommended what we call the ‘Eddie Murphy‘ rule to ban insider trading using nonpublic information misappropriated from a government source.”

The Duke brothers’ scheme was clear. Betting on the future should be on an even playing field.

Now, the meteoric rise of prediction markets is forcing a messy rethink of what it actually means to have an inside edge.

“The historical excitement about prediction markets is that they’re going to elicit information,” Andrew Verstein, the co-director of the business law program at the University of California, Los Angeles, told DL News. “It can be that a person is a diligent researcher, or they’ve got their own satellite that looks at crops and makes predictions legally.”

“Or it can be that they have a friend at the Agriculture Department who tells them what’s going to happen with frozen orange juice concentrated futures. That’s not something that data is going to help us see the difference between.”

‘Most corrupt corner of Washington’

Prediction markets such as Kalshi and Polymarket exploded onto the scene in the run-up to the 2024 US Presidential election.

Since then, volumes on both platforms have nearly quintupled, reaching over $25 billion in volume in January, according to data collated by data dashboards on Dune.

There are wagers for everything. Some $30 million is riding on whether Jesus Christ will return by 2027. Bettors have placed another $11 million on the outcome of the Federal Reserve’s next meeting. The largest category in prediction markets is sporting events.

“The fact that one doesn’t have clarity about the underlying governance is super problematic.”

Yesha Yadav, associate dean at Vanderbilt Law School

At the same time, digital sleuths are highlighting unusual, ultra-lucky traders in specific markets on these platforms.

Just hours before US special forces captured Venezuelan President Nicolás Maduro, a brand-new Polymarket account bet more than $30,000 on his ouster.

The account’s total payout exceeded $436,000, sparking major concern that they had intimate knowledge of the government’s classified military operation.

“The most corrupt corner of Washington, D.C. may well be the intersection of prediction markets and the federal government — where insider trading and self-dealing are no longer imagined risks but demonstrated dangers,” said New York Representative Ritchie Torres.

Torres and a host of Democrats have all co-sponsored the Public Integrity in Financial Prediction Markets Act of 2026. The bill prohibits elected officials from buying, selling or exchanging prediction market contracts tied to the administration’s policies.

Verstein shares a similar view.

“Government officials have a lot of power,” he said. “They have missiles and police. You don’t want them to be able to deploy that power in order to make their bets pay off.”

While that bill advances, another coalition of prediction market platforms, including Kalshi, Crypto.com, and Robinhood, argues that there is already a ban on precisely this kind of trading.

That’s because prediction markets are regulated by the CFTC, which has, thanks to the Murphy Rule, banned insider trading since 2010.

To date, however, there has been no major insider trading arrest in the US involving prediction markets.

Part of that, some academics argue, boils down to one question.

How is insider trading defined exactly, and when can anyone know when it has actually occurred?

Insider information

Trading on insider information involves using wit and expertise to try to predict an outcome.

Insider trading, however, is a legal term for describing fraud by which you use material nonpublic information — such as a secret USDA crop report — for profit.

Yesha Yadav, a professor of law and associate dean at Vanderbilt Law School, says the distinction between legally trading on insider information and illegal insider trading is becoming increasingly blurred.

“The challenge of prediction markets that we’re facing is that we don’t know when trading on insider information actually becomes insider trading,” Yadav told DL News. “The clarity of legal rules, duties, and understanding the scope of how broadly or narrowly the law reaches in this context is really unclear.”

It’s made even more unclear due to the breadth of markets available on prediction markets.

The Bad Bunny problem

Ahead of the Super Bowl in February, users bet roughly $113 million on what the Puerto Rican pop star Bad Bunny would play as the opening song for this year’s halftime show.

When asked if it would be considered insider trading if one of Bad Bunny’s dancers bet in this market, Kalshi CEO Tarek Mansour hesitated.

“If that’s the position that people are taking, which is essentially, ‘this is nonmaterial, nonpublic information,’” Mansour said, “and that it’s ok to talk about which song is going to be played, it’s ok to divulge certain information beforehand, then it’s totally fair game.”

In sum, it depends.

There’s also a case for insider trading on these markets — at least to an extent.

Polymarket CEO Shayne Coplan and Coinbase CEO Brian Armstrong suggest that insider trading should be encouraged because it can enhance the quality of the information markets provide.

A market with many insiders would, in theory, generate extremely accurate forecasts, they argue.

However, if average users are under the impression that most participants have key insights they don’t, they’re unlikely to be interested in participating.

“The way you make an exchange successful is that you reduce the amount of informed trading so that everyone feels like this is working for them,” Verstein said. “But if you do that, then it becomes less of a future machine. The people who know the future aren’t allowed to trade.”

It’s a delicate balance.

But it’s one that needs clearer attention from authorities, warns Yedev. Especially as these platforms swell in size and scope.

“People are seeing these future probability forecasts being brought into some really important settings,” she said.

“The fact that one doesn’t have clarity about the underlying governance is super problematic.”

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.

Ethereum’s Hegota upgrade will headline Fork-Choice Enforced Inclusion Lists — or FOCIL — a highly-anticipated yet controversial proposal that stands to boost the network’s censorship resistance.

Alex Stokes, an Ethereum Foundation researcher, confirmed the inclusion in the most recent All Core Devs meeting on Thursday.

FOCIL introduces changes that force Ethereum validators to include each and every transaction submitted to the network — even those sent by Office of Foreign Assets Control-sanctioned addresses.

Proponents say FOCIL is necessary because it guarantees censorship resistance at the protocol level, rather than relying on the decisions of those who build blocks and run validators.

“As we keep scaling, the centralisation force towards sophisticated actors is increasing, and FOCIL prevents these actors from censoring transactions,” Jihoon Song, an Ethereum Foundation researcher, said on the Ready to Merge podcast on February 19.

Ensuring that Ethereum is resistant to censorship, and cannot be controlled by outside forces, is incredibly important to its supporters. It is one of the blockchain’s most fundamental and defining features, and legitimises it as a decentralised, permissionless settlement layer.

Controversial upgrade

The Hegota upgrade, named by blending the Bogotá Devcon venue and Heze, a star, is scheduled for the second half of 2026.

It will succeed Glamsterdam, Ethereum’s next upgrade, which will headline two proposals: Enshrined Proposer-Builder Separation and Block-Level Access Lists.

Of all the proposals earmarked for Hegota, FOCIL is the most controversial. It was previously pushed back from inclusion in Glamsterdam as developers debated it.

Privacy Pools founder Ameen Soleimani has argued that the benefits of FOCIL are overstated, and it creates legal risks for US-based validators.

When Tornado Cash was placed on the OFAC sanctions list, some 90% of validators declined to include transactions that touched smart contracts linked to the privacy protocol, he said.

As long as a single validator was willing to include those transactions, however, they would eventually settle on Ethereum.

Had US validators been forced to include those transactions, they could have faced the wrath of the US government, Soleimani argued.

Yet many more Ethereum developers argue FOCIL brings more benefits than downsides.

In response to FOCIL’s inclusion in Hegota, Ethereum co-founder Vitalik Buterin said it will help boost privacy protocols in combination with another proposal called Frame Transactions.

Ethereum layer 2 developer Tim Clancy previously called FOCIL the “single most important [proposal] for Ethereum.”

“It delivers a capability that Ethereum must have to continue delivering on its mission of being the most neutral blockspace,” he wrote on X last year.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Bitcoin investors should hold tight, according to Matt Hougan, chief investment officer at Bitwise, because there’s still more pain to come.

“The February 5 event was shocking, but I’m not sure it was the final cathartic bottom,” Hougan said on the Blockspace podcast on February 19. “We’re going to get out of it this year, but we’re still in the depths of it.”

Hougan is referring to Bitcoin’s staggering decline from $72,000 to $60,000 at the beginning of February. Since then, the top crypto has stabilised but still trades in the mid $60,000 range, down from its October 2025 all-time high by nearly 50%.

The near-term future for Bitcoin’s price remains ominous.

“There’s often one or two big shakeouts,” Hougan added. “I wouldn’t be shocked to see another event like that at some point in the future.”

Of late, Bitcoin has behaved as a decidedly risk-on asset rather than the “digital gold” many had hoped for. In response to recent geopolitical and macroeconomic turmoil, Bitcoin slumped nearly 50% while gold rallied to new all-time highs above $5,000. Silver also surged.

Indeed, the divergence caught most Bitcoin bulls off guard, quelling the narrative that Bitcoin would benefit from the same debasement trade that drove precious metals higher.

Winter came early

Although many market watchers have been quick to call the record-breaking October 10 liquidation event the start of the crypto bear market, Hougan thinks the winter started much earlier.

“October is the obvious one,” Hougan said. “But outside of Bitcoin and Ethereum, everything else in crypto got crushed starting with the Trump inauguration in January [2025].”

Big layer 1 blockchains like Solana, Aptos, and Avalanche fell more than 70% in 2025, with the selling beginning in January and continuing straight down, argued Hougan.

To Hougan, institutions were slow to catch on, finally selling into the $19 billion liquidation event in October. That eventually confirmed the crypto winter and sent the top two cryptos, which had rallied during the year, down with everything else.

The four-year cycle

Despite the pain, Bitcoin’s price behaviour shouldn’t come as a surprise. Even if many crypto pundits had said this time was different.

Historically, the top crypto goes through drastic peaks and troughs in four-year boom-bust cycles. What happens is that Bitcoin’s monetary policy halves the issuance of new coins every four years — an event dubbed the halving — which sends investors into a euphoric state that drives a near-vertical rally.

But just as quickly as it comes on, it fizzles out, and Bitcoin gives way to a harrowing bear market, sometimes dropping by 80% to 90% as investors take profits.

To Hougan, large players could mean that such crashes are behind us.

Institutional adoption may mean that Bitcoin’s typical 80% drawdowns only fall to around 50% to 60%, he said. That’s because institutions and retail investors now operate on different cycles. When one group is selling, the other may be buying.

“This is the new reality we’re in,” Hougan said.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him atpsolimano@dlnews.com.

The US under President Donald Trump’s orders could soon strike Iran and that’s not great news for cryptocurrencies.

Indeed, analysts told DL News that another Middle Eastern conflict could prompt investors to further derisk, potentially bringing more pain to crypto investors.

“We’re already starting to see the uncertainty there weigh on crypto and equity markets,” Carlos Guzman of GSR Research said.

The warning comes as Bitcoin and the broader cryptocurrency market have lost about half their total value since October, with many analysts saying things could get worse from here.

Past conflicts

Bitcoin has long-been touted a hedge against global uncertainty, be that macroeconomic or geopolitical.

But history has proven that the top cryptocurrency has failed to live up to that title.

“A true bottom requires ownership to change hands, and right now it’s kind of like all the same people — it’s like, who’s the next buyer?”

Greg Magadini, Amberdata’s director of derivatives

Just last year, when tensions flared between neighbours Israel and Iran — with later involvement from the US — investors shorted Bitcoin.

Bitcoin’s price fell sharply following Israel’s June 2025 “Operation Midnight Hammer” strike and dipped again later that month when the US joined in.

Crypto prices then recovered after Trump signalled a pause in attacks.

This time, though, things are different.

Bitcoin and Ethereum have slumped severely following a brutal October $19 billion liquidation event that has continued to unwind.

Bitcoin was trading above $100,000 per coin during last year’s strikes and now trades around $67,000.

“In the current context of a bear market, geopolitical headwinds would exacerbate selling pressure on digital assets like Bitcoin and Ethereum, causing prices to decline further,” Julio Moreno, CryptoQuant’s head of research, told DL News.

How low can we go?

Regardless of a war, experts added, the bottom is not in, and a large war in the Middle East could do more harm than good.

“I don’t think the bottom’s in at all,” Greg Magadini, Amberdata’s director of derivatives, said of Bitcoin’s price.

“A true bottom requires ownership to change hands, and right now it’s kind of like all the same people — it’s like, who’s the next buyer?”

He added that a US strike on Iran would be a de-risking event that immediately sends Bitcoin nosediving, while gold and treasuries would benefit.

How low could Bitcoin go? Sebastian Serrano, the CEO of crypto exchange Ripio, forecasted Bitcoin dropping as low as $53,000 if bearish momentum following a strike were to continue.

“That said, if Bitcoin holds its ground and fails to move lower despite the macro headwinds, that would actually be a notably strong bullish signal — demonstrating real resilience in the face of risk-off sentiment,” he said.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

Bitcoin is unprepared for a future in which government agencies wielding superfast quantum computers can crack the top cryptocurrency’s cryptography.

Hunter Beast, a Bitcoin developer, made that case during a panel at the ETHDenver conference on February 19 alongside Isabel Foxen Duke, host of the Bitcoin Rails podcast, and Alex Pruden, CEO of Project 11, a company focused on securing blockchains against the quantum threat.

“We are not prepared right now for all that this will affect,” Beast said. “It is a vast, multidimensional problem in ways that are really subtle until you dive into it and really come to understand it.”

Bitcoin, like much of the world’s digital infrastructure, will eventually need to upgrade its cryptography to new algorithms that cannot be cracked by quantum computers.

Yet indecision among the top cryptocurrency’s developers, coupled with recent quantum computing breakthroughs, has brought what was once considered a distant threat much closer to reality.

The turning point came in December 2024, when Google unveiled its Willow quantum computing chip, which showed the technology was much closer to being used in real-world applications.

“That architecture cannot scale to the point where it could break Bitcoin, but it showed the path,” Project 11’s Pruden said on the panel.

Then, earlier this month, researchers in Sydney, Australia, released a paper demonstrating that some forms of encrypted data, including Bitcoin wallets, could be cracked by a much less powerful quantum computer than previously assumed.

“The bar to clear keeps dropping, while at the same time, results like Google’s show that progress is happening, and at some point those two lines are going to cross,” Pruden said.

‘Spooks’

It’s not just tech giants like Google and Microsoft that race to accelerate quantum computing, according to Beast.

“The major players here are spooks — they’re the NSA and the PLA,” he said, referring to the National Security Agency, an intelligence agency of the US Department of War, and the People’s Liberation Army, the military wing of the Chinese Communist Party.

The reason? Quantum computers are not cheap, Beast said.

They cost billions of dollars to build and millions to run, and they are not just useful for stealing Bitcoin, either.

They are much more useful to governments because they can also break RSA, a widely used form of digital encryption. In other words, whichever nation develops a powerful enough quantum computer first could potentially gain access to other nations’ encrypted data.

“If you’re not going to have something capable of doing this, it’s kind of pointless to build,” Pruden said.

Yet the fact that quantum computers cannot currently be used for any meaningful real-world application has made it difficult to convince some Bitcoin developers that they will eventually pose a threat.

Some of the most influential names in Bitcoin development argue that a cryptographically relevant quantum computer is still decades away, while others dismiss the threat entirely.

“Quantum isn’t a real threat. Bitcoin has much bigger problems to address,” Luke Dashjr, a Bitcoin Core developer, said in December.

Those sceptics could be right if quantum computer development hits some unforeseen roadblock. But for Beast, it’s not worth the risk.

“I don’t think we should bet the future of Bitcoin on discounting future progress,” he said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Binance is extending its promo programme for a Trump family-backed stablecoin as Democrats mount fresh attacks against the crypto industry.

The promo programme will extend until March 20 and reward participants with WLFI tokens issued by World Liberty Financial, the crypto venture run by Donald Trump’s sons.

“We’re stepping it up to ensure our early adopters are continuously incentivised for providing liquidity,” World Liberty Financial said on Thursday.

Binance’s promo begins just two days after World Liberty Financial gathered a star-studded lineup of crypto and finance superstars. It coincided with the president’s political opponents, spearheaded by anti-crypto firebrand Elizabeth Warren, firing off their latest salvo against the industry.

Binance partnership

World Liberty Financial’s close partnership with Binance has been a common feature in Democrats’ attack lines against Trump.

In December, Binance launched a programme aimed at promoting the use of USD1, World Liberty Financial’s dollar-pegged stablecoin. It offered up to 20% yield on USD1 holdings of up to $50,000 for the exchange’s clients. The new promotion extends that programme.

Customers who hold the stablecoin on their Binance accounts will be airdropped a proportion of the total 235 million WLFI rewards pool over the next month. Binance also custodies 76% of all USD1 tokens in circulation, Arkham data shows.

Backed by US Treasuries and other securities, USD1 has surged 50% over the past month to become the fifth-largest stablecoin by circulation, with over $5 billion issued, according to DefiLlama data.

“Our involvement with World Liberty Financial–related products, including USD1, is limited to standard listing, infrastructure, and market-access services that we provide to a wide range of projects on consistent terms,” Jessica Jung, a member of Binance’s global PR team, told DL News earlier in February.

World Liberty Forum

Binance’s co-founder and former CEO Changpeng Zhao is one of the most prominent voices in the crypto industry.

In 2023, he pleaded guilty to having violated US law by failing to run an appropriate anti-money laundering programme during his tenure as CEO. He spent four months in jail in 2024.

Trump pardoned Zhao in October. Zhao has dismissed allegations that the pardon was linked to Binance’s partnership with World Liberty Financial.

Zhao was notably not among the speakers at World Liberty Financial’s star-studded event at the Mar-a-Lago, the president’s Florida retreat, this week.

The World Liberty Forum drew in speakers like the CEOs of Coinbase, BitGo, Franklin Templeton and Goldman Sachs.

FIFA President Gianni Infantino, rapper Nicki Minaj, celebrity investor Kevin O’Leary, and a slew of elected officials and regulators also attended the World Liberty Forum.

Mounting pressure

The Trump family’s crypto ventures have come under fire from powerful lawmakers amid an industry crash that has vaporised $2 trillion in investors’ holdings.

Earlier in February, Warren was among senators who issued a formal letter to Scott Bessent, the US Secretary of the Treasury.

In it, they called for a probe into World Liberty Financial on national security grounds over a reported $500 million equity stake in the firm linked to the United Arab Emirates.

They cited a Wall Street Journal report that says the deal was signed four days before Donald Trump’s inauguration and saw the UAE firm buy a 49% stake in World Liberty Financial.

On February 19, Warren sent a letter to the Treasury Department and Federal Reserve to refrain from using taxpayer funds to “bailout” the crypto industry.

Warren, a member of the Democratic Party and long-time Trump critic, also took direct aim at World Liberty Financial.

“Not only would it be deeply unpopular to transfer wealth from American taxpayers to cryptocurrency billionaires, it could also directly enrich President Trump and his family’s cryptocurrency company, World Liberty Financial,” Warren wrote.

The White House has consistently dismissed accusations of wrongdoing.

“The president has no involvement in business deals that would implicate his constitutional responsibilities,” White House counsel David Warrington told DL News last week.

Zhao was quick to comment on Warren’s letter on X. “Crypto never needed a bailout, never will.”

Crypto market movers

Bitcoin is up 2.0% over the past 24 hours, trading at $68,181.

Ethereum is up 0.1% past 24 hours, trading at $1,967.

What we’re reading

Optimism token price plunges 25% as Coinbase cuts off DAO from millions in revenue — DL News

Ethereum price eyes historic slide as Bitwise flags $1,500 — DL News

Hyperliquid Launches $29 Million Policy Push in Washington — Unchained

Bitcoin Downtrend Explained: Why Most Investors Are Getting Wrecked Right Now w/ Koroush — Milk Road

Why Bitcoin price comeback is primed after the 47% crash, Kraken economist says — DL News

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.

Coinbase just broke up with the Optimism Collective — to the tune of tens of millions of dollars.

The US’ top crypto exchange is overhauling its nearly three-year partnership with the layer 2 software developer, saying that Coinbase’s Base blockchain will use in-house code moving forward, rather than Optimism’s OP Stack.

A spokesperson for Optimism confirmed that Coinbase will stop sharing Base revenue with the Optimism Collective. That revenue has topped $16 million over the course of the partnership.

“This is a hit to near-term onchain revenues,” OP Labs CEO Jing Wang said on X. “But as cryptotwitter has been saying for ages, we needed to evolve our biz model.”

Coinbase will instead remain as a customer of OP Labs’ “OP Enterprise” service, Wang added.

Base’s withdrawal hammered the price of Optimism’s token, OP. It has lost a quarter of its value since Wednesday, and was trading just under $0.14 as of this writing, down from its all-time high of $4.84 in 2024.

Coinbase has long shared 15% of Base revenue with the Optimism Collective, the digital cooperative that manages the OP Stack. To date, Base has contributed 8,387 Ether, worth about $16.4 million at Wednesday’s prices.

That’s 41% of the Optimism Collective’s lifetime revenue. But Base’s share of that revenue has shot up in recent months. In January, it hit 90%.

The move could, therefore, have significant ramifications for the Superchain, the collection of blockchains using the OP Stack. That list includes Sony’s Soneium, Uniswap’s Unichain, Kraken’s Ink, Worldcoin’s World Chain, and Optimism’s own OP Mainnet.

Wang and Coinbase didn’t return DL News’ requests for comment.

“We’re grateful for our three-year partnership with Base and proud to have helped it become one of the most successful Layer 2 deployments in history,” an Optimism spokesperson said in a statement shared with DL News.

“Our focus remains on delivering enterprise-grade blockchain infrastructure to our ecosystem, and we will continue to serve Base as an OP Enterprise customer while they build out their independent infrastructure.”

‘Disappointing’

OP Labs, a privately held company, has raised more than $175 million from the likes of Andreessen Horowitz and Paradigm. Its software engineers are responsible for maintaining and improving the OP Stack, though any changes they propose must be approved by the Optimism Collective.

A related entity, the Optimism Foundation, recently said it would seek to shift to the Collective at least some responsibility for funding Labs’ operations.

Superchain members’ tithe is denominated in Ether. That multimillion-dollar pot of crypto initially sat dormant, with the Collective instead issuing grants denominated in OP.

Those grants are intended to lure software developers to the Superchain — more developers means more applications, and more applications means more users.

But Optimism recently began putting that Ether to work.

Last March, The Collective approved staking most of the Ether in order to earn passive yield.

And, just last month, the collective approved a buyback programme meant to tie the value of OP to the Superchain’s success. Half of all the revenue flowing into the Collective is now being used to purchase OP. The Foundation was given permission to actively manage the other half.

Why Superchain?

“It’s disappointing, but in many ways unsurprising,” PaperImperium, a pseudonymous member of Optimism Collective delegate GFX Labs, told DL News. “Base has to answer shareholders and do what is best for them.”

The OP Stack is open-source: that means anyone can use the code for any reason, without seeking permission from Optimism.

“So why do chains like Base, Mode, Worldcoin, Zora, and all others in the Superchain choose to contribute shared revenue?” Optimism wrote in a 2024 blog post. “The answer lies in the network structure designed to benefit the entire Collective.”

Improvements to the OP Stack were supposed to turn the Superchain’s various members from a federation of siloed blockchains into a single, interoperable network.

“That unfortunately has not materialised despite years of technical work,” PaperImperium said.

Coinbase said it was making the move in order to speed its upgrade cadence, simplify its code, and pilot changes that could eventually appear on Ethereum.

“We could not have gotten so far so quickly without the world-class technology underpinning the OP Stack and are grateful for the collaboration over the last three years,” Coinbase said in a blog post.

When Base joined Optimism in 2023, it was given “the opportunity” to earn up to 118 million Optimism tokens over a six year period. It was not immediately clear how many of those tokens Base had earned or what would happen with the remainder.

Optimism did score a victory on Wednesday, when Ether.fi said it would move its crypto-based credit card from layer 2 blockchain Scroll to OP Mainnet.

“Over the coming months, ~70,000 active cards, ~300,000 accounts, and millions in user TVL are moving to Optimism,” Optimism said in a blog post. “For Optimism, this positions OP Mainnet as a leading chain for payments activity.”

As for Coinbase, Wang said it would remain as a customer of OP Labs’ “OP Enterprise: Mission-Critical” service, given Base’s ongoing reliance on Optimism-built code.

“If Base makes so many changes that it’s no longer recognizable as the OP Stack then they will no longer require ‘Mission Critical’ support from us,” she wrote.

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

Ethereum price risks crashing 22% to hit $1,500 as it’s on track to suffer through its worst streak in history, according to Max Shannon, senior research associate at Bitwise.

If the second biggest cryptocurrency’s price continues to fall in March, it would be within reach of the seven-month slump that extended between May and November 2018.

“Until a clear macro or idiosyncratic catalyst emerges to revive momentum and sentiment, downside risks extend below $1,500 for Ethereum,” Shannon told DL News.

For Shannon, there’s one clear-cut culprit behind Ethereum’s woes, and that’s Bitcoin. Ethereum moves in tandem with Bitcoin but suffers bigger swings. When Bitcoin drops 10%, Ethereum typically falls further, Shannon said.

“ETH continues to trade as a highly correlated, high-beta expression of BTC,” Shannon said, meaning Ethereum amplifies whatever Bitcoin does.

Plus, the market is ignoring good news and focusing purely on price charts, with Bitcoin leading the way down, Shannon said.

Baffling investors

On paper, though, things should be going Ethereum’s way.

It has lined up everything needed to hit another record. It, like the rest of the crypto industry, are enjoying a wave of regulatory clarity across the world.

A smattering of issuers have launched US spot Ethereum exchange-traded funds, and the $300 billion stablecoin sector relies heavily on the blockchain. It has even been name-checked by BlackRock’s CEO Larry Fink.

The stars have seemingly aligned, but Ether continues to give investors lacklustre price returns.

A glimmer of hope

There’s light at the end of the tunnel, however.

Options trades have backed off their most extreme bearish bets, said Shannon. Options give investors the right to buy or sell an asset at a certain price. The dealers who sell these options need to hedge their bets by buying or selling the actual cryptocurrency as it moves in one direction or another.

Right now, there’s a concentration of options in the range between $2,100 and $2,400. If Ethereum can climb back into that range — which means a rally of 10% to 20% — options dealers would be forced to buy Ether to protect themselves.

Still, to get Ethereum trending back upwards there need to be catalysts.

“The passage of the Clarity Act, and the resurgence of [digital asset treasuries] and ETFs purchasing more than 100% of the new supply, should boost ETH closer to new all-time highs," he said.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him atpsolimano@dlnews.com.

A company that conducts the know-your-customer checks required to access OpenAI’s advanced chatbots is allegedly sending customer data — including associated crypto addresses — to federal agencies.

A February 18 investigation published by pseudonymous security researchers vmfunc, MDL, and Dziurwa found publicly accessible code that appears to send data collected by Persona, the KYC provider, to The Financial Crimes Enforcement Network — or FinCEN — a bureau of the US Department of the Treasury that safeguards the financial system from illicit use.

“The same company that takes your passport photo when you sign up for ChatGPT also operates a government platform that files Suspicious Activity Reports with FinCEN and tags them with intelligence programme codenames,” the investigation’s authors said.

“So you uploaded a selfie to use a chatbot? Congratulations! It’s now being compared against a database of every politician, head of state, and their extended family tree on earth.”

‘Unanswered questions’

Multiple IT specialists and security experts confirmed to DL News that the investigation and its findings appear legitimate.

“It appears the research is credible and you can verify that the government domains cited do exist, and are highly likely hosted on dedicated infrastructure by Persona,” Tanuki42, a pseudonymous security researcher who contributes at SEAL911 and zeroShadow, the blockchain incident response groups, told DL News.

“That said, there are still a lot of unanswered questions around motives, what this platform is used for, and who it is used by.”

Persona CEO Rick Song has since responded to the allegations publicly on X. He accused the investigation’s authors of not reaching out to him before publishing their findings.

In emails between vmfunc and Song posted by Song on his X account, the Persona CEO said his firm does not work with any federal agency today. He has yet to directly address the findings of the investigation.

“I am genuinely disappointed in how all of this has been handled,” Song said on Thursday in a since-deleted X post. “What has really been frustrating for me is that I also admire vmfunc’s work and their clear talent.”

Vmfunc, also known in online circles as Celeste, is widely regarded as credible because of their track record of technical investigations that other security experts have repeatedly validated.

OpenAI and Persona did not immediately respond to DL News’ requests for comment.

Surveillance fears

The allegations come as both crypto users and the broader public grow increasingly concerned about the mass surveillance and privacy-eroding capabilities of enforced identification checks.

The fear is that companies like Persona, working with government agencies, could use identification data collected from customers to create a vast Orwellian surveillance network that uses opaque criteria to place users on watchlists without their knowledge, consent, or public oversight.

In recent years, more and more platforms have started requiring users to hand over personally identifiable information, often in the name of preventing crime or protecting vulnerable groups.

Yet critics say the checks do more harm than good.

Many of the biggest companies that provide KYC services have been found to misuse and mishandle data.

Even when companies aren’t misbehaving, the huge swaths of data they hold make them lucrative targets for hackers. Several more platforms have in recent years suffered data breaches, leaking millions of users’ personal data.

The issue is close to the hearts of crypto advocates.

Many early Bitcoin contributors were self-styled cypherpunks, privacy activists advocating for cryptography and privacy-preserving technologies to protect the public against government and corporate surveillance.

Persistent monitoring

When a user is prompted to verify their identity with OpenAI, their KYC data — usually a photo of their passport, a selfie, and a short video of their face — is sent to Persona for verification.

That data is then automatically screened against global sanctions and warning lists, undergoes facial similarity scoring, and is checked against records of people linked to terrorism, cybercrime and other financial crimes.

That’s all standard stuff.

But at the same time, the same information is sent directly to government agencies, according to Vmfunc, MDL, and Dziurwa.

The investigation found code that gives operators the ability to file suspicious activity reports straight to FinCEN; file equivalent reports to Canada’s financial intelligence unit; tag data with intelligence programme codenames; screen associated crypto addresses through Chainalysis, a blockchain security platform; and conduct over 250 more verification checks.

According to the investigation, the Chainalysis integration assesses cryptocurrency addresses for risk, analyses the other addresses they’ve interacted with, checks the value of the funds they contain, and tries to identify their owners.

“There’s also a native crypto address watchlist system layered on top,” the investigation’s authors said. “This isn’t a one-shot lookup but a persistent monitor. Your wallet goes on the list once and gets polled indefinitely against Chainalysis’ cluster graph.”

Chainalysis did not immediately respond to DL News’ request for comment.

The problem is that it isn’t clear what criteria need to be met to trigger the crypto address screening, the watchlist system, or any of the other actions. It’s also unclear if OpenAI users are specifically warned that their data could be used in this way when undergoing KYC checks.

According to the investigation, the code that runs these functions has been in place since November 2023.

As for how long data that is forwarded to the government agencies is kept for? That’s not clear either.

“What is the actual biometric retention period?” the investigation’s authors said. ”OpenAI says ‘up to a year.’ the code says three years max. Government IDs retained ‘permanently.’ Which is it?"

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Russia will block citizens from trading crypto on overseas exchanges as early as this summer, industry experts warn.

Roskomnadzor, the country’s internet and media censor, is poised to act, Nikita Zuborev, senior analyst at the Russian crypto exchange Bestchange, told Russia media outlet RBC.

“[The industry] expects Roskomnadzor may begin the mass blocking of the websites of crypto exchanges that are not registered in Russia as early as this summer,” Zuborev said.

The warning comes as the Kremlin and lawmakers attempt to police the nation’s crypto exchanges more strictly with new legislation during the State Duma’s forthcoming spring session. Policymakers say the new rules will outlaw transactions made on unregistered trading platforms.

A block on overseas crypto platforms would mark an escalation of the Kremlin’s censorship of foreign platforms. Roskomnadzor recently moved to block chat apps like Telegram and WhatsApp. It is also trying to restrict virtual private networks, which allow Russians to bypass blocks.

Earlier this month, the Ministry of Finance said the daily value of Russians’ crypto transactions had risen to $648 million. As crypto exchanges are still unregulated in Russia, all these trades take place either on unregistered domestic platforms or overseas exchanges, the ministry added.

Censor’s AI tools

Censors will likely follow the same technical playbook they’re using to block certain Russian-language YouTube services and “block-circumvention tools,” Zuborev said.

Roskomnadzor’s blocks will focus primarily on exchanges that have previously shown a willingness to comply with US, EU, and UK-led sanctions regimes, said Ignat Likhunov, founder of the legal firm Cartesius.

“It looks like the conditions for unfriendly foreign exchanges will worsen in Russia,” Likhunov said.

Russian citizens will be restricted from accessing many crypto trading platforms, the lawyer Dmitry Machikhin said, but blanket bans will be hard to enforce.

Machikhin noted that even after Binance’s official exit from Russia in 2023, at least a million Russians continue to trade on the platform.

Russia’s data protection laws could prove a stumbling block for overseas exchanges wanting to do business in Russia, the crypto market analyst Viktor Pershikov told the same media outlet.

These laws stipulate that firms that keep personal data on Russian citizens must do so on servers physically located in Russia.

As many larger international exchanges operate servers in Europe and the United States, Pershikov said, Roskomnadzor is likely to act sooner rather than later.

The forecasts come hot on the heels of reports Roskomnadzor will spend $29 million on AI and machine learning tools this year as part of its revamped web censorship drive.

Experts said these tools could disrupt Russian crypto traders’ ability to access overseas exchanges, mining pools, and data services.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.

A former investment fund chief who embezzled almost $40 million in Bitcoin from Georgia’s former prime minister Bidzina Ivanishvili has been released from prison.

The man, the Georgian-Russian national Giorgi Bachiashvili, was jailed for 11 years in absentia after fleeing the country in March.

He was later arrested on the border with Azerbaijan and transferred to prison to serve his sentence, with courts ordering him to serve a further four years for illegal flight, the Russian-language media outlet Vzglad reported.

But after striking a plea deal, Bachiashvili’s sentence was reduced, and he was allowed to walk free.

“Bachiashvili has fully admitted his guilt to all the criminal charges,” prosecutors told Georgian broadcaster Channel 1. “He also fully cooperated with the investigation and has paid compensation for the damages incurred.”

The development comes as the popularity of Bitcoin mining continues to grow in Georgia.

Regulatory data published late last year shows the Bitcoin mining sector’s power consumption tripled in the first 10 months of 2025, reaching 617 million kilowatt-hours. This represents 5% of the nation’s total electricity consumption.

Prosecutors drop charges

Ivanishvili is one of the richest people in Georgia and wields enormous political influence. He serves as the honorary chairman of the ruling Georgian Dream party.

In the early 2010s, Ivanishvili hired Bachiashvili to manage his own and his businesses’ assets.

In 2015, Ivanishvili’s banking firm Cartu loaned Bachiashvili the Bitcoin after the latter said he would use the cryptocurrency to launch a crypto mining firm. Instead of doing so, prosecutors said, Bachiashvili embezzled the coins.

Prosecutors also indicted Bachiashvili’s parents, accusing them of aiding their son’s efforts to launder $3.5 million worth of Cartu’s Bitcoin.

Prosecution officials have also dropped these charges.

Prosecutors said that, under the terms of the plea deal, Bachiashvili’s sentence was reduced to a suspended one-year jail term. Bachiashvili has also agreed to pay a $19,000 fine.

Most of Georgia’s data centres focus their efforts on crypto mining, with the majority of miners based in Tbilisi and Kutaisi’s free industrial zones.

Tim Alper is a News Correspondent at DL News. Got a tip? Email him at tdalper@dlnews.com.

Forget bone-snapping arm bars and chokeholds.

Tom Matthews tells clients instead to focus on simple yet devastating strikes to vulnerable areas if they ever find themselves in physical danger.

It can take years to learn a leg triangle grapple — but anyone can punch someone in the throat.

“Get real gnarly,” the ex-Secret Service member who now serves as head of physical security at crypto firm Asymmetric Security told DL News.

“Aim for the eyes, things that people don’t really prepare for. The throat, the groin.”

It’s part of why he advises simple fighting styles — such as boxing or Krav Maga, the self-defence technique developed for the Israel Defence Forces — to crypto investors who fear violent attacks to steal their digital assets.

Cut-off fingers

It’s a real threat.

Last year was the worst year on record for so-called wrench attacks, with victims being tortured and having fingers cut off.

Now, experts warn it will get even more brutal in 2026.

“My first conference in crypto was an FTX conference in the Bahamas.”

Tom Matthews, head of physical security at Asymmetric Security

There have already been nearly a dozen violent attacks or kidnappings of crypto entrepreneurs, investors and their loved ones since the start of the year.

In January, three teens disguised as delivery drivers entered a man’s house in England and threatened him with knives until he handed over his crypto. Individuals in France attacked a family in order to extort them for their cryptocurrencies last month.

In an ideal world, however, Matthews’s crypto clients are taking steps well in advance to avoid ever encountering dangerous altercations like those.

If crypto investors are ever cornered, Matthews still advises them to just hand over their crypto.

“If someone is armed and they are asking for things, you give up the keys to the castle,” said Matthews.

After years in the Marine Corps and a nearly two-year stint with the US Secret Service, Matthews has found a new home in the private sector following a shoulder injury.

Increasingly, that’s been executives in the digital assets industry.

Katy Perry concert

In 2022, Matthews found himself leading security for Jump Trading’s crypto group, Jump Crypto.

While there, he had a front row seat to the collapse of Terra’s algorithmic stablecoin in 2022 and worked through the $320 million Wormhole hack in 2023. Jump Trading was a large backer of both ventures.

Other experiences were surreal for different reasons.

“My first conference in crypto was an FTX conference in the Bahamas,” he said. “Katy Perry did a concert for like 50 People.”

As one of FTX exchange’s largest users, Jump Trading lost nearly $300 million when Sam Bankman-Fried’s crypto exchange collapsed in November 2022, according to financial journalist Michael Lewis.

While hacks and phishing scams continue to haunt the crypto industry, the startling rise of physical attacks has added a much more sinister dimension to the challenge of staying safe.

It’s why Matthews joined Asymmetric Research in June.

The cybersecurity company had received so much inbound interest for physical protection that the founders tapped Matthews to spin up a new division.

“We realised that the threat surface for our partners extends beyond smart contracts and infrastructure,” Jonathan Claudius, the co-founder and CEO of Asymmetric Research, told DL News. “Adding physical security was a natural move toward a more complete security model for the partners we already support.”

That doesn’t mean Matthews only gives founders and developers fighting lessons.

Mostly, he just wants them to put their phones down.

How to stay safe

Matthews’ biggest tip for staying safe in the industry is simply being present.

“Not being tied to your phone, not being completely locked in your work world,” he said. “You would be shocked by how many wrench attacks we could stop if we just had good situational awareness.”

He also suggests varying routines to make yourself harder to predict. Moreover, avoid posting extravagant pictures on social media flaunting your wealth, where you’re staying or of your family. At crypto conferences, take off the lanyard and try to avoid crypto t-shirts.

Matthews recommends incorporating a “kidnapping and ransom” policy, too.

“You just pick up the phone, and there’s a hostage negotiation team that will pay your ransom or your kidnappers‘ money, so that way you won’t lose any fingers and toes,” he said.

Though Matthews focuses on physical security, there’s plenty you can do to protect yourself online as well.

Pseudonymous security analyst Tanuki42, for instance, advises against using the Ethereum Name Service to link you to a large amount of crypto.

“It serves zero purpose other than painting a big target on your back,” Tanuki42, who also works with the cybersecurity team Seal911, told DL News.

They encourage the use of multi-signature wallets or so-called timelocks that won’t allow anyone to access funds until a specific period has passed. Tanuki42 also encourages the use of privacy-enhancing tools such as Railgun or privacy pools.

Both Matthews and Tanuki42 recommend keeping a small amount of crypto in a hot wallet with you in case the worst happens.

“Enough to make the bad guys happy, and enough that way you won’t get your toes and your fingers cut off,” said Matthews.

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.

Bitcoin is set to rally as markets calm down, according to Thomas Perfumo, global economist at Kraken.

Options traders are now betting that price swings will fade as Bitcoin’s price stabilises between $65,000 and $70,000, Perfumo told DL News.

“Historically, we’ve seen a similar dynamic during Bitcoin’s August 2024 and March-April 2025 corrections,” he said. “In both cases the dislocation preceded recovery rallies as markets digested heavy selling and volatility normalised.”

The Kraken analyst joins the likes of US Treasury Secretary Scott Bessent and Maelstrom chief investment officer Arthur Hayes, who have also made bullish predictions, suggesting that the market rout might be coming to an end.

Those predictions may serve as a balm to traders burnt by Bitcoin’s price crashing 47% below its October peak of $126,000. In the same time, the overall cryptocurrency industry has lost over $2 trillion, or about half, in value.

Other recovery signals

Perfumo also cited onchain data to support his argument for a market recovery.

A measure called “coin days destroyed,” which tracks the movement of older, long-held Bitcoin, has dropped back to lower levels after spikes in 2024 and 2025, Perfumo said.

That suggests fewer long-term holders are selling, reducing supply pressure and giving the market room to stabilise.

Gabe Selby, head of research at CF Benchmarks, also says the market may have bottomed out.

“Bitcoin’s price action and volatility suggest an exhaustion event,” Selby told DL News.

“The magnitude of the volatility spike, combined with Bitcoin’s roughly [47%] drawdown, suggests market participants are pricing in catastrophic outcomes, conditions that historically signal a panic-driven flush-out, not the beginning of a prolonged decline.”

Macroeconomic factors

Perfumo and Selby aren’t the only ones arguing that Bitcoin’s price is set for a rebound.

In a string of highly publicised blog posts, Hayes has argued that the Federal Reserve is going to pump the price of Bitcoin by adding liquidity into the market. The US central bank printing more money is usually positive for Bitcoin’s price movement.

Similarly, Bessent said on February 12 that the passage of crypto-friendly legislation like the Clarity Act will shore up investors’ confidence and thus boost Bitcoin prices.

To be sure, not everyone shares the bullishness.

Mike McGlone, the Bloomberg Intelligence strategist known for his bearish calls, warned on February 16 that the cryptocurrency market “bubble is imploding.”

McGlone sees Bitcoin crashing another 85% to trade at $10,000.

Kevin Warsh, US President Donald Trump’s hawkish pick to lead the Federal Reserve, may also affect the investors’ sentiment.

That’s because Warsh’s nomination is a significant U-turn by Trump, who has long insisted on lower interest rates which pump up asset prices.

A hawkish Fed means fewer and slower rate cuts, meaning less money in the financial system to boost asset prices like Bitcoin.

Not everyone shares the view that Warsh will be hawkish, though.

Wolfgang Münchau, director of Eurointelligence, wrote a column to DL News earlier in February, arguing that Warsh may be more flexible on interest rates than what people think and that he, more than anything, has family ties to Team Trump.

“Trump chose Warsh over other candidates,” Münchau said. “They all promised him that they would cut interest rates. Trump is wily enough to know that these promises are worth nothing.”

Crypto market movers

Bitcoin is down 2.0% over the past 24 hours, trading at $66,801.

Ethereum is down 2.8% past 24 hours at $1,963.

What we’re reading

OpenAI releases crypto security tool as Claude blamed for $2.7m Moonwell bug — DL News

Bitcoin price will hit a new record as AI destroys jobs, Arthur Hayes says — DL News

Mysterious $436 Million IBIT Buyer Raises Eyebrows, Says ProCap CIO — Unchained

BTC hasn’t done this since 2018 — Milk Road

ETHZilla stock plummets as Peter Thiel exits Ethereum treasury bet, filings show — DL News

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.