DeFi faces stress test, DoJ fears run on Binance, Hong Kong’s crypto trading: Hodler’s Digest, July 30 – Aug. 5
Top Stories This Week
The decentralized finance (DeFi) ecosystem experienced a challenging week after a seismic security incident led to over $61 million being stolen from Curve Finance’s pools, leaving several protocols facing broader contagion risks. This attack exposed vulnerabilities across DeFi projects and sparked efforts to recover stolen funds over the past few days, hammering the performance of tokens and even stablecoins as a result of the dramatic ups and downs in this story. As the community navigates the aftermath of this exploit, Cointelegraph compiled the week’s events, presenting a timeline of what happened since the hack on July 30.
US DoJ is concerned about a run on Binance should prosecutors bring fraud charges
The United States Department of Justice is reportedly considering charging cryptocurrency exchange Binance with fraud, but hesitating based on costs to consumers. According to people familiar with the matter, Justice Department officials are concerned about an indictment against Binance causing a run similar to what happened with FTX in November 2022. The officials are considering fines or non-prosecution agreements for Binance rather than criminal charges in an effort to reduce the harm to consumers. Binance has been targeted by a criminal probe in the U.S. for allegedly violating the country’s sanctions on Russia and has also faced lawsuits from U.S. regulators.
Hong Kong debuts retail crypto trading with HashKey and OSL
Digital asset firm HashKey has successfully obtained all necessary licensing to broaden its business from serving professional investors to taking on retail users, as Hong Kong expands its cryptocurrency trading to individual investors. The first license, Type 1, allows HashKey to operate a virtual asset trading platform under Hong Kong’s securities laws. The second one, Type 7, officially enables the firm to provide automated trading services to both institutional and retail users. OSL, another local crypto firm, received an upgrade to its existing license from Hong Kong’s Securities and Futures Commission, allowing it to offer Bitcoin (BTC) and Ether (ETH) trading to retail investors immediately.
Coinbase denies SEC told it to delist everything but Bitcoin
Coinbase has denied reports claiming that its CEO, Brian Armstrong, was once told by the U.S. Securities and Exchange Commission to delist all cryptocurrencies on its platform except for Bitcoin. In an interview with the Financial Times, Armstrong reportedly stated that the SEC wanted Coinbase to delist the nearly 250 tokens on its platform. According to a Coinbase spokesperson, however, the report is missing context and the SEC didn’t request Coinbase to delist any specific assets. SEC Chair Gary Gensler has previously claimed that “everything other than Bitcoin” is a security under the agency’s remit.
Ethereum’s 8th birthday: Crypto industry shares its top moments
The crypto community has come together to celebrate the birthday of the Ethereum network, marking eight years since the Ethereum Foundation first sent the network live.
On July 30, 2015, former Ethereum Foundation CCO Stephan Tual penned a blog post, officially announcing that the network had been rolled out. “The vision of a censorship-proof ‘world computer’ that anyone can program, paying exclusively for what they use and nothing more, is now a reality,” he wrote. Eight years later, Ethereum and its native currency, Ether (ETH), has grown to become the second-largest crypto asset in existence, boasting a market capitalization of $225 billion and more than 1,900 monthly active developers.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $28,985, Ether (ETH) at $1,823 and XRP at $0.63. The total market cap is at $1.16 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Helium (HNT) at 39.79%, XDC Network (XDC) at 20.11% and Bone ShibaSwap (BONE) at 18.04%.
The top three altcoin losers of the week are Compound (COMP) at -18.41%, Curve DAO Token (CRV) at -15.86% and Stellar (XLM) at -14.36%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
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Changpeng “CZ” Zhao, CEO of Binance
“As president, on day one, CBDC goes into the trash can — we’re not going to allow it.”
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“The most important thing that happened this year in Bitcoin is Larry Fink.”
Mike Novogratz, CEO of Galaxy Digital
Prediction of the Week
BTC price upside ‘yet to come’ at $29K after Bitcoin RSI reset — Trader
Bitcoin has not yet seen the majority of its gains this cycle, popular traders believe. After over a month of acting within a tight trading range, traders’ patience with Bitcoin is wearing thin, but amid expectations that BTC price will test levels closer to $25,000 or even lower, pseudonymous analyst Credible Crypto is one of those arguing the opposite.
Analyzing data, including Bitcoin market cap dominance and its relative strength index (RSI), he concluded that conditions had been reset. “Biggest upside moves on BTC are YET TO COME,” he summarized, before adding that:
“A month of sideways action on BTC and dominance has simply made a higher low. H12 bullish div confirmed, RSI on higher TF looks reset, maintaining above the ‘magic’ 40 RSI level, who’s ready for the next leg up?”
Continuing, fellow pseudonymous trader CryptoCon flagged RSI over longer timeframes to deliver a similarly bullish take on BTC price performance:
“I see price going sideways, and I’ve never been more bullish! Just wait until we break into phase 2 on the 3 Week RSI… Early bull market price action, period.”
FUD of the Week
Is SBF secretly behind BALD? Crypto Twitter debates latest conspiracy
Crypto Twitter has been abuzz with debate after a new conspiracy theory has suggested FTX founder Sam “SBF” Bankman-Fried may be secretly behind one of the most controversial new memecoins on Base. The Bald memecoin was launched on July 30 and witnessed an incredible 289,000% gain within the first 24 hours of trading. After the token’s anonymous developer removed thousands of ETH in liquidity, the price of Bald plummeted more than 85% — sparking allegations of a rug pull, which the developer has denied. The incident led a number of blockchain sleuths to dig into the developer’s on-chain past, prompting some to draw a link to SBF as the Ethereum wallet address responsible for deploying the Bald token, which had received thousands of ETH in funding from wallets associated with FTX and Alameda Research.
Individual charged with money laundering admits to hacking Bitfinex in 2016
Ilya Lichtenstein admitted to a U.S. court that he was the individual behind an exploit of cryptocurrency exchange Bitfinex in 2016 which resulted in the theft of roughly 119,754 Bitcoin. Lichtenstein spoke as part of a plea agreement with prosecutors, who charged him and his wife Heather Morgan with money laundering conspiracy and conspiracy to defraud the United States. The couple allegedly laundered more than 94,643 BTC from the Bitfinex hack — worth roughly $54 million at the time.
Users said CertiK’s warning was a false alarm — then the project rugged
Blockchain security firm Certik tried, in 2022, to warn users of an imminent rug pull surrounding a crypto project, but investors became angry and fired back. The firm rescinded the security alert. Then, the project pulled the plug. This is the story behind the Web3 gaming project “Crypto Cars.” At the time, the project’s native token was rapidly falling in price, its website was temporarily down, and its developers said that it would no longer respond on its Telegram due to the Lunar New Year holiday celebrated in Vietnam. The situation triggered Certik’s alert, but when Cointelegraph attempted to follow up with the project on Aug. 1, 2023, it had long ago shut its doors.
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Cryptocurrency markets saw another week of consolidation following last week’s long-awaited market recovery.
While Bitcoin (BTC) remained above the key $90,000 psychological level, investor sentiment continued to be dominated by “fear,” with a marginal improvement from 20 to 25 within the week, according to CoinMarketCap’s Fear & Greed index.
In the wider crypto space, the Ether (ETH) treasury trade appears to be unwinding, as the monthly acquisitions by Ethereum digital asset treasuries (DATs) fell 81% in the past three months from August’s peak.
Still, the biggest corporate Ether holder, BitMine Immersion Technologies, continued to amass ETH, while other treasury firms carried on with their fundraising efforts for future acquisitions.
Investors are also awaiting the key interest rate decision during the US Federal Reserve’s upcoming meeting on Wednesday to provide more cues about monetary policy leading into 2026.
Markets are pricing in an 87% chance of a 25 basis point interest rate cut, up from 62% a month ago, according to the CME Group’s FedWatch tool.
Ethereum treasury trade unwinds 80% as handful of whales dominate buys
The Ethereum treasury trade appears to be unwinding as monthly acquisitions continue to decline since the August high, though the largest players continue to scoop up billions of the Ether supply.
Investments from Ethereum DATs fell 81% in the past three months, from 1.97 million Ether in August to 370,000 ETH in November, according to Bitwise, an asset management firm.
“ETH DAT bear continues,” wrote Max Shennon, senior research associate at Bitwise, in a Tuesday X post.
Despite the slowdown, some companies with stronger financial backgrounds continued to accumulate the world’s second-largest cryptocurrency or raise funds for future purchases.
BitMine Immersion Technologies, the largest corporate Ether holder, accumulated about 679,000 Ether worth $2.13 billion over the past month, completing 62% of its target to accumulate 5% of the ETH supply, according to data from the Strategicethreserve.
BitMine holds an additional $882 million worth of cash according to the data aggregator, which may signal more incoming Ether accumulation.
Citadel causes uproar by urging SEC to regulate DeFi tokenized stocks
Market maker Citadel Securities has recommended that the US Securities and Exchange Commission tighten regulations on decentralized finance regarding tokenized stocks, causing backlash from crypto users.
Citadel Securities told the SEC in a letter on Tuesday that DeFi developers, smart-contract coders, and self-custody wallet providers should not be given “broad exemptive relief” for offering trading of tokenized US equities.
It argued that DeFi trading platforms likely fall under the definitions of an “exchange” or “broker-dealer” and should be regulated under securities laws if offering tokenized stocks.
“Granting broad exemptive relief to facilitate the trading of a tokenized share via DeFi protocols would create two separate regulatory regimes for the trading of the same security,” it argued. “This outcome would be the exact opposite of the “technology-neutral” approach taken by the Exchange Act.”
Citadel’s letter, made in response to the SEC looking for feedback on how it should approach regulating tokenized stocks, has drawn considerable backlash from the crypto community and organizations advocating for innovation in the blockchain space.
Arthur Hayes warns Monad could crash 99%, calls it high-risk “VC coin”
Crypto veteran Arthur Hayes has issued a warning over Monad, saying the recently launched layer-1 blockchain could plunge as much as 99% and end up as another failed experiment driven by venture capital hype rather than real adoption.
Speaking on Altcoin Daily, the former BitMEX chief described the project as “another high FDV, low-float VC coin,” arguing that its token structure alone puts retail traders at risk. FDV stands for Fully Diluted Value, which is the market value of a crypto project if all its tokens were already in circulation.
According to Hayes, projects with a large gap between FDV and circulating supply often experience early price spikes, followed by deep selloffs once insider tokens unlock. “It’s going to be another bear chain,” Hayes said, adding that while every new coin gets an initial pump, that does not mean it will develop a lasting use case.
Hayes said most new layer-1 networks ultimately fail, with only a handful likely to retain long-term relevance. He identified Bitcoin, Ether, Solana (SOL) and Zcash (ZEC) as the small group of protocols he expects to survive the next cycle.
Last year, Monad raised $225 million in funding from venture capital firm Paradigm. The layer-1 blockchain went live on Monday, accompanied by an airdrop of its MON token.
$25 billion crypto lending market now led by “transparent” players: Galaxy
The crypto lending market has become more transparent than ever, led by the likes of Tether, Nexo and Galaxy, and has just hit an aggregate loan book of nearly $25 billion outstanding in the third quarter.
The size of the crypto lending market has increased by more than 200% since the beginning of 2024, according to Galaxy Research. Its latest quarter puts it at its highest since its peak in Q1 2022.
However, it has yet to return to its peak of $37 billion at that time.
The main difference is the number of new centralized finance lending platforms and much more transparency, said Galaxy’s head of research, Alex Thorn.
Thorn said on Sunday that he was proud of the chart and the transparency of its contributors, adding that it was a “big change from prior market cycles.”
Portal to Bitcoin raises $25 million and launches atomic OTC desk
Bitcoin-native interoperability protocol Portal to Bitcoin has raised $25 million in funding amid the launch of what it describes as an atomic over-the-counter (OTC) trading desk.
According to a Thursday announcement shared with Cointelegraph, the company raised $25 million in a round led by digital asset lender JTSA Global. The fundraise follows previous investments by Coinbase Ventures, OKX Ventures, Arrington Capital and others.
Alongside the fresh funding, the company rolled out its Atomic OTC desk, promising “instant, trustless cross-chain settlement of large block trades.” The newly deployed service is reminiscent of crosschain atomic swaps offered by THORChain, Chainflip, and more Bitcoin-focused systems such as Liquality and Boltz.
What sets Portal to Bitcoin apart is its focus on the Bitcoin-anchored crosschain OTC market for institutions and whales, along with its tech stack. “Portal provides the infrastructure to make Bitcoin the settlement layer for global asset markets, without bridges, custodians, or wrapped assets,” said Chandra Duggirala, founder and CEO of Portal.
DeFi market overview
According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.
The Canton (CC) token fell 18%, marking the week’s biggest decline in the top 100, followed by the Starknet (STRK) token, down 16% on the weekly chart.
Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.
The lower house of Poland’s parliament failed to secure the required three-fifths majority to override President Karol Nawrocki’s veto of the Crypto-Asset Market Act, pushing the country further away from regulating its digital-asset sector at a moment when lawmakers argue that oversight is increasingly urgent.
As Bloomberg reported Friday, the legislation — advanced by Prime Minister Donald Tusk’s government — was intended to align Poland with the European Union’s MiCA framework for crypto markets. The bill was introduced in June but did not survive the president’s veto.
Nawrocki blocked the measure last week, arguing it would “threaten the freedoms of Poles, their property, and the stability of the state,” as Cointelegraph previously reported.
With the president’s veto upheld, the bill will not move forward, forcing the government to restart its crypto lawmaking process.
The proposal has sharply divided lawmakers and the crypto industry. Supporters framed the bill as a national security priority, saying that comprehensive rules are necessary to curb fraud and prevent potential misuse of crypto assets by foreign actors, including Russia, according to Bloomberg.
However, several crypto-industry groups opposed the legislation, warning that its requirements were overly burdensome and could drive startups out of the country.
Critics pointed to stringent licensing rules, high compliance costs and criminal-liability provisions for service-provider executives, arguing that the bill risked stifling innovation and creating an uncompetitive business environment.
Related: EU plan would boost ESMA powers over crypto and capital markets
Crypto adoption in Poland ramps up amid regulatory pause
Cryptocurrency use in Poland continues to accelerate even as the country stalls on comprehensive regulation. Chainalysis recently identified Poland as one of Europe’s “large crypto economies,” noting that the country’s onchain activity has expanded significantly over the past year.
According to the company’s 2025 Europe Crypto Adoption report, Poland recorded more than 50% year-over-year growth in overall transaction volume.
Polish investors are also increasing their exposure to Bitcoin (BTC), reflected in a surge in Bitcoin ATM installations in recent years. In January, Cointelegraph reported that Poland had become the world’s fifth-largest Bitcoin ATM hub, surpassing even El Salvador — a country that has made Bitcoin a central element of its monetary and financial system.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
US attorneys representing the federal government have requested that a judge send Terraform Labs co-founder Do Kwon to prison for 12 years at his sentencing hearing next week.
In a Thursday filing in the US District Court for the Southern District of New York, prosecutors asked that a judge sentence Kwon “to a term of twelve years’ imprisonment and finalize the forfeiture of his criminal proceeds.”
The filing came about four months after the Terraform co-founder pleaded guilty to two counts of wire fraud and conspiracy to defraud.
“In just a few years, Kwon caused losses that eclipsed those caused by Samuel Bankman-Fried […] Alexander Mashinsky […] and Karl Sebastian Greenwood [….] combined [emphasis included in filing],” said the Thursday filing. “The Terraform market crash triggered a cascade of crises that swept through cryptocurrency markets and contributed to what has since become known as ‘Crypto Winter.’”
Kwon, who is scheduled to be sentenced on Thursday, was indicted by US authorities in March 2023 for charges including securities fraud, market manipulation, money laundering and wire fraud related to his role at Terraform.
Though his whereabouts were initially unknown after the collapse of Terra in 2022, authorities in Montenegro arrested him on charges unrelated to his role at the company, and he was later extradited to the US.
Related: South Korea targets sub-$680 crypto transfers in sweeping AML crackdown
The price of Terra’s native token, LUNA, surged by more than 40% in the previous 24 hours amid the release of the sentencing recommendation, from about $0.07 to $0.10 at the time of publication. However, the token reached an all-time high price of more than $19.00 before the ecosystem collapsed in May 2022.
Kwon says he could still face prison time in South Korea
In a November court filing, lawyers representing Kwon asked that the Terraform co-founder be given a sentence of no more than five years. His attorneys presented several arguments in favor of a shorter sentence, including that the co-founder could face 40 years in prison in his native South Korea, where prosecutors are also working on a case against him.
“He would not be able to walk out of jail in the United States as a free man for any amount of time: He will be taken from whatever facility in which he serves his sentence directly to an immigration detention center to await a deportation flight to Seoul, where he will immediately reenter pretrial detention pending his criminal charges in South Korea,” said Kwon’s lawyers.
Although Kwon’s and prosecutors’ respective recommendations will remain under consideration, the judge overseeing the sentencing hearing has the authority to sentence the Terraform co-founder to decades in prison, or a significantly shorter time. In contrast, former FTX CEO Sam Bankman-Fried is serving a 25-year sentence after his conviction on seven felony charges, former Celsius CEO Alex Mashinsky was sentenced to 12 years in prison, and a judge sent Karl Sebastian Greenwood to prison for 20 years for his role in the OneCoin scheme.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
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