Decentralized finance (DeFi) protocol Volo has disclosed a security breach that resulted in the loss of approximately $3.5 million in digital assets, marking the latest incident in a series of exploits targeting DeFi platforms.
In a Wednesday post on X, the team said the attack affected select vaults and involved assets including Wrapped Bitcoin (WBTC), Matrixdock Gold XAUm and USDC (USDC). “We detected the attack, immediately notified the Sui Foundation and ecosystem partners to contain the damage, and froze the vaults to prevent any further exposure,” the team wrote.
The protocol added that around $28 million in total value locked across other vaults is safe, with the exploit limited to three isolated vaults and no shared vulnerability identified. It also revealed plans to absorb the losses rather than pass them on to users, though details of any remediation plan have yet to be finalized.
Volo is a liquid staking DeFi platform on the Sui blockchain, allowing users to stake their Sui (SUI) tokens and receive voloSUI (VSUI) in return. DeFi is already on edge, as the exploit comes as another liquid restaking protocol, Kelp, was hacked for approximately $293 million over the weekend, which has had a ripple effect across the broader ecosystem.
In two separate updates, Volo said it has frozen or blocked roughly $2 million of the stolen funds so far. In the first update, the protocol said that roughly $500,000 linked to the breach has already been frozen. In a later update, the team claimed it had successfully blocked an attempt by the attacker to bridge 19.6 WBTC, effectively removing those funds from the hacker’s control.
“We are now working with ecosystem partners to determine the best path to return these funds to Volo,” the protocol wrote.
As Cointelegraph reported, more than $17 billion has been stolen in crypto over the past decade, with private key compromises identified as one of the major contributing attack vectors, according to DefiLlama.
Roughly 22.3% of incidents are linked to brute-force key compromises, 18.2% to unknown methods and 10% to phishing attacks on multi-signature wallets. The findings show that many of the biggest losses stem from wallet security and user-side weaknesses rather than protocol bugs.
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
Admiral Samuel Paparo sees Bitcoin as a strategic tool for U.S. cybersecurity and national power, emphasizing its proof-of-work advantages.
A top U.S. military official has highlighted Bitcoin (BTC) as a critical tool for national security, with applications extending far beyond its monetary use. Speaking at a Senate Armed Services Committee hearing on April 21, Admiral Samuel Paparo, the commander of the U.S. Indo-Pacific Command, described Bitcoin’s proof-of-work technology as pivotal to strengthening cybersecurity and projecting American power globally.
“It is a valuable computer science tool, as a power projection,” said Paparo. He explained that Bitcoin’s decentralized and energy-intensive proof-of-work system imposes significant costs on potential attackers, making it a strong defensive asset in the escalating arena of cyberwarfare. Paparo added, “Outside of the economic formulation of it, it has got really important computer science applications for cybersecurity.”
Paparo’s remarks come as the U.S. faces mounting threats from state-linked cyber adversaries like North Korea’s Lazarus Group, which has stolen billions in crypto to fund its weapons programs. With Bitcoin trading at $75,508 as of April 22 and a market cap of $1.51 trillion, the digital asset continues to grow as a strategic resource. Analysts have long argued that Bitcoin’s decentralized infrastructure could play a key role in securing critical data and communications, particularly in military and government operations.
Bitcoin and National Security
The discussion at the Senate hearing centered on the Indo-Pacific region’s strategic challenges, including China’s military expansion, conflicts in Ukraine and the Middle East, and cyber threats from North Korea. Senator Tommy Tuberville, who questioned Paparo, noted that China’s monetary think tank has also begun treating Bitcoin as a strategic asset. While Paparo didn’t directly address U.S.-China Bitcoin competition, he emphasized that Bitcoin’s “peer-to-peer zero-trust transfer of value” aligns with broader U.S. national power goals.
Admiral Paparo’s comments echo earlier statements by U.S. Space Force member Jason Lowery, who in December 2023 argued that proof-of-work blockchains like Bitcoin could safeguard not just financial systems but also critical communications. Lowery warned that underestimating Bitcoin’s cybersecurity applications could undermine national security.
Legislative Push for Bitcoin Mining
Amid these strategic considerations, U.S. lawmakers are pushing to bolster domestic Bitcoin mining capabilities. In March 2026, Senators Bill Cassidy and Cynthia Lummis introduced the Mined in America Act, aiming to reduce reliance on foreign-manufactured mining equipment by incentivizing U.S.-based production. The legislation seeks to codify the Strategic Bitcoin Reserve, a concept first introduced under the Trump administration.
Currently, the U.S. holds the largest Bitcoin reserves among nation-states and dominates the global Bitcoin hashrate. However, vulnerabilities in the supply chain for mining hardware remain a concern. By addressing these gaps, policymakers hope to secure Bitcoin’s role in national defense and economic stability.
Strategic Implications
Admiral Paparo’s advocacy for Bitcoin underscores its growing recognition as more than an investment asset. Its role as a defensive tool in cyberspace could reshape how the U.S. approaches both military strategy and technological innovation. With adversaries increasingly leveraging cyberattacks to destabilize infrastructure, Bitcoin’s cryptographic architecture offers a unique layer of protection for sensitive systems.
For traders, these developments signal Bitcoin’s evolving narrative. What was once dismissed as a speculative asset now carries explicit endorsements from U.S. military leaders for its strategic utility. This shift could influence long-term institutional adoption and reinforce Bitcoin’s position as a geopolitical asset.
Bitcoin (BTC) mid-size wallet inflows to Binance fell to 3,000–4,000 BTC, marking a multi-year low in sell-side activity from this cohort.
This coincides with Coinbase recording about 8,500 BTC in inflows from similar wallets on Sunday, while other exchanges saw much smaller flows. Binance exchange Bitcoin inflows have fallen to 2023 levels, but how is this significant to today’s market?
Binance BTC inflows cool sharply to 2023 levels
CryptoQuant data classifies mid-size wallets as the entities holding roughly 100–1,000 BTC, often linked to active traders and smaller institutions. These wallets tend to move coins to the exchanges during distribution periods, making their inflows a useful proxy for near-term selling intent.
Binance inflow structure by Investor size. Source: CryptoQuant
Crypto analyst Amr Taha noted that seven-day average Bitcoin inflows from this cohort into Binance have dropped to 3,000–4,000 BTC. This remains well below the deposits observed during April to May 2023, which ranged from 5,500 to 6,000 BTC.
The lowered inflow levels suggest reduced immediate sell-side pressure, as fewer coins are being positioned on the exchange, although inflows alone do not translate into active selling.
The chart shows no comparable surge from retail participants (1-100 BTC) either, with smaller wallets contributing limited inflows of less than 300 BTC on Tuesday. This indicates a contained flow profile rather than broad-based selling pressure.
The distribution of BTC inflows across exchanges provides another perspective. Data from CryptoQuant shows that mid-size investor inflows into Coinbase reached about 8,500 BTC on Sunday, approaching levels last seen after the FTX exchange collapse in November 2022.
Bitcoin mid-size wallet inflows on Coinbase. Source: CryptoQuant
BTC activity across other exchanges remained relatively muted. Amr Taha noted that a broad distribution phase would typically reflect synchronized inflows across multiple exchanges, which is not evident in the current data.
A similar spike on Coinbase was observed on Jan. 14, shortly before Bitcoin declined from $95,000 to below $67,000 in February. However, the current conditions differ, as exchange inflows appear fragmented rather than market-wide, suggesting mixed sentiment rather than coordinated distribution.
Data from Bitcoin researcher Axel Adler Jr. also highlights a deeper shift in supply dynamics. Bitcoin’s 30-day net flow dropped to -300,000 BTC in March from +94,000 BTC in February, signaling a strong withdrawal phase. The metric stood near -98,000 BTC as of Tuesday, with outflows continuing at a slower pace.
Bitcoin 30D net flows. Source: CryptoQuant
Adler Jr. added that exchange reserves have declined for seven consecutive weeks, falling by over 105,000 BTC since early March. Notably, even during the April 2 pullback toward $67,000, there was no significant return of coins to exchanges.
This article is produced in accordance with Cointelegraph’s Editorial Policy and is intended for informational purposes only. It does not constitute investment advice or recommendations. All investments and trades carry risk; readers are encouraged to conduct independent research before making any decisions. Cointelegraph makes no guarantees regarding the accuracy or completeness of the information presented, including forward-looking statements, and will not be liable for any loss or damage arising from reliance on this content.
Poland’s parliament, the Sejm, has yet to pass a domestic enabling act for the EU’s regulations on cryptocurrencies.
The parliament has again failed to override a presidential veto on a key crypto regulation bill. President Karol Nawrocki defended his veto, citing concerns over excessive regulation that could harm small businesses. Opponents state that the lack of framework makes the Polish market vulnerable to fraud and free-for-all for illicit actors. The political path forward is unclear.
Outside the political arena, the reality is that Poland is the only EU member state left to implement the bloc’s Markets in Crypto-Assets (MiCA) regulatory framework. The deadline for the transitionary period ends on July 1.
This already makes it difficult for local firms to stay competitive in Europe. But after July 1, if a solution isn’t forthcoming, it will be impossible. Some are already taking their business elsewhere and moving abroad.
Crypto industry, Polish president claim bill is burdensome
In November 2025, the Sejm passed the Crypto-Asset Market Act, which would update Polish law to comply with MiCA.
Local enterprise groups were not pleased with the result. In an October letter, the Warsaw Enterprise Institute, a business-focused think tank, outlined a few of the perceived problems with the law.
First was the length. Including draft secondary regulations, the total length was well over 300 pages. The Warsaw Enterprise Institute said that, while other EU member states were satisfied with just a few dozen pages, “the Polish law has several hundred articles and provides for additional regulations.”
It said the act introduces “a ban on marketing activities related to basic cryptocurrencies and the possibility of blocking websites by administrative decision, without the right to appeal to a court.”
“Such solutions are not justified by MiCA and put Polish companies in a worse competitive position compared to entities operating in other EU countries.”.
Of further concern was the role the Polish Financial Supervision Authority (KNF) would play under the new regime. Under the law, the KNF would be the sole regulator of the entire crypto market. It would have the power to levy heavy fines as well as maintain and enforce a blacklist of “unreliable” crypto domains that Polish ISPs would have to block.
Not only would the KNF be incredibly powerful, but it is already notoriously slow. According to a payment institution peer review by the European Banking Authority, the KNF’s authorization times were the slowest in Europe. In an October letter, the Warsaw Enterprise Institute claimed that the KNF has only issued two licenses for brokerage houses in the last 10 years. In the same time period, it has only issued one electronic money institution license, while Lithuania has registered over 100.
On Dec. 1, 2025, Nawrocki vetoed the law, citing bloated regulation. The government failed to override the veto, and then reintroduced the exact same bill. Nawrocki vetoed the bill for a second time in February, and on April 17, the Sejm repeated itself in failing to overrule the veto.
Polish parliament struggles to find path forward for MiCA
The battle over the crypto bill shows no signs of stopping.
Firstly, for Nawrocki, passing the bill after being reintroduced in the same form would have presented a political problem.
Piech told Cointelegraph, “Once the president had already argued that the bill breached constitutional principles and contained excessive, disproportionate and vague provisions […] signing a near-identical version would have meant contradicting his own stated reasoning.”
“In that sense, the second push looked less like compromise and more like an attempt to pressure the president into a constitutional U-turn.”
Some in the crypto industry hailed the veto as Nawrocki sticking to his pro-crypto, sound regulatory principles.
“The veto is not anti-regulatory, it brings common sense back into the law-making process. […] The industry did not ask for privileges. It asked for proportionality,” said Sławomir Zawadzki, co-CEO of Kanga Exchange.
Different coalitions and groups have attempted to introduce their own versions. According to Piech, Finance Minister Andrzej Domański said that the government started work yesterday on solutions for a new crypto-asset bill.
In December, after the first veto, the Polska 2050 political party announced “an improved draft that is a step forward from the President’s arguments, which, although far-fetched, are perhaps worth considering.”
Nawrocki himself has said he would submit a draft but the speaker in the Sejm has blocked the introduction of presidential proposals.
The Confederation of Liberty and Independence and the Law and Justice have filed versions, while another political coalition, the Center Club, announced it would prepare another draft.
Overall, Poland’s political class is “still deeply split on crypto.”
“This is no longer just a technical argument about implementing MiCA. It has become a broader fight over whether crypto should be brought into a normal legal framework, or treated as a politically suspicious sector that can be overregulated, stigmatised or used as a proxy battlefield after the Zonda Crypto controversy,” he said.
Polish Prime Minister Donald Tusk, himself a member of the Civic Coalition, has accused local exchange Zonda Crypto of illicit funding and ties to Russian criminal networks. It has undergone a funding crisis, pausing withdrawals, and has reportedly lobbied against the bill.
The founder of BitBay (now Zonda Crypto), Sylwester Suszek, went missing in 2022. After his disappearance, the exchange entered a funding crisis. Source: Yaguar
Tusk also claimed that it “sponsors political and social events in Poland and promotes very specific political forces,” including the opposition far-right Law and Justice party, of which Nawrocki is a member.
Zonda Crypto did not respond to Cointelegraph’s request for comment.
Polish crypto companies look abroad
For companies in Poland, passing a new law by the end of the MiCA transitional period on July 1 may be a case of shutting the barn doors after the horses have bolted.
Said Piech, “A new law may still matter institutionally, especially for banks and larger financial institutions that may want to enter crypto once there is a clear legal path. But for all existing Polish crypto firms, it is already very late.”
Some domestic crypto firms are already looking abroad. Crypto exchange Kanga is considering a move to Latvia, “a country whose representatives have openly used conferences in Poland to attract crypto firms, offering a MiCA-friendly regime, faster procedures and relatively low supervisory fees,” per Piech.
Robert Wojciechowski, president of the Polish Chamber of Commerce for Blockchain and New Technologies, said, “Since we founded the chamber, about 70-80 percent of companies have sailed abroad. Now my colleagues say they are talking to the Czech Republic to move their business there.”
The Chancellery of the President has itself raised the alarm, stating that, “Overregulation is a guaranteed way to push companies abroad — to the Czech Republic, Lithuania or Malta — instead of creating conditions for them to operate and pay taxes in Poland.”
Zonda Crypto CEO Przemysław Kral has previously told Cointelegraph, “Although we are a company with Polish roots and the largest player in the crypto industry on the Polish market, we have been operating outside Poland for years.”
“We are confident that we will remain a key player on the market. However, many small Polish crypto companies will lose the opportunity to operate on the market,” he said.
Now it’s a race against the clock, as July 1 draws closer. Piech doesn’t see a “realistic chance” for a bill to pass, and if it doesn’t, “domestic firms without a functioning Polish route are left at a structural disadvantage.”
Cointelegraph Features publishes long-form journalism, analysis, and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Research or perspective in this article does not reflect the views of Cointelegraph as a company unless explicitly stated. Content published in Features does not constitute financial, legal, or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence. The selection, commissioning, and publication of Features and Magazine content are not influenced by advertisers, partners, or commercial relationships. This content is produced in accordance with Cointelegraph’s Editorial Policy.
Banks are moving onchain through competing models that take different approaches to how financial rules are enforced.
On the one hand are blockchain-native builders like Matter Labs co-founder Alex Gluchowski, who argue that financial systems require rules to be enforced across all participants. On the other are networks built for institutions like Canton, which prioritize privacy, control and interoperability over global state.
Gluchowski is among the most vocal critics of the latter approach, arguing it reproduces the limitations of traditional finance in a new form. The core of the critique is whether rules can be enforced across an entire network. That’s not possible in systems like Canton, he claimed.
“But they are possible with blockchains — specifically with zero-knowledge systems anchored to public blockchains like Ethereum, which is an environment all parties can trust because it cannot be captured by any single corporate interest,” Gluchowski told Cointelegraph.
Crypto’s institutional adoption is bringing banks and financial institutions onchain, but it’s also splitting the industry along a deeper fault line than geography or regulation.
Canton rose into the top 21 cryptocurrencies despite criticism from decentralization purists. Source: CoinGecko
Whether Canton counts as a blockchain depends on how the term is defined and what properties it is expected to guarantee.
For Gluchowski, a blockchain’s core feature is a single shared ledger that allows rules to be enforced across all participants at once. He claimed Canton does not qualify. The network connects institutions through bilateral or trilateral relationships, where each party sees and verifies the transactions it is directly involved in.
“Before blockchains, banks had to enter bilateral relationships and define how they handle edge cases through contracts and API interactions,” Gluchowski said. “It’s just taking these existing relationships and workflows and putting them into a tokenized form.”
Gluchowski said Canton’s model limits what the system can guarantee. While participants can verify the transactions they are directly involved in, they cannot independently verify system-wide properties such as total asset supply or other rules that apply across all users. He added that those kinds of guarantees require a shared state that everyone can check.
Digital Asset co-founder details how Canton differs from legacy systems in practice. Source: Shaul Kfir
“[Gluchowski] is correct that Canton does not have a global shared state, but he is incorrect in implying that this negatively affects Canton’s trust model,” Shaul Kfir, co-founder of Digital Asset, responded through a statement shared with Cointelegraph.
“In Canton, as in all other blockchains, I only trust my own validator and assume anyone else can be malicious. This ‘don’t trust, verify’ approach is very different from a distributed API system,” Kfir added.
In Canton’s model, trust does not come from a single system-wide view, but from each party independently checking the transactions it is involved in.
Network rules clash with issuer control
Following the conversation with Cointelegraph, Gluchowski took part in a live debate with another Digital Asset co-founder, Yuval Rooz. He reiterated his argument that financial rules must be enforced across an entire network in a blockchain network.
Rooz countered that system-wide enforcement doesn’t eliminate reliance on trusted parties, as public blockchain users still depend on token issuers. Rooz pointed to hacks that involved assets like USDC to argue that issuers remain the key enforcement mechanism.
The industry has repeatedly called for Circle to freeze stolen funds before illicit actors trade them for decentralized assets. Source: ZachXBT
“Actually, we would have been happier — as we’ve seen a lot of the crypto space saying if the centralized issuer were to intervene sooner rather than allowing these assets being traded and swapped into permissionless assets where then they can no longer interfere,” Rooz said.
“On Canton, no different than any other public chain, the issuer is centralized in real world assets, and they have different properties or similar properties to what they would have on public permissionless chains,” he added.
Gluchowski argued that issuance limits can be embedded directly into smart contracts. He said that on networks like Ethereum, activity beyond a certain threshold can be restricted or require additional approval, rather than relying solely on the issuer’s infrastructure.
“On Canton, you rely solely on the multisig. On Ethereum, you rely on smart contracts that are enforced by the network,” Gluchowski said.
“It’s just absolutely not true,” Rooz replied.
Kfir, whose statement was shared with Cointelegraph after the live debate, said that Gluchowski is “confusing the capabilities of Canton” with how it is used by centralized RWA issuers.
“When there’s a centralized RWA issuer, e.g. a stablecoin issuer, you’re already trusting them with the ‘mint’ function, and you’re trusting them and their auditors that the amount onchain is backed by reserves off-chain,” Kfir said.
Competing visions for bringing banks onchain
Canton and Matter Labs are competing to solve the same problem of how institutional finance moves onchain. Matter Labs, the developer of ZKsync, is targeting institutional use cases with Prividium, a model that keeps transactions private while anchoring verification to Ethereum through zero-knowledge proofs.
Kfir argued that systems like Prividium risk concentrating trust in a different place. In his view, users are no longer independently validating the relevant state, forcing them to reconcile their own records against what an operator reports happened onchain.
“ZKsync relies on Prividium operators who create ZKPs, but ZKsync’s own open source client doesn’t verify these proofs,” he said. “And even if a user does verify, it doesn’t verify which smart contract logic is running. The user is completely at the mercy of the Prividium operator.”
Gluchowski defended ZK technology in a February social media exchange with Rooz. Source: Alex Gluchowski
Rooz did concede one point during the debate, which is that Canton does not have public verifiability, while adding that there are plans to introduce it in the future.
For now, the divide remains unresolved. Canton is built around privacy and institutional control, while ZKsync’s Prividium attempts to preserve those features while anchoring verification to a public network. Both claim to offer a viable path for bringing banks onchain, but they are built on fundamentally different assumptions about how financial systems should work.
Banks are moving onchain through competing models that take different approaches to how financial rules are enforced.
On the one hand are blockchain-native builders like Matter Labs co-founder Alex Gluchowski, who argue that financial systems require rules to be enforced across all participants. On the other are networks built for institutions like Canton, which prioritize privacy, control and interoperability over global state.
Gluchowski is among the most vocal critics of the latter approach, arguing it reproduces the limitations of traditional finance in a new form. The core of the critique is whether rules can be enforced across an entire network. That’s not possible in systems like Canton, he claimed.
“But they are possible with blockchains — specifically with zero-knowledge systems anchored to public blockchains like Ethereum, which is an environment all parties can trust because it cannot be captured by any single corporate interest,” Gluchowski told Cointelegraph.
Crypto’s institutional adoption is bringing banks and financial institutions onchain, but it’s also splitting the industry along a deeper fault line than geography or regulation.
Canton rose into the top 21 cryptocurrencies despite criticism from decentralization purists. Source: CoinGecko
Whether Canton counts as a blockchain depends on how the term is defined and what properties it is expected to guarantee.
For Gluchowski, a blockchain’s core feature is a single shared ledger that allows rules to be enforced across all participants at once. He claimed Canton does not qualify. The network connects institutions through bilateral or trilateral relationships, where each party sees and verifies the transactions it is directly involved in.
“Before blockchains, banks had to enter bilateral relationships and define how they handle edge cases through contracts and API interactions,” Gluchowski said. “It’s just taking these existing relationships and workflows and putting them into a tokenized form.”
Gluchowski said Canton’s model limits what the system can guarantee. While participants can verify the transactions they are directly involved in, they cannot independently verify system-wide properties such as total asset supply or other rules that apply across all users. He added that those kinds of guarantees require a shared state that everyone can check.
Digital Asset co-founder details how Canton differs from legacy systems in practice. Source: Shaul Kfir
“[Gluchowski] is correct that Canton does not have a global shared state, but he is incorrect in implying that this negatively affects Canton’s trust model,” Shaul Kfir, co-founder of Digital Asset, responded through a statement shared with Cointelegraph.
“In Canton, as in all other blockchains, I only trust my own validator and assume anyone else can be malicious. This ‘don’t trust, verify’ approach is very different from a distributed API system,” Kfir added.
In Canton’s model, trust does not come from a single system-wide view, but from each party independently checking the transactions it is involved in.
Network rules clash with issuer control
Following the conversation with Cointelegraph, Gluchowski took part in a live debate with another Digital Asset co-founder, Yuval Rooz. He reiterated his argument that financial rules must be enforced across an entire network in a blockchain network.
Rooz countered that system-wide enforcement doesn’t eliminate reliance on trusted parties, as public blockchain users still depend on token issuers. Rooz pointed to hacks that involved assets like USDC to argue that issuers remain the key enforcement mechanism.
The industry has repeatedly called for Circle to freeze stolen funds before illicit actors trade them for decentralized assets. Source: ZachXBT
“Actually, we would have been happier — as we’ve seen a lot of the crypto space saying if the centralized issuer were to intervene sooner rather than allowing these assets being traded and swapped into permissionless assets where then they can no longer interfere,” Rooz said.
“On Canton, no different than any other public chain, the issuer is centralized in real world assets, and they have different properties or similar properties to what they would have on public permissionless chains,” he added.
Gluchowski argued that issuance limits can be embedded directly into smart contracts. He said that on networks like Ethereum, activity beyond a certain threshold can be restricted or require additional approval, rather than relying solely on the issuer’s infrastructure.
“On Canton, you rely solely on the multisig. On Ethereum, you rely on smart contracts that are enforced by the network,” Gluchowski said.
“It’s just absolutely not true,” Rooz replied.
Kfir, whose statement was shared with Cointelegraph after the live debate, said that Gluchowski is “confusing the capabilities of Canton” with how it is used by centralized RWA issuers.
“When there’s a centralized RWA issuer, e.g. a stablecoin issuer, you’re already trusting them with the ‘mint’ function, and you’re trusting them and their auditors that the amount onchain is backed by reserves off-chain,” Kfir said.
Competing visions for bringing banks onchain
Canton and Matter Labs are competing to solve the same problem of how institutional finance moves onchain. Matter Labs, the developer of ZKsync, is targeting institutional use cases with Prividium, a model that keeps transactions private while anchoring verification to Ethereum through zero-knowledge proofs.
Kfir argued that systems like Prividium risk concentrating trust in a different place. In his view, users are no longer independently validating the relevant state, forcing them to reconcile their own records against what an operator reports happened onchain.
“ZKsync relies on Prividium operators who create ZKPs, but ZKsync’s own open source client doesn’t verify these proofs,” he said. “And even if a user does verify, it doesn’t verify which smart contract logic is running. The user is completely at the mercy of the Prividium operator.”
Gluchowski defended ZK technology in a February social media exchange with Rooz. Source: Alex Gluchowski
Rooz did concede one point during the debate, which is that Canton does not have public verifiability, while adding that there are plans to introduce it in the future.
For now, the divide remains unresolved. Canton is built around privacy and institutional control, while ZKsync’s Prividium attempts to preserve those features while anchoring verification to a public network. Both claim to offer a viable path for bringing banks onchain, but they are built on fundamentally different assumptions about how financial systems should work.
Cointelegraph Features publishes long-form journalism, analysis, and narrative reporting produced by Cointelegraph’s in-house editorial team with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Research or perspective in this article does not reflect the views of Cointelegraph as a company unless explicitly stated. Content published in Features does not constitute financial, legal, or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence. The selection, commissioning, and publication of Features and Magazine content are not influenced by advertisers, partners, or commercial relationships. This content is produced in accordance with Cointelegraph’s Editorial Policy.
The CBOE Volatility Index (VIX), a preferred Wall Street metric to measure investor sentiment and market risk, dropped by over 45% in under a month. For Bitcoin (BTC), this could be a significant bullish signal.
Bitcoin may rise toward $82,700 if VIX keeps underperforming.
BTC’s upside outlook gets a boost from Strategy’s BTC buying spree.
Weakening VIX hints at BTC rising to $82,700
Often called Wall Street’s “fear gauge,” the VIX tracks how much volatility traders expect in the S&P 500 index over the next 30 days.
When the index rises, it usually signals rising stress and risk aversion across markets. When it falls, it suggests investors are becoming more comfortable owning riskier assets such as stocks and crypto.
History suggests that a VIX drop of 40% or more is bullish for Bitcoin.
For instance, BTC rallied approximately 40% during April 2025–May 2025, with its gains aligning with the VIX’s 70% dip.
BTC/USD and VIX daily chart. Source: TradingView
Similarly, a 46% VIX drop during the October–November 2025 period coincided with a 12% BTC gain.
Even the recent 42%–47% VIX decline has coincided with an 8%–9% BTC price rebound, improving the bullish backdrop for Bitcoin in the coming days.
BTC’s next upside target appears to be around the 200-day exponential moving average (200-day EMA, the blue line) at around $82,700 by early May.
What happens to Bitcoin if VIX starts rising?
A rising VIX is typically bearish for risk assets like Bitcoin. However, that correlation broke briefly in March, according to a chart highlighted by wealth management firm Swissblock.
BTC and VIX rose in tandem during the US–Iran escalation in March. In comparison, the broader risk market, including US equities, underperformed.
Bitcoin and VIX performance comparison. Source: Swissblock
One potential catalyst behind Bitcoin’s resilience may have been Strategy’s aggressive BTC buying, which has absorbed the equivalent to nearly 30 weeks of new coin supply since March.
This article is produced in accordance with Cointelegraph’s Editorial Policy and is intended for informational purposes only. It does not constitute investment advice or recommendations. All investments and trades carry risk; readers are encouraged to conduct independent research before making any decisions. Cointelegraph makes no guarantees regarding the accuracy or completeness of the information presented, including forward-looking statements, and will not be liable for any loss or damage arising from reliance on this content.
AAVE approaches make-or-break support levels as DeFi lending tokens face institutional rotation pressure. Technical patterns suggest potential downside to $70-75 if key support fails.
Market Context: Why AAVE is Moving Now
AAVE faces mounting pressure as institutional capital rotates away from DeFi lending protocols toward traditional finance yield opportunities. The token’s recent performance reflects broader skepticism about decentralized lending margins as conventional markets offer competitive returns with regulatory clarity.
The protocol maintains strong fundamentals with consistent revenue generation, but market sentiment has shifted toward more established crypto assets. This creates a disconnect between AAVE’s operational health and its price action, setting up potential technical opportunities for patient investors.
Technical Analysis Framework
AAVE’s chart structure reveals a critical juncture approaching. The token has been consolidating in a defined range, with lower support levels becoming increasingly important for maintaining bullish structure. RSI indicators suggest neither extreme oversold nor overbought conditions, creating uncertainty about near-term direction.
Moving averages show the token trading below key long-term trend lines, indicating the path of least resistance remains downward absent a catalyst. Bollinger Band positioning suggests volatility compression that typically precedes significant directional moves.
Volume patterns indicate reduced institutional participation, with trading activity concentrated among retail participants. This dynamic often creates conditions for sharp price movements when institutional flows resume.
Derivatives and Positioning Analysis
Futures positioning data suggests mixed sentiment among professional traders, with no clear directional bias in aggregate positioning. Open interest levels remain stable, indicating neither aggressive accumulation nor distribution phases currently active.
Funding rates across perpetual contracts show neutral readings, suggesting no significant premium for long or short positioning. This equilibrium often precedes periods of increased volatility as market participants await catalysts.
Options flow indicates interest in both upside and downside protection, with elevated implied volatility reflecting uncertainty about AAVE’s near-term trajectory.
Strategic Scenarios
The primary bearish scenario involves a breakdown below established support levels, which could accelerate selling toward the $70-75 range. This outcome becomes more probable if broader crypto markets experience renewed selling pressure or if DeFi sector rotation continues.
Such a decline would represent approximately 25% downside from current levels, bringing AAVE to technically significant support zones where institutional accumulation historically occurs.
The alternative bullish scenario requires reclaiming key resistance levels with sustained volume, potentially triggering short-covering and renewed institutional interest. This path faces headwinds from sector rotation trends but remains viable if broader crypto sentiment improves.
Target Analysis: Technical support breakdown could drive AAVE toward $70-75 within 10 trading days, creating potential accumulation opportunities for long-term investors at historically attractive valuations.
LDO’s recent bounce off multi-week lows reeks of short covering, not genuine buying interest. The next resistance test near $0.40 will likely trigger the final capitulation wave toward $0.25 support.
The Bounce That Screams Weakness
LDO carved out a textbook bear market rally from its recent lows, but the underlying structure tells a different story than the green candles suggest. When a token bounces this hard after weeks of selling pressure, the natural instinct is to assume buyers are stepping in. The reality is far grimmer.
Bear market rallies follow a predictable pattern: sharp oversold bounces that attract late longs, followed by brutal rejections that wipe out both new bulls and remaining bagholders. LDO’s current price action fits this template perfectly, trading in the danger zone where hope meets reality.
Technical Structure Breakdown
The key insight here isn’t about specific indicator readings – it’s about market structure. LDO remains trapped well below its major moving averages, indicating the longer-term trend stays firmly bearish. Every bounce in this environment serves one purpose: creating better short entry points for institutions.
The recent low around $0.27 established a temporary floor, but floors in bear markets are made to be broken. The current bounce has likely exhausted itself as it approaches the $0.38-$0.40 resistance cluster where previous support turned resistance.
What makes this setup particularly dangerous for bulls is the volume profile. Genuine accumulation phases show sustained buying interest across multiple timeframes. Instead, we’re seeing sharp spikes followed by immediate selling pressure – the hallmark of distribution disguised as recovery.
The Rejection Zone Approaches
The $0.38-$0.42 area represents the killing field for this bounce. Multiple technical factors converge in this zone to create a brick wall of resistance. Previous support levels from earlier in the downtrend now serve as resistance, and the psychological round number at $0.40 adds another layer of selling pressure.
Smart money understands this dynamic. They’re not chasing green candles into resistance – they’re positioning for the inevitable rejection. The bounce serves their purposes by clearing out weak shorts and attracting fresh long positions that will provide exit liquidity for the next leg down.
Derivatives Market Reality Check
The futures market tells the real story behind LDO’s price action. While spot prices bounce, the derivatives complex shows persistent bearish positioning from sophisticated traders. The funding rates and open interest patterns suggest institutions are using this rally to build larger short positions rather than covering existing ones.
This creates a dangerous feedback loop for retail traders. Surface-level bullish price action masks underlying bearish positioning from players with deeper pockets and better information. When the rejection comes, it tends to be swift and brutal as leveraged longs get liquidated in cascade fashion.
The Capitulation Target
Once LDO rejects from the $0.38-$0.42 resistance zone, the next major support sits around $0.25. This represents a significant breakdown below the recent lows and would likely trigger widespread capitulation from remaining holders.
The $0.25 level isn’t arbitrary – it aligns with longer-term Fibonacci retracement levels and represents a psychological breaking point for many LDO bulls. More importantly, it sits at a level that would flush out most leveraged positions and create the type of washout that marks genuine bear market bottoms.
Trading The Setup
The immediate strategy is straightforward: fade the bounce at resistance rather than chase green candles. LDO’s structure favors sellers at current levels, with risk-reward heavily skewed toward short positions as the token approaches the rejection zone.
The key is patience. Let the bounce exhaust itself naturally rather than trying to pick the exact top. Once rejection begins from the $0.38-$0.42 area, the downside targets become much more attractive with stops placed above the resistance cluster.
For those still holding LDO from higher levels, this bounce represents a gift – an opportunity to reduce position size before the next wave of selling pressure arrives. The technical and structural evidence suggests this relief rally is temporary, not the beginning of a sustainable recovery.
Crypto security is expanding beyond digital threats, with criminals increasingly targeting individuals directly through physical coercion rather than trying to exploit blockchain vulnerabilities or hack wallets.
The French case illustrates how attackers used a fake police raid and violence to force a Bitcoin transfer worth $1 million, bypassing encryption entirely by compelling the victim to authorize the transaction.
Wrench attacks are rising, with criminals using threats or force instead of technical exploits. This highlights how human vulnerability can override even the most secure cryptographic systems.
Impersonating authority figures such as police is highly effective because it combines fear, urgency and social conditioning, making victims more likely to comply without questioning the situation.
Digital defenses are no longer the only front line in crypto security. While phishing and exchange hacks have long been major threats, a growing number of thefts now bypass code entirely and target crypto holders directly.
A recent case in France highlights this shift. Attackers posing as police staged a “raid” and physically coerced a couple into transferring nearly $1 million in Bitcoin (BTC). This was not a failure of software, but a high-stakes robbery carried out through physical force.
When the victim, not the wallet, becomes the target
Posing as law enforcement officials is often effective because it taps into several psychological triggers:
Authority: People are socially conditioned to obey police directives.
Urgency: The appearance of an official raid creates the impression that immediate compliance is necessary.
Fear: Any resistance can seem as though it may lead to criminal consequences.
When criminals present themselves as police, victims often fail to question:
The reason for their presence.
The legitimacy of their demands.
The authenticity of the entire situation.
Under stress, the impulse to obey tends to overpower the instinct to verify or question what is happening.
In crypto, this risk is even greater because a single approved transaction can move significant funds in seconds.
Did you know? The term “wrench attack” became popular in the crypto space after an online comic joked that threatening someone physically is easier than breaking encryption. It reflects a real-world shift in which attackers bypass complex systems by targeting people rather than technology.
From simulated police raid to coerced Bitcoin transfer
Unlike conventional robberies that target cash, jewelry or other tangible items, this assault specifically targeted digital cryptocurrency holdings.
The attackers’ objective was straightforward: force the victim to carry out an immediate crypto transfer.
This form of theft can be difficult to contain for several reasons:
Stolen funds can be transferred anywhere in the world within minutes.
Blockchain transactions are generally irreversible.
Once transferred, funds can be moved quickly, which can make tracing and recovery more difficult.
When the victim retains direct control over their wallet, criminals do not need to steal hardware or break through security. They only need to force the victim to approve and send the transaction personally.
Understanding wrench attacks in the cryptocurrency space
It is often far easier to threaten a person with a wrench than to try to crack their encryption.
Rather than attempting to hack a wallet, perpetrators may use:
Threats
Physical violence
Other forms of coercion
These methods are used to force victims to reveal private keys or authorize the transfer of funds. Such attacks bypass even the strongest technical protections.
No matter how strong the encryption is, human vulnerability can make that security irrelevant.
Did you know? Some high-net-worth crypto holders now use “decoy wallets” with small balances. In a coercive situation, they can reveal these wallets instead of their main holdings, adding an extra layer of psychological and financial protection.
Why these attacks are becoming more frequent
Several underlying factors are driving this increase:
Growth in self-custody: A rising number of users now hold their own private keys and manage their assets directly, making them more immediate and accessible targets.
Visibility of high-value targets: Many cryptocurrency investors, company founders and executives maintain public profiles that make their wealth and identity relatively easy to identify.
Advances in cybersecurity: As digital wallet security improves and remote hacking becomes more difficult, criminals are increasingly turning to the softer target, the human user.
Instant global liquidity: Cryptocurrency enables near-instant transfers of value anywhere in the world without banks or intermediaries acting as gatekeepers.
In 2025 alone, documented cases of verified wrench attacks reportedly rose sharply, increasing 75% from 2024. Europe, and France in particular, stood out as a growing hotspot for such incidents. Financial losses reached $40.9 million in 2025, marking a 44% annual increase. While kidnapping remained the primary threat vector, physical assaults surged by 250%.
Why France has experienced a surge
France has recently recorded multiple high-profile violent crimes linked to cryptocurrency:
Kidnappings carried out to extort cryptocurrency ransoms.
Home invasions specifically targeting high-profile figures in the crypto industry.
Coordinated operations by organized criminal groups aimed at stealing digital assets.
These recurring incidents point to a shift in criminal behavior:
More deliberate efforts to identify individuals who hold cryptocurrency.
Increased surveillance of their physical locations and daily routines.
A growing preference for direct physical targeting over purely digital methods.
As cryptocurrency adoption continues to expand, public awareness of who owns it is also growing. Unfortunately, the physical risks associated with that visibility are rising as well.
Why criminals increasingly choose coercion over hacking
Crypto security has become increasingly strong. Hardware wallets, multisignature setups and cold storage solutions make remote hacking far more difficult.
Coercion, however, changes the equation.
Even the strongest technical protections may fail if a victim is coerced into unlocking their hardware device, revealing their credentials or authorizing a transaction.
Coercive attacks bypass cryptographic defenses entirely, target points of human access and exploit natural human reactions.
For perpetrators, this approach is often faster and more reliable than trying to break through technical defenses.
Why Bitcoin remains particularly exposed in duress situations
Bitcoin’s core architecture gives it considerable strength, but it also creates significant vulnerability when the owner is under coercion.
Its key features include:
The ability to transfer value immediately
The absence of any central entity capable of reversing transactions
Permissionless, worldwide accessibility
In a situation where the holder is forced to transfer funds, these traits can result in:
Assets being moved almost instantly
Virtually no realistic chance of recovery
Attackers rapidly moving funds across multiple addresses
The same qualities that give Bitcoin its independence and value also make stolen funds extremely difficult to recover once they are transferred under duress.
Did you know? Private security firms have started offering specialized protection services for crypto investors, including travel risk assessments, home security audits and digital footprint reduction strategies aimed at preventing targeted attacks.
How French authorities are responding
French law enforcement agencies are actively investigating the incident, with specialized organized crime units leading the effort.
Potential criminal charges under review include:
Although authorities are increasing enforcement in response to such incidents, these cases continue to present serious challenges because of:
The rapid cross-border movement of stolen assets
The pseudonymous and irreversible nature of cryptocurrency transactions
The involvement of organized and professional criminal groups
Key security takeaways for cryptocurrency owners
This incident underscores a major shift in the nature of cryptocurrency security threats.
Protecting technical systems alone is no longer enough. Safeguarding wallets, private keys and physical devices must now be paired with strong personal security measures.
Essential protective steps include:
Never publicly reveal or discuss the extent of your cryptocurrency holdings.
Keep your real-world identity separate from your wallet addresses and ownership.
Use multisignature wallets so that no single individual or compromised key can authorize transfers.
Distribute signing authority and key control across different geographic locations or trusted parties.
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