Category: Business

A cross-chain bridge holding nearly a fifth of a restaked ether token’s circulating supply just got drained, and the fallout is moving through DeFi faster than Kelp DAO can pause contracts.

An attacker drained 116,500 rsETH (restaked ether) from Kelp DAO’s LayerZero-powered bridge at 17:35 UTC on Saturday, worth roughly $292 million at current prices and representing about 18% of rsETH’s 630,000 token circulating supply tracked by CoinGecko.

LayerZero is a cross-chain messaging layer, or the infrastructure that lets different blockchains send verified instructions to each other. Kelp DAO is a liquid restaking protocol, which takes user-deposited $ETH, routes it through EigenLayer to earn additional yield on top of standard Ethereum staking rewards, and issues rsETH as a tradeable receipt.

The bridge that was drained held the rsETH reserve backing wrapped versions of the token deployed on more than 20 other blockchains.

The attacker tricked LayerZero’s cross-chain messaging layer into believing a valid instruction had arrived from another network, which triggered Kelp’s bridge to release 116,500 rsETH to an attacker-controlled address.

Kelp’s emergency pauser multisig froze the protocol’s core contracts 46 minutes after the successful drain, at 18:21 UTC. Two follow-up attempts at 18:26 UTC and 18:28 UTC both reverted, each carrying the same LayerZero packet attempting another 40,000 rsETH drain worth roughly $100 million.

rsETH is deployed across more than 20 networks including Base, Arbitrum, Linea, Blast, Mantle and Scroll, with LayerZero’s OFT standard handling the cross-chain movement.

The rsETH held in the bridge was the reserve backing wrapped versions on every layer 2 blockchain, or networks that run atop Ethereum.

With that reserve drained, holders on non-Ethereum deployments now face the question of whether their tokens have anything underneath them, which creates a feedback loop where panic redemptions on L2s pressure the unaffected Ethereum supply, potentially forcing Kelp to unwind restaking positions to honor withdrawals.

The contagion list is long and still growing.

Aave froze rsETH markets on V3 and V4 within hours, with founder Stani Kulechov affirming the exploit was external and Aave’s contracts were not compromised. SparkLend and Fluid froze their rsETH markets.

AAVE fell about 10% as the market priced potential bad debt.

Lido Finance paused further deposits into its earnETH product, which carries rsETH exposure, while clarifying that stETH and wstETH are unaffected and the core Lido staking protocol has no involvement in the incident.

Ethena temporarily paused its LayerZero OFT bridges from Ethereum mainnet as a precaution, saying it has no rsETH exposure and remains more than 101% overcollateralized. The stablecoin issuer said the pause would last roughly six hours while the root cause is identified.

Kelp, a product under the KernelDAO umbrella, acknowledged the incident in its first public X post at 20:10 UTC, nearly three hours after the drain. The protocol said it was investigating with LayerZero, Unichain, its auditors and outside security specialists. It has not disclosed how the exploit bypassed the bridge’s validation logic.

Whether rsETH holds peg through the weekend depends on how much of the cross-chain float tries to redeem into $ETH on Ethereum and whether Kelp can recover any portion of the stolen funds before the Tornado Cash trail goes cold.

The hack lands in an unusually hostile stretch for DeFi. Solana-based perpetuals protocol Drift was drained of about $285 million on April 1 in an attack later linked to North Korea-affiliated actors, and at least a dozen smaller protocols have been exploited in the weeks since, including CoW Swap, Zerion, Rhea Finance and Silo Finance.

Kelp’s $292 million loss is now the largest DeFi exploit of 2026, overtaking Drift by a few million dollars.

Leading bitcoin treasury company Strategy (MSTR) has proposed shifting the dividend payment schedule on its perpetual preferred equity, Stretch (STRC), from monthly to semi-monthly.

The amendment, outlined in Strategy’s investor presentation, would keep the 11.5% annualized dividend rate and total annual obligations unchanged (currently $1.2 billion). Holders would receive payouts roughly every two weeks instead of once a month, with the first semi-monthly payment expected on July 15, following the June 8 shareholder vote.

According to Strategy’s presentation, STRC currently sees an average $0.45 price drawdown after the ex-dividend date (the deadline to own a stock to receive a dividend), with recovery to its $100 par value taking around two weeks. Typically, on the ex-dividend date, the stock price drops by approximately the amount of the dividend payment.

When STRC trades below its $100 par value, Strategy cannot issue shares through its at-the-market (ATM) program to raise funds for bitcoin purchases. By smoothing the price action, the company aims to keep STRC closer to par, enabling more consistent capital raising.

Semi-monthly payments are expected to reduce this volatility and time lag.

Steadier bitcoin buying

More frequent payouts would also reduce reinvestment lag and spread out the buying pressure more evenly across the month, allowing Strategy to purchase bitcoin at a steadier pace and keep purchases consistent.

According to the presentation, the shift aligns with the typical twice-monthly U.S. payroll cycle and creates more entry and exit opportunities for shareholders, all aimed at lowering volatility.

STRC’s historical volatility averaged 13% from August 2025 to March 2026, but dropped to just 2% between March and April 2026, according to Strategy’s data.

If approved, STRC would become the only semi-monthly dividend-paying preferred in the market, compared with 921 that pay quarterly and 32 that pay monthly, the company said. Nasdaq rules require at least 10 calendar days between dividend declaration and the record date.

STRC recently fell below $99 following the April 15 ex-dividend date, a drop of more than $1, which is the volatility the company is aiming to reduce.

Disclosure: The author of this story owns shares in Strategy (MSTR).

Read more: The one metric investors are overlooking in Michael Saylor’s Strategy

The largest aluminum producer in the U.S., Alcoa, is close to selling its idle Massena East smelter in upstate New York to bitcoin firm New York Digital Investment Group (NYDIG), as it offloads dormant assets and taps demand for energy-ready industrial sites.

The company’s chief executive officer, Bill Oplinger, said the company is in advanced talks and expects the deal to close “in the middle part of this year,” Bloomberg reports.

The site, located along the St. Lawrence River, has sat idle since 2014 when Alcoa shut it down due to high operating costs and global competition.

The appeal lies in the site’s power, not the metal itself. Aluminum smelters are built to run around the clock, drawing large amounts of electricity through dedicated substations and transmission lines. When they close, that infrastructure remains.

For bitcoin miners and data center developers, this can cut years off the time required to secure grid access.

Massena East also has access to hydropower from the New York Power Authority, a draw for firms seeking low-cost and carbon-free energy.

The deal reflects a broader shift. Earlier this year, Century Aluminum sold a Kentucky smelter to TeraWulf (WULF), which plans to build a digital infrastructure campus supporting high-performance computing and AI.

Ripple has highlighted $XRP’s institutional growth since the spot ETFs launch in November last year. The crypto firm noted how the crypto asset has grown through regulatory clarity, which it achieved through the long-running legal battle against the Securities and Exchange Commission (SEC).

Forty cents of every venture capital dollar invested in crypto companies in 2025 went to firms building products that combine artificial intelligence and crypto, more than double the 18 cents a year earlier.

“AI is increasingly entering crypto not as a parallel narrative, but as part of crypto’s own product and infrastructure stack,” Binance Research said, citing data from Silicon Valley Bank, noting that this shows “how quickly AI is becoming embedded within crypto roadmaps.”

That pressure is visible in crypto’s shift from AI “co-pilots” to “agents.” Co-pilots help users analyze information, while agents can monitor conditions and execute actions. In trading environments, where timing affects outcomes, reducing the gap between insight and execution can change behavior.

The trend is part of a wider surge in AI spending. Crunchbase data shows AI companies raised about $242 billion in the first quarter of 2026, or roughly 80% of global venture funding. Gartner estimates total AI spending will reach $2.52 trillion this year.

Crypto leading the AI push

This trend, however, isn’t surprising.

As capital concentrates in one area, it often pulls adjacent sectors along with it, pushing firms to adapt their strategies and shorten product cycles, Binance Research wrote.

While almost all sectors are trying to incorporate AI into their business models, the report says that crypto platforms have moved faster than traditional finance in deploying such systems. This is due to support from always-on markets in the digital assets sector and programmable infrastructure, whereas TradFi faces market-hour constraints and intermediary systems that agents must pass through.

For example, the research noted that on Binance’s AI Pro beta, nearly half of the activity on a recent day, 45.7%, was triggered by the system rather than users.

These interactions came from scheduled tasks and monitoring systems, pointing to growing use of AI tools that run in the background without prompts.

Adoption of AI solutions is uneven across the 17 exchanges and brokers Binance Research surveyed. Risk management, market signals, and fraud detection are standard, while user-facing tools such as copy trading, chatbots, and portfolio advisors are present in only 47% to 71% of them.

Several major platforms have shipped agentic products this year, moving AI closer to monitoring and execution within set guardrails. That compresses the value chain between identifying an opportunity and acting on it, Binance Research added.

That means the competitive landscape will shift from who’s integrating AI features to who’s owning users’ decision-making loops, the report noted.

As allegations of manipulation surrounding the controversial RaveDAO ($RAVE) token in the cryptocurrency market intensify, a noteworthy statement has come from Binance, one of the sector’s largest exchanges.

Binance Co-CEO Richard Teng announced that allegations of insider trading on the $RAVE token are being taken seriously. Teng stated that the exchange has launched an investigation into the matter, adding, “We will always do our part to investigate all market abuses.”

The statement comes after recent sharp price movements in the $RAVE token and allegations of a “pump and dump” scheme. Market participants point out that high supply controls and sudden price fluctuations pose risks for individual investors.

$RAVE, an altcoin that has been the subject of much discussion lately due to its sharp fluctuations, lost 60% of its value today. However, it is still trading at a level 255% higher than it was 255% earlier in the last week.

*This is not investment advice.

The US SEC brought enforcement action against Donald G. Basile and his companies, GIBF GP, Inc. and Monsoon Blockchain Corporation, over a $16 million crypto securities offering tied to Bitcoin Latinum (LTNM), which Basile launched in 2020.

According to the SEC, Basile, through GIBF and Monsoon, sold Simple Agreements for Future Tokens (SAFTs), promising future delivery of a token called Bitcoin Latinum, which ultimately failed.

Regulators claim Basile misrepresented key aspects of the project, including nonexistent insurance coverage, false claims of asset backing, and misleading statements about how investor funds would be used to support the token ecosystem.

The SEC also alleges that rather than using investor funds as promised, the entrepreneur misappropriated millions for personal uses, including real estate purchases, credit card payments, and a high-value horse.

The project ultimately failed. LTNM was never properly launched or listed on major exchanges, activity ceased, and the token became worthless, leaving investors with major losses.

The SEC charges GIBF and Monsoon with violating the anti-fraud provisions of federal securities laws and that Basile is directly liable as well as responsible for aiding the violations.

The SEC is seeking permanent injunctions, repayment of ill-gotten gains with interest, civil penalties, and a ban preventing Basile from serving as an officer or director of a public company, along with other equitable remedies.