Tag: Business – Decrypt

Monthly active users on DeFi lending protocol Aave reached roughly 155,000 in February, marking an all-time high and nearly doubling over the past six months.

The rise in users comes as investors increasingly seek yield through decentralized lending protocols, according to on-chain analytics platform Token Terminal data.

Sean Dawson, head of research at on-chain options platform Derive, told Decrypt that market dynamics appeared to be the primary driver behind the swelling of users.

“The largest trade in crypto, the basis trade, has collapsed in recent months,” Dawson said. “Users used to be able to earn 10–30% or just by holding sUSDe, now this is less than 4%.” 

Broader structural shifts in crypto trading strategies are also pushing capital toward lending platforms, he said.

“Consequently, users have few places to park funds that are low risk—this makes lending the only remaining option,” he added.

Peter Chung, head of research at Presto Labs, told Decrypt that Aave’s long-standing role in decentralized finance infrastructure likely explains the continued growth in its user base.

“DeFi firms are largely experimental, but a select few have firmly established themselves as a critical onchain finance infrastructure,” Chung said. “Aave is one of them. They have gone through some governance changes recently, but not sure there is any causality there.”

The rise in user activity comes amid governance tension within the Aave ecosystem.

Last week, the Aave Chan Initiative (ACI) said it would wind down, alleging that addresses tied to Aave Labs, including a 111,000 AAVE delegation from founder Stani Kulechov, helped swing the “Aave Will Win” temperature check, a $51 million funding proposal that passed with 52.58% support.

ACI founder Marc Zeller said stripping those votes would have flipped the result, while the group’s own exit post cited “no role for an independent service provider” when the largest budget recipient can influence its own approval.

The departure follows BGD Labs, the team behind Aave’s V3 codebase, which also stepped away over strategic disagreements with Aave Labs, leaving two major contributors gone in quick succession.

Despite the governance turmoil, lending and borrowing activity on the protocol continues to operate normally.

Aave currently holds nearly $27 billion in total value locked across 20 blockchains, making it the dominant DeFi lending protocol by a wide margin, according to DeFiLlama data.

AAVE, the protocol’s governance token, is trading around $107, down about 0.7% over the past 24 hours and roughly 83.8% below its 2021 all-time high of $661, according to CoinGecko data.

Looking ahead, Dawson said the protocol’s growth will depend on whether lending activity continues expanding.

“Continued growth on TVL is the main metric I’d look at,” he said, adding that stability of rates without large deposits or withdrawals in the coming months will also be an important signal for the protocol’s trajectory.

Florida moved closer to becoming the latest U.S. state to enact stablecoin rules at the local level, following the State Senate’s passage of Senate Bill 314 on Friday.

Sam Armes, founder and President of the Florida Blockchain Business Association, described Senate Bill 314’s passage as a historic moment on X. He believes the bill will be signed by Florida Governor Ron DeSantis, a crypto advocate, within the next 30 days.

A spokesperson for DeSantis told Decrypt that the governor has not yet received the bill from the legislature. “Once delivered to his office, he will review it in its final form,” she added.

The measure, which passed unanimously on Friday, folds stablecoins into the Sunshine State’s existing regulations by explicitly defining them as a form of “monetary value” under the Florida Control of Money Laundering in Money Services Business Act.

The legislation meanwhile authorizes the Florida Department of Financial Services to accept approved stablecoins for payments, such as state-issued licenses and taxes, alongside a pilot program to study how the government could utilize stablecoins itself.

Republican Florida State Senator Colleen Burton told lawmakers that the legislation aims to integrate state oversight with federal guidelines, as established under a dual-track system in the GENIUS Act—a federal framework for stablecoins passed into law last year.

“It’s important that we do this today,” she said, noting that the bill would allow Florida’s Office of Financial Regulation to become the primary regulator of payment systems using stablecoins.

In many ways, Florida’s framework for stablecoins mirrors rules pertaining to traditional transactions. That includes requiring so-called money services businesses to maintain records of stablecoin transactions valued at more than $10,000, which is already the case for other digital assets defined as “virtual currencies.”

In 2019, Texas became the first state to recognize stablecoins as a form of “monetary value” regarding money transmission rules, according to analysis from law firm Paul Hastings. In 2023, additional rules were adopted under that state’s Money Services Modernization Act.

Popular prediction markets platform Kalshi is facing a class action lawsuit related to its handling of a market on the unseating of Iranian leader Ayatollah Ali Khamenei.  

Filed in the District Court for the Central District of California, the suit alleges that the platform ran a “predatory scheme to exploit retail consumers” by creating expectations that it would pay out correct predictions, yet failed to do so in its recent “Ali Khamenei out as Supreme Leader?” market. 

The plaintiffs allege that they expected that in the event of Khameni’s death—which was confirmed by multiple outlets on February 28—holding contracts for Khameni out by March 1 would resolve to “yes,” ultimately paying each share $1 as a correct prediction. 

Instead, the prediction market utilized a “death carveout provision,” a rules clause which indicated that if the Supreme Leader left office “solely because they have died,” then the market would “resolve based on the last traded price.” In other words, with this clause, the exchange did not pay out “yes” shares at $1.00, as expected by the plaintiffs. 

“Plaintiffs and the proposed class members—who correctly predicted the outcome—did not receive the amounts they were promised,” the suit reads. “Plaintiffs Risch and Gliksman, like thousands of other consumers who correctly predicted the outcome, received arbitrary amounts unilaterally determined by [Kalshi] that were significantly lower than their respective contract values.” 

As social media pushback began to build on February 28, the day of Khameni’s death, Kalshi CEO Tarek Monsour took to X to explain his firm’s decisions. 

“We don’t list markets directly tied to death,” he said. “When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death. That is what we did here.” 

The plaintiffs allege those rules, like the death carveout “upon which defendants relied was not adequately disclosed to plaintiffs or the proposed class members at the time they entered into their trades.” 

“In these instances, we make the caveat clear in the rules and in the market page, but today is a good learning that we can do more in terms of improving the UX and adding more ways to surface the rules,” said Monsour. 

As a result, the firm reimbursed all fees and net losses, with Monsour highlighting that “no trader lost money” on the market. 

Plaintiffs in the case held around $259.84 worth of positions in the market, which ultimately generated more than $54 million in total trading volume. 

In the suit’s relief requests, plaintiffs and all others similarly situated are requesting compensatory damages representing the full value of “yes” payouts, and “punitive damages in an amount sufficient to punish defendants and deter similar conduct in the future.” 

“We stand by principle and law,” Mansour posted on X in acknowledgement of the suit, reiterating that the firm didn’t deviate from rules, prevented a market where traders can benefit from a person’s death, and made no money on the market. 

Kalshi recently raised funds at an $11 billion valuation as prediction markets surge in popularity and trading volumes. (Disclaimer: Decrypt’s parent company, Dastan, operates the prediction market platform Myriad.) 

Leading crypto exchange Binance denied violating Iranian sanctions compliance in a letter sent in reply to U.S. Senator Richard Blumenthal (D-Conn), who recently launched a probe into the firm following media reports on purported violations.

Blumenthal’s probe followed a Wall Street Journal report that alleged that Binance allowed $1.7 billion worth of transactions tied to Iranian entities and sanction-evading trades from Russia to occur on the platform. 

“Binance takes its legal obligations seriously and shares your interest in the safety of its platform,” the exchange wrote in the letter. “The recent reporting on which your inquiry relies, however, is demonstrably false, unsupported by credible evidence, and defamatory in several material respects.” 

The alleged infractions identified two Hong Kong-based partners, Hexa Whale and Blessed Trust, that allegedly facilitated sanctions-evading transactions and approximately 2,000 other accounts associated with Iranian entities, according to the Wall Street Journal reporting.

But according to Binance, after law enforcement requests about those two firms, additional internal investigations led to offboarding of their accounts. 

“After receiving the requests, Binance investigators initiated a comprehensive review to determine not only Binance’s exposure to the wallets implicated by the outreach, but any other Binance users with such exposure,” the firm said of its investigation into Hexa Whale. It offboarded the account in August 2025, it said. 

A similar internal investigation followed for Blessed Trust, and once more led to the offboarding of the account in January 2026. 

“Once again, Binance appropriately investigated and addressed these issues,” the exchange said.”

In disputing the alleged reporting inaccuracies, Binance also backed its compliance processes, noting that it has “invested hundreds of millions of dollars in compliance infrastructure to build a strong compliance program,” which it said boasts more than 1,500 employees worldwide. 

“Binance has a rigorous compliance program that is consistently growing stronger. When there is credible risk information, Binance investigates, mitigates, offboards accounts, and reports to appropriate authorities,” it wrote. “With respect to the matters described in the letter, that compliance process was, in fact, effective.” 

The recent allegations against the firm come after it pleaded guilty to violating U.S. anti-money-laundering laws and sanctions requirements in 2023. At that time it agreed to pay $4.3 billion penalty, and its co-founder and former CEO Changpeng “CZ” Zhao was sentenced to four months in prison for his role.  

Zhao was pardoned by President Donald Trump last October after serving his sentence in 2024.

A Washington man has been sentenced to two years in prison after diverting $35 million in funds from his former employer to his own DeFi platform—and losing nearly all of it.

Nevin Shetty, 42, was found guilty of wire fraud last November for taking and misusing funds from the private software company at which he worked.

Shetty, who drafted a “conservative” company investment policy, secretly moved $35 million in company funds to his side business HighTower Treasury, after being told in April 2022 that his role as CFO would end due to performance issues. Those funds were then invested in high-yield DeFi lending protocols that promised returns of 20% or more.

Per the DOJ’s statement, Shetty planned to pay his employer a “comparatively small, fixed amount,” keeping the remainder of the returns for HighTower. Initially, the scheme paid off, earning some $133,000 in its first month for Shetty and his HighTower business partner.

The wheels came off in May 2022, following the Terra collapse and the subsequent crypto winter, with Shetty’s HighTower crypto investments plummeting in value from $35 million to near zero.

After confessing to colleagues at his employer, Shetty was fired from the company, which, according to trial judge Tana Lin, suffered “significant and severe effects” as a result of his theft, adding that his actions “almost put the company out of business.”

Shetty’s two-year prison sentence is significantly lower than the nine years requested by the prosecution, which urged for “stern punishment” to reflect the “web of lies” and impact on the company, which was forced to lay off 60 people in order to adapt to the “massive loss” caused by his fraud.

Shetty was ordered to pay $35,000,100 and will be placed on supervised release for three years after prison. Judge Lin also imposed a special condition blocking him from serving as an officer or director of a company without prior permission from the probation office.

An account on the prediction market Polymarket that appears to bear the name and birth year of British financier and Nigel Farage confidant George Cottrell lost more than $550,000 on bets about whether the U.S. would bomb Iran.

The “GCottrell93” account wagered roughly $550,000 on the outcome “No” to the question “US strikes Iran by February 28, 2026?” according to Polymarket data first cited by UK newspaper The Daily Telegraph. The position was wiped out after the United States struck Iran on February 28. Prior to this, the account won multiple bets against the strikes before other dates in February.

The same account also appears to have lost around $125,000 on a bet that Prime Minister Keir Starmer would be out of office by February 28. It has garnered almost $3.5 million in profits, the bulk of that coming from a bet on Trump winning the 2024 election.

Blockchain investigator ZachXBT has previously expressed “high confidence” that the account belongs to Cottrell, a longtime associate of Reform UK leader Farage who has helped raise millions of pounds for his political movements, including Ukip and the Brexit Party. In 2025 his mother, aristocrat Fiona Cottrell, emerged as one of Reform UK’s largest donors.

Cottrell has a long history with high‑stakes betting and finance. Court filings in the UK previously named him as part of a professional betting syndicate linked to Brighton and Hove Albion owner Tony Bloom. The syndicate, tied to the analytics firm Starlizard, reportedly generated hundreds of millions of dollars in winnings, with Cottrell said to have earned substantial sums by copying its bets.

Cottrell was arrested in 2016 while attending the Republican National Convention in Chicago alongside Farage. U.S. prosecutors charged him with conspiracy to commit money laundering, wire fraud, blackmail and extortion after meetings with undercover federal agents in Las Vegas. Following a plea agreement, he pleaded guilty to a single count of wire fraud and served eight months in prison.

Last month, he published a book entitled “How To Launder Money: A guide for law enforcement, prosecutors and policymakers,” whose launch was attended by Farage and senior Reform UK figures.

In a statement emailed to Decrypt, a Reform UK spokesperson said that “George Cottrell is not employed by the party so you are best approaching him for comment.” Decrypt has attempted to contact Cottrell via his company, Geostrategy. 

Reform UK and crypto

Reform UK has taken an explicitly pro‑cryptocurrency stance and became the first major British political party to accept crypto donations in June 2025. The policy has drawn criticism from lawmakers and transparency campaigners who warn that cryptocurrency donations could enable money laundering or foreign interference in British elections.

This week former Labour minister Rushanara Ali called for a ban on crypto political donations, describing them as a potential vector for “foreign interference in our democracy.” Seven parliamentary committee chairs also wrote to the prime minister earlier this year urging an explicit prohibition on cryptocurrency donations.

Campaign groups have raised similar concerns. The UK Anti‑Corruption Coalition and Spotlight on Corruption argue that the Electoral Commission lacks the powers necessary to properly monitor the origin of crypto donations.

Despite publicly saying it accepts it, donating online to Reform UK using crypto doesn’t seem to work. Decrypt tried to access the party’s crypto donations page online on multiple browsers and was directed to a blank page each time.

Prediction markets under scrutiny

Cottrell’s bets also come at a time of increased scrutiny of prediction markets. Polymarket is not licensed to operate in the UK and limits services to UK-based users. The Gambling Commission told Decrypt it “does not comment on individual businesses” but pointed to its register of licensed operators, which does not include Polymarket.

In guidance published last month, the regulator said prediction market platforms would likely fall under the legal definition of a “betting intermediary” in the UK, similar to a betting exchange, and would require the appropriate gambling licence to operate legally.

Despite arguments by some platforms that prediction markets are distinct from gambling, regulators around the world have taken an increasingly hard line. Companies in the sector face legal or regulatory challenges in numerous jurisdictions including  France, Germany, Italy, Australia, Singapore, Portugal, Hungary, Thailand and the Netherlands.

Kazakhstan’s central bank has earmarked $350 million for investments in the crypto, with plans to deploy capital as early as next month, Reuters reported on Friday.

“This includes not only cryptocurrency itself,” National Bank of Kazakhstan Governor Governor Timur Suleimenov reportedly said, while taking questions on the central bank’s latest interest rate decision. “We are currently developing ​a list of instruments in which we ⁠will invest.”

Derived from the Central Asian country’s gold and foreign exchange reserves, which totaled nearly $70 billion as of Feb. 1, the initiative marks an effort to diversify away from traditional stores as value using a relatively small amount of capital.

The investments will span “shares of high-tech ​companies related to cryptocurrencies and digital financial assets, index funds, and other instruments that exhibit similar ​dynamics to crypto assets,” suggesting that the central bank may not hold digital assets in their native form.

Decrypt has reached out to the National Bank of Kazakhstan for comment.

Kazakhstan’s national fund, established decades ago to manage oil-sale revenue, was valued at $65.23 billion at the start of last month. And the central bank’s investments in crypto could begin as late as May, per Reuters, which cited Deputy Governor Aliya Moldabekova.

“We are currently selecting companies that deal with digital ​assets. For ​example, those ⁠involved in cryptocurrency infrastructure,” she said. “We are currently in the process ​of selecting such companies.”

The measure resembles a relatively distinct approach to capitalizing on digital assets compared to the strategic Bitcoin reserve established by the Trump administration last year, set to be seeded using Bitcoin seized from U.S. criminal or civil proceedings via executive order. The reserve represented a key campaign promise from President Donald Trump in 2024.

Kazakhstan President Kassym-Jomart Tokayev floated a strategic crypto reserve himself in September, describing such assets as foundational to “the new digital financial system.”

At the time, he tied the country’s efforts to Alatau City, a so-called smart city featuring massive towers that aims to reach a population of 2 million residents by 2050.

“Alatau City should become the first fully digitalized city in the region,” Tokayev said, underscoring a desire for “technologies to pay for goods and services with cryptocurrency.”

Bitcoin plunged below $70,000 on Friday, falling more than 5% over the last day as the U.S. lost 92,000 jobs in February and the unemployment rate inched up to 4.4%, according to the Bureau of Labor Statistics.

U.S. Representative Darren Soto (D-FL) was quick to blame President Donald Trump for the weakening labor market.

“Job losses mount as Trump’s dismal economy continues to take its toll on American families,” he wrote on X. “U.S. lost another 92,000 jobs in February after dismal job numbers for 2025. His tariffs, corruption and incompetence are to blame.”

The president hasn’t yet commented on the the jobs report. On Truth Social, he said of the U.S. war with Iran that: “There will be no deal with Iran except UNCONDITIONAL SURRENDER!”

Bitcoin peaked above $72,000 yesterday, but was trading for $68,282 at the time of writing after having lost 5.6% in the past day, according to crypto price aggregator CoinGecko.

Liquidations have been modest over the past 24 hours. A total of $370 million worth of crypto derivatives have been forced to sell in the past day, the majority of that coming from long positions. Nearly half of that tally came from Bitcoin positions, according to derivatives analytics platform CoinGlass.

Earlier this week, Bitcoin climbed above $74,000 for the first time in four weeks. But the retrace isn’t cause for alarm, according to Nexo analyst Iliya Kalchev.

“Markets do not need acceleration here; they need acceptance above reclaimed levels,” he said in a note shared with Decrypt. “Stability above $70,000 would reinforce the idea that positioning has reset and that incremental supply is thinning.”

There’s also signs that institutional BTC investors are still feeling skittish, as Bitcoin ETFs shed $228 million on Thursday.

Looking ahead, next week will bring a full slate of marcoeconomic indicators, Kalchev added.

“Monday brings Japan’s gross domestic product data. Wednesday features Germany consumer price index, United States consumer price index, and a United States 10-year note auction that will test demand for duration at current yield levels,” he wrote. “Thursday’s initial jobless claims and Friday’s core personal consumption expenditures data alongside JOLTs job openings will further shape the inflation and labor narrative.”

Dubai’s digital asset regulatory body has ordered Kucoin Exchange EU Gmbh—operating as Kucoin—to cease and desist its operations in the emirate, according to a Friday announcement. 

The Virtual Assets Regulatory Authority (VARA) said that the cryptocurrency exchange does not hold a license to provide digital asset services within Dubai, and is therefore not authorized to operate there. 

“It has come to VARA’s attention that the company [KuCoin] may be providing Virtual Asset activities to Dubai residents without the necessary regulatory approvals and misrepresenting its licensing status,” the notice reads. “As a result, the company has been instructed to cease and desist all unlicensed VA activities.”

The regulator’s announcement warns investors that engaging with unlicensed companies can pose “significant financial risks” and advises them not to utilize KuCoin. 

In response to the news, KuCoin indicated that it operates via various entities in different geographic jurisdictions, saying KuCoin Exchange EU GmbH “operates as a MiCAR-regulated entity focused on the European Union (EU) market” and does not accept non-EU users or conduct marketing activity outside the area. 

“Regulatory frameworks for digital assets are developing rapidly across many jurisdictions, and regulators are increasingly clarifying their expectations for the industry,” a spokesperson for the firm told Decrypt. “KuCoin respects applicable laws and regulatory processes globally and maintains a cooperative approach with regulators while supporting the development of a responsible digital asset ecosystem.”

It is not immediately clear whether or not the exchange will seek the appropriate regulatory licenses to operate in the emirate, and a representative did not immediately respond to Decrypt’s inquiry. 

In addition to KuCoin, crypto exchange MEXC was issued a similar warning notice by the regulator on March 4. However, the regulator did not formally request that the firm cease and desist services, despite indicating that MEXC is “not allowed to offer or promote” virtual asset services in the emirate.

A representative for MEXC did not immediately respond to Decrypt’s request for comment.

Vancouver staff have recommended closing a council motion that explored whether the city could become “Bitcoin-friendly,” after determining that its rules don’t allow the crypto to be held as a municipal reserve asset.

The recommendation appears in a report to the council reviewing outstanding member motions, where staff said they had “conclusively determined” that Bitcoin is not “an allowable investment asset,” recommending the motion be closed as part of a broader reprioritization of staff resources and efforts.

Staff cited the Vancouver Charter, the provincial law that governs how the city operates, including how municipal funds can be invested, which does not permit the city to hold Bitcoin as a reserve asset, limiting Vancouver’s ability to pursue the proposal.

The motion’s sole opponent on council, Pete Fry, told local media he assumed the proposal had already been shelved and was surprised to see it referenced in the report.

“I already thought it was dead in the water,” he said. “It was probably good closure to have it mentioned in here, but I don’t even know that it was entirely necessary.”

The recommendation comes more than a year after Vancouver council initially backed a motion from Mayor Ken Sim directing staff to study whether the city could become a “Bitcoin-friendly city.”

At the time, the proposal asked officials to examine accepting taxes and fees in crypto, and the possibility of converting part of the city’s financial reserves into Bitcoin.

But the proposal had faced legal limits right off the start.

The British Columbia Ministry of Municipal Affairs said at the time that municipalities cannot hold financial reserves in crypto under provincial rules, adding in a statement that the intent of the legislation “is that local government funds are not exposed to undue risk.”

“The legal and treasury-related barriers were reportedly already understood from the outset, so the decision to end the process does not come as a real surprise” Kevin Lee, chief business officer at crypto exchange Gate, told Decrypt.

In Vancouver’s case, the initial prospects “appeared to reflect Mayor Ken Sim’s personal pro-Bitcoin vision as much as a practical municipal finance initiative,” Lee added.

Back then, Mayor Ken Sim defended the proposal, saying Bitcoin had been the top-performing asset “over the past 16 years,” arguing it should at least be considered as part of a diversified portfolio.

Decrypt has reached out to the mayor’s office for comment.

Constraints and upsides

The outcome also reflects limitations in how municipalities operate financially.

“Demand for Bitcoin isn’t the constraint, public balance sheet mandates are,” Dominick John, analyst at quantitative research firm Zeus Research, told Decrypt.

Municipal treasuries are “structured for capital preservation, which keeps assets like Bitcoin outside the reserve toolkit,” he said. “Until legislation, accounting treatment, and custody frameworks evolve, cities like Vancouver will remain stuck at the study.”

When asked whether this could set a precedent for other cities, John said it’s likely the same idea would be explored elsewhere, though most proposals “will die at feasibility.”

This could happen “only if local leaders believe there is political, branding, or ideological value in being seen as pro-crypto or pro-innovation,” Gate’s Lee said.

That value, as in Vancouver’s case, is not guaranteed, he said. “Once the political upside is weak, most of these initiatives are likely to stall at the feasibility stage.”

Still, crypto remains used far more as an investment than for payments, Gate’s Lee explained.

“Government payment options usually follow private sector behavior rather than lead it,” he noted. “If crypto becomes widely used for everyday payments across retail, e-commerce, and services, then accepting it for taxes or municipal fees will be the natural extension.”