Weekly Crypto Recap (March 10th - March 16th)

LIBRA Token Facilitator Linked to $40M WOLF Memecoin Collapse

Background
Hayden Davis, the controversial figure behind the LIBRA token associated with Argentinian President Javier Milei, has been linked to another memecoin, WOLF, which crashed 99% from its $40 million peak. Blockchain analytics platform Bubblemaps traced the token’s origins to Davis, who is now facing an Interpol Red Notice request from an Argentine prosecutor.

Key Points

• WOLF token, referencing Jordan Belfort, surged to a $43 million market cap on March 8 before crashing to around $530,000.

• Bubblemaps traced WOLF’s origin to a wallet linked to Davis, also used for launching LIBRA and the Official Melania Meme token.

• Davis is now wanted by Argentina, with authorities requesting an Interpol Red Notice amid the growing "Cryptogate" scandal.

• SEC clarified that memecoins do not fall under its jurisdiction but warned of fraud risks in the sector.

Key Takeaway
Hayden Davis, already embroiled in controversy over LIBRA, is now facing increased scrutiny as his latest memecoin project implodes, deepening Argentina’s political scandal and drawing international attention.

Kaito AI and Founder Yu Hu’s X Accounts Hacked in Coordinated Attack

Background
Kaito AI, a crypto data aggregation platform powered by artificial intelligence, and its founder Yu Hu fell victim to an X (formerly Twitter) social media hack on March 15. Hackers used the compromised accounts to spread misinformation about Kaito wallets being unsafe, attempting to manipulate the KAITO token price.

Key Points

• Hackers falsely claimed Kaito wallets were compromised, urging users to withdraw funds in a likely attempt to manipulate KAITO’s price.

• A short position was reportedly opened on KAITO tokens before the misinformation campaign, suggesting an orchestrated financial attack.

• Kaito AI quickly regained control of the accounts and confirmed that token wallets were not affected.

• This attack is part of a broader trend, with recent hacks targeting Pump.fun, Jupiter DAO, and DogWifCoin accounts for crypto-related scams.

Key Takeaway
The attack on Kaito AI highlights an evolving trend in crypto cybercrime, where social media hacks are being used for market manipulation rather than just promoting scam tokens.

Toncoin Surges as Pavel Durov Leaves France After Months of Legal Uncertainty

Background
Toncoin (TON) saw a sharp price rebound following news that Telegram founder Pavel Durov was granted permission to leave France after being compelled to remain in the country since his arrest in August 2024. The price recovery comes after months of decline tied to both Durov’s legal troubles and broader macroeconomic fears.

Key Points

• TON surged over 18% in the past 24 hours, rebounding from a March 11 low of $2.36 after falling 67% from its December 2024 peak.

• Durov was detained in France amid allegations that Telegram enabled illegal activities, though he denied wrongdoing and stated the company cooperates with legal authorities.

• The news of his release was celebrated by Telegram and TON supporters, who framed it as a victory for freedom of speech.

• It remains unclear if Durov’s case is fully resolved, or if he has only received temporary travel permission while legal proceedings continue.

Key Takeaway
Durov’s release has sparked renewed optimism around Toncoin, which had suffered heavy losses following his legal troubles. However, uncertainty remains regarding the long-term impact on Telegram and TON’s regulatory standing.

Cardano’s Unique Growth Strategy: Real-World Use Cases Over TVL

Background
Cardano’s adoption strategy stands apart from its competitors, as the blockchain focuses on real-world applications rather than measuring success by total value locked (TVL). CEO Frederik Gregaard emphasized this approach, even as ADA gained mainstream attention after U.S. President Donald Trump included it in the country’s strategic crypto reserve.

Key Points

• Cardano prioritizes non-financial blockchain activity, such as digital identity issuance and document verification, rather than just DeFi transactions.

• ADA trading volumes surged, averaging $720 million daily in February and over $1.4 billion in March, following Trump’s mention of the token.

• Key partnerships drive adoption, including a collaboration with Brazil’s state-owned IT firm SERPRO to integrate blockchain into national infrastructure.

• Cardano’s DeFi sector remains active, with DEX Minswap reaching $3.4 billion in cumulative volume and lending protocols like Liqwid and Lenfi contributing to a $116 million TVL.

• Governance tensions persist, as Cardano’s decentralized leadership structure—comprising the Cardano Foundation, IOG (led by Charles Hoskinson), and Emurgo—leads to occasional friction over the blockchain’s direction.

Key Takeaway
While many blockchain networks focus on DeFi and memecoins, Cardano aims to differentiate itself through real-world applications and long-term adoption, even if it means forgoing hype-driven market movements.

Trump’s World Liberty Financial Raises $550M in Public Token Sale

Background
World Liberty Financial (WLFI), a DeFi project associated with former U.S. President Donald Trump, successfully raised $550 million in a public token sale, bringing its total funding to $590 million. The project's rapid fundraising accelerated post-election, despite lingering questions about the Trump family's actual involvement.

Key Points

• WLFI raised $550 million through a public token sale, adding to an earlier $40 million investment.

• Donald Trump is listed as ‘chief crypto advocate’, but the project's white paper states that the Trump family has no operational role.

• Market impact remains uncertain, as the large fundraising could bolster WLFI’s position in crypto, though concerns about transparency and governance persist.

Key Takeaway
World Liberty Financial’s massive funding round highlights strong investor interest, but questions over Trump’s role and the project’s governance may influence its long-term credibility in the DeFi space.

FTX Liquidated $1.5B in 3AC Assets Just Weeks Before Hedge Fund’s Collapse

Background
Recently revealed court documents show that FTX liquidated $1.53 billion worth of Three Arrows Capital (3AC) assets just two weeks before the hedge fund collapsed in 2022. The revelation challenges the previous narrative that 3AC’s downfall was purely market-driven, raising new questions about FTX’s role in the event.

Key Points

• 3AC claims it was unaware of the liquidation, recently increasing its bankruptcy claim against FTX from $120 million to $1.53 billion.

• The hedge fund collapsed in mid-2022, unable to cover its debts after heavy leverage and exposure to the May crypto crash.

• Despite the missing $1.5 billion, analysts suggest 3AC would still have failed to meet its $3.3 billion in creditor claims.

• Binance’s former CEO Changpeng Zhao questioned whether FTX also played a role in the LUNA/UST collapse, adding further speculation.

Key Takeaway
The disclosure adds a new dimension to 3AC’s downfall, suggesting FTX’s secret liquidation may have exacerbated the hedge fund’s liquidity crisis, though it likely wouldn’t have prevented its collapse.

BlackRock’s BUIDL Becomes First Tokenized Fund to Surpass $1 Billion AUM

Background
BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) has reached a major milestone, surpassing $1 billion in assets under management (AUM). This makes it the largest tokenized fund tracking onchain U.S. Treasuries and highlights growing institutional adoption of blockchain-based financial products.

Key Points

• BUIDL is the first institutional-grade tokenized fund to cross the $1 billion mark, capturing nearly 25% of the $4.2 billion tokenized Treasury market.

• It overtook Franklin Templeton’s BENJI and Hashnote’s USYC, the previous leader in tokenized money market funds.

• Securitize, BUIDL’s tokenization provider, integrated its first oracle, enabling deeper DeFi integration for institutional-grade products.

• BlackRock continues to expand in crypto, launching ETFs for Bitcoin and Ethereum while partnering with Coinbase for institutional crypto portfolio management.

Key Takeaway
BlackRock’s BUIDL milestone reinforces the legitimacy of tokenized assets in traditional finance, signaling increased institutional interest in blockchain-powered investment products.

CZ Denies Binance Deal Talks Amid Reports of Trump Family Stake and Pardon Request

Background
Binance co-founder Changpeng Zhao (CZ) has denied any discussions regarding a potential deal involving Binance.US, following a Wall Street Journal report suggesting that the Trump family was exploring a stake in the exchange. The report also claimed Binance had requested a presidential pardon for CZ, who served a four-month sentence for anti-money laundering violations.

Key Points

• CZ dismissed claims of a Binance.US deal, stating he had “no discussions” with anyone about such an arrangement.

• The Trump family is reportedly considering a financial stake in Binance’s U.S. arm, though details remain unclear.

• Binance allegedly sought a presidential pardon for CZ, though it is uncertain if a Trump family investment is linked to this effort.

• Trump’s growing crypto involvement, including World Liberty Financial and previous token launches, has raised concerns about transparency and potential influence.

Key Takeaway
While CZ denies involvement in any Binance.US deal, the reports highlight ongoing regulatory and political entanglements surrounding Binance, Trump, and the broader crypto industry.

MoonPay Acquires API Stablecoin Platform Iron to Expand Enterprise Payments

Background
MoonPay has acquired Iron, an API-driven stablecoin infrastructure provider, to enhance its enterprise payments capabilities. The acquisition will allow businesses to manage multi-currency treasuries, accept stablecoin payments, and integrate programmable payment solutions at a low cost.

Key Points

• Iron’s integration enables instant stablecoin payments for enterprises, fintechs, and global merchants, improving real-time treasury management.

• This is MoonPay’s second acquisition in 2025, following its $175 million purchase of Helio, a Solana-based blockchain payment processor.

• Stablecoins now have over $230 billion in circulation, with major fintech firms like Stripe and PayPal driving mainstream adoption.

• Regulatory clarity is improving, with the SEC approving the first yield-bearing stablecoin security in February, paving the way for institutional expansion.

Key Takeaway
MoonPay’s acquisition of Iron strengthens its position in the growing stablecoin payments sector, reflecting broader industry momentum toward enterprise adoption and regulated yield-bearing stablecoins.

Crypto Trader Loses $733K in Suspected Sandwich Attack or Money Laundering Scheme

Background
A cryptocurrency trader lost $733,000 in USDC, receiving only $19,000 in USDT, in what appears to be a large-scale sandwich attack or a potential money laundering scheme. The event, which took place on Uniswap V3, has sparked debate among DeFi researchers and security analysts.

Key Points

• An MEV bot exploited the transaction, front-running the trader and removing liquidity, leading to a massive price disparity.

• DeFi analysts suspect money laundering, as the transaction patterns were unusual, involving wallets linked to Binance and Bybit before being swapped.

• Sandwich attacks have been used before to extract millions from unsuspecting traders, leveraging blockchain inefficiencies for arbitrage.

• Some experts believe the losses may be deliberate, suggesting illicit funds were being "washed" through inefficient swaps.

Key Takeaway
Whether an MEV exploit or a deliberate laundering attempt, this incident highlights the vulnerabilities of DeFi trading, where poor transaction execution or targeted attacks can lead to significant financial losses.

Binance Secures $2 Billion Investment from Abu Dhabi-Linked MGX

Background
Binance has raised $2 billion from MGX, a government-linked investment firm in Abu Dhabi, marking its first institutional investment. The move strengthens Binance’s presence in the UAE, though the exchange continues to operate without an official global headquarters.

Key Points

• MGX, launched in 2024 under UAE leadership, focuses on AI and advanced technologies, with investments in OpenAI, Databricks, and xAI.

• Binance CEO Richard Teng, formerly a regulator in Abu Dhabi, called the investment a major milestone for digital finance.

• Binance has expanded its UAE footprint, with 1,000 of its 5,000 employees based in the country, but still declines to name a global headquarters.

• Binance’s BNB token remained stable, trading between $550 and $560 following the announcement.

Key Takeaway
The $2 billion investment from MGX reinforces the UAE’s growing role in crypto regulation and innovation, while strengthening Binance’s long-term presence in the region.

HYPE Drops 8.5% Amid $4M HLP Vault Loss Following Whale Liquidation

Background
Hyperliquid’s native token, HYPE, dropped 8.5% following a $4 million loss in the HLP vault, triggered by a large whale liquidation event. While some community members speculated on possible manipulation, Hyperliquid confirmed that no exploit or hack occurred, attributing the loss to the protocol’s liquidation mechanics.

Key Points

• HYPE fell from $14.04 to $12.84, before recovering slightly after the incident.

• A whale built a $306.85 million long position in ETH, depositing 15.23 million USDC before being liquidated. Despite the liquidation, the trader exited with a $1.86 million profit, while the HLP vault absorbed a $4 million loss.

• HLP serves as a market-making vault, allowing users to deposit USDC and share in trading profits or losses. The vault’s total TVL stands at $451 million.

• Hyperliquid is adjusting its leverage limits, lowering max leverage to 40x for BTC and 25x for ETH, to improve liquidation risk management.

Key Takeaway
The whale liquidation exposed weaknesses in Hyperliquid’s liquidation engine, resulting in a significant loss for HLP. The exchange is tightening risk controls, but the incident raises concerns about liquidation handling in high-leverage trading environments.

THORChain Faces Growing Pressure as Decentralization Clashes with Illicit Activity

Background
THORChain has come under scrutiny after being used by North Korean hackers, Lazarus Group, to launder over $1.4 billion in stolen assets. The controversy has ignited debates over whether decentralized finance (DeFi) protocols can remain neutral or if they must evolve to avoid regulatory crackdowns.

Key Points

• Lazarus Group converted stolen ETH to BTC via THORChain, processing 72% of the Bybit hack funds, surpassing all other DeFi platforms.

• Governance cracks appeared as validators initially voted to halt ETH trading but reversed the decision, revealing selective decentralization.

• THORChain collected $5M in fees from illicit transactions, fueling criticism that financial interests may have influenced inaction.

• Key developer resignations, including Pluto and TCB, reflect internal divisions over the protocol’s governance and responsibility.

• Regulatory risks are rising, as Tornado Cash and Railgun faced U.S. enforcement actions for similar use cases involving illicit transactions.

Key Takeaway
THORChain’s reliance on a fully decentralized approach is being tested as regulators could view its facilitation of illicit transactions as a national security risk. Without proactive measures, the protocol risks facing sanctions, exchange delistings, or legal actions, mirroring past enforcement against privacy-focused DeFi projects.