Weekly Crypto Recap (May 5th - May 11th)

Zerebro's Jeffy Yu Allegedly Found Alive After Staged Death Sparks $100M Memecoin Frenzy

Background
Jeffy Yu, the 22-year-old co-founder of AI-driven memecoin project Zerebro, has reportedly been found alive at his parents’ home in San Francisco, days after faking his death in a widely shared video. The stunt triggered a massive price surge for the associated Solana-based memecoin, LLJEFFY, which reached a market cap of over $100 million before collapsing.

Key Points

• Yu was discovered at his parents’ home in the Crocker-Amazon neighborhood by a reporter from The San Francisco Standard.
• The staged suicide video and a glowing obituary were followed by the triggering of a “72-hour deadman’s switch,” releasing a message describing his death as a “final art piece.”
• Yu claimed he created a “legacoin” called LLJEFFY, which was "not an investment" but a form of “eternal grave in cyberspace.”
• LLJEFFY surged to a $105 million market cap on May 7 but rapidly crashed after doubts emerged.
• The obituary and manifesto were submitted via automated tools, and Yu has since expressed concern for his safety, stating he now plans to relocate his family.

Key Takeaway
What began as a controversial “performance piece” quickly spiraled into a high-stakes memecoin frenzy. The Jeffy Yu saga blurs the line between art, identity, and market manipulation in the most volatile corners of crypto.

German Police Shut Down Crypto Mixer Linked to Bybit Hack, Seize $38M

Background
German law enforcement has shut down eXch, a long-running crypto anonymisation platform allegedly tied to laundering funds from high-profile hacks—including the $1.5 billion Bybit exploit reportedly carried out by North Korea’s Lazarus Group.

Key Points

• Authorities seized $38 million from eXch, a nine-year-old service allowing users to swap crypto without identity verification.
• The platform is suspected of having processed part of the stolen assets from the Bybit hack, one of the largest ever, attributed to Lazarus Group.
• Just days before the seizure, eXch announced it would shut down voluntarily, citing pressure from law enforcement.
• In its final message, eXch claimed it never aimed to serve criminals and asserted that “Privacy is not a crime.”
• German police actions follow growing scrutiny of privacy-preserving platforms like Tornado Cash, blurring lines between financial autonomy and criminal utility.

Key Takeaway
The crackdown on eXch signals intensifying global pressure on crypto privacy tools, especially when linked to state-sponsored hacks. Germany’s move highlights a growing trend: regulators aren’t just watching mixers — they’re dismantling them.

Dinari and Zar Lead $30M Crypto Fundraising Week

Background
Crypto fundraising slowed noticeably this week, with just five projects securing a combined $30 million — a sharp drop from previous weeks. Still, trading platform Dinari and cash app Zar stood out with major rounds, as the total for 2025 reached $7.5 billion.

Key Points

• Dinari raised $12.7 million in a Series A co-led by HackVC and BlockChange.
  • The platform lets users trade onchain tokenized securities like stocks and bonds.
  • Its flagship product, dShares, represent real-world assets via smart contracts.
  • 89% of existing dShares exposure is in USFR, a Treasury ETF.
• Zar secured $7 million to scale its stablecoin-to-cash exchange system.
  • The app helps users swap stablecoins for local currency through vetted merchants.
  • Backers include Dragonfly, VanEck, a16z Crypto, Solana Ventures, and Coinbase Ventures.
• Fleek raised $5 million via CoinList to support its AI influencer platform.
  • Users can create and monetize virtual AI personalities like comedians or tech reviewers.

Key Takeaway
While crypto VC cooled off this week, strong backing for tokenized finance (Dinari) and stablecoin usability (Zar) shows investor appetite for real-world utility hasn’t faded.

Man Sentenced to 30 Years for Funding ISIS with Cryptocurrency

Background
A U.S. federal court has sentenced a Virginia man to over 30 years in prison after he was found guilty of using cryptocurrency and social media to fund ISIS operations abroad.

Key Points

• Mohammed Azharuddin Chhipa, 35, was convicted of conspiracy and four counts of material support to terrorism in late 2024.
• He raised over $185,000 between 2019 and 2022 via social media donations, cash collections, and wire transfers.
• The funds were converted to crypto and routed through Turkey to Syria, where they helped finance ISIS prison breaks, logistics, and fighter welfare.
• The FBI’s Washington Field Office led the investigation, calling the case a “reminder that digital finance can be weaponized.”
• Prosecutors emphasized that financing terror is as criminal as conducting attacks themselves.
• Despite growing concerns, blockchain data still shows illicit crypto activity remains under 1% of total transaction volume, according to Chainalysis.

Key Takeaway
The case underscores how crypto rails, while mostly legitimate, can be exploited by extremist networks—fueling political pressure for tighter oversight and regulation of digital assets.

Ethereum Surges Double Digits to $2,400 Following Pectra Upgrade

Background
Ethereum jumped more than 20% on Friday, briefly topping $2,400 after the long-awaited Pectra upgrade went live and global trade tensions showed signs of easing. This marks Ethereum’s biggest single-day gain in months.

Key Points

• ETH surged 28.9%, from $1,939 to $2,400, before stabilizing at $2,339 — up 20.4% on the day, according to CoinGecko.
• The move followed Wednesday’s successful Pectra upgrade, described by developers as Ethereum’s “most ambitious” upgrade since The Merge.
• Pectra introduced features like account abstraction, improved staking flexibility, and better data storage, enhancing user experience and network scalability.
• The rally coincided with a broader market bounce after Trump signed a trade deal with UK Prime Minister Keir Starmer, easing macroeconomic pressure.
• ETH had previously dropped 33.3% over three months, from $2,727 to $1,818, amid global trade war fears.
• Despite the rally, U.S. spot ETH ETFs saw outflows for three consecutive days, per CoinGlass.
• The crypto market cap rose to $3.37 trillion, with Ethereum-linked projects like PEPE (+43.3%), VIRTUAL (+24.3%), and UNI (+21.5%) leading gains.

Key Takeaway
Ethereum’s strong rebound highlights renewed investor confidence following the Pectra upgrade and improving macro sentiment — but lingering ETF outflows hint at caution beneath the surface.

Tom Brady, Larry David Among Celebs Cleared in FTX Lawsuit—Mostly

Background
A federal judge has dismissed the majority of claims in a lawsuit against celebrities accused of promoting the now-defunct crypto exchange FTX, ruling that plaintiffs failed to prove the stars knowingly supported fraud.

Key Points

• Judge K. Michael Moore threw out most allegations against high-profile endorsers like Tom Brady, Larry David, Naomi Osaka, and others.
• The court found no evidence that the celebrities knew about FTX’s fraudulent activities, despite their promotional involvement.
• Claims tied to unregistered securities promotion still stand, meaning part of the lawsuit may continue.
• Plaintiffs are permitted to amend and refile their complaint.
• FTX’s collapse in 2022 followed revelations that CEO Sam Bankman-Fried used customer funds for risky bets; he is now serving 25 years in prison.
• The ruling follows renewed public scrutiny, including jokes about FTX during Tom Brady’s Netflix roast earlier this week.

Key Takeaway
Celebrity endorsements remain a legal grey zone in crypto — even as most claims are dropped, the case underscores regulatory risks tied to promoting digital asset platforms.

Binance Founder CZ Says He Applied for President Trump Pardon

Background
Changpeng “CZ” Zhao, the founder of Binance, has confirmed he submitted a formal application for a presidential pardon from Donald Trump—just months after serving a four-month sentence for money laundering violations.

Key Points

• CZ revealed during a Rug Radio interview that he began the pardon application process two weeks ago.
• He denied reports claiming he tried to trade Binance.US equity for a pardon, calling them “completely untrue.”
• His legal team is now working through official channels to submit the request.
• Trump has already pardoned several crypto figures, including Ross Ulbricht and the BitMEX co-founders, fueling hope for CZ.
• CZ said the wave of media speculation pushed him to formalize the process, telling Rug Radio, “We might as well officially apply.”

Key Takeaway
With Trump already granting pardons to major crypto figures, CZ’s legal strategy signals confidence that political tides may again reshape accountability in the crypto industry.

Coinbase Stock Falls After Earnings Disappoints Wall Street on Market Volatility

Background
Coinbase reported weaker-than-expected Q1 results as market volatility and macroeconomic headwinds weighed on trading activity. Revenue, earnings, and volume all fell short of Wall Street’s estimates.

Key Points

• Q1 revenue dropped to $2B, missing analyst expectations of $2.1B and falling from $2.27B in Q4.
• Earnings per share came in at $0.24, significantly below the $1.93 analyst consensus.
• Trading volume declined 10% to $393.1B, with transaction revenue falling 19% to $1.3B.
• The company cited Trump’s tariff policy and broader macroeconomic uncertainty as key reasons for the downturn.
• Coinbase shares fell nearly 3% in after-hours trading following the report.
• Despite the weak quarter, Coinbase’s $2.9B acquisition of Deribit positions it to lead in the global crypto options market.

Key Takeaway
While Coinbase missed expectations across the board, its strategic bet on derivatives via the Deribit deal may define its next growth phase — if macro pressures don’t continue to weigh on the sector.

Celsius’ Alex Mashinsky Pleaded for a One-Year Sentence — He Got 12 Instead

Background
Alex Mashinsky, former CEO of Celsius, was sentenced to 12 years in federal prison for orchestrating a multi-year fraud scheme that led to the collapse of the crypto lending platform in 2022. Despite pleading guilty and requesting just one year, the court handed down a far harsher sentence.

Key Points

• Mashinsky was convicted of two counts of fraud, including lying about Celsius’ financial health and manipulating the CEL token’s price for personal gain.
• Prosecutors accused him of knowingly running an unsustainable business, misusing customer funds to pay interest, and misleading investors while personally cashing out $46M in CEL sales.
• His lawyers asked for leniency, citing his background as a Ukrainian émigré, war veteran, and founder of a firm with legitimate aims.
• Judge John Koeltl rejected the request, saying a substantial sentence was necessary given the seriousness of the offense.
• Victims, including retirees and van-dwelling crypto investors, attended the sentencing — many of whom trusted Mashinsky due to his weekly public appearances.
• The judge noted Mashinsky’s repeated dishonesty, including knowingly stating that no borrower had defaulted—when one already had.
• Prosecutors emphasized that the fraud was calculated, deliberate, and masked with a “folksy” persona meant to inspire trust.
• Mashinsky expressed remorse at sentencing: “I wanted Celsius to help people. I destroyed that, and I am sorry.”

Key Takeaway
Mashinsky’s sentence sends a strong message: founders who build public trust while secretly undermining it for personal enrichment will be held accountable — even if their fall is as dramatic as their rise.

Coinbase to Acquire Deribit in $2.9B Deal

Background
Coinbase has announced its largest acquisition to date, agreeing to acquire crypto derivatives platform Deribit in a $2.9 billion transaction. The move marks a significant expansion into the derivatives space for the U.S.-based exchange, amid rising institutional demand and a more favorable regulatory environment.

Key Points

• The $2.9 billion deal includes $700 million in cash and 11 million shares of Coinbase’s Class A common stock.
• This is the largest M&A deal in crypto history, surpassing Kraken’s $1.5B acquisition of NinjaTrader and Ripple’s $1.25B purchase of Hidden Road.
• Deribit is the leading crypto options exchange, with rising volumes due to growing institutional participation and easing regulatory pressure.
• Coinbase plans to build a comprehensive global derivatives platform offering spot, futures, perpetuals, and options under one umbrella.
• Deribit CEO Luuk Strijers said the acquisition would accelerate growth and provide traders with more integrated opportunities.
• The deal is expected to close by the end of 2025, subject to regulatory approvals.
• Kraken had also expressed interest in acquiring Deribit before Coinbase finalized the agreement.

Key Takeaway
With this acquisition, Coinbase cements its ambition to dominate the institutional crypto market—staking its claim as a one-stop platform for spot and derivatives trading globally.

Pump.fun Hits Back at Report That Claimed 98% of Memecoins on the Platform Are Fraudulent

Background
A new report from Solidus Labs alleges that nearly all memecoins launched on Solana’s pump.fun platform are fraudulent—raising concerns over rampant manipulation in the memecoin sector. Pump.fun has issued a strong rebuttal, arguing that the report misunderstands the cultural and speculative nature of memecoins.

Key Points

• 98.6% of tokens launched on pump.fun were labeled as rug pulls or pump-and-dumps, according to Solidus Labs.
• Just 97,000 of the 7 million tokens issued since January 2024 have retained $1,000+ in liquidity.
• A $1.9 million rug pull tied to “MToken” was identified as the largest in the report.
• On Raydium, 93% of liquidity pools showed soft rug pull behavior, with the median rug worth $2,800.
• Pump.fun spokesperson Troy Gravitt responded, calling the findings misguided and defending memecoins as cultural expressions rather than traditional assets.
• Gravitt emphasized that value emerges over time via community and marketplace dynamics—not initial liquidity metrics.
• Solidus' findings add to mounting scrutiny of the Solana ecosystem, with regulators eyeing the space closely.
• In April, the SEC filed a class action tied to M3M3 token on Meteora, citing a $69 million fraud.

Key Takeaway
As memecoin mania intensifies, platforms like pump.fun sit at the center of a cultural and regulatory clash—between speculative freedom and investor protection.

Arthur Hayes Says Bitcoin Will Hit $1M by 2028 as U.S.-China Craft Hollow Trade Deal

Background
Former BitMEX CEO Arthur Hayes believes Bitcoin is on track to reach $1 million by 2028—not because of Federal Reserve policies, but due to surging liquidity driven by the U.S. Treasury and looming geopolitical reshuffles between the U.S. and China. In a new interview, Hayes lays out a contrarian view on global monetary policy and its long-term implications for crypto.

Key Points

• The Treasury, not the Fed, is in control, Hayes argues. Liquidity is now driven by Treasury buybacks and debt management, not rate hikes or QT.
• Bitcoin's path to $1M is fueled by increased money supply, relentless government spending, and the erosion of fiscal discipline.
• Hayes believes the upcoming U.S.-China trade deal will be performative—a surface-level agreement with no real substance.
• Capital controls are the next battleground, including taxes on foreign investment and potential bond swap mandates to manage U.S. debt without angering voters.
• China will keep buying U.S. assets despite tensions, Hayes says: “Mathematically, they just can’t stop.”
• His portfolio: 60–65% Bitcoin, 20% ETH, and the rest in “quality shitcoins”—with a focus on fundamentals.
• The market is shifting: “We are in fundamentals season. People are tired of coins that don’t do anything.”

Key Takeaway
For Hayes, the future of Bitcoin lies not in the Fed’s decisions, but in a broader macro storm: Treasury-fueled liquidity, performative politics, and rising demand for real, working assets.

Robinhood Developing Blockchain-Based Platform to Trade U.S. Securities in Europe

Background
Robinhood is building a new blockchain-powered platform that would let European users trade tokenized U.S. securities, Bloomberg reports. The move signals the brokerage’s deeper expansion into crypto infrastructure, taking advantage of Europe’s more favorable regulatory landscape for digital assets.

Key Points

• The platform would allow trading of tokenized U.S. financial assets, giving European users direct access to U.S. markets.
• Arbitrum, Ethereum, and Solana are reportedly under consideration as the blockchain layer, depending on speed, cost, and decentralization factors.
• The project is being developed in partnership with a digital asset firm, though details remain undisclosed.
• Robinhood’s move comes amid a global surge in tokenization efforts—forecast to reach $23.4 trillion by 2033, according to analysts.
• Tokenization enables faster settlement, broader accessibility, and greater liquidity for traditional assets.
• In January, CEO Vlad Tenev criticized the U.S. regulatory vacuum for blocking tokenized finance, saying it’s limiting access to transformative financial innovations.
• Europe, by contrast, has moved forward with MiCA regulations, offering greater clarity for crypto and tokenized assets.

Key Takeaway
Robinhood’s strategy to bring tokenized U.S. stocks to Europe underscores the growing rift between U.S. and EU crypto policy—and the rising role of blockchain in reshaping traditional finance.

Movement Labs Terminates Co-Founder Rushi Manche After MOVE Token Scandal

Background
Movement Labs has officially terminated co-founder Rushi Manche following intense community backlash over a market manipulation scandal involving 66 million MOVE tokens. The company has since announced a restructuring initiative under a new name and leadership.

Key Points

• Rushi Manche was fired after brokering a controversial market-making deal that allowed the sale of 66 million MOVE tokens (5% of total supply), triggering a steep price decline.
• A new company, Move Industries, has been launched with early employees Torab You and Will Gaines as its leadership, aimed at restoring community trust.
• Move Industries promises increased transparency, open town halls, and tighter internal governance to avoid repeat incidents.
• The MOVE token has dropped over 20% in the last 24 hours, with continued pressure following the scandal and Coinbase’s announcement to suspend trading by May 15.
• Binance also blacklisted the market maker involved in the controversial deal.
• Manche acknowledged in an April 30 post that he "trusted opportunistic administrators" who acted in bad faith, fueling accusations of negligence and manipulation.
• Movement Labs initially suspended Manche on May 2, later finalizing his termination on May 7 following internal investigations.

Key Takeaway
Movement Labs’ rebranding to Move Industries is an attempt to distance itself from a mismanaged token deal that shook investor confidence and led to exchange suspensions. But with MOVE’s price still sliding, rebuilding trust won’t come easy.

Satoshi Era Bitcoin Whales Move Over $300 Million After Years of Silence

Background
Two long-dormant Bitcoin whales who hadn’t moved a satoshi since 2014 came online Tuesday morning, transferring more than 3,400 BTC—worth over $324 million—raising questions about motives, identity, and market timing.

Key Points

• Two separate wallets moved a total of 3,422 BTC, inactive since 2014 when Bitcoin traded below $1,000.
• The wallet “1NWPS” transferred 2,343 BTC ($222.2M) after 10.5 years of inactivity.
• The second wallet, “1PiEK,” moved 1,079 BTC ($102.5M) after lying dormant for 11.75 years.
• CryptoQuant reports a 110% year-over-year rise in movements of dormant BTC—62,800 BTC moved in Q1 2025, compared to 28,000 BTC in Q1 2024.
• These moves follow March’s resurgence of a whale wallet inactive since 2016, which transferred over 3,000 BTC ($250M+).
• Another wallet moved 50 BTC last month, untouched since they were purchased at under $0.10 in 2010—a 93,000,000% theoretical gain.

Key Takeaway
Dormant Bitcoin whales are waking up at a pace not seen in years, likely responding to favorable market conditions or regaining access to long-lost wallets—highlighting the unpredictable and historic nature of Satoshi-era holdings.

FTX Sold Anysphere Stake for $200K — It's Now Worth $9 Billion

Background
FTX’s bankruptcy estate sold Alameda Research’s entire stake in AI startup Anysphere for just $200,000 in 2023 — a year before the company surged to a $9 billion valuation. The decision could represent a missed windfall of hundreds of millions for FTX creditors.

Key Points

• Alameda invested $200,000 in Anysphere’s pre-seed round in April 2022 via Clifton Bay Investments (formerly Alameda Research Ventures).
• In April 2023, FTX’s bankruptcy estate sold that stake for exactly $200,000, without any realized gain.
• Anysphere is now worth $9 billion following a $900 million round led by Thrive Capital, with participation from a16z and Accel.
• The firm’s AI coding platform, Cursor, has become a breakout success, driving annual recurring revenue to around $200 million.
• Anysphere previously raised $8M (seed), $60M (Series A), and $105M (Series B) — boosting its valuation from $2.5B to $9B in less than 12 months.
• FTX estate’s early exits have drawn scrutiny, including the June 2024 sale of its Anthropic shares, even as bankruptcy legal costs have exceeded $500M.

Key Takeaway
What was once a modest $200K stake may have ballooned into a fortune — but FTX’s hasty post-collapse liquidations could cost creditors a slice of the AI boom.

VIRTUAL Surges 200% in a Month as Smart Money Pours Into Virtuals Protocol

Background
The Base-native Virtuals Protocol has emerged as a breakout performer in May, with its native token $VIRTUAL soaring over 200% in just one month. Smart money flows, the launch of a novel token distribution system, and renewed excitement in the AI sector are fueling the rally.

Key Points

• $VIRTUAL is up 207% in 30 days, reaching $1.66 and outperforming Bitcoin, Ethereum, and other major tokens.
• Smart money wallets—tracked by Nansen—have accumulated $14.2 million in $VIRTUAL, including $8.56 million in the past week alone.
• The token ranks as the most traded asset by smart money, ahead of $LINK, $PEPE, and $EBTC.
• The price surge coincides with the launch of the Genesis launchpad, a proof-of-contribution platform designed to reward builders and community members rather than speculators.
• Genesis offers automated refunds, transparent vesting, and contribution-based token allocations—features that are rare in today’s launchpads.
• Bankless praised Genesis for “showing there’s still room for creativity in token design” and called it a rival to typical VC or insider-driven launch systems.

Key Takeaway
With a powerful narrative around AI, transparent token mechanics, and smart money endorsement, Virtuals Protocol and its $VIRTUAL token are capturing serious market attention—positioning it as one of the strongest emergent plays in the AI token category this quarter.

Saylor’s Strategy Adds 1,895 BTC, Now Holds Over 555,000 Bitcoin

Background
Michael Saylor’s bitcoin acquisition campaign continues. Strategy (MSTR) disclosed this week that it bought another 1,895 BTC for $180.3 million, pushing its total holdings to a staggering 555,450 BTC.

Key Points

• Strategy purchased 1,895 BTC last week at an average price of $95,167, according to an SEC filing.
• The company’s total bitcoin holdings now stand at 555,450 BTC, acquired for $38.08 billion in total.
• Average acquisition cost is $68,550 per bitcoin — while current prices sit around $94,000.
• The latest purchase was funded through $128.5M in common stock sales and $51.8M in preferred stock (STRK).
• This move exhausted Strategy’s 2024 $21B at-the-market offering, with a new $21B ATM shelf already filed.
• At spot value, Strategy’s BTC stack is now worth over $52 billion — representing one of the largest corporate crypto treasuries globally.

Key Takeaway
Saylor’s conviction remains unmatched. With over half a million BTC and billions in new capital still being raised, Strategy continues to double down on bitcoin as its corporate backbone.

Vitalik Buterin Wants to Make Ethereum as Simple as Bitcoin

Background
Vitalik Buterin is pushing for a radical simplification of Ethereum’s protocol. In a new blog post, he proposed a long-term roadmap to reduce Ethereum’s complexity, citing the network’s growing technical sprawl and rising barriers to participation.

Key Points

• Buterin calls for reducing Ethereum’s “consensus-critical” complexity, arguing the system has become harder to maintain and audit.
• Proposals include a redesign of the consensus layer (beacon chain) to simplify mechanisms like epochs, slot shuffling, and sync committees.
• He suggests eventually replacing the Ethereum Virtual Machine (EVM) with a simpler alternative like RISC-V, a lightweight standard that could enhance performance for zero-knowledge applications.
• The blog emphasizes preserving Ethereum’s programmability while trimming down legacy features and technical debt.
• Buterin contrasts Ethereum’s sprawl with Bitcoin’s simplicity, noting that Bitcoin’s core can be understood by a high schooler, while Ethereum has grown far more complex.

Key Takeaway
Buterin’s vision signals a philosophical shift: Ethereum must balance innovation with sustainability. If realized, his roadmap could make Ethereum leaner, more secure, and easier to build on—without losing what made it powerful in the first place.

Dubai Family Office to Invest $8.8B to Turn the Maldives Into a Blockchain Hub

Background
The Maldives is set to receive a transformative $8.8 billion investment to establish itself as a global blockchain hub. The deal, led by MBS Global Investments — a Dubai-based family office managing assets for Qatari royal Sheikh Nayef bin Eid Al Thani — aims to diversify the tourism-dependent island economy.

Key Points

• The $8.8 billion investment exceeds the Maldives' total 2023 GDP of $7 billion and comes amid rising debt pressures, with $1.7 billion in repayments due by 2026.
• The initiative will fund an International Financial Centre covering 830,000 m², designed to house 6,500 residents and create 16,000 jobs — roughly 3% of the nation’s population.
• MBS Global has already secured $4–5 billion in funding through its consortium of family offices and HNWIs, with interests across fintech, real estate, and construction.
• Despite the Maldives’ minimal crypto presence, the move positions the nation to attract international capital and digital asset ventures, as it balances relationships with India and China.

Key Takeaway
With an investment that dwarfs its economy, the Maldives is betting big on digital finance to redefine its future — and Gulf money is at the heart of the transformation.