BitMEX, a derivatives-focused cryptocurrency exchange, has partnered with Zodia Custody, an institutional-first digital assets custody firm, to enable off-exchange trading and secure asset custody for BitMEX’s clients.

 

The partnership, announced this week, will see the integration of Zodia Custody’s Interchange platform into BitMEX. Interchange is an off-venue settlement solution that allows institutional and professional clients to trade directly on BitMEX while keeping their digital assets securely held off-exchange with Zodia Custody.

 

 

This partnership, according to Stephan Lutz, BitMEX CEO, draws on lessons learned from past market failures, especially the collapse of the FTX cryptocurrency exchange and the 1.4 billion dollar Bybit hack. These events, Lutz said, exposed the risks associated with unsegregated or compromised exchange-held funds and are key examples of how custody failures or security threats can put client funds at risk.

 

Through this partnership and the integration of the Interchange platform, BitMEX clients, especially institutional clients that often trade with large amounts of money, do not have to worry about the safety of their funds on the exchange in the event of a hack, as their digital assets are secured in Zodia Custody’s cold, segregated storage wallets.

 

The partnership also serves to bridge the gap between institutional-grade security and crypto-native liquidity, allowing BitMEX’s professional and institutional clients to access BitMEX’s deep crypto derivatives liquidity while eliminating the need to pre-fund the exchange before trading.

 

The Growing Need for Security on Crypto Exchanges

Security has been one of the major challenges faced by cryptocurrency platforms over the years. In 2025, over $4 billion was stolen from crypto platforms. This represents a 34 percent increase compared with 2024, when losses stood at $2.2 billion. Unfortunately, the recovery rate of stolen crypto funds remains very low, at less than 8 percent. This is even worse for centralized exchanges, which are often high value targets.

 

By integrating Zodia Custody’s interchange platform into its crypto infrastructure and allowing clients’ digital assets to be stored in Zodia Custody’s segregated vaults, BitMEX eliminates the trade offs institutional clients face when choosing between derivatives trading access and the safety of their assets. Since Zodia handles the custody of clients’ assets, BitMEX faces minimal damage in the event of a security breach or hack. 

 

 

Bitcoin has always operated on a simple, almost sacred premise: if you hold the private key, you own the coins. No government, no bank, no developer team can touch them. That promise is now being questioned from within, and the debate it has triggered cuts straight to the heart of what Bitcoin actually is.

 

Casa CTO Jameson Lopp and five co-authors formally published BIP-361 to Bitcoin's official GitHub repository on Tuesday. The proposal, titled "Post Quantum Migration and Legacy Signature Sunset," outlines a three-phase plan to migrate coins off quantum-vulnerable addresses. Wallets that do not migrate within the designated window would have their funds frozen at the consensus layer, meaning the network itself would prevent any movement of those coins. A bit frightening and something this author never thought he would be writing about. Bitcoin freezing coins. A very slippery slope.

 

What Is Actually at Risk

Roughly 34% of all Bitcoin in circulation sits in early Pay-to-Public-Key addresses where the public key is fully exposed on-chain. That includes what most analysts believe to be Satoshi Nakamoto's estimated 1.1 million BTC, worth around $74 billion at current prices. Zoom out further and Lopp estimates that approximately 5.6 million Bitcoin, worth somewhere in the range of $420 billion, has not moved in over a decade and is likely lost.

 

The cryptographic concern here is real, even if the timeline is still fuzzy. Bitcoin's current security relies on elliptic curve math. A sufficiently powerful quantum computer running Shor's algorithm could theoretically work backward from an exposed public key to derive the private key, handing an attacker complete control of the wallet. Google flagged 2029 as a plausible threat horizon in a recent report, warning that quantum progress may be "closer than may appear."

 

The more immediate concern Lopp is raising is not technical, it is psychological. "If there is any credible evidence that anyone has the capability to recover lost or vulnerable coins with a quantum computer, you should expect a massive market panic immediately," he told CoinDesk. "It doesn't even require a massive market dump." Rational holders, he argued, would exit the system before confidence in the blockchain can be restored.

 

How BIP-361 Would Actually Work

The proposal is structured in three phases that only kick off after a companion proposal, BIP-360, is activated. BIP-360, which introduces quantum-resistant address types via a new pay-to-Merkle-root transaction format, entered testnet implementation through BTQ Technologies in early 2026.

 

Phase A would arrive roughly three years after BIP-360 activation. At that point, wallets would be blocked from sending new funds to legacy address types. Users could still move coins out of vulnerable addresses, but nothing could flow in. Phase B arrives two years after that, invalidating all legacy signatures at the consensus level. Any Bitcoin still sitting in unmigrated addresses at that point becomes effectively frozen and unspendable under network rules.

 

Phase C, still under research, would offer a last-resort recovery mechanism. Using zero-knowledge proofs tied to a BIP-39 seed phrase, holders who missed the deadline could potentially prove ownership of frozen funds without ever exposing a private key. That said, no activation timeline has been set, and the proposal remains in draft status.

 

Even the Author Says He Does Not Want This to Happen

Lopp has been unusually candid about his own ambivalence. In a post to X after the proposal dropped, he wrote: "I know folks don't like BIP-361. I don't like it myself. I wrote it because I like the alternative even less." He told Cointelegraph separately that the proposal is "a rough sketch" and is "not currently in a position to be adopted." He is, in his own framing, thinking adversarially about a potential future threat rather than lobbying for immediate change.

 

He has used stronger language in the past. In a blog post from early 2025, Lopp described quantum computer operators recovering dormant coins as "vampires feeding upon the system," arguing they trade nothing of value and simply extract from an ecosystem they did not build.

 

The Community Is Pushing Back Hard

The response from the Bitcoin community has been swift and, in many corners, hostile. Bitcoin Magazine editor Brian Trollz rejected the proposal outright. TFTC founder Marty Bent called it "laughable." Phil Geiger of Metaplanet put it bluntly: "We have to steal people's money to prevent their money from being stolen."

 

Frederic Fosco, co-founder of Bitcoin metaprotocol OP_NET, told Decrypt the proposal turns Bitcoin's founding promise on its head. A protocol-enforced freeze "is confiscation, full stop," Fosco said. "The second you cross that line, you've built a system that can freeze any coins for any reason deemed important enough by whoever controls the next soft fork."

 

Blockstream CEO Adam Back, speaking at Paris Blockchain Week on Wednesday, staked out a different path. He argued that Bitcoin should start adding optional quantum-resistant features now, while leaving any forced migration decisions to the future. Back suggested Bitcoin's rough-consensus governance has historically been capable of rapid emergency coordination, pointing out that critical bugs have been patched within hours when the threat was real and visible.

 

The divide is real and it is not going away. On one side sits a developer community that wants to get ahead of a threat that could, if realized, crater confidence in the largest cryptocurrency on earth. On the other side are holders and advocates who see any network-enforced freeze, however well-intentioned, as a precedent that fundamentally rewrites what Bitcoin is. BIP-361 has no activation timeline and depends on a separate proposal that has not yet been adopted. But the conversation it has forced is one Bitcoin will eventually have to finish.

 

Blockchain data analytics company Chainalysis announced on Tuesday at its annual Links conference in New York the introduction of its blockchain intelligence agents, designed to scale investigations and compliance for security professionals and organizations.

 

According to the company’s CEO and co-founder, Jonathan Levine, the AI agents are not a “new product” or a “bolted-on chatbot feature,” but rather an evolution of the company’s existing platform and experience, built on insights from billions of transactions screened and more than ten million investigations conducted over the past decade.

 

"Chainalysis blockchain intelligence agents put the full depth of our platform, our data, products, and institutional expertise, into the hands of anyone in your organization,” Levine wrote in a company blog post. “From seasoned investigators and compliance analysts to executives, Chainalysis agents provide insights and amplify what your team can do.”

 

 

To ensure transparency and reliability in its use, the Chainalysis team built its blockchain intelligence agents around four key principles: data quality, context and reasoning, auditable results, deterministic workflows, and human control. These principles are designed to help the agents deliver accurate and consistent insights.

 

The blockchain intelligence agents will begin rolling out over the summer, and the team expects that, over time, they will be used by professionals across a range of roles to unlock new levels of blockchain insight.

 

Chainalysis Joins the AI Agents Race

Prior to Chainalysis's integration of AI agents into its blockchain intelligence platform, several blockchain companies had already developed and launched their own AI-powered tools.

 

On March 25, blockchain intelligence firm and Chainalysis competitor TRM Labs announced the launch of its Co-Case Agent, an embedded AI investigative assistant that enables investigators to use plain-language prompts for complex on-chain tasks such as tracing funds, auditing transaction graphs, and maintaining immutable audit logs for Suspicious Activity Reports (SARs).

 

Blockchain analytics and crypto intelligence platform Nansen also launched its Nansen AI agent earlier this year. The conversational assistant supports on-chain research and agentic trading, helping users analyze wallets, identify market signals, and suggest trades.

 

These AI agent releases followed the introduction of Elliptic’s Copilot. In April 2025, the blockchain analytics and crypto compliance firm launched its AI-powered assistant to streamline compliance workflows and risk management.

 

Elliptic’s Copilot is widely regarded as one of the earlier AI assistant tools introduced by a blockchain intelligence company.

 

 

The U.S. Federal Bureau of Investigation (FBI) has warned crypto users about a fake token on the Tron blockchain impersonating the agency.

 

In a post on its New York X account, the FBI said some Tron users have received messages from scammers posing as the agency, asking them to complete an anti-money laundering verification to avoid having their assets frozen and falsely claiming their wallets are under investigation.

 

The FBI cautioned against falling for such scams. “If you receive a token from an account with the details below, do not provide any identifying information to any website associated with the token,” the agency said.

 

Users who have already sent their personal information to the scammers were urged to file a complaint with the Internet Crime Complaint Center.

 

 

Inside Crypto Phishing Scams

The launch of the fake FBI token is one of several crypto phishing scams that have emerged in recent months. These scams often involve impersonating recognized government agencies, companies, or public figures, tricking users into giving up their personal credentials.

 

According to Scam Sniffer, about 106,106 victims were affected by crypto phishing scams in 2025, resulting in losses of approximately $83.85 million. 

 

Although this represents a significant drop compared to the $494 million in losses and 332,000 victims recorded the previous year, phishing remains widely used by attackers, especially with the growing use of AI-generated phishing campaigns.

 

 

FBI Created Fake Cryptocurrency Token

In 2024, the FBI created a fake artificial intelligence–related token, called NexFundAI, an Ethereum-based cryptocurrency designed to catch scammers.

 

The NexFundAI token was part of Operation “Token Mirrors,” launched to identify and expose fraudulent market makers and manipulators, including those involved in wash trading and pump-and-dump schemes.

 

The operation was successful, as it led to the arrest of more than 18 individuals and the seizure of several million dollars from the suspects. 

 

 

 

Trust Wallet has introduced a new address-poisoning protection feature that prevents crypto users from falling for address-poisoning attacks.

 

According to the company, this new feature automatically checks the destination address against a database of known scam and lookalike addresses to prevent malicious transactions. Because the feature runs automatically, users will receive real-time warnings if a risk is detected.

 

For now, the feature will be supported on 32 Ethereum Virtual Machine (EVM) chains, including Ethereum, BNB Smart Chain, Polygon, Optimism, Arbitrum, Avalanche, and Base.

 

The Menace of Address Poisoning

Address poisoning is a phishing-style attack in which scammers trick users into sending cryptocurrency to the wrong wallet address, usually one that closely resembles a legitimate address. 

 

Here’s how address poisoning works:

• A scammer generates a look-alike wallet address, typically one that shares the same first and last characters as a legitimate address.
• The attacker then sends a tiny, or “dust,” amount of crypto to an unsuspecting user.
• The fake address subsequently appears in the victim’s transaction history.
• Because crypto transactions are irreversible, the user may mistakenly send funds to the poisoned address, losing them permanently.

 

While address poisoning may not look as sophisticated or complex as other forms of crypto attacks, it has had a long history of success for scammers. 

 

In May 2024, a user accidentally sent 1,155 Wrapped Bitcoin (WBTC) worth approximately $68 million to a fake address. The attacker created a fake address that looked like the legitimate address, and due to lack of proper scrutiny, the user fell for it.

 

While in May 2025, a trader lost $2.6 million after falling for two address poisoning scams, and later that year, another trader lost $50 million in USDT after sending them to a poisoned wallet address.

 

 

Address Poisoning is Just a Numbers Game

Knowing that most crypto users rarely fall for address poisoning scams (roughly 1 success per 10,000 attempts), attackers often rely on scale to succeed. 

 

Between July 2022 and June 2024, over 270 million address poisoning attempts were recorded across the Ethereum and BNB Chain, with 6,633 of these attempts successful, leading to a loss of over $83 million. 

 

In another address poisoning campaign, scammers used 82,031 fake addresses on 2,774 victims. The result? Over $69 million was lost. 

 

And just last year, there were about 32,290 recorded address poisoning attacks in September, which affected over 6,000 victims.

 

 

An X user with the username "Sillytuna" has reportedly lost $24 million in Aave Ethereum USDC (aEthUSDC) in an attack that involved a combination of violence, sexual assault, weapons, and threats to life.

 

 

"Bruised, held off while I could, but can't do that much with axes over your hands and feet," Sillytuna wrote. The user further stated that he was, at this point, done with crypto. In his words, "And now... definitely out of crypto ****ers."

 

While the matter has already been reported to law enforcement, no official statement has been issued by the authorities. However, the X user has announced a 10% bounty for whoever helps recover the stolen funds.

 

 

 

How the Crypto Community Reacted

Shortly after the news went viral, the crypto community reacted with mixed feelings, with many commiserating with the user over their loss. Some also raised awareness about the deplorable state of security in the United Kingdom. Apparently, the victim is a UK resident.

 

 

Amid the sympathy from the global crypto community, some, however, doubted the authenticity of the victim's story.

 

According to YokaiCapital, an X user, the victim had not posted anything about crypto before. He also alleges that the victim's account appears to have been bought recently.

 

"He will probably shill the coin at some point or say that he will take donations from the coin," YokaiCapital went on to write. 

 

However, the victim has denied allegations that he intentionally wanted to trend and claims the stolen funds were long-term holdings.

 

 

How the Attackers Moved the Stolen Funds

Tracking the stolen funds, blockchain analytics firm Arkham Intelligence said that the attackers moved the funds across Layer 2 networks, Bitcoin, and Monero, obviously to evade trail.

 

 

 

Roughly $20 million of the stolen funds were stored in two Ethereum addresses as DAI, a stablecoin on the Ethereum network, while $2.48 million was bridged to USDC on Arbitrum.

 

Arkham reported that the attackers sent $2.47 million to Hyperliquid through 19 separate Wagyu accounts, which were used to convert the funds to Monero (XMR).

 

The attackers also bridged $1.1 million to the Bitcoin blockchain using LiFi, noting that 0.5 BTC was deposited into a mixing service, Arkham added.

 

 

 

U.S. law enforcement is quietly trying to sort through a messy and uncomfortable situation involving seized cryptocurrency, a government contractor, and allegations that tens of millions of dollars were improperly siphoned from wallets controlled by federal authorities.

 

At the center of the case is a claim that more than $40 million in seized crypto was moved out of government-linked wallets without authorization. The U.S. Marshals Service has confirmed it is reviewing the allegations, though no charges have been announced and the investigation remains in its early stages.

 

The claims surfaced publicly after blockchain investigators began flagging unusual on-chain movements tied to wallets believed to be associated with assets seized by the U.S. government in prior criminal cases.

 

Blockchain Trails and a Familiar Name

Much of the attention comes from independent blockchain investigators who traced large transfers from wallets associated with seized funds to addresses allegedly controlled by a single individual. According to multiple blockchain intelligence reports, the individual at the center of this incident is identified as John Daghita, known in crypto circles by the alias “Lick”. Analysts such as ZachXBT, an independent blockchain investigator, publicly tied on-chain movements from government-controlled cryptocurrency addresses to wallets controlled by Daghita.

 

ZachXBT’s investigation reportedly traced back transactions involving tens of millions of dollars to wallet addresses that received $24.9 million from a U.S. government account in March 2024. This particular government account is linked to assets seized after the 2016 Bitfinex hack, one of the largest cryptocurrency thefts in history, where authorities later seized funds connected to that case.

 

“Meet the threat actor John (Lick), who was caught flexing $23M in a wallet address directly tied to $90M+ in suspected thefts from the US Government in 2024 and multiple other unidentified victims from Nov 2025 to Dec 2025”, ZachXBT wrote on X.

 

According to on-chain analysis shared publicly, one wallet received roughly $25 million from a government-controlled address in March 2024. Investigators say the source wallet appears to be tied to cryptocurrency seized in connection with the 2016 Bitfinex hack, a case that has continued to ripple through the crypto industry nearly a decade later.

 

The situation escalated after a dispute in a Telegram group, where the individual allegedly disclosed wallet details that appeared to confirm control over large balances of ether and other digital assets. Once those wallet addresses were public, blockchain analysts quickly began connecting dots.

 

While blockchain data can show where funds move, it cannot on its own establish intent or legality. That distinction has become especially important as the story gains traction.

 

The Contractor Connection

What has made the case particularly sensitive is a reported family link to a government contractor.

 

John Daghita is said to be the son of Dean Daghita, president of Command Services and Support, a Virginia-based firm that holds a federal contract connected to the handling of seized cryptocurrency for the U.S. Marshals Service. The company was awarded that contract in late 2024, following a competitive procurement process that drew objections from rival bidders.

 

The contract reportedly covers the management and liquidation of certain seized digital assets, particularly smaller or less liquid tokens that are not typically handled by large exchanges.

 

There is no public evidence that the contractor itself is under investigation or that the alleged misconduct occurred as part of official company operations. Still, the overlap between government custody, private contractors, and family relationships has raised uncomfortable questions about access controls and oversight.

 

A Broader Problem for Seized Crypto

The allegations land at a time when the U.S. Marshals Service is already under scrutiny for how it manages digital assets. The agency plays a central role in handling property seized in criminal cases, including cryptocurrency tied to fraud, ransomware, darknet markets, and hacking incidents.

 

Over the years, the Marshals Service has accumulated billions of dollars worth of crypto, including large bitcoin holdings seized in high-profile cases. But audits and reporting have repeatedly shown that tracking, accounting, and securing these assets is far from simple.

 

Internal systems were not originally designed for blockchain-based assets, and oversight bodies have previously flagged weaknesses in inventory tracking and custody procedures. In some cases, the agency has struggled to provide a clear accounting of exactly how much crypto it holds at a given time.

 

Those challenges have become more visible as the value of seized crypto has soared and as debates continue in Washington over whether the government should hold, sell, or strategically manage these assets.

 

What Happens Next

For now, the U.S. Marshals Service is keeping its comments limited. Officials have acknowledged the allegations and confirmed that they are being reviewed, but they have not said whether criminal charges are expected or whether any funds have been recovered.

 

Key questions remain unanswered. Investigators will need to determine whether the alleged transfers involved unauthorized access, compromised credentials, or insider misuse of systems tied to crypto custody. Another open issue is whether the case points to individual misconduct or deeper structural weaknesses in how seized digital assets are handled.

 

Until law enforcement provides more clarity, much of the public narrative will continue to be shaped by blockchain analysts and online investigators. As with many crypto-related cases, the transparency of the blockchain offers clues, but not conclusions.

 

What is clear is that the case highlights the growing pains of government agencies adapting to digital assets. As crypto seizures become more common and more valuable, the systems designed to safeguard them are being tested in very real ways.

Trust Wallet Chrome Extension Hack Turns a Quiet Holiday Into a $7 Million Crypto Mess

Crypto has a way of ruining the calendar. Just when things slow down, markets calm, and people log off for the holidays, something breaks. This time it was Trust Wallet, and for some users, it broke badly.

More than $7 million in cryptocurrency was stolen after a compromised version of Trust Wallet’s Chrome browser extension made its way into circulation late last week. The losses came fast, right around December 24, when many users were updating software, traveling, or simply not paying close attention. By the time some noticed something was wrong, their wallets had already been drained.

The issue centered on a specific update to the Trust Wallet Chrome extension. On the surface, it looked like a normal release. No flashing red flags, no obvious warnings. Users installed it the same way they always do, clicking update and moving on. Somewhere along the line, though, malicious code ended up inside that release. Once active, it gave attackers a way to move funds out of users’ wallets quietly and efficiently.

What followed was a familiar pattern for anyone who has watched crypto hacks play out. Wallets that had been untouched for weeks suddenly sent out large transactions. Bitcoin, ether, BNB, and stablecoins flowed into unfamiliar addresses. Analysts tracking the blockchain could see the money moving, hopping between wallets, splitting up, recombining. It was all very visible and completely irreversible.

Trust Wallet confirmed that the breach was limited to one version of the Chrome extension. According to the company, mobile users were not affected, and neither were users who had not installed the compromised update. The company urged anyone using that version to disable it immediately and install the patched release from the official store.

That response helped contain the damage, but it did not undo what had already happened. In crypto, there is no undo button. Once assets leave your wallet, they are gone unless the attacker decides to give them back, which is not something people tend to count on.

Adding to the response, Changpeng Zhao, the Binance co-founder whose company owns Trust Wallet, said affected users would be reimbursed while an internal investigation continues. That promise brought some relief, especially for users who lost significant sums. Still, reimbursement does not erase the bigger concern. People want to know how a malicious update made it through in the first place.

Security researchers were already digging in by the time official statements came out. Some noticed odd wallet activity tied to recent extension updates. Others began pulling apart the extension code, looking for scripts that could leak private data or trigger unauthorized transactions. Warnings spread quickly across social platforms, security channels, and group chats. In crypto, news like this moves faster than press releases.

The episode once again highlighted a long standing weakness in crypto infrastructure. Browser wallet extensions are incredibly popular because they are easy. They connect seamlessly to decentralized exchanges, NFT platforms, and Web3 apps. For many users, they are the default way to interact with crypto on a daily basis. But that convenience comes with risk. Extensions live inside browsers that were never designed to protect private keys holding real money.

A single compromised update can affect thousands of users at once. Unlike phishing attacks that rely on tricking individuals one by one, an extension issue scales instantly. If the update is trusted, users trust it too.

This is why security experts keep repeating the same advice, even if it sounds boring. Large balances should not live in hot wallets. Browser wallets are tools for interaction, not vaults. Hardware wallets and cold storage are slower and less convenient, but they dramatically reduce the risk of exactly this kind of event.

In the aftermath, users have been urged to take several steps. Disable the affected extension. Review transaction histories carefully. Revoke token approvals that might still be active. In some cases, move remaining funds to an entirely new wallet with a fresh seed phrase that was never exposed to the compromised environment. None of this is fun, but waiting is usually worse.

There is also a broader reputational cost. Trust Wallet is one of the most widely used non-custodial wallets in the world. Incidents like this shake confidence, even if the company responds quickly and makes users whole. For newer users especially, it reinforces the idea that crypto is complicated, risky, and unforgiving.

The investigation into how the compromised extension was approved and distributed is still ongoing. Questions remain about whether this was a supply chain issue, a submission process failure, or something else entirely. Those answers will matter, not just for Trust Wallet, but for the wider ecosystem that relies heavily on browser extensions.

 

For now, the lesson is an old one, repeated yet again. In crypto, trust is fragile. Convenience is expensive. And even during the quietest week of the year, something can go wrong fast.

 

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