🤯 A $5 Billion Meltdown

Plus, 🫨 CZ denies DOJ deal over Justin Sun, 🎢 Tariff drama rumbles on, 🧑‍⚖️ CryptoPunk whale gets six years, 🚀 Tokenized treasuries surge, and more!

Author

Juan Aranovich
April 14, 2025

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Hi! In today’s edition:

  • 💥 Mantra’s $5.5B wipeout

  • 👀 CZ: “Ain’t no snitch”

  • 📊 Markets weather tariff chaos

  • 🚔 NFT whale faces jail

  • 📈 Tokenized treasuries: On the up 

The Financial Freedom Report explores the role currency and banking play in the civil liberties and human rights struggles of those living under authoritarian regimes and how Bitcoin is used to push back.

By Tikta and Steven Ehrlich

Real-world asset tokenization layer 1 Mantra's OM token suffered a catastrophic 90% price collapse on Sunday, erasing $5.5 billion of market capitalization in under an hour.

The Mantra team attributed the crash to "reckless forced liquidations" by a large investor on centralized exchanges, saying that cascading sell orders had overwhelmed the market.

However, onchain insights firm Spot On Chain identified suspicious whale activity, including 14.27 million OM tokens worth around $91 million being moved to crypto exchange OKX three days before the crash.

A pseudonymous researcher at Amagi Advisory claimed the Mantra team had sold their entire token allocation. OKX founder Star Xu also promised to make all data on OM deposits on its platform public.

The Mantra team, meanwhile, strongly denied allegations that insiders had been behind the token’s crash, saying that all team tokens could be verified onchain and that the official Mantra Telegram account was still up and running.

Former Binance CEO Changpeng "CZ" Zhao has strongly denied allegations in a Wall Street Journal report that he had agreed to provide evidence against Tron founder Justin Sun as part of his 2023 plea deal with the U.S. Department of Justice.

The Journal report cited unnamed sources alleging that CZ's cooperation was a previously undisclosed element of his settlement for Binance's anti-money laundering violations.

Zhao dismissed the report as a "baseless hit piece," arguing that government witnesses typically avoid prison and are protected — highlighting the fact that he had served a four-month prison sentence last year.

Sun also appeared to be caught off guard by the Journal’s report, saying he was "not aware" of the rumors and describing CZ as his "mentor and close friend.”

The DOJ has not publicly confirmed or denied any testimony arrangement.

Bitcoin and major altcoins experienced sharp swings around key policy reversals by U.S. President Donald Trump last week, but ultimately traded flat during the period, reflecting mixed signals in traditional markets.

Trump announced plans to impose new tariffs on imported semiconductor chips on Sunday, suggesting that exemptions for electronics such as smartphones and computers may be short-lived. That was an apparent U-turn from his announcement last Friday of exemptions for such goods from the steep duties he is imposing on almost every country in the world — a policy that he also threw into reverse last week, at least for three months.

Bitcoin fluctuated between $83,306 and $85,500 on Sunday, and was flat as of 4 a.m. ET on Monday. 

“Although bitcoin has been impacted by the tariff news, its volatility has remained surprisingly subdued,” said Greg Cipolaro, Global Head of Research at NYDIG.

“Perhaps investors are increasingly searching for stores of value not tied to sovereign countries and thus not affected by the trade turmoil,” he said. “In that case, an asset like bitcoin fits the bill.”

CryptoPunk Whale Faces 6 Years in Prison for Hiding $13M From IRS

Waylon Wilcox, a 45-year-old NFT trader from Pennsylvania, last week pleaded guilty to concealing more than $13 million in profits from CryptoPunk NFT sales between 2021 and 2022, evading around $3.3 million in taxes.

According to a statement from the U.S. Attorney’s Office for the Middle District of Pennsylvania, Wilcox sold a total of 97 CryptoPunks — 62 in 2021 for around $7.4 million and 35 in 2022 for around $4.9 million.

He filed false returns to the Internal Revenue Service for both years, intentionally answering "no" when asked about digital asset transactions.

“When a taxpayer sells an NFT, including a Punk, then the taxpayer must report sales proceeds and any gains or losses from the sale of the NFT on their tax return,” the U.S. Attorney said. “The total maximum penalty under federal law for these offenses is up to six years of imprisonment, a term of supervised release following imprisonment, and a fine.”

“I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”

Democratic political strategist James Carville famously made that quip in 1994, during what was known as the “Great Bond Massacre.” From October 1993 to October the following year, the yield on U.S. 10-year treasury bonds jumped from 5.42% to just below 8% due to concerns about President Bill Clinton’s spending plans. The Arkansan eventually had to back off.

The power of the bond market reared its head again this week, when U.S. 10-year yields surged overnight on Tuesday from 3.87% to almost 4.49%, indicating a sharp drop in demand. It’s no coincidence that this sudden movement forced President Donald Trump to backtrack on his “reciprocal” tariff program.

But while traditional treasuries flounder, why are tokenized versions suddenly thriving — and can they keep it up?

  • 🤝 Ripple and the U.S. Securities and Exchange Commission (SEC) last week filed a joint request to pause their legal battle for 60 days after reaching a preliminary agreement, signaling a potential end to a case that began in 2020 and defined years of crypto regulatory uncertainty.

  • 🔄 Binance and the SEC requested a 60-day extension to their pause in legal proceedings on Friday as both sides engage in settlement talks, with mid-June set for the next status update if the court approves.

  • 🧾 U.S. prosecutors last week confirmed that the Justice Department’s new, softer stance on crypto enforcement won’t affect the fraud and conspiracy charges against Terraform Labs founder Do Kwon, whose trial has now been postponed until next February.

  • 🧑‍⚖️ A New York judge ruled on Friday that most of the state attorney general’s civil securities fraud claims against crypto venture firm DCG and its executives over the Genesis/Three Arrows Capital fallout will proceed, rejecting DCG’s motion to dismiss while tossing two duplicative counts.

  • 💸 Bust exchange FTX plans to start distributing $11.4 billion to primary creditors on May 30, although repayments will reflect 2022 crypto prices, sparking a backlash from claimants as the exchange also sifts through billions of dollars in allegedly fraudulent submissions among a backlog of 27 quintillion (27,000,000,000,000,000,000) claims.

  • 🦅 The HAWK memecoin briefly surged 60% after social media influencer Hailey Welch, a.k.a. "Hawk Tuah Girl," announced that the SEC had closed its investigation of her without charges, even though she distanced herself from the token and disclosed broken promises around its chaotic $500 million pump-and-dump launch.

  • 🍔 The SEC sided with McDonald’s in its decision to exclude a shareholder proposal urging the company to buy Bitcoin, saying the issue fell under “ordinary business operations” and didn’t require discussion at the fast food giant’s upcoming annual meeting.

  • 🇨🇦 APX Lending secured a $20 million accordion credit facility from Cypress Hills and gained exemptive relief from Canadian regulators, enabling it to scale crypto-backed loan offerings across Canada without traditional registration burdens.

  • 🏢 Commercial real estate platform Janover allocated $9.6 million to Solana, launched a staking strategy, and saw its stock surge over 1,100% following a $42 million raise and a pivot towards becoming a crypto treasury proxy.

  • 🟠 Strategy purchased 22,048 BTC, pushing its total holdings past 528,000 BTC and unrealized gains to over $8.6 billion, as it continues to accumulate the original cryptocurrency despite widespread market volatility and altcoin losses exceeding 30%.