SEC’s Hester Peirce Signals In-Kind Crypto ETF Redemptions Coming Soon

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Now, in today’s news:

• 🔄 In-kind ETF redemptions might be next

• 📉 Resupply hit by $9.5M oracle bug

• 🧬 zkLend calls it quits after hack

• ✅ Kraken goes full MiCA in Europe

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SEC’s Hester Peirce Says In-Kind Crypto ETF Redemptions Could Come Soon

SEC Commissioner Hester Peirce, who also heads up the agency’s Crypto Task Force, signaled that in-kind redemptions for crypto exchange-traded funds (ETFs) are "on the horizon" and could soon become a reality.

“I can't prejudge, but we hear that there's a lot of interest,” she added.

In-kind redemptions allow investors to exchange ETF shares directly for the underlying asset rather than receiving cash, which is the current standard for spot crypto ETFs approved by the SEC in early 2024.

Peirce made these remarks while speaking on a panel at the Bitcoin Policy Institute, noting that multiple filings requesting in-kind creation and redemption mechanisms — such as those submitted by Nasdaq on behalf of BlackRock in January 2025 — are currently under review by the SEC.

A shift to in-kind redemptions is expected to reduce operational friction, lower tax implications, and improve the efficiency of crypto ETFs, making them more attractive to institutional investors and aligning their structure with traditional equity ETFs.

Resupply subDAO Loses $9.5M in Exploit

Resupply, a decentralized stablecoin protocol operating as a subDAO of both Convex Finance and Yearn Finance, lost an estimated $9.5 million in a Wednesday exploit, according to a number of blockchain security firms.

The BlockSec team first flagged the exploit through its Phalcon platform’s X account, after which several researchers determined the root cause was the ResupplyPair contract using an empty ERC-4626 wrapper as the price oracle. 

ERC-4626 is a tokenized vault standard for Ethereum, which provides a standardized interface for yield-bearing vaults. When an empty ERC-4626 vault is used as a price oracle, it reports inaccurate prices.

As a result, the attacker was likely able to manipulate the exchange rate to zero and enable uncollateralized borrowing of massive amounts of tokens. 

According to one engineer’s analysis of the attack transaction, the attacker used only 2 crvUSD to borrow 10 million reUSD.

zkLend Winds Down After February Exploit Erodes Confidence 

Starknet-based decentralized lending protocol zkLend has officially announced its decision to shutter operations after a major exploit in February that resulted in losses between $9.5 million and $10 million.

The zkLend attacker was able to drain funds by exploiting a decimal precision vulnerability in the protocol’s smart contract code on Starknet.

“This decision was not made lightly. Over recent months, the exploit we suffered has deeply eroded user confidence, and furthermore, the recent removal of ZEND from major exchanges such as Bybit and KuCoin has further constrained token liquidity and accessibility,” said the zkLend team.

“This development significantly limits our capacity to effectively allocate toward any new initiatives.”

The team now plans to allocate its remaining $200,000 in treasury funds to a user recovery fund, prioritizing compensation for affected users over any attempt to relaunch or continue development.

The protocol will keep its DeFi Spring, recovery, and kSTRK portals open so users can unstake assets or claim remaining balances.

Kraken Obtains MiCA License in Ireland

Crypto exchange Kraken has secured a Markets in Crypto-Assets (MiCA) license from the Central Bank of Ireland, marking a major milestone in its European expansion and regulatory compliance efforts.

The license enables Kraken to offer regulated crypto services across all 30 European Economic Area (EEA) member states, significantly expanding its market reach and allowing it to engage directly with clients throughout the region.

The move positions Kraken among leading global crypto platforms expanding under the MiCA framework, alongside Coinbase, OKX, Crypto.com, and Bybit.

One notable exemption is USDT issuer Tether, which has publicly stated that it will not seek compliance with MiCA regulations, arguing that the requirements for stablecoins under MiCA are too onerous and could pose risks to the European financial system.

Hyperliquid Reignited Interest in Crypto Perps. Can Coinbase and Robinhood Capitalize?

Perpetual futures have long dominated overseas crypto trading, but now Coinbase and Robinhood are pushing to bring the high-leverage, high-volume product to U.S. retail investors.

With Hyperliquid quietly growing into a serious threat to Binance’s perp dominance, and even attracting massive U.S. traffic despite being geo-blocked, American exchanges see an opening.

But will regulatory hurdles and the lack of token incentives keep them from catching up, or is the next big boom in U.S. crypto trading already underway?

• 🗳️ Trump-backed World Liberty Financial said it is preparing to make WLFI tokens transferable after raising $550 million in public sales, while also planning the first attestation of its USD1 stablecoin and launching a new mobile app amid growing institutional interest.

• 🏦 Grove, the newest autonomous unit in the Sky Ecosystem, launched with $1 billion from Sky to invest in tokenized CLOs through Janus Henderson’s JAAA fund, aiming to bring institutional-grade credit exposure to DeFi protocols.

• 🇦🇺🔍 Australia’s top regulator opened a formal inquiry into the ASX’s governance and tech operations, after the failed blockchain-based CHESS upgrade triggered a legal battle and ongoing concerns over the exchange’s infrastructure stability.

• 🚫 Layer 2 builder Eclipse Labs banned its own team from claiming its upcoming ES token airdrop, locking employee wallets and instituting multi-year vesting to avoid insider accumulation and ensure a fully community-controlled launch.

• 📈 BitGo’s assets under custody surged from $60 billion to $100 billion in early 2025, driven by staking demand and regulatory clarity, as the firm eyes an IPO and expands into South Korea and Dubai.

• 📜 Senate Republicans unveiled legislative principles for crypto oversight focused on regulatory clarity, consumer protection, and innovation support, as political tension grows over Trump-linked digital asset investments.

• 💼 After a two-year pause, SoFi is reintroducing crypto to its platform with Bitcoin and Ethereum trading, plus future offerings like staking and crypto-backed lending, as regulatory shifts open new paths for nationally chartered banks.

• 🏠 U.S. housing regulators instructed Fannie Mae and Freddie Mac to assess cryptocurrency as a valid asset in mortgage risk models, signaling a push to normalize crypto within traditional financial infrastructure.

• 🔮 Kalshi raised $185 million at a $2 billion valuation in a series C round led by Paradigm after 100x growth in trading volume and a court victory that legalized betting on U.S. elections for the first time in over a century.

• 📊 Galaxy closed a $175 million crypto venture fund, its first with outside capital, to invest in startups at the intersection of DeFi and traditional finance, with $50 million already deployed into projects like Ethena and Monad.

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