ZKJ Crashes 83% as Liquidity Crisis Spreads

Hi! In today’s edition:

• 🪫 ZKJ crumbles amid liquidity crunch

• 💸 Hyperliquid’s lonely winners

• 🏦 Trump Media gets BTC treasury nod

• 💰 EF funds Tornado Cash co-founder’s legal fight

• 🚫 White House kills crypto law’s ethics provisions

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Polyhedra’s ZKJ Plummets 80% Amid Liquidity Crisis, ‘Abnormal’ Transactions

Decentralized lending platform Polyhedra’s native ZKJ token collapsed during the weekend, dropping 83% from around $2 to under $0.31. 

The price action followed a series of “abnormal” onchain transactions, triggering a liquidity crisis that rippled through the broader Binance Alpha ecosystem tied to ZKJ and KOGE.

KOGE is a token issued by 48 Club DAO, closely linked to ZKJ through shared liquidity pools, which has been incentivized as part of Binance’s Alpha Points program.

The crisis began on Sunday when the KOGE/USDT liquidity pool was drained, leaving holders unable to exit their positions. Investors rushed to swap KOGE into ZKJ using the still-active KOGE/ZKJ pool, causing a flood of ZKJ redemptions that overwhelmed the ZKJ/USDT pool. 

That triggered a chain reaction and a liquidation cascade, with major holders withdrawing large quantities of both KOGE and ZKJ from on-chain pools.

Binance acknowledged the unfairness of large holders removing tokens and adjusted its Alpha Points rules so that the trading volume of the pairs would no longer count toward Alpha Points.

Only 170 Hyperliquid Trader Profits Top $10M

Only 170 Hyperliquid traders are sitting on more than $10 million of profits, according to an analysis of Hyperliquid wallets by pseudonymous onchain analyst DeFi Mochi. 

“Most of the traders with 8 figs [profit and losses] only have <200% ROI, suggesting that many of them already had size to begin with,” DeFi Mochi said.

The finding sheds light on the fact that despite Hyperliquid’s reputation as a high-performance decentralized exchange with low-latency trading, outsized gains are not uniformly distributed among its user base.

The total value locked on Hyperliquid’s layer 1 chain has reached $2.01 billion, a 70% increase in the last 30 days, according to DeFi Llama data. 

SEC Nod for Trump Media BTC Treasury Clears Way for $2.3B Raise

Trump Media & Technology Group’s registration for its bitcoin treasury deal was officially declared effective by the U.S. Securities and Exchange Commission on Friday.

The company can now proceed with its plan to add bitcoin to its balance sheet as part of a $2.3 billion capital raise was secured through the resale of approximately 56 million equity shares and 29 million shares underlying convertible notes to about 50 investors.

Trump Media’s CEO, former member of Congress Devin Nunes, emphasized the company’s aggressive expansion plans, while establishing a Bitcoin treasury as a core part of its assets. The company's Bitcoin holdings will be managed by Crypto.com and Anchorage Digital.

The move makes Trump Media among the biggest publicly listed holders of Bitcoin and reflects a broader trend of corporations incorporating cryptocurrency into their treasury strategies.

Tornado Cash Co-Founder Gets $500K Defense Boost From Ethereum Foundation

The Ethereum Foundation has donated $500,000 to support the legal defense of Tornado Cash co-founder Roman Storm, who is set to go on trial in July on a number of charges, including money laundering and conspiracy to violate U.S. sanctions.

The foundation also pledged to match up to $750,000 in community donations, emphasizing a position it characterizes as “privacy is normal, and writing code is not a crime.”

“I just want to say a huge, heartfelt THANK YOU to the amazing Ethereum Foundation,” said Storm, whose trial is to begin on July 14.

Storm’s defense has raised concerns about the withholding of key evidence by prosecutors and restrictions on expert testimony, framing the case as a crucial test for the future of decentralized finance and developer liability in the crypto industry.

Unchained SCOOP: White House Rejects Ban on Conflicts of Interest in Crypto CLARITY Act

A bipartisan negotiation by House Republicans and Democrats to insert conflict-of-interest guardrails into the House crypto market structure bill, intended mainly to address Democratic concerns over President Donald Trump’s crypto profiteering, ran into resistance from the White House on Tuesday evening during a key phase of negotiations, multiple sources familiar with the matter told Unchained.

One source said the provision had been designed to address conflicts of interest among senior political figures — such as the president, but also including the vice president, members of Congress and their family members — in crypto businesses while in office. 

Another source familiar with the negotiations said that lawmakers on both sides of the aisle had worked in good faith to propose language similar to existing campaign finance and financial disclosure norms so it would not be perceived as a direct rebuke of Trump’s many crypto business activities.

So, with the White House now blocking ethics provisions, will Democrats walk away, and could the CLARITY Act unravel before Trump ever signs it?

• 🧾 A new federal filing by the U.S. Office of Government Ethics on Friday revealed Donald Trump earned $57.4 million last year from World Liberty Financial, held $1 to $5 million in crypto, and collected millions more from branded books, merchandise, NFTs, and gold bars.

• ⚡ Bybit on Sunday announced Byreal, a Solana-based hybrid decentralized exchange blending centralized liquidity with DeFi tools such as request for quote and concentrated liquidity market maker routing, aiming to support both retail and institutional users through features like maximal extractable value protection, fair launches, and curated yield products.

• 🔄 Ethereum and Cardano co-founder Charles Hoskinson proposed converting $100 million in ADA into bitcoin and Cardano-native stablecoins to grow Cardano’s DeFi ecosystem and boost its TVL ratio, arguing the sale would not negatively impact ADA’s liquidity.

• 🟣 Polkadot’s community is divided over a proposal to convert 500,000 DOT into Bitcoin via a year-long DCA strategy using tBTC, with some arguing it’s a necessary hedge and others warning it could worsen selling pressure at a poor valuation time.

• 🇧🇷 Brazil has enacted a flat 17.5% tax on all crypto profits for individuals, removing the exemption for smaller monthly sales and applying the new rule globally across all wallets and exchanges, with losses deductible only over five quarters.

• 🚀 Vitalik Buterin proposed again on Friday replacing Ethereum’s transaction engine with RISC-V, a change he said could enable a 100-fold increase in execution capacity and dramatically cut user costs by optimizing for zero-knowledge proofs and hardware efficiency.

• 🛍️ Walmart and Amazon are considering launching U.S. dollar-pegged stablecoins to cut payment costs and settlement times, pending federal legislation such as the GENIUS Act, which may soon establish national rules for fiat-backed crypto.

• 🧠 AI output comparison platform Yupp exited stealth with a $33 million seed round led by a16z crypto to build a platform that lets users earn crypto rewards by providing feedback on AIs that are used to improve evaluation systems.

• 🇺🇸 Don Wilson’s DRW invested $100 million in Trump Media & Technology Group just weeks after his crypto firm Cumberland had an SEC lawsuit dropped, making DRW a major backer of the Trump family’s $2 billion bitcoin initiative.

• 🪙 SharpLink Gaming acquired $462 million worth of ETH on Friday for its treasury at an average price of $2,600, deploying more than 95% into DeFi protocols, even as its stock plunged 67% following confusion around a regulatory filing.

• 🇯🇵 Metaplanet acquired 1,112 BTC for $117.2 million, hitting its 10,000 BTC goal just as it approved a $210 million zero-interest bond issuance to EVO Fund, with plans to scale up to 210,000 BTC, 1% of total supply, by 2027.

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