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Tesla kept its entire 11,509 Bitcoin intact through the first quarter of 2026 despite a brutal crypto market selloff, the company reported in its earnings release today.

Bitcoin lost about 22% of its value during those three months, its steepest first-quarter drop in eight years, which pushed Tesla’s digital asset holdings from roughly $1 billion down to $786 million by the end of March.

The drop was caused by a mix of geopolitical tensions, a hawkish stance from the Federal Reserve, and overall risk-off sentiment, resulting in heavily negative investment product outflows in January and February.

By late April, Bitcoin had recovered much of its decline. The digital asset changed hands at $78,000, boosting Tesla’s holdings back to around $900 million.

Elon Musk’s electric vehicle maker bought 43,200 Bitcoin for $1.5 billion in February 2021. In 2022, the company sold about 75% of its holdings near the lows. The remaining 11,509 coins have sat untouched since January 2025, a period that included Bitcoin’s surge past $126,000 in September 2025 and the subsequent drop through Q1 2026.

Tesla ranks eleventh among public companies holding Bitcoin on their balance sheets, well behind Strategy, which has made Bitcoin accumulation essentially its entire corporate identity.

Tesla Q1 revenue rises 16% to $22 billion as free cash flow surges

Tesla posted Q1 revenue of $22.38 billion, a 16% increase year-over-year, driven by growth in automotive revenue to $16.2 billion and strong expansion in services and Full Self-Driving subscriptions, which reached 1.28 million. Free cash flow rose to $1.4 billion, largely outperforming expectations, while net income increased modestly to $477 million.

Despite these gains, Tesla’s core EV business showed signs of weakness, with deliveries of 358,023 vehicles falling short of expectations even as production exceeded 408,000 units. This suggests softer demand and a growing reliance on pricing, services, and software to support revenue.

While performance has improved compared to last year, it lags behind the company’s last three quarters. Tesla is now entering a capital-intensive phase, planning $25 billion in spending on AI and robotics in 2026, with management signaling negative cash flow in the periods ahead.

Crypto protocols have warned that an increase in AI use has led to a flood of bogus bug bounty submissions, putting a strain on teams trying to identify real threats to their protocols. 

Bug bounties are a system to reward “good” hackers for submitting reports about potential vulnerabilities and are popular in the crypto industry. AI has now made it easier to sift through large amounts of code to find possible bugs, though AI is also known to hallucinate. 

“AI is changing the way that bug bounty programs must operate,” said Barry Plunkett, co-CEO of Cosmos Labs, on Tuesday, responding to a bug bounty hunter who accused the protocol of ignoring their vulnerability report. 

“Our program has seen a 900% increase in submission volume from last year, on the order of 20-50 per day,” he said, adding that it’s led to a huge increase in both valid and invalid reports. 

Kadan Stadelmann, a blockchain developer and chief technology officer at Komodo Platform, told Cointelegraph he has also seen a notable increase in bug bounty submissions and payouts across organizations. 

“There has definitely been an increase in low-quality bug bounty submissions, some of which have been false positives, potentially suggesting AI sourcing. One potential explanation is that AI has caused a decrease in the cost to produce a report, resulting in an influx of submissions.” 

In January, Daniel Stenberg, the creator of the open-source data transfer tool curl, which is used in many apps, including blockchain infrastructure, announced he was ending his bug bounty program because of an influx of “AI slop in vulnerability reports,” and he was exhausted from sifting through them.

HackerOne, one of the largest bug bounty platforms in the world, reported in January that there were 85,000 valid bounty submissions in 2025, up 7% from the previous year.

AI could be both the cause and the solution

Plunkett said Cosmos Labs has already started to adapt its approach as a result of the uptick in bug bounty submissions by tightening how it scores submissions, prioritizing trusted researchers with a proven track record and working with other bug bounty providers that offer more advanced triage.

Meanwhile, Stadelmann said bug bounty programs have proven integral to defending decentralized systems, and adopting AI to assist in sifting through the noise could be a solution.

“Blockchain teams will have to create AI deterrents to sift through incoming bug bounties. The smaller the team, the bigger the problem of increased bug bounties will become. Software engineers won’t have the capacity to examine everything,” he said.

“This is where defensive AI systems to automatically sift through incoming bug bounties will be crucial. Teams dependent on bug bounties will need to develop stricter standards on their bug bounty programs as a means of lowering the number of incoming reports.”

Related: Crypto hackers stole $17B over past 10 years: DefiLlama

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Crypto lobby Coin Center expanded its argument that software code is free speech and should be protected under the First Amendment of the US Constitution, amid continued uncertainty over whether crypto developers are liable for how their inventions are used.

In a report published Monday, Coin Center executive director Peter Van Valkenburgh and director of research Lizandro Pieper said writing and publishing crypto software code is the same as writing a book or publishing a recipe.

The pair argued that the First Amendment, which protects individuals’ freedom of speech and expression, offers strict constitutional protection for developers who only publish and maintain software. 

“They are speakers and inventors, not agents, custodians, or fiduciaries. Extending pre-registration or licensing requirements to this speech activity drops the historical logic of financial oversight and imposes a classic prior restraint on activities that are primarily speech and expression—which is almost always unconstitutional,” they added.

Crypto software developers have been seeking legal protections to shield themselves from criminal liability over the software they create. Last year also saw several high-profile convictions of crypto developers based on how their software was used, including the trial of Tornado Cash developer Roman Storm.

Regulation applies when devs interact directly with users

Van Valkenburgh and Pieper said the paper is aimed at providing a framework for courts and regulators to distinguish between protected software publication and a developer’s professional conduct. 

They argued that a developer crosses into regulatable conduct when controlling user assets, executing transactions for users or making decisions on users’ behalf.

“Lower court confusion over the distinction between conduct and speech naturally found in software publishing has fueled the development of what might be called a functional code theory of diminished First Amendment protection,” they said.

“Some courts have suggested that because software can be executed to produce real-world effects, it resembles conduct rather than speech,” Van Valkenburgh and Pieper added.

“We argue that such activities are pure speech and that the Supreme Court’s existing jurisprudence insists on this interpretation even if some lower courts have gone astray.”

The pair cited the 1985 case of Lowe v. SEC, in which the Supreme Court found that a publisher that does not hold assets on behalf of a client or take action on the client’s behalf is protected by free speech and does not count as practicing a regulated profession. 

Crypto developers can’t be used as scapegoats

In some cases, crypto software has eliminated certain traditional middlemen, with self-custody and peer-to-peer transactions removing the need for a central authority to send funds or hold them. 

Traditionally, financial institutions acting on a user’s behalf as intermediaries are regulated by governments and required to hold licenses.

Related: Coin Center urges Senate not to axe crypto developer protection bill

Van Valkenburgh and Pieper said that while it is challenging to build regulatory frameworks around new technology, declaring software developers to be middlemen for “administrative convenience” is not the answer either. 

“Crypto software does not necessitate the invention of new legal doctrines or novel carveouts. It requires the faithful application of settled First Amendment principles to a new technological context,” they added.

“In the age of computers, where software is the primary means for expressing ideas and organizing economic life, those principles matter more, not less. Writing and publishing code is speech. And in a free society, speech cannot be licensed into silence.”

Storm was convicted last year on charges of conspiracy to operate an unlicensed money-transmitting business, but his lawyers have been working on a motion to dismiss using the Supreme Court case, Cox Communications Inc. v. Sony Music Entertainment, to argue he had no intent to participate in the crimes of which he is accused 

The co-founders of privacy-focused Bitcoin wallet Samourai Wallet were also found guilty on the same charge and were sentenced to between four and five years in prison.

Magazine: Will the CLARITY Act be good — or bad — for DeFi?

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

Michael Saylor’s Strategy, the world’s largest public Bitcoin holder, has blasted past 800,000 BTC in total holdings after announcing its latest purchases.

Strategy acquired 34,164 Bitcoin (BTC) for $2.54 billion between April 13 and 19, according to an 8-K filing with the US Securities and Exchange Commission on Monday.

The buy ranks as Strategy’s third-largest Bitcoin acquisition on record by coin count, behind purchases of 55,500 BTC and 51,780 BTC in November 2024.

Holding around 780,897 BTC after a $1 billion purchase just a week ago, the company now holds 815,061 BTC, purchased for $61.56 billion.

The new acquisition was made at an average price of $74,395 per coin, slightly below the company’s average acquisition price of $75,527.

Saylor had teased the purchase on Sunday, signaling another large Bitcoin acquisition ahead of the announcement. The company also disclosed on Friday plans to pay Stretch (STRC) dividends twice monthly. STRC is the company’s perpetual preferred security.

“If we were to move forward with paying STRC semi-monthly, we would be in category one, the only preferred in the world that pays semi-monthly dividends. We think this is unique and attractive,” Strategy CEO Phong Le said.

Related: Bitmine ramps up Ether buys, pushes holdings toward 5% of total supply

Strategy’s STRC funds more than 85% of the purchase

Similar to a few recent acquisitions, the majority of Strategy’s latest purchase has been funded through STRC.

According to the filing, STRC generated $2.18 billion, or about 85.7% of total proceeds, while sales of Class A common stock (MSTR) contributed $366 million.

Last week marked several new records for STRC, including the company’s largest single-day buying spree through its at-the-market, or ATM, program.

On April 13, STRC set a new estimated daily record of about 7,741 BTC, based on the sale of 11.9 million shares through its at-the-market, or ATM, program, generating more than $1 billion in trading volume, according to STRC Live.

The stock set another record the following day, with an estimated 9,364 BTC tied to 14.4 million shares sold through its at-the-market, or ATM, program. The two days combined brought an estimated 17,204 BTC, marking a 518% surge versus the four-week average.

Magazine: Will the CLARITY Act be good — or bad — for DeFi?

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

Prediction markets platform Polymarket is targeting a $400 million fundraising round at a valuation of about $15 billion including the new money, The Information reported on Sunday, citing people familiar with the matter.

The $15 billion figure is a 67% jump from Polymarket’s $9 billion valuation established in October 2025, when Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, led a $2 billion investment.

According to the report, the new round would add to ICE’s existing stake and could bring total new financing to around $1 billion.

Polymarket is also looking to bring in additional strategic investors alongside ICE. The company has been expanding its push into prediction markets as the sector gains momentum.

Trading volume and users

Prediction markets have expanded from niche crypto platforms into a multi-billion-dollar financial market, with monthly volumes growing from roughly $1.2 billion in early 2025 to over $20 billion by January 2026, according to TRM Labs.

The overall growth reflects both increased engagement from existing users and a broad influx of new participants, with leading platforms now reaching roughly 840,000 unique active wallets per month.

Trading activity is increasingly concentrated on geopolitics, macroeconomics, and political events, which now account for a majority of total market volume.

Kalshi and Polymarket currently dominate the prediction market space in terms of trading volume, liquidity, and user participation.

Beyond political and sports markets, Polymarket has begun offering prediction contracts on commodities and individual equities, integrating real-time pricing data from oracle providers such as Pyth and Chainlink.

Sanctioned crypto exchange Grinex said it has suspended trading after losing more than 1 billion Russian rubles ($13.7 million) to an attack bearing signs of involvement by foreign intelligence agencies.

The exchange, which is registered in Kyrgyzstan but has been linked to Russia’s crypto ecosystem and alleged sanctions evasion, said on Thursday that the funds were taken from 54 addresses and that the digital footprint and nature of the attack indicate an “unprecedented level of resources and technology available only to entities of hostile states.”

“Due to the attack, the Grinex exchange has been forced to suspend operations. All available information has been transferred to law enforcement agencies. A criminal complaint has been filed at the location of the infrastructure,” it added.

Grinex had been widely seen as the successor to the similarly sanctioned Garantex exchange. Both have been accused by US authorities of assisting Russia and other entities in evading sanctions and laundering funds for Russia-linked hackers.

Elliptic founder Tom Robinson has accused it of being the primary platform for trading A7A5, a ruble-backed stablecoin linked to sanctions evasion.

A Grinex spokesperson told Cointelegraph last year that it strongly condemns any form of illegal activity, including sanctions evasion and money laundering.

Another exchange might have been hit by the same attacker

Grinex may not have been the only exchange targeted. Blockchain intelligence company TRM Labs said on Thursday that two wallets from TokenSpot, a Kyrgyzstan-based exchange with on-chain links to Grinex, sent around $5,000 to the same consolidation address used by the Grinex attacker.

TokenSpot’s Telegram channel announced technical work and a brief platform outage on April 15, followed the next day by an announcement that it had resumed full operations.

At the same time, TRM Labs said it has identified 16 additional addresses linked to the incident in addition to those Grinex publicly disclosed. The consolidation address where all the funds have been sent contains 45.9 million TRON (TRX), worth nearly $15 million.

Hacker might have stolen $15 million in USDT

Blockchain analytics firm Elliptic said it tracked about $15 million in USDt (USDT) leaving Grinex accounts. The funds were then sent to accounts on the Tron or Ethereum blockchains.

Related: Ukraine arrests FBI-wanted cybercrime suspect, seizes $11M in assets

“This USDT was then converted to another asset, either TRX or ETH. By doing so, the thief avoided the risk of the stolen USDT being frozen by Tether,” the company said.

This is not the first time an exchange accused of helping entities evade US sanctions has been targeted. Iran-based exchange Nobitex had $81 million drained in June 2025, with a pro-Israel hacker group claiming responsibility.

Magazine: Singapore isn’t a ‘crypto hub’ — it’s something better: StraitsX CEO

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

A Texas man found guilty of helping orchestrate a cryptocurrency scam project that defrauded $20 million from nearly 1,000 investors has been sentenced to 23 years behind bars by a US judge on Tuesday.

US District Judge LaShonda Hunt sentenced Robert Dunlap, who served as a trustee of the project that sold the fictional token Meta-1 Coin, to prison and ordered him to pay restitution to victims of the fraud, according to the Illinois US Attorney’s office.

Assistant US attorneys Jared Hasten and Paige Nutini said in the government’s sentencing memorandum that Dunlap was “unrepentant” and that his lies grew “over the years.”

“Would-be criminals planning to engage in similar conduct need to know that such actions will be met with a serious repercussion that includes loss of one’s liberty for an extended period of time,” they added.

Regulators and authorities are turning up the heat on crypto scammers. In March, a man accused of hacking defunct DeFi platform Uranium Finance was charged with one count of computer fraud and one count of money laundering.

Token backed by $44 billion in gold, rare artworks

A federal jury in the Northern District of Illinois convicted Dunlap in November on two counts of mail fraud, each carrying a possible sentence of up to 20 years in federal prison.

He was accused of conspiring with others to market and sell Meta-1 Coin through a Meta-1 Coin Trust from 2018 to 2023, making false and misleading statements to investors, including that the token was backed by a $1 billion art collection made up of works by Pablo Picasso and Vincent van Gogh and $44 billion in gold.

Related: There’s more to crypto crime than meets the eye: What you need to know

Dunlap and his co-conspirators used automated trading bots to artificially inflate the market price and trading volume of the Meta-1 Coin on the Meta Exchange, a website Dunlap created, according to authorities.

In March 2020, the US Securities and Exchange Commission (SEC) ordered an asset freeze and other emergency relief orders to stop Dunlap, another alleged accomplice, Nicole Bowdler and former Washington state Senator David Schmidt from marketing and selling Meta-1 Coin.

The defendants allegedly told investors that Meta-1 Coin was risk-free and could offer returns of up to 224,923%. Instead, the coins were never distributed and the funds were used to cover personal expenses and buy luxury cars, including a Ferrari, according to the SEC.

Magazine: Forget stablecoin yield, how does the CLARITY Act treat DeFi? 

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

Flow Capital Partners is planning to tokenize its private credit fund through Singapore-based DigiFT, Bloomberg reported Friday, as the Hong Kong credit manager looks to tap blockchain-based distribution for its next capital raise.

According to the report, Flow Capital plans to bring its $150 million private credit fund on the blockchain through Singapore-based tokenization platform DigiFT by the end of April, seeking to raise an additional $30 million in tokenized shares by the end of 2026, Jacky Tian, chief investment officer of Flow Capital, said.

The $30 million raise is part of the company’s plans to expand the size of the fund to $250 million with a target net return of 12%. The fund launched in mid 2025, with $125 million in seed capital, according to the company. Cointelegraph has approached Flow Capital and DigiFT for comment.

The move adds to a growing push to use tokenization as a distribution channel for traditional credit products.

Some of the largest TradFi companies have announced similar tokenization initiatives, including asset manager BlackRock, which launched its BlackRock USD Institutional Digital Liquidity Fund (BUIDL), a tokenized treasury fund on Ethereum, in March 2024. Investment banking giant JPMorgan also launched its tokenized money-market fund, My OnChain Net Yield Fund (MONY), on Ethereum in December 2025.

However, industry leaders have raised misconceptions tied to the liquidity of tokenized assets.

Related: Gold, silver and oil drive 65,000% jump in commodity perpetuals

Executives warn tokenization isn’t liquidity

Oya Celiktemur, Ondo Finance sales director for Europe, said tokenization doesn’t magically make hard-to-trade assets liquid.

“I think there’s still this idea that tokenizing something illiquid will somehow magically make it a liquid asset, which is just not true,” said Celiktemur, speaking during a panel discussion at Paris Blockchain Week 2026.

Francesco Ranieri Fabracci, head of tokenization expansion at Tether, made a similar point, arguing that tokenizing an asset won’t make it liquid, but added that some instruments, including bonds, money market funds and stablecoin, will likely see consistent liquidity on blockchain rails.

The total value of tokenized assets rose 9.6% during the past 30 days to $29.9 billion on Friday, data from RWA.xyz shows.

Tokenized US treasury debt was the largest sector with $13.7 billion in value, followed by commodities with $5.4 billion and asset-backed credit with $3.2 billion.

Magazine: Can Robinhood or Kraken’s tokenized stocks ever be truly decentralized?

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy

Tether will inject up to $127.5 million into Drift Protocol as part of a recovery plan totaling nearly $150 million following the platform’s recent exploit that led to about $285 million in user losses, the company announced Thursday.

Tether CEO Paolo Ardoino hinted at the bailout earlier today.

Today will be a good day for DeFi

— Paolo Ardoino 🤖 (@paoloardoino) April 16, 2026

In a separate statement, Ardoino said Tether’s role in the digital asset ecosystem is to support the industry during periods of stress, describing it as stepping forward in “moments of darkness.” The move targets restoring user confidence through a relaunch tied to real activity and long-term growth.

“This collaboration reflects our confidence in Drift and its role in the DeFi ecosystem,” Ardoino stated. “The focus is on restoring user confidence and supporting a strong relaunch, with a structure that aligns recovery with real activity and long-term growth.”

The structure ties repayments to ongoing trading activity, with platform revenues contributing to user recovery as operations resume. Further funding will be deployed gradually and linked to performance, aligning recovery with usage rather than upfront capital injections.

Drift also plans to shift its settlement assets from USDC to USDT as part of the relaunch, onboarding more than 128,000 users and ecosystem participants. The move is expected to increase liquidity and reinforce USDT’s role in the Solana-based trading infrastructure.

Drift’s native token, DRIFT, rose about 22%, climbing from $0.045 to $0.055 following the announcement, per CoinGecko. The token previously plunged as much as 30% in the aftermath of the attack.

Circle faces scrutiny over USDC freeze timing after Drift exploit

Circle has faced criticism following the Drift Protocol exploit, where attackers moved more than $230 million in USDC to Ethereum. Critics, including prominent blockchain sleuth ZachXBT, said the crypto giant had the technical ability to freeze funds during the multi-hour transfer window but did not act.

Circle CEO Jeremy Allaire defended the company’s USDC freeze policy. Responding to criticism, Allaire said wallet blockings are only carried out under formal legal authority such as court orders or law enforcement directives.

Circle has maintained that it acts only under legal compulsion and has urged clear regulatory standards for stablecoin issuers.