The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.

“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.

State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.

Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.

However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.

Related: Elon Musk’s ‘government efficiency’ team turns its sights to SEC — Report

Trump administration targets CFPB in efficiency push

The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.

Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.

Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.

Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.

In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Opinion by: Daryl Xu, co-founder and CEO, NPC Labs

While gaming has been on a steady decline since the end of COVID-19 lockdowns, 2024 hit the industry especially hard, with layoffs and studio closures hitting even the most prominent studios. 

While unsustainable development costs and an innovation crisis seem to be the main culprits behind the collapse, Web3 gaming emerged as a potential solution promising to return power to developers — and it raised billions of dollars in investment to do so. 

Yet, despite a continued rise in crypto adoption, Web3 gaming has failed to capture mainstream players’ attention or solve any of gaming’s fundamental problems. Why? Early blockchains were designed for financial applications. Game developers were forced to either build on blockchains that weren’t designed for their use or create their own chains that isolated themselves from the blockchain ecosystem. Either choice led to poor player experience and an overemphasis on tokenomics. 

Many developers choose the latter, picking control over connectivity. Inadvertently, this resulted in walled gardens that were not dissimilar to the ones that contributed to traditional gaming’s collapse.

A solution that created more problems

A recent article in The New York Times revealed that over the last 30 or 40 years, video game industry executives have bet on better graphics to bring in players and profits rather than leaning on creativity. Traditional gaming development is costly, regularly exceeding $100 million per title. Indie developers often struggle to compete against large publishers who ultimately control funding and distribution.

Blockchain seemed to be a promising solution for indie studios, providing them with new avenues to raise funds and giving them control over distribution. Early Web3 gaming platforms, however, ended up recreating the same enclosed systems that blockchain was trying to fix. With high player acquisition costs and limited Web3 gamers, Web3 gaming platforms deepened their moats to prevent users from moving away. As it continued developing, Web3 gaming introduced its own problems. 

An impossible choice for game developers

The technological infrastructures of layer-1 blockchains like Ethereum and Solana were created for finance and not aligned with gaming’s requirements. Beyond transaction speed, layer-2 solutions were not designed to handle gaming’s unique needs either.

Game developers — attracted to Web3’s funding model, promises of ownership and user engagement, are forced to either build on existing blockchains and compromise gameplay or launch their own chain — which diverts attention and resources away from what they want to do: make better games. 

Recent: Web3 gaming investors no longer throwing money at ‘Axie killers’

While crypto native players may feel this is a worthwhile tradeoff, mainstream gamers want engaging experiences. A January DappRadar report showed that Web3 gaming had reached 7.3 million unique active wallets, but  in speaking with the community anecdotally, approximately 10,000 of those represent the actual gaming cohort who aren’t in games just to farm rewards. This number may be higher but is not more than 50,000 to 100,000 at the most.

A misalignment with gaming culture

The thing that converts mainstream users onchain isn’t non-fungible tokens (NFTs) or decentralized finance, its meaningful ownership of in-asset games. Mainstream gamers have spent decades on arcade games, Nintendo or mobile games. If combined with true ownership of in-game assets, that familiarity is powerful enough to create a compelling experience for developers and gamers.

While Web3 games claim to be revolutionizing gaming, most projects aren’t listening to actual gamers. In actuality, they end up competing for the same crypto-native users. Rather than focusing on fun and engaging gameplay, most Web3 games are led by crypto technology and tokenomics. Within this bubble, success in Web3 gaming meant taking crypto users from each other rather than bringing new players onchain. 

With rare exceptions, the industry lost sight of what’s important: making fun games that people want to play.

This misalignment also extends to game developers who want to enter Web3 to create better player experiences and sustainable revenue models. Game studios understand the potentials of Web3 but are hesitant to navigate crypto’s complex systems, which require technical skills to build protocols with sufficient liquidity and user bases while delivering seamless gameplay simultaneously.

Make games fun again

As major studios continue to struggle, Web3 has a second chance to deliver on its promise. But this time, we must rethink how games interact. We must focus on creating access for creators and players instead of building new walled gardens. This requires Web3 gaming-specific infrastructure that provides both developer control and cross-ecosystem collaboration. 

The path forward is clear. We need to restore economic freedom to creators and put control back in players’ hands. That means revenue models that reward collaboration instead of isolation. Most importantly, it means returning to gaming’s roots — making games fun again. 

The future of gaming isn’t about better graphics or token incentives. It’s about creating an industry where creativity and collaboration can thrive. When developers can focus on making engaging experiences instead of building moats, everyone wins.

Opinion by: Daryl Xu, co-founder and CEO, NPC Labs.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Cryptocurrency markets could be on track for recovery as investor sentiment begins to stabilize following US President Donald Trump’s sweeping tariff announcement — what some analysts are calling the peak of recent market uncertainty.

Trump announced his reciprocal import tariffs on April 2, which sent tremors across global markets. The S&P 500 lost more than $5 trillion, its largest drop on record, surpassing the pandemic-induced crash in March 2020, according to Reuters.

Still, some analysts see a silver lining to the tariff announcement.

“In my opinion, the tariffs are the representation of the uncertainty in the markets,” Michaël van de Poppe, founder of MN Consultancy, told Cointelegraph. “Liberation Day is basically the peak of that period, the climax of uncertainty. Now it’s out in the open. Everybody knows the new playing field.”

Van de Poppe added that he believes Trump is using tariffs as a strategic move to stimulate domestic growth and reduce yields. “Tariffs are literally the only way to do that,” he said. “I wouldn’t be surprised if they’re reversed within the next six to 12 months.”

President Trump’s plan imposes a 10% baseline tariff on all US imports from April 5 and a higher “reciprocal tariff” of up to 54% on select countries with larger trade deficits from April 9.

Related: Michael Saylor’s Strategy buys Bitcoin dip with $1.9B purchase

Import tariffs could trigger Fed easing

Still, the end of the uncertainty could bring renewed investment into crypto markets, leading to a recovery, Van de Poppe said:

“We’ll start to see the rotation toward the crypto markets in the coming period where there’s more calm and peace in the markets where investors start to buy the dip and understand that some things have been undervalued.”

He noted that the economic impact of the tariffs may ultimately lead the US Federal Reserve to lower interest rates and begin a new round of quantitative easing (QE), a monetary policy that involves the Fed buying bonds to inject liquidity into the economy.

Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, has predicted Bitcoin could climb to $250,000 if the Fed formally enters a QE cycle.

Related: Satoshi Nakamoto turns 50 as Bitcoin becomes US reserve asset

Trump tariff uncertainty still weighing on sentiment

On the downside, the tariff-related uncertainty may continue pressuring risk asset appetite for weeks, according to Noelle Acheson, author of the Crypto is Macro Now newsletter.

“We can count on President Trump changing his mind a few times within the first couple of weeks,” Acheson told Cointelegraph. She added:

“With heightened uncertainty a given in these markets, we can expect more risk-off behavior, even though some short-term bounces may bring some relief.”

“For crypto, BTC continues to act like a risk asset short-term while its analog counterpart gold breaks through one all-time high after another,” a development that may impact crypto investor sentiment in the short term, Acheson said.

Meanwhile, crypto intelligence firm Nansen estimated a 70% probability that the market could bottom by June, depending on how the tariff negotiations evolve.

Magazine: Bitcoin ATH sooner than expected? XRP may drop 40%, and more: Hodler’s Digest, March 23 – 29

Decentralized cryptocurrency exchanges (DEXs) continue to challenge the dominance of centralized platforms, even as a recent $6.2 million exploit on Hyperliquid highlights risks in DEX infrastructure.

A cryptocurrency whale made at least $6.26 million profit on the Jelly my Jelly (JELLY) memecoin by exploiting the liquidation parameters on Hyperliquid, Cointelegraph reported on March 27. 

The exploit was the second major incident on the platform in March, noted CoinGecko co-founder Bobby Ong.

“$JELLYJELLY was the more notable attack where we saw Binance and OKX listing perps, drawing accusations of coordinating an attack against Hyperliquid,” Ong said in an April 3 X post, adding:

“It’s clear that CEXes are feeling threatened by DEXes, and are not going to see their market share erode without putting on a fight.”

DEX growth reshapes derivatives market

Hyperliquid is the eighth-largest perpetual futures exchange by volume across both centralized and decentralized exchanges. This puts it “ahead of some notable OGs such as HTX, Kraken and BitMEX,” Ong noted, citing an April 4 research report.

Related: Bitcoin to $110K next, Hyperliquid whale bags $6.2M ‘short’ exploit: Finance Redefined

Hyperliquid’s growing trading volume is starting to cut into the market share of other centralized exchanges.

Hyperliquid is the 12th-largest derivatives exchange, with an over $3 billion 24-hour open interest — though it still trails Binance’s $19.5 billion by a wide margin, CoinGecko data shows.

According to Bitget Research analyst Ryan Lee, the incident may harm user confidence in emerging decentralized platforms, especially if actions taken post-exploit appear overly centralized.

“Hyperliquid’s intervention — criticized as centralized despite its decentralized ethos — may make investors wary of similar platforms,” Lee said.

Whale exploits Hyperliquid’s trading logic

The unknown Hyperliquid whale managed to exploit Hyperliquid’s liquidation parameters by deploying millions of dollars worth of trading positions.

The whale opened two long positions of $2.15 million and $1.9 million, and a $4.1 million short position that effectively offset the longs, according to a postmortem by blockchain analytics firm Arkham.

When the price of JELLY rose by 400%, the $4 million short position wasn’t immediately liquidated due to its size. Instead, it was absorbed into the Hyperliquidity Provider Vault (HLP), which is designed to liquidate large positions.

Related: Polymarket faces scrutiny over $7M Ukraine mineral deal bet

As of March 27, the unknown whale still held 10% of the memecoin’s total supply, worth nearly $2 million, despite Hyperliquid freezing and delisting the memecoin, citing “evidence of suspicious market activity” involving trading instruments.

The Hyperliquid exploit occurred two weeks after a Wolf of Wall Street-inspired memecoin — launched by the Official Melania Meme (MELANIA) and Libra (LIBRA) token co-creator Hayden Davis — crashed over 99% after launching with an 80% insider supply.

Magazine: Memecoins are ded — But Solana ‘100x better’ despite revenue plunge

Key takeaways

• Grok 3 adjusts its predictions based on evolving market trends by analyzing real-time data patterns.

• Combining technical analysis with sentiment data improves accuracy; Grok 3 effectively identifies potential trade opportunities.

• Backtesting strategies before live trading is crucial; testing Grok 3’s prompts using historical data helps refine conditions and improve performance.

• While Grok 3 can automate trades, human oversight remains critical in adapting to unexpected market conditions.

Crypto trading is complex. Prices can swing wildly, and even experienced traders struggle to keep up. That’s why automation tools are gaining attention, with many now exploring Grok 3, an advanced artificial intelligence (AI) model from xAI (founded by Elon Musk).

Grok 3 wasn’t built specifically for trading, but its ability to analyze data, spot patterns and interpret trends has encouraged traders to test it for automated strategies. The idea is simple: Let Grok 3 make data-driven decisions, removing the emotional guesswork that often leads to poor trades.

But does it actually work? Some traders report impressive results, while others find it unpredictable, especially in volatile markets.

This article digs into what happens when you automate crypto trades with Grok 3. From successful strategies to unexpected risks, you’ll get a clear picture of what to expect, plus actionable tips to improve your results.

What is Grok 3 and how does it relate to crypto trading?

Grok 3 is an AI model designed by xAI, an artificial intelligence company founded by Elon Musk. While its primary focus is natural language processing, some traders are now testing Grok 3 as a potential tool for improving crypto trading strategies. Unlike traditional trading bots operating on rigid rules, Grok 3’s flexible design allows it to analyze diverse data sources and uncover patterns that might be overlooked.

Why some traders are turning to Grok 3

Grok 3’s appeal lies in its ability to handle complex data, a crucial advantage in crypto markets, where price moves are often triggered by unexpected events or sentiment shifts.

Here’s where traders say Grok 3 has potential:

• Identifying market sentiment trends: Crypto markets are heavily influenced by emotions like FOMO (fear of missing out) and FUD (fear, uncertainty, doubt). Grok 3 can analyze social media, news headlines and community discussions to assess changing sentiment, a key factor in crypto volatility.

• Recognizing hidden patterns: Grok 3’s machine learning capabilities allow it to detect subtle correlations between indicators that traditional bots may overlook. For instance, Grok 3 may link an increase in social sentiment with rising whale activity to predict bullish momentum.

• Flexible analysis based on prompts: Rather than following static rules like “Buy when RSI falls below 30,” Grok 3 enables traders to design more complex strategies using natural language instructions.

What happens when Grok 3 is used to automate crypto trades?

Grok 3 isn’t your typical crypto trading bot. It doesn’t place trades directly or integrate with exchanges on its own. But it can help traders build smarter, faster and more flexible automation systems. From writing trade logic to analyzing market sentiment, Grok 3 is already being used in the real world to streamline how crypto strategies are created and tested.

Instead of manually scripting every piece of logic, traders are now using Grok 3 to generate working code for bots. For example, a user asked Grok 3 to write token buy/sell logic with parameters like slippage, take-profit and gas priority fees. It generated a script that can be plugged into DeFi tools or expanded with 0x and Uniswap APIs.

Some traders use Grok 3 to build end-to-end bots tailored to niche tokens or specific strategies. In another example, Grok 3 was used to create an automated system that scans price action and triggers trades under strict conditions. It doesn’t just stop at buy/sell logic. Grok also writes portfolio rebalancing scripts and can simulate how positions would perform under different volatility conditions.

Here is an example of a prompt fed into Grok 3, along with the output received.

Grok 3’s response: High-frequency trading bot framework for Solana (SOL)

Below is a structured outline for a high-frequency trading bot framework designed for Solana (SOL), focusing on one-minute price fluctuations, risk management and trade execution. This outline provides a modular structure with placeholders for key components, avoiding specific implementation details as requested.

1. Core configuration

• Purpose: Define global settings and constants for the bot.

• Components:

  Solana network endpoint (e.g., mainnet RPC URL)

  Wallet configuration (private key or keypair for trading)

  Trading pair (e.g., SOL/USDC)

  Timeframe (one-minute candlestick data)

  Trade size ($100 per position)

  Max trades (10 concurrent or sequential positions)

  Profit target ($50 total)

  Max loss per trade ($20)

2. Data acquisition module

• Purpose: Fetch and process real-time SOL price data.

• Components:

  WebSocket connection to Solana blockchain or exchange API (e.g., Serum, Raydium, or centralized exchange like Binance)

  1-minute OHLCV (Open, High, Low, Close, Volume) data stream

  Data buffer for storing recent price history

  Error handling for connection drops or latency

3. Volatility analysis module

• Purpose: Assess SOL’s price volatility to inform trade decisions.

• Components:

  Placeholder: Calculate short-term volatility (e.g., standard deviation or ATR over one-minute candles)

  Placeholder: Define volatility thresholds (e.g., high/low volatility states)

  Output: Volatility score or signal to adjust trade frequency/size

4. Trade signal generator

• Purpose: Generate buy/sell signals based on price fluctuations.

• Components:

  Placeholder: Simple momentum strategy (e.g., price crossing a short-term moving average)

  Placeholder: Filter signals using volatility analysis

  Signal validation (e.g., avoid over-trading within one-minute window)

  Output: Buy/sell signal with timestamp

5. Risk management module

• Purpose: Enforce risk controls and position limits.

• Components:

  Position size calculator (fixed at $100 per trade)

  Max loss check ($20 per trade stop-loss)

  Total profit/loss tracker (halt at $50 profit or after 10 trades)

  Concurrent trade limiter (cap at 10 active positions)

  Emergency stop (pause bot on extreme volatility or connectivity loss)

6. Trade execution module

• Purpose: Execute trades on the Solana blockchain or exchange.

• Components:

  Placeholder: Build Solana transaction (e.g., swap SOL for USDC via a DEX like Raydium)

  Order type (market order for speed in one-minute timeframe)

  Slippage tolerance (e.g., 0.5% max slippage)

  Transaction signing and submission

  Confirmation listener (await transaction finality)

  Error handling (e.g., retry on failed execution)

7. Performance monitoring module

• Purpose: Track and log bot performance in real time.

• Components:

  Trade log (entry price, exit price, profit/loss, timestamp)

  Running total profit/loss calculator

  Performance metrics (e.g., win rate, average trade duration)

  Alert system (notify on profit target, max loss, or errors)

8. Main control loop

• Purpose: Orchestrate bot operations in a continuous cycle.

• Components:

  Initialize bot (load config, connect to data feed)

  Loop:

  Fetch one-minute price data

  Analyze volatility

  Generate trade signal

  Apply risk management checks

  Execute trade if conditions met

  Update performance metrics

  Exit conditions (profit target hit, max trades reached, or manual stop)

9. Shutdown and cleanup

• Purpose: Safely terminate the bot and finalize operations.

• Components:

  Close open WebSocket connections

  Finalize pending transactions

  Save trade log and performance summary

  Release resources (e.g., memory, wallet connections)

Notes

• This framework assumes integration with Solana’s ecosystem (e.g., using a DEX or liquidity pool). Adjust the execution module if targeting a centralized exchange.

• Volatility analysis and signal generation are left as placeholders for customization (e.g., technical indicators or machine learning models).

• Risk management is strict to align with the $50 profit goal and $20 max loss per trade, ensuring the bot operates within defined boundaries.

Caution! The above is a tailored outline shaped by the user’s prompt, targeting one-minute price fluctuations, risk management and trade execution. Its output varies with prompt detail, as specificity sharpens results. Moreover, placeholders like volatility analysis await user customization, reflecting Grok 3’s adaptive learning. It’s a conceptual guide, not code, and success hinges on implementation and market conditions. For deeper refinement, such as Solana-specific tweaks, users can provide more context. Grok 3 adjusts using their input and its latest insights.

Let’s learn the general steps required to set up Grok 3 for automated crypto trading.

How to set up Grok 3 for automated crypto trading

Setting up Grok 3 for AI-powered crypto trading automation isn’t as straightforward as installing a typical trading bot. Since Grok 3 wasn’t built for direct trading, it requires thoughtful setup, integration and customization. Below is a practical guide to setting up Grok 3 effectively for automated crypto trading with AI (artificial intelligence).

Step 1: Choosing a compatible trading platform

Since Grok 3 doesn’t connect directly to crypto exchanges, it requires integration with third-party platforms that support API automation. Platforms like:

• 3Commas: Ideal for executing trades via automated strategies.

• TradingView: Used for generating trade signals using Pine Script.

• CryptoHopper: Offers custom strategy-building tools with API integration.

Ensure that the chosen platform offers robust API support for managing trade execution, setting risk controls and tracking performance.

Step 2: Integrating Grok 3 with the trading platform

Grok 3 doesn’t connect directly to crypto exchanges; integration requires creative workarounds:

• API integration via automation tools: Platforms like Zapier or Make.com can connect Grok 3’s analysis to trading platforms.

• Custom Python scripts: For tech-savvy traders, Grok 3’s insights can be processed through Python scripts that execute trades based on Grok 3’s recommendations.

• No-code automation tools: Services like IFTTT can trigger basic trading actions based on Grok 3’s sentiment analysis.

Step 3: Defining trading strategies with Grok 3

Grok 3’s success hinges on well-defined strategies. Unlike traditional bots that rely solely on technical signals, Grok 3 crypto trading bot can combine multiple factors, including:

• Technical indicators: RSI, MACD, Bollinger Bands, etc.

• Sentiment analysis: Social media trends, influencer opinions and news headlines

• Onchain data: Whale activity, exchange inflows/outflows and large wallet movement.

Step 4: Backtesting strategies before live trading

Before deploying Grok 3’s strategy in live markets, backtesting is essential to evaluate its performance. Backtesting can reveal:

• Accuracy of trade signals: Identify how often Grok 3’s suggested trades align with profitable outcomes.

• False signal detection: Ensure Grok 3 isn’t generating excessive buy/sell recommendations in volatile or stagnant markets

• Refinement opportunities: Fine-tune conditions such as RSI thresholds, sentiment scores or trade exit conditions

Examples of tools for backtesting include TradingView and CryptoQuant.

Step 5: Implementing risk management controls

Even with solid insights, crypto markets are unpredictable. Adding risk controls minimizes potential losses:

• Stop-loss orders: Automatically exits trades if prices move beyond a set threshold.

• Position limits: Restricts trade size to reduce exposure in uncertain markets.

• Trailing stops: Locks in profits during upward trends while minimizing downside risk.

Example of risk control prompt:
“Write a code to handle buying and selling a token with the given parameters, including priority fees, slippage, and a take-profit mechanism.”

Please note that the output shown above is not complete and is provided for illustration purposes only.

Step 6: Ongoing monitoring and strategy refinement

Grok 3’s strength lies in its adaptability, but it requires ongoing monitoring to ensure optimal results. Regularly review:

• Performance data: Assess win rates, profit margins and signal accuracy.

• Market conditions: Adjust strategy if major shifts (e.g., regulatory changes or macroeconomic factors) impact sentiment or momentum.

Pro tip: Revisiting Grok 3’s prompts regularly can refine strategy outcomes and improve long-term performance.

Limitations of Grok 3

Despite its strengths, Grok 3 has limitations that traders must consider. 

• Data loss: Crypto trading thrives on accurate and real-time data. However, crypto trading automation with Grok 3 has been reported to lose chunks of data, miscount words and provide incorrect time references, which can be detrimental in a fast-moving market and result in inaccurate signal detection, delayed responses to market events and flawed strategy execution.

• No direct exchange integration: Unlike purpose-built trading bots, Grok 3 doesn’t connect directly to crypto exchanges. Traders must rely on third-party platforms to execute trades.

• Forgetfulness: One of the biggest frustrations highlighted by some users is Grok 3’s “retrograde amnesia,” when it forgets everything from previous sessions. For crypto traders, this is a nightmare. Imagine building a trading strategy and needing Grok 3 to remember past trends and conversations, only for it to start fresh each session.

• Bias: Grok 3 may deliver biased responses, potentially relying on incomplete or skewed sources. For traders who depend on unbiased sentiment analysis to gauge market mood, this shift could lead to misleading insights and poor decision-making.

• Slower execution speed: Since Grok 3 processes information based on detailed prompts, its trade signals may lag behind fast-moving price changes.

• Prompt dependence: Grok 3’s accuracy depends heavily on well-structured prompts. Vague or incomplete instructions often produce unreliable results.

While Grok-3 and other AI systems offer powerful tools for automating crypto trades, caution is essential. Their performance depends heavily on the quality of data and the strategies they’re programmed with, meaning unexpected market shifts or flawed inputs can lead to significant losses. 

Remember, AI lacks human intuition and may struggle with unprecedented events, so relying solely on it without oversight is risky. Always test strategies with small amounts first and get help from experts before making large investments.

Nearly 400,000 creditors of the bankrupt cryptocurrency exchange FTX risk missing out on $2.5 billion in repayments after failing to begin the mandatory Know Your Customer (KYC) verification process.

Roughly 392,000 FTX creditors have failed to complete or at least take the first steps of the mandatory Know Your Customer verification, according to an April 2 court filing in the US Bankruptcy Court for the District of Delaware.

FTX users originally had until March 3 to begin the verification process to collect their claims.

“If a holder of a claim listed on Schedule 1 attached thereto did not commence the KYC submission process with respect to such claim on or prior to March 3, 2025, at 4:00 pm (ET) (the “KYC Commencing Deadline”), 2 such claim shall be disallowed and expunged in its entirety,” the filing states.

The KYC deadline has been extended to June 1, 2025, giving users another chance to verify their identity and claim eligibility. Those who fail to meet the new deadline may have their claims permanently disqualified.

According to the court documents, claims under $50,000 could account for roughly $655 million in disallowed repayments, while claims over $50,000 could amount to $1.9 billion — bringing the total at-risk funds to more than $2.5 billion.

The next round of FTX creditor repayments is set for May 30, 2025, with over $11 billion expected to be repaid to creditors with claims of over $50,000.

Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their original claim value in cash.

Related: FTX liquidated $1.5B in 3AC assets 2 weeks before hedge fund’s collapse

How FTX users can complete KYC

Many FTX users have reported problems with the KYC process.

However, users who were unable to submit their KYC documentation can resubmit their application and restart the verification process, according to an April 5 X post from Sunil, FTX creditor and Customer Ad-Hoc Committee member.

Impacted users should email FTX support ([email protected]) to receive a ticket number, then log in to the support portal, create an account, and re-upload the necessary KYC documents.

Related: Crypto trader turns $2K PEPE into $43M, sells for $10M profit

FTX’s Bahamian subsidiary, FTX Digital Markets, processed the first round of repayments in February, distributing $1.2 billion to creditors.

The crypto industry is still recovering from the collapse of FTX and more than 130 subsidiaries launched a series of insolvencies that led to the industry’s longest-ever crypto winter, which saw Bitcoin’s (BTC) price bottom out at around $16,000.

While not a “market-moving catalyst” in itself, the beginning of the FTX repayments is a positive sign for the maturation of the crypto industry, which may see a “significant portion” reinvested into cryptocurrencies, Alvin Kan, chief operating officer at Bitget Wallet, told Cointelegraph.

Magazine: XRP win leaves Ripple a ‘bad actor’ with no crypto legal precedent set

Crypto-friendly billionaire investor Bill Ackman is considering the possibility that US President Donald Trump may pause the implementation of his controversial proposed tariffs on April 7.

“One would have to imagine that President Donald Trump’s phone has been ringing off the hook. The practical reality is that there is insufficient time for him to make deals before the tariffs are scheduled to take effect,” Ackman, founder of Pershing Square Capital Management, said in an April 5 X post.

Trump may postpone tariffs to make more deals, says Ackman

“I would, therefore, not be surprised to wake up Monday with an announcement from the President that he was postponing the implementation of the tariffs to give him time to make deals,” Ackman added.

On April 2, Trump signed an executive order establishing a 10% baseline tariff on all imports from all countries, which took effect on April 5. Harsher reciprocal tariffs on trading partners with which the US has the largest trade deficits are scheduled to kick in on April 9.

Ackman — who famously said “crypto is here to stay” after the FTX collapse in November 2022 — said Trump captured the attention of the world and US trading partners, backing the tariffs as necessary after what he called an “unfair tariff regime” that hurt US workers and economy “over many decades.” 

Following Trump’s announcement on April 2, the US stock market shed more value during the April 4 trading session than the entire crypto market is currently worth. The fact that crypto held up better than the US stock market caught the attention of both crypto industry supporters and skeptics.

Prominent crypto voices such as BitMEX co-founder Arthur Hayes and Gemini co-founder Cameron Winklevoss also recently showed their support for Trump’s tariffs.

Related: Trump tariffs squeeze already struggling Bitcoin miners — Braiins exec

Ackman said a pause would be a logical move by Trump — not just to allow time for closing potential deals but also to give companies of all sizes “time to prepare for changes.” He added:

“The risk of not doing so is that the massive increase in uncertainty drives the economy into a recession, potentially a severe one.”

Ackman said April 7 will be “one of the more interesting days” in US economic history.

Magazine: New ‘MemeStrategy’ Bitcoin firm by 9GAG, jailed CEO’s $3.5M bonus: Asia Express