GM, dreamers! ☕️ 
The market’s feeling a little under the weather, but nothing we haven’t weathered before.

Let’s keep our heads up - sometimes a small stumble can set the stage for a better bounce.

No, not even sometimes, in crypto it’s always.

Today we explore:

• 🔥 Some CEX could be insolvent again – how will this cycle end?

• 🫡 Rare DeFi win – SEC drops Uniswap case

• 🥷 Cleaning out house in crypto – Gotbit MM founders are going to jail

• 👛 Crypto wallets should replace exchanges – CZ

Our W3OF degen portfolio took a modest knock but is still standing. Not the prettiest chart in the room, yet it’s far from doomsday.

We’ll stay watchful and see if this slump opens any hidden doors.

P.S. Got ideas? Swing by our Discord and let’s swap some strategies!

Some CEX could be insolvent again – how will this cycle end?

It’s starting to feel familiar, isn’t it?

Another crypto cycle, another round of CEX drama 🤦‍♂️ 

This time, the red flags are flying over Bybit and OXFun - one hit by a massive hack, the other spiraling into insolvency allegations.

And as we’ve seen before, the fallout from failing CEXs has the potential to drag the broader market down with it. So, how does this one end? 🤔 

Bybit’s $1.5B hack – a blow to market confidence

• Bybit, one of the largest exchanges still standing after the post FTX fallout, found itself at the center of a historic $1.5 billion hack.

• The FBI traced the attack back to North Korea’s infamous Lazarus Group, who exploited Bybit’s security infrastructure through SafeWallet. The post-mortem revealed that the attack was executed via a compromised SafeWallet developer machine, raising serious concerns about multisig vulnerabilities.

• Despite attempts to recover funds, history suggests that a hack of this scale shakes investor confidence, triggering withdrawals and potential liquidity crises. We’ve seen this before - hacks and sudden fund losses weaken trust, leading to panic exits, which in turn expose deeper structural issues within exchanges 🪙 

OXFun’s liquidity crisis

• Meanwhile, OXFun, a relatively lesser-known but still significant exchange, is heading toward a collapse reminiscent of past failures like Mt. Gox, QuadrigaCX, and - more recently - FTX. Su Zhu, the infamous 3AC co-founder, is now linked to OXFun’s insolvency, with allegations of fund mismanagement, frozen withdrawals, and extortion attempts against users.

Reports indicate that the exchange’s liquidity has plummeted to near-zero levels, confirming fears that the platform is effectively bankrupt.

Leaked internal documents reveal that OXFun allegedly funneled funds into dubious marketing campaigns and even Singapore strip clubs, all while denying insolvency 🫠 

The classic playbook of a collapsing CEX is once again unfolding: withdrawals halted, vague “technical issues” explanations, and influencers who once shilled the platform now going radio silent 😶 

CEX failures have crashed markets before – could it happen again?

Let’s not forget - CEX failures have played a major role in previous crypto crashes.

• Mt. Gox (2014): The collapse of what was then the largest Bitcoin exchange triggered a year-long bear market.

• FTX (2022): The $8 billion black hole left by SBF’s empire sent the market into a brutal winter, wiping out billions in value overnight.

• Many other small, less significant ones, but ones that were still costly to the regular users 💸 

Each time, investors lost money, and trust in centralized platforms eroded.

How does this cycle end?

The answer likely depends on liquidity and trust. If these CEX learned something from the previous cycles and can contain the damage and restore faith in its operations, they might survive. But if fear spreads and withdrawal pressure intensifies, it could be another domino falling in a fragile market.

Ultimately, the lesson remains the same: centralized exchanges are convenient, but they carry risk. Hacks, fraud, and mismanagement continue to plague CEXs, yet traders still trust them with billions.

This won’t truly end until the industry moves toward decentralization, transparency, and security first infrastructure 🫡 

Rare DeFi win – SEC drops Uniswap case

It’s not often that DeFi gets a clean win against regulators, but this time, Uniswap has done just that.

The SEC has officially dropped its investigation into the DEX, marking a rare moment where a crypto project walks away unscathed 🙏 

After nearly three years of legal uncertainty, the SEC has decided not to pursue enforcement action against Uniswap. The investigation accused the protocol of facilitating the trading of unregistered securities 🤔 

The argument followed the same script regulators have used against centralized exchanges like Binance and Coinbase - claiming the platform’s operations were akin to a brokerage service.

Uniswap Labs, the entity behind the protocol, pushed back. It argued that Uniswap is nothing more than a decentralized set of smart contracts running on public blockchains.

With no centralized control, it falls outside the scope of traditional securities laws. The SEC, facing mounting legal defeats and a shifting regulatory climate, has now backed off 👴 

For DeFi, this sets a crucial precedent. If Uniswap - a fully decentralized protocol - can operate freely, it strengthens the case that other DEXs and DeFi applications should not be treated as regulated financial intermediaries.

A win with bad timing

• One would expect Uniswap’s governance token, UNI, to pump on the news, but instead, it has struggled.

• Market-wide bearish sentiment has overshadowed the legal victory, with Bitcoin and altcoins facing downward pressure. UNI has been sliding toward key support levels, even as its fundamental outlook improves 📉 

This isn’t the first time good news has landed at the wrong time in crypto. XRP has recently won a major legal battle against the SEC, but the token failed to sustain a rally.

Similarly, Uniswap’s structural win may not immediately translate to price action - especially in a market still dominated by macroeconomic concerns and liquidity constraints 💱 

But all hope is not lost yet.

The Uniswap ruling signals that DeFi isn’t going anywhere, even as regulators continue their war on centralized players. However, the market's muted response suggests that DeFi is still far from mainstream adoption.

Cleaning out house in crypto – Gotbit MM founders are going to jail

If you’ve ever watched a random low-cap sh%%coin pump for no reason - the kind that magically prints green candles while the rest of the market bleeds - you’ve probably seen a market maker at work 🥷 

And now, one of the most notorious names in the game, Gotbit, is finally facing the music.

Aleksei Andriunin, founder of Gotbit IO, has been extradited to the U.S. and is facing wire fraud, market manipulation, and conspiracy charges.

His operation ran from 2018 to 2024, allegedly using wash trading and fake volume to prop up scam projects and mislead investors.

Andriunin’s firm didn’t just make markets - they made illusions, engineering pump-and-dumps that fueled some of the worst shitcoin scams of the last few cycles.

The business of fake pumps

Let’s be real - crypto is no stranger to questionable pumps, but market makers like Gotbit took it to another level 👇️ 

• Ever seen a dead project suddenly 10x on no news?

• Coins that should be down 99% mysteriously holding strong?

• A random token on page 20 of CoinGecko moving like a blue chip?

That’s Gotbit’s bread and butter. By faking liquidity, artificially inflating trading volume, and controlling the order books, they made garbage projects look alive long enough for insiders to dump on retail 💰️ 💰️ 

And they didn’t do it for free - Gotbit charged projects hefty fees to manipulate their way into trending sections and major exchange listings.

Gotbit’s fall – just the start?

The FBI’s “Operation Token Mirrors” exposed the entire playbook for scammy market makers, leading to $25 million in seized crypto and shutting down multiple trading bots linked to the scheme 🪙 

This isn’t just about one bad actor - this case shines a spotlight on the entire market-making industry, where wash trading, spoofing, and volume inflation are basically standard practice 🤷‍♂️ 

Gotbit is getting cleaned out, but how many more firms are still running the same game?

Crypto wallets should replace exchanges – CZ

Chenpeng Zhao (CZ), the man who once ran the world’s biggest centralized exchange, now thinks crypto wallets should replace CEXs 😲 

Bold words from someone who, let’s be honest, probably oversaw the siphoning of billions in user funds - but, for once, he’s saying something that Ambire users can actually get behind 🤩 

Because let’s face it: CEXs have to go. They’ve been the single biggest point of failure in crypto, and now, even CZ himself admits that wallets are the future - self-custody, autonomy, and security over trusting a third party to hold your assets 🔒️ 

In a recent interview, CZ claimed that centralized exchanges should only serve professional traders and liquidity providers, while everyday users should be using wallets like Trust Wallet for transactions 🤯 

His argument is “most people shouldn’t have to use an exchange.”

He’s not wrong - just a few years too late 😏 

The best crypto wallets already do everything an exchange can, without the withdrawal freezes, shady liquidity games, and rug-pull risks. With smart contract wallets, users can trade, earn yield, swap assets, and manage DeFi positions - all without trusting a CEX.

With regulations closing in and users becoming less trusting of centralized platforms, wallets are evolving fast. They’re no longer just storage solutions - they’re financial command centers that put users in control.

CZ’s vision of wallets replacing CEXs might sound like a grand new idea, but for anyone who’s been in DeFi, it’s just catching up to reality 🧠 

The future of crypto isn’t in exchanges - it's in wallets. And more specifically, in good UI/UX 🖼️ 

And the sooner the industry embraces that, the sooner we can move past the broken, corrupt, and failure-prone CEX model for good.

Other worthy reads

Thoughts by LondonCryptoClub:

Waiting for a new meta:

A lot of talk about stablecoin battles that are happening in Washington:

MEMES

That's all for now, frens.

We'll meet in a week! And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us, and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

Brought to you by Ambire: The Only Web3 Wallet That You’ll Need!