Ethereum’s Pectra Upgrade, Celsius’ Mashinsky Sentenced: Weekly Recap

Transcript

Welcome to this week's crypto roundup. In today's recap, Ethereum launches its biggest upgrade in years, President Trump hosts crypto dinners while Democrats storm out of Congress, and Solana fixes a critical bug. Plus, legal drama for Samurai Wallet, Movement Labs shakes up leadership, Robinhood exploring blockchain for stock trading, and prediction markets get the green light. Lastly, in the fun bits, FTX fumbles a $500 million opportunity. Thanks for tuning in to the weekly news recap. Let's begin. Ethereum activates major upgrade.

Ethereum has officially launched the Pectra upgrade, a major network overhaul that observers say is its most consequential development since the 2022 merge. Activated at epoch 364032, Pectra combines the Prague and Electra upgrades and implements 11 Ethereum Improvement Proposals aimed at enhancing staking operations, user wallet functionality, and layer-2 scalability. A highlight of the upgrade is EIP 7702. The proposal allows externally owned accounts to temporarily behave like smart contracts, enabling gasless transactions, token-based fee payments, and advanced wallet recovery features.

"It is Ethereum's glow-up," wrote pseudonymous developer Binji_X on X. Another key change, EIP 7251, raises the maximum effective validator balance from 32 ETH to 2048 ETH. This allows staking operators to consolidate multiple validators, reducing bandwidth needs, and operational costs. "Small operators can compound their stake directly, while large ones can consolidate validators," explained Ethereum Foundation's Tim Beiko. The upgrade also includes EIP 7691, which doubles blob throughput, improving layer-2 efficiency, and EIP 6110, which cuts validator onboarding time from hours to minutes. Former Celsius CEO

Alex Mashinsky sentenced to 12 years. Alex Mashinsky, the former CEO collapsed crypto lender Celsius, has been sentenced to 12 years in prison for orchestrating what prosecutors previously called, quote, one of the biggest frauds in the crypto industry, according to Inner City Press. The sentence was handed down by US District Judge John George Koeltl on Thursday in New York. Mashinsky, 59, pleaded guilty in December to commodities fraud and a scheme to manipulate the price of Celsius's native token, CEL. Prosecutors alleged he misled customers about the company's financial health, contributing to billions in losses before Celsius filed for bankruptcy in 2022. While defense attorneys requested a sentence of just over a year,

prosecutors pushed for 20 years. The judge ultimately ordered Mashinsky to report to prison by September 12th. Trump courts crypto donors. President Donald Trump is ramping up fundraising efforts with two cryptocurrency-themed dinners this month, even as a report raises questions about profits tied to the Melania meme coin. The first event, dubbed the, quote, crypto and AI innovators dinner, was held to support the MAGA Inc. super PAC, with seats priced at $1.5 million each. A second dinner, set for May 22, will bring together the top 220 holders of the Trump meme coin. News of the gathering pushed the token's value up more than 50%. Quote, I want crypto, Trump said during a Sunday interview on Meet the

Press. Quote, I think crypto's important because if we don't do it, China's going to. It's very popular. It's very hot. At the same time, an investigation by the Financial Times found that 24 wallets purchased $2.6 million worth of Melania tokens just minutes before Melania Trump announced the project online. The token price surged from $2 to nearly $13, with traders liquidating most holdings within 12 hours and earning nearly $100 million. The firm behind the token, MKT World, has reportedly withdrawn $64.7 million in profits from sales and fees. In related news, Senate Democrat Richard Blumenthal launched an inquiry into Trump's crypto-linked ventures, requesting records from World Liberty

Financial and the Trump meme coin project over potential legal violations and foreign entanglements. Crypto hearing derails as Democrats walk out over Trump ties. A congressional hearing on a major crypto market structure bill collapsed in the partisan conflict Tuesday as House Democrats staged a dramatic walkout in protest of President Donald Trump's expanding involvement in the crypto industry. The joint hearing, hosted by the House Financial Services and Agricultural Committees, was set to examine new legislation proposing regulatory roles for the SEC and CFTC. But, tensions flared when Representative Maxine Waters, Democrat California, refused unanimous consent to proceed, citing, "The corruption of the President of the United States and his ownership of

crypto." Waters and several Democrats exited the room, convening a separate event titled the "Democratic hearing to discuss Trump's crypto corruption." There, experts raised concerns over potential violations of the emoluments clause, referencing reports that Trump's crypto ventures may have added $2.9 billion to his personal wealth. Meanwhile, Republicans rebranded the hearing as a round table, allowing witnesses such as Coinbase executive Greg Tuscher and former CFTC Chair Rostin Behnam to continue discussion. But, the walkout underscored growing doubts about whether meaningful crypto legislation can pass by the August deadline President Trump has publicly urged. Movement Labs ousts co-founder after secret token deals. Movement Labs

has terminated co-founder Ruairi Manion following revelations of undisclosed token agreements and governance failures tied to the Move token launch. The decision came days after Coinbase delisted Move, citing concerns about the project's transparency and compliance. In a post on X, Movement Labs announced Manion's immediate dismissal, stating the firm, "will continue under different leadership." The termination follows a CoinDesk investigation revealing hidden arrangements between Movement linked entities and market makers, including Rent Tech and Web3 Port. Internal documents show Monche facilitated deals that enabled Web3 Port to offload 66 million MOVE tokens, resulting in about $38 million in downward pressure. In response, Movement Labs has launched a

new entity, MOVE Industries, appointing Torab Torabi as CEO and Will Gains as CMO. The new leadership pledged governance reforms and increased transparency. The project has also commissioned an independent review by private intelligence firm Groom Lake. CFTC withdraws appeal against Kalshi. The US Commodity Futures Trading Commission has moved to dismiss its appeal against prediction markets platform Kalshi, effectively clearing the way for Americans to trade on political outcomes such as congressional control. The agency's voluntary dismissal, filed Monday in the DC Circuit Court, followed a unanimous three-to-zero commission vote with one abstention.

Kalshi's legal battle began in 2023 after the CFTC denied its request to list event contracts on House and Senate control, citing concerns over unlawful gaming. A federal judge ruled in Kalshi's favor last September, prompting the CFTC to appeal. However, under acting chair Carolyn Pham, the agency has adopted a more streamlined enforcement strategy and opted to drop the case. "Today is historic," Kalshi CEO Tarek Mansour told Reuters. He added that this result is proof that doing things the right way, quote, pays off. As part of the agreement, both parties will cover their own legal fees, and Kalshi waived any right to sue the CFTC for past litigation. Solana fixes major bug. The Solana Foundation disclosed

that developers had fixed a security flaw that could have allowed hackers to create unlimited amounts of certain tokens or even take them from other users. The issue was found on April 16 and affected token 22 confidential tokens, which are designed for private transactions on the network. The problem was tied to have the system check private transactions using cryptographic proofs. A missing step in the process made it possible for someone to trick the system into approving fake transactions. Solana quickly responded by working with development teams and outside security firms to create a fix.

Two patches were sent to validator operators starting April 17th, and most had updated their systems by the next day. The Solana Foundation confirmed that no one took advantage of the bug before it was fixed and that all funds are safe. Even so, the quiet way the issue was handled has sparked debate about how decisions are made behind the scenes on the network. Samourai Wallet lawyers accused prosecutors of hiding key evidence. Attorneys for Samourai Wallet are asking a federal judge to dismiss charges against the crypto mixing services co-founders, claiming that US prosecutors withheld critical evidence.

According to a court filing, the Treasury's Financial Crimes Enforcement Network, FinCEN, told prosecutors in August 2023 that Samourai did not require a money transmitter license. Despite that, charges were filed 6 months later. The US government has accused Samourai Wallet of enabling over $2 billion in illegal transactions, including $100 million linked to online black markets. The company's founders, Keonne Rodriguez and William Hill, were indicted for operating an unlicensed money transmitting business and conspiracy to commit money laundering. Lawyers for the defense say the government failed to disclose FinCEN's guidance until April 2025, well beyond the required time frame under the Brady rule, which mandates timely sharing of evidence that could help the defense.

The suppressed evidence could have influenced bail decisions and shaped early motions in the case. A hearing on possible dismissal is expected. Robinhood explores blockchain to bring US stocks to European investors. Robinhood is developing a blockchain-based platform to let retail investors in Europe trade tokenized versions of US securities, according to sources familiar with the project. The company is in ongoing talks with Arbitrum and Solana as possible partners to support the initiative, though no final agreements have been made. The platform would allow European users to trade US stocks around the clock using tokenized assets, aiming to reduce settlement costs and increase market access. The move follows Robinhood securing a brokerage license in Lithuania, enabling it to operate across the European Union.

Time for fun bits. FTX sells future fortune for pocket change. In what may go down as one of the greatest oops moments in crypto bankruptcy FTX liquidators managed to turn a $200,000 stake into a $500 million regret. Back in April 2023, the FTX estate offloaded its investment in AnySphere, the AI startup behind coding assistant Cursor, for the same $200,000 Alemeda Research originally paid. At the time, it probably felt like a routine item on the bankruptcy to-do list. Fast forward to this week, Cursor just closed a $900 million funding round led by Thrive Capital, ballooning AnySphere's valuation to a sizzling $9 billion.

That $200,000 stake, it could have been worth half a billion dollars today. Cursor's user base and revenue have exploded, making it one of the fastest-growing AI companies on record. Meanwhile, FTX creditors are left staring at the lost windfall like someone who sold 10,000 Bitcoins for some pizza. And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to unchainedcrypto.beehive.com, that is unchainedcrypto.beehive.com, and sign up for our free newsletter so that you can stay up-to-date with the latest in crypto.

Unchained is produced by Laura Shin with help from Matt Pulchard, Wan Ranovic, Megan Gavis, Margaret Curie, and me, Pam Mujumdar. The weekly recap was written by Wan Ranovic and edited by Steven Ehrlich. Thanks for listening.