Holders of the project's FITFI and KCAL tokens have two weeks to cash out, although they're not likely to recoup much. FITFI trades at fractions of a cent, and KCAL trades at $0.01 — far below its $1–$4 prices from the project's peak in 2022 and 2023. Holders of Step NFTs are likely similarly out of luck.
Step App "move-to-earn" project shuts down
Step App, one of the last surviving "move-to-earn" projects from the 2022 crypto fitness fad, announced it will shut down all services on August 21. The project advertised itself as a "fitness app that pays you", and was essentially a step counter that paid crypto rewards. Users had to first buy the Step App's FITFI token to purchase an NFT representing sneakers, then were rewarded with the project's KCAL tokens for each minute they spent moving — although the number of minutes that would generate rewards were capped, often at just a few minutes, and required more NFTs to increase.
Proof of Attendance Protocol (POAP) shuts down
Proof of Attendance Protocol, or POAP, was a darling of the web3 hype cycle and supposed proof of the utility of NFTs. "Using blockchain technology, POAP tokenizes your memories, so they can last forever and be truly yours," the website gushes, presenting a solution to a problem I previously did not realize I had.
The tokens were typically issued as souvenirs from crypto conferences or other events, and were supposed to function as cryptographically verifiable proof that the owner attended an event. The fact that the POAPs were tradable of course undermined this somewhat, but nevertheless the crypto world had come up a number of reasons why POAPs would be the future of event planning and digital identity and all kinds of things.
Now, the project's co-founder has announced that "Unfortunately, crypto's funding cycles and distribution dynamics made it hard to build a sustainable company without cannibalizing the ethos that made POAP mean something. Building on a fragile and quickly evolving stack, in the middle of an incredible hype cycle, only added to the challenges."
MVMT Labs files for bankruptcy
MVMT Labs, the company behind the Movement blockchain, has filed for bankruptcy, reporting assets of between $100,001 and $500,000 against liabilities of between $1 million and $10 million. The largest unsecured claim, at more than $1.6 million, belongs to co-founder Rushi Manche — whom the company fired in May 2025 after an investigation into the MOVE token launch.
Movement was an Ethereum layer-2 built on Move, the language originally developed for Facebook's dead Libra stablecoin project. It raised tens of millions, including a $38 million Series A led by Polychain in April 2024, before its December 2024 token launch went sideways. The firm opted to give an obscure market maker called Rentech control of 66 million $MOVE, or around 5% of supply, which they promptly dumped, crashing the price.
The Movement blockchain will reportedly continue on under a new company called Move Industries, and pivot away from Ethereum scaling and towards stablecoin operations.
- Chapter 11 Voluntary Petition filed by MVMT Labs
- "Movement Labs files for Chapter 11 bankruptcy months after token scandal", CoinDesk
Summer Finance exploited for $6 million, shuts down
Summer Finance, a defi platform that provides "institutional defi vault infrastructure", was exploited for $6 million in an apparent flash loan attack. The attacker used a flash loan to deposit $64.8 million and then withdraw $70.9 million, taking advantage of a price manipulation bug that allowed them to withdraw more than they deposited.
Shortly after the exploit, Summer Finance announced it had "no viable path forward other than to wind down operations". They added, "a meaningful portion of the team's own capital was held in the affected vaults, removing the runway we needed to rebuild."
- "Lazy Summer USDC Vault Exploit Post-Mortem: What Happened and What Comes Next", Summer Finance
- "Sunsetting Summer.fi and the Labs Company", Summer Finance
Dutch Knaken crypto platform collapses with $8 million in customer funds missing
The Dutch cryptocurrency platform Knaken (not to be confused with the American Kraken platform) abruptly went offline in early June, leaving roughly 30,000 customers unable to access their funds. The company was unable to secure a license under the EU's MiCA regulations, which it said forced them to shut down. Though they claimed to be winding down the company in an orderly fashion, they reportedly stopped paying customer withdrawals, and asked customers to stop filing claims.
Dutch prosecutors asked courts to declare the platform bankrupt and install a court-appointed trustee to oversee the process of extracting assets from the company to return to customers, who are missing around €7 million (~$8 million). The request was approved. The country's Fiscal Information and Investigation Service has also opened a criminal investigation into the platform.
Users of the SecondFi Cardano wallet lose $2.4 million in series of hacks
Users of the Cardano wallet SecondFi (formerly Yoroi) have lost a cumulative 16 million ADA (~$2.4 million) across three attacks targeting a vulnerability in the project's wallet generation code.
After the attacks commenced, SecondFi "rescued" another 129 million ADA (~$19.4 million) by moving the assets to a third party entity. They announced that an external accounting firm would verify the funds and process user claims.
About a month after the hack, SecondFi announced it would shut down operations.
Main Street USD (msUSD) loses its dollar peg
Main Street USD, also known as msUSD, lost its dollar peg and crashed to around $0.25. At points, the token dipped as low as around $0.06. The asset, issued by Main Street Finance, is supposed to be redeemable 1:1 with Circle's USDC stablecoin. It's used as part of a yield strategy that is marketed as "democratizing the options box spread strategy through a stablecoin". Prior to the depeg, there was about $80 million msUSD in circulation.
On June 20, the verification provider Accountable announced that they had "terminated its service agreement with MainStreet, effective immediately. MainStreet was unable to meet our verification standards." The sudden loss of confidence in the token caused the price to plummet as holders rushed to withdraw funds.
Main Street issued a statement, claiming that "Mainstreet remains fully backed" and that "this is an infrastructure and reporting issue, not a solvency issue." However, they noted that "while our portfolio remains fully backed, converting positions into immediate liquidity depends on prevailing market depth and market-maker appetite."
Largest North American bitcoin ATM operator, Bitcoin Depot, files for bankruptcy
Bitcoin Depot has filed for Chapter 11 bankruptcy. The company operates a fleet of kiosks at retail locations that allow customers to purchase bitcoin with cash. Bitcoin Depot announced in a press release that its 9,700 kiosks – primarily located at gas stations and convenience stores – had already been taken offline.
The company's bankruptcy filing reports between $10 million and $50 million in both assets and liabilities. In a recent financial disclosure, the company had reported a 49% year-over-year reduction in revenue and a net loss of $9.5 million for the year. The company had also suffered a $3.67 million hack in April.
Bitcoin Depot has blamed a challenging state-level regulatory environment for its bankruptcy, pointing to a series of regulatory restrictions and outright bans on crypto ATMs, which are a major conduit for crypto scams. An FBI report on Internet crime in 2024 showed 11,000 reports of fraud involving crypto ATMs – a 99% increase from the prior year. Almost $250 million was reported lost due to such scams, with a majority of it coming from victims over 60 years old. Several states have responded by introducing laws imposing strict compliance requirements or transaction limits on ATM operators, and Indiana and Tennessee have both recently banned the kiosks entirely. Additionally, the company is defending against lawsuits from both Massachusetts and Iowa, which argue that the company uses a misleading pricing structure, knowingly enables crypto scames, and maintains a predatory refund policy.
- "Bitcoin Depot Initiates Voluntary Chapter 11 Process to Facilitate an Orderly Wind-Down and Sale of the Company’s Assets", Bitcoin Depot press release [archive]
- Issue 92, Citation Needed [archive]
- Issue 105, Citation Needed [archive]
- Chapter 11 Voluntary Petition
Polish Zondacrypto exchange stops processing withdrawals amid possible insolvency
The Polish cryptocurrency exchange Zondacrypto faced complaints that withdrawals were not being processed as far back as December 2025, but the crisis seems to have escalated. CEO Przemysław Kral attempted to assuage insolvency fears by pointing to a cryptocurrency wallet containing around 4,500 BTC (~$330 million) as proof of assets, but he also admitted that the keys to the wallet were known only to the exchange's previous CEO and not transferred during the company's 2021 sale. The former CEO has been missing for four years.
Polish authorities have launched investigations into the apparent collapse. Losses have been estimated at 350 million zł (~$96 million).
Poland's Prime Minister Donald Tusk has also recently accused Zondacrypto of sponsoring conservative and right-wing politicians, including Polish President Karol Nawrocki. Nawrocki has repeatedly vetoed legislation aiming to regulate the crypto sector, describing it as overly burdensome to crypto businesses. Tusk has also alleged that Zondacrypto was funded by the Russian mafia and Russian intelligence services. These allegations are also being investigated by Polish authorities, and one report citing the country's Internal Security Agency claims that the Kremlin-linked Tambovskaya Bratva Russian mafia group took over the exchange as far back as 2018.
- "UOKiK zbada sprawę Zondacrypto. 'Znacznie poważniejsze nieprawidłowości'", Money.pl (in Polish) [archive]
- Polish leader Tusk claims Russia-linked crypto firm backed Nawrocki’s presidential bid", AP News [archive]
- "Powerful Russian mafia 'took control' of crisis-hit Polish firm Zondacrypto", TVP World [archive]
Balancer Labs shuts down after $110 million hack
After a November 2025 exploit in which $110 million was drained from the Balancer defi protocol, the company behind the project has announced it will shut down. Besides the massive loss, the hack also caused users to flee the protocol, and Balancer's total value locked quickly plummeted from around $775 million to around $300 million. It has continued to decline since, now hovering around $150 million.
Balancer co-founder Fernando Martinelli has said he strongly considered shutting down the protocol entirely, but ultimately decided to continue the project as it generates a relatively small amount of revenue. Instead, the project will move to being operated by a DAO and operating company, which Martinelli hopes will allow them to dodge "real and ongoing legal exposure" and "the liability of past security incidents".
Although another Balancer co-founder has optimistically presented this as "the start of a better chapter" for Balancer, it remains to be seen whether a skeleton crew will be able to revive the project.