Top 5 Crypto News of the Week! (11 - 17 May)
Dear PointPay Family,
Our roundup of this week's top 5 news stories is here! We've sifted through thousands of headlines to bring you the 5 most interesting, important, and entertaining stories from the past few days. This way, you can easily stay up to date on key developments in the crypto world.
AI exploit on X leads to $200K crypto transfer through morse code trick
An X user exploited a vulnerability involving AI chatbot Grok and automated trading assistant Bankrbot, triggering the unauthorized transfer of nearly $200,000 in crypto assets. The attacker reportedly used a hidden instruction encoded in Morse code to bypass the system's safeguards and convince the connected AI tools to execute a transaction on the Base network.
The scheme began after the attacker expanded Grok's wallet permissions through a Bankr Club Membership NFT, enabling advanced functions such as swaps and token transfers. The user then asked Grok to decode and relay a Morse code message to Bankrbot, which interpreted the translated text as a legitimate command. As a result, 3 billion DRB tokens were transferred directly to the attacker's wallet before being quickly sold on the market, causing temporary price instability.
BlackRock expands tokenization push with Ethereum-based fund structure
BlackRock is strengthening its presence in blockchain finance by selecting Ethereum as the infrastructure layer for new tokenized fund products tied to traditional financial assets. Recent filings reveal that the asset management giant plans to issue blockchain-based shares connected to treasury-focused money-market funds, signaling growing institutional confidence in Ethereum as a settlement network for real-world assets.
The initiative includes tokenized share classes designed for verified wallet holders and regulated on-chain investors, while maintaining strict compliance controls such as whitelisting and transfer restrictions. BlackRock's move adds further momentum to the broader tokenization trend, where major financial firms are increasingly integrating blockchain rails into conventional markets. With nearly $14 trillion in assets under management, the company's adoption of Ethereum carries significant weight in the race to become the dominant infrastructure for tokenized finance.
New report reveals most Polymarket traders are losing money
A large-scale on-chain study has revealed that the overwhelming majority of Polymarket users are trading at a loss, raising questions about who truly benefits from prediction markets. According to the analysis, more than 84% of wallet addresses tracked on the platform ended up unprofitable, while only a tiny fraction generated meaningful long-term gains.
The findings suggest that profits are heavily concentrated among sophisticated traders using automated systems, arbitrage strategies, and high-speed execution tools. Meanwhile, most retail participants appear to trade briefly before exiting with losses. The report arrives as Polymarket continues expanding into mainstream sports partnerships and influencer-driven promotion campaigns, fueling concerns that inexperienced users are entering a market dominated by algorithmic trading advantages.
Japan launches blockchain pilot for $7.5 trillion government bond market
Japan is taking another step toward blockchain-based finance through a new pilot focused on its massive government bond market. Major institutions including Mizuho, Nomura, Japan Securities Clearing Corporation, and Digital Asset have joined forces to test how blockchain infrastructure can support real-time collateral management for Japanese government bonds.
The initiative is designed to explore faster and more flexible settlement processes while preserving the legal framework governing traditional securities. Unlike a public token launch, the pilot focuses on improving how bond ownership records and collateral transfers operate behind the scenes, particularly for cross-border transactions outside standard banking hours. The project reflects a broader shift among financial institutions seeking to modernize market infrastructure using blockchain technology originally popularized by crypto networks.
Ethereum introduces clear signing standard to improve wallet security
The Ethereum community has introduced a new security standard aimed at eliminating one of the ecosystem's most dangerous user risks - blind signing. The initiative, known as Clear Signing, is designed to replace unreadable transaction approvals with clear, human-friendly information before users confirm blockchain actions.
Built around the ERC-7730 standard, the system allows compatible wallets to display understandable transaction details such as token amounts, recipients, expiration times, and expected outcomes instead of raw technical data. The effort has received support from major industry participants including Ledger, MetaMask, Trezor, WalletConnect, and Fireblocks. The launch follows several high-profile security incidents that exposed how difficult it can be for users to verify complex transaction requests, including the massive Bybit exploit linked to deceptive signing interfaces.
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