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forklog.media Is Phemex Safe? Proof of Reserves, Wallet Security and Asset Protection Explained

On January 23, 2025, Phemex lost over $70 million in a Lazarus Group attack on its hot wallets. A month later, the same hackers struck Bybit — this time for $1.5 billion. The surge in cybercriminal activity is forcing traders to rethink the balance between centralized and decentralized services. The Phemex team shared with ForkLog how the exchange reinforced its security framework and strengthened its defenses after the breach. From DeFi Back to CEX? Any centralized exchange (CEX) is, by definition, delegated custody of private keys. The user trades control for convenience and accepts the risks tied to bad-faith management of the venue and external attacks on hot wallets. The alternative to CEXes are DeFi services — not just DEXes and perp DEXes, but also lending protocols and liquid staking, since most centralized exchanges have long moved beyond trading and offer a wide range of financial products. April 2026 turned into the worst month for DeFi protocols in years. It started with the attack on Drift Protocol on April 1 — $280 million drained. The incident was linked to TraderTraitor, a Lazarus Group subunit behind the Bybit and Phemex breaches. Two weeks later, the exploit of Kelp Protocol for $293 million dealt a blow to Aave, the largest lending market. The attackers stole rsETH tokens and used them as collateral to siphon real funds. That triggered a wave of withdrawals: according to data from Standard Chartered, users pulled $17 billion out of Aave, and active loans shrank by $5.5 billion. The attacks continued through the end of the month. On April 22, hackers compromised the liquid staking platform Volo on Sui and drained $3.5 million. On April 27, the lending platform Scallop on the same blockchain was hit. On April 28, three projects were breached at once: cross-chain network ZetaChain ($334,000), Ethereum infrastructure project Syndicate ($330,000) and Sui-based exchange Aftermath Finance ($900,000). On April 30, attackers exploited the Wasabi protocol — losses topped $5 million. Many investors who held stablecoins and Ethereum in "battle-tested" protocols like Aave and Lido began moving capital out. But not everyone wants to give up the extra yield. Some users are again considering Earn products and a return to familiar trading on centralized exchanges. CEXes themselves have stepped up security in recent years along three key lines: Proof-of-Reserves (PoR) — cryptographic proof that an exchange holds assets covering its liabilities to clients. Became the de facto standard after the collapse of FTX in November 2022. multi-tier custody — splitting funds across cold, warm and hot wallets with multisig. compensation mechanisms — exchanges have started setting up insurance funds for unforeseen events. Phemex builds trust at the intersection of these three elements. Let's unpack what stands behind each. Proof-of-Reserves Phemex was one of the early centralized exchanges to release a Proof-of-Reserves system, launching its Merkle-tree version on November 21, 2022 — ten days after FTX's collapse. At launch, the system supported bitcoin, Ethereum, USDT and USDC. By May 2026, the list had grown to 11 assets, including TRX, BNB, XRP, SOL, SUI and AVAX. Reports come out monthly. As of May 2026, the combined reserve ratio stood at 129.75% — assets exceeded the exchange's liabilities to clients. That creates a buffer for extreme market conditions or operational disruptions. Source: Phemex. “Reserve transparency should be practical, repeatable, and easy for users to verify. Monthly Proof of Reserves helps turn that principle into a regular operating standard. For us, being user-first means giving traders the information they need to assess the platform for themselves, not asking them to rely only on statements of trust,” said Phemex CEO Federico Variola. The Merkle tree lets users verify that their own balance is included in the overall snapshot without exposing other clients' data. "Client balances are hashed in pairs, those hashes are hashed in pairs again, and so on until a single value remains — the Merkle root. Changing any balance by even 1 satoshi changes the root entirely. To confirm their funds are accounted for, a user copies their Hashed Client ID from the personal account and verifies it on the Proof-of-Reserves page," the Phemex team explains. Some of the exchange's cold wallet addresses are public. Anyone can check the balances through block explorers of the relevant networks. Where User Assets Are Stored Phemex uses three-tier custody: cold wallets — over 70% of client funds. Private keys are fully isolated from the internet. Each transaction requires sign-off from several independent signers physically separated from one another. All transfers are processed manually after multiple verifications; warm wallets — about 20% of assets. A secure bridge between cold and hot storage. A limited volume for liquidity management without direct internet exposure; hot wallets — under 8% of funds. Handle day-to-day deposits and withdrawals. Even if hot wallets are fully compromised, more than 90% of capital remains untouched in cold and warm storage. Hot wallet private keys are protected by Shamir Secret Sharing: a key is mathematically split into N encrypted fragments, and recovery requires K of N (for example, 3 of 5). The fragments are stored in separate locations, and compromising any one of them is useless without the rest. The fragments themselves are processed inside AWS Nitro Enclaves — isolated computing environments inaccessible to the operating system and to administrators. The custody infrastructure is reinforced by a partnership with Fireblocks, an institutional provider with a multi-party computation (MPC) custody model. MPC distributes cryptographic shares of a key across several protected environments. No single device and no single employee holds the full private key. "On top of that, there is round-the-clock wallet monitoring: automated analysis of activity across all three tiers, tracking transaction frequency and size, recipient addresses and deviations from behavioral patterns. Suspicious transactions are paused automatically and flagged for manual review," the team adds. What Protects the Account Account protection measures on Phemex are activated by the user. Only two-factor authentication is mandatory — for login, withdrawals, API key creation and security setting changes. To raise account security further, a user can set up: an anti-phishing code — a text string shown in every legitimate email notification from the exchange. If the code is missing or doesn't match, the message is a phishing attempt; a withdrawal address whitelist. This protects against a scenario where an attacker gains access to the account and tries to quickly send funds to a new address. At the infrastructure layer, Phemex relies on Palo Alto Networks corporate firewalls, network segmentation (trading engines are separated from web servers, wallet infrastructure from public APIs) and globally distributed DDoS protection. According to the exchange's data, uptime in 2025 reached 99.999%. What the Stress Test Revealed A breach is the strongest counterargument to any claim of "complete security." In January 2025, Phemex's internal monitoring detected anomalous activity in hot wallets. Within hours, Cyvers Alerts and PeckShield publicly reported suspicious transactions. Phemex fully suspended deposits and withdrawals across all networks. The exchange covered all user losses from corporate reserves. Unlike Binance with its dedicated SAFU insurance fund, Phemex has no separate insurance pool — payouts come straight from the corporate balance sheet. After the incident, the exchange rebuilt its custody system: introduced the three-tier architecture with the warm intermediate layer, dropped hot wallet share below 8%, added Fireblocks MPC and AWS Nitro Enclaves, and expanded address monitoring. What to Consider Before Signing Up Phemex remains a centralized exchange. Neither custody architecture nor a Proof-of-Reserves system makes a CEX functionally equivalent to self-custody in a cold wallet. The exchange is registered as a Money Services Business (MSB) with FinCEN in the United States and holds a Virtual Asset Service Provider (VASP) license in Poland. For users from Russia, Belarus and Ukraine, restrictions apply on fiat operations — deposits and withdrawals through partner Legend Trading are unavailable. Know Your Customer (KYC) verification is required for trading and withdrawals. Without it, only Phemex Academy materials are accessible. The check is run by Jumio and takes 2–5 minutes. For more on Phemex's functionality, see the March exchange review. Phemex Exchange Review 2026: Fees, Security, Trading Bots, and Earn Products Phemex started in 2019 as a derivatives exchange. Six years later, it trades 600+ crypto assets, tokenised stocks of Apple and Tesla, gold and silver futures, and serves over 10 million users. ForkLog So, Is Phemex Safe? The short answer: yes, if "safety" is understood in terms applicable to a CEX. After the breach, Phemex compensated users, rebuilt its custody system and made transparency the core of its public communication. By spring 2026, the picture looks like this: nearly 130% combined PoR with monthly publication, public addresses for on-chain verification, over 70% of assets in cold wallets, multisig for critical operations. Custodial risk is built into any CEX. The minimum account protection set includes two-factor authentication, anti-phishing codes and withdrawal whitelists. Regardless of an exchange's reputation, large amounts are best stored outside it, on a hardware wallet.

blockonomi.com FUNToken Games “Fruit Chop Frenzy” and “Infinite Sinkhole” Surpass 100,000+ Downloads, Marking Strong Ecosystem Growth

May 2026 FUNToken continues to build momentum in its rapidly expanding gaming ecosystem, with two of its latest mobile titles – Fruit Chop Frenzy and Infinite Sinkhole, each surpassing 100,000+ downloads on Android. This milestone reflects growing player engagement and increasing adoption of FUNToken’s reward-driven gaming model, where users can play skill-based games and earn [...] The post FUNToken Games “Fruit Chop Frenzy” and “Infinite Sinkhole” Surpass 100,000+ Downloads, Marking Strong Ecosystem Growth appeared first on Blockonomi.

cryptobriefing.com Australia’s 50% capital gains tax discount for crypto remains intact despite viral claims

The retention of Australia's 50% CGT discount for crypto supports long-term investment stability, potentially influencing investor behavior and market dynamics. The post Australia’s 50% capital gains tax discount for crypto remains intact despite viral claims appeared first on Crypto Briefing.

blockmanity.com Circle’s $222M Arc Token Presale Hauls in BlackRock and Apollo Backing for $3B Blockchain Vision

Circle, the company behind the popular USDC stablecoin, just made a big move in the crypto world. It raised $222 million in a presale for its new token called Arc. This token powers a fresh blockchain aimed at big institutions. […] The post Circle’s $222M Arc Token Presale Hauls in BlackRock and Apollo Backing for $3B Blockchain Vision appeared first on Blockmanity.

news.bitcoin.com Trump Meme Team Moves $17M in TRUMP to Bitgo as Allocation Wallet Stirs Again

The official allocation wallet tied to the TRUMP meme coin project transferred 7 million TRUMP tokens, worth approximately $17.22 million, to institutional custodian Bitgo on Sunday, raising fresh questions about insider token movements and potential sell pressure. What the Bitgo Transfer Signals The official Trump meme team allocation wallet transferred 4.915 million TRUMP tokens to […]

forklog.media Morgan Stanley’s Bitcoin ETF Completes First Month Without Fund Outflows

Morgan Stanley's spot bitcoin ETF (MSBT) concluded its first month of operation without a single day of net outflows. This marks the best performance among competitors for the same period. Source: SoSoValue. The fund was launched on April 8. On its first day, inflows reached $30.6 million with a trading volume of $34 million. Bloomberg analyst Eric Balchunas classified this debut among the top 1% of ETF launches in history. Meanwhile, the entire segment recorded a net outflow of $94 million on the launch day. By mid-May, daily inflows into MSBT had decreased from tens to single millions of dollars, yet the figure never went negative. Other major players, such as BlackRock's IBIT and Fidelity's FBTC, occasionally faced outflows. The primary factor for success is the 0.14% annual fee, the lowest in the U.S. market. For institutional investors, the 0.11% difference compared to IBIT translates to a saving of $1.1 million per billion invested. In the first six days of trading, MSBT attracted $103 million—more than WisdomTree's BTCW, which has been trading since January. Amy Oldenburg, head of digital assets at Morgan Stanley, noted that nearly all capital was provided by retail clients. The bank has yet to fully open access to the instrument for its 16,000 financial advisors, who manage $9.3 trillion in assets. Balchunas predicts that MSBT's assets under management could reach $5 billion in its first year. To achieve this, the bank needs to engage its wealth management division's advisors in sales. Back in March, Morgan Stanley submitted an S-1 filing to the SEC for the launch of a spot bitcoin ETF.

blockonomi.com 6 Top Crypto Presales To Join This Month Before Stage Prices Rise And Early Entry Closes

A low entry price can disappear in a single presale update, and that is exactly why the top crypto presale to join this month matters right now. DOGEBALL, Crypto All Stars, Pepe Unchained, Flockerz, Solaxy, and Bitcoin Hyper are all getting attention, but DOGEBALL is creating the strongest urgency because its Stage 2 price is still [...] The post 6 Top Crypto Presales To Join This Month Before Stage Prices Rise And Early Entry Closes appeared first on Blockonomi.

blockmanity.com TrickMo Android Malware’s New Trick: TON Blockchain Powers Covert Command Control

Introduction to a Sneaky Android Threat The world of mobile cybersecurity just got a new headache. A dangerous Android malware called has leveled up its game. This nasty piece of software now uses the TON blockchain for secret communications. It […] The post TrickMo Android Malware’s New Trick: TON Blockchain Powers Covert Command Control appeared first on Blockmanity.

news.bitcoin.com XRP Bulls Drive Token Above $90B Market Cap as Bitcoin Retakes $82,000

XRP climbed above $1.50 for the first time in nearly two months during a broader crypto market rally that also pushed bitcoin past $82,000. ETF Inflows and Exchange Withdrawals Boost XRP Momentum On May 10, XRP breached the $1.50 mark for the first time in nearly two months amid a rare weekend cryptocurrency market rally […]

cryptobriefing.com Megan Greene: Inflation remains above target, geopolitical events exacerbate economic challenges, and the UK faces weak growth amid supply-side issues | Odd Lots

UK's inflation persistence and weak growth are driven by supply-side challenges and geopolitical shocks. The post Megan Greene: Inflation remains above target, geopolitical events exacerbate economic challenges, and the UK faces weak growth amid supply-side issues | Odd Lots appeared first on Crypto Briefing.

blockmanity.com Revolutionizing Payroll: From Legacy Rewards to Blockchain-Backed Smart Compensation Systems

Revolutionizing Payroll: From Legacy Rewards to Smart Compensation Systems Payroll used to be simple. Pay workers on time and accurately. But today, that is not enough. Companies need more. They want pay systems that build trust, give fast cash access, […] The post Revolutionizing Payroll: From Legacy Rewards to Blockchain-Backed Smart Compensation Systems appeared first on Blockmanity.

news.bitcoin.com Raoul Pal Says a Bitcoin Supercycle Is More Likely Than Ever in 2026

Macro strategist Raoul Pal says the probability of a bitcoin supercycle has risen significantly, citing debt monetization pressures, a historic global capital expenditure boom, and structural shifts in how governments are managing sovereign debt. What Is Driving Pal’s Supercycle Thesis? Raoul Pal, the founder of Real Vision and one of the most closely followed macro […]

news.bitcoin.com From $8 to $81,700: What Bitcoin Was Worth on Every Mother’s Day Since 2011

This Mother’s Day, bitcoin was trading around $81,700, a figure that would have seemed impossible when it sat at $8 on the same holiday in 2011, making this the second-highest Mother’s Day price in bitcoin’s 15-year history. A Mother’s Day Gift That Kept Compounding Every second Sunday in May offers a unique lens through which […]

forklog.media Bitcoin briefly tests $82,000

On May 12 bitcoin briefly traded above $82,200, the highest level since the start of the month amid institutional inflows. Hourly chart, BTC/USTD on Binance. Source: TradingView. At the time of writing, bitcoin trades at $80,859 (+0.1% over 24 hours).  Analysts at Zeus Research explained the rise by strong demand for spot bitcoin-ETF and improving macroeconomic conditions.  According to SoSoValue, net inflows into crypto funds totalled $622.75 million last week. Positive momentum has persisted for six straight weeks, with more than $3.4 billion invested over the period. Source: SoSoValue. Progress on the CLARITY Act has offered an additional tailwind. Hearings in the relevant US Senate committee are scheduled for May 14.  Bitrue Research Institute noted that easing political tensions in the Middle East also helped dampen volatility. Even so, analysts warned of a pullback toward $78,000–$80,000 if buying does not resume. Among altcoins, SUI led gains. Over 24 hours, it jumped 20% to $1.27. Hourly chart, SUI/USTD on Binance. Source: TradingView. The rally likely reflects SUI Group’s decision to stake 108.7 million coins, reducing available supply. Interest was also supported by the launch of futures on CME and the project’s partnership with fintech firm Paga to enable cross-border payments.  XRP broke multi-week resistance at $1.45. The rise was accompanied by a spike in trading volumes, indicating activity from large players. Hourly chart, XRP/USTD on Binance. Source: TradingView. The token moved out of the $1.41 area. Within an hour, trading volume exceeded $169 million and price reached a local high of $1.507, before retreating back to $1.45. Analysts noted the importance of clearing $1.45—this level had capped rallies since April. Heavy volume confirms the move, though momentum faded near the psychological $1.50 mark. Trader and analyst Michaël van de Poppe highlighted the upside potential for altcoins. According to him, most assets have fallen by 90% since the summer of 2024 and are now starting to recover. Most #Altcoins have gone down by 90% since the Summer of '25.They are barely breaking out, but the upside is enormous.Things can go really quickly in a matter of weeks, and these are the first signs that we're seeing on the markets. I don't think this will end relatively…— Michaël van de Poppe (@CryptoMichNL) May 10, 2026 He noted that the market shows early signs of a move that could accelerate within weeks, calling the upside “enormous”. At the same time, the trader warned of sharp pullbacks. He recommended gradually increasing the share of stablecoins in portfolios to buy dips. Van de Poppe does not expect the current cycle to end soon. Short-term holders’ profit Unrealised profit for bitcoin short-term holders (STH) reached $19.25 billion amid the price rise, according to an analyst using the pseudonym Zizcrypto. $BTC: STH Unrealized Profit Rebuilds Below Prior PeaksShort-Term Holder supply, defined as coins younger than 155 days, is seeing unrealized profit rise again as Bitcoin trades near $81K.As of May 10, STH Unrealized Profit stands at $19.25B, showing renewed growth while… pic.twitter.com/dUrdlgH8Zi— Zizcrypto (@_Crypto_glass) May 11, 2026 STH refers to wallets that hold coins for fewer than 155 days. Their profit is rising but remains well below previous peaks. For comparison: in October 2025 it was $50.16 billion, and in January 2026 — $28.35 billion. The analyst believes selling zones may form at lower profit levels than before. This implies the market does not need to return to extreme profit readings to start a correction. The current set-up suggests scope for further gains. However, if the rally continues, newer bitcoin holders will become more sensitive to price changes. Zizcrypto stressed that profit growth by itself does not confirm immediate selling. Short-term investors’ behaviour will be a key factor if prices continue to recover. On May 8, the price of the leading cryptocurrency fell below $80,000 amid US strikes on targets in Iran.

blockonomi.com Capital B Raises €15.2 Million to Expand Bitcoin Treasury Holdings

TLDR: Capital B issued 23,038,844 ABSA units at €0.66 each, raising €15.2M from global institutional investors. Net proceeds of €14.4M will fund 182 additional BTC, bringing total potential holdings to 3,125 BTC. Full exercise of 92,155,376 warrants could generate an additional €99.1M for Capital B’s treasury. Strategic investors Adam Back and TOBAM increased their stakes [...] The post Capital B Raises €15.2 Million to Expand Bitcoin Treasury Holdings appeared first on Blockonomi.

blockonomi.com Strategy’s Saylor: We’d Buy 10 to 20 Bitcoin for Every One We Sell

TLDR: Strategy Chairman Michael Saylor confirmed the firm would buy 10 to 20 BTC for every bitcoin it sells. CEO Phong Le said bitcoin sales would only fund STRC dividends when more accretive than equity sales. Strategy holds 818,334 BTC worth roughly $66.2 billion, with JPMorgan projecting $30B in buys this year. Strategy’s software segment [...] The post Strategy’s Saylor: We’d Buy 10 to 20 Bitcoin for Every One We Sell appeared first on Blockonomi.