Jupiter Walks Back “Zero Contagion” Claim

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Good Morning,

Jupiter is walking back its “zero contagion” claim, MetaMask is quietly turning itself into a prediction market hub, and Europol just cracked one of the most organized crypto fraud rings ever uncovered.

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In Today's Email:

• What Matters: Jupiter Walks Back “Zero Contagion” Claim 👀 

• Product of the Week: Metamask x Polymarket 🦊 

• Charts: Europol Dismantle $816M Crypto Fraud Network 📊 

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WHAT MATTERS

Jupiter Walks Back “Zero Contagion” Claim

State of play: Jupiter’s COO Kash Dhanda admitted the team’s earlier claim that Jupiter Lend had “zero risk of contagion” was not fully accurate.

• The controversy began after Kamino and other Solana lending builders pointed out that Jupiter Lend uses rehypothecation, meaning collateral inside different vaults can indirectly affect each other.

Dhanda said the vaults are isolated only in how they’re configured, not in the sense of keeping collateral flows fully separate.

• Kamino’s co-founder argued this is a misuse of the term and warned that users were misled about risk.

• Jupiter deleted the original posts and now plans clearer documentation after Breakpoint.

• Despite the criticism, Jupiter highlighted the protocol’s performance during the October market crash and its rapid growth to over $1B in TVL.

Why it matters: If a protocol says “isolated” but assets still move around underneath, users and other builders will call it out. This episode shows how fast credibility can get questioned in Solana DeFi.

Our take: Jupiter’s tech might be solid, but the messaging wasn’t. Rehypothecation is fine if you’re upfront about it. The walk-back was needed, and clearer docs will help calm things down.

For builders and investors: Be precise, be transparent, and don’t oversell safety. In a crowded lending market, clean communication is becoming as important as the product itself.

PRODUCT OF THE WEEK

Metamask x Polymarket

MetaMask has integrated Polymarket directly into its mobile app, letting users trade prediction markets without leaving their wallet.

• Each trade also earns MetaMask Rewards points, which may tie into the expected MASK token airdrop.

• The integration includes one tap funding from any EVM token and adds another access point for Polymarket.

• MetaMask has been expanding fast, rolling out multichain accounts and preparing for a native token ahead of a potential IPO.

Other cool products:

• Defx, a DEX and L1.

• GemPad, a multi-chain decentralized launchpad.

• Tymio, a decentralized structured products protocol.

• CiaoTool, a no-code automation tools tailored for crypto.

• Accumulated Finance, an omnichain modular liquid staking protocol.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

CHARTS OF THE WEEK

Suspect in $243M Genesis Heist Likely Arrested

State of play: Crypto investigator ZachXBT says a British threat actor linked to the $243M Genesis creditor theft may have been arrested in Dubai.

• He pointed to $18.5M in crypto sitting in an address he believes was seized and noted that several wallets tied to the suspect were consolidated in a pattern similar to past law enforcement actions.

• The suspect, known online as Danny or Meech and allegedly named Danish Zulfiqar, was reportedly last seen in Dubai.

• ZachXBT claims a villa raid may have occurred, though Dubai police and UAE regulators have not confirmed any arrests or seizures.

• The case traces back to an August 2024 theft where attackers used social engineering to access a Gemini account and steal 4,064 BTC from a single Genesis creditor.

• US prosecutors have since brought multiple cases tied to the broader network behind the heist, involving SIM swaps, remote access hacks, and lavish spending by suspects.

Our take: No official confirmation yet, but it shows global pressure on large crypto thieves is getting harder to escape.

Europol Dismantle $816M Crypto Fraud Network

State of play: Europol says a major international operation has taken down a sprawling crypto fraud and laundering network responsible for moving more than €700M ($816M), through fake investment platforms.

• The scheme relied on aggressive call center tactics, fabricated dashboards, and complex cross chain laundering to hide stolen funds from thousands of victims.

• Authorities executed two waves of coordinated raids in October and November across Europe and Israel.

• The first targeted the laundering infrastructure, leading to nine arrests and the seizure of cash, crypto, bank funds, devices, and luxury goods.

• The second focused on the affiliate marketing networks that lured victims using deepfake ads featuring celebrities and media impersonations.

• Europol says the operation hit multiple layers of the fraud ecosystem, and asset tracing efforts will continue.

Our take: This shows how big and organized these scams have become. They run like real companies, with call centers, deepfake ads, and pro laundering setups

QUICK BITES

• Aztec Network raises over $60M in ETH.

• Coinbase reopens app in India after two-year hiatus.

• Farcaster shifts focus to wallet service over social app.

• South Korea to impose bank-level liability on crypto exchanges.

• Canada targets Dapper Labs users in second-ever crypto tax probe.

• MetaMask moves into prediction markets with Polymarket integration.

• Jupiter exec acknowledges 'zero contagion' claim was not 100% correct.

NOTEWORTHY READS & MEME

• Cryptoleon’s read on how Crypto Change His Life.

• Nathan’s read on A World of 1000 Stablecoin Neobanks.

• Ignas’s read on Decentralized Social Network and Farcaster’s Pivot.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.