Coin Market

The whale, the hack and the psychological earthquake that hit HEX

Published

4 weeks ago

April 11, 2025

An elderly crypto whale known as “HEX 19” lost nearly $4.5 million in a slow-moving hack that drained his staked HEX over multiple years.

At first, it looked like a HEX whale was cashing out. But it wasn’t long before the community realized he didn’t voluntarily unstake his tokens — he had become a victim of a major exploit.

The cyberattack started in November 2021, touched multiple phishing wallets and was traced back to an online entity known as “Konpyl,” a threat actor familiar to crypto investigators.

The breach not only shook the token’s price but also exposed a web of fraudulent operations tied to Inferno Drainer and the $1.6 million fake Rabby wallet scam of February 2024.

HEX token price sinks following the HEX19 hack. Source: CoinGecko

HEX hackers and the web of connections

A blockchain investigator who spoke to Cointelegraph on condition of anonymity said, “There’s direct counterparty exposure with wallets used in the fake Rabby app scam as well as the HEX19 Victim’s funds flowing directly into wallets used to launder illicit Inferno Drainer phishing scam proceeds.”

The first major batch of outflows from the victim’s wallet occurred in November 2021 and has continued over the years as assets locked away in decade-long stakes continued to unlock, some prematurely closed by the hacker with penalties.

HEX19 wallet loses almost $4 million on Nov. 21. Source: Arkham Intelligence

The deeper investigators dug into the wallets tied to the HEX19 hack, the more it became clear that this wasn’t a one-off for the hacker. The same addresses appeared again and again across phishing campaigns, wallet drainers and laundering trails.

Wallets used by the HEX19 hacker, the fake Rabby wallet scam, and several schemes related to Inferno Drainer, share a common address: Konpyl.

In an October 2024 investigation, Cointelegraph Magazine analyzed on- and offchain evidence gathered by an investigator and a US government agency which links Konpyl to Konstantin Pylinskiy, an executive of a Dubai-based investment firm who uses the nickname in his online activities. Pylinskiy has denied any involvement with scams.

The investigator said the attack on HEX19 was possible because the victim had stored his seed phrases in the cloud. Transaction records show that the hackers use victim funds for initial transfers to their illicit accounts, a common trait of Konpyl-linked schemes.

“The HEX19 hacker follows similar patterns from other scams by ‘Konpyl,’” they said.

In a November 2024 report, Cointelegraph learned that Konpyl-linked wallets had a high number of interactions with scams connected to Inferno Drainer, a scam-as-a-service threat actor.

Fantasy, a forensics specialist and investigations lead at crypto insurance firm Fairside Network, told Cointelegraph that Konpyl may possibly function less as a direct attacker and more as a laundering proxy.

Inside the HEX hack

The first batch of funds started moving out from the wallet on Nov. 21, 2021, but blockchain records show that the wallet may have been compromised as early as Nov. 3, as the victim wallet (0x97E…7a7df) had an outflow to one of the hacker’s wallets.

On Nov. 21, the HEX19 was drained nearly $4 million across nine separate transactions. The majority of the losses were in HEX tokens. The primary destination was address 0xcfe…8A11D, which we will call HEX Hacker 1 (HH1).

That same day, HH1 began splitting the stolen funds. It sent $2.64 million (12.33 million HEX) to a second wallet 0xA30…2EA17, or HEX Hacker 2 (HH2).

A follow-up transaction on Dec. 10, 2021, sent another 616,700 HEX (worth around $86,700 at the time) from HH1 to HH2.

Then, on Feb. 18, 2022, HH1 transferred 5.2 million HEX (worth about $1 million at the time) and some Ether to yet another address: 0x719a…4Bd0c, where the funds remain parked to this day.

The HH2 wallet appears central to laundering efforts.

From December 2021 to March 2022, HH2 sent over $1 million to Tornado Cash, Ethereum’s best-known anonymizing protocol.

HH2 also transferred $106,758 in DAI to an intermediary wallet, 0x837…2Ba9B, which was used to interact with DeFi platforms like 1inch to further obscure or swap funds.

The intermediary interacts with 0x7BF…C4eAa, a wallet that received direct inflows from Konpyl (an online persona that has appeared in numerous phishing and draining operations).

HH2’s laundering chain also intersects with a high-risk wallet — 0x909…e4371 — flagged for over 70 suspicious transactions.

On May 16, 2024, a third wallet Hex Hacker (HH3) wallet 0xdCe…4f0d8 began withdrawing funds from the compromised HEX19 address.

HH3 has received around $108,000 in HEX from the victim’s account.

HH3 connects to 0x87B…53d92, an address previously Cointelegraph’s November investigation as part of an Inferno Drainer-linked scam. That same wallet shares a commingling address (0xF2F…6a608) with Konpyl, which connects a March 2024 Inferno-linked scam and the Rabby wallet phishing incident.

Finally, a fourth wallet 0x7cc…59ee2 — HEX Hacker 4 (HH4) — enters the picture. Beginning on Jan. 12, 2024, HH4 began siphoning funds from the HEX19 wallet through March.

This wallet interacts with 0x4E9…c71C2, which is a known address used by the fake Rabby wallet scammer.

Lessons from the HEX19 Hack

HEX19, the retired tech veteran, has been through booms and busts before — just not ones that emptied millions of dollars from his digital wallet in a single day.

He filed police reports, and exchanges couldn’t do much to help, he said. The remaining staked funds, including 10-year HEX locks, became ticking time bombs. He knew the hackers had access and were just waiting to extract more.

Cointelegraph has found at least 180 suspicious transactions from November 2021 to October 2024, totaling over $4.5 million. The victim’s wallet still has nine active stakes remaining, though their values aren’t as significant as those prematurely closed and withdrawn by the thieves.

The active stakes are not as valuable as those closed by hackers. Source: HEXscout

“You have this feeling in the pit of your stomach and you say, ‘Oh my God.’ And then you say, ‘Oh, geez, I gotta tell my family that I’ve screwed up again,’” HEX19, purportedly a retiree in his 80s, said in an interview with HEX community member Mati Allin soon after the exploit. Cointelegraph attempted to get in touch with HEX19 but did not receive a response.

Despite the loss, HEX19 maintains a surprising sense of calm: “We’re retired. We live without debt. We live very simply. We have a great family, awesome daughters, granddaughters,” he said in the 2021 community interview. “There’s more to life than money.”

While he doesn’t expect to recover the funds, he does hope his experience helps others think twice before storing their seed phrases online.

Magazine: Financial nihilism in crypto is over — It’s time to dream big again

Coin Market

Dem lawmakers object to hearing, citing 'Trump’s crypto corruption'

Published

41 minutes ago

May 6, 2025

Representative Maxine Waters, ranking member of the House Financial Services Committee (HFSC), led Democratic lawmakers out of a joint hearing on digital assets in response to what she called “the corruption of the President of the United States” concerning cryptocurrencies.

In a May 6 joint hearing of the HFSC and House Committee on Agriculture, Rep. Waters remained standing while addressing Republican leadership, saying she intended to block proceedings due to Donald Trump’s corruption, “ownership of crypto,” and oversight of government agencies. Digital asset subcommittee chair Bryan Steil, seemingly taking advantage of a loophole in committee rules, said Republican lawmakers would continue with the event as a “roundtable” rather than a hearing.

HFSC Chair French Hill urged lawmakers at the hearing to create a “lasting framework” on digital assets, but did not directly address any of Rep. Waters’ and Democrats’ concerns about Trump’s involvement with the crypto industry. He claimed Waters was making the hearing a partisan issue and shutting down discussion on a digital asset regulatory framework.

This is a developing story, and further information will be added as it becomes available.

Coin Market

What bankers, CPAs and CFOs need to know about blockchain

Published

41 minutes ago

May 6, 2025

Why finance veterans are still skeptical about blockchain

Blockchain has been part of the finance conversation for over a decade now. Yet many professionals remain cautious.

Many seasoned professionals in finance, wealth management and economics often question blockchain’s relevance, asking, How exactly is blockchain supposed to fit into what we already do?

This question reflects a few key ongoing skepticisms about blockchain within finance.

Uncertainty about practical applications

Blockchain offers some big promises: faster settlements, stronger security and better transparency. But actually applying those promises across banking, accounting and operations is still complicated.

A 2021 APQC survey identified the main hurdles: a lack of industry-wide adoption, skill gaps, trust issues, financial constraints and problems with interoperability. Even organizations that want to embrace blockchain often struggle to turn ideas into working solutions.

Doubts about necessity

Some finance professionals aren’t convinced blockchain is necessary at all.

The same APQC survey showed trust issues and a lack of understanding as major reasons for the slow adoption. Without a clear and compelling return on investment (ROI), it’s tough to justify tearing up existing systems that, frankly, still work.

Lack of understanding

Maybe the biggest obstacle? A lack of understanding.

A 2024 study revealed that only 13.7% of financial advisers engage with clients about cryptocurrencies despite increasing client interest and the approval of crypto exchange-traded funds (ETFs) between 2021 and 2024.

Moreover, while groups like the American Institute of Certified Public Accountants (AICPA) are trying to build frameworks for blockchain compliance and auditing, there’s no standard playbook yet. And without clarity, leadership teams are stuck.

This article will aim to address each of these skepticisms, ultimately providing an answer to how blockchain fits into finance in 2025.

Did you know? Christina Lynn, a behavioral finance researcher and certified financial planner, highlighted in her 2024 Journal of Financial Planning article that many financial advisers dismiss cryptocurrency due to biases, fear and regulatory concerns despite growing investor interest. She urges advisers to educate themselves, adopt a balanced approach, and provide guidance to avoid client mistakes.

The 2025 blockchain landscape: Key developments

Unbeknownst to many, thanks to regulatory shifts, stablecoins gaining ground and major institutions building on-chain infrastructure, blockchain is moving from experimental to essential within finance. Below are the developments serving as key contributors in 2025.

Regulatory shifts

The US Federal Reserve has relaxed its 2022 stance, no longer requiring banks to get explicit approval to offer crypto services. Similar signals from the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency show that regulators are starting to treat blockchain as a legitimate tool.

At the same time, SEC Chair Paul Atkins is pushing for clearer, innovation-friendly crypto rules, moving away from vague enforcement tactics and toward a more structured regulatory framework.

Stablecoin stampede

The stablecoin market capitalization has climbed to nearly $240 billion as of late April 2025, brushing up against an all-time high.

Regulators are also stepping up. In Europe, the Markets in Crypto-Assets (MiCA) framework is now fully live, laying down clear ground rules for crypto assets. For stablecoins, that means strict 1:1 reserve requirements and a crackdown on anything resembling an algorithmic model without real backing.

Meanwhile, in the US, lawmakers are making moves, too. The STABLE Act, reintroduced in March, proposes tighter oversight over stablecoin issuers and even suggests a two-year freeze on new algorithmic coins. Alongside it, the GENIUS Act aims to set up a whole new licensing system for stablecoins, making issuers meet banking-level standards for reserves, redemption rights and compliance.

The private sector isn’t sitting still either. Coinbase recently waived fees on PayPal’s PYUSD (PYUSD) transactions and now offers seamless USD redemptions. It’s a smart play to make stablecoins more visible in day-to-day finance.

And the uptake isn’t just happening in the US. In Asia, stablecoins are becoming a go-to for cross-border remittances because they’re faster and cheaper than traditional methods. In Latin America, they’re being used to hedge against local currency collapses; in Brazil, for example, stablecoins now make up over 80% of crypto transactions.

In different corners of the world, stablecoins are solving very real problems.

Blockchain goes big

Projects like JPMorgan’s Kinexys and Citigroup’s permissioned blockchain platform show that major banks are actively investing in tokenization, digital asset settlement and blockchain infrastructure for global finance.

Did you know? The global blockchain market is projected to reach $162.84 billion by 2027, up from $26.91 billion in 2024.

Blockchain in banking operations

As of 2025, blockchain is helping streamline settlements, tighten compliance, and transform cross-border payments from a headache into a smooth operation.

Here’s how:

Real-time settlement and clearing

Moving money between banks — especially across borders — used to be a slow, messy process. Layers of intermediaries meant delays, high fees and plenty of room for errors.

By cutting out intermediaries and verifying transactions directly, blockchain enables near-instant settlement, slashing turnaround times dramatically.

In fact, JPMorgan’s Kinexys platform (part of its Onyx suite) now processes over $2 billion in daily transactions, using JPM Coin to settle payments across banks and currencies in real time.

It’s an example of a live system handling serious volume with the help of a blockchain.

Enhanced KYC and AML compliance

Know Your Customer (KYC) and Anti-Money Laundering (AML) checks have always been necessary — but painfully slow and repetitive.

Blockchain offers a smarter way to handle them. A tamper-proof ledger allows banks to securely store and share verified customer information, speeding up audits and reducing compliance headaches.

Another real-world example from JPMorgan is Liink, which runs a blockchain-inspired service called Confirm, which helps banks validate over 2 billion bank accounts across more than 3,500 financial institutions, dramatically improving efficiency for KYC processes.

Cheaper, faster cross-border payments

Sending money internationally used to take days and came with hefty fees.

With blockchain, transactions can settle in minutes, and fees are significantly lower.

Real-world moves:

HSBC and Ant Group: In 2023, they ran real-time HKD-denominated tokenized transactions under the Hong Kong Monetary Authority’s Ensemble Sandbox, giving businesses 24/7 cross-bank transfers.Wells Fargo: Implemented HSBC’s blockchain-based system for foreign exchange settlements, reducing risk and speeding up cross-border FX deals.

Even Deloitte estimates that blockchain could slash cross-border payment costs by 40%-80%, saving the industry up to $24 billion a year.

This all shows that banks are betting real money and real infrastructure on blockchain delivering real value.

Did you know? Visa’s Tokenized Asset Platform (VTAP) allows banks to mint, burn and transfer fiat-backed tokens, such as tokenized deposits and stablecoins.

Considerations for banks

Of course, blockchain isn’t a panacea. There are a few things banks need to keep in mind:

Integration is critical: Blockchain systems have to plug into existing core banking infrastructure. Full rip-and-replace projects aren’t practical (or cheap).Training matters: New systems won’t work if the people running them don’t know how. Banks need to upskill teams across compliance, operations and IT.Customer experience comes first: It’s not just about making internal processes faster — clients need to feel the difference, too.

Behind the scenes, accounting and auditing firms are also finding that blockchain can fix long-standing pain points. That’s what will be explored next.

Blockchain in accounting and auditing

Accounting and auditing might not be flashy headlines, but behind the scenes, blockchain is slowly changing how financial data is managed, verified and reported.

Better data security and fraud prevention

With blockchain, once a transaction is recorded, it can’t be altered without consensus from the network. This built-in immutability drastically reduces the risk of tampering or fraud and strengthens the integrity of financial records.

More transparency = better audits

Auditors no longer need to stitch together fragmented information from multiple systems. Blockchain provides a single, real-time, tamper-proof trail of transactions, making audits faster, more accurate and more reliable.

Streamlined reconciliation and reporting

Blockchain simplifies day-to-day reporting, too. Instead of manually reconciling across different ledgers, authorized parties all have access to a shared, automatically updating record.

Adoption challenges

Of course, it’s not all smooth sailing.

Lack of standardization: There’s still no universal rulebook for blockchain accounting. Groups like the AICPA and the International Accounting Standards Board are issuing early guidance, but without global standards, firms must tread carefully.Integration woes: Most firms still use legacy enterprise resource planning and accounting platforms that weren’t designed for blockchain. Integrating — or deciding when to overhaul — poses serious technical and financial challenges.Regulatory uncertainty: Regulations around digital assets and blockchain-based transactions are evolving fast. Firms must keep their internal controls and reporting practices agile to stay compliant.

Did you know? The concept of triple-entry accounting, enabled by blockchain, adds a third component to traditional double-entry systems.

Blockchain for CFOs and treasurers

In 2025, blockchain is a practical tool for chief financial officers and treasurers looking to sharpen financial reporting, improve operational efficiency, and strengthen risk controls.

Strategic applications

Real-time financial reporting and analysis: Blockchain’s tamper-proof, real-time data streams give CFOs instant access to financial performance. No more waiting for reconciliations — finance teams can forecast and pivot with live numbers at their fingertips.Smart contracts for compliance and transactions: Smart contracts automate routine processes like compliance checks and payment executions, reducing human error and ensuring agreements are enforced exactly as written.Tokenization for capital raising and asset management: Tokenizing assets such as real estate, equipment or equity opens new doors for raising capital and improving liquidity. Fractional ownership models also make it easier to access a broader investor base.

Risk management considerations

While blockchain enhances security overall, it’s not invulnerable. Strong access controls, regular audits and active network monitoring are essential to protect systems and assets.

Organizations also need contingency plans in place, since blockchain networks can experience outages or latency issues; having off-chain fallback procedures ensures business continuity during disruptions.

Finally, CFOs and treasurers must stay actively engaged, working closely with legal teams and regulators to stay ahead of compliance risks and future-proof their operations.

Best practices for blockchain compliance

If you’re operating — or planning to operate — in blockchain environments, these practices should be at the top of your checklist.

Establish robust internal controls

Managing digital assets safely demands stricter-than-ever internal controls. That means:

Segregation of dutiesRole-based access systemsRigorous transaction validation.

Without these safeguards, the risk of fraud or mismanagement climbs quickly.

Engage with regulators early

Organizations that wait for final rulings often find themselves scrambling. Proactively building relationships with regulatory bodies helps you stay informed and adapt to early guidance.

For example, a licensed Swiss crypto bank, SEBA, engaged early with the Swiss Financial Market Supervisory Authority (FINMA) and became one of the first banks to secure a banking and securities dealer license in 2019. Its proactive compliance approach allowed it to operate both crypto and traditional assets legally in Switzerland.

In addition, the Crypto Valley Association (based in Zug) collaborates regularly with Swiss regulators to shape clear, forward-thinking crypto and blockchain policies. They’ve been instrumental in making Switzerland one of the world’s most crypto-friendly jurisdictions.

Invest in ongoing compliance training

Blockchain regulation is in flux. Regular training ensures your finance and compliance teams are ready to adapt.

Everyone from junior auditors to senior compliance officers needs to stay fluent in blockchain fundamentals, regulatory updates and best practices.

By building these habits into your organization now, you’ll be better equipped in the long term.

Actionable steps for finance professionals

So, blockchain does have real use cases in finance; it is here to stay and needs to be firmly on your radar.

Here’s how different finance professionals can start making smart, manageable moves today:

For bankers

Focus on practical wins first.

Look for areas where blockchain can immediately improve operations, like speeding up settlements, streamlining compliance processes or making loan servicing more transparent.

Instead of jumping into a full blockchain overhaul, pilot small initiatives in targeted areas like trade finance or cross-border payments. This way, you can measure results with minimal risk.

Also, partnering with fintechs that specialize in blockchain infrastructure can accelerate your learning curve and implementation, letting you tap into blockchain benefits without rebuilding internal systems from scratch.

For CPAs and auditors

Stay current with evolving standards — especially updated AICPA guidance on digital asset accounting and blockchain auditing.

Certified Public Accountants (CPAs) and auditors also need to build technical expertise because auditing blockchain records isn’t the same as auditing traditional ledgers.

You’ll need to understand:

How blockchain structures dataHow verification worksWhat best practices apply to blockchain audit trails.

Moreover, don’t be afraid to advocate for blockchain adoption at your firm — especially when it can boost transparency, lower risk, and strengthen the credibility of financial reporting.

For CFOs and treasurers

When evaluating blockchain initiatives, look through a financial lens first. Consider:

How blockchain impacts cash flowHow tokenization might affect your balance sheetHow stablecoins or blockchain-based settlements could influence treasury operations.

If tokenization or stablecoin strategies are even on the horizon for your business, they should already be reflected in your three- to five-year strategic plans.

Also, don’t go it alone: Engage with peer networks, industry groups and blockchain-focused finance events. Real-world insights from other CFOs and treasurers can help you spot opportunities and avoid common early-adoption pitfalls.

Coin Market

Frictionless flows are Ethereum's path to economic dominance

Published

41 minutes ago

May 6, 2025

Opinion by: Barna Kiss, CEO of Malda

An idea recently floated by some prominent thinkers in the Ethereum space to reclaim value for the mainnet is the taxing of its Layer-2s. The future of Ethereum does not depend on policy but on enabling frictionless capital movement between the L2s in question. Tariffing rollups may appear a neat way to reclaim value for the mainnet. In practice, it would fragment the ecosystem, drain liquidity, push users toward centralized platforms, and avoid decentralized finance altogether. In a permissionless system, capital flows to where it is treated best, and Ethereum’s rollups mistreat it.

Liquidity fragmentation is Ethereum’s real threat

In traditional finance, the link between fluidity and growth is well established. Lower barriers to capital inflows lead to higher investment. Take the European Union’s pre-Brexit single market. Investment flows slowed when the United Kingdom’s exit fragmented access to capital pools, as economists tracking cross-border activity noted. Ethereum faces a decentralized parallel.

Rollups, particularly those that are optimistic and ZK-based, impose delays of up to a week on withdrawals and offer only patchy cross-rollup liquidity. The result is a fragmented system in which adoption slows, and capital is underused.

Developers are left with two poor choices. Either they focus on one rollup and limit their audience, or fragment liquidity across several and accept inefficiencies. Neither option serves the ecosystem’s long-term interests. A significant opportunity lies, therefore, with protocols that remove these frictions. They will attract more capital, operate more efficiently, and deliver better experiences.

Recent: 3 reasons Ethereum could turn a corner

Capital movement must be abstracted away from the end-user. Bridges and withdrawal queues should become protocol-level concerns, not user problems. It is feasible for liquidity deployed on one rollup to satisfy demand on another, with background rebalancing ensuring solvency and efficiency. What today seems complex can be made invisible.

This design shift from reactive bridging to intent-based liquidity coordination would restore composability and preserve decentralization. More importantly, it would uphold Ethereum’s core principles of building open systems without central gatekeepers. Without it, users will continue to rely on centralized exchanges to bypass friction, compromising self-custody for convenience. This is not just a technical challenge — it is a philosophical one.

Designing around friction is the competitive edge

Designing around capital efficiency is becoming a competitive edge. Tomorrow’s DeFi protocols will not simply compete on fees or yield. They will compete on how well they can access liquidity across a fractured landscape. The winners will be those that can fulfill a user’s request wherever the user is without requiring them to move funds manually. The result will be better UX, more productive capital, and higher network stickiness.

Some underlying technologies are beginning to address the problem. Ethereum-native rollups, planned after a hard fork in 2026, promise closer integration, and while they are still not ready for deployment, based rollups offer tighter alignment with Ethereum by sharing sequencing and improving settlement while sacrificing some independence. In the meantime, optimistic rollups are racing to implement zero-knowledge proofs to speed up exits. These innovations reduce friction, but they are not enough on their own. Scale will come from applications designed around these constraints, not from the base layers alone.

Zk-Rollups are particularly well suited for this. Their cryptographic structure allows for low-latency and trust-minimized messaging between chains. This makes them ideal for applications like payments, decentralized trading, and real-time financial products, all of which demand speed and certainty. If Ethereum can make such cross-rollup flows seamless, it will not just scale. It will become the backbone of a more efficient financial system.

That outcome is not guaranteed. Tariffing rollups may serve short-term goals, but in the long run, they would weaken the very network Ethereum aims to strengthen. Solana, for example, already offers composability within a single domain. While Ethereum’s modular approach is arguably more robust, it cannot afford to ignore the usability cost of fragmentation.

Ethereum’s greatest strength is its neutrality. That should include the ability of capital to move freely within its ecosystem. The future will not be built by taxing rollups. It will be built by enabling them to function as one economic engine.

Opinion by: Barna Kiss, CEO of Malda.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.