Counterparty Insights #2
Insights from This Week's Crypto Legal & Infrastructure Providers
Welcome back to our weekly provider roundup, where we highlight companies shaping the infrastructure of digital assets — from custody to analytics — all listed on our platform Counterparty Catalogue. This week’s edition includes insights from their team and ours.
DigOpp Insights: Our Industry Loves the Blanket Term “Hack”
That label makes it sound like unmitigated losses all come from code defects. But dig a little deeper and most of the damage is operational: bad custody practices, busted business processes, outright insolvency.
Even the catchall tag “access control failure” doesn’t tell a risk manager what actually broke. Case in point: every incident below is stamped “access control” on De.Fi and Web3IsGoingGreat (both of these are great databases).
Let’s take a look at what really happened this month:
UPCX: ~ $70 M lost (Apr 1)
Key leaks allowed an attacker to push an upgrade.
Cause: Key custody failure.
KiloEx: ~ $7.5 M lost (Apr 14)
Exploited public function calls and oracle manipulation.
Cause: Code logic / access control bug.
ZKSync: ~ $5 M lost (Apr 15)
Operator key compromised, leading to unauthorized transfers.
Cause: Key custody failure.
What Jumps Out
Two of three incidents — and 91 % of the value lost — came down to mishandled private keys.
More Thoughts
These aren’t just DeFi risks. Hedge funds, prime brokers, OTC desks, allocators — anyone parking capital in digital asset operations inherits the same attack surface.
We’re tracking where these losses are piling up and how they can be mitigated. If you’re concerned with custody and operational risk (and we strongly believe the market should be), reach out — we’re happy to share and discuss the data.
Spotlights
Solstice Law
Solstice Law is a Web3-focused legal firm offering Token Distributions, Crypto Tax Disputes, Departure Tax Planning, Protocol Formation, and General Tax Advice services. The firm is known for helping protocols and founders navigate the cross-border tax and regulatory landscape.
Industry Take
“With the first quarter of 2025 coming to a close, the cryptocurrency industry appears to be plagued by its traditional volatility. However, this cycle is different. Institutional investments and regulatory progress are at an all-time high in the sector. The U.S. has introduced federal stablecoin legislation…, the SEC has dropped numerous actions against crypto protocols…, and overall, the industry has hope for a government in favour of domestic growth within the space.
This positive outlook has drawn many industry players to develop a stronger U.S. presence. Nevertheless, traditional tax havens such as the Cayman Islands, Panama, and the UAE continue to see a large influx of crypto investment. We see the developments in the first quarter, both domestically and internationally, as a positive outlook. Although the current cycle poses short-term headwinds, the cryptocurrency industry is positioning itself for long-term success.”
— Anish Kamboj, Principal and Founder
Arkis
We’ve released our newest operational due diligence (ODD) report on Arkis, a permissioned DeFi prime brokerage protocol. Arkis enables capital-efficient lending and borrowing through a neutral settlement layer all on-chain. Our latest report provides a deep dive into their operations, controls, risk profile, and more.
Industry Take
“We’re observing a rising demand for CEX-DEX credit solutions as market participants seek greater capital efficiency across both centralized and decentralized venues. Trading firms that we previously saw executing only CeFi are now exploring DeFi, which fuels this demand.
We also believe that portfolio margining across exchanges will be critical in shaping the next phase of institutional trading infrastructure.”
— Serhii Tyshchenko, Co-Founder and CEO
Circuit
Circuit is a disaster recovery solution for digital assets, powered by its Automatic Asset Extraction technology. It enables assets to be retrieved during outages or disasters without manual intervention.
Industry Take
“We’re seeing increased demand around Bitcoin-backed loans. Institutions that were early to the space often hold significant BTC in deep cold storage. They want to put that capital to work without compromising custody — meaning private keys can’t leave the vault. Transaction-based collateralization models that ensure both lender and borrower protections, without moving the assets, are gaining ground quickly.”
— Tom Gillingham, Head of Growth
That’s it for this week - stay turned for more highlights and insights next Friday.
Want to be featured on Counterparty Catalogue? Let us know at info@digopp.group.
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