MegaETH will return all user funds from its pre-launch deposit bridge after its fundraising attempt was derailed by smart contract errors and an accidental cap lift.

The U.K. government has proposed a "no gain, no loss" tax rule for DeFi lending and liquidity pools, a move hailed as a "major win" by Aave CEO Stani Kulechov.

Tron founder Justin Sun escalated his fraud allegations against First Digital Trust, claiming the firm fabricated documents to mask unauthorized transfers and urging Hong Kong regulators to close loopholes.

Top stories in the Crypto Roundup today:

• MegaETH Refunds Users After "Chaotic" $500M Pre-Sale Fail
• UK Proposes ‘No Gain, No Loss’ Tax Rule for DeFi in 'Major Win' for Users
• Justin Sun Accuses First Digital Trust of Fabricating Documents to Hide TUSD Reserves

MegaETH Refunds Users After "Sloppy" Pre-Sale

MegaETH announced it will return all user funds deposited into its pre-launch “Pre-Deposit Bridge,” reversing a campaign meant to preload liquidity for USDm, the stablecoin that will anchor the network’s Frontier mainnet. The team admitted the execution was "sloppy," citing a blow-by-blow breakdown of technical failures and operational missteps that produced a chaotic and unfair sale process.

The issues began immediately at launch when transactions failed due to an incorrect SaleUUID in the contract, necessitating a slow 4-of-6 multisig update. Simultaneously, Sonar, the KYC provider, applied unexpectedly strict rate limits that blocked large portions of user traffic for over twenty minutes. When the system finally resumed, deposits opened at a randomized time, allowing users refreshing the page to fill the initial $250 million cap in minutes while locking out those relying on official communications.

The situation worsened when a decision to raise the cap to $1 billion backfired. The transaction to lift the limit was executed roughly 30 minutes early by an external party—a known feature of Safe multisigs—causing the team to lose control of the timing. Subsequent attempts to contain inflows by lowering the cap to $400 million and then $500 million failed as deposits outpaced transaction confirmations.

MegaETH has suspended the process entirely and is refunding all deposits via a new smart contract currently under audit. The team plans to reopen the USDm and USDC conversion bridge with improved controls before the Frontier mainnet launch.

UK Proposes ‘No Gain, No Loss’ Tax Rule for DeFi in 'Major Win' for Users

The U.K. government is working on a new tax framework designed to treat deposits into liquidity pools and crypto lending protocols as "no gain, no loss" (NGNL) events. This shift would effectively defer capital gains tax liabilities until a true economic disposal takes place, addressing the current issue where merely depositing funds triggers a taxable event despite the user retaining ownership of the underlying value.

Practically, this ensures that contributors to automated market makers (AMMs) or lending protocols are not taxed at the moment of deposit. Instead, taxation would only occur when assets are eventually sold or traded to realize an actual gain or loss.

Stani Kulechov, CEO of major DeFi platform Aave, welcomed the outcome on X, noting that HMRC’s recognition that DeFi deposits are not disposals is “a major win for U.K. DeFi users.” He added: “We’re fully supportive of this approach and hope to see these changes reflected in U.K. tax legislation soon.”

Although the framework accommodates complex multi-token structures, the government clarified that tokenized real-world assets and traditional securities fall outside its scope. HMRC has yet to confirm a legislative timeline but is continuing industry consultations to refine the rules and evaluate reporting obligations for high-volume traders.

Justin Sun Accuses First Digital Trust of Fabricating Documents to Hide TUSD Reserves

Tron founder Justin Sun escalated his conflict with First Digital Trust (FDT) in Hong Kong this week, accusing the fiduciary and its CEO, Vincent Chok, of not only unauthorizedly rerouting TUSD reserves but also fabricating transaction documents to conceal the transfers. 

Sun claims FDT exploited loopholes in Hong Kong’s Trust or Company Service Provider (TCSP) regime to move hundreds of millions of dollars into illiquid offshore vehicles without the transaction-level safeguards typically required.

The dispute centers on funds that Techteryx, the owner of TUSD, claims were intended for the Aria Commodity Finance Fund but were instead diverted to Aria Commodities DMCC, where they allegedly became trapped in illiquid infrastructure deals. 

FDT denies misappropriation, arguing it followed instructions from Techteryx representatives and that the funds are stuck because Aria raised AML/KYC concerns regarding Techteryx’s ownership, rather than due to liquidity issues. Sun explicitly rejected this defense.

Sun used the press conference to urge local regulators to close the regulatory gaps that allow trust companies to operate without capital requirements or transaction monitoring comparable to licensed securities intermediaries, a flaw acknowledged by Legislative Council member Johnny Ng.

FDT, which sought an injunction to restrain Sun from holding the press conference, characterized the allegations as "unproven and baseless." CEO Vincent Chok stated the firm is suing Sun for defamation and maintained that their position is grounded in "documented facts and the judicial record."

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