Track market-moving stories before they get noisy

Early traction builds on Stellar rails@Zebec_HQ says its enterprise payroll product on @StellarOrg has signed up nine business accounts within two months of launch, generating an annualized run-rate of roughly $4 million in $USDC payroll. The figures offer an early read on real-world demand for on-chain payroll infrastructure at a time when stablecoin adoption in corporate payments is accelerating.

Zebec's enterprise dashboard is designed for HR managers overseeing large, distributed teams, letting employers stream salaries and contractor payments in stablecoins directly into workers' digital wallets. The Stellar deployment, announced in March 2026, marked Zebec's first expansion beyond the Solana blockchain, where its streaming payroll infrastructure was originally built.

Stellar's architecture suits the use case. Transaction costs on the network run below one cent, and the network processes more than 250,000 USDC transactions daily, providing the liquidity base needed for high-frequency payroll operations.

Ecosystem add-ons broaden reachZebec has been layering on integrations since launch. A MoneyGram offramp gives workers cash-out access through MoneyGram's global agent network. Privy wallet infrastructure handles onboarding, while Tangem hardware wallet support adds a physical self-custody option for employees. Euro-denominated payouts are available through AllUnity's EURAU stablecoin, expanding the product beyond dollar-only settlement. Zebec Cards support for onramping and treasury management is flagged as the next item on the roadmap.

The additions reflect a broader pattern in enterprise stablecoin payroll, where coverage of local fiat offramps and wallet flexibility often determine whether a product gains traction in non-US markets. Zebec has positioned itself as Stellar's designated payroll infrastructure provider, with @StellarOrg selecting the firm in that role as part of a wider push to attract institutional use to the network.

Sources:
Zebec: Enterprise Payroll on Stellar launch post
Crypto Economy: Zebec launches enterprise payroll on Stellar
Edgen: Stellar taps Zebec for USDC payroll

Altcoins

18 August 2026 | 00:57 Aave is considering ending the public bug bounty for its Aptos deployment. The request is separate from, but connected to, plans for the lending market.

Key Takeaways Aave is reviewing the ongoing security setup around its Aptos deployment. The Aptos version of Aave V3 uses Move and carries a separate technical scope. A different governance proposal covers lending activity and possible limits on new use. July’s market snapshot showed sharply lower liquidity and minimal revenue. Both measures require governance approval before they affect the protocol. Aave’s latest ARFC asks the DAO to sunset the bug-bounty program for Aave V3 on Aptos and end Cantina’s role as its provider.

A bug bounty pays independent researchers for valid vulnerability reports. The program provides an ongoing route for security findings after a product goes live.

The request arrives while Aave is separately debating the future of its Aptos lending market. Those discussions cover the market itself and the services that support it.

Two governance requests cover different parts of Aptos The Aptos discussion involves two Aave proposals.

The market proposal: A July ARFC on low-adoption markets recommends limiting new use of Aave V3 on Aptos while current positions are reduced over time. The bounty proposal: The newer ARFC asks whether Aave should continue funding an Aptos-only bug bounty through Cantina. The market proposal deals with deposits, borrowing and available liquidity. The bounty proposal covers rewards for researchers who report security issues.

Both requests are awaiting governance approval. The protocol configuration remains unchanged unless a later governance action implements either measure.

Why Aptos had a dedicated bounty Aave launched on Aptos with a separate version of V3. Aptos uses Move, while Ethereum smart contracts commonly use Solidity.

According to Aave’s launch announcement, the Move-based deployment went through audits, a Cantina mainnet security competition and a bounty offering up to 500,000 GHO, Aave’s stablecoin.

Each measure serves a different purpose:

Audits examine code before or around a launch. Security competitions give researchers a set period to test a project. Bug bounties reward valid reports while the program remains open. Cantina’s published Aptos scope covered Move modules, frontend components, APIs and deployment configuration. The program covered the full Aptos product setup.

Aave outlined this arrangement in its 2026 bounty-program restructuring proposal, which assigned Aave V3 on Aptos to Cantina while other Aave products used different providers.

Aptos market activity had already fallen The July market proposal described a sharp decline in Aptos activity.

At the time of publication, it estimated about $1.7 million in supplied assets and roughly $719,000 in debt. Available liquidity had fallen from around $18 million to $1 million over the previous six months, while quarterly revenue was below $1,000.

These figures reflect the market conditions reported in July. The proposal recommended freezing Aptos reserves and setting supply and borrow caps to one. Approval would block meaningful new deposits and borrowing while existing suppliers and borrowers reduce their positions.

The document leaves the bounty program’s costs undisclosed, preventing a direct calculation between that expense and the market’s decline. The lower level of activity still provides the backdrop for Aave’s review of a dedicated Aptos security program.

What the proposals mean for users and researchers For Aave users The bounty proposal affects the reward program for outside researchers. Lending parameters, withdrawal access and borrowing conditions remain tied to the live protocol configuration and any separately approved market changes.

Users with an Aptos position should follow the market proposal and later governance decisions. Those measures would determine the timetable and limits for activity on Aave V3.

For security researchers Eligibility follows the active terms published by Aave and Cantina. The ARFC asks to sunset the program, while the published scope and any approved closure terms determine which reports qualify for a reward.

Closing the bounty would close this public reporting and reward route for Aave V3 on Aptos.

The two Aptos plans now move together Aave Labs recorded the release of Aave V3 on Aptos in its June 2025 development update. The launch introduced Aave’s first deployment outside Ethereum-compatible networks and required its own codebase and security setup.

Approval of both proposals would narrow Aave’s Aptos operations. The market would admit less new lending activity, and the dedicated public bounty through Cantina would close.

The decisions concern Aave’s own Aptos deployment, its activity levels and the operating work required to maintain it.

Author

Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.

Hedera (HBAR) is drawing attention as it maintains a major demand zone in a broadly bearish crypto environment and sees its role expand in institutional finance. Despite the market’s downside pressure, traders are watching closely for early signs of a bullish reversal in the HBAR price.

HBAR price holds key supportHBAR trades at $0.06594, with a 24-hour volume of $30.91 million and market capitalization reaching $2.89 billion. The token gained 1.19% over the last 24 hours, and analysts note that both price structure and network activity suggest a possible shift to the upside for HBAR.

Crypto analyst Crypto Patel remarked that HBAR remains approximately 84% below its 2024 high and is yet to reclaim its former peak. Despite this, the $0.0435–$0.057 zone continues to act as a robust support level on the weekly timeframe, previously sparking significant rallies of 1,823%, 816%, and 1,600%.

Traders are monitoring this area for accumulation and increased buying before expecting an upward breakout in price. For a bullish reversal to materialize, market participants expect a liquidity sweep, a reclaim of the level, a change of character (CHoCH), and a break of structure (BOS).

Should these technical signals align, HBAR could set its sights on targets at $0.10, $0.30, $0.50, $0.70, and eventually $1 as broader bullish conditions take hold. However, a weekly close below $0.03563 may invalidate this bullish scenario, indicating heightened downside risk.

Level/ZoneDescription$0.0435–$0.057Key demand zone, historical support$0.10First major target in bull scenario$0.30, $0.50, $0.70, $1Further upside targets$0.03563Bearish invalidation thresholdUK FX pilot drives institutional progressHedera’s institutional momentum has accelerated with the completion of the UK’s first foreign exchange pilot using tokenized assets as collateral. The pilot, conducted in partnership with Lloyds Banking Group, Aberdeen Investments, and Archax, utilized Hedera’s network to settle trades involving tokenized money market funds and UK government bonds.

Token Relations indicated that the pilot highlights Hedera’s growing influence in the tokenization of real-world assets and its expanding role in financial infrastructure. The project also involves key integrations with Taurus, Utila, Mastercard, and Assetto, further reinforcing Hedera’s institutional engagement.

Mini dictionary: Hedera is a decentralized public network designed for enterprise-grade applications, using the Hashgraph consensus mechanism to provide fast, fair, and secure transactions. Tokenization refers to the representation of real-world assets on blockchain networks as digital tokens, enabling efficient settlement and greater access to traditional financial markets.

Hashgraph, the underlying protocol of Hedera, reported expanding adoption among institutions. Tools supporting developers and payment services have also contributed to wider usage of the Hedera network.

Price outlook and institutional impactWith the broader crypto market sentiment improving and Bitcoin showing recovery, HBAR has also experienced upward momentum. Analysts point out that the sustainability of this trend for HBAR largely depends on buyers defending the $0.0435–$0.057 zone and moving beyond important resistance levels.

Market observers believe confirmation of both a CHoCH and BOS would improve the probability of a bullish trend reversal, targeting $0.10 as the initial upside threshold. Rising institutional participation in real-world asset tokenization could further strengthen HBAR demand.

Traders continue to focus on the $0.0435–$0.057 region as a key area for potential accumulation and an early signal for new bullish momentum.

A close below $0.03563 on the weekly chart, however, would undermine the bullish case and may prompt further price declines.

Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.

In brief Solana's PUMP is today's the top performer in the top 100 coins by market cap, up 8.26% The technical signals on the charts are starting to paint a more optimistic picture for PUMP holders. Protocol revenue on the Pump.fun app hit a new weekly high of $10.03 million on August 11. The crypto market is up 1.1% on a Monday that opened with Fear & Greed Index score at 39, meaning markets may still be fearful, but they're not in panic mode anymore. Meanwhile, the Altcoin Season Index is at 44 out of 100, which typically means traders go to Bitcoin as a hedge against volatility and overly bearish movements. Bitcoin dominance remains high enough that most altcoins are treading water.

The native token of the Solana meme coin factory, Pump.fun, is not treading water. Pump’s token, which trades as PUMP, is the best-performing coin in the top 100 on the day, posting almost 9% of gains in today’s trading session. And the technical signals are finally backing up what the revenue numbers suggested weeks ago.

PUMP bottomed at $0.001491 in July and has since nearly doubled, touching $0.003000 intraday today before settling at $0.002933. The monthly gain sits at roughly 90%, per CoinMarketCap

The 50-day Exponential Moving Average, or EMA—which tracks short-term price momentum by weighting recent closes more heavily, is crossing above the slower and longer-term 200-day EMA, which represents the long-term trend baseline. That crossover, called a golden cross, signals a structural shift from a bearish trend to a bullish one.

It's not a guarantee of continuation, but it is the first time since PUMP launched in mid-2025 that short-term momentum has overtaken the long-term average from below. After months in which the 200-day served as a ceiling, it's now beginning to act as a floor.

The Average Directional Index, or ADX, measures trend strength independent of direction on a scale from 0 to 100. Anything above 25 is considered a trending market; anything above 40 is a strong one. PUMP's ADX reads 45.3, with the positive directional indicator above the negative—meaning bulls are in control of a strengthening move. The Relative Strength Index, or RSI, sits at 51.4, above the 50 midline that separates bullish from bearish momentum territory, but far enough from 70 to leave room for continuation without an overbought red flag.

What's driving the moveThe chart isn't operating in a vacuum. The protocol generated $11.52 million in seven-day revenue, per DefiLlama, of which $5.37 million flowed directly to PUMP token holders through the buyback-and-burn program—the mechanism that converts fee income into direct buy pressure on the token.

This means the float has seasoned, early distribution has largely cleared, and a consistent buyback gives the chart a fundamental bid that chart patterns alone don't.

Also, Pump.fun's new social trading features introduced to compete against trading app Fomo's offerings to top traders appears to have restored confidence in the protocol's positioning.

The derivatives market is also aligned. Open interest in PUMP perpetuals stands at $238.42 million, per Coinglass, up from roughly $189 million two weeks ago, when the token was still testing $0.0025.

The simultaneous rise in price and open interest suggests fresh capital is entering rather than short positions closing. Funding rates have flipped positive during the recovery, meaning leveraged longs are now paying shorts to hold their positions—a signal that the market is building conviction, though one that makes the setup more vulnerable to a sharp flush if price reverses.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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A threat actor responsible for more than $300 million in reported thefts from Coinbase users has once again moved a significant portion of stolen funds. On-chain investigator VAL reported that approximately $500,000 was recently converted to Ethereum and transferred to Tornado Cash, an Ethereum-based privacy protocol.

Investigators have linked these substantial losses to coordinated social engineering attacks rather than smart contract vulnerabilities. According to the research, scammers impersonated Coinbase customer support representatives, targeting account holders directly through deceptive communications.

Victims were tricked into sharing sensitive information such as account credentials, or into following fraudulent instructions, which resulted in unauthorized transfers or the approval of malicious transactions. These attacks exclusively targeted individual users, and there has been no evidence indicating an exploit within the Coinbase or Ethereum smart contract infrastructure.

On-chain investigator ZachXBT previously detailed that cumulative losses have exceeded $300 million. This figure accounts for multiple Coinbase accounts compromised during the course of the scam operation.

Tens of millions of dollars are believed to remain in wallets controlled by the threat actor, although investigators did not disclose the current total across all linked addresses.

Funds routed through Ethereum privacy protocolsVAL observed that in the most recent incident, the scammer converted around $500,000 into ETH before transferring it to Tornado Cash. Three weeks earlier, the same operator moved another $2 million using a similar method. Rather than executing a single large transfer, the threat actor used multiple discreet transactions to obscure the trail.

On the Ethereum blockchain, Tornado Cash functions through smart contracts that deposit and withdraw funds separately, complicating efforts to track assets once deposited in the protocol. Investigators noted it remains technically feasible to trace funds until the point of deposit into Tornado Cash contracts.

VAL identified two specific wallet addresses connected to the latest series of transactions: 0x5Da2…89D8a and 0x3ECe…f296. The operator has also been known to send custom messages within transactions to on-chain investigators, such as ZachXBT, often including taunts regarding ongoing efforts to identify the scammer.

Messages apparently mocked both ZachXBT and VAL as they pursued leads in the investigation, but so far no details have emerged about the suspect’s identity or the location of remaining funds.

Growing scrutiny and Web3 innovationBoth ZachXBT, who tracks aggregate losses, and VAL, who reports on the latest movements, have verified that these transactions form part of the same coordinated campaign targeting Coinbase users. In response to ongoing phishing schemes, Coinbase representatives have repeatedly emphasized that their staff will never request passwords, two-factor authentication codes, or asset transfers from customers.

As scams targeting traditional brokerage platforms and centralized exchanges continue, the landscape of asset management is rapidly evolving. While traditional markets rely on complex brokers, a massive shift is happening: Wall Street is moving to Web3. Investors are now using platforms like 1stepSwap to hold shares of major U.S. companies, gold, and silver directly in their crypto wallets. By tokenizing Real-World Assets (RWAs) and automatically finding the best market prices in seconds, it completely removes the middlemen.

Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.

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The pressure on BitMart is shifting from a narrow social media dispute to a test of how centralized exchanges handle demands for basic financial disclosure.

At the center of the disagreement is a Chinese-language X account that, according to the original report, made claims about blocked funds and unpaid employees. BitMart founder Sheldon Lee responded by saying the account was hacked. Users, however, are not satisfied with that explanation. They are asking the exchange to disclose wallets, assets, and liabilities.

The difference between those two positions is significant. A hacked account can explain why a particular claim spread online. It cannot, on its own, show whether customer funds are unencumbered or whether the exchange is solvent.

What the hacked-account response leaves unanswered Lee’s statement appears aimed at stopping the spread of information rather than answering the substantive demand. That is a familiar pattern in centralized exchange disputes: address the messenger, not the message. The problem is that the message here is not a single accusation. It is a request for information that would make the exchange’s position verifiable.

If BitMart disclosed wallet addresses and a liability breakdown, the market could check whether the platform holds enough to cover customer balances. Until that happens, the exchange is asking users to trust its word while leaving the actual ledger closed.

Proof of reserves has a blind spot After the collapse of FTX, many exchanges rushed to publish proof-of-reserves or third-party attestations. But proof of reserves is typically only one side of the balance sheet. It can confirm that assets exist in certain wallets, yet it often says little about liabilities, the use of customer funds, or whether those assets can be accessed when users withdraw.

That blind spot is particularly relevant for BitMart, which has operated across multiple jurisdictions and maintained a broad retail user base. For traders, the practical question is not whether a social account was compromised, but whether their balances are fully backed and redeemable on demand.

The exchange has not publicly committed to publishing a full asset and liability reconciliation. That leaves users reliant on the same kind of partial information that has caused problems at other venues in previous cycles.

Information asymmetry is the real risk Centralized exchanges hold customer funds and control the data about those funds. Users can see their own balances, but they cannot see how the exchange manages them. That imbalance becomes acute when rumors or withdrawals start. Even if a rumor is false, the absence of clear disclosure can make it harder for an exchange to restore confidence.

In this case, the source of the claims may be compromised, but the demand for disclosure is separate. BitMart could address the underlying issue by publishing verifiable wallet addresses and a liability snapshot. The market has seen repeated examples where platforms resisted that step until liquidity problems became unmanageable.

The wider market context The regulatory environment adds another layer. In Washington, the banking sector is trying to reshape a major crypto market bill just days before a Senate vote, a fight covered in BlockchainReporter’s reporting on the Senate fight. That legislative process could eventually create clearer standards for how platforms report reserves and customer assets, but it offers no immediate remedy for BitMart users.

At the same time, institutional crypto markets continue to move toward tokenized real-world assets and live settlement, as tracked in the latest tokenization roundup. That institutional progress does not automatically translate into better custody disclosure at retail-facing exchanges.

Network-level activity also remains strong. Ethereum, BNB Chain, and Polygon still lead developer activity, according to BlockchainReporter’s developer activity ranking. But active developer ecosystems do not protect users from centralized custody risks.

For BitMart, the unresolved question is simple: can users verify what the exchange holds and what it owes? Until the company publishes that information, a hacked-account explanation will not close the trust gap.

AUTHOR

Tokoni Uti is a Lagos-based writer with several years of experience. Her work has appeared in the Huffington Post, the Los Angeles Free Press and the San Diego Free press among others. She is a graduate of Bowen University.

Cap, the stablecoin protocol behind cUSD and stcUSD, has integrated LayerZero’s OVault standard to enable cross-chain deposits and minting across four blockchain networks. Users can now interact with a single central hub vault from Ethereum, Tempo, MegaETH, and Katana, sidestepping the fragmented liquidity problem that has plagued multi-chain DeFi for years.

How the plumbing works Traditional multi-chain deployments require protocols to spin up individual vaults on every supported network, each needing its own liquidity, security monitoring, and maintenance. OVault collapses that into a single vault that communicates across chains through LayerZero’s messaging infrastructure.

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For Cap specifically, this means users minting cUSD or stcUSD no longer need to bridge assets manually before depositing. The process happens in one step, with the cross-chain routing handled under the hood. cUSD is minted on a 1:1 basis against blue-chip dollar assets, while stcUSD serves as its yield-bearing staked counterpart.

Cap’s operational model has three layers: users who mint stablecoins at par value, operators who borrow those assets to deploy yield-generation strategies, and delegators who restake with smart contract compliance enforcing the rules.

LayerZero’s OVault standard itself launched in September 2025 and reportedly secured approximately $9 billion in assets on its first day.

Cap’s multi-chain trajectory Cap first extended to MegaETH on January 5, 2026, using LayerZero’s OFT bridging to support real-time operations for both cUSD and stcUSD. At the time of that launch, Cap reported a total value locked exceeding $400 million and a circulating supply of more than $350 million for cUSD.

Cross-chain messaging layers add complexity, and complexity is where exploits tend to hide. LayerZero’s infrastructure has been battle-tested to a degree, and the $9 billion secured by OVault on launch day suggests meaningful confidence from the market. But any system that routes value across multiple chains introduces attack surface that wouldn’t exist in a single-chain deployment.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

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Hyperliquid’s expansion beyond crypto derivatives has been one of the more aggressive pushes into tokenized real-world assets, commodities, and equity trading. But Wintermute CEO Evgeny Gaevoy is not treating that growth as a clean path toward becoming a full-scale market venue. In an interview with The Archive Pod, he framed US regulation as the biggest long-term obstacle for the perps exchange, according to the original report.

Gaevoy said Hyperliquid has performed well across those asset classes, but the platform will eventually have to confront two structural constraints. One is regulatory pressure from the United States. The other is throughput, especially if Hyperliquid wants to compete against incumbent venues like CME and Nasdaq. That second issue compounds the first: scaling into traditional market competition may require order matching and data infrastructure that do not map neatly onto a fully decentralized validator set.

The regulatory concern is not abstract. If Hyperliquid is eventually required to implement know-your-customer checks, the product would need identity verification at deposit, withdrawal, or even trading layers. That would erode the permissionless model that has made the venue attractive to traders who are outside major jurisdictions. Gaevoy noted that a KYC mandate and a desire to compete with CME and Nasdaq could push Hyperliquid toward becoming increasingly centralized. That is the core tradeoff: the closer the platform gets to institutional equities and commodities, the more it may look like the intermediaries it set out to replace.

The KYC and Centralization Tension US regulators have been moving unevenly on market structure rules, and the stakes for crypto venues have become clearer as the fight over the biggest crypto bill in US history showed how much banks and legacy financial players still control the process. For Hyperliquid, the question is whether it will be treated as a derivatives exchange, an alternative trading system, or something else entirely.

A KYC requirement would not just add a compliance layer. It would change the sequencing and clearing assumptions behind a decentralized perpetuals venue. Users could still trade without custody, but their on-chain addresses would need to be tied to identities. That undermines one part of the value proposition while leaving the operational complexity intact. Hyperliquid’s fast block times and low-fee execution may still work, but the user experience would shift dramatically if a regulator demands real-time screening and transaction monitoring.

The bigger unknown is token classification. If the HYPE token is seen as facilitating an unregistered exchange or clearing activity, the pressure would extend beyond KYC to delisting, fines, or geographic blocks. Gaevoy’s comments did not go that far, but they reflect a recognition that US enforcement often uses market access as a lever even when formal rules are unresolved.

Throughput Is the Second Friction Point Competing with CME and Nasdaq is not only a legal problem. It is an engineering problem. Traditional venues operate with microsecond-level matching and deeply optimized order books. Hyperliquid’s own throughput has been a differentiator in crypto, but the gap remains when compared with centralized derivatives infrastructure. Gaevoy identified throughput as the second long-term challenge, which suggests that raw transaction speed alone will not close the distance if compliance and data retention requirements add friction.

Even among the top blockchains by developer activity this week, sequencing and scalability remain design constraints rather than solved problems. Hyperliquid’s approach uses a specialized L1 with a smaller validator set, which improves performance at the cost of decentralization. That architecture may be a preview of where high-performance trading chains are headed, but it also makes the regulatory conversation harder because there are fewer independent operators to distribute legal responsibility.

What the Market Is Watching Next Hyperliquid’s positioning sits at the intersection of two growing narratives. On one side, tokenized real-world assets have gained traction as on-chain tokenization volumes crossed $20 billion, with institutions beginning to treat the space as a serious settlement layer. On the other side, US enforcement and legislative uncertainty continue to weigh on venues that try to list equities or commodities without traditional registration.

For traders, the practical question is whether Hyperliquid will be forced to restrict US users, introduce gradual KYC, or split its product into compliant and non-compliant silos. Each option changes the liquidity profile. Institutional participants may prefer a KYC-enabled order book because it gives them clearer legal standing, while offshore retail traders may migrate if identity checks become mandatory.

What remains uncertain is timing. Regulators have not issued a specific rule targeting Hyperliquid, and the platform has not signaled a shift toward centralized compliance. But the Wintermute CEO’s warning matters because it comes from a market maker that deals with liquidity and risk across venues. His concern is less about whether Hyperliquid can scale technically, and more about whether the final version of the platform will still be recognizable as the decentralized venue it is today.

AUTHOR

Tokoni Uti is a Lagos-based writer with several years of experience. Her work has appeared in the Huffington Post, the Los Angeles Free Press and the San Diego Free press among others. She is a graduate of Bowen University.

The company raised $333.7 million selling MSTR shares last week and spent all of it on preferred dividends, preferred buybacks and its dollar reserve, leaving its 840,447 bitcoin untouched.

Original Image Credits: Gage Skidmore / flickr.com

Posted August 17, 2026 at 9:48 am EST.

“No bitcoin purchases or sales were made this week,” Strategy said in a Form 8-K filed Monday. The company neither bought nor sold bitcoin between Aug. 10 and Aug. 16, and every dollar it raised selling stock went to servicing its preferred shares instead.

The company sold 3,458,866 MSTR shares for $333.7 million in net proceeds, about $96.48 a share after commissions. It sent $52.4 million to dividends on its STRC preferred stock, $132.2 million to buying that same preferred stock back, and $149.1 million into its USD Reserve. Those three uses account for the entire raise. Strategy sold no preferred stock, having halted the STRC issuance that once funded its bitcoin buying.

Eight Weeks Since the Last Buy Strategy last bought bitcoin in the week ended June 21, when it added 520 BTC for $34.9 million at an average of $67,068 a coin. Monday’s filing was the eighth straight to report no purchase, a stretch that has taken in a $216 million bitcoin sale and the start of a financing overhaul. Executive Chairman Michael Saylor had pledged in May to buy 10 to 20 bitcoin for every one the company sold.

Holdings stand at 840,447 BTC bought for $63.36 billion, an average of $75,385 a coin. With bitcoin near $63,530 on Monday, the position is roughly $9.96 billion underwater.

Buying Back Preferred Below Par The week’s repurchase covered 1,388,720 STRC shares at about $95.19 each, close to 5% under the $100 par value and a shade above STRC’s $94.78 close on Friday. Strategy told investors in June that it wanted the security to trade near par. About $653 million of the $1 billion preferred repurchase authorization remains, alongside an untouched $1 billion for common stock.

The USD Reserve finished the week at $4.80 billion, up from $4.65 billion. Strategy’s board set a floor in June of 12 months of expected preferred dividends and interest, which the company put at about $1.76 billion a year. In a post on X, Strategy said the week “increased USD Duration by 41 days to 2.8 yrs and tightened STRC’s BTC Credit by 4 bps to 114 bps.”

Related Listen: Strategy Sells $216M in Bitcoin. Is Saylor a Buyer or a Seller Now?: Bits + Bips

AI-assisted content: This article was produced with the assistance of AI tools and was reviewed, edited, and fact-checked by a member of the Unchained editorial team before publication.

Strategy, the Nasdaq-listed digital asset company formerly known as MicroStrategy, entered another week without purchasing or selling Bitcoin. The company maintained its Bitcoin holdings unchanged, opting instead to strengthen its cash reserve amid market turbulence.

Cash reserve strategyAccording to a recent regulatory filing, Strategy raised $333.7 million by issuing 3,458,866 shares of its MSTR common stock. The company allocated $149.1 million of this sum to expand its USD reserve, while $52.4 million was used to pay dividends on STRC preferred stock. Additionally, Strategy spent $132.2 million repurchasing its own stock.

Chairman Michael Saylor emphasized the company’s efforts on social media, highlighting the $150 million increase in reserves and the repurchase of $132 million worth of STRC stock. With this move, the USD reserve now sits at $4.8 billion. Saylor also reported that the company extended its USD duration to 2.8 years and narrowed the STRC BTC credit to 114 basis points.

Strategy raised $333.7 million through a stock sale, bolstered its USD reserve by $150 million, and repurchased $132 million of STRC shares, while maintaining its Bitcoin holdings and supporting investor returns.

Mini dictionary: Strategy is a Nasdaq-listed company focused on digital assets and is the largest publicly traded corporate Bitcoin investor. Previously named MicroStrategy, it has shifted toward strengthening its cash position through stock offerings alongside its crypto holdings.

ActionAmountShares sold (MSTR)3,458,866Funds raised$333.7 millionUSD reserve addition$149.1 millionSTRC stock buyback$132.2 millionDividend payments$52.4 millionBitcoin holding policyStrategy has refrained from both buying and selling Bitcoin during the latest reporting period, halting all Bitcoin sales after previously reducing its holdings earlier in the year. This marks a shift from its aggressive accumulation strategy that peaked in 2025.

As of August 16, 2026, the company holds 840,447 BTC, worth $53.4 billion at an average acquisition price of $63,357 per coin. Despite volatile market conditions, Strategy continues to present itself as the largest corporate Bitcoin holder.

Strategy initiated its large-scale Bitcoin purchases in 2020, outlining its intention to use the asset as a hedge and a tool for enhancing shareholder value. Since then, it has served as a model for other corporations adopting similar crypto-treasury management approaches.

Stock performance and outlookMSTR shares have faced significant downward pressure throughout 2026. The stock has dropped more than 60% since the start of the year and now trades at just over $95, down nearly 80% from its 2024 peak.

Speaking earlier this month, CEO Phong Le addressed investor apprehension around the company’s strategic direction, citing confidence in their long-term commitment to Bitcoin. Le described Strategy as akin to “the J.P. Morgan of the crypto economy,” suggesting minor sales are negligible compared to their broader holdings and philosophy.

Strategy’s leadership asserts that their commitment to Bitcoin remains unchanged and that recent moves to boost cash reserves do not indicate a shift away from their core digital asset strategy.

Influence on industry peersStrategy’s approach to balancing a large Bitcoin treasury with traditional financial reserves has influenced a wave of companies to adopt similar treasury strategies. As market conditions evolve, many firms look to blend crypto assets with cash holdings to navigate volatility and support long-term objectives.

Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.

An unusual wave of unsolicited escrow transactions targeting users of the Xaman Wallet on the XRP Ledger has prompted urgent warnings from both the wallet provider and key community figures. The fraudulent activity came to light after Web3 consultant Stone received a report from another user and found two unexplained escrow-related transactions in his own wallet: one for creation and one for cancellation.

Details of the phishing techniqueStone sought clarification using the Xaman Wallet support xAPP, receiving an in-depth explanation from the support team. According to Xaman, scammers have begun sending unsolicited escrow transactions to a variety of wallet addresses. These transactions are crafted to appear as if they hold substantial amounts of tokens, in some cases presenting assets labeled as USDT0 or other fabricated tokens not supported by the real XRP Ledger.

The fraudsters intend to draw user attention to links embedded within the transaction details or memos. These links often direct unsuspecting users to external websites, which falsely claim they can assist in claiming or releasing the escrowed assets. Engaging with these sites can result in users authorizing harmful transactions that provide scammers with access to their funds.

The wallet provider urges users not to connect their wallets or approve any transaction requests generated by unknown third-party sites. These unauthorized operations are specifically designed to secure account-level permissions, which could subsequently compromise user assets.

Xaman stressed that simply receiving an unsolicited escrow transaction is not sufficient for scammers to steal funds. For fraud to succeed, users must actively authorize a malicious transaction, granting the attacker the ability to control balances or redirect assets. Unless a user takes such action, their wallet remains secure despite receiving suspicious escrow activity.

Public nature of the XRP Ledger and user limitationsThe XRP Ledger’s decentralized and open structure means that any active wallet can send a transaction to another address without prior approval. As a result, users are unable to stop other parties from sending them transactions or to delete those entries from the ledger.

Xaman likened the process to receiving unwanted physical mail, where recipients cannot determine who sends messages to their address. Additionally, the technical team clarified that any fees associated with these unsolicited transactions are covered by the sender, not the recipient.

The support team’s response notes that users are not financially impacted by network fees in these cases, as those costs are paid entirely by the originator of the scam transaction.

Official guidance and next steps for usersTo further mitigate risk, Xaman has flagged the scammer accounts in its blacklist database and is actively monitoring the situation. The company advises wallet holders to disregard unsolicited escrow transactions, refrain from clicking on suspicious links embedded in transaction metadata, and avoid signing or approving transactions without deliberate intent.

Stone publicly thanked Xaman for its detailed explanation and rapid action, sharing the company’s recommendations across the broader XRP Ledger community. This experience underscores the importance for wallet users to utilize official support channels when encountering unexpected on-chain activity and to avoid direct interaction with transactions that seem unfamiliar.

As the digital asset sector continues to evolve, parallel trends are emerging within traditional financial markets. While monitoring for phishing attempts and new token-based threats remains central for XRP holders, investors are also witnessing a significant transition as Wall Street moves its operations to Web3 infrastructure. Platforms such as 1stepSwap now allow digital asset holders to keep tokenized shares of major U.S. companies, as well as assets like gold and silver, directly in their crypto wallets. By automatically sourcing the best available market prices and removing traditional intermediaries, these solutions are redesigning the landscape for both conventional and crypto-native investors.

Xaman reiterates the need for ongoing vigilance, emphasizing that security depends on users not authorizing or initiating transactions for unrecognized assets or sources. For any unexpected or unclear wallet activity, consulting official support is strongly encouraged before taking action.

Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.

BitMart chief executive Sheldon Lee dismissed accusations circulating on X as fabricated rumors on Monday, hours after a public campaign gave him until August 19 to explain where customer money went.

BitMart announced an orderly wind-down of its trading platform in July. Many users still report blocked withdrawals, and former employees say last month’s salaries remain unpaid.

Why BitMart Users Want Proof of ReservesA Chinese-language account posting as BitMart 币市 published a five-point accountability demand on Monday. It asks Lee and business partner Yi Li to disclose wallets, assets, liabilities, and usable reserves that a third party can verify.

The account also questions who ordered the withdrawal limits. Moreover, it asks when management first knew the platform could no longer process requests normally.

Strain showed up on-chain almost immediately. Ethereum withdrawals surged to a 2026 high within days of the notice, while BMX crashed 46% as the announcement landed.

The July 26 notice stopped deposits and new Bitmart registrations at once. It also switched futures accounts to reduce-only mode, which lets traders close positions but not open fresh ones.

Staff pay sits at the center of the complaint. Rank-and-file employees never decided how company funds were managed, the account argues, so they should not absorb the cost of that decision.

“Let the fund flows be traced clearly. Let users know where their money is. Let employees get back the pay they deserve.”

Legal Threats Replace a Repayment PlanLee skipped the demands point by point. Instead, he said the company had gathered evidence and would file a police report and send a lawyer’s letter to X requesting technical forensics.

Sheldon. Source: XHe added that employee assets carry no priority over client assets. Meanwhile, the reply offered no reserve figures, no liability total, and no repayment timeline.

The campaign wants a repayment plan with an order of priority, a start date, and an independent audit. So far, BitMart has published none of that.

On-chain investigator ZachXBT pushed back within minutes.

“If you actually have the liquidity then simply return the funds to everyone instead of posting vague statements?”

The official notice sets August 26 as the final trading day and the recommended cutoff for withdrawal requests. Login access runs until January 31, 2027.

BitMart is one of several venues to exit this year. Analysts read closures as a healthy reset, though staff cuts at Luno pointed to wider stress. European regulators, meanwhile, opened a custody review under MiCA after an earlier exchange collapse.

Wednesday’s deadline now sets the next test. Verifiable reserve data would answer the question quickly, while another statement without numbers likely will not.

Tether announced Thursday that KPMG U.S. completed the company's first full independent financial statement audit, issuing an unqualified opinion on Tether International's 2025 financials and confirming that reserves backing USDT exceeded liabilities by $6.814 billion at year-end.

The distinction between this and what Tether has published before matters more than the headline number. Attestations, which Tether has relied on since 2021, are limited to a snapshot in time, built on a scope the company itself defines, and carry no binding opinion from the accounting firm performing them. A full audit is different in kind: KPMG examined Tether's complete financial statements, transactions, systems, valuations, counterparties, and ownership records, and — notably — physically counted and inspected every individual gold bar Tether holds, verifying existence and identifying information directly rather than relying on custodian reports. The audit covered a balance sheet that includes more than $141 billion in direct and indirect US Treasury exposure, alongside gold and roughly $60 billion in bitcoin, according to Arkham Intelligence data cited by outlets covering the announcement; Tether's own statement did not break out its bitcoin position. CEO Paolo Ardoino called it the "largest inaugural financial audit in history," and noted that critics had spent years insisting an audit of Tether's scale could never actually be completed.

The audit result gave both sides of Tether's long-running credibility debate something to point to. Supporters treated the $6.8 billion surplus and KPMG's clean opinion as vindication after years of unresolved scrutiny. Critics were quicker to note that gold verification, however thorough, addresses only one reserve category, and that KPMG's own network has previously audited firms that later collapsed under fraud allegations — a reminder that a clean audit opinion narrows the range of open questions without eliminating all of them.

The credibility question Tether just answered first became unavoidable in October 2024, where we covered a public accusation that Tether was "a $120 billion scam" with no audit ever completed — a claim that gained traction precisely because it was, at the time, factually true: no independent audit existed, only quarterly attestations Tether itself commissioned. That gap persisted even as Tether pursued a US-facing pivot, with Blockhead reporting last September that Tether launched USAT, a dollar stablecoin built for American compliance through Anchorage Digital, after a 2021 New York Attorney General settlement first forced the company into a regime of quarterly attestations without an admission of wrongdoing. This audit is the step that gap-filling campaign had been building toward.

USDT's market capitalization has passed $180 billion, and Tether has become one of the largest private holders of US government debt globally — a scale where "trust us" stopped being a sufficient answer for regulators and institutional counterparties years ago. A single audit doesn't retroactively resolve every past criticism, and the audited entity is a Tether subsidiary rather than the parent company. But it does convert the central question that's followed Tether since 2017 — do the reserves actually exist — from something only Tether could answer into something a Big Four firm has now put its own name behind. Whether that's enough for the regulators still watching USDT's compliance status under the GENIUS Act, given Tether issues the token from outside the US, is the next question the audit alone can't settle.

Following the launch of buyback-and-burn programs for BTT and WIN, JST completed its fourth major token burn, while SUN rolled out a comprehensive upgrade to its buyback mechanism. 

With these initiatives now operational, TRON’s flagship assets have officially entered a deflationary era. This sends a clear message to the broader crypto market: TRON is anchoring its tokenomics in economic reality. By converting actual protocol revenue into real benefits for token holders, TRON is reinforcing its ecosystem flywheel and steering the entire ecosystem toward real value creation. 

TRON’s Core Assets Enter Deflationary Era as Network-Wide Buybacks Go Live By taking protocol revenue to repurchase tokens on the open market and permanently remove them from circulation, TRON’s four flagship assets—JST, SUN, WIN, and BTT—are adopting a mechanism similar to traditional equity buybacks, with the potential to support long-term token value.

JST, an essential asset across TRON’s DeFi segment, has spearheaded the buyback wave. As of July 17, it has completed its fourth major buyback-and-burn round, removing a cumulative total of 1,711,249,863 JST from circulation, which accounts for 17.29% of its total supply.

Data shows that JST’s total buyback value across four rounds has surged past the $94.62 million mark, exhibiting explosive round-over-round growth. This surging capital scale vividly highlights a leap in JST’s underlying revenue generation, reinforcing TRON’s firm resolve toward a model of absolute deflation. 

As JST sets the pace, SUN.io—another key pillar of TRON’s DeFi ecosystem—has completed a major upgrade to its buyback mechanism, unlocking greater on-chain transparency. SUN’s buyback mechanism now draws its funding from an expanded range of SUN.io’s product suite, including SunSwap V2, SunPump, and SunX.

Since the launch of its buyback initiative on December 15, 2021, SUN.io has executed 51 consecutive, uninterrupted burn rounds, permanently removing 678,547,188.32 SUN from circulation—making up 3.4% of the total supply. Furthermore, it launched a dedicated buyback-and-burn dashboard on April 22 this year, allowing global investors to witness firsthand how protocol revenue translates into sustainable value growth. 

Building on this momentum, BitTorrent, the world’s premier decentralized network infrastructure provider, and WINkLink, the first decentralized oracle network on TRON, introduced their own buyback and burn programs in July. 

To fund these initiatives, WINkLink will allocate 100% of its revenue to repurchasing WIN, while BitTorrent will utilize the entirety of the revenue generated from its decentralized business to buy back BTT. Both projects are slated to officially commence their burn phases in Q4 2026. 

JST Leads the Charge as TRON’s Core Infrastructure Tokens Rally in Unison Among the four projects, JST stands out as the clear leader in the scale and volume of its buyback and burn program. JustLend DAO’s robust revenue base provides the foundational support, with its Energy rental operations accounting for 70% of the allocated funds. Concurrently, accrued stability fees from USDJ were tapped for the very first time to supply the remaining 30%, marking JST’s successful establishment of a diversified, multichannel value capture framework. 

Catalyzed by strong deflationary expectations, JST is undergoing an explosive realignment with its intrinsic value on the secondary market. Since the inception of its buyback and burn, the token’s price has surged over 200%, breaching the $0.1 mark on July 10 to hit a recent historic high that sits 50% above its Q1 peak. Both the eye-watering Q2 trading volume of $3.27 billion and this significant price appreciation are directly underpinned by genuine revenue growth. Together, these metrics cement JST’s position as a premier growth and value asset, offering unparalleled certainty within the TRON DeFi ecosystem. 

Building on JST’s momentum, SUN—the native token of SUN.io, another core DeFi engine on TRON—is exhibiting remarkable resilience in both price and trading volume, bolstered by continuous enhancements to its deflationary mechanics. 

As of July 29, CoinGecko data indicates that SUN has maintained a steady upward trajectory over the past month, posting a solid 10% gain. Its impressive $640 million in Total Value Locked (TVL) and $440 million in 7-day trading volume demonstrate robust capital retention within the protocol. This steady price appreciation, underpinned by deep liquidity, further cements SUN’s position as the bedrock of the TRON ecosystem’s trading hub.

In parallel, with the official launch of their buyback and burn programs in July, WIN and BTT—dual engines of TRON’s infrastructure—have shown tangible value realization. Catalyzed by this mechanism, both assets have demonstrated strong price resilience. As of July 29, driven by the announcement of its “100% Real-Revenue Buyback & Burn” initiative, WIN has rallied approximately 22.5%. Meanwhile, BTT has also found a strong base of support amidst price fluctuations. Together, these two infrastructure pillars are working in lockstep with the broader DeFi ecosystem, driving sustainable, synergistic growth across the network.

Beyond Hype and Narrative: How TRON is Redefining Value Accrual Through Real Yield TRON has evolved far beyond a standard Layer 1 network into a highly cash-generative, on-chain financial engine. With active user accounts approaching the 400 million mark and Total Value Locked (TVL) comfortably exceeding $27.0 billion, the network now hosts over $90 billion in stablecoin supply, with its diverse business lines continuously generating protocol revenue every day. 

Rather than letting these earnings sit idle, TRON is channeling its yield back into the ecosystem. Through comprehensive buyback and burn programs across JST, SUN, BTT, and WIN, TRON has built a self-sustaining value flywheel, routing network revenue straight back to its community and token holders. 

Right now, TRON’s ecosystem flywheel is spinning at full tilt. These four flagship projects aren’t isolated bets in separate verticals—they interlock, each one reinforcing the others in a genuine, self-compounding business loop. And what keeps that loop turning is relentless, disciplined engineering at the protocol layer.

Q2 2026 brought a sweeping wave of upgrades across the board. JustLend DAO shipped its SBM V2 isolated pool and plugged directly into Binance Wallet. SUN.io slashed energy costs with a router contract overhaul. BitTorrent made its boldest move yet, launching BTTInferGrid to stake a claim in decentralized AI compute. WINkLink kept scaling its price feed coverage. Individually, these read as incremental UX refinements; collectively, they build the deep, frictionless infrastructure that TRON’s massive liquidity pools depend on. 

This model creates a compounding flywheel effect: as circulating token supply tightens and persistent buyback demand accelerates, a self-reinforcing value loop takes shape—one designed to attract capital regardless of broader market sentiment. JST’s sustained burn program represents merely the opening act. Together with the revamped SUN buyback framework and the upcoming BTT and WIN repurchase schedules, TRON’s entire asset stack is now fully aligned around systematic supply deflation as a core growth strategy. 

TRON Eco Team Email:[email protected] Singapore Disclaimer: TheNewsCrypto does not endorse any content on this page. The content depicted in this Press Release does not represent any investment advice. TheNewsCrypto recommends our readers to make decisions based on their own research. TheNewsCrypto is not accountable for any damage or loss related to content, products, or services stated in this Press Release.

According to official announcements, HertzFlow, a perpetual contract trading infrastructure project backed by YZi Labs, has officially launched on the BNB Chain mainnet and simultaneously kicked off a one-week Genesis Vault mainnet pre-deposit campaign. Co-hosted by HertzFlow, United Stables (U), and the official team of WLFI ecosystem stablecoin USD1, the campaign allows users to deposit USD1 or U to build the mainnet’s initial liquidity. The USD1 vault has a $4.44 million cap, while the U vault is capped at $8.88 million; both have hard limits and operate on a first-come, first-served basis. Meanwhile, HertzFlow’s mainnet Merit points campaign is also live: liquidity providers who hold their deposits for 90 days will receive a 10x points bonus, and will gain corresponding actual returns once perpetual contract trading opens on August 24. With the mainnet launch and points campaign launching in tandem, HertzFlow aims to expand its perpetual contract trading infrastructure’s liquidity scale via early liquidity incentives and prepare for subsequent trading function rollouts.

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Buried in the European Commission's MiCA review consultation, open until August 31, is the question that decides whether global stablecoins can exist in Europe at all: should the regulation "continue to be open to multi-issuance models?" The bureaucratic phrasing conceals a two-year institutional brawl. On July 9, the European Parliament voted 390 to 86 to back multi-issuance with safeguards, rejecting a push from the European Systemic Risk Board, chaired by Christine Lagarde, to shut the practice down. The ECB side has not conceded. Nobody has, because the word at stake is fungible, and fungibility is the entire product.

Multi-issuance is how a global stablecoin squares MiCA with reality. Circle became the first global issuer authorized under MiCA, through France, in 2024; Paxos issues its Global Dollar through a Finnish entity-launches-in-the-eu). A USDC minted in Paris and a USDC minted in Boston are the same token at the same price, redeemable anywhere. Break that fungibility and you do not have a global dollar with an EU license. You have an EU token that happens to share a name with one.

Frankfurt's nightmare scenario is specificThe ECB's objection is a run-dynamics argument, stated plainly in its November Financial Stability Review: when an EU entity and a third-country entity jointly issue a fungible coin, the EU issuer may hold "insufficient reserve assets under the supervision of EU authorities to fulfil the combined redemption requests." The ESRB's version, from the Reuters reporting that surfaced the fight last October: in a run, "investors will choose to redeem in the EU, since it has the strongest safeguards." Europe wrote the world's most protective redemption rights, and those rights make its reserves the run's front door. Global holders converge on the redemption window with the best guarantee, and the guarantee is Europe's.

It is a coherent scenario, and the counterargument is equally concrete: reserves can be sized and ring-fenced to EU circulation, issuers rebalance across entities in practice, and the EBA told Reuters in November that existing MiCA tools, applied with safeguards, can carry the risk. The Commission's spokesperson was blunter still: MiCA already provides "a robust and proportionate framework." Market authorities versus monetary authorities, competitiveness versus sovereignty, with the file sitting in Brussels.

The formal machinery behind the fight matters because it fixes the calendar. The systemic-risk board's recommendation, adopted in September and published in October, asked the Commission to act by the end of 2025; a Council working document circulated to member states argued MiCA "lacks dedicated tools" for the multi-issuer model. The Commission instead folded the question into its scheduled review, published the consultation in May, and its report is due by mid-2027 with legislation after. Deadlines, in Brussels, are a form of answer: the ECB asked for action in months and received a process measured in years.

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The asymmetry underneath the argumentWhat gives the fight its edge is how little Europe has built on its own side of it. All MiCA-compliant euro stablecoins together total about €674 million, growing fast but standing at roughly a fifth of one percent of the dollar-stablecoin market. Circle's USDC alone circulates $77 billion. The ECB counts dollar-denominated coins at 99% of all stablecoin supply. Nineteen authorized issuers operate under MiCA, and the volume that matters still runs through two American brands. Restricting multi-issuance would not conjure euro coins into existence. It would ring-fence the dollar coins Europeans already use, with consequences the Ledger Insights analysis states precisely: even ring-fenced, local reserves could be drained in a crisis as holders elsewhere rush to redeem, and a hard split invites the one outcome everyone claims to oppose, the same coin trading at different prices inside and outside the EU.

The register beneath the fight is modest either way: 19 authorized issuers of e-money tokens under MiCA as of March, issuing 29 tokens, with Circle's EURC, at $430 million, the largest euro coin. The euro complex is growing at triple-digit rates, which Brussels cites as vindication, from a base that rounds to zero against the dollar complex, which Frankfurt cites as the emergency. Both citations are accurate. A regime one year into operation is being renegotiated over a market share it never had time to win, because the currency at stake is the one Europe prints.

What a safeguarded settlement would mean in practice is already legible in the consultation's questions. An EU treasurer's USDC would redeem through EU-authorized platforms, making exchanges and custodians the border checkpoints; issuers would carry reserve-rebalancing duties sized to EU circulation, monitored by the EBA, whose staff has already sketched the liquid-asset expectations; and the third-country entity on the other side of the fungibility promise would need a home regime Brussels recognizes. Global coins would survive with more paperwork and a standing dependence on EU-US regulatory relations, which, for an instrument marketed as borderless, is its own kind of verdict.

Tether's absence frames the stakes from the other side. The largest stablecoin on earth skipped MiCA entirely, was delisted for EEA users by Binance in March 2025, and is still being removed from platforms, with Revolut dropping USDT for EU customers this month. MiCA already fenced out the coin that would not comply. The current fight is over the ones that did comply, which is why it stings: the issuers being threatened with ring-fencing are the regulation's own success stories. Circle's policy chief Patrick Hansen makes exactly that point about the review: it "does not signal MiCA's failure" but the scheduled maintenance of a young regime.

The digital euro is standing just offstageNo reading of this fight is complete without the project the ECB actually wants. In October the Governing Council put dates on the digital euro: a pilot in mid-2027 and first issuance in 2029, conditional on the legislation passing. Executive Board member Piero Cipollone's speeches braid the threads together explicitly, warning that dollar stablecoins could gain a foothold in European retail payments while pitching the digital euro as the European public option. Every warning about multi-issuance run risk doubles as an exhibit in the digital euro's case file. That does not make the warnings wrong. It does explain the enthusiasm with which they are delivered.

Cipollone's February speech in Rome made the linkage nearly explicit, warning that dollar stablecoins could gain a foothold in European retail payments while presenting the digital euro as the public option built on European infrastructure. His earlier catalogue of stablecoin risks, runs, fire sales of reserve assets, ran through the same speeches that advanced the digital euro timeline. The two files are formally separate and rhetorically inseparable, and every institution in the fight understands the choreography.

Where this landsThe formal path is now fixed: consultation closes August 31, the Commission's review report is due by mid-2027, legislation follows. The Parliament's lopsided vote signals where the political center sits, and the likely landing zone is visible in the consultation's own questions, multi-issuance preserved, wrapped in safeguards, reserve rebalancing obligations, redemption gates through EU-authorized platforms, perhaps equivalence requirements for the third countries involved. The Skadden reading of the options lists exactly those mechanics, and the consultation's own safeguard questions add third-country equivalence regimes, the tool the EU reaches for when it wants leverage over foreign supervisors. That would put Washington in the loop: a GENIUS-regulated US issuer wanting EU fungibility would need its home regime blessed by Brussels, the mirror image of the comparability determinations the GENIUS Act demands of foreign issuers. Two blocs, two rulebooks, each holding a key to the other's market, is where global stablecoin regulation was always going to land.

The technical question, who redeems what, where, in a run, is real, and answerable with arithmetic and ring-fencing. The political question underneath is harder: whether Europe can live with the dollar's private rails winning on European soil under a European rulebook. The GENIUS Act settled America's stablecoin fight in a summer. Europe, characteristically, has scheduled its own for 2027, and in the meantime every euro of growth in that €674 million tells Frankfurt time is not neutral. Fungibility will probably survive the review; a 390-to-86 Parliament and a Commission on record that MiCA suffices are hard to overturn with a scenario, however coherent. What fungibility now carries is a price tag, denominated in safeguards, reserve rebalancing duties, redemption gates, equivalence tests, and the invoice arrives with the 2027 legislation. Europe regulated stablecoins first and is discovering the sequel obligation: regulating first means renegotiating first, in public, with the market watching the drafting.

The U.S. Department of the Treasury has issued a notice of proposed rulemaking, soliciting public comments on the payment stablecoin regulatory framework under Section 3 of the GENIUS Act. Per the legislation, starting January 18, 2027, any individual issuing payment stablecoins in the U.S. must obtain a federal or state license; digital asset service providers are prohibited from offering foreign-issued payment stablecoins unless the foreign issuer has the technical capability to comply with U.S. laws and reciprocal arrangements. Starting July 18, 2028, all payment stablecoins that service providers offer or sell to persons within the U.S. must be issued by a licensed issuer. Treasury Secretary Scott Bessent stated, “Trump and Congress passed the GENIUS Act, establishing a landmark framework and clear rules for payment stablecoins, and the Treasury is moving quickly to implement it.” The core of this proposed rule is to define the specific meanings of “issuing payment stablecoins in the U.S.” and “offering or selling to persons within the U.S.,” clarifying for the industry when a license is required and how to operate compliantly in the U.S. market. The public may submit comments within 60 days of the notice’s publication in the Federal Register. This rulemaking builds on a prior notice issued by the Treasury last September, marking the transition of stablecoin regulation from a framework act to the implementation of enforceable rules, which will directly impact the compliance paths of major stablecoin issuers including USDC and USDT, as well as trading platforms.

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Harmony has proposed rolling back its blockchain to two Aug. 11 checkpoints, a recovery plan that would discard more than 109,000 regular transactions as the network removes ONE created through a forged mint.

Summary

Harmony plans to roll back its blockchain to two checkpoints from Aug. 11 following a forged ONE mint. More than 109,000 regular transactions and 315 staking transactions would be discarded under the recovery plan. One forged mint wallet moved 2.385 trillion ONE through 477 successful transfers in 106 seconds. Harmony said exchanges, bridges and law enforcement are assisting with the investigation. According to Harmony’s latest incident update on X, validators would retain shard 0 block 92,730,034 and shard 1 block 94,978,278, both recorded at 11:25:37 p.m. UTC on Aug. 11, before restarting the network from replacement databases built around those checkpoints.

Under the plan, new blocks would begin at heights 92,730,035 on shard 0 and 94,978,279 on shard 1. Harmony said client version v2026.1.2 has been configured to reject the abnormal block hashes linked to the incident, preventing validators from accepting the affected chain history after the restart.

The first confirmed forged mint reached shard 0 at block 92,730,036, according to the network. Block 92,730,035 contained no regular or staking transactions, incoming receipts or gas usage, while its state remained unchanged from block 92,730,034.

Harmony said it selected block 92,730,034 to provide a one-block safety buffer. The database, recovery scripts and validator procedures had also been prepared and reviewed around that block, while changing the checkpoint at a late stage could leave validators working from different recovery targets.

Shard 1 was not where the forged mint occurred. Harmony said its corresponding checkpoint was included as a precaution using the same timestamp.

Harmony rollback would use replacement databases The recovery plan would replace the affected shard databases instead of using Harmony’s existing in-place rewind function.

According to the team, the network’s –revert function mainly moves chain heads and does not fully clear later receipts, indexes, snapshots and cross-shard information. Leaving some of that data behind could preserve an attack route or cause validators to reach different states.

Harmony said a replacement database gives validators a single reviewed state from which to resume consensus.

The team also considered burning or repairing the forged ONE directly, but said the tokens had already passed through exchanges, decentralized exchange pools, contracts and numerous wallets. Removing assets at individual destinations could therefore affect funds belonging to unrelated users.

A blacklist was rejected because it would leave the forged supply in existence while potentially restricting wallets holding legitimate assets. Selectively replaying transactions was also ruled out because the state of the replacement chain would differ from the discarded chain, meaning identical transactions could produce different results.

Token migration was another option reviewed by Harmony, but the team said it would cause substantially more disruption.

The decision comes after another blockchain faced a similar choice following an exploit. In December 2025, Flow revised rollback plans following a $3.9 million execution-layer exploit, dropping an initial full rollback proposal in favor of targeted token burns after bridge operators and other participants raised concerns about the effect on legitimate activity. crypto.news reported at the time that Flow also planned a phased network restart and restrictions on flagged accounts.

More than 109,000 transactions face removal Harmony’s rollback would discard all blocks created after the selected checkpoints, including regular transactions made by users during the affected period.

To measure the impact, the team built a shard 0 archive covering blocks 92,730,035 through 92,871,662. The dataset contained 141,628 consecutive blocks, 109,126 regular transactions and 315 staking transactions, with 109,441 exact transaction-to-receipt matches.

Harmony said it checked parent-hash continuity and receipt completeness throughout the archived range.

Automated activity accounted for most of the transaction count. Of the 109,126 regular transactions, 104,545, or 95.80%, were classified as automated. DEX automation represented 99,863 transactions, including 75,430 successful swaps and 11,804 failed bot attempts.

As a result, Harmony cautioned that the number of discarded transactions should not be treated as the number of affected users.

The team also examined whether some regular transactions could be safely restored after the rollback. Only 22 were simple native transfers without an obvious dependency in the available data, but Harmony said even those could not automatically be considered safe for replay.

Another 860 native transfers raised questions involving balances, funding sources, nonces or later spending. A further 80,630 transactions depended on contract or blockchain state, while 27,614 were failed transactions, incident-linked activity or movements involving exchanges, bridges and consolidation routes.

All 315 staking transactions also depend on chain and epoch state, according to the update.

Harmony said balances, nonces, token approvals, swap deadlines, liquidity pool reserves and staking conditions would change once the replacement chain starts. Under that altered state, a transaction that previously failed could succeed, while a swap, approval or staking transaction could generate a different outcome.

Full EVM traces are also unavailable through the RPC data used in the review, leaving internal contract transfers and storage changes subject to application-specific analysis.

Forged ONE moved through exchanges, pools and bridges The investigation has separately mapped the movement of the newly created ONE across the network.

According to Harmony, one wallet involved in the forged mint attempted 534 transfers of 5 billion ONE each within 106 seconds. A total of 477 transfers succeeded, moving 2.385 trillion ONE.

Investigators created a time-ordered graph beginning with all wallets associated with the forged mints, separating transactions signed by those wallets from successful transfers, failed attempts and subsequent movements through other addresses.

The traced activity was checked against blocks, transaction receipts and balances through shard 0 block 92,805,850. Harmony said the funds reached standalone wallets, exchange accounts, DEX routers and pools, liquidity provider positions, bridge contracts, wrapped ONE, staking wallets and high-volume service wallets.

When forged ONE became mixed with other assets, the tracing model followed transfers chronologically and capped the amount attributed to the forged tokens at each wallet’s available balance. According to the team, the method was intended to prevent the same tokens from being counted repeatedly as they moved between addresses.

An earlier model traced more than 99.9% of the forged ONE to a wallet or service boundary, while a later version reconciled almost all of the amount across those boundaries and transaction fees at the selected cutoff.

Harmony stressed that route coverage does not mean investigators can identify the individuals controlling every destination. Exchange accounts, pools, contracts and other service clusters can contain funds belonging to many users.

The amount that can be safely destroyed is smaller still, according to the team. Forged tokens left untouched in a standalone wallet may be possible to isolate, while ONE that entered an exchange wallet, liquidity pool, bridge, staking position or another shared balance could no longer be removed in full without risking unrelated assets.

A comparable problem has surfaced in other token-minting attacks. In June, Humanity Protocol disclosed that compromised administrative keys allowed attackers to take control of bridge infrastructure and mint additional H tokens on BNB Smart Chain. The protocol halted affected bridge operations and coordinated with exchanges and law enforcement while investigators tracked the stolen assets.

Investigation continues alongside validator recovery Harmony said it has made initial progress toward tracing the hacker and is working with exchanges, bridges and law enforcement to preserve records and continue the investigation.

An independent third-party security company also reviewed the incident separately and corroborated the forged mint and the main findings from the fund-flow analysis, according to the network.

Harmony has dealt with a major cross-chain security incident before. Its Horizon Bridge lost about $100 million in June 2022 after private keys controlling the bridge were compromised. The project subsequently worked with exchanges, law enforcement, and blockchain analytics firms to identify the attacker, while raising its hacker bounty to $10 million.

Funds from that attack continued moving months later. In January 2023, on-chain investigators tracked stolen ETH through hundreds of addresses, while Binance and Huobi froze accounts linked to the movement and recovered 124 BTC.

For the current incident, Harmony said it is working with exchanges and bridges to assess the effect of discarding post-checkpoint activity and determine how affected parties can be handled. The team said all blocks after the checkpoints would be removed under the proposed recovery, including regular transactions that were unrelated to the forged mint.

11h35 ▪ 7 min read ▪ by Luc Jose A.

Summarize this article with:

Rarity could soon no longer be the exclusive domain of bitcoin. According to projections published by Grayscale, the annual growth of Ethereum and Solana supply could fall below gold’s 1.8% by 2031. Indeed, several reforms are currently being debated, including EIP-8361 on Ethereum and SIMD-0550 and SIMD-0553 on Solana. If adopted, ETH’s annual inflation could drop to 0.4%, compared to 1.1% for SOL. This development is likely to reshuffle the cards between rarity, staking yield, and valuation of these two cryptos.

In brief According to a Grayscale study, new technical proposals could reduce Ethereum’s annual inflation to 0.4% and Solana’s to 1.1%, making them rarer than physical gold. The EIP-8361 proposal plans to burn an increasing share of validator rewards as staking increases, bringing ETH issuance back to Bitcoin’s level. By doubling the emission reduction rate via the SIMD-0550 proposal, Solana considerably accelerates its path to a tightly capped supply. Although this tightening reduces direct returns paid to stakers and ETFs, the increased rarity could support token prices and transform these altcoins into leading stores of value. The overhaul of Ethereum’s emission model by EIP-8361 On August 4th, six researchers from the ecosystem, including Justin Drake of the Ethereum Foundation, formally submitted proposal EIP-8361, entitled “Tapered Issuance Burn”. This text aims to fix what the authors call artificial overissuance in the current economic model of the network. Today, validators can still claim a staking yield close to 1.5% per year, even in a scenario where almost all ETH tokens would be locked in the protocol.

According to the diagnosis made by the researchers, this ceiling maintains excessive monetary creation without this corresponding to a real need for operational security. EIP-8361 thus introduces a dynamic mechanism designed to burn an increasingly large share of rewards as the ratio of staked ETH increases, planning a transition over 18 months to burn all rewards once about 60.25 million ETH, or half of the total supply, will be staked.

According to the quantitative models integrated in the proposal and analyzed by Grayscale, Ethereum’s annual issuance would peak around 0.5% at a staking level of 20%, before starting a downward trajectory towards zero as the network approaches the 50% plateau. In its central scenario projected for 2031, the asset manager estimates that ETH’s annual inflation would fall to about 0.4%, thus matching the emission rate anticipated for bitcoin over the same period.

This structural change does not go unnoticed by the institutional financial sector. Grayscale also recalls that its own ETHE spot fund began earlier this year distributing staking yields to its shareholders, constituting the first crypto spot exchange-traded product (ETP) in the United States to implement such a mechanism.

Several fundamental numerical indicators summarize the technical and financial impact of this update for the Ethereum network :

60.25 million ETH : the staking threshold from which 100% of the emission dedicated to rewards will be burned after the 18-month transition ; 0.4% : the theoretical annual inflation rate of ETH supply projected by Grayscale by 2031, equaling that of bitcoin ; 0.5% : the peak that the annual issuance would barely exceed when the network’s staking rate is around 20%. Solana: accelerating supply reduction via SIMD-0550 and SIMD-0553 On its side, Solana follows a separate disinflationary trajectory, centered on improvement documents SIMD-0550 and SIMD-0553. Currently set at about 3.695% per year, this crypto’s inflation rate follows an initial schedule predicting a 15% reduction per year until reaching a long-term floor set at 1.5%. The SIMD-0550 project proposes to accelerate this process by doubling the annual reduction rate, compressing several years of gradual monetary adjustment into a much shorter time frame.

In parallel, the SIMD-0553 proposal modifies transaction fee management to increase the proportion of SOL permanently destroyed, preventing these cryptos from being re-injected to validators. However, Grayscale’s analysis shows that the additional amount of SOL burned via SIMD-0553 remains modest compared to the daily issuance volume under current network conditions, confirming that SIMD-0550 is the real driver of the projected drop to 1.1% by 2031.

This dual technical initiative does not enjoy a fully homogeneous consensus regarding its time feasibility. As Grayscale’s research note explicitly points out, these emission trajectories rely on strict assumptions of immediate implementation without alteration of other operational parameters, a condition considered unlikely to be realized exactly as such in reality.

The political and community dimension plays a key role here. In a recent intervention, Zach Pandl, Grayscale’s research director, qualified the comparative progress of the two networks. He then stated: “Solana’s plan enjoys broader community support and has better chances of being implemented than its Ethereum equivalent”. This divergence in the degree of buy-in from key players proves decisive for investors seeking to incorporate this future rarity in their valuation models.

The economic trade-offs of enhanced rarity The evolution of these emission models places community governance at the heart of the strategic choices of each crypto ecosystem. Although mathematical models anticipate a marked compression of token creation, moving from proposal to effective implementation requires the buy-in of the majority of validation actors.

The difference in support highlighted by Grayscale between Ethereum and Solana illustrates how political and economic considerations influence the adoption of technical updates. On the market side, establishing rarity greater than that of gold marks a stage in the structuring of major altcoins as mature financial assets, capable of competing with traditional safe havens against global inflationary pressures.

Economically, the shift toward algorithmic enhanced rarity imposes a complex trade-off between the unit value of the asset and the gross yield perceived by network participants. By reducing the pace of new token issuance, these reforms de facto decrease nominal income paid to validators and holders of staked crypto ETF shares.

Zach Pandl notes, however, that a smaller circulating supply could support token prices in the market, thus offsetting the mechanical decrease in staking yields. The final equation will depend on the ecosystems’ ability to maintain the security of their consensus while convincing staking actors to accept lower direct rewards in exchange for a theoretically rarer and more robust underlying asset against traditional monetary pressures.

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Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

Binance has overtaken CME Group in Bitcoin futures open interest for the first time since late 2023, holding roughly 148,500 BTC against CME’s 102,840. The reversal unwinds two years of institutional dominance narrative and raises questions about whether traditional finance is retreating from crypto derivatives or simply relocating.

Summary

Binance has surpassed CME Group in Bitcoin futures open interest for the first time since late 2023, holding roughly 148,500 BTC ($9.6 billion) compared with CME’s 102,840 BTC ($6.7 billion). CME open interest has fallen to its lowest level since February 2024 after five consecutive months of decline, driven largely by the unwinding of the cash and carry basis trade. The annualized Bitcoin futures basis has compressed to roughly 3%, falling below the 3.8% yield on two year U.S. Treasuries, eliminating the arbitrage incentive that fueled institutional CME positioning. Market makers and hedge funds are migrating toward offshore perpetual contracts on Binance, Bybit, and OKX, while a parallel regulatory shift is bringing perpetual futures onshore through CFTC approved venues like Kalshi. The reversal raises fundamental questions about whether the “institutional adoption” narrative built on CME dominance was always more fragile than it appeared, and whether traditional finance is retreating or simply relocating. For two years, a single chart told the story of Bitcoin’s institutional coming of age. CME Group, the Chicago exchange where pension funds, sovereign wealth managers, and hedge funds trade everything from corn to crude oil, held more Bitcoin futures open interest than any venue on Earth. That lead over Binance, the offshore exchange synonymous with retail speculation, became the most cited proof point for the “institutions are here” thesis.

That chart has now flipped. Binance holds roughly 148,500 BTC in open interest, worth approximately $9.6 billion. CME has dropped to around 102,840 BTC, or $6.7 billion, its lowest reading since February 2024. The gap is not narrow. It is roughly 45,000 BTC wide and growing.

The shift did not arrive overnight. CME open interest has fallen for five consecutive months, accelerating through the second quarter of 2026 as the profitability of the basis trade collapsed and institutional appetites shifted. What looked like a permanent structural change in Bitcoin market microstructure may have been, at least in part, an arbitrage play dressed in institutional clothing.

Understanding what happened, why it matters, and where it leads requires following the money through a maze of basis spreads, regulatory upheaval, and the evolving definition of what “institutional” even means in crypto.

The basis trade machine and how it broke The centerpiece of CME’s rise to the top of the Bitcoin futures leaderboard was not directional conviction. It was the cash and carry basis trade, a delta neutral strategy older than most of the people trading it.

The mechanics are straightforward. Buy spot Bitcoin, or more commonly after January 2024, buy shares of a spot Bitcoin ETF like BlackRock’s IBIT. Simultaneously sell Bitcoin futures on CME at a premium to the spot price. The difference between the futures price and the spot price, the basis, represents annualized yield. When Bitcoin was rallying through 2024 and the first half of 2025, that basis regularly exceeded 15% to 20%, dwarfing anything available in traditional fixed income.

Hedge funds, proprietary trading desks, and institutional players rotated capital into this trade at scale. According to CFTC Commitments of Traders data, leveraged funds held persistent net short positions on CME Bitcoin futures throughout most of 2024 and 2025, the signature footprint of the basis trade. They were not bearish on Bitcoin. They were harvesting yield from the contango.

The problem is that the basis trade is self limiting. As more capital enters, competition compresses the spread. As Bitcoin’s price declined from its highs above $120,000 to the $60,000 to $80,000 range through the first half of 2026, futures premiums collapsed alongside it. By mid 2026, the annualized three month basis on CME had fallen to roughly 3%, below the 3.8% yield on two year U.S. Treasuries.

At that point, the math stopped working. Why lock up capital in a trade that earns less than risk free government debt, while carrying counterparty risk, margin requirements, and the operational complexity of rolling quarterly futures contracts? The answer, for most institutional desks, was to unwind.

The unwinding was not panic. It was arithmetic. The Block reported that CME Bitcoin futures activity slumped to a 14 month low in April 2026, with average daily open interest falling below $8 billion and daily trading volume dropping under $3 billion. Each month since has continued the decline.

The scale of the exodus is visible in the raw numbers. CME began 2026 with approximately 175,000 BTC in open interest. By April, that figure had dropped to roughly 120,000 BTC. By August, it sat near 103,000 BTC, a decline of more than 40% in eight months. For context, the open interest that CME lost over this period, roughly 72,000 BTC, represents more than $4.5 billion in notional value at current prices. That is not a rounding error. It is a structural repricing of where institutional derivatives capital lives.

Where the money went The capital that exited CME did not vanish from the Bitcoin derivatives market. Some returned to direct spot holdings, simplifying portfolios and removing the futures leg entirely. But a meaningful share migrated to offshore perpetual contracts, the instrument that dominates crypto derivatives trading and has for years.

Perpetual futures, which have no expiration date and use a funding rate mechanism to stay tethered to spot prices, account for roughly 90% of all crypto derivatives volume globally. Binance alone controls approximately 33% of the centralized perpetual futures market, followed by OKX and Bybit. In the first quarter of 2026, Binance tightened its grip even as overall crypto trading volume declined, capturing a 40% share of perpetual futures activity.

The appeal for institutional market makers is not mysterious. Perpetuals offer continuous liquidity without the friction of quarterly roll dates. Margin requirements on offshore exchanges are more flexible. And for desks that are genuinely market neutral, providing liquidity on both sides, the funding rate on perpetuals can generate yield similar to the old basis trade, often with better capital efficiency.

What has changed is not the existence of these benefits, which offshore venues have offered for years, but the willingness of institutional participants to act on them. As the basis trade on CME became unprofitable and the regulatory climate around perpetuals began to shift, the stigma of trading on offshore venues appears to have softened for a segment of the institutional market.

This does not mean Goldman Sachs is opening a Binance account. The migration is concentrated among crypto native market makers, quantitative trading firms, and smaller hedge funds that operate across jurisdictions. Many of these firms are registered in Singapore, Dubai, or the British Virgin Islands and face no regulatory barrier to trading on Binance or similar platforms. For them, the question was never whether they could trade offshore but whether the economics justified staying on CME. Once the basis spread vanished, the answer changed.

These participants were a significant share of CME’s open interest, and their departure has been measurable. CoinGecko data from the first quarter of 2026 shows that Binance and OKX together dominate the perpetual futures landscape, with decentralized perpetual exchanges also nearly quadrupling their share of open interest year over year, adding another layer of competition that CME cannot match.

CME’s countermove and why 24/7 was not enough CME did not sit idle while its Bitcoin futures franchise eroded. On May 29, 2026, the exchange launched 24/7 trading for cryptocurrency futures and options, eliminating the weekend gap that had been a persistent structural disadvantage against crypto native venues.

The inaugural weekend saw more than 7,200 contracts traded, roughly $50 million in notional value. Average daily volume across CME’s crypto complex reached 407,200 contracts, up 46% year over year. The exchange also introduced Bitcoin volatility futures on June 1, expanding the toolkit available to institutional traders.

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— crypto.news (@cryptodotnews) April 27, 2026 These moves addressed genuine pain points. Corporate treasury desks, asset managers, and hedge funds running Bitcoin positions had long struggled with the inability to adjust hedges during weekends when spot markets kept moving. The CME gap, a visible discontinuity in Monday’s opening price relative to Friday’s close, was a real source of basis risk.

But 24/7 trading arrived too late to reverse the basis trade exodus. The open interest decline continued through June, July, and August, suggesting that the forces driving capital away from CME were more fundamental than trading hours. The basis trade collapse was a yield problem, not an access problem, and extending trading hours does not restore the contango.

The perpetual futures revolution comes onshore While CME was losing open interest to offshore venues, a parallel regulatory development was reshaping the competitive landscape from the other direction. On May 29, 2026, the same day CME went 24/7, the CFTC approved Kalshi’s BTCPERP contract, the first Bitcoin perpetual futures product listed on a regulated U.S. exchange.

The approval represented a watershed moment for American crypto derivatives trading. Perpetual futures had existed exclusively offshore for nearly a decade, generating trillions of dollars in annual volume on exchanges beyond the reach of U.S. regulators. The CFTC’s decision to allow them onshore, initially through Kalshi and with additional applications from Coinbase and others in the pipeline, opened a new front in the competition for institutional flow.

CME’s response was to sue. The exchange filed a federal lawsuit against the CFTC and its chairman, arguing that the agency had overstepped its authority and that perpetual futures should be classified as swaps, not futures, which would subject them to different regulatory treatment and potentially restrict their availability. The legal argument centers on whether a contract that never expires and settles through continuous funding rate payments meets the statutory definition of a futures contract or whether it more closely resembles a swap, which carries heavier compliance obligations including mandatory clearing and reporting. The case remains pending, and its outcome could reshape the regulatory framework for crypto derivatives in the United States for years to come.

Kalshi’s early traction has been notable. Within weeks of launch, the platform generated more than $5.5 billion in cumulative perpetual futures volume. It subsequently added Ethereum, Solana, and XRP perpetuals, broadening its product lineup beyond Bitcoin.

The implications for CME are significant. If regulated perpetual futures gain a foothold in the United States, they could siphon volume not only from offshore venues but from CME’s own quarterly futures contracts. The instrument that CME is fighting in court may ultimately become the instrument that defines the next phase of institutional crypto derivatives trading.

Was institutional adoption ever what it seemed? The Binance CME flip forces a reexamination of the “institutional adoption” narrative that has underpinned much of the bullish thesis for Bitcoin since 2024. That narrative rested on several pillars: the approval of spot Bitcoin ETFs, the growth of CME open interest, the expansion of custody solutions from banks like Citi, and the entry of traditional brokerages like Charles Schwab into crypto trading.

Each of those pillars remains standing. Spot Bitcoin ETFs control more than $100 billion in assets, even as the institutional rotation into other products accelerates. Schwab launched Bitcoin and Ethereum trading on its $13 trillion platform in May 2026. Citi is building $30 trillion custody rails scheduled for deployment later this year.

But the CME open interest decline reveals that a meaningful portion of what was counted as “institutional demand” was actually basis arbitrage, mechanically long spot and short futures, with no directional view on Bitcoin’s price. When the basis compressed, the demand disappeared.

This distinction matters for how markets interpret institutional flow. A pension fund buying IBIT because its investment committee believes in Bitcoin as a long term asset is fundamentally different from a prop trading desk buying IBIT and shorting CME futures to harvest a 15% annualized spread. Both show up as ETF inflows. Both contribute to CME open interest. But only one represents genuine conviction in Bitcoin’s value proposition.

The first half of 2026 exposed this ambiguity. U.S. spot Bitcoin ETFs recorded $5.4 billion in net outflows, the first negative half year since the products launched in January 2024. A significant portion of those outflows traced directly to basis trade unwinding, as desks closed the spot leg alongside the futures leg. The headline, that institutions were dumping Bitcoin, obscured the more nuanced reality that arbitrageurs were simply closing a trade that no longer paid.

The opposing case: why this reversal may be temporary Not everyone reads the Binance CME flip as a structural shift. Several factors could reverse the trend and restore CME to the top of the open interest rankings within months.

First, the basis trade is cyclical. When Bitcoin enters its next sustained rally and futures premiums expand back into double digit contango, the cash and carry trade will become profitable again. Institutional capital will return to CME for the same reason it arrived: risk adjusted yield. A move above $100,000 in spot Bitcoin, combined with renewed ETF inflows, could compress the timeline for this reversal to weeks rather than months.

Second, CME’s 24/7 trading is still new. The exchange needs time to build liquidity around the clock, particularly on weekends when crypto markets are often most volatile. As that liquidity deepens, the structural advantages of trading on a CFTC regulated exchange, counterparty clearing through CME Clearing, standardized margin, and regulatory certainty, may draw institutional flow back.

Third, the regulatory crackdown on offshore exchanges could intensify. Binance has operated under scrutiny from U.S., European, and Asian regulators for years. Any enforcement action, licensing restriction, or counterparty event affecting Binance could rapidly shift open interest back toward regulated venues.

The invalidation criteria for the structural shift thesis are clear: if Bitcoin’s three month annualized basis on CME returns above 8% for a sustained period, if CME regains the open interest lead from Binance, or if U.S. spot ETF flows turn decisively positive again, the reversal narrative loses its foundation.

What the hedge fund positioning data reveals One of the most telling signals in the CME data is not the decline in overall open interest but the shift in how hedge funds are positioned. For most of 2024 and 2025, leveraged funds on CME held persistent net short positions, the signature of the basis trade. In recent weeks, CFTC Commitments of Traders data shows that hedge funds have flipped to a net long position, a rare and significant shift.

This flip suggests that the remaining institutional participants on CME are no longer running delta neutral arbitrage. They are taking directional bets on Bitcoin’s price. The nature of institutional demand on CME is changing from yield extraction to conviction, which is arguably a healthier and more durable form of institutional participation.

The flip also means that the next phase of CME open interest growth, when it comes, may be driven by genuine directional flow rather than arbitrage. This could produce a CME open interest profile that is smaller in absolute terms but more meaningful as a signal of institutional sentiment.

Whether this transition is complete or merely in its early stages remains unclear. The net long positioning could reverse if Bitcoin’s price declines further, triggering stop losses and margin calls among the remaining directional traders. But for now, the data suggests a qualitative change in the type of institution that trades Bitcoin futures on CME.

There is a parallel signal worth noting. JPMorgan analysts have observed that institutional participation in perpetual futures skews heavily toward speculative trading instead of hedging, a dynamic that differs from traditional commodity futures markets where commercial hedgers anchor open interest. If CME’s remaining participants are increasingly directional while perpetual venues remain speculative, the two markets may be evolving toward different functions entirely: CME as a venue for macro conviction bets, and perpetuals as the infrastructure for short term trading and market making.

What to watch The Binance CME flip is not the end of institutional Bitcoin adoption. It is, however, the end of a specific chapter in which CME open interest served as the primary scoreboard for measuring it.

Several developments will determine whether this shift is temporary or permanent. The Bitcoin futures basis is the single most important variable: if annualized yields return above 8% to 10%, expect the basis trade and the CME open interest it generates to come back quickly. The trajectory of U.S. spot ETF flows will signal whether institutional appetite for Bitcoin exposure, independent of arbitrage, is growing or contracting.

The onshore perpetual futures market deserves close attention. Kalshi’s volume trajectory, CME’s lawsuit against the CFTC, and whether additional regulated venues launch competing perpetual products will shape the competitive landscape. If perpetuals win regulatory acceptance in the United States, the quarterly futures contract that made CME the center of institutional crypto trading may become an increasingly niche product.

Binance’s regulatory status is equally critical. The exchange is operating under a monitored compliance agreement with U.S. authorities and faces ongoing scrutiny in multiple jurisdictions. Any deterioration in Binance’s regulatory position could rapidly redistribute open interest toward CME and other regulated venues.

Finally, watch the CFTC Commitments of Traders data for shifts in hedge fund positioning. The recent flip from net short to net long is a meaningful signal, but it needs confirmation over multiple reporting periods to constitute a trend.

The market structure that emerges from this transition will look different from what came before. A world in which CME, Kalshi, Binance, and decentralized perpetual protocols each serve distinct segments of the institutional and retail spectrum is more fragmented but potentially more resilient than one in which a single venue dominates. The risk is that fragmentation reduces transparency, making it harder for regulators and market participants alike to gauge total leverage in the system.

The story of Bitcoin’s institutional market is not the story of one exchange winning and another losing. It is the story of capital finding the most efficient venue for each strategy at each moment. Right now, that search is pulling capital away from CME and toward offshore perpetuals, onshore innovations, and direct spot holdings. Where it goes next depends on basis spreads, regulation, and whether the next Bitcoin rally reignites the machine that made CME dominant in the first place.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or trading advice. Cryptocurrency markets carry significant risk, and past performance does not guarantee future results. Always conduct your own research before making investment decisions. Published August 16, 2026.

SafePal’s latest disclosure hits a less obvious layer of crypto infrastructure: the commerce systems around wallet sales rather than the custody layer itself. The wallet provider confirmed that order information tied to nearly 40,000 customers was exposed, according to the original report.

SafePal has not disclosed whether the records were held on its own systems or by a third-party fulfillment vendor. That detail will matter to customers because a logistics partner breach can be just as dangerous as a compromise of the wallet maker’s internal database.

What did not move is just as important. SafePal said private keys, seed phrases, and crypto assets were not compromised. That distinction defines the risk here: this is not a failure of the signing device or the wallet’s cryptographic design, but of the operational layer that handles purchases and customer data.

Order records can still create a real exposure. Names, shipping addresses, purchase history, and contact details are the kind of data that feeds targeted phishing, fake delivery notices, and social engineering attempts. An attacker does not need a seed phrase if they can convince a customer to enter it into a convincing lookalike interface built from leaked order context.

AUTHOR

Kester is an experienced freelance content writer. His focus is primarily on blockchain technology and cryptocurrency. One might even refer to him as a "blockchain enthusiast." He has been following advancements in the crypto and blockchain area for several years, researching and writing his insights in the media. In addition to being a skilled content writer, Mushumir is also knowledgeable in SEO and digital marketing. He aspires to succeed as a content creator in the digital realm, dealing with customers in the finance and tech industries to generate traffic through engaging taglines and content. Mushumir enjoys traveling, reading, and playing cricket when he is not writing. He now works as a news and article writer for BlockchainReporter.

Norway's $2.4 trillion sovereign wealth fund held a record 11,549 BTC in indirect bitcoin exposure at the end of the first half of 2026, according to K33 Research, marking the sixth consecutive reporting period of growth and the fund's first time in five-digit BTC territory.

Norges Bank Investment Management, which manages the Government Pension Fund Global on behalf of Norway's Ministry of Finance, holds no bitcoin directly. K33's methodology instead multiplies NBIM's ownership stake in any publicly traded company holding bitcoin on its balance sheet by that company's BTC holdings, then sums the result across the fund's entire equity portfolio. Exposure rose 21.2% during the first half of 2026 and 60.5% over the trailing twelve months, valued at roughly $725 million. Strategy alone accounted for 9,914 BTC-equivalent — 85.8% of NBIM's total exposure — up from 7,801 BTC at the end of 2025, an increase that on its own exceeded the fund's entire net portfolio-wide gain for the period, meaning reductions elsewhere partially offset Strategy's continued pull. Metaplanet ranked a distant second at 671 BTC-equivalent, followed by MARA Holdings, Coinbase, and Block. Despite the record dollar figure, bitcoin-linked holdings still represent just 0.03% of NBIM's total assets under management, down from 0.04% at the end of 2025, since the fund's overall assets have grown faster than its bitcoin-linked exposure.

K33 head of research Vetle Lunde was explicit that the growth doesn't reflect a deliberate allocation decision by Norway's fund managers — it's a byproduct of NBIM tracking broad global equity indices that increasingly include bitcoin treasury companies, not a bet anyone at Norges Bank chose to place.

In January 2025, we reported that NBIM's indirect exposure stood at 3,821 BTC worth about $356.7 million, cited then as one data point in a wider divide over sovereign bitcoin exposure — the European Central Bank rejecting bitcoin reserves outright even as Norway's fund passively accumulated exposure through its equity book. Eighteen months later, that exposure has more than tripled in BTC terms, entirely through the same passive mechanism, with no change in strategy required.

The concentration here is the real story, not the headline total. With Strategy responsible for nearly 86% of NBIM's bitcoin-linked exposure, the fund's bitcoin narrative is now largely a proxy for one company's balance sheet decisions — and Strategy's stock has not been a stable proxy to be tied to. Blockhead reported in June that Strategy's shares fell below $100 for the first time in two years, erasing roughly 81% of the stock's peak value as bitcoin's own price slid. NBIM's BTC-equivalent count keeps climbing regardless of Strategy's share price, since K33's methodology tracks bitcoin held on the balance sheet rather than market capitalization — but the dollar value of that exposure, and Strategy's own weight inside NBIM's broader equity portfolio, moves with a stock that has proven considerably more volatile than the passive index logic driving the fund's involvement in the first place.

JPMorgan Chase now lets institutional clients pledge Bitcoin and Ethereum as collateral for U.S. dollar loans, placing crypto on the same ledger as Treasuries and blue-chip equities. For a bank whose CEO spent years calling Bitcoin a fraud, the reversal rewires how capital moves between Wall Street and decentralized networks, and forces every competitor to answer the same question.

Summary

JPMorgan Chase launched a program in March 2026 allowing institutional clients to pledge Bitcoin and Ethereum as collateral for U.S. dollar loans through its Kinexys digital assets platform, with custodians including Fidelity Digital Assets and Coinbase Custody holding the pledged tokens.
The bank applies estimated haircuts of 30% to 50% on crypto collateral, meaning a client pledging $100,000 in Bitcoin may receive only $50,000 to $70,000 in financing, with real-time oracle feeds from providers such as Chainlink adjusting valuations continuously.
This move follows JPMorgan’s filing of bitcoin-backed structured notes tied to BlackRock’s IBIT exchange-traded fund, offering leveraged returns of up to 1.5x and potential gains of 16% if IBIT hits predetermined targets by December 2026.
Goldman Sachs, Citigroup, and Bank of America are building a tokenized deposit network launching in the first half of 2027, suggesting JPMorgan’s collateral program is the opening act of a broader Wall Street integration.
The cultural shift is stark: CEO Jamie Dimon once called Bitcoin a “hyped-up fraud” and a “pet rock,” yet the bank now treats Bitcoin identically to stocks, bonds, and gold on its collateral schedule.

The pledged assets never leave cold storage at third-party custodians such as Fidelity Digital Assets and Coinbase Custody, but the dollars they unlock are as real as any credit line backed by government paper. JPMorgan Chase opened the program in March 2026 through its Kinexys digital assets platform, and the competitive cascade it triggered is already reshaping the banking industry.

From “pet rock” to pledgeable asset
Jamie Dimon’s public disdain for Bitcoin has been a recurring fixture of earnings calls and conference panels since at least 2017. He called it a fraud, compared it to tulip mania, and warned employees that trading it would be grounds for termination. Yet JPMorgan’s institutional clients kept asking for exposure, and the bank kept quietly building infrastructure to serve that demand. The Kinexys platform, formerly known as Onyx, now processes more than $5 billion in daily transaction volume and has handled over $3 trillion in cumulative settlements since its launch. Adding crypto collateral to that engine was less a philosophical U-turn and more the logical next step for a system already designed to move tokenized value at scale.

The internal evolution at JPMorgan tells a more nuanced story than the public rhetoric suggests. While Dimon was calling Bitcoin a fraud in shareholder letters, the bank’s technology division was hiring blockchain engineers, filing patents on tokenized settlement systems, and building the infrastructure that would become Kinexys. The digital assets team operated with a degree of autonomy that allowed it to build production-grade systems while the CEO continued to express skepticism on CNBC. That dynamic, where the engineering side of a bank runs ahead of the executive messaging, is common in large financial institutions. It happened with derivatives in the 1980s, with electronic trading in the 1990s, and with algorithmic market-making in the 2000s. The public stance catches up to the private investment, usually when a revenue opportunity becomes too large to ignore.

Eric Trump captured the irony at Consensus Miami 2026, pointing out that JPMorgan had gone from “crapping all over bitcoin” to offering mortgage products backed by crypto holdings in roughly 18 months. The timeline matters because it compresses what analysts expected to be a multi-year adoption curve into something closer to a sprint. When the bank that sets the pace for Wall Street lending accepts an asset as collateral, it sends a signal that cascades through compliance departments, risk committees, and boardrooms at every other major financial institution.

How the collateral program works
The mechanics mirror traditional securities lending more closely than most observers expected. A hedge fund or corporate treasury deposits Bitcoin or Ethereum with a third-party custodian, typically Fidelity Digital Assets or Coinbase Custody. JPMorgan never takes direct possession of the tokens. Instead, the bank receives a custodial receipt confirming the deposit, and the Kinexys platform records the pledge on its permissioned blockchain. The client then receives a U.S. dollar loan, with the crypto holdings serving as security.

Real-time price feeds, sourced from oracle providers including Chainlink, continuously update the valuation of the pledged assets. If the value of the collateral drops below a predetermined threshold, the system issues a margin call automatically. The client must either deposit additional collateral or repay part of the loan. If neither happens within the specified window, the custodian can liquidate the crypto position to cover the shortfall. The entire lifecycle, from pledge to margin call to potential liquidation, runs on blockchain rails that operate around the clock, a meaningful upgrade over the batch-processing cycles of traditional collateral management.

One detail that distinguishes this program from crypto-native lending platforms is the separation between custody and credit. On platforms like Aave or Compound, the collateral and the lending pool exist in the same smart contract ecosystem. A bug in the protocol can expose both simultaneously. JPMorgan’s structure intentionally fragments these functions across different entities: the bank underwrites the loan, the custodian holds the tokens, and the oracle provider supplies the pricing. That fragmentation adds operational complexity but creates firebreaks. A failure at any one layer does not automatically cascade into the others.

The initial rollout targets high-net-worth clients and institutional players. Retail access is not part of the current scope, though internal JPMorgan documents referenced by Bloomberg suggest the bank is evaluating a phased expansion that could include qualified retail investors by mid-2027.

The haircut question
Collateral haircuts are where the details reveal how seriously a bank treats an asset class. U.S. Treasuries typically carry haircuts of 1% to 5%, reflecting their low volatility and deep liquidity. Investment-grade corporate bonds sit in the 5% to 15% range. Gold, depending on the form and custodian, attracts haircuts of 10% to 25%.

JPMorgan’s reported haircuts for Bitcoin collateral land between 30% and 50%. That range acknowledges Bitcoin’s realized volatility, which has averaged roughly 50% to 70% annualized over the past five years, while still treating the asset as meaningfully pledgeable. A client depositing $1 million in Bitcoin would receive between $500,000 and $700,000 in loan proceeds. The spread within that range likely depends on the client’s creditworthiness, the loan tenor, and prevailing market conditions.

These numbers are not punitive by historical standards. When Goldman Sachs and other tier-one banks first explored Bitcoin-backed lending through tri-party repo arrangements, internal models suggested haircuts as high as 70%. The compression from 70% to a midpoint of roughly 40% over just a few years reflects both declining realized volatility as the asset matures and growing confidence in custodial infrastructure. If Bitcoin’s annualized volatility continues to fall, as it has with each successive halving cycle, the haircuts will tighten further. A world in which Bitcoin collateral receives a 20% haircut, comparable to high-yield corporate bonds, is plausible within the next three to five years.

What changes when Bitcoin becomes a balance-sheet instrument
The shift from speculative asset to pledgeable collateral rewires incentive structures across the financial system. Consider three immediate consequences.

First, it creates a reason to hold Bitcoin that has nothing to do with price appreciation. A corporate treasurer sitting on $50 million in Bitcoin can now borrow against that position to fund operations, acquisitions, or working capital without triggering a taxable event. The cost of capital for that borrowing, once haircuts and interest rates are factored in, may compare favorably to unsecured corporate debt for many mid-tier firms. Bitcoin becomes a tool for liquidity management, not just a bet on number-go-up.

Second, it introduces a new class of forced sellers. Margin calls on crypto-collateralized loans create liquidation pressure that did not exist when Bitcoin sat entirely outside the banking system. A sharp drawdown that triggers widespread margin calls at JPMorgan and its eventual competitors could amplify selling in a way that the market has not yet experienced at institutional scale. The plumbing that makes collateral possible also makes cascading liquidations possible.

Third, it pressures accounting standards. Under current U.S. GAAP rules updated in late 2024, companies can carry Bitcoin at fair value with changes flowing through earnings. If banks are treating Bitcoin as loan collateral, auditors and regulators will face increasing pressure to harmonize the treatment of crypto assets across the financial system. The gap between how a bank values Bitcoin as collateral and how a corporate borrower accounts for it on its balance sheet creates friction that the system will eventually resolve.

Fourth, it changes how Bitcoin miners and large holders think about treasury management. Companies like MARA Holdings have already used Bitcoin to refinance debt through crypto-native lenders such as Arch Lending. The entry of JPMorgan into this market gives those same borrowers access to cheaper capital, longer tenors, and the reputational cover of borrowing from a systemically important bank. The interest rates on JPMorgan’s crypto-collateralized loans have not been publicly disclosed, but the bank’s cost of funding is significantly lower than any crypto-native lender. That cost advantage will pull borrowing volume away from decentralized platforms and into the traditional banking system, an ironic outcome for an asset class built on the premise of disintermediation.

The competitive cascade
JPMorgan rarely moves first without knowing that competitors are watching. Goldman Sachs has been working on its own crypto-collateral program through tri-party repo structures. Citigroup is building custody rails designed to handle $30 trillion in tokenized assets. Bank of America, Wells Fargo, and Citigroup are jointly constructing a tokenized deposit network that launches in the first half of 2027 and would allow round-the-clock corporate fund transfers. Each of these initiatives is a precondition for accepting crypto collateral at scale.

The pattern echoes what happened with prime brokerage services for hedge funds in the 1990s. Once one bank offered a comprehensive package, every competitor had to match it or risk losing clients. The same dynamic is playing out with crypto services. JPMorgan has already filed to issue bitcoin-backed structured notes tied to BlackRock’s IBIT ETF, offering leveraged returns and conditional principal protection. Goldman Sachs is expected to announce similar products before the end of the third quarter. The question is no longer whether traditional banks will offer crypto-backed financial products, but how quickly the full menu will be available.

Regional banks face a different calculus. They lack the technology budgets and regulatory relationships to build Kinexys-style platforms from scratch. Most will rely on infrastructure partners, likely the same custodians and oracle providers that JPMorgan uses, to offer white-label versions of crypto collateral services. The result is a tiered market in which the largest banks offer bespoke crypto lending directly, mid-tier banks partner with fintechs, and smaller institutions simply refer clients elsewhere. That tiering already exists for foreign exchange and derivatives. Crypto is following the same organizational logic.

The opposing case: why this could unravel
Every structural shift comes with scenarios that could reverse it. The most direct threat is a regulatory crackdown. The Office of the Comptroller of the Currency has not issued definitive guidance on bank-held crypto collateral, and a change in administration or a major crypto-related loss at a systemically important bank could prompt restrictions that make the economics unworkable.

Volatility remains the fundamental challenge. Bitcoin’s 30-day realized volatility spiked above 100% during the March 2020 crash and exceeded 80% during the May 2021 selloff. A similar spike under the new collateral regime would trigger margin calls at a scale the system has not been tested against. If custodians cannot process liquidations quickly enough during a flash crash, the resulting losses could make banks pull back from crypto collateral entirely.

Custodial risk is the dark scenario. The collapse of FTX in 2022 showed that even large, apparently reputable crypto custodians can fail catastrophically. JPMorgan mitigates this by using regulated third-party custodians with segregated accounts, but the risk is not zero. A breach, hack, or operational failure at a major custodian could freeze collateral and create cascading defaults.

The invalidation criteria are clear: if any G-SIB (global systemically important bank) suspends its crypto collateral program due to losses or regulatory action within the next 18 months, the competitive cascade described above stalls. If two or more suspend simultaneously, the entire thesis reverses and crypto reverts to its pre-collateral status as a purely speculative asset class in the eyes of traditional finance.

Ethereum’s parallel path and the altcoin question
JPMorgan’s program accepts Ethereum alongside Bitcoin, but the two assets occupy different positions in the institutional hierarchy. JPMorgan’s own analysts have argued that Bitcoin has pulled decisively ahead as the institutional base layer, with spot Bitcoin ETFs recovering roughly two-thirds of their October 2025 outflows while spot Ethereum ETFs clawed back only about one-third.

The divergence matters for collateral because it affects how banks model risk. Bitcoin’s correlation structure, its relationship to equities, gold, and real interest rates, is better understood and more stable than Ethereum’s. A risk committee evaluating Ethereum collateral must also consider smart contract risk, network upgrade risk, and the possibility that DeFi activity on Ethereum declines further, reducing the fundamental demand for the token. These factors justify wider haircuts on Ethereum than on Bitcoin, and internal bank models reportedly reflect that asymmetry.

The broader altcoin universe is nowhere near collateral eligibility. Tokens with lower liquidity, shorter track records, and less regulatory clarity will remain outside the banking system’s collateral framework for the foreseeable future. The gap between Bitcoin and Ethereum on one side and everything else on the other is widening, not narrowing, as institutional infrastructure develops. Solana, despite processing JPMorgan’s first public-blockchain commercial paper issuance, is not on the collateral schedule. Neither are any stablecoins, wrapped tokens, or governance tokens. The threshold for collateral eligibility in the traditional banking system is far higher than the threshold for exchange listing, and that distinction will shape capital allocation for years to come.

For Ethereum specifically, the path to tighter haircuts runs through proving sustained network utility. If staking yields stabilize, layer-2 activity grows, and real-world asset tokenization on Ethereum scales meaningfully, risk committees may eventually treat ETH collateral on terms closer to Bitcoin. But that convergence is not guaranteed, and the current data points in the opposite direction.

What the Bitcoin ETF ecosystem means for collateral
The existence of spot Bitcoin ETFs creates a bridge between crypto-native collateral and traditional securities lending. A bank can accept shares of BlackRock’s IBIT as collateral without ever touching Bitcoin directly. The ETF wrapper provides regulatory clarity, custodial simplicity, and a familiar risk framework. JPMorgan’s structured notes tied to IBIT are an early example of this hybrid approach.

The ETF bridge also creates an interesting arbitrage dynamic. If a client can pledge IBIT shares at a 10% haircut through a standard securities lending agreement, or pledge the underlying Bitcoin at a 40% haircut through the crypto collateral program, the economics strongly favor the ETF route. This means that much of the early demand for crypto collateral may flow through ETFs rather than spot crypto, at least until haircuts on direct Bitcoin pledges tighten to competitive levels.

Over time, the two tracks should converge. As banks gain experience with direct Bitcoin custody and the realized loss rates on crypto-collateralized loans become visible, the haircut premium for spot Bitcoin over ETF shares will narrow. The end state is one in which Bitcoin, whether held directly or through an ETF, is treated as a single asset class on the collateral schedule, with haircuts reflecting the underlying volatility rather than the wrapper.

The regulatory dimension reinforces this convergence. The Clarity Act, which JPMorgan publicly backed despite lowering its estimate of the bill’s passage probability to below 50%, would provide a federal framework for digital asset classification. If passed, the act would remove much of the legal uncertainty that currently justifies wider haircuts on spot crypto versus ETF shares. Even without the Clarity Act, the SEC’s approval of spot Bitcoin and Ethereum ETFs has already created a regulatory precedent that treats the underlying assets as legitimate enough to wrap in registered securities. The collateral question is the next logical extension of that precedent.

What to watch
The next 12 months will determine whether JPMorgan’s collateral program is the beginning of a permanent structural shift or an experiment that gets walked back under pressure. Three signals matter most.

The first is competitor entry. If Goldman Sachs, Morgan Stanley, and at least one European universal bank launch comparable programs by mid-2027, the shift is durable. If JPMorgan remains alone, something is wrong with the economics or the regulatory environment.

The second is haircut compression. The current 30% to 50% range for Bitcoin reflects uncertainty. If that range tightens to 20% to 35% within a year, it means realized loss rates are low and the bank’s risk models are being validated by actual experience. If haircuts widen, the opposite is true.

The third is a stress test. The program has not yet been through a genuine market dislocation. The first 20%-plus drawdown in Bitcoin while significant collateral is pledged through the system will reveal whether the liquidation mechanisms work as designed. A clean liquidation cycle, one that processes margin calls and sells collateral without systemic disruption, would be the strongest possible endorsement of the program’s architecture.

Beyond these three signals, watch for the accounting and regulatory responses. If the Financial Accounting Standards Board issues updated guidance specifically addressing crypto collateral in banking contexts, it signals that the infrastructure is being built to last. If the OCC publishes interpretive letters clarifying the permissibility of crypto-backed lending for nationally chartered banks, the door opens for institutions that have been waiting on the sidelines. Conversely, if enforcement actions or congressional hearings target bank-held crypto collateral specifically, the expansion timeline extends significantly. The regulatory posture in Washington over the next year will shape the speed of this transition more than any single bank’s internal decision.

This article is for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments carry significant risk, and readers should conduct their own research before making any financial decisions. Published on August 16, 2026.

Bank Leumi, 0ne of Israel’s largest banking institutions, has formed a partnership with Galaxy Digital (Nasdaq: GLXY) to introduce cryptocurrency trading services for its clients. The collaboration positions the institution as the first bank in the country to plan direct digital asset trading offerings through its own platforms.

Under the arrangement, customers of Bank Leumi and its mobile digital banking division, PEPPER, will gain the ability to purchase, hold, and sell select cryptocurrencies—initially including Bitcoin, Ethereum, and Solana.

These transactions will occur within a dedicated, secure portion of the Leumi

Trade capital markets application, allowing users to manage digital assets alongside their existing investment activities without needing separate exchange accounts or personal wallets.

The service is projected to become available in early 2027.

Galaxy Digital will supply the core infrastructure via its GalaxyOne Institutional platform, which is designed for banks, asset managers, and other institutional clients and emphasizes institutional-grade execution.

Separately, Bank Leumi has agreed to utilize Galaxy’s Custody Infrastructure platform—previously known as GK8—to underpin the secure holding of digital assets.

Maya Ravia, Head of Strategy at Bank Leumi, highlighted the move as a key element of the bank’s broader innovation efforts.

She noted that it aims to deliver straightforward, secure, and regulated access to digital asset trading through leading technological systems.

Ravia emphasized the bank’s view that digital assets are increasingly embedding themselves into the global financial landscape, and that institutions like Leumi have a responsibility to offer customers participation in this evolution within a trusted banking environment.

Lior Lamesh, CEO of Galaxy Israel, framed the partnership as part of a larger shift in finance toward open and programmable systems.

He pointed out that early-adopting banks will help shape the coming era, and that Leumi selected Galaxy to enable this capability for Israeli customers.

Lamesh also referenced the rapid growth of the local digital assets market and Galaxy’s role in delivering a unified platform combining trading and custody with strong security standards, intended for banks worldwide.

Bank Leumi, established more than 120 years ago and operating without a controlling shareholder, serves millions of clients spanning households, small businesses, mid-sized firms, and large corporations.

It blends a physical branch network with advanced digital and artificial intelligence tools, having improved operational efficiency through ongoing technological upgrades.

Galaxy Digital, listed on Nasdaq under the ticker GLXY, focuses on digital assets and data center infrastructure.

Its offerings include trading, advisory services, asset management, staking, self-custody, and tokenization, while also developing facilities to support artificial intelligence and high-performance computing workloads.

This development follows an earlier, unrealized 2022 effort by the bank involving a different partner.

The current initiative relies on Galaxy’s established institutional tools and Israeli-rooted custody technology.

Commercial details such as fees and specific eligibility criteria have not been disclosed.

Regulatory clearance, including from the Bank of Israel, is anticipated as a necessary step before launch. The partnership reflects growing institutional interest in bringing cryptocurrency access inside established banking interfaces, potentially expanding regulated participation in digital assets within Israel’s financial system.

Publicly listed / traded Bitcoin mining companies have reportedly reduced their dedicated computational capacity more rapidly than the broader network, as a growing number shift electricity and data-center resources toward artificial intelligence and high-performance computing applications.

This development signals that many operators are prioritizing more predictable income streams over traditional cryptocurrency production.

Three months earlier, analysis had shown a redistribution of power within the sector.

Firms including Core Scientific, IREN, Cipher Digital, TeraWulf, and Keel Infrastructure were scaling back Bitcoin operations, while Bitdeer, MARA, Riot Platforms, and American Bitcoin absorbed much of the displaced share, keeping the overall public cohort roughly stable. Second-quarter results, however, indicate that this equilibrium is eroding.

Operators continuing to reduce exposure kept decommissioning equipment, yet fewer peers expanded sufficiently to offset the losses.

At the same time, colocation and related revenues climbed markedly among those furthest advanced in the transition.Core Scientific recorded $136.7 million in colocation income during the second quarter—nearly five times its $27.5 million from Bitcoin mining—accounting for 83 percent of total sales, up from 67 percent in the prior quarter.

TeraWulf followed a parallel path, with high-performance computing lease revenue reaching $31.9 million, or 71 percent of overall revenue, against $12.8 million from mining.

For these two companies, non-mining activities have already surpassed Bitcoin production as the primary revenue driver.

Elsewhere in the sector the shift remains less advanced: Riot Platforms reported $23.2 million in data-center revenue versus $113.7 million from mining, while Bitdeer generated $14 million from AI cloud services compared with $197.1 million from mining-related operations.

Hut 8 and MARA showed smaller contributions from compute services, and Cipher and Keel Infrastructure had not yet begun recognizing high-performance computing revenue.

Drawing on an expanded set of public miners and updated network data, TheEnergyMag calculates that the tracked cohort delivered a combined realized hashrate of 368.3 EH/s in the fourth quarter of 2025, 344.4 EH/s in the first quarter of 2026, and 319.0 EH/s in the second quarter—a 13.4 percent decline over six months.

The Bitcoin network’s quarterly average fell from 1,071 EH/s to 993 EH/s and then to 957 EH/s, a 10.6 percent reduction.

Public companies therefore contracted faster than the network as a whole.

In the first quarter, expansion by a few operators largely masked the scale of shutdowns elsewhere; by the second quarter those offsets proved insufficient.

Bitdeer provided the largest counterweight, increasing its realized hashrate 44 percent from the fourth quarter to the second quarter to reach 63.0 EH/s.

Excluding Bitdeer, the remaining cohort’s realized hashrate declined 21.2 percent, from 324.6 EH/s to 255.9 EH/s.

Bitdeer’s growth stemmed from its proprietary SEALMINER production line; by June the company reported 73 EH/s of self-mining capacity and 15.9 EH/s of co-mining capacity, producing 990 Bitcoin in the month—388 percent more than a year earlier.

MARA and American Bitcoin also continued to expand, yet their gains could not fully compensate for reductions at Cango, Cipher, Keel, Core Scientific, TeraWulf, and IREN.Cango illustrates the speed of the economic shift.

After entering Bitcoin mining in late 2024 and deploying 50 EH/s during 2025, the firm began decommissioning less efficient machines, leasing hashrate, and relocating capacity to lower-cost regions.

Its realized hashrate dropped from 44.8 EH/s in the fourth quarter of 2025 to 31.3 EH/s in the first quarter; estimates place second-quarter capacity near 16.5 EH/s—a 63 percent reduction in six months.

Keel Infrastructure advanced further, completing the decommissioning of all US Bitcoin mining operations in the second quarter ahead of data-center construction, while Canadian mining continues during the phased transition.

Replacement revenue has yet to materialize fully.Viewed over a longer horizon, the second-quarter data underscores the unwinding of the post-China expansion cycle.

China’s 2021 mining ban temporarily removed roughly half the network’s computing power, with hashrate bottoming at 57.5 EH/s in June 2021 before miners relocated and the network recovered by December.

The United States became the dominant hub, prompting an institutional build-out in which public miners raised capital, secured power sites, and ordered successive generations of ASICs, eventually driving the network past one zettahash per second.

Only one halving has occurred since that expansion.

Now, machines and electrical infrastructure accumulated during the post-China race are being idled, impaired, or depreciated so that power can be reassigned to GPUs.

The industry expanded at substantial cost, only for some of its most prominent operators to begin dismantling capacity after a single halving cycle. Unlike the China ban, the present contraction lacks a single dramatic catalyst; it arises from the combination of weak mining economics and a competing demand for capital and electricity.