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In May 2023, the Ethereum blockchain faced its first inactivity leak, a mechanism designed to restore chain finalization amid prolonged network disruptions. This feature aims to reduce the voting power of validators who become unreachable, redistributing their power to active validators. Our investigation delves into the safety implications of this inactivity leak within the Ethereum blockchain. Through theoretical analysis, we explore how Byzantine validators might expedite the finalization of conflicting branches or reach a voting power exceeding the critical safety threshold of one-third. Additionally, we revisit the probabilistic bouncing attack, demonstrating how the inactivity leak might allow Byzantine validators to breach safety thresholds. This article uncovers how penalizing inactive nodes can undermine blockchain properties, especially when Byzantine validators can coordinate their actions.

I. Overview
Background
In September 2022, Ethereum transitioned from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) protocol. This change aimed to improve energy efficiency and scalability. The Ethereum PoS protocol is unique due to its hybrid nature, combining elements of classical Byzantine Fault-Tolerant (BFT) Consensus with the Nakamoto-style blockchain framework. In BFT blockchains, validators explicitly vote on block proposals, ensuring that once a block is added, it remains permanently incorporated. In contrast, Nakamoto-style blockchains allow forks but eventually reconcile to a single chain.

Motivation
The motivation behind this study stems from Ethereum's introduction of the inactivity leak, a penalty mechanism designed to address prolonged network disruptions. When validators become unreachable, their voting power is reduced and redistributed to active validators. While this mechanism aims to restore chain finalization and maintain liveness during network partitions, it raises significant concerns about its impact on the blockchain's safety. Specifically, the potential for Byzantine validators to exploit the inactivity leak to expedite the finalization of conflicting branches or gain a voting power exceeding the critical safety threshold of one-third necessitates a thorough investigation.

Contributions
This article is mainly based on the many sources, one of our main contents came from Byzantine Attacks Exploiting Penalties in Ethereum PoS from authors: Ulysse Pavloff, Yackolley Amoussou-Genou, Sara Tucci-Piergiovanni

This paper makes several key contributions:

Formal Analysis of the Inactivity Leak: They provide the first formal description of the inactivity leak, detailing its operational mechanics and its intended purpose within the Ethereum PoS protocol.

Impact on Safety: Our analysis explores various configurations and scenarios to understand how the inactivity leak influences the safety of the Ethereum blockchain, particularly under the influence of Byzantine validators.

Revisiting Known Attacks: We reexamine the probabilistic bouncing attack in the context of the inactivity leak, demonstrating how this attack can be leveraged to probabilistically breach safety thresholds.

Theoretical and Practical Insights: The findings offer valuable insights for both theoretical research and practical implementations of penalty mechanisms in PoS blockchains.

Organization of the Paper
The paper is structured to provide a comprehensive exploration of the inactivity leak and its implications. The organization is as follows:

Introduction: An overview of the motivation, contributions, and structure of the paper.

System Model and Ethereum Protocol: A detailed description of the Ethereum PoS protocol, including its safety and liveness trade-offs, Byzantine fault tolerance, and the inactivity leak mechanism.

Analysis of Safety Loss Scenarios: An in-depth analysis of scenarios where safety might be compromised, including conflicting finalization with honest validators and coordinated Byzantine attacks.

Revisiting the Probabilistic Bouncing Attack: A thorough reexamination of the probabilistic bouncing attack, assessing its impact in the presence of the inactivity leak and presenting simulation results.

Future Work: A discussion of the implications of our findings for Ethereum and other PoS blockchains, along with directions for future research.

Conclusions: A summary of our findings, emphasizing the importance of refining penalty mechanisms to ensure blockchain safety and stability.

II. System Model and Ethereum Protocol
Ethereum PoS Protocol Overview
Ethereum's shift to proof-of-stake (PoS) in September 2022 was a landmark event, transitioning from the energy-intensive proof-of-work (PoW) to a more sustainable and scalable consensus mechanism. The Ethereum PoS protocol combines elements of classical Byzantine Fault-Tolerant (BFT) Consensus with the Nakamoto-style blockchain, creating a hybrid model. In this system, validators are selected based on their stake to propose and validate new blocks, aiming to achieve consensus through voting. The protocol leverages a fork-choice rule to determine the canonical chain from a tree-like structure of blocks, ensuring that the blockchain can adapt and reconcile forks to maintain a single chain.

Safety and Liveness Trade-offs
In the context of blockchain protocols, safety and liveness are critical properties that need to be balanced. Safety ensures that the blockchain does not fork, meaning that once a block is finalized, it cannot be revoked. Liveness, on the other hand, ensures that the blockchain continues to grow and accept new transactions.

BFT Consensus: BFT blockchains achieve safety by using super-majority quorums to finalize blocks, preventing forks but potentially halting growth during network partitions or failures. This trade-off means that while the blockchain is safe, it may not always be live.

Nakamoto-style Blockchains: These blockchains are designed to remain live even during network disruptions, as they allow for the existence of multiple forks. Eventually, they reconcile to a single chain, but this means they can experience temporary forks, which poses a challenge to safety.

Ethereum PoS: Ethereum PoS aims to balance these trade-offs by maintaining a finalized chain alongside a forkable chain. The finalized chain is protected by BFT mechanisms, ensuring safety, while the forkable chain continues to grow, ensuring liveness.

Byzantine Fault Tolerance
Byzantine Fault Tolerance (BFT) is a critical aspect of blockchain security, ensuring that the protocol can withstand malicious actions by up to one-third of the validators. In BFT systems, validators vote on proposed blocks, and a block is only considered finalized if it receives votes from a super-majority of validators. This mechanism ensures that even if some validators act maliciously or become unreachable, the blockchain can still achieve consensus and finalize blocks.

Inactivity Leak Mechanism
Definition and Purpose

The inactivity leak is a penalty mechanism introduced to handle scenarios where validators become inactive or unreachable due to network disruptions. When validators fail to participate in the consensus process for an extended period, their stake and voting power are gradually reduced. This reduction is intended to reallocate voting power to active validators, thereby restoring the blockchain's ability to achieve finalization and maintain liveness.

Impact on Voting Power

The inactivity leak directly affects the distribution of voting power among validators. By penalizing inactive validators, the mechanism ensures that the remaining active validators have increased influence in the consensus process. This reallocation is crucial for restoring liveness during network partitions, as it allows the blockchain to continue finalizing blocks despite the absence of some validators. However, this mechanism also introduces potential risks, particularly if Byzantine validators can exploit it to gain a disproportionate amount of voting power.

Restoring Liveness: During network partitions or disruptions, the inactivity leak helps maintain liveness by reducing the influence of inactive validators and empowering active ones to continue finalizing blocks.

Risks to Safety: The redistribution of voting power can create scenarios where Byzantine validators, through coordinated actions, may exploit the inactivity leak to increase their influence. This can lead to safety breaches, such as the finalization of conflicting chains or exceeding the critical one-third threshold of Byzantine voting power.

Ethereum's Unique Hybrid Model

Ethereum PoS's hybrid model of maintaining a finalized and non-finalized chain within a single data structure aims to offer the best of both BFT and Nakamoto-style blockchains. The finalized chain guarantees safety, ensuring that once a block is finalized, it remains unaltered. The non-finalized chain allows for continued growth and transaction processing, ensuring liveness even during adverse network conditions.

The Ethereum PoS protocol's innovative combination of BFT and Nakamoto-style elements, along with the introduction of the inactivity leak, represents a significant advancement in blockchain technology. However, this complexity also introduces new challenges, particularly regarding the balance between safety and liveness and the potential exploitation by Byzantine validators. Understanding these dynamics is crucial for ensuring the robustness and security of the Ethereum blockchain.

III. Analysis of Safety Loss Scenarios
Conflicting Finalization with Honest Validators
Network Partitions and CAP Theorem

Network partitions can disrupt the Ethereum blockchain's operation, potentially leading to conflicting finalization of blocks. The CAP theorem, which states that a distributed system can only achieve two out of three properties—consistency, availability, and partition tolerance—underlines the challenge of maintaining both safety and liveness during network partitions. In Ethereum PoS, this means that while efforts are made to maintain liveness by allowing the chain to continue growing, safety can be compromised if different parts of the network finalize conflicting blocks independently.

Independent Finalization on Different Chains

During network partitions, validators in different network segments may finalize different blocks independently. This situation arises when validators in one partition finalize one set of blocks, while validators in another partition finalize a different set. As a result, the blockchain can face conflicting finalization, where multiple chains claim to be the valid continuation of the blockchain. This scenario challenges the blockchain's safety guarantees, as transactions on conflicting branches may lead to inconsistencies and potential double-spending.

Coordinated Byzantine Attacks
Accelerated Conflicting Finalization

Byzantine validators can exploit network partitions and the inactivity leak to accelerate conflicting finalization intentionally. In scenarios where Byzantine validators strategically coordinate their actions, they can exploit the reduced influence of honest validators (due to network partitions or penalties from the inactivity leak) to finalize conflicting blocks quickly. This coordinated action undermines the blockchain's safety guarantees, as it introduces uncertainty about the true state of the blockchain.

Breaching the Safety Threshold

Another significant risk arises when Byzantine validators coordinate to exceed the critical one-third threshold of voting power. In Ethereum PoS, maintaining safety relies on ensuring that less than one-third of validators are Byzantine. However, if Byzantine validators can increase their influence through strategic actions during network disruptions or by exploiting the inactivity leak, they may collectively control more than one-third of the voting power. This breach of the safety threshold can lead to irreversible decisions and compromises the integrity of the blockchain.

IV. Revisiting the Probabilistic Bouncing Attack
Original Attack Description
The probabilistic bouncing attack is a known strategy in blockchain environments, particularly relevant in proof-of-stake (PoS) protocols like Ethereum. This attack exploits periods of network uncertainty or synchronization to delay block finalization intentionally. Validators participating in the consensus process strategically withhold their votes or propose conflicting blocks, leading to prolonged ambiguity about which chain should be considered the canonical one. By introducing delays in the finalization process, the attack undermines the blockchain's liveness guarantees, as transactions may remain pending or reversible for extended periods.

sources: arxiv.org

Impact of the Inactivity Leak
The introduction of the inactivity leak mechanism amplifies the effectiveness of the probabilistic bouncing attack. This penalty mechanism penalizes validators who become inactive due to network disruptions or strategic inactivity. As inactive validators lose stake and voting power over time, active validators gain a disproportionate influence in the consensus process. This redistribution of voting power alters the dynamics of the blockchain's security model, potentially creating opportunities for malicious actors to exploit.

In the context of the probabilistic bouncing attack, the inactivity leak exacerbates the impact during periods of network synchrony. Byzantine validators can strategically become inactive to avoid penalties and then coordinate attacks when network conditions are favorable. By delaying finalization through strategic inactivity and subsequent coordinated actions, malicious validators can prolong uncertainty about the blockchain's state, further compromising its liveness and integrity.

Conditions for Safety Threshold Breach
Our analysis identifies specific conditions under which the probabilistic bouncing attack, augmented by the inactivity leak, can breach the safety threshold of Ethereum PoS. These conditions include prolonged network partitions, strategic coordination among Byzantine validators to exploit penalties, and the operational mechanics of the inactivity leak itself. The combination of these factors creates a scenario where Byzantine validators can probabilistically control the blockchain's decision-making process, potentially leading to irreversible decisions or conflicting finalizations.

Simulation Results and Discussion
Simulation studies provide empirical evidence of how the probabilistic bouncing attack, enhanced by the inactivity leak, impacts Ethereum's safety and liveness properties. By modeling various attack scenarios and network conditions, we illustrate the potential vulnerabilities introduced by the inactivity leak and the strategies employed by Byzantine validators to exploit them. Discussions delve into the implications of these findings for blockchain security and propose strategies for mitigating the risks posed by such attacks.

source: arxiv.org

V. Future Work
Summary of Findings
Our study has highlighted significant vulnerabilities in Ethereum's proof-of-stake (PoS) protocol, particularly concerning the probabilistic bouncing attack and the inactivity leak mechanism. These findings underscore the importance of enhancing blockchain security while maintaining robustness in consensus mechanisms. We have identified critical areas where future research and development efforts can focus to address these challenges effectively.

Implications for Ethereum and Other PoS Blockchains
The implications extend beyond Ethereum to other PoS blockchains that utilize penalty mechanisms and face similar security challenges. Understanding these vulnerabilities provides a foundation for improving the design and implementation of future blockchain protocols. Key implications include:

Security Enhancements: Develop more resilient penalty mechanisms that mitigate the risks posed by Byzantine attacks and strategic network disruptions.

Consensus Protocol Optimization: Refine consensus algorithms to improve their ability to handle network partitions and maintain safety and liveness guarantees simultaneously.

Governance and Protocol Design: Implement governance structures that can adapt dynamically to emerging threats and vulnerabilities, ensuring continuous improvement and adaptation of blockchain protocols.

Directions for Future Research
Future research efforts should prioritize the following areas to advance blockchain security and resilience:

Enhanced Penalty Mechanisms: Investigate novel penalty mechanisms that discourage malicious behavior while incentivizing active participation and network stability.

Dynamic Governance Models: Explore governance frameworks that enable swift responses to security threats, including protocol upgrades and adjustments to consensus rules.

Formal Verification and Security Audits: Conduct rigorous formal verification and security audits of blockchain protocols to identify and mitigate potential vulnerabilities before deployment.

Cross-Chain Interoperability: Address interoperability challenges between different PoS blockchains to foster collaboration and enhance overall blockchain ecosystem resilience.

Related Work and References
Our study builds upon existing research in Ethereum PoS, Byzantine fault tolerance, and consensus algorithm design. Further exploration into related work can provide deeper insights and inspire innovative solutions to address current and future challenges in blockchain security.

Conclusion
Our exploration of the probabilistic bouncing attack and the inactivity leak in Ethereum PoS has underscored critical vulnerabilities that require immediate attention. By focusing on enhancing security mechanisms, optimizing consensus protocols, and fostering collaborative research, the blockchain community can strengthen the resilience of PoS blockchains against malicious actors and network disruptions. Through these efforts, we aim to contribute to the evolution of blockchain technologies towards more secure, efficient, and trustworthy decentralized systems.

Arthur Hayes has said he has closed Maelstrom’s directional trading book, citing macroeconomic and geopolitical risks, as Lookonchain has reported $22.28 million in sales across Ethereum and six other tokens.

Summary

Arthur Hayes says he closed Maelstrom’s directional book amid macroeconomic and geopolitical uncertainty. Lookonchain reported $22.28 million in sales across ETH, ENA, UNI, ETHFI, AERO, PENDLE and ZAMA. Ethereum accounted for approximately 68% of the reported sales, totaling 6,400 ETH worth $15.2 million. Hayes plans to remain on the sidelines, reversing Maelstrom’s previously declared maximum-risk positioning. Lookonchain identified 6,400 ETH as the largest component of the transactions in an Oct. 24 post, valuing the Ethereum at $15.2 million. A subsequent post from the blockchain tracker shared Hayes’s statement that he had taken profits on ETH, ENA, UNI, and other tokens.

Arthur Hayes says macro risks drove his exit In his statement on X, the BitMEX co-founder described the positions as Maelstrom’s directional book and said he intended to wait before returning to the market.

“I think we gotta go down to go up.”

Hayes attributed his caution to conditions in “macro and geopolitical land,” without identifying a particular policy decision, conflict or economic release. He gave no price target for Bitcoin or Ethereum and did not set a date for rebuilding the positions.

His reference to the directional book limits the scope of the announcement. The statement did not provide a complete inventory of Maelstrom’s investments, remaining holdings, hedges, or private-market commitments. It did not separately identify a Bitcoin sale.

Although Hayes described the disposals as profit-taking, he did not publish acquisition prices or realized returns. Lookonchain’s dollar figures describe the reported value of the tokens involved, not the amount of profit earned.

Ethereum accounts for roughly 68% of the reported sales Beyond ETH, Lookonchain listed 14 million ENA worth $2.76 million and 323,000 UNI valued at $2.24 million. The tracker included 1.89 million ETHFI worth $1.23 million.

The smaller positions comprised 546,609 AERO valued at $398,000, 120,000 PENDLE worth $244,000 and 3 million ZAMA worth $214,000, according to its breakdown.

Adding the seven rounded valuations produces $22.286 million, close to the tracker’s $22.28 million headline figure. On that basis, Ethereum represented approximately 68.2% of the listed value, while the other six tokens accounted for $7.086 million.

ETH, ENA and UNI together represented $20.2 million, or roughly 90.6% of the listed total. The calculation uses Lookonchain’s rounded dollar amounts and does not establish exact execution proceeds or trading fees.

The posts did not provide a complete transaction-by-transaction account of execution venues or counterparties. Hayes’s statement supports his account of selling, but it does not independently reconcile every quantity in the tracker’s list with a completed trade.

Maelstrom previously declared maximum risk exposure The exit follows an earlier period when Hayes publicly backed aggressive exposure to crypto. As crypto.news previously reported on Aug. 25, he had described Maelstrom as being at maximum risk exposure, naming Bitcoin, Ether, Ethena and Ether.fi among its main positions.

The underlying essay, “Same Same But Different,” carries an Aug. 24 date on his Substack. Hayes argued that U.S. Treasury efforts to support the government bond market would create conditions favorable to Bitcoin and other crypto assets.

His argument centered on Treasury Secretary Scott Bessent’s approach to bond buybacks and dollar liquidity. Hayes expected volatility even if his bullish forecast proved correct, warning readers that an upward market could contain severe corrections.

The August coverage distinguished his interpretation from the Treasury’s stated purpose for buybacks, which was supporting market liquidity and managing cash. The operations were not equivalent to Federal Reserve quantitative easing.

Neither the August essay nor the Oct. 24 statement supplied audited portfolio records. The earlier declaration and latest exit describe Hayes’s stated positioning at different times; they do not establish the full sequence of Maelstrom’s trades between those dates.

Earlier Ethereum trades involved both buying and selling Hayes-linked wallet activity has previously included purchases followed by reported disposals within days. On June 15, Lookonchain identified a wallet possibly linked to him that received 3,000 ETH worth $5.42 million from market maker Flowdesk.

The wallet attribution was qualified in the original report. A transfer from a market maker did not, by itself, provide a full record of the recipient’s other holdings or financing arrangements.

In the same June coverage, Hayes’s June 8 essay “Reality Test” was cited as disclosing sales of Hyperliquid, Near Protocol, Worldcoin and Zcash. He characterized those decisions as a defensive response to macro risks while retaining Bitcoin and Ethereum as core holdings at that time.

During the June 15 session, the same coverage identified another wallet, geministar.eth, as accumulating 21,136 ETH worth around $37 million from Binance. Ethereum had risen almost 6% over the preceding 24 hours and traded near $1,828 at the time of that report. Those prices and wallet movements refer to June and are not current market readings.

By June 19, Lookonchain had reported that he sold 6,000 ETH for approximately $10.14 million, at an average price of $1,690. The tracker estimated a loss of $606,000 after reporting purchases of roughly 5,900 ETH at an average price of $1,793 in the preceding days.

The June 19 tracking included buying by other investors. K3 Capital withdrew 10,000 ETH worth $16.9 million from Binance, while a wallet linked to entrepreneur Chun Wang acquired 7,650 ETH valued at nearly $12.9 million.

Ascend Markets, LLC, a wholly owned subsidiary of PSG Digital Labs, Inc. (“Ascend”), and M1X Global today announced the successful completion of the first institutional repurchase agreement (repo) on the Stellar network. The transaction utilized USDM1, a US dollar-denominated sovereign bond issued natively onchain and secured 1:1 by short-duration US Treasuries, and marks a milestone in bringing institutional secured financing onto the Stellar network, one of the longest-running public blockchains, expanding the network’s established payments and transfer infrastructure into programmable repo markets.

Executed through Ascend’s institutional credit facility using the Stellar network’s smart contracts, the repo included 72 consecutive programmatic hourly rolls between October 16 and 19, including overnight and weekend financing without manual intervention. The transaction was priced at SOFR plus 10 basis points, equivalent to an annualized financing rate of 3.98%, with interest accruing daily, a 2% collateral haircut and a maximum loan-to-value ratio of 98%. The repo concluded with repayment and return of USDM1 collateral, with all aspects of the closing process completing successfully. The trade is a demonstration of the capital efficiency of tokenized sovereign collateral and Ascend’s support for the asset class.

The first institutional repo transaction combined several important institutional financing capabilities on the Stellar network. These included continuous repo financing under an executed and enforceable master repurchase documentation, and the Stellar network’s smart contracts supporting pledging, financing, automated rolls, repayment and collateral release. The Repo trade was the first to use Chainlinks new Data Feeds for USDC on Stellar network as its price Oracle and USDM1’s published par redemption value supported collateral valuation, while Ascend’s infrastructure incorporated identity, access permissions, compliance rules, and operational controls.

The transaction used Stellar Asset Contract (SAC) tokens for both legs and demonstrated institutional financing functionality directly on Stellar Mainnet. The aggregate network fees on the Stellar network for the automated hourly rolls added up to a fraction of a cent.

Repos are foundational to global capital markets, supporting trillions of dollars in daily financing activity. Banks, broker-dealers, trading firms, and investment funds rely on repo to finance securities positions, fund inventory, mobilize collateral, and manage balance-sheet exposures. Roughly 80% of global repo is collateralized by sovereign bonds.

Traditional repo infrastructure operates within established banking, custody and settlement workflows which limits institutional flexibility in managing collateral, and constrains collateral movement outside business hours. The Ascend-M1X Global transaction demonstrates how secured sovereign debt can be financed, repurchased and mobilized continuously on public blockchain infrastructure, combining conventional repo economics - including benchmark-linked financing rates, collateral haircuts and established contractual protections - with automated execution, settlement and collateral management.

Dennis O’Connell, Chief Executive Officer & Co-Founder, Ascend and President of ERC-3643 Association, said “Repo is fundamental to institutional capital markets, yet much of the infrastructure supporting it remains constrained by traditional settlement windows. Together with M1X Global, we have demonstrated that repo financing can operate continuously on the Stellar blockchain while preserving the legal protections, compliance controls and financing mechanics that financial institutions require. Accomplishing this trade with transaction-based fees attributable to Ascend’s U.S. broker-dealer subsidiary, together with executed SIFMA Repo Agreements, USDC as settlement, and real sovereign debt during off hours as the first ever institutional repo transaction on the Stellar network, is a tremendous milestone.”

Jordan Goldman, President and Chief Operating Officer, M1X Global, said “The ability to finance and mobilize collateral is fundamental to how modern capital markets function. By combining secured sovereign debt with programmable repo infrastructure on the Stellar network, institutions have the ability to mobilize the same collateral more efficiently and support more financing activity with a given collateral pool. These transactions demonstrate how blockchain infrastructure and continuous digital markets can expand the capabilities of institutional secured financing.”

USDM1 is a US dollar-denominated sovereign bond issued natively onchain by the Republic of the Marshall Islands under New York law. Structured in the tradition of fully collateralized Brady bonds, it is secured 1:1 by short-duration US Treasury instruments held in a bankruptcy-remote structure. It is compatible with ISDA, GMRA, GMLSA agreements for derivatives, repo and securities lending. Cleary Gottlieb Steen & Hamilton LLP advised as issuer’s counsel. Its integration into Ascend's financing facility demonstrates how established institutional financing arrangements can be seamlessly extended into continuously operating blockchain networks.

The first completed institutional repo on the Stellar network establishes an operational foundation for additional institutional repo and secured financing activity. In combining natively-issued secured sovereign debt, institutional custody, enforceable repo documentation, programmable collateral controls and continuous settlement, the breakthrough transaction enables institutional financing markets in which collateral can be mobilized, financed and redeployed around the clock, rather than being limited by conventional settlement windows.

About Ascend

Ascend is a U.S. based technology and financial holding company, integrating a proprietary infrastructure of regulated U.S. broker-dealer licenses and prime-brokerage technology for digital securities. Ascend is thus constructed as a one-stop regulatory and technical solution for institutional financing for securities lending, repurchase, swaps, and collateral upgrade. Its protocol acts as the neutral tri-party agent and is implemented in both Stellar and EVM networks based on the principles of the ERC-3643/ SEP-57 standards for digital securities. Learn more at ascend.gl.

Ascend was conceived in response to the SEC’s Project Crypto announcement and Chairman Paul Atkins’ call for the development of the next generation of onchain U.S. Capital Markets infrastructure and today announces the first realization of that mandate by providing U.S. markets by providing the first onchain credit facility for collateral mobility and lending of digital securities, purpose built to operate in consonance with existing securities laws.

Ascend was the first to present a Digital Tri-Party Solution to the SEC Crypto Task Force on September 18, 2026. The presentation highlighted this trade and Ascend’s novel reuse of ERC-3643/SEP-57 to achieve a complete, native integration of applicable securities and BSA/AML regulatory requirements, including Identity, Access Controls, Compliance Rules, and Operational Controls, in an onchain credit facility.

Ascend is committed to advancing regulated, transparent, and resilient market infrastructure that encourages onshore capital markets issuance and enhanced liquidity through onchain solutions that are executed within the securities regulatory framework - an approach that is critical to ensuring continued global trust in the U.S. as a leader in global finance.

About USDM1

USDM1 is a fully collateralized, USD-denominated sovereign bond natively issued onchain. It is structured in the style of a Brady bond under New York law, with an explicit customary waiver of sovereign immunity, and secured on a 1:1 basis by short-duration US Treasury instruments pledged to a US trust company in a bankruptcy-remote structure. It is compatible with ISDA, GMRA, GMLSA agreements for derivatives, repo and securities lending. Cleary Gottlieb Steen & Hamilton LLP serves as issuer’s counsel. It is issued by the Republic of the Marshall Islands, which operates exclusively on the US dollar standard under its Compact of Free Association with the United States.

About M1X Global

M1X Global is a sovereign financial infrastructure and technology company bridging public finance and onchain capital markets. Operating in public-private partnership with the Republic of the Marshall Islands, M1X Global coordinates the legal, compliance, technology, custody and institutional infrastructure behind sovereign digital instruments. M1X Global is a member of the DTC Digital Assets Solution Industry Working Group created to advance tokenization and digital assets.

Disclaimer

The content of this communication is for informational purposes only and is not intended to market, offer, or solicit you to buy or sell USDM1 or any financial product directly from Ascend Markets, PSG Digital Labs, M1X Global, the Republic of the Marshall Islands or otherwise. USDM1 is being offered and sold solely outside the United States in reliance on Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"). The Republic of the Marshall Islands has not registered any offering of USDM1 under the Securities Act, or any other US federal and state securities laws. Accordingly, USDM1 may not be offered, sold, pledged or otherwise transferred in the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S), unless they are registered, or exempt from, or not subject to, registration under the Securities Act.

Nothing in this communication constitutes, or should be construed as, a recommendation by Ascend Markets, PSG Digital Labs, M1X Global, the Republic of the Marshall Islands or any third party to acquire or dispose of USDM1 or any other security, or to engage in any investment strategy or transaction.

Forward-Looking Statements

This release contains forward-looking statements. Forward-looking statements are not historical facts. Words such as anticipates, believes, estimates, expects, intends, plans, will and similar expressions are intended to identify them. Statements regarding trends relating to USDM1, and future expansions or projects relating to USDM1, are examples of forward-looking statements. Such statements reflect current views and are subject to risks and uncertainties, and rest on assumptions including general economic and market conditions, industry conditions and operating factors. There is no guarantee that the expected events or results will occur, and any change in those assumptions could cause actual results to differ materially from current expectations.

Analyst: Bitcoin has seen notable pullbacks in every prior U.S. midterm election cycle, and its key support level of $73,000 requires close attention.

Crypto analyst Ali Charts wrote in a post that as the November 3 US midterm elections approach, investors may overlook the recurring Bitcoin pullbacks seen in previous election cycles. He believes this election could again bring significant volatility, with downside risks worth noting, and his key support level to watch is $73,000. According to his statistics, Bitcoin saw pullbacks of 72%, 65%, 52%, and 27% during the US midterm election cycles in 2010, 2014, 2018, and 2022 respectively. However, he emphasized that correlation does not equal causation; the elections themselves may not be the cause of the drops, and these pullbacks are also influenced by Bitcoin’s overall market cycle, liquidity conditions, and investor sentiment.
Q4 returns show a similar pattern: Bitcoin fell 16.70%, 42.16%, and 14.75% in Q4 of 2014, 2018, and 2022 respectively. The only exception was 2010, when it rose 391%—though Bitcoin was still in its early stages back then. As a result, three of the past four midterm election years saw negative Q4 returns.
Regarding future price action, Ali Charts noted that the $73,000 level is near the average acquisition cost of Bitcoin’s current short-term holders, making it a key area to monitor the positioning of recent investors. He pointed out that in an established bull market, Bitcoin often finds support near the short-term holder average cost after a significant pullback. He believes that if selling pressure accelerates after the November 3 elections, pushing Bitcoin back toward $73,000, this zone will be a critical level to test whether buyers are still willing to uphold the overall bullish trend. If prices rebound sustainably from this area, it will reinforce the bullish thesis. For trading, he will wait for signs of selling pressure drying up and demand reemerging before considering opening long positions.

23 minutes ago

SpaceX’s $40 billion off-balance-sheet debt financing is facing pressure on pricing negotiations amid turmoil in the AI market.

According to Bloomberg, citing people familiar with the matter, SpaceX is negotiating a $40 billion off-balance-sheet debt financing plan, which would use a special purpose vehicle (SPV) to purchase Nvidia chips to support its AI business expansion. The structure is designed to keep the related liabilities off SpaceX’s balance sheet, preserving its investment-grade credit rating. However, recent turmoil in the AI sector has pushed up industry borrowing costs, complicating pricing negotiations. Banks led by Goldman Sachs are discussing the plan with investors led by Apollo; Apollo-backed Atlas SP would manage the entity, with Pimco also considering participation.
Previously, yields on some subordinated debt were discussed in the mid-8% to 9% range, but recent volatility has prompted investors to reevaluate pricing, and the two sides remain in talks. SpaceX’s financial filings this week also revealed that last year, xAI had attempted to raise up to $20 billion in off-balance-sheet debt via a sale-leaseback arrangement with Valor Equity Partners. Auditors classified the deal as a “failed sale-leaseback arrangement”, leading SpaceX to eventually record roughly $13 billion of the sum as its own debt. The proposed structure aims to avoid a repeat of that outcome.

23 minutes ago

South Korean stock market's retail war chest shrank by 36.5%; retail investors continued net buying, but capital replenishment has slowed.

Data from Korea Financial Investment Association shows that as of October 22, investor deposits at South Korean securities firms fell to 88.68 trillion won, a drop of around 51 trillion won from the all-time high of 139.69 trillion won recorded on June 4, representing a 36.5% decline and returning to levels seen at the start of the year. The balance dipped below 90 trillion won on October 21, marking the first such drop in nearly nine months.
Investor deposits refer to funds held in securities firm accounts that have not yet been used to purchase assets such as stocks, and are typically viewed as potential buying power. The decline in the balance can stem from either stock purchases or fund withdrawals, so the full drop cannot be equated to capital exiting the stock market.
Retail investors continue to make net purchases. Between June 4 and October 23, individual investors bought a net 44.17 trillion won in the KOSPI market and 3.15 trillion won in the KOSDAQ market, while net purchases of ETFs over the same period reached 28.25 trillion won. The report notes that unlike the first half of the year, where new capital inflows exceeded stock purchases, the pace of capital replenishment in the second half has lagged behind outflows, leading to the continuous decline in deposit balances.
The KOSPI index closed at 5550.30 points on October 23, having fallen nearly 20% over the past month. A securities industry official said the recent decline is indeed excessive relative to earnings fundamentals, but the AI sector, which previously drove gains, still faces credit risk concerns, making it too early to expect a sustained rebound.

23 minutes ago

Renowned Trader: Bitcoin Should Add Positions Instead of Panicking When It Hits $80,000 'Buy Zone'

Renowned crypto trader Doctor Profit stated in a post that every time Bitcoin hits its "buy zone", it is an opportune moment to add to existing long positions, and he is currently executing this strategy. His accompanying chart labels the area near $80,000 as the "buy zone", emphasizing: "This zone is for buying, not panicking."

23 minutes ago

AI computing power expansion in the Gulf region faces communication risks due to Iran's threats to attack undersea fiber-optic cables.

Two senior Iranian security officials have revealed that Iran has drawn up plans to strike submarine communications cables in the Gulf if the U.S. and Israel launch another attack; one official added that they will also block repairs to extend the communication outage. Officials from Iran’s Islamic Revolutionary Guard Corps (IRGC) had previously threatened to target seven major undersea internet cables beneath the Strait of Hormuz if Iran’s infrastructure is attacked. These threats have introduced new communication risks to cloud computing and AI infrastructure in the Gulf region. Reuters reported that past attacks by Iran hit two Amazon Web Services (AWS) facilities in the United Arab Emirates (UAE) and damaged infrastructure near an AWS facility in Bahrain. Analysts noted that simultaneous damage to multiple cables could disrupt financial transactions, e-commerce, and cloud services, though the actual impact depends on traffic rerouting capabilities and backup line capacity. International bandwidth passing through the Strait of Hormuz accounts for less than 1% of the global total, so the direct impact on global communications may be limited. Microsoft plans to invest over $10 billion in the UAE, Saudi Arabia, Qatar, and Kuwait by 2030, and allocate more than $400 million to improve submarine and terrestrial network connections in the Middle East, to enhance the resilience of its digital infrastructure.

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This week, U.S. spot Bitcoin ETFs recorded net inflows of $301.2 million, with BlackRock’s IBIT alone attracting $565.7 million in inflows.

According to Farside's monitoring, net inflows into U.S. spot Bitcoin ETFs totaled $301.2 million this week. The breakdown is as follows: BlackRock’s IBIT saw a net inflow of $565.7 million; FBTC recorded a net outflow of $116.6 million; BITB posted a net outflow of $18.5 million; ARKB had a net outflow of $99.6 million; EZBC notched a net inflow of $7.3 million; MSBT saw a net inflow of $6.5 million; GBTC registered a net outflow of $51.8 million; and BTC recorded a net inflow of $8.2 million.

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Bloomberg — Algunos de los primeros inversionistas más destacados de bitcoin vuelven a enfrentarse. Ahora buscan sacar provecho de una subida espectacular de la criptomoneda más destacada de este año.

Entre aquellos que han contribuido a impulsar y a beneficiarse del aumento de casi un 3.000% del token de privacidad Zcash, que permite a sus titulares ocultar sus transacciones, encontramos a Cameron y Tyler Winklevoss, de Gemini, así como a Barry Silbert, fundador del conglomerado de criptomonedas Digital Currency Group.

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Los hermanos Winklevoss están retomando la estrategia que les ayudó a convertirse en multimillonarios durante el auge del bitcoin. Adquirieron la criptomoneda en una fase temprana y crearon negocios alrededor de ella. En 2012, Silbert descubrió el bitcoin más o menos al mismo tiempo que los gemelos. Siguió un camino similar, invirtiendo desde el inicio y creando fondos que permitieron a otros apostar por su subida.

Ver más: Bitcoin cae por debajo de US$82.000 ante temores por la IA que afectan al mercado

Actualmente, ambos bandos están invirtiendo sustancialmente en operaciones de minería de Zcash y compiten por atraer a inversionistas a través de fondos rivales.

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Los multimillonatios del bitcoin se apresuran a aprovechar un auge de cirptomonedas del 3.000%Barry Silbert, fundador de Digital Currency Group, invierte fuertemente en la minería de Zcash y bucas atraer inversiones.(Photographer: Joe Buglewicz/Bloo/Joe Buglewicz)

A lo largo de los años transcurridos, los hermanos Winklevoss y Silbert han sido a la vez socios y rivales durante el auge y, posteriormente, el colapso del mercado de las criptodivisas en 2022. Se produjo un enfrentamiento muy sonado a raíz del fracaso del programa Gemini Earn.

Más recientemente, se han centrado en el ecosistema de Zcash, lo que ha dado lugar a una carrera por el dominio tanto en los vehículos de inversión de Wall Street como en las infraestructuras.

“Es como un déjà vu con Zcash”, señaló Cameron Winklevoss, presidente de Gemini, durante una presentación en la conferencia Token2049 celebrada en Singapur a inicios de este mes. “Si tuvieras una máquina del tiempo y pudieras volver a 2013, ¿qué pensarías de forma diferente y cómo actuarías? Probablemente, la mayoría diría que habría comprado más bitcoins y que lo habría hecho antes. Hoy tienes esa oportunidad con Zcash”.

Lanzada hace unos diez años, Zcash ha suscitado un renovado interés ante la creciente preocupación de que la IA está facilitando el seguimiento de las actividades financieras de particulares en las cadenas de bloques públicas. Una oleada de secuestros y robos violentos dirigidos contra inversionistas en criptomonedas ha acentuado la preocupación por la exposición de su patrimonio.

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Ver más: JPMorgan ve al bitcoin superando a las acciones, pero advierte sobre un riesgo

Los dos bandos se beneficiarán del creciente interés en Zcash, a pesar de la competencia por una parte del mercado que lo rodea. Ninguno ha calificado públicamente sus inversiones como una rivalidad, mientras que el repunte ha atraído a un mayor número de inversionistas. Los hermanos Winklevoss y Silbert declinaron hacer declaraciones a Bloomberg News.

¿Por qué Zcash se ha disparado casi un 3.000%?El detonante del auge de Zcash se produjo en marzo de 2025, cuando un fallo histórico de EE.UU. contribuyó a disipar muchas de las incertidumbres en torno a las llamadas criptomonedas centradas en la privacidad.

Esto impulsó a destacados promotores del mercado, como Arthur Hayes, a promover el token como una cobertura contra el bitcoin durante lo que aquel entonces era una subida sin precedentes de la criptomoneda original.

“Todo inició con una narrativa, ya que la privacidad volvió a ser un tema candente, inversionistas conocidos comenzaron a promocionar Zcash como una especie de bitcoin privado, y luego llegó el dinero real”, explicó Thomas Probst, analista de investigación de Kaiko.

Ver más: Trump y World Liberty son demandados por operaciones cripto vinculadas a Emiratos Árabes Unidos

Tanto los hermanos como Silbert se han movido con rapidez para crear una constelación de entidades competidoras.

Cypherpunk Technologies Inc. y Fortitude Mining, respaldadas por los gemelos y Silbert respectivamente, se han convertido en dos de las mayores mineras de dicha criptomoneda. Estas compañías invertirán decenas de millones de dólares en mayor capacidad de procesamiento para competir por una mayor parte de las recompensas de minería.

Concretamente, al igual que la minería de bitcoin, el proceso para acuñar el token nativo de Zcash, ZEC, se trata de un juego de suma cero en el que los mineros compiten por un suministro fijo que se libera periódicamente, con un impacto limitado en los precios.

Cuanto mayor sea la capacidad de procesamiento de un minero, mayor será la probabilidad de que reciba la recompensa en tokens por procesar transacciones en la red.

Ver más: Gemini, la empresa cripto de los hermanos Winklevoss, se dispara 64% en su debut en bolsa

“Pensamos que Zcash representa una de las oportunidades más atractivas en el ámbito de los activos digitales”, declaraba Silbert en un documento que se presentó en junio.

Grayscale, la división de DCG, fue la primera en el mes de agosto, en lanzar un ETF de Zcash en EE.UU., lo que proporcionó un canal directo para el capital institucional. Ese ETF fue creado a partir de un fideicomiso que Grayscale había abierto en 2013 para inversionistas acreditados.

Al igual que bitcoin, Zcash tiene un límite de suministro fijo, una escasez que ha contribuido a amplificar su precio a medida que fluye nuevo capital.

Según Ethan Vera, director de operaciones de Luxor Technology, empresa de servicios de minería de criptomonedas, existió un esfuerzo coordinado entre ciertos compradores o mineros a gran escala, tanto en EE.UU. como en China. Añadió que, desde entonces, esto se ha expandido considerablemente.

Fortitude anunció que alcanzará el 20% de esa capacidad de minería tras las últimas actualizaciones. Entre tanto, Cypherpunk posee casi el 20% de la potencia de minería de toda la red. A comienzos de este mes, los hermanos Winklevoss solicitaron la aprobación de su propio ETF de Zcash.

Los multimillonario del bitcoin se apresuran a aprovechar un auge cirptomonedas del 3.000%Alza a lo largo de todo el año; el token de privacidad ZEC se ha disparado durante el último año, contrariamente a la caída generalizada del mercado de las criptomonedas.(Bloomberg)

A pesar de una demanda cada vez mayor, el aumento astronómico del precio de Zcash desde mediados de 2025 ha planteado desafíos únicos para los inversionistas. La creciente presencia de los hermanos Winklevoss y Digital Currency Group también pone de relieve la concentración del poder de la minería y la propiedad de los tokens.

Un investigador de seguridad usó Claude de Anthropic en mayo para descubrir una vulnerabilidad crítica en Zcash que había pasado desapercibida durante años. Dicha vulnerabilidad habría permitido a un atacante falsificar una cantidad ilimitada de tokens Zcash.

El descubrimiento de esta vulnerabilidad planteó nuevas preguntas sobre cómo la inteligencia artificial podría redefinir la lucha entre quienes protegen las redes de criptomonedas y quienes intentan hackearlas.

Más allá de esas posibles vulnerabilidades, invertir en tokens de privacidad entraña riesgos normativos propios y específicos. Unos requisitos de cumplimiento más rigurosos o posibles vínculos con pagos ilícitos pueden hacer que las autoridades reguladoras vigilen más de cerca un token o incluso lo prohíban.

Ver más: Este fondo cripto se resiste a la fiebre de la IA y mantiene su apuesta por los activos digitales

“Los riesgos potenciales relacionados con las criptomonedas centradas en la privacidad se derivan de la falta de transparencia en cuanto a las actividades y transacciones”, aseguró Eric Jardine, jefe de investigación de Chainalysis. “Los actores ilícitos podrían abusar de ellas para evitar ser detectados por las fuerzas del orden”.

También existe siempre el riesgo de la próxima inversión de moda. Los inversionistas en criptomonedas han oscilado entre diferentes monedas durante años, pasando a los NFT y las memecoins cuando eran las favoritas del mercado. Recientemente, los compradores especulativos se han concentrado en valores relacionados con la IA y en una serie de apuestas a través de futuros perpetuos.

“Estas personas no son necesariamente tan fieles creyentes como los primeros que apostaron por el bitcoin”, explicó Alexander Blume, fundador y CEO de Two Prime, una firma de gestión de activos digitales. “Les interesa ganar dinero y tienen la esperanza de que todavía queda margen para que el precio continúe subiendo”.

Lea más en Bloomberg.com

Table of contents

Kraken co-CEO Arjun Sethi said the exchange’s Monero emails were “wrong” and confirmed that XMR stays listed, after Kraken asked customers who bought Monero with their own money and withdrew it to disclose their employer, source of funds, and what they planned to do with the coins. Sethi said no rule required the inquiries, and that the questions have now been withdrawn. The statement, posted on X on October 24, came in response to a public call-out over the messages.

the $XMR emails were us. they were wrong. here is what happened and what changed. what happened – clients who bought xmr with their own money and withdrew it got an email asking for employer, source of funds and what they planned to do with their coins – no rule required it. someone saw a young client with a lot of money and called it a red flag. that is not a red flag. that is our customer and client what changed – those requests are withdrawn and the clients have been told nothing is required of them – the “what will you do with your coins” question is gone and unacceptable. where your money came from is a fair question. what you do with it after it leaves is not xmr stays listed. buy it here, take it home. that is the product.. we’ll keep making it better. thx for the call out.

— Arjun Sethi (@arjunsethi) October 24, 2026

What the Emails Asked, and Why Kraken Says They Were Wrong
According to Sethi’s account, the emails went to clients who had already bought XMR with their own funds and moved the coins off the platform. The message asked for three things: the customer’s employer, the source of the funds, and what they intended to do with the withdrawn coins. Sethi wrote that “no rule required it,” and traced the trigger to a single judgment call. “Someone saw a young client with a lot of money and called it a red flag. That is not a red flag. That is our customer and client.”

The correction is procedural as much as it is reputational. Sethi said the requests have been withdrawn and the affected clients have been told nothing is required of them. The question about what a customer would do with their coins after they left Kraken is “gone and unacceptable,” he wrote.

The Line Kraken Now Draws
The episode turns on a distinction Kraken is now making explicit: the origin of funds is a legitimate compliance question, but their destination is not. “Where your money came from is a fair question. What you do with it after it leaves is not,” Sethi wrote. That framing separates the anti-money-laundering obligation that exchanges actually carry from an inquiry into a customer’s post-withdrawal activity, which Kraken has no legal requirement to police and now says it will not.

Monero remains listed. “XMR stays listed. Buy it here, take it home. That is the product,” Sethi wrote, adding that Kraken will keep improving the product. The confirmation matters because Monero is the most prominent privacy coin, and its availability on major exchanges has been a recurring point of tension as regulators pressure venues over anonymity-enhancing assets.

What the Walkback Does Not Settle
The correction is limited to Kraken’s own conduct. It does not change the broader regulatory environment for privacy coins, and it does not mean other exchanges will follow. Sethi’s statement resolves one episode at one venue; the questions of whether and how exchanges should gather information on self-custodied privacy-coin withdrawals remain open across the industry.

Monero traded near $602 with a market capitalization of about $11.3 billion on October 24, up roughly 2% over the prior 24 hours and about 11.5% over the prior week, according to CoinGecko. The token has traded in the range of roughly $584 to $606 over the past day, and sits below its January 2026 record near $798. The walkback is a customer-service and compliance-policy event, not a market event; the price figures are context, not a reaction to the statement.

Kraken’s retreat from the withdrawal questions lands in the middle of a longer conversation about how exchanges treat privacy coins, a subject BlockchainReporter has tracked through Monero’s privacy trade and the exchange’s own regulatory expansion. The next observable signal is whether other venues that have restricted or questioned Monero activity adjust their own approaches, and whether any regulator weighs in on post-withdrawal questions of the kind Kraken has now disowned.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

AUTHOR

Jide Idowu is a skilled freelance writer with expertise in blockchain technology, cryptocurrency, and digital finance. Known for his ability to break down complex topics into clear, engaging content, Jide crafts articles, blog posts, and analyses that resonate with both beginners and seasoned professionals. His work spans a wide range of subjects, from emerging crypto trends to in-depth explorations of blockchain innovations. With a keen eye for detail and a passion for educating readers, Jide is a reliable voice in the rapidly evolving world of digital assets.

Canary's spot Hedera ETF (HBR) has seen little activity in October, including a $559K net outflow on October 16. Here is what the flows say about demand for HBAR.

Activity in Canary Capital's spot @Hedera ETF has been subdued this month, raising questions about investor appetite for $HBAR exposure. The Canary HBAR ETF (ticker: HBR) has recorded net flows on only three days in October, and one of them, October 16, was only the product's second day of net outflows since launch, at about -$559K.

Quiet flows after a slow startHBR is not the first time the fund has struggled for traction. It began trading on October 28, 2025.

Demand picked up briefly afterwards.

Recent sessions have been far quieter. Data compiled by SoSoValue and reported by TokenPost shows that Earlier in the week,

What it means for more Hedera ETFsThe weak flow pattern is not new. In August, one report noted that The same report said

That matters for issuers weighing new products. If trading and flows do not improve, it appears unlikely that additional Hedera ETFs will follow. Fund sponsors typically look at sustained inflows and trading volume when deciding whether a new listing is worth the cost, and HBR's recent record offers little encouragement.

For now, HBR remains the main regulated route into HBAR in the US. Whether October's muted activity is a temporary lull or a sign of fading interest will become clearer as the market moves into the final weeks of the year.

Sources:

TokenPost: Altcoin spot ETF flows on October 22, 2026Yahoo Finance: HBAR and Litecoin ETFs show life after silent debutBusiness Wire: Canary Capital launches spot HBAR ETF

Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom Fund, has exited his entire directional trading book.

On October 24, 2026, he confirmed the move on X, selling Ethereum (ETH), Ethena (ENA), Uniswap (UNI), and other altcoins worth roughly $22.28 million.

The exit signals a sharp defensive pivot amid rising macro and geopolitical uncertainty.

Hayes Closes the Book: What He Sold and Why In his own words on X, Arthur Hayes wrote: “I dumped it all. The Maelstrom directional book, took profits on $ETH, $ENA, $UNI and other shitcoins. I think we gotta go down to go up. It looks a bit dicey out there in macro and geopolitical land. Going to sit on the sidelines and wait for the all clear signal … Brrrrr.”

On-chain data from Lookonchain confirmed the scale of the exit. The sales included 6,400 ETH worth approximately $15.2 million.

Hayes also offloaded 14 million ENA (~$2.76M) and 323,000 UNI (~$2.24M). Smaller positions in ETHFI, AERO, PENDLE, and ZAMA were also closed.

The timing is striking. Just weeks ago, Hayes predicted Ethereum could reach $10K alongside massive ENA and ETHFI gains. That bullish stance is now paused. Hayes is not abandoning his long-term thesis, he is managing short-term risk.

The broader market context supports his caution. Multiple factors have been dragging crypto prices lower this week, including hawkish Fed signals, ETF outflows, and risk-off sentiment across tech and AI names. Geopolitical tensions have added another layer of uncertainty.

A Tactical Retreat, Not a Change of Heart This is not the first time Arthur Hayes has stepped back from altcoin exposure during uncertain periods.

He previously flagged crypto’s ‘no-trade zone’ and outlined his Bitcoin, Gold, and Hyperliquid outlook. That cautious streak is now showing up in his portfolio.

Earlier this year, a wallet linked to Hayes bought $5.4M in ETH following the US-Iran deal. That aggressive accumulation has now been reversed.

The pattern is consistent: Hayes cycles between deep alt exposure and full cash when macro conditions deteriorate.

His long-term structural view remains intact. Hayes has doubled down on Bitcoin reaching $1 million and laid out a potential timeline.

The current cash position is a tactical pause, not a permanent exit from crypto markets. For ENA specifically, Standard Chartered has separately forecast ENA reaching $2 by 2028.

The longer-term narrative around Ethena remains, even as Hayes steps aside in the near term. It is also worth noting that Hayes sold his entire Hyperliquid position earlier this year, sending HYPE down 4%.

That precedent shows that his sell announcements carry real market weight. ETH, ENA, and UNI could face near-term selling pressure as the market digests this exit.

Arthur Hayes said he is waiting for the ‘all clear signal’ before re-entering. Until then, Maelstrom sits in cash, and the market will be watching closely for his next move.

In this week’s edition of the weekly recap, US regulators finalized stablecoin rules under the GENIUS Act, Bitcoin lost ground after a sharp reversal in ETF flows, and Solana activated Alpenglow. Corporate Bitcoin financing, institutional custody deals, and Ethereum’s postponed testnet upgrade also shaped crypto.news coverage for Oct. 18–24.

Summary

Jan. 18, 2027, is the effective date for the OCC’s final GENIUS Act stablecoin rules.
$635.49 million left US spot Bitcoin ETFs on Oct. 22, ending three consecutive inflow sessions.
Solana activated Alpenglow on Oct. 21, targeting roughly 150-millisecond finality with its new consensus system.
Strategy increased its Bitcoin holdings to 848,517 BTC and expanded its securities buyback authorization.
Strive closed a $630 million preferred stock offering carrying a fixed 15% annual dividend rate.

GENIUS Act rules set January start date

The Office of the Comptroller of the Currency finalized stablecoin regulations on Oct. 21, establishing standards for reserve assets, redemptions, risk management, custody and issuer supervision. The rules take effect Jan. 18, 2027, and cover issuers and related activities under the agency’s jurisdiction.
Existing issuers with substantially complete applications pending by the deadline may seek temporary compliance waivers while their submissions undergo review. Anti-money laundering and sanctions provisions remain subject to a separate rulemaking with the Treasury Department. The framework also addresses foreign issuers and transitions from state to federal oversight.

Bitcoin ETF withdrawals interrupt the recovery

US spot Bitcoin ETFs recorded $635.49 million in net outflows on Oct. 22, reversing three consecutive sessions that brought in approximately $1.08 billion. SoSoValue’s figures showed the largest daily withdrawal since June 25, with October’s cumulative flows turning negative by about $174.5 million.
Bitcoin traded near $81,450 in crypto.news’ Oct. 23 market report after failing to sustain its recovery toward $85,000. The retreat returned attention to the $80,000 area. CoinGlass separately recorded roughly $406 million in liquidations across the broader cryptocurrency market over 24 hours, rather than Bitcoin alone.

Solana activates Alpenglow consensus

Solana Foundation’s activation record confirmed Alpenglow’s deployment on mainnet during epoch 1064 on Oct. 21. The Votor consensus system targets roughly 150-millisecond finality, compared with 12.8 seconds under TowerBFT. Transaction execution, program behavior, and fee mechanics remain unchanged.
Alpenglow consensus began at slot 459,653,000 after a genesis block received certification from 446 of 654 validators. Rotor, the proposed data-distribution component, remains reserved for a later release. Solana also promoted Quantumglow research, but the proposed post-quantum adaptation has no announced deployment date and is separate from the completed consensus migration.

Strategy adds Bitcoin and expands buybacks

Strategy acquired another 267 Bitcoin, bringing its holdings to 848,517 BTC as of Oct. 18. Michael Saylor’s Oct. 19 disclosure also reported $193 million in STRC preferred stock repurchases and approximately $5.3 billion in dollar assets. The company increased its digital credit securities repurchase authorization from $2 billion to $3 billion.

Strive closes $630 million preferred offering

Strive closed its upsized offering on Oct. 20, selling 7 million SATS preferred shares for $90 each. The shares carry a fixed annual dividend of 15% against their $100 stated value. The Bitcoin treasury company outlined an 18-month dividend reserve equivalent to $157.5 million at the final offering size; payments remain subject to board approval and legally available funds.

BlackRock proposes Bitcoin protection ETF

BlackRock filed for a fund called the iShares Bitcoin Managed Protection ETF, with proposed ticker PBIT. Its options strategy would seek partial downside protection while limiting potential gains. The proposed fund would hold cash, fixed-income instruments, and Bitcoin-linked options rather than Bitcoin directly. Its filing did not establish a confirmed launch date or guarantee investors a maximum loss.

JPMorgan expands tokenized funds to Solana

J.P. Morgan Asset Management brought two funds to Solana through Morgan Money, offering MONY and JLTXX to qualified US investors. Investors can subscribe and redeem through the platform and receive token balances at their blockchain addresses. Existing fund documents describe onboarding controls, approved-wallet requirements and $1 million opening minimums, with waivers available under JLTXX’s terms.

Standard Chartered signs Zodia acquisition agreement

Standard Chartered signed definitive agreements to acquire full ownership of Zodia Custody and integrate its regulated custody operations into Securities Services. The Oct. 21 announcement left completion subject to regulatory approvals and customary conditions. Financial terms were undisclosed. Zodia’s software and professional services operations will operate separately as Zodia Solutions under SC Ventures.

Fireblocks denies reported Visa acquisition talks

Fireblocks denied acquisition reports after Axios reported that Visa was negotiating a purchase worth approximately $2.5 billion. A spokesperson said the reported transaction was news to the company and untrue at the time. Visa declined to comment on the reported negotiations. Neither company announced a definitive agreement, leaving the proposed deal disputed.

Tether joins Tenstorrent’s $1.5 billion raise

Tether joined Tenstorrent’s financing at a $6.2 billion post-money valuation, extending its investments in AI infrastructure. Tether announced its participation on Oct. 20 after the chipmaker disclosed the completed Series E. Tenstorrent plans to fund server deployment, chip development and commercial expansion. The $1.5 billion represents the whole round; Tether’s individual contribution was undisclosed.

Ethereum postpones Glamsterdam testnet activation

Ethereum developers postponed the Hoodi upgrade scheduled for Oct. 26 while investigating EIP-8037’s interaction with existing smart contracts. ChainSecurity identified risks involving failed calls and retry mechanisms under proposed gas changes. The decision also removed a planned increase to a 200 million gas limit. Developers had not announced replacement Hoodi or mainnet activation dates.

Phantom opens Kalshi markets to US users

Phantom opened Kalshi market access for eligible US wallet users, with combined platform and exchange fees of $0.02 per contract. Customers must create or link a Kalshi account and complete identity checks. Trading funds move to Kalshi, while available proceeds return to Phantom’s Cash account. The integration uses conditional CFTC staff no-action relief for specified software activities.

Initia halts its blockchain after security incident

Initia halted its layer-1 network and rollups on Oct. 23 while investigating a security incident with researchers, validators, and exchanges. Security researcher Spreek alleged unauthorized token minting and estimated that an attacker had cashed out approximately $2.6 million. Initia confirmed the suspension but did not establish a final loss figure in its initial statement.

OKXICE encounters issuer objections to stock tokens

OKXICE’s proposed stock-token venue faced nine documented objections, including Broadcom, CoreWeave, Verizon and UnitedHealth, according to its Oct. 15 notice covered on Oct. 18. The SEC’s exemption lets issuers block unaffiliated tokenization on the notifying venue. The proposed platform would use Uniswap v4 pools on XLayer, with no confirmed public launch date.

Major cryptocurrencies Shiba Inu (SHIB), Dogecoin (DOGE), XRP, and Binance Coin (BNB) showed divergent trends, with technical indicators highlighting ongoing uncertainty across the broader crypto market. While SHIB, DOGE, and XRP grappled with persistent selling pressure and struggled below important resistance levels, BNB displayed relative strength above its long-term trend indicators.

Shiba Inu (SHIB) faces bearish sentimentShiba Inu continued to trade under sustained bearish pressure, hovering near $0.00000508 after losing momentum in its recent recovery attempts. The altcoin failed to reclaim resistance between $0.00000530 and $0.00000550, where several short-term moving averages were clustered.

A move above this range could trigger further advances toward $0.00000580, with the $0.00000600 mark acting as a psychologically significant target for buyers. However, the descending trend in long-term moving averages signaled ongoing vulnerability to downside risk.

Immediate support sits at $0.00000500, with a drop below this threshold potentially exposing SHIB to additional declines toward $0.00000470 and $0.00000450. The Relative Strength Index (RSI) remained below the neutral 50 level, indicating that bearish momentum remained dominant. Lower trading volumes also pointed to a lack of substantial buying conviction. A clear move above $0.00000550 could be the first signal for a shift in short-term sentiment.

Despite signs of stabilization in the broader market structure, the combination of persistent resistance and muted trading activity continues to keep SHIB on uncertain footing as it trades near recent lows.

Dogecoin (DOGE) slump extendsDogecoin traded near $0.07958 following an extended decline throughout 2025. Attempts to mount a lasting recovery repeatedly stalled, with the latest rejection occurring near $0.1000. This reversal brought DOGE below several important moving averages and reaffirmed the prevailing bearish setup.

DOGE faces immediate resistance between $0.0850 and $0.0880. A breakout above this area could push the price closer to $0.0920, where a downward sloping long-term moving average poses another obstacle. The psychological level of $0.1000 remains a key upside target for any significant reversal.

On the downside, DOGE finds support around $0.0780, with further protection at $0.0750. A clear breach below these levels would likely increase selling pressure, possibly driving prices down to $0.0700—a level that previously attracted buyers. The RSI hovered near the bottom of its neutral range, signaling subdued buying momentum. Declining volume added to signs of caution among traders.

AssetCurrent PriceResistanceSupportShiba Inu (SHIB)$0.00000508$0.00000530–$0.00000550$0.00000500Dogecoin (DOGE)$0.07958$0.0850–$0.0880$0.0780XRP$1.3045$1.35, $1.38–$1.40$1.30Binance Coin (BNB)$743.70$750–$760$710–$720XRP sellers keep control under resistanceXRP traded around $1.3045, remaining weak after losing ground to sellers at higher levels. The token briefly rallied from August lows near $1.00 but could not sustain momentum as multiple resistance zones pushed the price lower. XRP continued to hover beneath its descending long-term moving average, which stood near $1.38, creating a central challenge for any bullish reversal.

Key resistance sits at $1.35, while a cluster of moving averages between $1.38 and $1.40 further limits upside attempts. Establishing a foothold above these levels could renew bullish optimism, potentially setting a path toward $1.45 and $1.50. However, buyers would likely need improved trading activity and consistent closes above resistance levels to confirm the start of a new uptrend.

Support at $1.30 is critical in the near term, with a break below that area leaving room for further declines to $1.25 or even $1.20. If selling accelerates, technicians point to the $1.10–$1.15 range as the next potential target. Lower volume since XRP’s last breakout has further contributed to uncertainty around short-term market direction, suggesting that consolidation or additional weakness is possible without a clear catalyst to the upside.

Buyers have attempted to steady XRP after the latest rejection at resistance, but the waning volume and inability to regain higher ground highlight a cautious environment where downside risks remain prominent.

Binance Coin (BNB) steadies above trend supportBinance Coin traded near $743.70 as stabilization efforts emerged following a correction from highs around $800. As the native token of the Binance ecosystem and one of the largest cryptocurrencies by market capitalization, BNB held above critical long-term trend indicators, reflecting relative strength compared to many peers stuck below their averages.

BNB’s rebound from approximately $580 in August to $800 in early October marked a robust recovery. After a wave of profit-taking pushed the price toward $720, buyers stepped in, keeping the asset well-positioned above short-term support.

Resistance is clustered between $750 and $760, with a successful breakout likely to renew buying interest and challenge the $780 level, followed by the key psychological bar at $800. Support resides between $710 and $720, an area where previous demand provided stability.

With the RSI around the midline, analysts view BNB as being at a crossroads between bulls and bears. Current consolidation near $740 suggests selling may have eased post-correction, but stronger volume will be needed to confirm new upward momentum. Maintaining closes above $710–$720 would support the longer-term recovery trend, while a break above $760 could boost optimism for a fresh rally.

Mini dictionary: Binance Coin (BNB) is the native digital asset of Binance, one of the world’s largest cryptocurrency exchanges. BNB is used to pay transaction fees on Binance, participate in token sales, and access a variety of financial services within the Binance ecosystem.

Shiba Inu, one of the most actively traded meme tokens, is currently priced at $0.00000510. The token recovered from a daily low of $0.00000493 but remains just above a critical price threshold, while exchange data indicates increasing supply on trading platforms.

Exchange reserves and market pressureTotal SHIB reserves held on exchanges climbed to 87.2364 trillion tokens, up by 0.06% over the last 24 hours. This pool is now valued at approximately $441.4 million, reflecting a 0.86% increase. Data shows a net inflow of 53.8 billion SHIB to exchanges in the same period, with inflows totaling 256.4 billion SHIB and outflows at 202.6 billion SHIB—representing a 3.69% day-over-day rise in net inflow.

MetricValue24h ChangeSHIB exchange reserves87.2364T+0.06%Net inflow53.8B SHIB+3.69%Reserve value$441.4M+0.86%Large net inflows of coins to exchanges can signal a possible increase in selling pressure. When tokens are held on trading platforms, holders have the option to sell quickly, especially if the price stalls below resistance levels. At the moment, SHIB finds resistance near multiple moving averages, and the rise in supply on exchanges adds an extra layer of caution for market participants.

Recent data shows a net inflow of 53.8 billion SHIB onto exchanges, raising supply there to 87.2 trillion tokens and potentially increasing short-term selling pressure as Shiba Inu’s price hovers near critical resistance.

Network metrics and technical outlookDespite the cautious sentiment, SHIB’s underlying network activity remains stable. There were 4,634 transactions recorded, marking a 0.98% increase, and active addresses grew by around 1%. These gains suggest regular use of the network, though they stop short of indicating significant new demand.

During the last seven days, Shiba Inu saw a total of 1.88 million SHIB burned. A single sharp spike in the burn rate was visible, but the overall burned supply did not meaningfully impact the vast circulating supply.

Mini dictionary: Burned supply refers to the process of permanently removing tokens from circulation, reducing the total supply and potentially impacting token value if burns are significant relative to total circulating supply. Most burns are small and do not affect price unless conducted on a large scale.

Technical indicators show Shiba Inu remains under several key resistance levels. The 100-day moving average sits near $0.00000525, and the 200-day moving average is close to $0.00000558, collectively forming a barrier above the current market price. The Relative Strength Index (RSI) stands between 40 and 45, pointing to weak momentum that is neither oversold nor strongly trending upward. In addition, a recent decline in trading volume highlights a lack of robust buying support behind the recent price bounce.

Key support and resistance levelsOn the downside, technical support is located between $0.00000480 and $0.00000493. This range has held firm in recent sessions. Should SHIB fall below this zone, the price could revisit the $0.00000450 level, which previously served as support in August.

For bulls to regain control, the price needs to close above the 100-day average at $0.00000525. Sustained inflows to exchanges while SHIB remains under this resistance may increase the chance of a pullback. Conversely, stronger outflows paired with a move above key moving averages would strengthen the case for further recovery.

If Shiba Inu maintains a daily close above $0.00000525 and exchange outflows rise, the recovery may gain momentum, but persistent net inflows and weak volumes suggest ongoing caution for now.

The general partner confirmed Thursday evening that he will start a company, hours after Chris Dixon said the firm's newest crypto fund can now back AI and other frontier startups.

a16z's crypto team becomes a16z Frontier as Ali Yahya announces his exit

Posted October 23, 2026 at 8:05 pm ET.

The newest fund at a16z Crypto is no longer limited to crypto. Managing partner Chris Dixon wrote in a post at noon ET Thursday that the firm is “expanding the scope of our new fund beyond crypto startups to the broader category of frontier startups,” meaning bets on new technologies whose markets could need years to form.

The team now goes by a16z Frontier, and its old a16zcrypto.com blog address redirects to a new domain. Dixon described the move as “an expansion” and said the firm “will continue to invest in crypto and related ventures and advocate for sensible crypto regulation.”

a16z closed its fifth crypto fund at $2.2 billion in May, lifting its total across five crypto funds to $9.8 billion. Dixon’s post did not give a fund size or say how much of the capital could go outside crypto.

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Why Dixon dropped the label
Dixon argued that blockchains have become less visible as they spread, with Wall Street firms and fintechs now shipping products on them. “The label matters less now,” he wrote. In his view, it “makes more sense to define companies by what they do rather than by the technologies they use.”

He listed brand-new uses of AI, robots and other autonomous machines, biology and medicine, and startups that mix software, hardware and services, along with networks where people and intelligent agents transact. Crypto, he argued, can give those systems economic capabilities of their own, including machine-to-machine transactions. “These are examples, not boundaries,” he wrote.

Dixon said he will share the fund’s leadership with Eddy Lazzarin and Guy Wuollet, both general partners, and with a16z co-founders Marc Andreessen and Ben Horowitz.

Yahya heads out
General partner Ali Yahya wrote in a post on X at 7:33 p.m. ET Thursday that he has “decided to leave @a16z, move to SF, and start a company.” The Information had reported that morning that Yahya told some investors he planned to leave.

Yahya joined Dixon in 2017 from Google, where he says he worked on robotics as a Google Brain engineer. When a16z promoted him to general partner in 2021, it called him the “first full-time member of the crypto team.” He said his company is early but will focus on “building infrastructure that enables open software ecosystems,” starting from the view that AI use will move from one person talking with one agent to many people and agents working together. He called himself “forever an a16z superfan” and thanked the firm’s partners by name.

Crypto investor Paradigm announced a $1.2 billion fund in July and said it now works “across AI, robotics, and other frontiers.”

Related Listen: Why Ali Yahya Believes That the Chain That Protects Private State Will Win

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M is the only major exception in the green today, while WLD has plummeted hard, followed by LIT, DOT, STRK, and many others.

Bitcoin’s adverse price movements that began with the rejection at $85,000 on Wednesday continue, with the asset sliding to $80,400 earlier this morning, perhaps due to the latest Trump comments on the war against Iran.

Most altcoins have followed suit, with ETH dropping further below $2,400, and XRP seemingly losing the crucial $1.30 support. NEAR, BTW, PUMP, WLD, and DOT have slumped even more.

Will $80K Hold? After the intense volatility experienced in the previous business week following the release of the CPI and PPI data, and BTC’s subsequent retreat to under $80,000, the cryptocurrency tried to rebound almost immediately and stood above $82,000 over the weekend. Then came a flash crash that brought it south by a grand on Saturday evening, before the bulls tried to take down the $83,000 resistance on Monday.

They failed at first, and bitcoin slipped to $81,000. A sudden uptick on Tuesday drove it to just over that line before the bulls took it a step further on Wednesday, driving BTC to a two-week peak of almost $85,000.

However, this was a short-lived rally, and the rejection was quite rapid and painful. At first, BTC tanked to under $83,000, but the bears took complete control of the market on Friday and Saturday morning, at least for now, driving bitcoin to $80,400 for the first time in about ten days.

Although BTC remains above $80,000 as of now, it’s still 1% down for the day again. Its market cap has pulled back to $1.620 trillion, but its dominance over the alts stands tall at 60% on CMC.

BTCUSD October 24. Source: TradingView Alts in the Red Again ETH is down by a similar percentage to BTC and sits well below $2,400. Ripple’s native token has dived by over 2%, and it’s now below $1.30. Recall that the asset neared $1.40 on Wednesday before the market-wide pullback. SOL is close to breaking below $100, while ZEC has tanked below $1,200.

Further losses are evident from XMR, XLM, LINK, RAIN, LTC, and NEAR. WLD is the only double-digit loser, while M has defied the broader market’s move with a 10% surge.

The total crypto market cap is down by over 1% daily to $2.7 trillion on CMC.

Cryptocurrency Market Overview October 24. Source: TradingView Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Holders can't redeem through Swell for now, and on DEXs the tokens fetch well below the inflated rate their contracts report.

Swell freezes swETH and rswETH withdrawals until it corrects their exchange rates

Posted October 23, 2026 at 9:05 pm ET.

Holders of Swell‘s swETH and rswETH cannot deposit or withdraw through the protocol after the team said at 2:39 a.m. ET Friday it had paused both tokens’ deposits and withdrawals. Swell wrote that returning their net asset value (NAV) “to the correct value” is the next step before it reopens them.

At 4:48 p.m. ET Friday, the swETH contract put its rate at about 1.203 ETH and rswETH at about 1.138 ETH, according to Unchained’s read of the contracts. Those figures sit roughly 6% and 5% above the last rates that on-chain analyst Spreek identified as clean, 1.133 ETH and 1.082 ETH.

On decentralized exchanges, swETH fetched about 1.089 WETH in a Uniswap pool with roughly $143,000 of liquidity, and rswETH went for about 1.029 WETH on Curve. According to DefiLlama, swETH holds about $29 million and rswETH holds roughly the same.

Swell has not given a reopening timeline or guidance on trading or providing liquidity. “All funds are safe,” the team wrote, and it warned that events like this can bring more phishing attempts.

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How the rates rose
At 9:28 p.m. ET on Wednesday, Oct. 21, Spreek wrote that admin keys for both tokens appeared to be compromised and that NAV was being raised by “max 1% (unbacked) each hour” at the time. He said four malicious upgrade contracts able to take about 2,500 ETH had been deployed, but none had been queued through Swell’s multisig.

Odysseus, founder of Phylax Systems, said the incident looked like “BOT-key abuse” and stressed that the 2,513 ETH held “is NOT confirmed loss.”

Swell said at 11:03 p.m. ET that it was investigating with security partners and that “no ETH has left the swETH or rswETH withdrawal or deposit contracts.”

Cause still unconfirmed
Both researchers raised a possible tie to Railway, a cloud deployment platform. Railway said in an Oct. 21 security disclosure that an “unauthorized third party” may have gotten into customers’ encrypted environment variables and read some of them in decrypted form. Railway’s disclosures do not mention Swell, and Swell has not confirmed a link or described the cause.

Spreek’s incident report, which he said was AI-written and not fully checked, found that as of late Oct. 21 none of Aave, Spark or Fluid accepted either token and that a Morpho market priced off the contract rate had about 34 ETH available to borrow.

In April, LayerZero linked a $292 million exploit of the bridge for Kelp DAO’s rsETH restaking token to North Korea’s Lazarus Group, and Kelp DAO later sued LayerZero over it.

Related Listen: How Spark Escaped the KelpDAO Hack Before It Even Happened

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The Delphi Digital head of markets said Papertrade has the attack risk right, but that rewriting the rules once roughly $140 million had come in is "a bad look."

Delphi's Pagoulatos calls Papertrade's rule change after deposits "a bad look"

Posted October 23, 2026 at 7:05 pm ET.

Delphi Digital head of markets Jason Pagoulatos said on the Oct. 22 episode of Unchained that Papertrade is right about the danger of letting its PAPER token trade freely, but that changing course after users pre-deposited roughly $140 million is “a bad look.”

He said the move was “not exactly a rug” but that the team is “kind of bait and switching you” on the terms users signed up for. “You sell a bunch of people on a rule set beforehand, a bunch of money comes in, and now you change everything after the fact,” he added.

Papertrade, a high-leverage trading venue on Hyperliquid’s HyperEVM network that went live Oct. 10, said on Oct. 19 that “at this juncture we do not have plans to allow off-contract token transferability.” Its Oct. 1 launch plan had listed transfers as a later phase. Traders earn PAPER when they lose money and can stake it for a cut of fees.

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Papertrade’s reasoning
The team said a market for shorting PAPER would make price manipulation pay. In a hypothetical with a $10 million bankroll, it wrote, “an attack costing $15m manipulating the price of bitcoin or ether is not viable,” but adding a $10 million PAPER short would make that attack “very viable indeed.”

Pagoulatos agreed that an attack “will 100% happen if the token is made transferable because anybody can whip up a perp market” and that “we’ve already seen the first part of it happen the day of launch.” He said the team manually blocked positions tied to large Hyperliquid market orders that moved ether’s price that day.

Paragon listed a PAPER perp on Hyperliquid through HIP-3, the network’s system for third-party markets, on Oct. 18, then halted and settled it about a minute after Papertrade’s post.

Pagoulatos said that by capping pool size or leverage, “you kind of take away all the reasons in which somebody would use paper trade to begin with.” He also noted the team “literally put the risk in the doc ahead of time” and said “there is some blame to go around for everybody.”

Farmers and organic demand
Papertrade has distributed about $57 million to PAPER stakers through Oct. 21, according to DefiLlama. Daily payouts fell from about $1.3 million on Oct. 20 to roughly $88,000 on Oct. 21, then recovered to about $1.07 million on Oct. 22.

Pagoulatos said current activity shows “the organic usage of people who want this type of thing” rather than that of users who came “to potentially farm a token to then sell.”

He said he was “not gonna say it’s over,” but that “it’s going to be extremely tough.”

Related Listen: PaperTrade Attracted $140M, Then Changed the Rules. Was It a Bait and Switch?

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.

TLDR Table of Contents

PURR stock climbs 1.15% to $8.78 after Hyperliquid expands its buyback to $100M. Hyperliquid triples its repurchase capacity, lifting its buyback cap to $100M. About $72M remains available for PURR share repurchases under the new plan. Hyperliquid extends its PURR stock repurchase deadline to October 31, 2027. PURR shares add 0.23% after hours, reaching $8.80 following Friday’s gains. Hyperliquid Strategies expanded its stock buyback authorization to $100 million, lifting the previous $30 million cap. PURR stock gained 1.15% to $8.78, adding $0.10 after recovering from intraday lows near $8.60. Shares advanced another 0.23% to $8.80 after hours as the company updated its capital plans.

Hyperliquid Strategies Inc Common Stock, PURR

PURR Stock Gains Following Board Decision The stock reversed an early decline during Friday’s session as buying strengthened later in the day. That recovery helped offset earlier selling and supported a positive close despite uneven trading. After-hours activity produced a smaller additional increase, continuing the upward move.

The board’s decision raises the maximum authorization by $70 million against its previous limit. The new amount more than triples the program’s original capacity for share purchases. Still, the authorization gives management permission to repurchase shares without requiring immediate purchases.

Hyperliquid Strategies focuses on digital asset treasury operations within the Hyperliquid ecosystem. The company uses capital management decisions to support its financial structure and broader treasury strategy. Accordingly, the buyback expansion adds flexibility to its existing approach to share management.

Hyperliquid Strategies Extends Buyback Deadline to 2027 The board extended the program’s end date from December 5, 2026, to October 31, 2027. The longer period gives management additional opportunities to consider purchases under changing market conditions. Meanwhile, approximately $72 million remains available under the expanded authorization.

The company may buy PURR shares on public markets at prevailing prices. Management may also arrange private transactions or use other methods allowed under federal securities law. The selected approach will depend on market circumstances, transaction terms and applicable requirements.

The company linked the decision to its long-term capital strategy and broader treasury framework. The increased limit allows management to evaluate purchases alongside other company capital needs. However, the company did not establish a fixed share count or transaction calendar.

What the $100 Million PURR Repurchase Plan Allows Share repurchases allow businesses to acquire their own stock, potentially changing the number of outstanding shares. The effect depends on whether and how companies complete those transactions over time. An authorization alone creates no immediate change to outstanding shares.

Management will consider PURR’s trading price, general economic conditions and relevant legal restrictions. Those factors will shape the timing, size and total value of any future repurchases. The remaining allocation does not indicate an immediate cash commitment.

The company retains authority to extend, pause or end the program without advance notice. Accordingly, the final amount spent may differ from the authorized maximum at expiration. The expanded buyback capacity and extended deadline now form part of Hyperliquid Strategies’ capital management plans.

Franklin Templeton, a global asset management firm overseeing $1.8 trillion in assets, has announced the registration of two innovative exchange-traded funds (ETFs) designed to blend traditional U.S. stock investing with gradual exposure to Bitcoin. The new funds, titled the Franklin US Equity Bitcoin DRIP Index ETF (FBEQ) and the Franklin US Innovation Bitcoin DRIP Index ETF (FIBT), mark a further expansion of the firm’s activity in the cryptocurrency investment sector.

New ETFs combine equities and Bitcoin allocationUnlike most spot Bitcoin ETFs that directly track the price of the cryptocurrency, FBEQ and FIBT will primarily invest in U.S. equities, allocating 95% of their portfolios to stocks while dedicating the remaining 5% to Bitcoin-related assets.

Franklin Templeton stated that the core strategy behind these ETFs is to let investors benefit from both traditional equity markets and incremental cryptocurrency exposure in a single product, thus offering a differentiated investment approach in traditional finance.

Both funds aim to accumulate Bitcoin over time by channeling dividend income from U.S. stocks into digital asset exposure, eliminating the need for direct crypto purchases by the investor.

How the dividend reinvestment process worksThe distinguishing feature of these two ETFs is their application of a dividend reinvestment plan (DRIP), where dividends paid out by the underlying U.S. stocks are used to purchase Bitcoin-related assets instead of simply acquiring additional company shares.

According to filings, the DRIP mechanism will apply to both regular and special dividends, which will be reinvested in Bitcoin-related assets on the trading day immediately following the ex-dividend date. This method offers a structured path for investors to steadily increase their Bitcoin allocations without requiring hands-on involvement in cryptocurrency trading.

Mini dictionary: DRIP (Dividend Reinvestment Plan), a program that automatically uses dividends from investment holdings to buy more of the same asset or related assets, compounding growth over time.

Gradual Bitcoin accumulation via equity exposureThrough the structured reinvestment of dividends, FBEQ and FIBT are designed to slowly build a position in Bitcoin-related assets alongside substantial exposure to the U.S. stock market. This hybrid approach seeks to attract investors looking for diversified portfolios that include digital assets but who may prefer not to manage cryptocurrency purchases themselves.

Franklin Templeton currently offers the Franklin Bitcoin ETF (EZBC), a spot Bitcoin product that has attracted cumulative net inflows of approximately $335 million. The introduction of FBEQ and FIBT now brings an alternative product structure that integrates cryptocurrencies into more conventional portfolios through automatic mechanisms.

ProductTypeMain StrategyNet Bitcoin ExposureCurrent InflowsEZBCSpot Bitcoin ETFDirect Bitcoin investment100%$335 millionFBEQ/FIBTEquity-Bitcoin DRIP ETF95% US equities, 5% Bitcoin; dividends reinvested in BitcoinUp to 5%, grows over time via DRIPN/A (newly registered)This latest move highlights Franklin Templeton’s ongoing effort to offer diversified investment opportunities for both traditional and digital asset markets. The firm aims to provide products that can cater to varying investor interests and risk appetites within the evolving landscape of crypto finance.

Michael Saylor has posted a cryptic message about resolving Bitcoin matters behind closed doors after Strategy disclosed a $22.1 million purchase funded largely through common-share sales.

Summary

Saylor’s “closed doors” post gives no purchase amount, transaction date, or funding details.
Strategy bought 517 BTC for $43.6 million across its two latest disclosed weeks.
Common-share sales funded approximately 98.6% of those Bitcoin purchases, with cash covering the rest.
STRC buybacks totaled $385.5 million over the same period, roughly 8.8 times Bitcoin spending.

In an Oct. 23 X post, Michael Saylor wrote, “Just resolving a few Bitcoin matters behind closed doors.”

The post includes a 14-second Matrix-style action video featuring Saylor but gives no purchase amount, transaction date, or financing details. It arrives before Monday, Oct. 26, following company disclosures on the previous two Mondays. Neither the caption nor the accompanying screenshot announces when Strategy will issue its next transaction update.

The company’s Oct. 19 Form 8-K records 267 BTC purchased during Oct. 12–18 at an average price of $82,900, including fees and expenses. Holdings stood at 848,517 BTC, acquired for $64.02 billion at an average cost of $75,446.

Saylor’s earlier messages have sometimes preceded purchase announcements. On Oct. 11, he wrote, “There’s always room for more orange,” before Strategy disclosed a 250 BTC acquisition the next day. The latest Friday caption does not specify whether it concerns another acquisition.

Strategy’s Bitcoin purchases grew modestly over two weeks
Strategy’s Oct. 12 announcement recorded $21.5 million spent on 250 BTC during Oct. 5–11, when its average purchase price was $86,194. The following week’s purchase added 17 more coins for $600,000 more.

Calculated from the two disclosures, the number of Bitcoin purchased rose 6.8%, while dollar spending rose approximately 2.8%. The average acquisition price fell roughly 3.8% between those reporting periods.

Together, the two weeks account for 517 BTC bought for $43.6 million. Those figures describe completed purchases through Oct. 18; they do not establish how much Strategy bought during the week of Saylor’s latest post.

As crypto.news previously reported, Strategy’s earlier 250 BTC purchase brought its holdings to 848,250 BTC. Its aggregate average acquisition price moved from $75,444 to $75,446 across the two disclosures, with both company figures including fees and expenses.

Common stock supplied the latest Bitcoin funding
In its Oct. 19 filing, Strategy identified $22 million in proceeds from selling 140,872 MSTR common shares and $100,000 of existing USD Cash as the funding sources for its latest purchase. No preferred-share sales appeared in that week’s ATM table.

For the preceding week, the Oct. 12 disclosure identified $21 million from common-stock sales and $500,000 from USD Cash. Strategy sold 125,183 common shares during that period.

Across the two periods, those figures total 266,055 common shares sold, $43 million in net proceeds, and $600,000 in cash used for Bitcoin purchases. Common-share proceeds therefore covered approximately 98.6% of the combined acquisition spending.

The disclosed weekly transactions distinguish the company’s recent funding mix from its historical use of preferred securities. An Oct. 21 account described Fidelity Digital Assets’ research on the preferred-stock financing channel, including 135,979 BTC accumulated through that channel as of Oct. 5.

Fidelity’s figure covers the financing channel examined in its report, not Strategy’s total holdings. The report said more than 95,000 BTC purchases were financed through preferred issuance between March and May, generating over $7 billion.

Fidelity cautioned that Bitcoin-focused preferred shares are not equivalents of money market funds. Its report tied their success to Bitcoin’s long-term performance and the issuing companies, without treating the stated income payments as a guarantee of investment returns.

STRC repurchases exceeded Bitcoin spending
Strategy spent $193.1 million repurchasing STRC during Oct. 12–18, after spending $192.4 million during Oct. 5–11. The combined $385.5 million was approximately 8.8 times the $43.6 million allocated to Bitcoin over those weeks.

The company restated its STRC trading range objective of $99–$100 over time in an Oct. 19 message. Its published policy describes regular repurchases below $100, while management has said it will not issue new STRC shares below that level.

STRC is Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock. The company’s Oct. 19 graphic listed a 12% dividend rate, semi-monthly payments and an Oct. 28 vote on daily dividends.

The board expanded the preferred-security repurchase authorization from $2 billion to $3 billion, including earlier purchases and related costs. Strategy reported $1.16 billion remaining under that authorization as of Oct. 18.

Separate cash accounts funded buybacks and dividends
Strategy’s capital framework distinguishes its USD Reserve, intended to support preferred dividends and debt interest, from general-purpose USD Cash used for Bitcoin purchases and capital management.

During Oct. 12–18, the company used $193.1 million of USD Cash for STRC repurchases and $45.5 million from its reserve for preferred dividends. The reported closing balances were $447.3 million in USD Cash and $4.83 billion in the reserve.

A week earlier, Strategy reported $640.5 million in USD Cash and $4.88 billion in reserves. Comparing the rounded disclosures puts the cash decline at $193.2 million and the reserve decline near $50 million.

Item 7.01 of the Oct. 19 filing identifies Strategy’s website dashboard as a public disclosure channel covering securities prices, Bitcoin holdings, purchases, and company performance metrics. The filing encourages investors to review information published through that dashboard.

Franklin Templeton plans to launch two exchange-traded funds that put 95% of their assets in US stocks and 5% in Bitcoin. One is built around S&P 500 exposure. The other targets the Nasdaq 100.

The asset manager filed a Form 8-A with the SEC on October 22, 2026. That filing typically signals a listing is close.

The two products are the Franklin US Equity Bitcoin DRIP Index ETF, ticker FBEQ, and the Franklin US Innovation Bitcoin DRIP Index ETF, ticker FIBT. Both will list on Nasdaq.

The effective date is projected for October 27, 2026. Trading is positioned to begin after that.

Under the hood, FBEQ tracks the VettaFi US Large-Cap 500 Bitcoin DRIP Index. FIBT follows the VettaFi US Innovation 100 Bitcoin DRIP Index.

“DRIP” refers to dividend reinvestment. Normally, an investor collects stock dividends and rolls them back into more shares. These funds route those payouts into Bitcoin instead.

The funds will not hold Bitcoin directly. They will get their exposure through exchange-traded products, including Franklin’s existing spot Bitcoin ETF, EZBC.

The rebalancing rules The 5% Bitcoin allocation is a starting point, not a fixed ceiling. The Bitcoin weight can drift above 5% between rebalances, whether from dividend inflows or price gains.

Every quarter, the index trims the Bitcoin position back down to 4.5%. There is also a hard cap of 20% on Bitcoin’s weight.

On cost, the research shows expense ratios reported as low as 0.09%.

Background: Franklin’s growing Bitcoin shelf These funds build on infrastructure Franklin already has. Its spot Bitcoin ETF, EZBC, has drawn approximately $335 million in net inflows.

EZBC now gets a second job as the Bitcoin engine inside these new equity funds.

What this means FIBT deserves a closer look on one front. Growth-oriented, tech-heavy companies often pay smaller dividends than broad large-cap names, so the Bitcoin accumulation engine may run slower there than in FBEQ.

The quarterly trim cuts the other way. When Bitcoin outperforms, the index sells some of it back down to 4.5%, so these funds will not be pure buy-and-hold vehicles for the asset.

The launch timeline puts the answer in the hands of the market fairly soon after October 27, 2026.

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

Crypto analyst Yi Lihua, also known as JackYi, shared today the importance of patience in the face of market fluctuations. He stated that he believes more attractive buying opportunities may emerge in the future.

Yi cited the past period when Ethereum fluctuated around $3,000 for an extended period as an example. He noted that investors who couldn’t withstand the price movements and rushed into buying were able to do so before the decline was complete.

The analyst, who also viewed the prolonged volatility seen after Bitcoin’s pullback from the $86,000 region within the same context, stated that he considers it important for individuals to be able to control their own trading impulses during the current process.

Another noteworthy part of the post was the assessment that the era of easy gains in the cryptocurrency sector is over. According to Yi, simply waiting for the next surge isn’t enough to achieve returns above the market average; knowledge, judgment, and psychological resilience are also required.

However, the investor did not share a specific Bitcoin or Ethereum price for new buying opportunities. Therefore, the statement does not contain a definitive bottom prediction or a call to buy at a particular level.

*This is not investment advice.

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Institutional activity around Bitcoin [BTC] escalated as Fidelity and BlackRock received significant BTC transfers into their ETF wallets, suggesting fresh interest among these key asset managers.

According to Onchain Lens on X, Fidelity’s FBTC ETF wallet reportedly received 282.63 BTC valued around $23.08 million from Binance. Additionally, BlackRock’s ETF wallets also received 384.77 BTC, valued at approximately $31.4 million.

Combined, these transactions reflected a continued institutional activity despite Bitcoin’s latest price weakness.

Here it is important to note that even though wallet transfers alone could not validate fresh purchases, the movements strengthened the attention toward institutional Bitcoin positioning.

Source: Onchain Lens on X
Beyond the institutional activity, another noteworthy accumulation activity emerged among newly created wallets.

Since the 1st of October, Bitcoin’s large holders additionally heightened their activity, with 40 newly created wallets withdrawing 9,458 BTC from Wintermute. These withdrawals totaled roughly $771.5 million, which reflected considerable movements among wallets potentially connected to large market players.

This concentration of withdrawals across the newly created addresses reinforced the chance of a well-coordinated accumulation ahead of a possible price recovery. In fact, such transfers often attract attention since investors sometimes move acquired Bitcoin into wallets for longer-term custody.

The broader exchange activity meanwhile provided additional context for assessing whether BTC holders were indeed reducing their available exchange supply.

Source: Lookonchain on X
BTC exchange withdrawals deepen amid reserve decline
Bitcoin‘s Spot market registered around -$465.55 million in Spot Netflows on the 22nd of October, validating the withdrawal narrative. For context, this negative netflow implied that more BTC left exchanges than entered during the reporting period.

Interestingly, Bitcoin’s USD-denominated exchange reserves fell 1.35% over 24 hours, reaching roughly $226.33 billion. These figures together pointed towards reduced exchange balances, even though Bitcoin’s valuation also influenced the dollar-denominated reserve metric.

Importantly, the continued withdrawals could reduce the immediately available selling supply in case holders continued moving coins away from trading platforms.

Now with institutional accumulation and whale withdrawals dominating the recent activity, Bitcoin’s price structure became increasingly important.

Source: BTC Spot Netflows on CoinGlass
Bitcoin demand zone strengthens as SAR flips
Bitcoin’s daily timeframe chart highlighted buyers defending an important order block around the $81k price region.

Following the most recent price rebound, BTC traded around $81,764 at press time, maintaining its position above the identified demand region. Importantly, the Parabolic SAR had just flipped below price, with its dots visibly at $80,001, suggesting improving bullish conditions amid the earlier decline.

Meanwhile, the Money Flow Index (MFI) indicator stood at 53.74, implying moderately positive buying pressure as capital inflows slightly outweighed outflows. Overall, institutional transfers, whale withdrawals, and declining exchange balances favored a  bullish outlook as BTC defended its key support level.

Bitcoin, therefore, stands a better chance of extending its recovery toward $84,000 so long as buyers continue defending the demand zone supported by the bullish Parabolic SAR reversal.

Source: BTC/USDT Chart on TradingView

Final Summary

Institutional Bitcoin transfers and $771.5 million in whale withdrawals highlighted growing accumulation activity.

BTC held its demand zone as the bullish SAR flip strengthened recovery attempts toward $84,000.

Bitcoin Investors Look To Mid-Term And Fed Meeting Results Amid Range-Bound Trading

New York Attorney General Letitia James is trying to secure a $1.37 billion judgment against the operators of NovaTech and its predecessor AWS Mining, two successive cryptocurrency investment schemes that allegedly defrauded hundreds of thousands of investors worldwide out of more than $1 billion.

Alleged founders Cynthia and Eddy Petion never appeared in court and, according to the AG’s office, fled the country.

“NovaTech and AWS Mining scammed thousands of vulnerable New Yorkers by telling them they were making a safe investment when in reality, they were victims of a pyramid scheme,” James said in a statement. “These scammers targeted immigrant and religious communities with the promise of a better life but instead robbed them of their life savings.”

The schemes, AWS Mining and later NovaTech, relied on promoters who recruited heavily in Haitian and other immigrant communities — through prayer groups, WhatsApp chats, and ads in Haitian Creole.

AWS Mining sold crypto mining contracts promising 15 to 20 percent monthly returns and 200 percent within 15 months. It collapsed in 2019. The Petions then launched NovaTech, marketed as a registered hedge fund broker, promising weekly trading returns of two to four percent — more than 140 percent a year.

Those returns were fabricated, according to prosecutors. Records from B2Broker, which supplied NovaTech’s white-label trading platform, show that of the more than $1 billion investors deposited between 2019 and 2023, only about $26 million was ever actually traded — and NovaTech’s traders lost $18.2 million of that. Returns to earlier investors came from newer deposits, not trading. When NovaTech collapsed in mid-2023, tens of thousands of investors could not withdraw their funds.

The AG is also seeking $134.5 million the Petions allegedly withdrew to their own wallets from the investor account Cynthia Petion solely controlled, plus $4.7 million tied to the earlier AWS Mining scheme. A default judgment entered in August 2025 already bars the couple and their companies from the securities, commodities, and cryptocurrency industries.

Separately, four of the scheme’s top promoters have agreed to pay nearly $6 million in disgorgement to victims and accepted the same industry bans.

Mathew Di Salvo

Mathew is a reporter who's covered the space since 2019, reporting on everything from Salvadoran president Nayib Bukele's Bitcoin bet to crypto exchange FTX's bankruptcy.