Bitcoin (BTC) traded near $81,025 on May 5 after rising 1.56% in the latest session. 

The asset also recorded an intraday high near $81,204, while trading volume stayed elevated as buyers returned above the $80,000 zone.

The move followed a sharp market reaction to Middle East headlines and renewed demand through U.S. spot Bitcoin ETFs. Bitcoin’s rebound placed the market back near a key technical area watched by traders after several weeks of recovery.

Analyst watches $83,000 resistance

Well-known crypto analyst Ali Martinez asked, “Is Bitcoin heading to $100,000?” He said Bitcoin has shown structural strength since a bullish MACD crossover appeared on the weekly chart on April 13. Since then, BTC has gained about 15%.

Ali Martinez said similar weekly MACD crossovers preceded earlier multi-month moves. He cited a 147% rally after Oct. 23, 2023, a 75% rally after Oct. 14, 2024, and a 35% rally after May 5, 2025.

On the daily chart, Ali placed the 200-day simple moving average near $83,000. He described that area as the main psychological and structural barrier. A daily close above it could open a path toward $89,000, with $94,000 as the next target.

ETF inflows support Bitcoin demand

Spot Bitcoin ETFs added fresh support to the rally. SoSoValue data showed U.S. spot Bitcoin ETFs drew $532 million in net inflows on May 4, after $630 million on May 1. The two sessions brought about $1.16 billion into the products.

ETF demand also suggests that many buyers are entering Bitcoin through regulated market products rather than direct on-chain transfers. Bitcoin’s market dominance also rose above 60%, showing that capital continued to favor BTC over many altcoins during the move.

Ali Charts also reported that whales bought 4,527 BTC in 24 hours, worth about $362 million. That activity points to large-holder demand even as broader network use remains weak.

Network activity sends mixed signal

Santiment data showed Bitcoin’s on-chain activity dropped to two-year lows while BTC moved back above $80,000. About 531,000 Bitcoin wallets made daily transfers, while roughly 203,000 new wallets were created each day.

That creates a mixed setup for the market. Price has risen while fewer users are active on-chain, meaning the rally may depend more on whales, ETFs and derivatives activity than broad retail participation.

Short liquidations also helped the move. Market data cited by traders showed about $270 million in short positions were cleared as BTC moved higher. Better miner returns also reduced near-term selling pressure, with daily mining revenue per petahash rising to its highest level since late January.

Finally, Macro conditions also shifted after the U.S. launched Project Freedom to guide ships through the Strait of Hormuz. Reuters reported that the operation followed weeks of tension around the shipping route, which remains central to global oil flows.

Key Takeaways

• World Liberty Financial initiated defamation proceedings in Florida targeting Justin Sun
• Allegations include Sun engaging in short-selling activities and moving WLFI tokens to Binance with intent to manipulate pricing
• Sun had already launched legal action against World Liberty in April over frozen token assets
• The WLFI token experienced a 12% surge following lawsuit disclosure but remains 72% below initial trading levels
• Revenue distribution shows 75% of token sales flowing to the Trump family, generating over $1 billion

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The cryptocurrency platform World Liberty Financial, established through a partnership with Donald Trump and his family members, has initiated defamation proceedings against Justin Sun, previously among its most significant financial supporters.

https://twitter.com/coinbureau/status/2051292790693540220?s=20

Court documents were submitted to Florida’s state judicial system on May 4. The complaint accuses Sun of orchestrating a coordinated effort to publicly malign the venture and undermine its credibility.

[[LINK_START_0]]World Liberty[[LINK_END_0]] contends that Sun moved WLFI tokens carrying governance privileges to the Binance cryptocurrency platform. Additionally, the filing asserts he executed short-selling strategies designed to profit from declining token values, coinciding with the public trading debut in September 2025.

Sun has rejected these accusations outright. Through his representatives, he characterized the legal action as “a meritless PR stunt” and expressed confidence in his courtroom defense.

This marks the second round of litigation between these entities. Sun filed his own lawsuit against World Liberty in April through San Francisco’s federal court system. His complaint alleged unauthorized freezing of his token holdings, elimination of his governance participation rights, and threats to permanently destroy the assets.

World Liberty countered that token freezing provisions were explicitly outlined in contractual documentation. The company accused Sun of improper behavior and dismissed his legal challenge as “a desperate attempt to deflect attention.”

The Transformation from Strategic Partner to Courtroom Opponent

Sun’s involvement began as a cornerstone supporter. His financial commitment totaled $45 million across late 2024 and early 2025, earning him an advisory position. He expanded his Trump-related investments by purchasing $100 million worth of Trump’s meme coins in July 2025.

Eric Trump previously praised Sun as “a great friend and an icon in the crypto space.” On September 1, 2025, when WLFI trading commenced, Sun publicly declared his conviction that the project would become “one of the biggest and most important projects in crypto.”

That alliance has now completely deteriorated.

Market Performance and Financial Exposure

Sun’s portfolio includes 4 billion WLFI tokens, presently valued at approximately $264 million. Since trading commenced, the token has plummeted from 31 cents to below 8 cents, representing roughly a 72% depreciation.

The token did experience a temporary 12% price increase after Monday’s lawsuit became public knowledge.

Revenue Distribution Structure

World Liberty’s organizational framework allocates 75% of proceeds from WLFI token transactions to the Trump family. According to Reuters’ financial analysis, the family has already secured more than $1 billion through this arrangement.

In his legal filing, Sun claimed that specific individuals managing World Liberty are exploiting the Trump reputation “to profit through fraud.” World Liberty categorically denies any impropriety.

The Securities and Exchange Commission previously examined Sun regarding allegations that he compensated social media influencers to promote his business interests without proper disclosure. Following the investigation’s closure, Senator Elizabeth Warren raised concerns about potential connections between that outcome and Sun’s financial involvement with Trump’s cryptocurrency enterprises.

The banking industry is pushing back against the latest draft of the CLARITY Act, arguing that its language on stablecoin yields does not adequately protect ordinary bank deposits. In a coordinated Monday statement, the American Bankers Association joined several industry groups to say the proposed provisions fall short of the policy goal of prohibiting stablecoin yield in ways that could undermine traditional banking funding models.

The groups—comprising the American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum and the Independent Community Bankers of America—emphasized that Congress must get the policy right. They warned that any loopholes could enable platforms to offer bank-like interest on crypto balances outside established regulations, thereby threatening the stability of the banking system and the safety of deposits.

Key takeaways

• The CLARITY Act’s current Section 404 is seen by banking coalitions as insufficient to block stablecoin-related yields on crypto platforms, potentially eroding traditional deposit funding streams.
• Lawmakers such as Senators Thom Tillis and Angela Alsobrooks are pursuing policy language intended to prohibit yields on stablecoins, but banks argue the bill as drafted does not adequately close loopholes.
• Banking groups cite studies suggesting that broad stablecoin adoption could trigger substantial outflows from U.S. banks, particularly from smaller, community institutions that lack flexible balance sheets to absorb such shifts without costly wholesale borrowing.
• Economists cited by banks argue that stablecoin yields could depress broad lending if deposits move to crypto platforms, while White House economists say a yield ban would have a relatively modest impact on lending—though the math remains contested.
• The CLARITY Act currently faces a cautious path through Congress, with doubts about whether it can advance before the midterm elections in November 2026, and with ongoing negotiations over exact wording.

The case for stronger language on yields

The banking groups’ joint statement framed the issue around a central question: how to prevent stablecoin rewards from siphoning off core funding from the traditional banking system. They argue that the proposed language, as it stands, would allow crypto platforms to pay interest or yields on crypto holdings in ways that resemble bank deposits but avoid regulation under conventional banking rules. This, they say, would create a significant regulatory blind spot and potential deposit risk for banks that must compete for funding in stricter regulatory environments.

“It is imperative that Congress get this right,” the groups asserted in their Monday communique, stressing that the current iteration would not fully shield banks or customers from the stability risks associated with stablecoins and their yield mechanics. The statement was issued with the backing of major trade associations representing traditional financial institutions, signaling broad concern across the sector.

The draft’s supporters, including Senator Tillis, have argued that the text represents a practical compromise: it prohibits stablecoin rewards on idle balances while allowing other, non-deposit-related customer rewards. Tillis said the current text strikes a balance that could move the CLARITY Act toward passage on a bipartisan basis, even as some in the banking industry push back against continuing ambiguity.

Nevertheless, the bankers pledged to deliver further “detailed suggestions for strengthening the proposed language” to lawmakers in the coming days, underscoring the push for an explicit, robust prohibition that would close perceived regulatory gaps before any final vote.

Economic modeling and policy tensions

Beyond deposit protection, the debate touches on broader economic implications. The banking groups highlighted studies indicating that widespread stablecoin adoption could lead to substantial outflows from U.S. banks, especially among community banks. They argued these outflows could impair banks’ balance-sheet flexibility, potentially forcing higher-cost wholesale funding if institutions cannot shrink their traditional funding bases quickly enough.

In support of a tougher stance, the coalition cited an analysis from a Stanford-trained economist, Andrew Nigrinis, which framed stablecoin yield as a channel that could drive deposits away from banks and, in turn, depress consumer, small-business, and agricultural lending by a material margin. That line of argument underscores a fear among banks that the policy gap is not merely regulatory loophole but a real economic lever with the potential to constrain credit provision.

On the other side of the ledger, White House economists have presented a more subdued projection. In April, officials argued that banning stablecoin yield would yield only a modest net increase in lending—about $2.1 billion—roughly 0.02% of the banking sector’s total lending. The numbers, while small in aggregate, feed a broader debate about how policy choices translate into real-world lending capacity and consumer access to credit.

The divergent views reflect a broader tension around how tightly to regulate stablecoins and related yield mechanisms while preserving incentives for innovation and financial inclusion. The CLARITY Act’s supporters contend that strong, clear rules are essential to safeguard the financial system and to set a predictable framework for developers and investors. Critics say overly aggressive restrictions could hamper the growth of blockchain-based financial services and DeFi infrastructure, potentially pushing activity overseas or into less regulated niches.

Regulatory horizon and industry reactions

The legislative journey of the CLARITY Act remains unsettled. The bill cleared the U.S. House of Representatives in July with a 294-134 vote, but its path through the Senate—and, crucially, whether it can pass before the elections—remains uncertain. The midterm cycle is typically a bottleneck for major regulatory legislation, and the timing raises questions about whether lawmakers will reach a markup or a final vote in the current session.

For now, the banking industry is signaling that while it supports the aim of prohibiting inappropriate yields on stablecoins, it cannot endorse language that leaves room for “customer rewards” or other compensatory mechanisms that could still undermine deposit protection. Some observers note that the debate could become a proxy fight over the balance between innovation and financial stability, especially as more retail users engage with crypto products through mainstream platforms.

Industry advocates argue that a tightly drafted text would offer a clearer path to bipartisan agreement, enabling policymakers to address both consumer protection and system-wide risk. They contend that any compromise should be explicit about what is prohibited and what remains permissible, to prevent misinterpretation by crypto platforms and by banking institutions adapting to a rapidly evolving landscape.

The broader ecosystem—comprising exchanges, wallet providers, DeFi builders and incumbents—will be watching closely. If the Senate advances a version with stronger prohibitions, it could provide a clearer regulatory signal to developers and investors who have been waiting for durable rules. Conversely, a delay or a watered-down provision could keep ambiguity alive, potentially slowing legitimate innovation and prompting continued lobbying from both sides.

What readers should watch next

The immediate watch point is whether the Senate will bring the CLARITY Act to a markup in the coming weeks and whether a bipartisan framework can be achieved before the midterm deadline. Investors and builders in the crypto and DeFi spaces should monitor how lawmakers translate these concerns into concrete text, and how banks’ deposit stability considerations influence the final shape of the law. While the economic projections cited by proponents and opponents differ, the underlying question remains: will the final version deliver a clear, enforceable boundary around stablecoin yields that protects conventional banking models without stifling legitimate innovation?

As this regulatory arc unfolds, market participants should also factor in potential shifts in platform risk, liquidity dynamics in traditional banks, and the incentive structure facing users who interact with stablecoins and yield-generating crypto products. The outcome will likely affect not only policy clarity for developers but also the calculus of institutions considering how to compete or cooperate with crypto-native financial services in a compliant, transparent manner.

Readers should stay tuned for forthcoming legislative text, committee hearings, and potential amendments that could redefine the balance between innovation and stability in this rapidly evolving sector.

Polygon has introduced a privacy layer for stablecoin transfers, allowing transactions to remain hidden from public view while still meeting compliance checks.

According to a statement released by Polygon on Sunday, the update adds a wallet feature that routes payments through a shielded pool, where verification is handled using zero-knowledge proofs as part of its integration with Hinkal. 

The company said each transaction is screened through Know Your Transaction checks before execution, ensuring that compliance requirements are met even when transaction details are not publicly visible.

Polygon community lead Smokey, writing on X, described the move as a requirement for real adoption, stating that businesses need operational privacy rather than tools designed to avoid regulatory oversight. Polygon, in its own statement, added that confidentiality remains a missing element for institutions that already operate with restricted financial data on traditional payment rails.

Addressing concerns around oversight, Polygon said privacy on its network is designed to limit visibility to the market while preserving access for regulators. Hinkal’s documentation notes that users can generate audit files for authorities, including tax officials, providing a mechanism for post-transaction verification without exposing activity in real time.

The release comes as privacy-focused features continue to gain traction across blockchain networks. Aptos launched its Confidential APT token on April 24, introducing a system that conceals transfer data while maintaining verifiability, with the asset pegged to the value of the native APT token.

Polygon’s move also fits into a wider push to position the network as a payments-focused platform built around stablecoin flows. 

In an April report, Polygon Labs said it was seeking up to $100 million in new funding to expand a payments stack that includes Coinme and Sequence, with CEO Marc Boiron stating that the company’s ambition is to operate as a regulated payments entity in the United States. 

Polygon has said its Open Money Stack is designed to handle cross-chain and cross-currency transfers in a unified system for fintech firms and enterprises.

Data from DeFiLlama shows Polygon’s stablecoin market capitalization reached $3.6 billion on April 10, placing it among the top chains for stablecoin activity. The network has also handled a large share of non-USD stablecoin transfers, according to ecosystem updates cited by Polygon Labs, highlighting its role in processing local currency payments.

Institutional interest in stablecoin payments has grown following regulatory developments such as the GENIUS Act passed in July last year, which supported stablecoin adoption in financial services. Recent activity from traditional firms has added to that trend, with Western Union announcing a USD-pegged stablecoin on Solana on Sunday.

Earlier integrations have already tested stablecoin use cases on Polygon’s network. In April, Meta Platforms began offering select creators the option to receive payouts in USDC through wallets on Polygon and Solana, with payments processed by Stripe and supported by tools for tax reporting.

Uphold has pushed back against the New York Attorney General’s statement on its $5 million CredEarn settlement. 

The company shared the update with crypto.news after the regulator said Uphold misled investors by promoting Cred LLC’s crypto yield product. 

In its response, Uphold said the Attorney General’s statement misrepresented key facts about the settlement. The company also rejected any claim that it knowingly promoted Cred’s alleged fraud. Uphold said Cred misled the company, its customers and other CredEarn users.

NYAG says Uphold promoted CredEarn

The New York Attorney General said Uphold agreed to pay more than $5 million to harmed investors. The regulator said Uphold promoted CredEarn as a reliable savings product while Cred used customer crypto in risky lending activity. 

The settlement document said Uphold advertised CredEarn on its website and mobile app from 2019 to October 2020. It also said more than 6,000 Uphold customers invested about $50 million through the product. Those customers later lost over $34 million after Cred collapsed. 

Moreover, Uphold said it did not know about Cred’s liquidity issues until October 2020. It also said it was unaware that Cred’s statements about the financial health of CredEarn were false. The company said it froze Cred’s access to its platform within hours after learning about the issue. 

Uphold CEO Simon McLoughlin said, “We are deeply disappointed by the New York Attorney General’s statement.” He also said the U.S. Department of Justice treated Uphold as a victim in its criminal case against Cred executives. Uphold said it settled without admitting liability. 

Settlement adds new compliance duties

The settlement requires Uphold to pay $5 million in monetary relief. It also requires any initial distribution tied to Uphold’s $545,189.97 claim in the Cred bankruptcy case to be added to customer payments. 

Uphold must also maintain a risk-based review process before recommending third-party products. That process may include checks on financial records, insurance policies, compliance policies, customer checks, security systems and outside verification. 

Dispute centers on Uphold’s role

The Attorney General said Uphold promoted CredEarn without proper registration and failed to disclose key risks. The regulator also said no insurance existed to protect retail investors from digital asset investment losses, despite statements about Cred’s insurance coverage. 

Uphold gave a different account. It said Cred deceived the company and that it acted to stop further customer exposure once it learned of Cred’s problems. The dispute now centers on whether readers should view Uphold mainly as a promoter of CredEarn or as another party deceived by Cred.

Key Highlights

• XRP currently hovers between $1.39 and $1.41, posting a 1.70% gain over the past day with $2.15 billion in trading activity
• Binance’s 30-day liquidity measurement for XRP has plummeted to 0.038, marking the weakest reading in five years
• Derivative market metrics reveal a 48.27% jump in volume alongside a remarkable 311.69% spike in options activity
• Technical analysts suggest a monthly settlement above $1.50 may trigger bullish momentum toward the $2.20 zone
• Polymarket data indicates the CLARITY Act carries a 64% probability of enactment before 2026

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XRP continues to consolidate around the $1.40 mark following a modest 1.70% uptick over the last 24-hour period. Daily trading volumes registered approximately $2.15 billion, while the aggregate cryptocurrency market capitalization stands at $2.64 trillion.

Bitcoin momentarily surpassed the $80,000 threshold before retracing to approximately $79,700. Ethereum maintained its position above the $2,300 level. These movements helped establish a constructive sentiment throughout digital asset markets.

XRP bounced from its support foundation near $1.35 and has established a series of ascending lows. The primary resistance barrier lies within the $1.42–$1.45 corridor, an area where selling pressure has consistently emerged.

A decisive push beyond $1.45 would bring the $1.50 threshold within striking distance. Chart analysts suggest that securing a monthly closing price above $1.50 would validate an escape from an extended diamond consolidation formation, projecting a technical objective at $2.20.

Market Depth Reaches Historic Lows

The 30-day liquidity measurement for XRP on Binance has contracted to 0.038. This represents the most compressed level observed since 2020, based on information referenced by Arab Chain.

Reduced liquidity indicates a sparse order book environment. With fewer market participants actively posting buy and sell orders, substantial transactions can generate price swings that are both faster and more pronounced than typical conditions would produce.

The noteworthy aspect is XRP’s price stability despite this liquidity erosion. The token has maintained its range while order book depth has quietly contracted. Arab Chain characterizes this as a dual-edged scenario: the subsequent significant capital flow in either direction could catalyze price movement exceeding normal volatility parameters.

Legal commentator Bill Morgan emphasized that macroeconomic market conditions remain influential. He suggested XRP’s regulatory standing might persist independent of legislative developments, though broader market fragility could still exert downward pressure on valuation.

Legislative Probability and Compliance Developments

Decentralized prediction marketplace Polymarket currently assigns approximately 64% likelihood to the CLARITY Act’s passage by 2026. This proposed legislation addresses digital asset categorization and has attracted considerable interest from both policymakers and market participants.

The Senate Banking Committee may conduct deliberations on the measure as soon as mid-May. Recent weeks saw legislators introduce revised language addressing stablecoin yield provisions following extended negotiation periods.

XRP historically exhibits sensitivity to legal and regulatory announcements due to its prolonged engagement with the Securities and Exchange Commission. Enhanced clarity regarding token classification frameworks could influence institutional participation strategies.

Evernorth, a Ripple-supported XRP treasury entity, has named Robert Kaiden — Chief Financial Officer of the OpenAI Foundation — to its governing board. The organization maintains holdings of hundreds of millions of XRP tokens and pursues a $1 billion capital raise preceding an anticipated Nasdaq public offering.

XRP’s options open interest currently registers at $52.89 million, reflecting a 2.81% increase, while aggregate derivatives open interest achieved $2.59 billion.

America’s largest banking groups said they remain dissatisfied with the CLARITY Act’s newly proposed language on stablecoin yield, arguing that it fails to protect bank deposits.

In a statement Monday, the bankers acknowledged that US Senators Thom Tillis and Angela Alsobrooks are “seeking to achieve the correct policy goal” in prohibiting stablecoin yield but noted that the CLARITY Act’s “proposed language” currently “falls short of that goal.”

“It is imperative that Congress get this right,” the American Bankers Association said in a joint statement with the Bank Policy Institute, Consumer Bankers Association, Financial Services Forum and Independent Community Bankers of America.

The dispute between bankers and the crypto industry over stablecoin yield has stalled the bipartisan bill, which passed the House of Representatives in July by a 294-134 vote. There are concerns that the CLARITY Act may not pass before the US midterm elections in November 2026, which could further hinder its progress.

Banking groups have previously cited studies suggesting that widespread stablecoin adoption could lead to trillions in outflows from the US banking system, particularly from community banks, which may not have enough balance-sheet flexibility to absorb these outflows without resorting to higher-cost wholesale borrowing. 

In the Monday statement, the bankers also cited an article by Stanford-trained economist Andrew Nigrinis to argue that stablecoin yields driving bank deposit outflows “could reduce all consumer, small-business, and farm loans by one-fifth or more, making it essential for the prohibition to be clear and transparent.”

However, White House economists reported in April that banning stablecoin yield may increase bank lending by only $2.1 billion, a marginal net increase of about 0.02%. 

Bankers want “loophole” closed

The bankers contested the language of Section 404, arguing that it allows crypto platforms to pay users bank-like interest or yield outside traditional rules. 

Extract of the “SEC 404. Prohibiting interest and yield on payment stablecoins” document. Source: Alex Thorn

“This is a significant loophole that must be addressed,” the bankers said, adding that they will be sharing “detailed suggestions for strengthening the proposed language with lawmakers in the coming days.”

Related: Lummis says CLARITY Act offers ‘strongest’ developer protections

However, Tillis said the current text of the CLARITY Act strikes a compromise by prohibiting stablecoin rewards on idle balances while allowing crypto platforms to “offer other forms of customer rewards.”

“Most importantly, it helps put us on a bipartisan path to pass the CLARITY Act, providing the regulatory certainty needed to foster innovation. Some in the banking industry may not want either of these things to happen, and we respectfully agree to disagree.”

The current text of the CLARITY Act was made public on Friday, with Coinbase and other members of the crypto industry pushing for a Senate markup next week.

Magazine: Will the CLARITY Act be good — or bad — for DeFi?

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