Syndicate Labs announced it is winding down after five years of developing onchain infrastructure for customizable Ethereum rollups and sequencers, citing a shrinking market for rollups.

The company said on Thursday on X that the decision was necessary because “the rollup market has fundamentally shifted.”

“Unfortunately, the rollup market has shrunk dramatically. For every new rollup spinning up, several more are quietly shutting down,” it said. 

Syndicate Labs is a venture capital-backed company that focuses on enabling customizable, programmable Ethereum appchains, or application-specific rollups, with smart sequencers. It raised $20 million in Series A funding led by Andreessen Horowitz in 2021. 

The Ethereum scaling ecosystem is dominated primarily by three players — Arbitrum One, Base and OP Mainnet — which command a 75% market share. Smaller players are slowly getting squeezed out as activity and capital concentrate among the top three.

Additionally, the total value secured across the layer-2 rollup ecosystem has declined by about 36% since its peak of just over $50 billion in October, with smaller networks losing much more as capital migrated to the industry leaders, according to L2Beat. 

“L2 activity has dropped 61% since June, leaving many smaller networks as ‘zombie chains’ with minimal usage,” reported 21Shares in December. 

Three players account for nearly $30 billion in rollup total value secured. Source: L2Beat 

Rollup market has shifted

Syndicate said the market has shifted away from its technology, “making it impossible to wait out these market conditions.”

“Instead, custom chains are being built by consulting teams from scratch, with very little reusable tech or network value.”

Related: Legend becomes latest DeFi app to throw in towel

The company said the Syndicate Network Collective is independent of Syndicate Labs, so SYND token governance is not immediately affected. It also said the decision to wind down was not influenced by the recent bridge compromise. 

The Syndicate Commons Bridge on Base was exploited in late April because of a security breach and a leaked private key, resulting in the loss of 18.5 million SYND tokens worth about $330,000 at the time. 

SYND fell 44% after the hack and declined another 21% over the past three hours, hitting an all-time low of $0.012 after the closure announcement, according to CoinGecko. The token is down 99.5% from its September 2025 peak of $2.61. 

A year of DeFi and crypto closures 

Syndicate Labs is the latest addition to a growing list of crypto and DeFi closures this year. 

DeFi mobile superapp Legend announced it was winding down on May 13, citing growth and scaling problems. 

Other recent closures include Solana DeFi aggregator Step Finance, DeFi derivatives protocol Polynomial, Balancer Labs, the team behind the DeFi protocol Balancer, and Seamless Protocol, a DeFi lending protocol on Base.

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A massive XRP derivatives play is betting that its price goes nowhere until the end of June, even as macro headwinds and regulatory developments suggest a volatility boom.

The move hit the tape on crypto exchange Deribit as a single-block trade, meaning it was a large transaction executed over-the-counter in a privately negotiated deal to prevent it drastically moving the price.

The trade likely involved a whale or an institution executing what is known as the “short straddle” strategy by shorting (selling) 1.5 million contracts of both the $1.40 call and put options expiring on June. 26.

By selling both the call and put, the trader is effectively providing insurance against sharp price movements away from the $1.40 strike. The trader received an upfront premium of $224,500 for assuming this volatility risk.

The trader will retain that amount as profit if XRP remains near $1.40 through June 26.

Hence, the bet is essentially on volatility to stay low, with prices pinned near $1.40. The payments-focused cryptocurrency has largely traded between $1.30 and $1.50 since February, according to CoinDesk data.

The strategy is not without risk. A sharp move in either direction would turn the position unprofitable, requiring the trader to cover losses owed to option buyers.

As of now, plenty of factors point to potential for volatility. Inflation concerns in the U.S. and other parts of the world are pushing up government bond yields worldwide, disincentivizing investments in stocks, cryptocurrencies and other risky assets.

Meanwhile, the Senate Banking Committee advanced the Clarity Act, a landmark U.S. legislative proposal designed to establish a clear regulatory framework for cryptocurrencies and digital assets. The bill now moves forward to a full Senate vote.

Stuart Alderoty, chief legal officer at Ripple, which uses XRP to facilitate cross-border transactions, reportedly called the banking committee’s decision a “monumental outcome” and cited the protection of 67 million American crypto holders as the bill’s purpose.

XRP is often seen as a U.S. crypto play, as Ripple is based in San Francisco and is among several firms that have received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish the Ripple National Trust Bank (RNTB).

Tax dodgers have started turning to Bitcoin Ordinals, BRC-20 tokens and other digital methods in an attempt to hide their wealth from tax authorities, according to blockchain analytics platform Chainalysis.

“Tax evasion and unreported income are age-old financial crimes, but the methods used to commit them are rapidly evolving,” Chainalysis said in a report Wednesday.

“As digital assets become more mainstream, bad actors frequently attempt to exploit novel technologies — such as NFTs, decentralized finance protocols, or emerging token standards — in hopes of keeping their wealth hidden from tax authorities and law enforcement.”

Tax authorities have been scrambling to catch up with technological advances and to track and apply taxes. A March study estimated that only 32% to 56% of US crypto owners report their gains. In Norway, that percentage was only 12%, according to a study from August 2024. 

Source: Chainalysis

Italian authorities uncover $1 million tax evasion scheme

Chainalysis reported that Italy’s Economic and Financial Police Unit in Foggia reportedly uncovered a tax evasion scheme in which an individual allegedly used Bitcoin Ordinals and the BRC-20 token standard to hide 1 million euros ($1.1 million) in undeclared capital gains.

Introduced in 2023, the Ordinals protocol assigns a serial number to a satoshi, the smallest unit of Bitcoin, and allows data, such as images or text, to be embedded in a Bitcoin transaction. The BRC-20 standard, built on top of it, allows text inscriptions to be deployed, minted into tokens and transferred on the Bitcoin blockchain.

Italian authorities discovered during their investigation that the suspect was using the Ordinals protocol and the BRC-20 standard to create tokens, then sent them and listed them on marketplaces, according to Chainalysis.

“The assets were sold for multiples of their original cost, and the profits were routed back to the suspect’s primary wallet in Bitcoin,” Chainalysis said. “The suspect continually reinvested these earnings into new inscriptions.”

Blockchain intelligence essential infrastructure

The US Internal Revenue Service estimates that the gross tax gap, the government’s best estimate of the total tax it is legally owed but did not receive, is about $606 billion. Tax evasion tactics usually include paying in cash and underreporting income.

However, Chainalysis said using crypto for tax evasion comes with a “fatal flaw” because of the “inherent transparency of the blockchain. No matter how sophisticated a scheme appears, the underlying technology leaves a permanent immutable trail.”

Blockchain intelligence can reconstruct a financial network and cross-reference it with data that crypto exchanges are required to report to unmask transactions tied to suspected tax dodgers, according to Chainalysis.

Related: Italy’s largest bank more than doubles crypto holdings to $235M in Q1: Report

“This landmark Italian case serves as a powerful reminder for law enforcement and compliance professionals globally: the technical novelty of crypto does not equal anonymity,” it said.

“As new digital asset classes continue to emerge and generate income streams, the gap between actual on-chain wealth and declared tax positions will become a primary target for global investigative attention. In today’s financial landscape, blockchain intelligence is essential infrastructure.”

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The former chief risk officer of Silvergate revealed she made the decision to settle with the US securities regulator in 2024 to avoid a “multi-year battle” in court, where she was accused of misleading investors about anti-money laundering rules and how the bank monitored crypto customers.

In her first public comments about her settlement with the SEC on Wednesday, Kate Fraher claimed that no financial agency proved that Silvergate’s anti-money laundering controls had failed, and that she only opted to settle to “move forward.” 

Fraher had agreed to a civil penalty of $250,000 and was banned from serving as a company executive or board director for five years.

“The process itself is designed to apply maximum pressure, and the human costs are real. I was personally de-banked and had credit lines summarily closed—an aggressive tactic used to disrupt daily life and force compliance,” she said. 

The comments provide more insight into the circumstances surrounding the wind-down of Silvergate, a crypto-friendly bank that voluntarily closed following the collapse of FTX. Fraher said her ability to comment came after the SEC rescinded the long-standing “gag rule” on Monday.

Source: Kate Fraher

Fraher said the wind-down was not because of a “bank run” or market volatility from FTX’s collapse in November 2022, even as the bank experienced a deposit run of around 70%. 

Instead, Fraher said the company chose to wind down because the “broader administrative and regulatory pressure levied against the digital asset industry made operating a viable business impossible.”

Many crypto industry pundits labeled this as “Operation Chokepoint 2.0,” an unconfirmed plan in which US financial regulators cut off banking services to crypto companies in an attempt to restrict their ability to operate within the broader financial system. 

Silvergate wasn’t the only crypto-friendly bank affected by the strict measures, which intensified following the collapse of FTX in November 2022.

Signature Bank and Silicon Valley Bank also shut down in early 2023, in part due to deposit runs, liquidity stress and contagion effects tied to FTX and several crypto lending platforms that went bankrupt in 2022.

Related: Trump-backed Truth Social pulls bids for crypto ETFs 

But Fraher said by the beginning of 2023, it had weathered the FTX collapse by restructuring the business with “appropriate capital levels” and a “right-sized workforce” to continue operations safely.

Gag policy was unconstitutional, Fraher argues

Fraher applauded the current Paul Atkins-led SEC leadership for ending the gag rule, which she described as an “unconstitutional policy.”

“I am glad the right to speak the truth has finally been restored,” Fraher said, adding: “We must continue to talk about the long-term professional and personal toll exacted on individuals by regulation through enforcement.”

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TLDR

• President Trump declares Iran nuclear negotiations have reached their “final stages” while threatening fresh military strikes without agreement
• Qatar and Pakistan have developed a revised peace framework under consideration by Tehran, which remains inflexible on key demands
• Heated Tuesday phone conversation between Trump and Netanyahu revealed deep disagreements, with sources describing the Israeli leader as extremely agitated
• Tehran’s most recent proposal essentially reiterates previously rejected conditions, including demands for Strait of Hormuz authority
• Global oil markets react with Brent crude approaching $108 per barrel as the critical Strait of Hormuz stays mostly shut

President Trump announced Wednesday that diplomatic efforts with Iran have entered their concluding phase, though he cautioned that military operations may resume without a breakthrough. The ceasefire, which began six weeks ago when Trump suspended Operation Epic Fury, has yielded minimal diplomatic progress.

“We’ll see what happens. Either have a deal or we’re going to do some things that are a little bit nasty,” Trump told reporters.

The President revealed he nearly authorized additional strikes earlier this week but decided to postpone them, allowing diplomacy more breathing room. He indicated that appeals from multiple Gulf states neighboring Iran influenced his decision to cancel the operations at the eleventh hour.

A New Proposal, Old Problems

A revised diplomatic framework has been crafted by Qatar and Pakistan, incorporating feedback from regional intermediaries such as Saudi Arabia, Turkey, and Egypt. The initiative seeks to secure more definitive commitments from Tehran regarding its nuclear activities, while obtaining greater clarity from Washington on unfreezing Iranian assets.

Iran acknowledged it is examining the updated framework. However, Tehran’s counter-proposal, presented this week, essentially reiterates demands that Trump has previously dismissed. These include Iranian authority over the Strait of Hormuz, reparations for conflict damages, comprehensive sanctions removal, and complete withdrawal of American military forces.

Iran’s Foreign Ministry indicated discussions were progressing “based on Iran’s 14-point proposal.” Pakistan’s interior minister made a Wednesday trip to Tehran to facilitate mediation efforts — marking his second visit within a seven-day period.

Trump and Netanyahu at Odds

A contentious telephone exchange between Trump and Israeli Prime Minister Benjamin Netanyahu occurred Tuesday. One insider characterized Netanyahu’s reaction as having his “hair was on fire” following the discussion.

Netanyahu maintains skepticism toward the diplomatic track. He advocates for resuming military campaigns to further diminish Iran’s operational capacity and eliminate essential infrastructure.

Trump stated Netanyahu “will do whatever I want him to do” regarding Iran, while simultaneously emphasizing their positive relationship. Two Israeli officials verified that the leaders hold conflicting views on the path forward. Israel’s embassy rejected claims that the ambassador had briefed U.S. congressional members about the conversation.

Hormuz and Oil Prices

Tehran has maintained a near-complete closure of the Strait of Hormuz to non-Iranian vessels since the U.S.-Israeli military operations commenced in February. The blockade represents the most significant interruption to worldwide energy distribution in modern times.

Maritime tracking service Lloyd’s List documented approximately 54 vessel transits through the strait last week, representing roughly twice the volume from the preceding week. Iranian authorities reported 26 ship crossings within the last day. Prior to hostilities, approximately 140 vessels traversed daily.

Two substantial Chinese oil tankers transporting roughly 4 million barrels departed through the strait Wednesday, following a bilateral arrangement Iran finalized with China last week. South Korean officials confirmed one of their tankers also completed passage with Iranian cooperation.

Brent crude declined approximately 2.75 percent Wednesday, settling near $108 per barrel, although prices have maintained an upward trajectory on a weekly basis.

Trump faces mounting pressure to conclude hostilities before November’s congressional elections, as elevated energy costs are eroding Republican voter support.

Iran’s Revolutionary Guards issued a Wednesday warning that renewed U.S. attacks would trigger conflict expansion beyond Middle Eastern borders. Fresh drone assaults targeted Saudi Arabia and the UAE this week, allegedly launched by Iraq-based militant groups with Iranian connections.

As of Wednesday, Tehran continues to maintain its stockpile of near-weapons-grade enriched uranium and preserves its missile arsenal and proxy network capabilities.

Trading giant IG (IGG), which started offering cryptocurrency trading in the U.K. a year ago, said it plans to expand the service across Europe, without giving a time scale.

The European division of the London-listed investment platform will use crypto exchange Bitpanda’s infrastructure — including liquidity, trading connectivity and market data — to provide digital asset access to European investors, according to an emailed statement on Thursday.

The company reported revenue of 331.2 million pounds ($445 million) for the first quarter of 2026 this week, of which spot crypto contributed 2.4 million pounds ($3.2 million).

IG, which introduced spread betting to the U.K. in the early 1970s, is one of Europe’s best-known retail trading platforms, offering clients access to equities, foreign exchange, commodities and derivatives markets. It has 1.3 million clients globally.

Bitpanda is primarily licensed in Austria, with headquarters in Vienna. The exchange also holds licenses under the European Union’s Markets in Crypto-Assets (MiCA) regulation in Germany and Malta, allowing it to offer crypto services across the bloc.

The former Silvergate Bank chief risk officer has shed new light on the bank’s winding-down and the terms of a 2024 SEC settlement, saying she agreed to a civil penalty and a multi-year ban to avoid a protracted court battle over assertions that the bank misled investors about its anti-money-laundering rules and how it monitored crypto customers. In her first public remarks since the settlement, Kate Fraher indicated that no regulator had proven AML controls had failed, and that she chose to settle to “move forward.”

Fraher’s disclosures come as the U.S. securities regulator’s enforcement stance on the crypto sector continues to shape the industry’s access to traditional banking services. The former executive confirmed that the SEC’s action led to a civil penalty of $250,000 and a five-year ban from serving as a company executive or board director. She also highlighted the personal toll of the enforcement process, noting that she was de-banked and faced immediate credit-line closures as part of the broader pressure on crypto-related firms.

The comments arrive just after the SEC signaled a new openness in settlements by rescinding a long-standing gag rule earlier this week. Fraher, speaking after the gag rule’s removal, said she found the prohibition on discussing regulatory actions “unconstitutional” and welcomed the ability to speak more freely about the experience and its long-term personal and professional costs. Her remarks were circulated in part via social media posts, including a link to her public statements on X.

The wind-down of Silvergate, a lender that several crypto firms relied on for several years, was not framed by Fraher as a simple consequence of a bank run. While the bank did experience a deposit outflow—reported at around 70% during the wind-down—she argued that the decision to close operations in the first place stemmed from broader regulatory and administrative pressures targeting the digital asset industry, which in her view made operating a crypto-friendly business untenable in the prevailing climate. The timing followed the fallout from FTX’s collapse in late 2022 and the ensuing liquidity strains across the sector.

In the crypto policy discourse, Fraher’s account intersects with a widely discussed if loosely defined narrative often referred to as “Operation Chokepoint 2.0”—a label used by industry observers to describe efforts to restrict banking access for crypto businesses by tightening upstream financial-services channels. While the exact mechanisms and aims of such pressure remain contested, the broader takeaway from Fraher’s account is that regulatory strain, more than a single market shock, played a decisive role in Silvergate’s decision to wind down and exit the business.

Key developments around Fraher’s settlement and the gag policy

Fraher’s public comments assert that the SEC’s case did not establish a failure of Silvergate’s AML controls. She said she settled to avoid a “multi-year battle” and to move forward rather than litigate the allegations to verdict. The terms of the settlement—$250,000 civil penalty and a five-year ban from serving as an officer or director—are consistent with many enforcement actions where the regulator seeks accountability while offering a clear exit path from ongoing proceedings.

The renewed capacity to speak publicly follows the SEC’s decision to rescind the gag rule on Monday, a move Fraher framed as a step toward greater transparency in enforcement actions. Critics have argued that gag rules stifle important disclosures about regulatory actions and market practices, while supporters say restrictions can protect sensitive or confidential information. Fraher’s account, while centered on her own experience, also touches on a broader debate about how much participants in the crypto sector should be able to discuss settlements, findings, and internal risk assessments in the wake of enforcement actions.

Fraher also drew attention to the role of regulatory pressure in shaping the crypto banking landscape. She acknowledged that Silvergate weathered the initial shock of the FTX collapse and subsequently restructured with “appropriate capital levels” and a leaner workforce to operate more safely. Yet she emphasized that the drawdown of crypto-friendly banking options was driven in large part by the regulatory environment, not solely by market volatility or a single incident.

Regulatory momentum and what it means for the sector

Silvergate’s case is one notable thread in a broader pattern of regulatory risk that continues to reshape how banks interact with crypto businesses. The closures of other crypto-friendly lenders in 2023—such as Signature Bank and Silicon Valley Bank—illustrated the fragility of services available to crypto companies amid liquidity stress, depositor concerns, and the broader contagion from high-profile collapses in the sector. Fraher’s remarks underscore the tension between risk controls, enforcement expectations, and the practical needs of crypto firms seeking reliable banking relationships.

From an investor and builder perspective, Fraher’s comments illuminate several important dynamics. First, even settlements without a finding of AML failure can carry meaningful reputational and operational costs for executives and their firms. Second, the gag-rule reversal signals a potential shift toward greater candor in discussing enforcement actions, which could influence how future cases are perceived by the market. Finally, the persistent regulatory headwinds suggest that stable on- and off-ramp banking solutions for crypto firms will continue to hinge on evolving policy frameworks, not just market conditions.

As the sector digests these developments, observers will be watching for further clarity on how regulators define acceptable risk controls in crypto banking, and whether any formal guidelines emerge that explicitly address AML practices, customer monitoring, and the governance standards expected of financial institutions serving digital assets. Fraher’s experience—alongside ongoing enforcement activity—will likely influence how industry players assess compliance investments and risk-management priorities in the near term.

For readers tracking the policy front, the next note to watch is whether the SEC or other regulators publish additional guidance or reforms aimed at balancing enforcement with the practical realities of crypto-business models. Market participants will also want to monitor any new actions or settlements that signal how aggressively regulators plan to police AML controls, customer screening, and the surveillance of crypto-related activities as the industry seeks steadier banks and clearer operating rules.

Fraher’s disclosures offer a rare, candid glimpse into the personal and corporate calculus at the intersection of crypto banking and regulation. The broader question remains: how quickly, and through what contours, will the regulatory framework evolve to either shrink or stabilize the path for compliant, crypto-friendly financial services?

As the sector navigates these headwinds, investors and builders should stay attuned to policy shifts, enforcement posture, and the practicalities of banking access for digital assets. The coming months are likely to reveal whether the current climate yields a more resilient and transparent framework or further consolidation among banks willing to serve crypto clients under tighter scrutiny.