StarkWare co-founder Eli Ben-Sasson argues that quantum-safety for Bitcoin is more likely to arrive through ZK STARKs—especially when used to compress the huge signature data expected from post-quantum (PQ) schemes—rather than by simply expanding blocks or accepting slower throughput. He also suggested that Adam Back, founder of Blockstream, aligns with the core idea, though Cointelegraph reported no response from Back to its outreach.

The broader debate has resurfaced this week as Ben-Sasson also drew attention for a separate, contentious proposal on X: raising Bitcoin inflation to 4% annually. However, his technical case for ZK STARK aggregation rests on a concrete concern—PQ signatures are far larger than today’s ECDSA/Schnorr signatures—and the resulting trade-offs for network capacity and decentralization.

Key takeaways

• Post-quantum signatures are much larger than Bitcoin’s current signature schemes, potentially forcing major capacity changes.
• ZK STARK aggregation could compress many large signatures from a block into a much smaller proof, reducing on-chain data pressure.
• Simply increasing block size is an alternative, but it may raise costs for nodes and revive decentralization concerns.
• Bitcoin’s governance and Script limitations are the main bottlenecks for adding native STARK verification at the base layer.
• StarkWare’s roadmap points to a different approach via account abstraction, making post-quantum upgrades operationally easier on systems like Starknet.

The core constraint: PQ signatures don’t fit like today’s

Ben-Sasson’s argument starts with the mismatch between Bitcoin’s existing cryptographic footprint and the expectations around post-quantum schemes. Adding PQ signatures “by itself,” he says, does not make the chain quantum-safe in a practical sense; it introduces an engineering problem first: the new signatures are orders of magnitude larger.

According to the article, the current set of PQ signatures approved by the US-based National Institute of Standards and Technology (NIST) are roughly 10 to 100 times larger than Bitcoin’s prevailing ECDSA and Schnorr signatures. The practical risk is throughput and verification overhead—one oft-cited concern is that a block could end up supporting far fewer transactions.

Ben-Sasson’s counterproposal is to move the bulk of that data off the chain and replace it with a compact cryptographic statement. In his view, the signatures for all transactions in a block could be aggregated into a single ZK STARK proof, which would be significantly smaller than including the original signatures. That, he argues, could preserve or even improve effective efficiency compared with a naive on-chain PQ upgrade.

“If they don’t allow for ZK STARK aggregation, then definitely it will be a very unfortunate move because it won’t really solve the problem … where the problem is ‘can everyone actually use Bitcoin?’” Ben-Sasson said.

“So for that you need massive scale. And for that, you need things like signature aggregation and just increasing the block size isn’t enough.”

Block size as the “simple engineering” fix—and why it’s controversial

One alternative Ben-Sasson acknowledges, via commentary from other experts, is increasing Bitcoin’s block size. The dispute is not about whether it works—it’s about the cost structure and the governance path.

Marin Ivezic, author of PostQuantum.com and founder of Applied Quantum, told Cointelegraph that Bitcoin’s SegWit scheme reduced the impact of larger signatures by up to 75%. But Ivezic’s modeling of NIST’s ML-DSA-44 scheme (described in the article as having 2,420 bytes per signature) suggests block capacity could drop to roughly 500 to 700 transactions under those conditions—down from 2,500 to 3,000 “today.”

That figure is what makes block-size debates feel inevitable: if PQ signatures drive transaction sizes sharply upward, the network needs somewhere for that data to go. Yet, as the article notes, critics see block growth as a blunt instrument because it pushes more storage, bandwidth, and verification work onto all nodes. Over time, that can mean higher operating costs and potentially less hardware diversity—an outcome that opponents argue could shift Bitcoin toward centralization.

The article also points to Blockstream Research’s recent experiments compressing hash-based post-quantum signature schemes for Bitcoin. It cites SHRINCS and SHRIMPS, with “everyday” signatures said to be around five times larger than current Bitcoin signatures, and up to 40 times larger in recovery scenarios such as wallet resurrection. The implication is that even with compression, larger signatures remain a throughput challenge unless block sizes increase.

“Raising capacity natively is the simple engineering answer and the hardest governance answer,” Ivezic said. “We just don’t have time for those debates.”

Why ZK aggregation could matter more than capacity alone

The attraction of ZK STARK aggregation is not simply that it is smaller. It’s that it changes the economics of what must be stored and verified by nodes.

At a high level, ZK proofs let one side prove that some statement holds without exposing all underlying details. In the Bitcoin setting described in the article, a STARK proof could certify that the necessary conditions for multiple transactions—tied to signatures—are satisfied, without requiring the chain to carry the full set of individual signature bytes.

The operational claim from Ben-Sasson is that generating a proof for a single block is a job that likely needs to be done once (with optional redundancy), and that the proving hardware could be far cheaper than commercial mining setups. The article further notes that verifying proofs could be feasible on very modest devices, pointing to Lean Ethereum’s specification benchmarks—where proving equipment is described as potentially under $100,000 and verification could run on almost any equipment, even something like a Raspberry Pi.

Ben-Sasson also argues the momentum for ZK STARKs existed among early Bitcoin developers. He claimed that figures such as Greg Maxwell and Mike Hearn were “very bullish about ZK STARKs,” citing their belief that STARKs provide post-quantum security without trusted setup. In the article, he adds that he thinks Bitcoin Core developer Luke Dashjr and Adam Back are aligning more with the idea, though Cointelegraph states it did not receive a response from Back.

One complication raised in the article is that Ethereum researcher Justin Drake has described a desire for Bitcoin to adopt Lean Ethereum’s ZK proof aggregation approach. However, political constraints might make that difficult to implement in practice—even if the technical path exists.

What would it take for Bitcoin to verify STARKs?

The question for Bitcoin is less about whether ZK STARKs are cryptographically credible and more about whether Bitcoin can verify them in a practical, acceptable way. That brings the discussion to Bitcoin Script and governance.

The article suggests a more politically pragmatic starting point may be re-enabling OP_CAT, an opcode Satoshi introduced and later removed. Ben-Sasson argues that if OP_CAT is enabled, it could unlock capabilities needed for STARK proofs and aggregation and thereby support post-quantum security.

Still, while OP_CAT drew attention in earlier months (as the article frames it, 12 to 24 months ago), it has “lost momentum” more recently. It remains a governance-dependent path, with Bitcoin’s deliberative culture cited as a key factor.

Beyond OP_CAT, the article mentions other proposals such as OP_STARK_VERIFY, an opcode-oriented idea designed to verify STARKs more efficiently on Bitcoin, and a concept called BitZip associated with Ethan Heilman. Heilman’s framing (as quoted in the article) outlines two broad routes: enhancing Bitcoin with general-purpose opcodes to support rollup-like constructions, or supporting STARKs at the consensus layer. He also referenced weaker aggregation schemes—like CISA (Cross Input Signature Aggregation)—as potential partial help.

Even if the crypto is strong, the practical gating factor is that Bitcoin Script cannot verify STARKs today. The article quotes Ivezic’s assessment that a base-layer STARK verifier is realistically a 2030s governance conversation, noting that consensus-layer changes carry far more surface area than small signature-related opcodes—even ones like OP_CAT that have already faced years of debate.

By contrast, the article highlights that other networks may find post-quantum transitions easier. It notes that Ethereum is targeting 2029 for post-quantum transition and that Solana has experimented with post-quantum signatures. For Starknet specifically, the article ties StarkWare’s three-phase quantum-secure transition to native account abstraction, which allows upgrades of underlying cryptography without forcing every user to migrate accounts manually.

“On Starknet, we have this big advantage that we have already native account abstraction and smart wallets, which means that nothing is enshrined so its very easy to upgrade the wallets and the infrastructure to be post quantum.“

The strategic implication, as Ben-Sasson presents it, is that post-quantum roadmaps on networks without flexible account layers could be “extremely hard,” while Starknet’s design choices reduce lock-in risk.

For Bitcoin readers, the next watchpoints are straightforward: whether any OP_CAT-related or STARK-verification discussions regain momentum, and whether the community gravitates toward aggregation-first proposals that preserve decentralization—rather than defaulting to block-size increases that may raise node burdens. The cryptography may be solvable, but Bitcoin’s ability to verify it at scale hinges on governance and Script capabilities.

UK Labour MPs are preparing to push for a permanent ban on crypto donations to political parties and candidates, arguing that recent allegations around Nigel Farage’s funding have underscored risks of undue influence in British politics.

According to The Guardian, the party is looking to overhaul existing donation rules after a March moratorium on crypto contributions was introduced and then prompted further scrutiny. The renewed push is linked to Farage’s resignation from Parliament and reporting that he received large “gifts” connected to the digital-asset industry.

Key takeaways

• Labour MPs are considering making the March crypto-donation moratorium permanent, moving from temporary restraint to a lasting rule change.
• The push follows Farage’s resignation and claims that he accepted millions in donations described as “gifts” from crypto-linked figures.
• UK lawmakers plan to review proposed amendments next week, potentially tightening political funding limits for digital assets.
• A by-election in Farage’s constituency will be triggered, but major parties reportedly plan not to run candidates, leaving the contest to voters.

A temporary ban becomes a permanent proposal

The legislative debate centres on the March moratorium on crypto donations, which was announced by the UK government as part of a broader effort to protect democratic processes. The government’s move included a cap on donations from overseas electors and a ban on crypto donations, framed explicitly around safeguarding the integrity of elections.

Labour now wants that crypto restriction to be extended beyond its initial window. The Guardian reports that MPs have tabled amendments aimed at turning the moratorium into a permanent measure.

Liam Byrne, a Labour MP for Birmingham Hodge Hill and Solihull North and chair of the business select committee, is among the figures backing the changes. He argued that the scale of the alleged inflows—cited in the report as “$268 million”—could fuel a wider political media ecosystem that benefits populist movements.

In a post on X, Byrne reiterated his view that stronger donation safeguards are needed, linking the current push to evidence of how crypto-related money could intersect with political influence.

Farage’s resignation reignites the funding controversy

Farage announced his resignation on Tuesday, following reporting about contributions he accepted while serving as MP for Clacton. He said the UK parliamentary standards commissioner was investigating the donations, while maintaining that he “did nothing wrong.”

The allegations described in the reporting include a $6.7 million “gift” from crypto billionaire Christopher Harborne and additional support—such as staff, security, transport, and accommodation—linked to George Cottrell, described as a convicted fraudster connected to a crypto casino.

Earlier coverage from Cointelegraph noted Farage’s resignation was tied to the controversy over crypto donations and gifts. That resignation is expected to keep the issue at the top of the UK political agenda, particularly as Labour seeks to lock in lasting limits.

What Labour MPs want to change—And why it matters

Under the reported plan, Labour lawmakers intend to consider amendments to the representation of the people measures next week. If adopted, a permanent crypto donation ban would represent a significant tightening of rules around how digital-asset wealth can flow into electoral politics.

For investors and builders in the crypto economy, the practical implication is straightforward: policy risk around political funding could shift from a temporary, trial-like restriction to a durable compliance requirement—one that may influence how crypto-linked businesses think about political engagement in the UK.

It also changes the timeline for uncertainty. A moratorium implies a watch-and-review period; a permanent ban implies long-term regulatory expectations. Market participants typically price in policy duration, and longer-lived restrictions tend to reduce the odds of sudden rule reversals—either tightening further or reversing course.

There is also a governance angle. Labour’s framing, as reported, focuses on democracy-protection rather than market conduct. That means the next step for observers is not just how the crypto donation ban is written, but how enforcement is handled and whether standards investigations evolve into broader election-law reforms.

By-election dynamics and the leadership question

Farage’s resignation automatically triggers a by-election in Clacton. He told constituents that “the people of Clacton should be the judges of my actions,” according to the reported coverage. However, the major party landscape is expected to be unusual: The Guardian reports that Labour, Conservatives, Liberal Democrats, and Greens will reportedly not field candidates.

UK Prime Minister Keir Starmer has described Farage’s move as a “desperate stunt,” a characterization that signals the political conflict around the donation allegations is likely to remain sharply contested.

Separately, a potential political leadership transition could affect how quickly Labour pushes the crypto donation issue through parliament. Earlier this week, a week-long window reportedly opened for Labour MPs to nominate candidates for the party’s next leader, who would also become prime minister if Labour wins.

Cointelegraph previously noted that Andy Burnham—a Labour MP and former mayor of Greater Manchester—has been positioned as a contender following Starmer’s resignation. As mayor, Burnham backed the idea of making the city a “Web3 powerhouse” and supported using digital technology for economic development.

If Burnham secures enough support to win the leadership contest, he may face immediate pressure to address both the proposed crypto donation ban and broader questions about how UK regulators oversee crypto activity, including the Financial Conduct Authority’s role.

What to watch next

Next week’s consideration of Labour’s proposed amendments will be the key milestone. Observers should watch whether the party’s push results in a permanent statutory ban on crypto donations and, equally important, how any enforcement mechanisms and parliamentary standards findings develop around the Farage-linked allegations.

Key Takeaways

• Secondary market valuations place Anthropic at $1.2 trillion, representing a 550% surge year-over-year
• Investor appetite dramatically outweighs available shares, with current shareholders reluctant to part with equity
• Special purpose vehicles facilitate the majority of transactions, despite the company’s official disapproval
• OpenAI’s secondary market standing now sits at $908 billion, trailing its competitor
• A confidential IPO filing was submitted to the SEC by Anthropic in early June 2026

The artificial intelligence firm Anthropic, creator of the Claude AI assistant, has achieved a staggering $1.2 trillion valuation in secondary market trading. This milestone positions the company as the world’s highest-valued private artificial intelligence venture, surpassing its primary competitor OpenAI.

This remarkable $1.2 trillion valuation marks a 550% climb compared to the same period last year, as reported by Javier Avalos, who serves as cofounder and chief executive of Caplight, a platform specializing in private secondary market transactions.

Avalos characterized Anthropic as representing “the most sought-after company the venture secondary market has ever seen.”

Limited Supply Creates Transaction Bottleneck

While investor interest remains extraordinarily high, actual completed deals remain surprisingly scarce. Glen Anderson, who heads Rainmaker Securities as CEO, verified that transactions are indeed occurring at the $1.2 trillion valuation mark, though successful closings happen infrequently.

“The demand outstrips the supply in Anthropic so much that it’s rare to get a trade done because no one’s selling,” Anderson told Business Insider.

Since neither Anthropic nor OpenAI trades on public exchanges, interested investors must navigate secondary markets to acquire ownership stakes. This requires finding employees or early-stage backers willing to liquidate their positions — a challenging endeavor given most stakeholders prefer to hold.

Some eager investors have resorted to extraordinary measures in their pursuit of Anthropic equity, including proposals to trade residential properties in exchange for company shares.

Special Purpose Vehicles Dominate Trading Activity Despite Corporate Resistance

The transactions that do materialize predominantly utilize special purpose vehicles, commonly known as SPVs. These financial structures aggregate capital from numerous investors to execute a single unified transaction.

Anthropic has taken a firm public stance against this approach. The company’s official website includes a clear warning: “Invest at your own risk: if someone offers you a way to participate, even on an indirect basis, in an investment in Anthropic, assume that it is invalid.”

Avalos additionally highlighted that SPV arrangements frequently carry substantial fees that buyers must absorb.

Anthropic’s most recent formal capital raise, a Series H round finalized in late May 2026, established the company’s valuation at $965 billion. Current secondary market pricing of $1.2 trillion represents a significant premium over that official figure.

OpenAI, which maintained valuation superiority over Anthropic for an extended period, currently trades at $908 billion on the Caplight platform.

This valuation divergence between the two AI leaders also manifests in their latest primary funding rounds. OpenAI secured an $852 billion valuation following its March 2026 financing, while Anthropic commanded $965 billion in its Series H.

Investor enthusiasm for OpenAI had experienced a relative lull until recent developments. The company’s launch of its GPT-5.6 model family, featuring the premium “Sol” model alongside the cost-effective “Terra” variant, has sparked renewed purchasing interest, Anderson observed.

Regarding the comparative demand between the two organizations, Avalos estimated approximately five potential Anthropic investors for every two seeking OpenAI exposure.

Anthropic submitted a confidential initial public offering prospectus to the Securities and Exchange Commission in early June 2026. Company representatives have indicated that the ultimate timing for any public market debut will be determined by prevailing market conditions.

Technology giant Sony’s online banking unit said it received conditional approval to establish a U.S. national trust bank subsidiary to support the issuance and management of dollar-denominated stablecoins.

The planned unit, Connectia Trust, National Association, will be based in New York and capitalized with $40 million, according to a Sony Financial Group announcement. Sony Bank will own 100% of the subsidiary.

The move comes as stablecoin usage is surging. Transaction volume hit a $1.79 trillion record last month, 63% more than in May and more than double the year-earlier level, according to Visa’s onchain dashboard.

With dollar-pegged tokens accounting for more than 99% of the total $311 billon market capitalization, according to DeFiLlama data, it may be a difficult market to crack.

Not only do market leaders USDT and USDC alone account for about $250 billion of the total, competition is increasing. A wave of potential rivals has also won conditional approval from the Office of the Comptroller of the Currency (OCC) for federal trust-bank structures tied to stablecoin businesses, including Stripe-owned Bridge, Paxos and Circle Internet.

Members of the UK’s ruling Labour party are considering a total ban on digital asset donations in response to Nigel Farage’s resignation from Parliament and the potential influence crypto billionaires had on his policies.

The Guardian reported Thursday that Labour MPs are looking to overhaul existing rules on donations to political parties and candidates. Specifically, lawmakers have proposed that a moratorium on crypto donations enacted in March be made permanent after it was revealed that the Reform leader personally accepted millions of British pounds in what he called “gifts” from industry figures.

“Amendments to the representation of the people bill which my colleagues and I have tabled are vital safeguards against the wider threat that’s seen [$268 million] come flooding in to build a whole media political complex behind populists in Britain,” said Liam Byrne, MP for Birmingham Hodge Hill and Solihull North and the Labour chair of the business select committee calling for a permanent crypto donation ban. “We simply cannot afford to let our crumbling defenses be undermined any further.”

Source: Liam Byrne

UK lawmakers will reportedly consider amendments to the crypto donation measures next week. Farage announced on Tuesday that he would resign as MP for Clacton in response to reports of the contributions, which included a $6.7 million “gift” from crypto billionaire Christopher Harborne and staff, security, transport and accommodation by George Cottrell, a convicted fraudster involved in a crypto casino.

Farage confirmed in his resignation speech that the UK’s parliamentary standards commissioner was investigating the donations, but said that he did “nothing wrong.” 

Related: Bank of England governor denies Farage lobbying swayed CBDC policy: Report

The Reform UK leader’s resignation has automatically triggered a by-election in the area, where he said “the people of Clacton should be the judges of my actions.” However, the major political parties, including Labour, Conservatives, Liberal Democrats and Greens will reportedly not field candidates for the by-election, with UK Prime Minister Keir Starmer calling Farage’s resignation a “desperate stunt.”

Former Manchester mayor on track to be next UK PM

Andy Burnham, a UK Labour lawmaker who recently won a by-election to become an MP representing Makerfield, is expected to be the country’s next prime minister following Starmer’s resignation. On Thursday, the week-long window opened for Labour MPs to nominate candidates for the party’s next leader, who would also become prime minister.

As mayor of Greater Manchester, Burnham advocated for the city to be a “Web3 powerhouse” and supported using digital technology as an economic development tool. If he receives enough support from Labour MPs to win a leadership bid, he could address the crypto donation ban and the Financial Conduct Authority’s oversight of the industry.

Magazine: Crypto industry looks to stablecoins and DeFi revisions in MiCA 2.0

This summary was created based on CoinDesk Research’s latest report; Digital Assets: Quarterly Review and Outlook, Featuring CoinDesk 5 and CoinDesk 20.

– Joshua de Vos, Research Lead, CoinDesk

Ask an Expert

Q: Is Asia advancing via tokenization and stablecoins rather than spot bitcoin ETFs?

Institutional adoption in Asia is shifting from exploratory pilots to targeted deployment, with tokenization of real-world asset and regulatory stablecoin acting as key entry points for bank and asset managers. Jurisdictions like Hong Kong have introduced comprehensive legislation such as the Stablecoins Ordinance. Requiring full reserve backing, redemption rights and risk controls to make tokenization activity compatible with existing prudential frameworks. Against that backdrop, pure bitcoin ETF plays a smaller strategic role than in North America and Europe.

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The growth of deep, liquid options markets on regulated bitcoin ETFs gives structured product issuers a reliable exchange-traded tool for income and hedging strategies. This is why covered call, buffered and other derivatives-based approaches are being used to generate income from bitcoin ETFs, which do not pay cash distributions or dividends.

Q: How much more capital could flow into bitcoin ETPs from institutions?

The more capital an asset can reasonably attract, the bigger its pool of potential buyers who follow fixed rules like pension plans, retirement accounts and institutional allocators. Right now, retirement systems are the largest pool of this kind of money that still has not meaningfully slowed into bitcoin ETFs. Just a 1% allocation from the $22 trillion US 401(k) and Defined Contribution system would generate $90-$130 billion of inflows, roughly matching the size of the current bitcoin ETF market size.