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USAT went from $22 million to $140.8 million in a single month, the fastest growth of any regulated dollar token this year. In the same window, its offshore parent shed roughly six billion. One of those numbers is a rounding error on the other, and the gap between them is the most interesting structure in stablecoins.

There is a specific kind of corporate structure that appears when a very large business decides it may eventually need to be a different business, and Tether built one in January.

USAT is a dollar token issued through a federally chartered bank, designed from the ground up to satisfy the American stablecoin statute, run by a separate US entity with its own chief executive, and it is, by any measure of scale, almost nothing. It launched at $10 million. By the end of its first week, it held $17.6 million. Six months later, after the fastest month of growth any regulated dollar token has posted this year, it holds roughly $141 million, which is about eight hundredths of one percent of the $184 billion its parent has in circulation. Read one way, that is a failure to launch. Read another, it is a 540% month, faster growth than Circle, PayPal, or Ripple managed at any point this year, off a base small enough that the percentage means less than it appears. The interesting reading is the third one: USAT is not primarily a product. It is an option, written on a regulatory outcome, held by a company whose main business currently sits outside the perimeter the option would let it enter. This piece takes the numbers seriously, examines the structure that produced them, and asks what the twin is actually for.

The numbers, in order

Start with the sequence, because the growth story and the scale story are both true and point in opposite directions.

USAT launched on January 27 with a $10 million initial supply as an ERC-20 token, immediately available on several major exchanges. Anchorage Digital Bank’s first reserve attestation, dated January 31, reported 17,501,391 tokens outstanding against $17,604,716 in reserves, roughly 0.6% overcollateralized. By the end of March, circulation stood near $22 million. Then April: the Deloitte-signed reserve report published in late May showed circulating supply at $140.8 million as of April 30, an increase of about 540% in a single month, which the US entity’s chief executive attributed to institutional treasury operations, settlement flows, and regulated dollar liquidity management.

Now the context that the percentage conceals. Circle’s USDC sits around $75 billion. PayPal’s PYUSD is roughly $5.5 billion. Ripple’s RLUSD, itself a young institutional token, is about $1.7 billion. USAT at $141 million is therefore under a fifth of one percent of USDC, roughly two and a half percent of PYUSD, and about eight percent of RLUSD, which makes it the smallest meaningful entrant among the regulated dollar tokens competing for American institutional use. Against its own parent, the ratio is starker still: USDT’s circulation of roughly $184 billion makes USAT about 0.08% of the group’s outstanding dollar liabilities.

One further number completes the picture and is the reason this is a story instead of a launch update. While the twin grew, the parent shrank. USDT peaked near $190 billion in May and stood at approximately $184.1 billion on July 21, a decline of roughly $5.4 to $6 billion over sixty days, alongside a broader stablecoin market contraction of about $10 billion from its May high. The compliant American token is growing quickly from nothing while the offshore token it exists alongside is contracting by amounts larger than the twin’s entire supply, several times over, every month.

Strategy acquires $200M Bitcoin, Anchorage reports USAT reserves, Kazakhstan allocates $350M for crypto portfolio | Weekly recap

Strategy bought $200M in Bitcoin, Deloitte audited USAT reserves, and Kazakhstan plans a $350M crypto reserve allocation: weekly recap.

— crypto.news (@cryptodotnews) March 8, 2026

The structure, and who is in it

The corporate architecture explains more about the strategy than any growth figure, and each participant is worth naming.

Anchorage Digital Bank, N.A. is the issuer. It holds a national trust bank charter granted conditionally by the Office of the Comptroller of the Currency in 2021, well before the current administration, and describes itself as the first federally regulated crypto bank. Its chief executive has framed USAT as evidence of what stablecoin issuance looks like inside the US banking system, under supervision, with accountability. That is the structural core of the arrangement: Tether does not issue USAT. A chartered American bank does, under federal supervision, which is precisely the arrangement the offshore parent cannot currently replicate.

Cantor Fitzgerald serves as designated reserve custodian and preferred primary dealer, the same firm that has handled Tether’s Treasury holdings, and its former chief executive is now the sitting Commerce Secretary. The US entity is led by Bo Hines, previously executive director of the White House Council of Advisers on Digital Assets, appointed in September to run the American vehicle. Neither fact implies impropriety, and both were reported at launch. Together they describe something worth stating plainly: the compliance vehicle for the world’s largest offshore stablecoin issuer is staffed and served at the precise intersection of the policy network that wrote the framework it is designed to satisfy. In an industry where our own reporting has documented the crypto sector supplying more than a third of all corporate election money this cycle, that adjacency is part of the strategic picture, not a curiosity.

Distribution has been assembled in parallel: availability across major exchanges from day one, a payments integration with a commerce platform announced in February, and, in the chief executive’s framing, a stated ambition that Tether could become one of the largest buyers of US Treasury bills as demand for its dollar tokens grows.

The disclosure inversion

The most revealing detail in the entire structure is one almost nobody has commented on, and it runs opposite to what anyone would predict.

USAT, at $141 million, publishes reserve reports signed by Deloitte. USDT, at $184 billion, has operated for its entire existence on attestations rather than a full audit, a gap this publication has documented repeatedly and which S&P cited when it downgraded the token to the weakest grade on its stablecoin scale in December, alongside the rising share of higher-risk assets in the reserves. The small token has the stronger disclosure regime. The enormous one does not.

That inversion is not an accident; it is the whole design. USAT exists inside the federal framework, which imposes reserve composition, custody, and reporting requirements, and satisfying them is the token’s entire purpose. USDT operates outside that framework by choice and by history, with reserves that, as reported at USAT’s launch, do not currently align with the statute’s standards, while the company describes itself as progressing toward compliance. The group therefore runs two dollar tokens with opposite regulatory postures: one built to the American rulebook and audited to it, one built for global liquidity and disclosed on its own terms.

For anyone assessing Tether, this is the most useful lens available. The twin is proof that the group can meet the standard when it chooses to, on a token small enough that meeting the standard costs almost nothing. Whether the $184 billion business ever moves onto that footing is a different question, involving reserve composition changes at a scale that would reshape the company’s economics, and nothing in USAT’s existence answers it.

What the twin is actually for

Three readings compete, and the honest answer is that all three are partly right.

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The product reading takes the growth at face value: institutions want a regulated dollar token from an issuer with unmatched global distribution, USAT supplies it, and 540% in a month is what early product-market fit looks like. Its supporters can point to a real gap in the market, since the regulated field is dominated by one incumbent and the alternatives are small, and to Tether’s distribution as an advantage no startup can match.

The option reading treats USAT as insurance. If American regulation eventually forces offshore dollar tokens out of US-facing channels, or if institutional counterparties increasingly require a federally issued instrument, the group already holds a functioning, chartered, audited vehicle it can scale instead of building under pressure. The cost of maintaining that option is trivial against $1.04 billion in quarterly profit, and the value if the perimeter tightens is enormous. On this reading the size is the point: an option does not need to be large until it is exercised.

The hedge reading is the least flattering and the hardest to dismiss. A company earning float income on $184 billion of offshore liabilities faces exactly one existential risk, which is that the regulatory environment turns against the structure generating those liabilities. A compliant American subsidiary, staffed by the people who wrote the rules and served by a firm with the deepest ties to the administration, is a hedge against that risk purchased in the most direct way available. Nothing about it is improper. It is simply what a rational company with Tether’s exposure would build.

The three readings imply different things to watch, and they are separable in the data. A product would keep compounding across a broad institutional user base. An option would plateau at a level sufficient to keep the machinery live. A hedge would scale only when the perimeter moved. The next two quarterly reserve reports will begin to distinguish them, which makes USAT’s supply curve one of the more informative small numbers in stablecoins.

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The field the twin entered

USAT’s numbers only mean something against the market it is competing in, and that market changed shape considerably in the eighteen months before it launched.

The regulated American dollar-token field is dominated by one incumbent and populated by a widening set of challengers with different theories. Circle’s USDC, at roughly $75 billion, holds around a quarter of all stablecoin supply and has spent years building exactly the compliance-first, publicly listed profile that the federal framework rewards, which is why its leadership has argued the legislation makes it a primary beneficiary. PayPal’s PYUSD, near $5.5 billion, represents the consumer-platform theory: distribution through an existing payments network with hundreds of millions of accounts. Ripple’s RLUSD, around $1.7 billion, is the institutional-settlement theory, aimed at treasury and cross-border flows and, as this publication has documented, increasingly embedded in that company’s own product stack. Bank consortium tokens and fintech issuers occupy the remainder.

USAT entered against all of them with a distinct pitch: the compliance profile of a chartered bank issuer combined with the distribution of the world’s most widely held stablecoin. That combination is genuinely unmatched on paper, since no competitor has both a national bank issuing its token and a sibling instrument used by hundreds of millions of people in emerging markets. It is also, so far, mostly potential. Distribution is not transferable by announcement; the users who hold USDT hold it for reasons, principally dollar access in markets where dollars are hard to obtain, that have nothing to do with American regulatory compliance and are not served by a token designed for US institutional treasury operations. The two customer bases barely overlap, which is why the parent’s global scale does not automatically become the twin’s American scale, and why the growth that matters is the institutional adoption the US entity’s chief executive describes rather than any migration from the existing user base.

That reframes the competitive question usefully. USAT is not competing for USDT’s users. It is competing with USDC, PYUSD, and RLUSD for American institutional balances, in a market where the incumbent has a five-hundred-fold size advantage, a public listing, years of relationships, and a compliance record predating the statute. Against that, $141 million after six months is neither the failure the absolute number suggests nor the triumph the percentage implies. It is an entrant with an unusual parent, roughly where a well-funded entrant would be, in a market that has not yet decided how many regulated dollar tokens it actually needs.

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What to watch

The May and June reserve reports. One 540% month off a $22 million base proves little. Whether growth compounded through the second quarter, or April was a single institutional allocation, is the difference between the product reading and the option reading, and the Deloitte-signed reports will show it plainly.

USDT’s own compliance path. Any concrete move to bring the $184 billion token’s reserves into alignment with the federal standard would change everything about this structure, because it would make the twin redundant. Silence is equally informative.

The parent’s contraction. USDT shedding roughly $6 billion in sixty days is a far larger phenomenon than USAT’s entire existence, and whether that reflects market-wide stablecoin contraction, competitive loss, or regulatory friction determines how urgent the American vehicle becomes.

The Treasury claim. The stated ambition of becoming a top-ten buyer of US government debt is checkable against public data as it develops, and it is the clearest available test of whether the group’s American strategy is operational or aspirational.

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A closing note on what the twin reveals about the parent, because that is ultimately the more consequential subject. Tether’s global business is built on a structure that American law is steadily making harder to operate from outside: an offshore issuer, reserves disclosed on the company’s own terms, a token used by hundreds of millions of people for reasons no regulator designed. Every element of that structure has been a competitive advantage for a decade, and every element is now a liability inside a jurisdiction writing rules for regulated dollars. The company’s response has been neither to restructure the parent nor to abandon the market, but to build a small, clean, fully compliant version of itself and let it grow on its own timetable while the large version continues as it is.

That is a genuinely sophisticated answer to a hard problem, and it has one obvious failure mode. Options expire. If the American perimeter tightens faster than USAT scales, the group holds a compliant vehicle a thousand times too small to absorb the business that would need to migrate into it, and building capacity under regulatory pressure is the most expensive way to build anything. If the perimeter never tightens, the twin remains a modest business inside a company earning billions elsewhere, which costs almost nothing. Between those poles sits the actual question worth watching over the next year, and the reserve reports will answer it faster than any announcement.

Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. Supply figures, reserve reports, and market data reflect information available at the time of writing and change continuously. Nothing here is a recommendation to buy, sell, or hold any asset. Always do your own research. Information is accurate as of July 27, 2026.

Frequently Asked Questions

What is USAT?

Tether’s US-regulated dollar stablecoin, launched January 27, 2026 and designed to operate within the federal stablecoin framework. It is issued by Anchorage Digital Bank, a nationally chartered bank, with Cantor Fitzgerald as designated reserve custodian and preferred primary dealer, and is run by a separate US entity led by Bo Hines, formerly executive director of the White House Council of Advisers on Digital Assets.

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How large is USAT now?

Roughly $141 million. Circulating supply was $17.6 million at the end of January, about $22 million in March, and $140.8 million as of April 30 per a Deloitte-signed reserve report, representing 540% growth in a single month. In context, that is approximately 0.08% of USDT’s circulation, about 8% of Ripple’s RLUSD, 2.5% of PayPal’s PYUSD, and under 0.2% of Circle’s USDC.

Why does Tether need a second dollar token?

Because USDT’s reserves do not currently align with the federal stablecoin statute’s requirements, while the company describes itself as progressing toward compliance. USAT is purpose-built to satisfy that framework through a chartered bank issuer, giving the group a compliant American instrument without restructuring the reserves behind its $184 billion global token.

Why does the smaller token have better disclosure?

Because the federal framework requires it. USAT publishes Deloitte-signed reserve reports as a condition of operating inside the American regime, while USDT has historically operated on attestations rather than full audits, a gap S&P cited when downgrading the token to the weakest grade on its stablecoin stability scale in December. The inversion is a design consequence, not an oversight.

Is USAT growing or stalling?

Both, depending on the frame. Its growth rate is the fastest among regulated dollar tokens this year, but from a base so small that the percentage flatters it, and it remains the smallest meaningful entrant in the US institutional market. Whether April’s jump was the start of compounding adoption or a single large allocation should become clear in subsequent reserve reports.

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What is happening to USDT itself?

It is contracting. Circulation peaked near $190 billion in May and stood at approximately $184.1 billion on July 21, a decline of roughly $6 billion in sixty days, against a broader stablecoin market that shed about $10 billion from its May high. Tether reported $1.04 billion in first-quarter profit and a reserve buffer above token obligations of roughly $8.2 billion.

Who runs USAT, and why does that matter?

Bo Hines, previously the executive director of the White House crypto council, leads the US entity, and Cantor Fitzgerald, whose former chief executive is the sitting Commerce Secretary, custodies the reserves. Nothing about the arrangement is improper and both facts were public at launch, but the compliance vehicle for the largest offshore issuer being staffed and served at the center of the policy network that wrote the framework is a material part of the strategic picture.

What should observers actually watch?

The next two reserve reports, since compounding growth, a plateau, or a reversal distinguishes a product from an option from a hedge; any concrete step toward bringing USDT’s own reserves into federal alignment, which would make the twin redundant; and the trajectory of the parent’s contraction, which determines how urgently the American vehicle is needed. This is educational analysis, not investment advice.

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Ten European financial institutions have launched Regulated Layer One (RL1), a jointly owned blockchain cooperative designed for regulated financial markets and tokenized assets. 

On Tuesday, the group announced that RL1 had been established as a European Cooperative Society in Luxembourg and had begun operations with founding members including ABN AMRO, Cecabank, Chartered Investment, Crédit Mutuel Alliance Fédérale, DekaBank, DZ BANK, LBBW, Natixis CIB, SC Ventures and Seturion. 

RL1 said each member will have equal decision-making rights over the network’s governance and development.

The private, permissioned network is based on infrastructure developed by German fintech Secure Worldwide Interbank Asset Transfer (SWIAT), which has now transferred ownership of the network to the cooperative. 

SWIAT said the platform has processed more than 50 transactions worth over 700 million euros (about $808 million) during three years of production use.

The blockchain is designed to support institutional use cases including digital money, tokenized bonds, collateral and blockchain-based settlement. RL1 said the shared network could reduce fragmentation caused by financial institutions operating separate distributed ledger systems. 

Former SWIAT Managing Director Henning Vollbehr will lead RL1. KfW and L-Bank will continue supporting the initiative, while RL1 said it is in discussions with additional institutions, including NatWest, about joining the network. 

Related: CoinShares debuts Bitcoin mining ETF in Europe entrance

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

Everyone covering the prediction market legal war has been watching states. The more dangerous case is being argued in the Ninth Circuit by three California tribes under a different statute entirely, and at oral argument this month a judge told Kalshi’s lawyer that its contracts sound like a bet.

The prediction market industry has spent two years describing its legal problem as a fight with the states, and the coverage has followed: Nevada, New Jersey, Massachusetts, a dozen gaming regulators issuing orders, appellate arguments over whether federal derivatives registration preempts state police powers. That framing has produced a blind spot, and it is a large one. The most consequential case now pending against Kalshi was brought by three small California tribes, it runs on an entirely different federal statute, and at oral argument in the Ninth Circuit this month the panel appeared considerably less friendly to the exchange than the district court had been, with one judge saying flatly that the contracts sound like a bet subject to Native American gambling laws and another suggesting it would not be unreasonable to exclude tribes from the federal framework the industry is relying on. Sixty-plus federally recognized tribes have filed amicus briefs across the related proceedings. A Brookings analysis calls the sector an existential threat to Indian gaming. And virtually none of this has been covered in the crypto press, which has been reading the state docket. This piece corrects that, because the tribal front asks a question the state cases do not, and the answer reaches further.

The case

The facts are narrow, and the theory is not.

Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians sued Kalshi in California federal court in 2025, arguing that its sports event contracts function as unlicensed sports betting accessible on tribal lands, in violation of the Indian Gaming Regulatory Act. Their argument, as their counsel framed it at argument, turns on location: the moment a user opens the platform while physically on a reservation, the tribes contend, Kalshi is conducting Class III gaming on Indian lands without the tribal ordinances, compacts, or regulatory approvals that federal law requires of anyone doing so. They sought declaratory judgment and injunctive relief.

Kalshi’s response is textual and, at the district level, it worked. Its counsel argued that the exchange is not a party to any compact or set of secretarial procedures, that those documents govern what the tribes themselves may offer, not what an independent federally regulated exchange may make available online, and that IGRA has never previously been deployed against an unrelated private company in this way.

District Judge Jacqueline Scott Corley denied the preliminary injunction in November. Her reasoning is worth precision because it defines the appeal. She found that secretarial procedures are functionally equivalent to compacts under IGRA, a point favorable to the tribes, but concluded that the relevant provisions did not prohibit Kalshi’s conduct, since the documents address internet games offered by the tribes and are silent about outside companies. She then held that the Unlawful Internet Gambling Enforcement Act governed the disputed transactions, and that statute’s definition of a bet or wager excludes transactions conducted on an entity registered under the Commodity Exchange Act, which placed Kalshi within the exclusion. She further concluded that the Commodity Futures Trading Commission holds exclusive jurisdiction to determine what qualifies as a covered contract.

That chain of reasoning is the industry’s entire defense in compressed form: we are a registered derivatives exchange, the statutes carve us out, and the agency that licenses us decides what we may list.

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The Ninth Circuit, this month

Appellate panels do not decide from the bench and questions are not rulings, but the tenor of argument was materially different from the district court’s disposition.

The panel pressed Kalshi’s counsel on why the contracts are not simply bets. One judge stated directly that they sound like a bet subject to Native American gambling laws. Another suggested it would not be unreasonable to exclude tribes from federal oversight in this area, which, if it became the holding, would carve a sovereignty exception into precisely the preemption argument on which the sector’s American operations rest.

Counsel for the tribes pressed the point that ordinances cannot be separated from the compacts and secretarial procedures, because those agreements require gaming to comply with the tribes’ regulatory frameworks, and that IGRA would offer little protection if an outside company could conduct unauthorized gaming on tribal lands while escaping suit merely because its name appears in none of the governing documents.

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The panel gave no timeline. The underlying district court case is stayed pending the decision. And the hearing followed a separate Ninth Circuit argument earlier this year in Nevada’s enforcement attempt against Kalshi, Robinhood, and Crypto.com, where the same court was similarly skeptical of the preemption arguments, which means one appellate circuit is now weighing two distinct challenges to the same legal foundation.

Why this is not the state fight

The distinction matters and is easy to miss, because both sets of cases involve sports contracts and the same defendants.

The state cases ask whether federal registration under the Commodity Exchange Act preempts state gaming law, a classic federalism question about whether Congress displaced state police powers. The tribal cases ask something different: whether one federal statute, the Commodity Exchange Act as amended in 2010, silently displaced another federal statute, the Indian Gaming Regulatory Act of 1988, along with the compacts negotiated under it. That is not federal-versus-state. It is federal-versus-federal, with a sovereign third party whose rights derive from treaties, statutes, and a body of law that courts have historically read protectively.

The argument that gives this its force was put sharply in international gaming law commentary: if the CFTC’s position prevails, then when Congress amended the Commodity Exchange Act in 2010, it silently erased decades of Indian gaming law without a single reference to tribes or to IGRA anywhere in the text. Courts are generally reluctant to find implied repeals, and especially reluctant where Indian law is concerned, given the canon that ambiguities are construed in favor of tribes. Kalshi’s counter is that its position requires no repeal at all, because the exchange is simply not conducting gaming under IGRA’s definitions, and that the tribes’ theory would make any nationally available financial product a per-jurisdiction licensing question the moment a user carried a phone across a boundary.

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There is a third federal thread running in parallel: the Sixth Circuit is separately considering whether these contracts qualify as swaps under the Commodity Exchange Act, a definitional question with implications for everything above. Three circuits, three theories, one product.

What is actually at stake

For the tribes, the stakes are the bargain that Indian gaming rests on, and the arithmetic behind it is why the language has hardened.

Under IGRA, tribes negotiate compacts with states that grant exclusivity over certain gaming in exchange for regulatory compliance and, in many states, substantial revenue sharing. That exclusivity is the consideration; it is what tribes purchased with decades of negotiation and what funds government services, healthcare, education, and infrastructure across Indian Country. If federally licensed exchanges may offer functionally identical sports wagering nationwide, including to users on reservations, without negotiating a compact or complying with IGRA, then the exclusivity tribes bargained for has been rendered worthless without anyone renegotiating anything. The Indian Gaming Association’s chairman put the functional argument plainly: open the app and you see the same bets offered in every legal sportsbook. A Brookings analysis by a legal scholar described the development as an existential threat to American Indian gaming.

The response has been organized, not rhetorical. Tribal organizations and more than sixty federally recognized tribes have filed amicus briefs across the relevant cases. At this year’s Indian Gaming Association convention, leaders described a parallel path of litigation and federal lobbying, pressing Congress to require the CFTC to enforce its own rules and arguing that the agency has permitted gambling to operate under a financial label. And California’s broader tribal coalition has reaffirmed plans for a 2028 ballot initiative for tribally led sports betting, framed partly as a response to prediction markets operating in what they characterize as a regulatory gray area.

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NEW: 🇺🇸 CFTC Chair Michael Selig says the agency will no longer sit idly by while overzealous states undermine federal jurisdiction over prediction markets.

CFTC files friend-of-the-court brief supporting @cryptocom pic.twitter.com/dBTPnTIQPB

— crypto.news (@cryptodotnews) February 17, 2026

For the industry, the stakes are equally direct. Sports contracts generate the majority of retail prediction market volume, a Massachusetts court found nearly seventy percent of Kalshi’s volume tied to sports when it moved to block the app there in January, and an adverse tribal ruling would not merely add a compliance burden. It would introduce geographic carve-outs into a product whose entire architecture assumes nationwide uniformity under a single federal license, in a country with hundreds of reservations.

The honest reading

Both sides hold a genuinely strong argument, which is why this is being litigated in three circuits instead of settled.

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The tribes’ best case is not the functional similarity to sportsbooks, appealing as that framing is to a panel. It is the implied-repeal problem: a 2010 amendment to a commodities statute, containing no mention of tribes, should not be read to nullify a 1988 statute and the compacts negotiated under it, particularly given the interpretive canon favoring tribes. That is a structural argument about how Congress legislates, and it does not depend on characterizing event contracts as gambling at all.

Kalshi’s best case is not the sportsbook comparison’s inadequacy either. It is Judge Corley’s chain: UIGEA expressly excludes transactions on CEA-registered entities from its definition of a bet, the compacts and procedures govern what tribes may offer rather than what third parties may, and Congress assigned the CFTC exclusive authority over what counts as a covered contract. Each link is textual, and textual arguments travel well in appellate courts.

What neither side can claim is that the current arrangement was designed. Nobody in 1988 or 2010 contemplated a federally licensed exchange offering yes-or-no contracts on football games to a phone sitting on a reservation, and the courts are being asked to allocate an authority that Congress never consciously assigned. That is the honest description of every question in this sector, and the tribal case is simply the version where the party with the strongest historical claim to the disputed ground was not at the table when the statute that may override it was written.

The exclusion that decides the case

One statutory provision is doing more work in this litigation than any argument either side has made, and it deserves its own examination because it was written for an entirely different purpose.

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The Unlawful Internet Gambling Enforcement Act, passed in 2006 to attack offshore online poker and sports betting by cutting off payment processing, defines a bet or wager and then carves out exceptions. One of those exceptions covers transactions conducted on an entity registered under the Commodity Exchange Act. The purpose in 2006 was mundane: Congress did not want a statute aimed at internet gambling to accidentally sweep in the legitimate commodity futures markets, where contracts on future prices are a normal financial activity, and so it excluded regulated derivatives venues from the definition. Nobody drafting that exclusion contemplated a CFTC-registered exchange offering contracts on football games to retail customers, because no such thing existed or was seriously proposed.

Twenty years later, that carve-out is the load-bearing element of the district court’s ruling in the tribal case, and functionally the strongest single sentence in the industry’s legal position. If transactions on a CEA-registered entity are not bets or wagers under federal internet gambling law, then a federally licensed exchange listing sports contracts is not conducting internet gambling as Congress defined it, whatever it resembles in practice.

The reasoning is textually sound and it is also a textbook example of a provision applied far outside the circumstances that produced it.

Which is why the tribes’ implied-repeal argument and this exclusion are really the same fight from opposite ends. The industry says two federal statutes, read together, plainly exclude it from gambling law. The tribes say those statutes were never written with prediction markets or Indian gaming in mind, and that reading an incidental carve-out to nullify a negotiated sovereign framework attributes to Congress an intention it never formed. Appellate courts resolve exactly this kind of dispute by choosing between text and purpose, and the Ninth Circuit’s questions this month suggested at least some appetite for the second. That choice, more than any characterization of what an event contract feels like to a user, is what the panel is actually deciding.

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What to watch

The Ninth Circuit’s opinion. No timeline was given, and the panel’s questions ran against the exchange. A reversal returns the case to Judge Corley for reconsideration and immediately raises the possibility of geographic carve-outs; an affirmance largely closes the tribal theory and strengthens preemption across the board.

The Sixth Circuit’s swaps question. Whether these contracts are swaps under the Commodity Exchange Act is upstream of everything, and a ruling there could reshape both the tribal and state cases before either concludes.

Congressional lobbying. Tribal organizations are pressing Congress directly, and tribal interests have historically been effective when compact rights are threatened. Any legislative language addressing tribal lands specifically, whether in the pending sports-contract bill or elsewhere, would be the fastest route to resolution.

The 2028 California initiative. A tribally led sports betting measure would change the competitive landscape in the largest state regardless of how the litigation ends, and its drafting will reveal how tribes intend to coexist with, or exclude, federally licensed event contracts.

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One last observation for readers following the broader sector. The three legal challenges now running against prediction markets, the state preemption cases, the tribal sovereignty cases, and the Sixth Circuit’s swaps definition question, look like three versions of one dispute and are actually three separate bets on how a single ambiguity gets resolved. The ambiguity is that Congress created a category, event contracts on a federally licensed exchange, without deciding whether that category displaces the gambling law built around the same activity by states and tribes over decades. Each set of plaintiffs has picked the doctrine most favorable to their position, and the industry’s defense is identical in all three: we are a registered derivatives venue, the statutes say what they say, and the Commission decides what we may list.

The consequence is that the sector’s legal exposure is not additive but structural. A loss in any one forum does not merely add a compliance requirement; it proves that the federal registration defense has a limit, and every other plaintiff then argues for their own version of that limit. Which is why the industry’s compliance build, its data partnerships, and its political spending are all running in parallel rather than sequentially, and why the coming months matter more than the volume charts suggest. The category is not waiting for one verdict. It is waiting to learn whether its foundational legal claim survives contact with three different sovereigns at once.

Disclaimer: This article is for information and educational purposes only and does not constitute legal, financial, or investment advice. It describes pending litigation whose outcome is unknown, and characterizations of oral argument reflect contemporaneous reporting rather than rulings. Nothing here predicts any judicial result. Always do your own research. Information is accurate as of July 27, 2026.

Frequently Asked Questions

Who is suing Kalshi, and on what theory?

Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, and Picayune Rancheria of the Chukchansi Indians, three California tribes, argue that Kalshi’s sports event contracts constitute unlicensed Class III gaming conducted on tribal lands under the Indian Gaming Regulatory Act, because users can access the platform while physically located on reservations without Kalshi holding any tribal authorization.

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What did the district court decide?

Judge Jacqueline Scott Corley denied the tribes’ preliminary injunction in November. She found secretarial procedures functionally equivalent to compacts under IGRA but concluded the relevant provisions did not prohibit Kalshi’s conduct, since they address gaming the tribes offer and are silent about outside companies. She also held that federal internet gambling law excludes transactions on Commodity Exchange Act registrants and that the CFTC has exclusive jurisdiction over covered contracts.

What happened at the Ninth Circuit?

The panel heard argument this month and questioned Kalshi closely, with one judge stating the contracts sound like a bet subject to Native American gambling laws and another suggesting it would not be unreasonable to exclude tribes from federal oversight in this area. No ruling issued from the bench and no timeline was given, and the district case remains stayed.

How is this different from the state lawsuits?

Different statutes and different sovereigns. The state cases ask whether federal derivatives registration preempts state gaming law, a federalism question about state police powers. The tribal cases ask whether the 2010 amendments to the Commodity Exchange Act silently displaced the Indian Gaming Regulatory Act of 1988 and the compacts negotiated under it, which is a federal-versus-federal question involving tribal sovereignty.

Why do tribes consider this existential?

Because exclusivity is the consideration in the IGRA bargain. Tribes accepted regulation and, in many states, substantial revenue sharing in exchange for exclusive gaming rights that fund government services across Indian Country. If federally licensed exchanges can offer functionally identical sports wagering nationwide, including on reservations, without compacts, that bargained-for exclusivity is effectively voided without renegotiation.

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How organized is the tribal response?

Considerably. More than sixty federally recognized tribes have filed amicus briefs across the related cases, tribal organizations described a parallel litigation and lobbying strategy at this year’s Indian Gaming Association convention, and California’s tribal coalition has reaffirmed plans for a 2028 ballot initiative for tribally led sports betting in response to prediction markets.

What is the strongest argument on each side?

For the tribes, the implied-repeal problem: a commodities amendment mentioning neither tribes nor IGRA should not be read to nullify a 1988 statute and its compacts, especially given the canon construing ambiguity in favor of tribes. For Kalshi, the textual chain the district court accepted: federal internet gambling law excludes CEA registrants, the compacts govern tribal conduct and not third parties, and the CFTC holds exclusive definitional authority.

What would an adverse ruling mean for the industry?

Potentially geographic carve-outs in a product built for nationwide uniformity under one federal license, across a country with hundreds of reservations. Sports contracts generate the majority of retail volume, with one court finding nearly seventy percent of Kalshi’s volume tied to sports, so the commercial exposure is substantial regardless of how compliance would be implemented. This is educational analysis, not legal or investment advice.

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Core Scientific has reported a sharp rebound in its second-quarter financial performance as its data-center colocation business—built to support artificial intelligence (AI) and high-performance computing (HPC)—continues to drive results after the miner’s shift away from a Bitcoin-only model.

In earnings released Tuesday, the company said Q2 revenue rose to $164.2 million, compared with $78.6 million in the same quarter a year earlier. Colocation revenue made up the overwhelming majority of that figure, climbing to $136.7 million from $10.6 million, while gross profit increased to $70 million from $5 million.

Key takeaways

• Core Scientific’s revenue more than doubled in Q2, with colocation now the dominant earnings engine.
• AI- and HPC-oriented infrastructure appears increasingly central to the company’s profit trajectory, as gross profit jumped alongside colocation revenue.
• Despite strong topline growth, Core Scientific posted a large net loss driven largely by a non-cash accounting impact tied to warrant valuation.
• The company’s newly announced AMD partnership could support up to 2.5 GW of leasable capacity, with initial multi-site agreements beginning in 2027.

Revenue surge driven by colocation, not mining

The company’s results highlight how quickly Core Scientific’s operating profile has changed. According to the earnings figures, colocation revenue—rather than mining-related activity—accounted for $136.7 million of the quarter’s total $164.2 million. In the year-ago period, colocation contributed only $10.6 million, underscoring the scale of the pivot and the speed at which the business ramped.

Gross profit also rose substantially, reaching $70 million from just $5 million. While revenue growth alone can sometimes reflect mix effects or transitional capacity, the gross profit jump suggests Core Scientific’s shift is beginning to translate into a more favorable economics profile for its core infrastructure operations.

Core Scientific is no longer positioning itself as a pure-play Bitcoin miner. Earlier coverage from Cointelegraph noted that it generates the bulk of its revenue from colocation services while holding a comparatively small Bitcoin treasury of fewer than 1,000 BTC, based on industry data compiled by bitcointreasuries.net.

The net loss: accounting effects, not necessarily cash stress

Even as revenue and gross profit climbed, Core Scientific still recorded a $1.15 billion net loss. The company attributed the result primarily to a non-cash accounting charge connected to the rising value of outstanding warrants as its share price increased.

This matters for readers because the market often interprets net losses as immediate operational distress. Here, the earnings disclosure frames the loss as largely accounting-driven rather than a direct signal that the business is consuming cash faster than it generates it. In the context of a company transitioning to longer-term infrastructure contracts, that distinction can influence how investors evaluate near-term headlines versus underlying demand and contracted capacity.

Following the earnings release, Core Scientific’s shares reportedly fell by more than 4%, trimming its year-to-date gains—an indication that some investors may have focused on the net loss headline before digging into what drove it.

An AMD deal aims to lock in large-scale AI compute capacity

Alongside its quarterly results, Core Scientific announced a partnership with Advanced Micro Devices (AMD). AMD designs CPUs and AI-oriented graphics processors that compete with other major chip vendors.

The agreement is structured to support up to 2.5 gigawatts of leasable data-center capacity. The initial phase is anchored by 15-year agreements covering 530 megawatts across multiple US sites starting in 2027, with the ability to expand over time.

Core Scientific said the broader AMD partnership could generate more than $14 billion in contracted base revenue. The company also stated that its total leased customer power capacity is now roughly 1.1 GW, representing more than $24 billion in potential contracted revenue.

From an investor perspective, this type of power-and-capacity contracting is often viewed as a way to stabilize revenue in infrastructure businesses, especially when the demand side is tied to large compute requirements from AI training and inference workloads. For traders and equity holders, the key question becomes how quickly these longer-dated commitments translate into actual utilization and incremental margins—especially as the market moves from “plans” to “running load.”

Broader AI data-center competition signals shifting priorities across crypto infrastructure

Core Scientific’s quarter and its AMD partnership arrive as other infrastructure providers tied to the crypto era also expand into AI compute. Earlier this month, IREN disclosed $2.8 billion in cloud contracts with AI developers. Separately, Hut 8 unveiled a $9.8 billion lease agreement with an unnamed customer for capacity at its AI data campus.

Set against those moves, Core Scientific’s results look less like a standalone turnaround story and more like part of a sector-wide reallocation of resources. Bitcoin mining companies that secured data-center assets and power access during the mining buildout are increasingly competing on hosting, leasing, and compute-adjacent services rather than relying solely on block rewards.

Still, uncertainty remains. While contracted capacity figures and partnership announcements can support a longer-term growth narrative, the market continues to watch for execution details: how fast customers ramp usage, whether contracted power translates into sustained gross margins, and how balance-sheet dynamics—such as the accounting treatment of warrants—can affect headline profitability.

Investors should watch Core Scientific’s next reporting period for two things: whether the revenue mix continues to lean further into colocation and how management’s guidance and utilization metrics evolve as AMD-linked capacity approaches the initial 2027 ramp-up window.

Ten European financial institutions have formed a new jointly owned blockchain cooperative called Regulated Layer One (RL1), positioning it as a permissioned network for tokenized assets and regulated market infrastructure.

RL1 announced that it has been established as a European Cooperative Society in Luxembourg and has started operations with founding members including ABN AMRO, Cecabank, Chartered Investment, Crédit Mutuel Alliance Fédérale, DekaBank, DZ BANK, LBBW, Natixis CIB, SC Ventures and Seturion. The group says governance will be shared, with each member holding equal decision-making rights over the network’s development.

Key takeaways

• RL1 is launching as a Luxembourg-based European Cooperative Society with 10 founding financial institutions.
• The network is permissioned and aimed at institutional use cases such as tokenized bonds, collateral, and settlement.
• RL1 is built on infrastructure originally developed by German fintech Secure Worldwide Interbank Asset Transfer (SWIAT), now transferred to the cooperative.
• SWIAT reports more than 50 transactions worth over €700 million during three years of production use.
• Additional institutions are being discussed for membership, including NatWest, as RL1 begins operations.

A cooperative model for regulated blockchain infrastructure

RL1’s launch reflects a broader push among banks and other regulated players to build shared blockchain rails that can integrate with existing compliance and oversight frameworks. By organizing the network as a cooperative, RL1 is attempting to shift control away from single-operator models and toward governance shared across member institutions.

The founding structure matters for investors and market participants because governance can directly affect roadmap priorities—such as which tokenized asset standards are supported, how settlement workflows are designed, and how risk controls are maintained. RL1 says each member will have equal decision-making rights, signaling that the network is meant to evolve through collective agreement rather than unilateral changes.

From SWIAT-built infrastructure to RL1 ownership

RL1’s technical foundation traces back to infrastructure developed by German fintech Secure Worldwide Interbank Asset Transfer (SWIAT). According to the cooperative, SWIAT has transferred ownership of the network to RL1, marking a clear step from an originating build phase into an operator-and-governance phase under the cooperative structure.

SWIAT also provided performance context from its production use period, stating that the platform processed more than 50 transactions totaling over €700 million (about $808 million) across three years. While that figure is not presented as a measure of network scale in terms of daily volume or active users, it does frame the initiative as having moved beyond prototypes into live transaction processing before the cooperative launch.

Use cases designed for tokenization and settlement

RL1 says the blockchain is intended to support institutional workflows tied to digital money and tokenized financial instruments. The cooperative highlighted use cases including tokenized bonds, collateral management, and blockchain-based settlement.

One theme RL1 emphasizes is reducing fragmentation in distributed ledger efforts. Financial institutions have historically pursued separate DLT systems, often leading to interoperability challenges and duplication of integration work. RL1 argues that a shared network among regulated participants can mitigate those issues by giving members a common infrastructure layer for tokenized settlement-related activities.

For market participants, that framing matters because interoperability and shared settlement are frequently cited barriers to wider adoption of tokenized assets. A network that centralizes governance and standards among a defined group of regulated institutions can shorten the path to operational alignment—though it cannot eliminate the need for external integrations where assets or counterparties sit outside the network.

Leadership and expansion plans

RL1 named Henning Vollbehr, formerly Managing Director at SWIAT, as its leader. The cooperative also said that KfW and L-Bank will continue supporting the initiative, indicating the project retains institutional backing as it transitions into ongoing operations.

RL1 is also looking outward: the group said it is in discussions with additional institutions about joining the network, including NatWest. That expansion effort will likely be a key indicator of whether RL1 can grow beyond the initial consortium and increase its usefulness as a settlement and tokenization venue for more participants.

Going forward, readers should watch how RL1’s cooperative governance translates into concrete product decisions—especially around asset types, settlement rules, and interoperability with external systems—alongside whether the membership talks broaden participation beyond the founding banks.

Core Scientific shares fell after the Bitcoin miner agreed to provide AMD with up to 2.5 gigawatts of data center capacity for artificial intelligence deployments starting in 2027.

AMD secures up to 2.5 GW from Core Scientific

Core Scientific and AMD have signed an agreement covering up to 2.5 GW of data center capacity for customers deploying the chipmaker’s AI systems.

Capacity will become available from 2027, according to a joint announcement from the companies. Core Scientific and AMD will also work together on the physical design of the infrastructure needed to support high-density computing workloads.

Planned deployments will use AMD Instinct graphics processing units, EPYC processors, and the company’s ROCm software platform. The announcement did not disclose the financial value of the agreement or identify the end customers expected to use the capacity.

Unlike a standard hardware order, the arrangement pairs AMD’s computing products with Core Scientific’s power and data center infrastructure. The scale of the agreement could make AMD an important customer and commercial partner as Core Scientific converts more of its sites from crypto mining to AI computing.

AMD will also receive market-priced warrants allowing it to purchase Core Scientific common stock. The warrants remain subject to commercial conditions, and the companies did not disclose the potential size of AMD’s resulting stake.

Core Scientific accelerates its shift from Bitcoin mining

Core Scientific built its business around Bitcoin mining but has increasingly redirected capital and power capacity toward high-density data center services.

As previously reported by crypto.news, the company sold 2,385 Bitcoin earlier in 2026 to provide liquidity during the transition. BitcoinTreasuries data shows that Core Scientific still holds 848 BTC.

The company continues to generate revenue by mining crypto for its own account and providing hosting services to other miners. However, it is repurposing its remaining facilities for colocation services capable of supporting power-intensive AI systems.

The AMD agreement places Core Scientific among several publicly traded Bitcoin miners pursuing AI infrastructure contracts. Limited access to large sites with substantial power connections has made miners’ existing facilities attractive to cloud providers and AI developers.

MARA recently expanded its AI infrastructure footprint through the acquisition of a site in Texas. TeraWulf also signed a 20-year data center agreement with Anthropic earlier in July.

Hut 8 and IREN announced separate multibillion-dollar AI infrastructure deals last week. Hut 8 signed a second 15-year lease worth $9.8 billion at its Beacon Point campus in Texas, while IREN disclosed $2.8 billion in new multiyear AI cloud contracts.

CORZ reverses its premarket gain

CORZ initially rose more than 5% in premarket trading after the AMD agreement was announced. The stock reversed direction after the opening bell and fell more than 4% as a broader equity market sell-off weighed on trading.

Core Scientific shares have now declined more than 12% over the past week. Despite the latest pullback, the stock remains up over 40% since the start of 2026 as investors assess its transition from Bitcoin mining to AI infrastructure.

The reversal indicates that investors are weighing the agreement’s long-term capacity against near-term execution costs and market conditions. The companies did not disclose expected revenue, construction spending, deployment stages, or a timetable for bringing the full 2.5 GW online.

For U.S. investors, AMD’s warrants introduce a potential dilution consideration if the chipmaker exercises its right to buy CORZ shares. The commercial conditions and number of shares covered will determine the eventual effect on existing holders.

Execution becomes the next test for Core Scientific

Core Scientific must now prepare its facilities for deployments scheduled to begin in 2027. Its progress will depend on power availability, construction timelines, customer demand, and the capital required to convert former mining sites.

Investors will also watch for disclosures covering the agreement’s financial value, deployment schedule, and warrant terms. These details will help determine how quickly the AMD partnership could replace declining reliance on Bitcoin mining revenue.

The wider shift among miners is increasing competition for AI tenants and financing. Core Scientific’s 2.5 GW agreement gives it substantial contracted demand, but future results will depend on how much capacity is delivered and how profitably the company operates it.