The Blockchain Association urged the U.S. Securities and Exchange Commission to rescind two provisions of Regulation NMS, arguing that rules written for conventional stock exchanges could restrict tokenized securities markets.

The Washington based industry group published its comment letter on Aug. 18 supporting the proposed repeal of Rules 611 and 610(e). The SEC issued the proposal on June 11 under file number S7-2026-20.

The proposal remains under consideration. Neither rule has been repealed, and the Commission has not announced a date for voting on a final version.

Blockchain Association backs repeal of both rules

Rule 611, commonly called the Order Protection Rule, generally prevents trading venues from executing transactions at prices worse than protected quotations displayed elsewhere.

The rule was adopted in 2005 to connect fragmented U.S. equity markets and protect displayed prices across exchanges. It requires trading centers to maintain policies designed to prevent prohibited trade throughs, subject to exceptions.

Rule 610(e) addresses locked and crossed quotations. A locked market occurs when the best bid equals the best offer. A crossed market occurs when a bid exceeds an available offer.

The provision requires national securities exchanges and associations to maintain rules reasonably designed to prevent members from displaying quotations that lock or cross protected quotations.

The Blockchain Association’s letter supports removing both provisions. It argues that trading systems have become faster, more automated and more interconnected since the rules were adopted.

The group also said the rules assume trading through conventional order books where displayed price serves as the main measure of execution quality. Tokenized markets can operate differently by combining execution, ownership records and settlement through blockchain systems.

Group says price should not be the only measure

The Blockchain Association argued that the best displayed price may not always produce the best overall result for an investor. Other factors can include transaction fees, execution certainty, settlement speed, liquidity and counterparty exposure.

Blockchain venues can also execute and settle transactions together rather than separating the trade from a settlement process that occurs later. The Association said regulation should allow firms to consider those differences when evaluating execution.

“Public blockchains can enable 24/7 trading, faster settlement, greater transparency, interoperability, and new models for executing trades,” the Association said.

These are claims about potential benefits. Blockchain settlement can still face liquidity limitations, smart contract risks, network congestion and different investor protection requirements.

The group asked the SEC to modernize best execution guidance alongside any rescission. Removing Rule 611 would not eliminate a broker’s wider duty to seek favorable terms for customer orders.

SEC Commissioner Mark Uyeda also said removing the rules would raise questions about best execution, transparency, trading mechanics and investor confidence. He described the proposal as the beginning of a broader market structure review rather than its endpoint.

Tokenized securities remain covered by U.S. law

The letter does not ask the SEC to exempt tokenized securities from federal securities laws. It argues that compliant onchain trading systems should be able to satisfy regulatory duties through methods suited to their technology.

Blockchain Association said the Commission should recognize tokenized securities trading as capable of meeting requirements for execution, transparency and investor protection. The exact obligations would depend on the asset, venue and intermediaries involved.

As previously reported, SEC officials have maintained that tokenized securities remain subject to existing securities laws. Recording a stock or entitlement on a blockchain does not change its legal status.

U.S. tokenization projects have nevertheless continued expanding within regulated structures. In related coverage, Ondo Finance placed a BlackRock ETF and Micron shares on Ethereum while retaining the underlying securities through traditional custody arrangements.

Kraken backed xStocks has also launched an onchain engine for more than 70 tokenized equities. Its products operate across Ethereum and Solana, although availability and investor rights vary by jurisdiction.

These products show why the interaction between blockchain execution and existing market rules has become a live regulatory issue. They do not establish that removing Rules 611 and 610(e) would automatically permit every tokenized trading model in the United States.

SEC proposal would change traditional equity markets

The SEC’s proposal covers national market system stocks generally, not only blockchain based products. Any final rescission would affect conventional exchanges, alternative trading systems, brokers and market makers.

Chairman Paul Atkins said the review was intended to simplify market structure, reduce costs and allow competition to shape U.S. equity markets.

Atkins said the proposal is “intended to simplify market structure and reduce costs,” but the SEC has not established that those results will occur.

The proposing release examines potential benefits and risks. Without Rule 611, venues could gain more flexibility in routing and execution, but investors could also receive trades at prices inferior to displayed quotations elsewhere.

Some public commenters opposed the repeal because they view Rule 611 as an objective price protection for retail investors. They argued that relying more heavily on brokers’ best execution assessments could increase conflicts involving order routing.

The Blockchain Association takes the opposite position. It argues that a rigid focus on displayed price can prevent investors from choosing venues offering faster settlement, lower total costs or other benefits.

What happens next for Regulation NMS

The formal comment deadline for the proposal was Aug. 17, following publication in the Federal Register on June 17. The Association announced its submission one day after the listed deadline, although its statement says the letter was submitted to the Commission.

SEC staff will review the comments before deciding whether to recommend a final rule, modify the proposal or leave the existing provisions in place. The Commission may also request further information.

Any final rescission would require another Commission vote and publication in the Federal Register. The SEC would need to specify an effective date and any transition requirements.

The Association also wants updated best execution guidance that addresses tokenization and extended trading. FINRA is separately accepting comments through Sept. 25 on possible changes to its best execution guidance following the SEC proposal.

Edward Zimbardi, the alleged operator of a $165 million crypto Ponzi scheme, returned to the United States on Aug. 14 after authorities in Fiji deported him, federal prosecutors announced Monday.

Zimbardi, 59, of Flowery Branch, Georgia, faces 12 counts of wire fraud, 12 counts of money laundering and one count of conspiracy to commit money laundering. A federal grand jury in the Northern District of Georgia returned the indictment on July 8.

The U.S. Attorney’s Office said Zimbardi was expected to appear before a federal magistrate judge in Los Angeles on Aug. 17. Prosecutors planned to seek his detention before the case proceeds in Georgia. No publicly accessible order confirming the outcome of that hearing was identified by publication time.

The charges are allegations. Zimbardi is presumed innocent unless prosecutors prove his guilt beyond a reasonable doubt.

Prosecutors say the crypto Ponzi raised $165 million

According to the Justice Department’s release, Zimbardi created and promoted an investment operation called The Crypto Program between June 2022 and August 2023.

Promotional videos and websites allegedly described the program as an opportunity to buy digital advertising packages. Investors were reportedly promised guaranteed monthly returns of 25%.

Participants were instructed to send cryptocurrency to wallets that prosecutors say Zimbardi secretly controlled. Thousands of investors allegedly transferred more than $165 million to those addresses during the operation.

Prosecutors claim the promised advertising packages were not purchased. Instead, Zimbardi allegedly used money from later participants to pay returns to earlier investors, a payment structure associated with crypto Ponzi schemes.

The indictment’s underlying cryptocurrency addresses and complete transaction records have not been released publicly. The Justice Department also has not identified the digital assets investors used or disclosed how much cryptocurrency authorities have recovered.

Foreign currency trades allegedly lost investor money

Zimbardi allegedly placed more than $34 million of investor funds into risky foreign currency trades. Prosecutors said those trades produced substantial losses, although the Justice Department did not provide an exact loss figure.

The indictment also accuses Zimbardi of spending at least $10 million on personal expenses. The purchases allegedly included a house for his son, luxury vehicles and alimony payments to his former wife.

Those figures represent prosecution allegations rather than court findings. Zimbardi has not entered a publicly reported plea in the Northern District of Georgia, and no defense response to the allegations was available.

The case resembles other federal prosecutions involving promised fixed returns and later investor funds. As crypto.news previously reported, federal authorities charged a Florida executive over a separate alleged $328 million investment operation that prosecutors also characterized as a crypto Ponzi scheme.

In another case, an Arizona defendant pleaded guilty after investors lost $13 million through purported automated trading businesses. Those proceedings are unrelated to Zimbardi’s case.

Fiji deported Zimbardi after more than one year

The Crypto Program allegedly collapsed in August 2023, leaving investors unable to recover their funds. Prosecutors said Zimbardi later traveled through Hawaii, Fiji and other locations.

Investigators allege he learned of the FBI investigation and fled to Fiji in July 2025. He reportedly remained there for more than one year.

Prosecutors also claim Zimbardi canceled plans to attend his son’s wedding in Virginia in May 2026 because he suspected FBI agents would arrest him. The Justice Department said his suspicion was correct but did not explain how investigators learned about the planned trip.

Fijian authorities deported Zimbardi on Aug. 14 after learning about the federal charges. The FBI and U.S. Department of State coordinated his return with Fiji’s immigration ministry and police.

The case also received assistance from the SEC, CFTC, California Department of Financial Protection and Innovation, Georgia Secretary of State and other U.S. agencies. No parallel civil enforcement action against Zimbardi was identified on the SEC or CFTC websites as of Aug. 18.

Victims can submit information while the case advances

The immediate next steps include Zimbardi’s transfer or appearance in the Northern District of Georgia, a formal plea and a decision on whether he remains detained pending trial.

Prosecutors must also disclose evidence under federal criminal procedures. The court will set deadlines for motions and trial after Zimbardi appears in the Georgia case. No trial date has been announced.

The FBI has opened a dedicated portal for people who invested in The Crypto Program. Potential victims can submit contact details and information about their transactions.

The FBI said it may later request supporting documents for restitution proceedings. Submission does not guarantee repayment, and any restitution would depend on the outcome of the prosecution, verified losses and recoverable assets.

Assistant U.S. Attorney Bethany L. Rupert is prosecuting the case. The FBI is leading the investigation with assistance from federal, state and Fijian authorities.

Neynar is seeking a new team to operate Farcaster, Clanker and its developer platform, cofounder Rish Maheshwari said on Aug. 17.

The process comes less than seven months after Neynar acquired the decentralized social protocol from Merkle Manufactory.

Maheshwari disclosed the search in an X post. Neynar has not named a prospective operator or provided a deadline for proposals. It also has not disclosed whether the process involves a sale, transfer of control or another operating arrangement.

The announcement marks Farcaster’s second planned leadership change in 2026. Merkle founders Dan Romero and Varun Srinivasan stepped away from daily operations when Neynar took over in January.

Farcaster could change operators for the second time

Neynar acquired Farcaster on Jan. 21 and agreed to maintain the protocol, operate its primary application and manage Clanker. The package included protocol contracts, code repositories and related developer operations.

Neynar was already one of Farcaster’s main infrastructure providers before the deal. Its APIs and developer tools supported many applications built around Farcaster’s social graph. Romero described Neynar as a suitable successor because the company had worked within the ecosystem from its early development.

Neynar initially said it would pursue a builder focused strategy. Maheshwari also said in January that the Farcaster application, protocol and Clanker would continue operating while the team assessed product priorities.

The latest announcement creates uncertainty around that roadmap. Neynar has not said whether it will continue operating the products while searching for a successor. There has also been no confirmed change to Farcaster accounts, protocol contracts or developer access.

Revenue has fallen from its early 2026 peak

Farcaster’s tracked gross protocol revenue has declined sharply since the first quarter. However, available data does not support the $35.43 million first quarter figure cited in some reports.

At the time of review, DeFiLlama data showed approximately $27.88 million in gross protocol revenue during the first quarter of 2026. The dashboard reported about $3.88 million for the second quarter and roughly $245,690 during the incomplete third quarter.

DeFiLlama treats Farcaster as a parent protocol and includes revenue associated with Farcaster and Clanker. The figures therefore should not be interpreted as revenue earned solely from the Farcaster social application. Live analytics dashboards can also revise historical totals when classifications or underlying data change.

Clanker drove much of the ecosystem’s earlier fee activity. The Base based token launch platform allows users to deploy tokens through Farcaster interactions and collects fees from trading in those assets.

As previously reported, Clanker created an ecosystem fund that had deployed $8 million to purchase 14% of its token supply. The platform had generated more than $50 million in cumulative protocol fees since launching in late 2024, according to figures cited in that report.

The subsequent decline does not establish why Neynar is seeking another operator. Maheshwari did not publicly attribute the decision to revenue, user activity or operating costs.

Neynar inherited Farcaster after a $180 million return plan

Merkle Manufactory raised about $180 million during Farcaster’s development. The total included a $150 million funding round led by Paradigm in May 2024, which reportedly valued the company at $1 billion.

After the Neynar transaction, Romero said Merkle planned to return the full $180 million raised from investors. He also rejected speculation that Farcaster was closing.

“Farcaster is not shutting down. The protocol works and will continue to work,” Romero said at the time. 

He reported 250,000 monthly active users and more than 100,000 funded wallets in December 2025. Those figures came from Romero and were not independently audited.

The founders had previously shifted Farcaster toward wallet and trading services after the social application struggled to sustain earlier growth. Neynar then proposed returning the ecosystem’s attention to developers, infrastructure and applications built on its open social graph.

Farcaster’s investors include U.S. venture firms Paradigm and a16z crypto. Neither firm has publicly commented on Neynar’s latest search or indicated whether the earlier capital return has been completed.

A successor and transfer structure remain unconfirmed

The next development will be the identification of a prospective operator. Neynar has not published eligibility requirements, financial terms or a formal application process.

Several parts of the proposed handoff may require separate arrangements. Farcaster’s contracts and open source repositories differ from the commercial infrastructure operated by Neynar. Clanker also has its own contracts, fee system, treasury and token related commitments.

No shutdown date has been announced for Farcaster, Clanker or Neynar’s developer services. Users and developers therefore have no confirmed migration deadline.

Any new operator would need to clarify control of protocol contracts, repositories, application data and Clanker’s treasury. Until Neynar publishes those details, the announcement confirms a search for new leadership rather than a completed transfer.

Jane Street reported more than $1 billion in U.S. spot Bitcoin ETF shares as of June 30, 2026, according to a quarterly regulatory filing released in August.

The quantitative trading firm’s largest disclosed position was BlackRock’s iShares Bitcoin Trust, or IBIT. Jane Street reported roughly $828 million of IBIT shares in its second quarter filing.

The remaining exposure was distributed among other U.S. listed products. Those holdings included Fidelity’s Wise Origin Bitcoin Fund and Grayscale’s Bitcoin Trust. The combined value of Jane Street’s reported spot Bitcoin ETF shares exceeded $1 billion at the quarter’s close.

The disclosure concerns shares issued by investment funds. It does not establish that Jane Street directly owned the Bitcoin held by those funds.

Jane Street’s IBIT position rebounded during the quarter

Jane Street’s approximately $828 million IBIT position represented a sharp recovery from the previous quarter. At March 31, the firm reported about 5.9 million IBIT shares valued near $225 million.

The earlier reduction attracted attention because Jane Street had held more than 20 million IBIT shares at the end of 2025. As crypto.news reported, the firm reduced several fund positions while expanding its Ether exposure during the first quarter.

The second quarter filing indicates that Jane Street rebuilt its reportable IBIT position by June 30. However, changes in reported value can reflect both share transactions and movements in the fund’s market price. A Form 13F does not disclose when the shares were acquired or the prices paid.

The filing also cannot establish Jane Street’s motive. The firm is a major quantitative trader and liquidity provider in exchange traded products. Its holdings may support market making, arbitrage, hedging or other trading activities rather than a long term directional position.

The $1 billion disclosure does not equal direct Bitcoin ownership

Spot Bitcoin ETFs hold Bitcoin through fund custody arrangements while investors trade shares on regulated securities exchanges. Jane Street’s filing therefore reports ownership of securities rather than coins controlled through the firm’s blockchain addresses.

This distinction also means the filing cannot be converted directly into a specific amount of Bitcoin owned by Jane Street. Each fund has its own share count, net asset value and Bitcoin holdings. Jane Street’s position represents an economic interest in the funds at the reporting date.

Form 13F provides only a partial view of an institutional manager’s activity. SEC guidance requires covered managers to report the number and quarter end value of eligible securities, including ETF shares.

The reports do not provide a complete trading book. Short sales and many derivatives are absent. Separate put and call positions may appear when reportable, but they still do not reveal how each position interacts with the manager’s other trades.

Consequently, the filing does not prove Jane Street held more than $1 billion of unhedged exposure to Bitcoin. It only confirms that its reportable long ETF shares crossed that level on June 30.

U.S. institutions continue using regulated Bitcoin funds

Jane Street’s disclosure adds to evidence that major financial firms use U.S. spot Bitcoin ETFs for trading, portfolio exposure and liquidity management. BlackRock’s IBIT has repeatedly appeared as the largest crypto fund position in institutional reports.

Other institutions have also disclosed material IBIT holdings. In related coverage, Abu Dhabi’s Mubadala raised its reported position to approximately $566 million during the first quarter of 2026.

Banks have reported smaller positions through the same regulatory process. Barclays, for example, disclosed approximately $131 million of exposure in an earlier filing.

Those disclosures do not necessarily represent comparable strategies. A sovereign investor, bank, hedge fund and market maker can hold the same ETF shares for different reasons. Form 13F provides position data but does not require managers to explain their investment purpose.

No verified market reaction could be attributed specifically to Jane Street’s filing. Bitcoin and ETF prices also respond to fund flows, macroeconomic news and wider market positioning.

The next filing will show Jane Street’s September holdings

Jane Street’s next Form 13F will provide a snapshot of reportable positions held on Sept. 30. The SEC lists Nov. 16, 2026, as the filing deadline for third quarter reports.

That disclosure will show whether the firm maintained, expanded or reduced its Bitcoin ETF shares by quarter end. It will not reveal any changes made after Sept. 30 or positions closed before the reporting date.

Investors should therefore treat the current report as historical information. The June 30 holdings may have changed before the filing became public, and Jane Street’s undisclosed hedges could materially alter its net exposure.

Bitcoin rose above $64,000 on Tuesday, up over 1% on the day and marginally higher on the week, the only major with a meaningful gain as the rest of the market drifted lower.

Ether eased half a percent to just under $1,900, though it holds an almost 1% weekly gain. XRP fell over 1% to just under $1 and is down over 2% on the week, the weakest of the group. Dogecoin dropped almost half a percent to 7 cents, BNB and tron both slipped marginally to just over $600 and 33 cents, and solana was flat at just under $76.

Hyperliquid’s HYPE was the exception among the smaller majors, up almost 1% to just over $59 and 7.5% over seven days, by far the strongest weekly performance.

Alex Kuptsikevich, chief market analyst at FxPro, said bitcoin has now spent four days below its 50-day moving average after an earlier attempt to break above it, and remains below its 200-week average on the longer view. That puts sellers in control on both the medium and very long-term trends, he said, and nothing changes until the price leaves the $62,000 to $65,000 range it has been stuck in.