Capital.com plans to introduce spot cryptocurrency services in the United Arab Emirates after its affiliate, Capital Vault, received a virtual asset license from the UAE Capital Market Authority.

Capital.com announced the approval on Aug. 21. The license authorizes Capital Vault to deal in virtual assets as an agent or matching principal and provide custody services for clients.

Once the service launches, eligible UAE customers will be able to buy and hold actual crypto assets through the Capital.com application. Capital Vault will handle trade execution, custody and settlement.

Capital.com did not disclose a launch date, list of supported cryptocurrencies, trading fees or minimum account requirements. The availability of every product may also depend on customer eligibility and local regulatory conditions.

Capital.com will offer ownership beyond CFD exposure

Capital.com currently provides crypto market exposure through contracts for difference in supported jurisdictions. A CFD tracks the price of an asset without transferring ownership of the underlying cryptocurrency to the trader.

Six weeks of bearish positioning ended in 24 hours. Here is how the trade unwound, who got caught, and whether the squeeze has legs.

Crypto derivatives markets had been building toward this moment for six weeks. Open interest in Bitcoin perpetual futures climbed steadily through July, with funding rates drifting negative as traders added to short positions. Bearish bets outnumbered bullish ones on every major exchange. On Binance, shorts held 51.64% of open interest. On OKX, 51.13%. On Bybit, 52.25%. The consensus was clear: the market was going lower.

Then, over the span of 24 hours, it went violently higher.

What triggered the squeeze

The first catalyst landed on Aug. 19 at approximately 2:30 PM UTC, when the U.S. Treasury announced it would at least double the maximum size of its liquidity support buyback operations for 10 to 20 year and 20 to 30 year nominal coupon securities. The cap moved from $2 billion to $4 billion per operation, effective Sep. 9 through Nov. 4.

Treasury buybacks are not quantitative easing. The department buys back illiquid, off the run bonds and replaces them with fresh, on the run issuance. The net effect on the government balance sheet is roughly neutral. But the market impact is not. By removing duration from the market, buybacks compress long end yields and improve liquidity conditions across risk assets. For more on the mechanics, see our breakdown of how the $4 billion Treasury buyback moved Bitcoin 8% in a day.

Bitcoin responded within minutes. The price moved from $64,100 to $66,800 in the first hour after the announcement. That initial move was enough to trigger the first wave of margin calls on leveraged shorts, and the cascade began.

The liquidation cascade

The mechanics of a short squeeze in crypto derivatives are straightforward but brutal. When a short position on a perpetual futures contract falls below its maintenance margin, the exchange liquidates it by placing a market buy order. That buy order pushes the price higher, which triggers more liquidations, which generates more buy orders. The feedback loop continues until the selling pressure from remaining shorts can absorb the forced buying.

On Aug. 19 and 20, the loop ran for roughly 18 hours before stabilizing.

Total liquidations across all major exchanges exceeded $3 billion. Short positions accounted for approximately $2.77 billion, or 92% of the total. Long liquidations were a rounding error at $264 million. According to CoinGlass data, roughly $1.29 billion in short positions closed within a single hour, the fastest concentrated squeeze of 2026. As we reported when Bitcoin first broke past $68K on the initial $1 billion short squeeze wave, the cascade was just beginning.

The breakdown by exchange reveals how concentrated the pain was. Binance saw approximately $518 million in liquidations. Hyperliquid, the decentralized perpetuals exchange that has grown rapidly this year, absorbed roughly $513 million. Bybit recorded around $303 million. The remaining liquidations spread across OKX, dYdX, and smaller venues.

Bitcoin shorts accounted for approximately $1.37 billion of the total, while Ethereum shorts contributed roughly $1.01 billion. The remainder came from altcoin positions, with Solana, XRP, and Dogecoin among the most affected.

The exchange level data reveals a secondary pattern that the headline numbers obscure. On Hyperliquid, a decentralized exchange that does not use a traditional order book for liquidations, the insurance fund absorbed roughly $47 million in losses during the cascade. The fund, which stood at approximately $380 million before the event, dropped to $333 million by the time the squeeze stabilized. On Binance, the auto deleveraging system activated twice during the peak liquidation hour, forcing profitable long traders to partially close their positions to cover the counterparty shortfall. These mechanisms prevented cascading failures at the exchange level but added to the speed and violence of the price move.

The altcoin liquidation data adds granularity that the Bitcoin and Ethereum headlines miss. Solana perpetual futures saw approximately $187 million in short liquidations, driven by the same macro catalysts plus the additional momentum from cumulative SOL ETF inflows crossing $1.16 billion earlier in the week. XRP shorts lost roughly $142 million, with the asset rallying 10% alongside the broader market. Dogecoin, which had seen a buildup of speculative short positions during a quiet July, contributed approximately $89 million. These figures matter because altcoin liquidations tend to be more violent per dollar of open interest. Altcoin perpetual markets are thinner, with fewer market makers and wider spreads. When liquidations cascade through these markets, the price impact per dollar liquidated is significantly larger than in Bitcoin or Ethereum.

Why the positioning was so extreme

The bearish lean in crypto derivatives markets did not appear overnight. It built over six weeks, from early July through mid August, during a period when multiple headwinds converged.

The CLARITY Act, the most comprehensive crypto market structure bill to reach the Senate floor, stalled after its procedural vote was postponed to September. The SEC finalized its “Regulation Crypto Assets” framework, which some market participants interpreted as an attempt to preempt Congressional legislation. For more on how these two frameworks conflict, see our analysis of SEC regulation crypto assets vs the CLARITY Act. Bitcoin had traded in a narrowing range between $60,000 and $66,000 since late June, with each rally attempt meeting selling pressure near the upper bound.

Funding rates on Bitcoin perpetual futures turned negative in late July and stayed negative through mid August, meaning that short traders were being paid to hold their positions. That dynamic attracted more shorts, creating a self reinforcing cycle of bearish positioning.

The numbers tell the story precisely. On Aug. 18, one day before the squeeze, the eight hour funding rate on Binance Bitcoin perpetual futures stood at negative 0.012%, a level that had persisted for three consecutive weeks. At negative funding, traders holding short positions receive a payment from traders holding long positions every eight hours. The payment is small in absolute terms but compounds meaningfully over weeks. A trader with a $10 million short position at negative 0.012% funding received approximately $3,600 per day simply for maintaining the position. That dynamic attracted capital into shorts not because of a directional thesis but because of the yield. When the forced unwind came, many of these yield seeking shorts had no thesis to defend and no plan for a stop loss.

The result was a market that was heavily one sided. When the Treasury announcement provided a fundamental reason for risk assets to rally, the positioning was too extreme to absorb the move without forced buying.

The second catalyst: the White House summit

The Treasury announcement alone might not have been sufficient to produce a $3 billion liquidation event. But it was followed within hours by reports that President Trump would host a crypto industry summit at the White House, attended by senior SEC officials and executives from major exchanges.

The summit, confirmed for late August, signaled that the administration remained committed to a regulatory framework favorable to the crypto industry. Coming on top of the Treasury buyback expansion, it created a second wave of short covering that pushed Bitcoin from $68,000 to above $71,000 on Aug. 20.

The combined effect of both catalysts was greater than either alone. The Treasury announcement provided the fundamental case for higher prices. The White House summit provided the narrative. Together, they forced the most aggressive unwind of bearish positioning since the collapse of FTX sent the market into a tailspin in November 2022.

How Ethereum outperformed

Ethereum’s 18% single day move was the standout of the squeeze. While Bitcoin gained roughly 8%, Ethereum outperformed by a factor of more than two. The reason lies in the composition of the short positions that were liquidated.

Ethereum shorts on major exchanges had grown disproportionately through July and August, partly because of skepticism about the Pectra upgrade timeline and partly because of persistent outflows from Ethereum spot ETFs. The net short positioning in Ethereum perpetual futures was, relative to open interest, more extreme than in Bitcoin.

When the squeeze began, Ethereum’s thinner order books amplified the price impact. Trading volume on Ethereum pairs surged 402% in 24 hours, according to AMBCrypto data. The asset moved from approximately $1,920 to above $2,270 before stabilizing near $2,250. For our full Ethereum price prediction, see our dedicated analysis.

The rally also exposed a structural risk in DeFi. On Aave, the largest decentralized lending protocol, just 9% of positions carry roughly half of the platform’s total debt. These positions are built around a leveraged Ethereum staking correlation trade, using WETH debt against liquid staking collateral like weETH, rsETH, and wstETH. The average health factor on these positions sits near 1.06, meaning an 8% to 9% wrapper discount could trigger a liquidation cascade on chain.

The staking correlation trade that dominates Aave’s risk profile operates on a simple premise that conceals significant complexity. A trader deposits weETH, a liquid restaking token issued by EtherFi, as collateral on Aave. The trader then borrows WETH against that collateral at a loan to value ratio near 90%. The borrowed WETH is restaked through EtherFi to produce more weETH, which is deposited again as collateral. Each loop multiplies both the staking yield and the leverage. At 10 times leverage, the effective annual yield on the trader’s equity approaches 40% to 50% before accounting for borrowing costs and gas fees. The trade is profitable as long as weETH maintains its peg to ETH within a narrow band. The moment the wrapper discount exceeds the health factor buffer, the entire recursive structure unwinds through liquidation.

The Aug. 20 rally did not trigger that cascade because ETH moved higher, not lower. But the concentration of risk in a small number of highly leveraged positions remains a vulnerability. If Ethereum corrects sharply from current levels, the same positions that survived the upside squeeze could face liquidation on the way down.

The institutional side of the trade added another layer to Ethereum’s outperformance. U.S. spot Ethereum ETFs, which had recorded net outflows for much of July and early August, posted net inflows of approximately $189 million on Aug. 19 alone. The reversal in ETF flows suggests that institutional investors were not only covering short positions in derivatives but also adding long exposure through regulated products. Weekly ETF inflow figures strengthened in tandem, signaling that the squeeze may have catalyzed a broader reassessment of Ethereum’s near term prospects among allocators who had been underweight the asset.

What the data says about follow through

Not every short squeeze leads to a sustained rally. The question is whether the forced buying created genuine demand or simply cleared out weak hands.

The evidence is mixed. On one hand, Bitcoin’s move above $72,000 broke a six week trading range and set a new short term high. Open interest has declined by approximately 15% since the squeeze, suggesting that leveraged positioning has been significantly reduced. Funding rates have turned positive, indicating that the market is no longer paying traders to be short.

On the other hand, the fundamental catalyst has a built in expiration date. The Treasury’s expanded buyback program runs only through Nov. 4, 2026. After that window closes, Treasury will reassess whether to maintain the larger operation size. If long end yields have stabilized by then, there is no guarantee that the program continues at its current scale.

Most Americans believe President Donald Trump and his family should not earn money from cryptocurrency while he holds office, according to a Reuters/Ipsos poll released on Aug. 19.

The survey found that 63% of respondents considered the Trump family’s crypto profits inappropriate. Another 32% viewed the activity as appropriate, while the remaining respondents did not answer the question.

Reuters and Ipsos conducted the nationwide online survey between Aug. 14 and Aug. 17. The poll included 1,166 U.S. adults and carried a margin of error of about three percentage points.

Trump crypto profits expose a partisan divide

Views differed sharply by political affiliation. About 69% of Republicans considered the family’s cryptocurrency earnings appropriate, according to the reported results. By comparison, 92% of Democrats said the activity was inappropriate.

The poll also examined broader concerns about private commercial interests. Around 69% of respondents said they believed Trump’s business interests influenced his presidential decisions. That included approximately two-thirds of independent respondents and nine in ten Democrats.

The findings measure public opinion and do not establish that Trump violated any law or influenced government policy for financial gain. The White House has consistently rejected allegations of a conflict.

“There are no conflicts of interest. The President only acts in the best interests of the American public,” White House spokesperson Anna Kelly told Reuters.

Trump has also said his investments are managed independently and that he does not participate in the family businesses’ daily operations.

Financial filing puts crypto income above $1.4 billion

The poll followed the publication of Trump’s annual financial disclosure in June. A Reuters analysis of the filing calculated that Trump reported more than $1.4 billion in income connected to cryptocurrency ventures during 2025.

The figure represents reported income rather than the current value of Trump’s personal cryptocurrency holdings. As crypto.news reported, the disclosure included more than $1 billion in crypto-related income from projects including World Liberty Financial and the Official Trump memecoin.

Companies linked to the Trump family received almost $800 million from World Liberty Financial activities, Reuters calculated. The total included more than $520 million connected to token sales and over $250 million from the sale of business interests.

The filing also reported approximately $635 million from licensing arrangements associated with the TRUMP token. In related coverage, blockchain analysis found that many buyers recorded substantial losses while Trump-linked entities continued receiving transaction-related revenue.

These figures should not be treated as a calculation of personal net profit. The disclosed revenue flowed through several companies and agreements, and some proceeds were shared among Trump family members and business partners.

Ethics concerns overlap with U.S. crypto policy

The debate comes as the Trump administration promotes legislation establishing clearer federal rules for digital assets. Lawmakers have disagreed over whether crypto market legislation should include restrictions on elected officials and their families.

As previously reported, proposed ethics provisions have become a central obstacle to advancing crypto legislation. Supporters argue that broad market rules remain necessary, while critics want stronger safeguards covering officials with financial interests in digital-asset businesses.

World Liberty Financial also received conditional approval on Aug. 14 to establish World Liberty Trust Company as a national trust bank. The Office of the Comptroller of the Currency listed the decision in its official records. Conditional approval does not allow immediate operations because the company must satisfy the regulator’s requirements before opening.

Congressional scrutiny, future financial disclosures and the conditions attached to World Liberty’s proposed trust bank will provide further tests of the separation between Trump’s public duties and family business interests. The Reuters/Ipsos results indicate that most Americans remain unconvinced that the current arrangements adequately address those concerns.

South Korea’s Shinhan Asset Management signed a four-party memorandum on Aug. 21 to test a Korean won tokenized fund using the Solana blockchain.

The agreement brings together Shinhan Asset Management, the Solana Foundation, tokenization platform Etherfuse and decentralized exchange Orca. The participants will conduct a proof of concept covering the fund’s issuance and distribution process.

The planned product would invest in short term Korean won bonds and target overseas institutional investors. However, the participants have not announced the fund’s size, expected yield or public launch date.

Shinhan will test the complete tokenized fund process

The proof of concept will examine the steps needed to issue and distribute a regulated tokenized fund. These include know your customer checks, anti-money laundering controls, token issuance and onchain liquidity arrangements.

Shinhan will provide asset management and regulatory expertise. Etherfuse will supply infrastructure for creating and managing the tokenized assets. Orca will help design the liquidity system used to distribute or exchange the fund tokens on Solana.

The Solana Foundation said the model draws from BlackRock’s BUIDL fund, one of the largest tokenized money market products. The comparison refers to the blockchain based distribution model. It does not mean the proposed Shinhan fund will hold the same assets or offer the same legal rights.

BlackRock’s product primarily invests in U.S. Treasury bills, cash and repurchase agreements. By comparison, Shinhan’s test concerns a Korean won product backed by short term domestic bonds.

Solana expands its institutional fund activity in Asia

Solana offers low transaction fees and rapid settlement, which could support frequent subscriptions, redemptions and transfers. However, those technical features do not remove securities registration, custody or investor protection requirements.

The network has already attracted other Asian asset managers. As previously reported, SBI Global Asset Management launched a tokenized Japanese equity fund on Solana in July. That product targets institutional and accredited investors through regulated tokenization platform DigiFT.

Shinhan has also been testing more than one blockchain. On Aug. 14, the asset manager signed a separate agreement with Plume to develop a demonstration for a won-denominated tokenized fund.

The parallel projects suggest Shinhan is examining different technical and distribution models rather than committing exclusively to Solana. Results from the tests could determine which infrastructure the manager uses after South Korea’s regulatory framework becomes effective.

Korea’s 2027 framework will determine any launch

South Korea’s National Assembly passed amendments supporting tokenized securities on Jan. 15. The legislation recognizes distributed ledgers as valid securities registries and permits qualifying investment contract securities to circulate through licensed securities companies.

The Financial Services Commission said issuers will still need to satisfy existing securities registration and disclosure obligations. Unlicensed companies will not be allowed to broker tokenized securities.

The amendments are expected to take effect one year after their promulgation, with implementation anticipated in early 2027. Regulators are preparing account management infrastructure and investor protection rules before the rollout, according to the FSC’s official statement.

As crypto.news reported, South Korean authorities are preparing rules for stocks, bonds and funds alongside a blockchain platform operated for the Korea Securities Depository.

Market forecasts remain uncertain

Solana said the existing tokenized real world asset market was worth about $36 billion. The announcement also cited a Boston Consulting Group projection suggesting the sector could reach as much as $30 trillion by 2030.

That projection should be treated as a forecast rather than an expected outcome. BCG’s more recent middle scenario estimates tokenized real world assets could reach $14 trillion by 2030 and $55 trillion by 2035. Its faster growth scenario places the market as high as $88 trillion by 2035.

Current adoption remains much smaller. In related coverage, publicly visible onchain assets grew to approximately $30 billion by mid-2026, led by private credit and tokenized government debt.

The next stage will involve completing the proof of concept and aligning the fund structure with Korea’s final rules. Any commercial launch will depend on regulatory approval, operational testing and demand from eligible overseas institutions.

Strategy’s Bitcoin treasury briefly returned to an unrealized profit on Aug. 21 after Bitcoin climbed above the company’s $75,385 average acquisition price.

Bitcoin reached approximately $75,613 during the rally, placing Strategy’s 840,447 BTC about $228 per coin above its disclosed cost basis. Multiplying that difference by its holdings produced an estimated unrealized gain of approximately $191.6 million.

The gain changed rapidly with Bitcoin’s price. Crypto.news price data later placed BTC near $75,500, reducing the estimated surplus to about $97.5 million. These figures are snapshots rather than fixed company results.

Strategy Bitcoin holdings cross their cost basis

Strategy reported that its remaining Bitcoin was acquired for approximately $63.36 billion, including fees and expenses. The position carried an average purchase price of $75,385 per coin as of Aug. 16.

Bitcoin rose about 8.5% over 24 hours, trading between approximately $69,498 and $75,528, according to crypto.news market data. The move brought the asset above Strategy’s average price for the first time since its recent decline.

The company’s Bitcoin position remains below its June peak of 847,363 BTC. Strategy sold several batches during the summer to support preferred share payments, repurchases and its U.S. dollar reserve.

As previously reported, the company sold 1,690 BTC for $108.6 million during the week ending Aug. 9. It used those proceeds to repurchase approximately 1.15 million STRC preferred shares.

Strategy made no Bitcoin purchases or sales during the following week. It instead raised $333.7 million by issuing MSTR common shares, according to its latest regulatory disclosure.

Unrealized gains remain sensitive to Bitcoin price

Strategy needs Bitcoin to remain above $75,385 for its current treasury to stay above the disclosed aggregate purchase cost. A $1,000 movement in Bitcoin changes the position’s market value by approximately $840.4 million.

An unrealized gain does not provide cash unless Strategy sells Bitcoin or uses the holdings in a financing transaction. It also does not account for the company’s debt, preferred stock obligations, cash holdings or software business.

Under current U.S. accounting rules, qualifying crypto assets are measured at fair value, with changes recognized through earnings. However, accounting results can differ from the simple comparison between market value and aggregate purchase cost.

MSTR gained approximately 7.8% during Thursday’s session and closed near $112.39. The stock’s performance can differ from Bitcoin because shareholders also face dilution, financing costs and claims from securities that rank above common stock.

In related coverage, Strategy CEO Phong Le said the company plans to resume Bitcoin accumulation during 2026. The company has not announced a date or amount for its next purchase.

BitMine remains below its reported Ethereum cost

BitMine Immersion Technologies reported 5,815,164 ETH as of Aug. 16 after adding 9,926 tokens during the preceding week. Its company release also listed 198 Bitcoin and other investments.

Third-party treasury data estimated BitMine’s average ETH acquisition cost at approximately $3,366. BitMine’s latest company release confirmed the token balance but did not provide that average cost figure. It should therefore be treated as an outside calculation rather than a company-confirmed amount.

With Ethereum trading around $2,371, the difference from the reported average cost was approximately $995 per token. Applied across 5,815,164 ETH, that produces an estimated unrealized loss of about $5.79 billion.

As crypto.news reported, BitMine increased its holdings to 5.82 million ETH while staking approximately 5,067,309 tokens. The staked balance represented about 87% of its reported ETH holdings.

The company projected $250 million in annualized staking revenue using recent yields. That figure remains a management forecast because staking rates, token prices and active balances can change.

What happens next for both treasuries

Strategy’s next weekly SEC filing will show whether it maintained its Bitcoin holdings, resumed purchases or sold more coins. Its future position relative to cost will depend primarily on whether BTC holds above $75,385.

Strategy must also balance Bitcoin accumulation against its preferred dividends, security repurchases and dollar reserve. Its previous filings showed that recent share sales were directed toward liquidity rather than additional Bitcoin purchases.

BitMine’s position requires a larger price recovery to return to the reported average cost estimate. Ethereum would need to rise about 42% from $2,371 to reach $3,366, assuming the estimated cost and treasury balance remain unchanged.

Future BitMine disclosures will also show whether staking rewards and further purchases reduce its effective average cost. Until those figures are reported, comparisons between the two treasuries remain market value estimates rather than realized corporate gains or losses.

Ripple has backed a new institutional credit fund that will issue RLUSD working-capital loans to fintech and payments companies through the XRP Ledger, with Clearpool and Cicada Partners handling the lending infrastructure and credit management.

CoinDesk reported on Aug. 21 that the fund will provide loans denominated in Ripple USD (RLUSD), while Cicada Partners will source borrowers, set lending terms and oversee credit risk. Clearpool is developing the infrastructure needed to create and manage the credit pools, with Ripple joining other institutions as an investor.

The companies did not disclose the planned size of the fund or the amount Ripple has committed.

Under the structure, Cicada will serve as the fund’s general partner and credit-pool manager. The firm said it has underwritten more than $860 million in credit, while Clearpool said its lending platform has facilitated more than $930 million in institutional loans since 2021.

Ripple will participate as a limited partner under the same terms offered to other investors, according to the report. Its involvement does not include a guarantee against losses, leaving borrower assessment and credit management under the structure established by Cicada.

RLUSD credit fund will finance working capital

Borrowers approved for the fund will receive RLUSD and repay their loans in the same stablecoin, giving the dollar-pegged token a direct role in the credit cycle.

The structure separates Ripple’s stablecoin from XRP’s function on the network. RLUSD will serve as the asset being lent, while XRP will continue to cover XRP Ledger transaction fees and the minimum reserve balances required for accounts.

For Ripple, the planned fund adds lending to existing uses for RLUSD across settlement and trading. A July report from Evernorth said RLUSD had already generated more than $2.5 billion in trading across XRP Ledger pairs since its public launch, with the RLUSD/XRP pair accounting for about $900 million over six months, as previously covered by crypto.news.

Evernorth also said RLUSD’s share of on-chain trading had climbed from below 1% to around 12% during 2026. The report put RLUSD supply on the XRP Ledger slightly above its Ethereum supply at the time.

The new credit product would give the stablecoin another use if the lending system reaches the XRP Ledger mainnet, allowing institutions to supply and borrow dollar-denominated liquidity without using XRP as the loan asset.

XRP Ledger lending still awaits mainnet activation

Clearpool’s integration is currently being tested on a development network because the two XRP Ledger features needed to run the product have not completed the network’s amendment process.

XLS-65, known as Single Asset Vaults, allows funds from multiple participants to be pooled into a vault managed under defined rules. XLS-66 introduces the lending protocol that can issue, service and repay fixed-term loans directly on the ledger.

The structure places credit underwriting outside the blockchain while using XRPL to handle the movement and accounting of funds. Under the proposed system, institutions can assess borrowers and negotiate loan terms off-chain before the lending protocol manages the resulting credit position on-chain.

The proposals entered validator consideration earlier this year. A June report on the protocol detailed how XLS-66 uses Single Asset Vault liquidity for fixed-term lending while leaving borrower underwriting and risk assessment to participating institutions.

Activation requires validator approval under the XRP Ledger amendment system. Until the required support threshold and voting conditions are met, the Clearpool and Cicada product cannot operate through the planned native lending functions on mainnet.

Developers and infrastructure providers can still work with the features on devnet, giving firms time to test applications before a possible activation.

Security work has focused on XRP Ledger credit features

The lending code has undergone additional security work ahead of its proposed mainnet deployment.

RippleX developers and Common Prefix used formal verification to examine the planned lending system earlier this year. The June formal verification review covered both XLS-66 and XLS-65, with the work designed to identify edge cases that conventional software testing could miss in financial infrastructure implemented directly at the Layer 1 level.

The review examined the fixed-term lending model, which uses pooled vault liquidity and relies on off-chain credit assessment for uncollateralized borrowers. The model differs from lending systems where collateral and automatic liquidation rules handle most borrower risk directly through application-level smart contracts.

Security firm Halborn subsequently completed a re-audit of the XRP Ledger Lending Protocol. Its June lending protocol re-audit found no critical or high-risk issues after reviewing changes linked to fixed-term loans and Single Asset Vaults.

Halborn identified five findings in total: one medium-severity issue, two low-severity issues and two informational findings. The firm said all reported findings were addressed, with some resolved by Ripple’s engineering team and others accepted or acknowledged following review.

One medium-severity finding involved a way for loan interest to bypass a maximum-assets limit applied to a vault, according to the audit. Halborn’s engagement covered transaction checks, accounting rules, state consistency, parameter limits and access controls across the protocol.

XRP has rallied as the credit plan emerges

XRP has gained almost 20% over the past 24 hours to trade around $1.30 and is up about 30% over seven days, according to CoinDesk, placing the token among the strongest performers during the latest crypto market rally.

The advance followed a sharp move across major cryptocurrencies after the U.S. Treasury announced an expansion of its long-dated bond buyback program. The Treasury plans to increase the cap on individual operations from $2 billion to at least $4 billion beginning Sept. 9, a move that initially pulled long-term yields lower and weakened the dollar.

Bitcoin climbed above $72,000 during the market move, while XRP recorded a 10.4% gain on Wednesday before extending its advance into Thursday. Decrypt reported that XRP’s weekly rise reached roughly 30% after the token had traded below $1 the previous week.

XRP exchange-traded fund inflows fell from $5.81 million to $2.35 million during part of the rally, while Bitcoin ETFs attracted about $517 million, according to the same report. XRP futures open interest had also fallen 11.31% from its rally-day level as of Aug. 20.

The biggest single day ETH move in two years did not trigger the liquidation cascade. But the concentrated staking correlation trade on Aave is one bad day from unwinding.

The number that matters from Aug. 20 is not 18%. It is 1.06.

Ethereum’s single day gain of roughly 18% dominated the headlines. Trading volume surged 402%. More than $1 billion in short positions were liquidated. The altcoin market cap crossed $1 trillion. By every surface metric, it was one of the strongest days for Ethereum in two years.

But underneath the rally, a structural vulnerability in decentralized lending sat untouched. On Aave, 9% of positions carry roughly half the protocol’s total debt. Those positions run at an average health factor of 1.06, a margin of safety so thin that an 8% to 9% move in the wrong direction could trigger a liquidation cascade on chain.

The rally did not test that vulnerability because ETH moved higher, not lower. The concentrated positions survived. But surviving is not the same as being safe.

The anatomy of the correlation trade

To understand the risk, start with the trade itself.

Ethereum’s transition to proof of stake created a new asset class: liquid staking tokens. When a user stakes ETH through a protocol like Lido, Rocket Pool, or EtherFi, they receive a derivative token (wstETH, rETH, or weETH) that represents their staked position. These tokens are designed to trade at or near a 1:1 ratio with ETH, accruing staking rewards over time.

The correlation trade exploits the tight relationship between these wrapper tokens and ETH itself. A trader deposits liquid staking tokens as collateral on Aave, borrows WETH against them, stakes the borrowed WETH to create more liquid staking tokens, and repeats. Each loop adds leverage. The profit comes from the staking yield, which compounds with each layer of recursion.

On paper, the trade appears low risk. The collateral (liquid staking tokens) is correlated with the debt (WETH). As long as the wrapper tokens maintain their peg to ETH, the health factor remains stable. The borrower earns staking yield on every layer of collateral while paying borrowing costs on the WETH debt.

In practice, the risk is concentrated in the peg itself.

Bitcoin mining pool operator Poolin Technology and two affiliated companies have filed for Chapter 11 bankruptcy protection in New Jersey, with court records placing Poolin’s estimated liabilities between $100 million and $500 million.

Verita Global’s case information page shows that Poolin Technology PTE. LTD., Lonestar Taproot LLC and Lonestar Dream, Inc. filed voluntary petitions on July 22 in the U.S. Bankruptcy Court for the District of New Jersey. The three cases are being jointly administered under Poolin’s lead case, 26-18325, before Judge Eamonn J. O’Hagan.

Poolin’s filing lists estimated assets of between $1 million and $10 million and liabilities of between $100 million and $500 million. The petition estimates that the company has between 10,001 and 25,000 creditors and states that funds are expected to be available for distribution to unsecured creditors.

Court records give Lonestar Taproot case number 26-18326 and Lonestar Dream case number 26-18327. All three companies remain debtors in possession while the Chapter 11 process moves forward under the jointly administered case.

Poolin bankruptcy moves toward an asset sale

The debtors told the court that they entered Chapter 11 to carry out an orderly sale process intended to preserve value for creditors and other interested parties. Michael DuFrayne, the companies’ chief restructuring officer, said in a first-day declaration that the process would use Chapter 11 to pursue sales of the debtors’ assets.

On Aug. 17, the bankruptcy court approved bidding procedures covering substantially all of the debtors’ assets and authorized Poolin and its affiliates to designate a stalking horse bidder. The order also set procedures for an auction, the treatment of certain contracts and leases, and a hearing on the proposed sale.

Under the sale timetable, qualified bids are due Sept. 8, while an auction is scheduled for Sept. 10 if competing qualified bids are received. A court hearing on the proposed asset sale is scheduled for Sept. 18 at 11 a.m. ET before Judge O’Hagan in Trenton.

The bidding process covers assets held across Poolin and its two U.S. affiliates. Lonestar Dream had substantially completed the wind-down of operations at its mining sites by the bankruptcy filing, according to DuFrayne’s declaration, after discontinuing services for customer Elektron Energy and beginning the removal of Elektron equipment from the facilities.

A limited workforce was kept in place to protect the mining sites and equipment, support the asset sale and administer the bankruptcy proceedings. Lonestar Taproot, meanwhile, owns equipment and other property linked to the mining facilities, including power-related assets, buildings, improvements and substation infrastructure, according to the filing.

Lonestar Taproot previously operated as a partnership involving Lonestar Dream and mining hardware maker Bitmain between March 2022 and December 2023. Court filings state that Bitmain contributed about $34.4 million and received roughly $24.1 million when it withdrew after the partnership recorded significant losses.

Creditors are set to meet on Aug. 28

Poolin’s creditors are scheduled to meet on Aug. 28 at 9 a.m. ET through a remote Section 341 meeting. The date remains upcoming and has not yet taken place, according to the amended Chapter 11 notice filed on Aug. 5.

Creditors seeking to file proofs of claim can send originally executed forms to the Poolin Claims Processing Center operated by KCC dba Verita Global in El Segundo, California. The case page states that claims may be submitted through U.S. mail or another hand-delivery system, while fax and other electronic delivery methods are not accepted.

A general deadline for filing proofs of claim had not yet been established in the amended bankruptcy notice.

Archer & Greiner, P.C. is representing the debtors in the proceedings. Stephen M. Packman, Alexander J. Andrews, Doug Leney and Natasha Songonuga are listed among the attorneys handling the cases, while the court has also approved the retention of DuFrayne LLC as crisis manager and Michael DuFrayne as chief restructuring officer.

The bankruptcy court has also authorized Verita Global to serve as administrative adviser. Additional restructuring professionals include Oon & Bazul LLC as Singapore restructuring and insolvency counsel and McCarn, Weir & Sherwood P.C. for oil, gas and mineral matters.

Poolin previously faced a wallet liquidity crisis

Poolin’s financial problems became public several years before the Chapter 11 filing. In September 2022, crypto.news reported that Poolin suspended withdrawals from PoolinWallet after the company faced liquidity problems and a rise in withdrawal requests.

The company subsequently said it would issue six IOU tokens representing users’ BTC, ETH, USDT, LTC, ZEC and DOGE balances at a 1:1 ratio. Poolin said at the time that it was considering several ways to address the liquidity shortage, including seeking new investment, pursuing debt-to-equity transactions and selling assets.

Another report from September 2022 said Poolin had stopped withdrawals, flash trades and internal transfers through PoolinWallet while leaving routine mining operations and direct mining-pool payouts unaffected. The company also suspended certain swap services as it tried to preserve liquidity.

Financial pressure has remained a problem across parts of the Bitcoin mining industry in 2026. A July analysis found that public miners sold Bitcoin at a record pace during the first quarter, with more than 32,000 BTC sold as hashprice fell to post-halving lows.

The same report placed hashprice in the high-$20 range per petahash per day by mid-2026, below the roughly $35 level cited as the breakeven point for older mining machines.

Bankruptcy proceedings have also continued to surface elsewhere in the crypto infrastructure sector. In May, Nasdaq-listed Bitcoin Depot filed for Chapter 11 after taking its crypto ATM network offline, with the company citing regulatory pressure and financial losses as it moved toward a shutdown.

Poolin’s bankruptcy docket has continued to develop since its July petition. On Aug. 17, the court entered the order approving the bidding procedures for substantially all of the debtors’ assets, allowing the companies to proceed toward the September bid deadline, possible auction, and sale hearing.