Crypto World
Article explains Vitalik’s ETH plan to cut proving costs via binary state tree and RISC-V VM.
ETH tackles 80% proving bottleneck as Vitalik proposes binary state tree and long-term RISC-V VM swap.
Summary
- EIP-7864 replaces the hexary keccak Merkle Patricia Tree with a unified binary state tree using BLAKE3 (or a future Poseidon2), cutting Merkle proof size by about 75% and branches by 3–4x.
- Page-based storage groups 64–256 adjacent slots so early-slot dapps can save over 10k gas per transaction, while simpler, more uniform depth improves auditing and sets up future state expiry.
- Long-term, Vitalik proposes replacing the EVM with a RISC-V VM, arguing state tree plus VM drive over 80% of proving cost and that a RISC-V stack would align with existing ZK provers, reduce precompiles, and keep old contracts via staged migration.
Ethereum (ETH) co-founder Vitalik Buterin has proposed two technical changes aimed at addressing proof-efficiency challenges in the blockchain network, according to a proposal outlined in EIP-7864 and related documentation.
The near-term proposal, designated as EIP-7864, would replace Ethereum’s current hexary keccak Merkle Patricia Tree with a binary tree structure utilizing a more efficient hash function. The existing hexary structure was designed for priorities that differ from the proving-heavy architecture Ethereum developers are currently pursuing, according to the proposal.
The binary tree structure would produce Merkle branches that are four times shorter than the current system, as binary operations require 32 times log(n) compared to hexary’s 512 times log(n) divided by 4, according to technical specifications in the proposal.
The reduction would decrease costs for client-side branch verification and reduce data bandwidth requirements for tools including Helios and private information retrieval systems by the same factor, the proposal states.
Proving efficiency gains would extend beyond branch length improvements. The proposal indicates that shorter branches would deliver a three to four times improvement, separate from hash function optimization. Implementing blake3 instead of keccak could provide an additional three times improvement, while a Poseidon variant could potentially deliver 100 times improvement, though additional security analysis is required before Poseidon deployment, according to the document.
The binary tree design includes a page-based storage system that groups adjacent storage slots into pages of 64 to 256 slots, approximately 2 to 8 kilobytes. The block header and the first 1 to 4 kilobytes of code and storage would share the same page, allowing contracts that read from initial storage slots to benefit from batch efficiency rather than individual access costs. The proposal estimates this could save more than 10,000 gas per transaction for decentralized applications that load data from initial storage slots, which represents a substantial portion of active deployed contracts.
Binary trees offer simpler implementation and auditing processes, according to the proposal. The structure provides more predictable access depth across contracts of varying sizes, reducing variance in execution costs, and creates space for embedding metadata required for future state expiry development.
The longer-term proposal involves replacing the Ethereum Virtual Machine with a more efficient virtual machine such as RISC-V. The proposal argues that the EVM’s architecture is not optimized for a proving-heavy blockchain and that replacing it would address fundamental inefficiencies rather than managing them through accumulated precompiles and workarounds.
Buterin’s proposal cites four advantages of RISC-V over the EVM. First, raw execution efficiency: RISC-V outperforms the EVM to a degree that would eliminate the need for many precompiles, as underlying computations could run efficiently within the VM itself. Second, prover efficiency: zero-knowledge provers are currently written in RISC-V, creating natural alignment with existing proving infrastructure. Third, client-side proving: a RISC-V VM would enable users to generate zero-knowledge proofs locally about account interactions with specific data, enabling privacy and verification applications not currently supported by the EVM without external tools. Fourth, simplicity: a RISC-V interpreter can be implemented in several hundred lines of code, according to the proposal.
The deployment roadmap outlined in the proposal includes three stages. In the first stage, a new virtual machine, potentially RISC-V, would handle precompiles only, with current and new precompiles becoming code blobs in the new VM. In the second stage, users could deploy contracts directly in the new VM. In the third stage, the EVM would be retired and reimplemented as a smart contract written in the new VM, preserving backwards compatibility for existing contracts with the primary change being gas cost adjustments, which are expected to be overshadowed by concurrent scaling developments.
Buterin characterizes both changes as addressing the same fundamental challenge from different angles. The state tree and the VM together account for more than 80 percent of the bottleneck in efficient proving, according to the proposal. Addressing either component without the other leaves the larger problem partially unresolved, while addressing both would produce a protocol structurally aligned with the zero-knowledge-proof-heavy architecture Ethereum has been developing, rather than retrofitting that architecture onto infrastructure designed for different requirements.
The proposal acknowledges that the VM replacement does not currently represent consensus within the Ethereum development community, describing it as a change that will become more apparent once state tree modifications are completed. The proposal presents the changes as sequential: binary trees first, followed by VM replacement once proving infrastructure matures around the new state structure. The EVM has accumulated complexity through years of incremental additions, and the proposal states that meeting Ethereum’s functionality requirements necessitates addressing the VM rather than continuously implementing workarounds.
Check out which tokens may plummet by 90% if such a scenario unfolded.
The global geopolitical tension escalated over the weekend after the USA and Israel carried out mutual attacks on Iran, creating a sudden surge of uncertainty that quickly spread across the region and beyond.
The military operation struck many targets and eventually led to the liquidation of Ali Khamenei (the supreme leader of the Asian country). Iran retaliated against several nations in the region, including the UAE, Bahrain, Qatar, and Saudi Arabia. The American president, Donald Trump, warned that the war may continue for up to four weeks, while leading European economies (some of which are nuclear powers), such as France, Germany, and the UK, have hinted that they may “defend their interest” and join the conflict soon.
Right now, the world is watching the Middle East with growing concern, as the risk of a wider conflict and even a potential World War III seems more real than it has in years. Beyond the countless human lives this devastating event would claim, it would also send shockwaves through global financial and crypto markets. To explore the potential impact, we asked four of the most popular AI-powered chatbots which digital assets would be hit the hardest if such a scenario unfolded.
Small Alts, Memes, and More
ChatGPT started with a disclaimer, stating that a world war will not be just “bad news” but cause a “systemic liquidity shock.” It predicted that such a conflict would lead to immediate market panic, with equities dumping and credit freezing. In that kind of environment, crypto would get hit just as hard as everything else.
The chatbot suggested that small-cap altcoins are at the highest risk because they have thin liquidity, few real buyers, and heavy retail exposure. It alerted that cryptocurrencies, whose market capitalization is under $100 million and whose use-cases are dubious, may collapse by up to 90% in a World War III scenario.
Another sector that may experience a real carnage is the meme coin niche. According to ChatGPT, tokens like PEPE, BONK, WIF, and FLOKI can plummet to zero since they are sentiment-driven and notorious for their enhanced volatility:
“In a true risk-off event like a global war, speculative appetite collapses first, and liquidity in meme tokens can disappear within hours.”
Google’s Gemini agreed with ChatGPT’s assumption. It forecasted that such a major conflict could have a devastating effect on small and mid-cap altcoins and meme coins due to mass panic selling and total lack of buyers.
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Perplexity focused specifically on the biggest meme coins by market cap, Dogecoin (DOGE) and Shiba Inu (SHIB), estimating they would likely suffer the most due to their “extreme sensitivity to risk-off sentiment and lack of fundamental utility.”
Grok, the chatbot integrated within X, presented a rather different thesis. It claimed that stablecoins like Tether’s USDT and Circle’s USDC could be among the biggest victims due to their connection to the American dollar:
“Stablecoins are pegged 1:1 to fiat currencies like the USD, backed by reserves in banks, Treasuries, or other assets. In WW3, if major economies like the US face hyperinflation, debt defaults, or banking freezes (as seen in historical wars), these reserves could become worthless or inaccessible. In a global war, peg breaks could lead to total devaluation, turning them into “digital IOUs” for a collapsing dollar.”
How About BTC?
All four chatbots we consulted argued that Bitcoin would plunge substantially immediately after a potential announcement of a global war, but would remain the most resilient asset in the crypto sector. They also suggested that, despite the initial shock, BTC could recover its losses relatively quickly compared to the rest of the market.
“BTC would likely drop sharply alongside other risk assets as investors rush to liquidity. However, if the conflict leads to monetary instability or aggressive money printing, BTC could recover faster than most altcoins as its decentralziation and “digital gold” narrative regain strength,” ChatGPT stated.
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The highest level of margin utilization by US traders in history has, unfortunately, led to historic underperformance in crypto prices as speculators re-learned timeless wisdom: leverage works both ways.
After spending 2025 through January 2026 building their largest leveraged positions in history, bets on digital assets have unraveled with unnerving speed.
In January 2026, US margin debt had surged to a record $1.28 trillion — its ninth consecutive monthly increase and a 50% rise from April 2025. That financial leverage added bids to crypto assets which made new all-time highs in May, July, August, and October 2025.
Then, despite investors continuing to pile on more margin debt than ever, prices collapsed 47% and shed $2 trillion in combined market capitalization as a sector rotation to AI and precious metals ensued.
Crypto losses since October are staggering.
US margin debt increased $53 billion from December to January alone. Worse, the ratio of margin to real disposable personal income exceeded 6.0% in January for the first time on record.
That ratio measures more financial leverage in January 2026 relative to income than the dot-com mania.
Leverage-fueled demand flows into crypto instruments like bitcoin (BTC) futures, spot and leveraged ETFs, call options, and publicly traded crypto companies. Although more leverage can amplify gains, it also amplifies crashes.
Although traditional margin statistics are an incomplete measure of total systemic risk on crypto, which has vast quantities of opaque exchanges and trade data APIs controlled by offshore entities with little to no regulatory oversight, it can nonetheless inform some analysis about the causes of crypto volatility.
A supernova of crypto leverage that wiped out $2 trillion
Some crypto derivatives traders spent mid-2025 building their largest leveraged positions in history, then watched all of their paper gains evaporate.
Aggregate crypto futures open interest peaked above $220 billion on October 6, 2025. Within a week, the industry began to crash and never looked back.
October 10 produced more than $19 billion in total liquidations across exchanges, according to CoinGlass data — the single largest day of forced closures in crypto history.
Many saw Binance as a convenient scapegoat.
Read more: Crypto traders consider lawsuits after $600B market meltdown
Record-setting volatility continued amid record-setting margin levels. On February 5, 2026, another flash-crash drove BTC from $73,000 to $62,000 and wiped out 10-figure position values within a single day.
Worst day of realized losses from BTC liquidations
Glassnode estimated that February 5’s crash produced $3.2 billion in realized losses from liquidated BTC trades — the largest single-day realized loss in Glassnode’s recorded history that surpassed even October 10, 2025, the FTX bankruptcy in November 2022, or the May 2022 collapse of Terra/Luna.
By late February, crypto’s margin trading hangover had set in.
CoinGlass’ Crypto Fear & Greed Index fell to five out of 100 — a never-before-seen rating that exceeded its Three Arrows Capital bankruptcy low of six in June 2022, and its COVID-19 low of seven in March 2020.
As of writing, the index still remains near historic lows at nine, or “extreme fear.”
Losses amid record margin levels have also drawn out spot BTC from US ETFs. Specifically, spot BTC ETFs lost $4.5 billion in net outflows through the first eight weeks of 2026, according to Investing.com.
The leveraged unwind of Strategy
Adding insult to injury, software company-turned-leveraged BTC acquirer Strategy became the most-shorted large cap stock in the US last month, according to data from FactSet cited by multiple outlets.
The company held 717,722 BTC over this weekend, purchased at an average cost near $76,020 per coin. With BTC trading in the mid-$60,000s, the company faces unrealized losses in the billions.
Margined short-sales against Strategy and its BTC, in this case, have actually stood out as a rare success story amid crypto’s margin mania of January 2026.
Leverage always works both ways. Although US margin debt at $1.28 trillion is an incredible headline, the real story is that leverage has seeped into every layer of crypto valuations — from listed securities in brokerage accounts to perpetual swap venues in tax havens.
With losses liquidating collateral and forcing cascading sales, each layer’s losses have been feeding the next since October.
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The “Aave Will Win” governance proposal has successfully passed the Temp Check vote, garnering 52.58% support, and is now progressing to the Aave Request for Final Comment (ARFC) stage, marking a significant step for Aave’s future development.
In a closely watched governance decision for one of DeFi’s largest protocols, the “Aave Will Win” framework has passed its initial Temp Check vote, moving the proposal forward in Aave DAO’s multi-stage governance process.
The off-chain Snapshot vote, designed to gauge community sentiment ahead of more binding stages, closed with approximately 52.58% in favor, 42% against, and roughly 5% abstaining. This approval clears the first formal hurdle and advances the framework to the Aave Request for Final Comment (ARFC) phase, where structural and implementation details will be refined based on community feedback before any on-chain vote occurs.
A Token-Centric Model
The “Aave Will Win” framework proposes a fundamental shift in how Aave’s economic value is distributed and how Aave Labs is funded: it would direct 100% of product revenue generated by Aave products to the AAVE token and DAO treasury, aligning incentives between token holders and the protocol’s builders.
Stani Kulechov, founder of Aave and long-time steward of the protocol, confirmed the result on social media shortly after the vote closed, framing the outcome as a step toward a fully token-centric model for the ecosystem.
“Temp Check for the Aave Will Win proposal has passed,” Kulechov wrote. “This brings Aave Labs closer to a fully token-centric model, directing 100% of product revenue to the $AAVE token,” he wrote, underscoring the strategic shift.”
Kulechov followed up with additional remarks reaffirming the protocol’s direction and the DAO’s role in shaping the final structure as the proposal progresses.
Governance Debate and Split Vote
Despite the ultimate approval, the vote exposed ongoing tensions within Aave’s governance community. The margin was relatively narrow, and earlier debate on the forums and in governance reports highlighted deep divisions over funding levels, the size of token allocations to Aave Labs, and how decentralized authority should evolve.
Following the vote, Marc Zeller, founder of the Aave Chan Initiative, published a detailed post-mortem analyzing the Temp Check results, noting that when excluding votes from several large Aave Labs–linked addresses, the broader community actually tilted against the proposal.
Zeller’s analysis argued that while many delegates support the general direction of “Aave Will Win,” concerns remain about fiscal guardrails, capital deployment phases, and independence from Labs’ influence.
What Comes Next
With the Temp Check cleared, the Aave Will Win proposal now enters the ARFC stage, where community feedback will be folded into a more detailed governance proposal that may ultimately be put to an on-chain Aave Improvement Proposal (AIP) vote. Only through an AIP vote would any commitments become binding.
If the framework ultimately garners approval in that final vote, it could reshape Aave’s economic and governance model, formalizing revenue alignment with token holders and setting V4 as the long-term technical foundation for future growth.
With the proposal’s advancement, the focus now shifts to the ARFC stage, where further community input will shape the final outcome. The proposal’s progress is a testament to the robust governance framework that empowers Aave’s community to steer its future direction.
This article was generated with the assistance of AI workflows.
Michael Saylor’s Strategy, the world’s largest public holder of Bitcoin, completed its 101st Bitcoin purchase, pushing its total holdings above 720,000 BTC.
The company acquired 3,015 Bitcoin (BTC) for $204.1 million last week, according to a US Securities and Exchange Commission filing on Monday.
The average buy price of its latest purchase was $67,700 per BTC, marking another purchase well below the company’s average acquisition price of $75,985.
The purchase brings its holdings to 720,737 BTC, acquired for a total cost of about $54.8 billion, the company disclosed.
Another buy below Strategy’s cost basis
The latest buy is one of a small number of Strategy purchases made below the company’s average cost basis, according to data compiled by SaylorTracker, a website that tracks Strategy’s bitcoin acquisitions.
The first such purchase occurred on Feb. 9, when the company bought 1,142 BTC as market prices dipped below $76,051 during the week. Strategy reported the average acquisition price of that batch at $78,815, above the market price at the time.
Strategy encountered a similar situation around 2022-2023, when BTC price dipped below its cost basis of around $30,600. The company completed a total of seven purchases of 28,560 BTC during that below-cost period.
MSTR shares rise modestly while Bitcoin trades near $65,800
Strategy (MSTR) shares saw some upward momentum last week, rising from around $125 on Monday to nearly $130 by Friday, according to TradingView.
Bitcoin, however, remained largely flat over the same period. The crypto asset started the week near $65,000, briefly surged above $69,000 on Wednesday, and dipped below $64,000 before stabilizing. At the time of publication, Bitcoin was trading at $65,834, according to TradingView.
Related: Strategy yield wrapper lands in Europe as 21Shares lists STRC ETP
The news came after Strategy chairman Saylor announced on Sunday that the company is raising the dividend on its STRC preferred stock, also known as “Stretch,” to 11.50% for March 2026, from the previous 11.25%.
The capital raised through the stock can be used for corporate purposes, including potential Bitcoin acquisitions.
Magazine: 6 massive challenges Bitcoin faces on the road to quantum security
TLDR
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Natural gas prices across Europe experienced dramatic increases following disruptions to LNG transportation routes through the Strait of Hormuz linked to Iranian conflict.
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Production facilities operated by QatarEnergy were forced offline following drone strikes, creating immediate global LNG supply constraints.
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Benchmark Dutch TTF gas contracts climbed by up to 49% in intraday trading amid mounting supply anxieties.
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LNG imports have become critical for Europe’s energy security after the continent pivoted away from Russian gas in 2022.
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Market experts caution that extended supply disruptions could drive European gas prices significantly higher while straining worldwide energy availability.
Natural gas markets in Europe experienced substantial price increases as Middle Eastern geopolitical tensions threatened critical energy transportation corridors. Trading activity reflected heightened concerns over liquefied natural gas delivery reliability.
During early trading hours, European gas valuations jumped approximately 25%. The Dutch TTF benchmark contract subsequently accelerated, posting gains approaching 49% at peak levels.
Price movements came as regional military tensions escalated dramatically. Disruptions connected to Iranian military activities have impacted maritime operations through the Strait of Hormuz, one of the world’s most vital energy chokepoints.
This narrow waterway facilitates substantial volumes of international LNG trade. Vessel movements have declined considerably as security threats mounted.
Following drone strikes on its infrastructure, QatarEnergy suspended operations at natural gas production sites. The government-controlled operator supplies approximately 20% of worldwide LNG exports.
European Vulnerability to Supply Shocks
European nations face significant vulnerability to LNG supply interruptions. The continent dramatically reduced Russian pipeline gas dependence following 2022’s energy upheaval.
Qatari sources now provide substantial volumes of Europe’s LNG requirements. Numerous cargoes transit the Strait of Hormuz en route to European import facilities.
Storage levels decline throughout winter heating demand periods. European nations must consequently increase LNG purchases to replenish stockpiles.
Market analysts drew comparisons to circumstances observed during 2022’s crisis. That episode produced industrial closures and accelerated inflation throughout European economies.
Goldman Sachs projected that a one-month suspension of LNG transits through the Strait would likely more than double European gas valuations. Benchmark prices could reach €74 per megawatt hour in such circumstances.
Should disruptions extend beyond two months, prices might exceed €100 per megawatt hour. Historical data shows such elevated pricing previously forced substantial demand destruction across the continent.
Broader Energy Market Impacts
Commodity markets swiftly incorporated supply risk assessments. Oil prices advanced as market participants factored in potential regional disruption scenarios.
Approximately 80 million tonnes of LNG flow through the Strait of Hormuz annually. This volume constitutes roughly 19% of total global supply.
Crude oil movements through this strategic waterway similarly underpin global energy systems. Roughly 20% of worldwide petroleum production traverses these waters.
Reports emerged over the weekend of three oil tankers sustaining damage in regional waters. Shipping uncertainties have amplified price fluctuations.
Transportation costs for crude carriers have escalated sharply in recent trading periods. Certain Gulf-to-Asia shipping routes have experienced threefold rate increases over thirty days.
Asian LNG markets confront comparable price pressure risks. Interconnected global gas trading means supply disruptions in one region ripple across others.
Domestic U.S. natural gas pricing has demonstrated relatively muted responses thus far. Export infrastructure operates near maximum capacity, constraining the ability to rapidly boost outbound volumes.
European market participants continue monitoring LNG supply chain resilience closely. Trading sentiment hinges on whether Strait of Hormuz shipping operations normalize within upcoming weeks.
TLDR
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Block’s price target was lifted to $78 by Cantor Fitzgerald, up from $70, with the firm keeping its Overweight stance.
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Fiscal 2026 projections indicate gross profit reaching approximately $12.2 billion with EPS around $3.66.
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The fintech company surpassed Q4 expectations for both gross profit and adjusted earnings metrics.
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A major restructuring will see Block eliminate approximately 40% of its staff to focus on AI integration.
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Wall Street analysts anticipate that expense reductions will enhance profitability and drive sustainable growth.
Following impressive quarterly results and forward-looking guidance, Block (XYZ) secured an upgraded price target from Cantor Fitzgerald. The investment firm elevated its target from $70 to $78 while continuing to rate the stock as Overweight.
This reassessment comes after Block delivered fourth-quarter numbers that exceeded Wall Street’s projections. The payment technology firm beat consensus estimates on both gross profit and adjusted EPS.
Block’s diluted earnings came in at $2.10 per share for the trailing twelve-month period. The company’s gross profit figure also topped analyst predictions, prompting several firms to revise their outlooks upward.
Following management’s fiscal 2026 outlook, Cantor adjusted its financial models accordingly. Block anticipates generating approximately $12.2 billion in gross profit alongside adjusted operating income near $3.2 billion.
For the full fiscal 2026 year, adjusted EPS is expected to reach roughly $3.66. The company’s first-quarter outlook calls for gross profit around $2.8 billion with adjusted EPS approximately $0.67.
Wall Street Perspective and Stock Metrics
The revised $78 target from Cantor reflects a 16x multiple applied to its calendar 2027 EPS projection of $4.85. This represents an upgrade from the prior methodology using a 14x multiple on more conservative earnings estimates.
Block’s stock price has jumped approximately 25.5% in the last week alone. Trading recently around $63.70, the company commands a market cap approaching $38.2 billion.
Block trades at approximately 30 times earnings currently. Analysts noted the valuation looks reasonable when measured against anticipated earnings expansion and discounted cash flow analysis.
Additional Wall Street firms have reaffirmed bullish stances following the earnings report and restructuring reveal. UBS, RBC Capital, and Bernstein each maintained Buy or Outperform designations with targets spanning the mid-$80s to $90 range.
Truist kept its Hold recommendation with a $72 target. Raymond James reduced its objective to $79 while retaining an Outperform view, pointing to potential execution challenges.
Staff Reductions and AI Transformation
Block disclosed plans to eliminate roughly 40% of its employee base in a significant restructuring. Leadership characterized this as a strategic realignment designed to integrate artificial intelligence throughout the business.
Company executives indicated the workforce adjustments will result in a more streamlined cost structure and improved organizational efficiency. Analysts project these modifications could bolster operating margins going forward.
Block highlighted that its Cash App platform delivered substantial contributions to recent gross profit expansion. The Cash App ecosystem remains central to the company’s revenue generation and profitability.
Leadership noted that updated fiscal guidance incorporates strong business momentum from the end of Q4 2025. The revised forecasts include elevated projections across gross profit, operating income, and per-share earnings.
Block’s stock has experienced significant price swings over the trailing year but surged dramatically after the restructuring disclosure. Market participants are closely tracking the implementation of cost initiatives and achievement of updated financial targets.
Key takeaways
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After paying a $45-million settlement in 2023 and exiting the market, Nexo has reentered the US with a redesigned product model focused on regulatory alignment rather than direct yield issuance.
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The 2023 crackdown centered on unregistered securities concerns. The SEC alleged that Nexo’s Earn Interest Product functioned as an unregistered security, raising questions about retail yield marketing, transparency, custody practices and counterparty risk.
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The new model relies on licensed US partners. Instead of directly offering yield products, Nexo now operates through regulated US intermediaries, including licensed entities and, where required, SEC-registered investment advisers.
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The Bakkt partnership anchors the compliance strategy. By collaborating with Bakkt, a publicly traded US crypto firm with regulatory licenses, Nexo shifts from a direct issuer model to a partner-delivered framework embedded within regulated infrastructure.
Three years after departing the US and paying a $45-million settlement to federal and state regulators, Nexo has formally reentered the US market. But this is not a straightforward relaunch. Rather, it is a structural overhaul.
What changed is not merely the timing or the political climate; it is how the product is designed, delivered and regulated.
This article examines why Nexo exited in 2023, what regulators objected to and how its 2026 return is structured differently. It also explores what US users should watch before engaging with crypto-backed loans or yield-style products.
The 2023 crackdown: Why Nexo left the US
Nexo, co-founded by former Bulgarian lawmaker Antoni Trenchev, developed much of its initial US footprint through its Earn Interest Product (EIP), which enabled users to deposit crypto and earn yield.
In January 2023, the US Securities and Exchange Commission (SEC) accused Nexo of offering and selling unregistered securities through this product. The SEC contended that the EIP met the legal definition of a security and, therefore, required proper registration.
Nexo consented to a settlement:
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It paid a total of $45 million in fines to the SEC and various state regulators.
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It neither admitted nor denied the allegations.
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It ceased offering the product to US investors.
Soon after, Nexo withdrew from the US retail market.
Why regulators targeted “earn” products
The enforcement action stemmed from a wider post-2022 crypto lending fallout. Major failures across the lending industry had revealed liquidity mismatches, rehypothecation risks and retail exposure to opaque yield structures.
Regulators were particularly concerned about:
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The promotion of yield products to retail investors
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Transparency regarding how returns were generated
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Custody practices and credit counterparty risks
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Whether these offerings functioned as investment contracts.
The crackdown extended beyond Nexo and signaled a broader regulatory overhaul for centralized crypto yield offerings.
Did you know? Borrowing against volatile assets is not a new concept. Traditional stock margin lending has existed for decades, but crypto’s 24/7 trading makes liquidation mechanics far more dynamic and automated.
What changed in 2026
Nexo’s 2026 comeback rests on a core claim: The product is now structured differently and provided through licensed US partners.
Instead of directly delivering yield-like products to US investors under its former approach, Nexo states that its updated structure:
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Relies on properly licensed US partners
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Incorporates an SEC-registered investment adviser when required
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Has phased out the product addressed in the 2023 order.
This difference is significant: Rather than operating as an independent provider of an earn program, Nexo is now positioned within a regulated infrastructure framework.
According to Nexo, it will offer crypto-backed loans and yield-generating products. These services will be provided through licensed US partners.
Crypto-backed loans differ from the unsecured lending models that failed in 2022. Users deposit digital assets as collateral and borrow against them. Liquidation occurs if the collateral falls below set loan-to-value thresholds.
The Bakkt partnership: Compliance by design
A key factor in the relaunch is Nexo’s collaboration with Bakkt, a publicly traded US crypto firm.
Bakkt provides regulated trading infrastructure and holds multiple US licenses. By channeling US operations through regulated entities, Nexo is effectively moving from a direct issuer model to a partner-delivered model.
In practical terms, this means:
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Trading, custody or advisory services could reside with regulated entities.
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Product elements may be distributed across licensed intermediaries.
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Supervision may occur across multiple regulatory layers.
This framework is designed to address the regulatory objections that led to the 2023 settlement.
Did you know? Unlike banks, most crypto lending platforms do not benefit from federal deposit insurance, meaning customer protections depend heavily on custody structures and legal agreements rather than government backstops.
A shifting regulatory landscape
Timing is a factor in Nexo’s return to the US. Under President Donald Trump’s administration, the SEC has terminated or scaled back multiple crypto enforcement actions. The enforcement environment has shifted from an intense crackdown to a period of readjustment.
For instance, the SEC moved to drop a lawsuit involving the Gemini Earn program following investor recoveries. This does not indicate that crypto lending issues are entirely resolved, but it points to a more adaptable regulatory stance than in early 2023.
Nevertheless, the US regulatory framework remains fragmented. Federal agencies, state securities regulators, money transmitter statutes and consumer lending rules may all apply depending on the structure.
What US users need to watch
Even if products are offered through regulated intermediaries, users should assess:
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Who is your legal counterparty? Is the agreement with Nexo, with a US-licensed entity or with multiple entities?
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Where does custody sit? Are assets held by a qualified custodian? Under which regulatory regime?
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How are returns generated? Are yields derived from lending, staking, market-making or other activities?
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What are the liquidation terms for crypto-backed loans?
What is the loan-to-value (LTV) threshold?
How quickly can liquidation occur?
Are there additional fees?
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What disclosures exist? Look for:
Risk disclosures
Rehypothecation clauses
Conflict-of-interest statements
Jurisdiction clauses.
“Compliant structure” does not equal “risk-free product.”
Did you know? Money transmitter licensing in the US is state-based, which means a crypto company may need approvals in dozens of jurisdictions. This is one reason partner-led models are gaining popularity.
Why this comeback matters for the industry
Nexo’s return could indicate a wider transformation in US crypto lending:
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Phase 1 (Pre-2023): Direct-to-consumer yield models with minimal registration
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Phase 2 (2023-2025): Regulatory enforcement, withdrawals and reorganization
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Phase 3 (2026 onward): Partner-led models employing licensed intermediaries and segregated functions.
If this framework proves viable, other international crypto companies may reenter the US through comparable compliance layers instead of direct issuance models.
The real shift: It is about the wrapper, not just the product
The primary takeaway from Nexo’s return is structural.
The fundamental economic idea of generating yield on digital assets or borrowing against crypto remains intact. What has evolved is the regulatory framework surrounding it.
Rather than pushing the limits of securities law, the updated model integrates into licensed infrastructure.
Whether this method satisfies regulators over the long term will hinge on:
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Disclosure quality
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Risk management practices
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Transparency of revenue sources
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Ongoing federal and state coordination.
For now, Nexo’s comeback reflects a more prudent crypto industry that recognizes that in the US, structure dictates survival.
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Crypto outflows from Iran’s largest exchange jumped 700% within minutes of the first U.S.-Israeli airstrikes on Tehran, blockchain analytics firm Elliptic said in a Monday blog post.
Elliptic said transaction volumes leaving Nobitex spiked almost immediately after the strikes, suggesting a rush to move funds offshore. Initial blockchain tracing indicates the crypto was sent to overseas exchanges that have historically received significant inflows from Iran.
The activity “potentially represents capital flight from Iran that bypasses the traditional banking system,” according to Dr. Tom Robinson, Elliptic’s co-founder and chief scientist.
Over the weekend, coordinated U.S. and Israeli airstrikes struck multiple targets in Iran, killing Supreme Leader Ayatollah Ali Khamenei and escalating a wider Middle East conflict. The attacks stoked market volatility as investors priced in potential disruptions to oil supplies through the strategic Strait of Hormuz, sending global crude prices sharply higher and triggering broad sell-offs in equities and safe-haven buying across assets.
Nobitex allows users to convert Iranian rials into crypto and withdraw funds to external wallets, offering a route around traditional banking channels.
The exchange processed $7.2 billion in crypto transactions in 2025 and claims more than 11 million users, making it central to Iran’s digital asset ecosystem, Robinson said.
Elliptic has previously linked the exchange to IRGC-aligned financial activity and reported in January that Iran’s central bank appeared to use Nobitex in efforts to support the weakening rial.
Iran’s crypto ecosystem
Previous reports have detailed Iran’s growing use of cryptocurrencies as a hedge against a weakening rial and as a potential workaround to international sanctions, with U.S. authorities probing whether digital-asset platforms have enabled state-linked actors to move funds and access hard currency outside the traditional banking system. Blockchain research cited in those reports estimates that Iran-linked crypto activity has reached into the billions of dollars annually, spanning retail users as well as, according to officials, sanctioned entities.
Robinson also flagged additional surges in Iranian crypto outflows earlier this year. The largest came on Jan. 9, following widespread anti-regime demonstrations and a subsequent government-imposed internet blackout.
Two additional surges followed U.S. sanctions announcements targeting Iranian actors, the report said, suggesting crypto may be used to mitigate the impact of sanctions.
Bitcoin and major altcoins dropped sharply in the immediate aftermath of the strikes, with BTC briefly falling below $64,000 before recovering to the mid-$60,000s, underscoring crypto’s sensitivity to geopolitical tensions. Ether (ETH) and other tokens also declined, though several remained above pre-strike levels, pointing to a relatively swift rebound after the initial sell-off.
The world’s largest cryptocurrency was over 2% lower at publication time, trading around $65,500. Ether, the second-largest crypto by market cap, was 3.8% lower at around $1,930.
Read more: Iran crisis puts the regime’s $7.8 billion crypto shadow economy in spotlight
CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.
The CoinDesk 20 is currently trading at 1907.12, up 0.3% (+5.99) since 4 p.m. ET on Friday.
Eight of the 20 assets are trading higher.
Leaders: NEAR (+12.4%) and SOL (+2.1%).
Laggards: DOT (-7.3%) and BCH (-4.5%).
The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.
Strategy Inc has purchased 3,015 Bitcoin for about $204 million, lifting its total holdings to 720,737 BTC despite ongoing market weakness.
Summary
- Strategy bought 3,015 BTC at an average price of $67,700.
- Total holdings now stand at 720,737 BTC worth about $54.77B.
- The purchase was funded mainly through ATM share sales.
Strategy has added more Bitcoin (BTC) to its balance sheet after spending over $200 million on a fresh purchase, continuing its long-running effort to build one of the largest corporate crypto treasuries in the world.
On March 2, Strategy Inc revealed in a regulatory filing that it bought 3,015 BTC between February 23 and March 1 at an average price of $67,700 per coin, taking total holdings to 720,737 BTC.
Funding the latest Bitcoin purchase
The company spent about $204.1 million on the acquisition, using mainly proceeds from its at-the-market share sales and preferred stock offerings. During the same period, Strategy raised roughly $237.1 million, leaving part of the funds as a cash reserve.
With this purchase, Strategy’s total Bitcoin acquisition cost has reached around $54.77 billion. Its average cost basis now stands at about $75,985 per BTC.
At current market prices, the company’s Bitcoin holdings are valued at roughly $47 billion to $47.5 billion. This places Strategy at an estimated unrealized loss of between $7 billion and $9 billion, depending on price movements.
Strategy’s Class A shares trade on the Nasdaq Global Select Market under the ticker MSTR. The stock is down about 50% over the past year and 18% year-to-date, tracking Bitcoin’s recent decline.
The latest deal marks the company’s tenth straight weekly Bitcoin purchase. Its approach remains focused on raising capital and converting it directly into BTC to increase per-share exposure.
Financial pressure and long-term strategy
While Strategy continues to buy, the weak market has weighed on its financial results. Since early 2025, the company has used fair-value accounting for digital assets, which requires marking Bitcoin holdings to market.
In the fourth quarter of 2025, Strategy reported a $12.4 billion net loss, driven largely by unrealized crypto losses. Its core software business remains small, making overall performance closely tied to Bitcoin prices.
To limit dilution from issuing new common shares, the company has relied more on preferred stock. In February, it raised the dividend rate on its Variable Rate Series A preferred shares to 11.50%.
Executive chairman Michael Saylor has continued to support the company’s long-term holding strategy, arguing that Bitcoin should be treated as a primary reserve asset.
Analysts remain divided. Supporters say buying during downturns could pay off if prices recover above the company’s cost basis. Critics warn that extended weakness could deepen losses and strain investor confidence.
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